strategic marketing plan framework-adapted

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TADCO

TADCO

Strategic Marketing Planning

Theoretical Frame work to be used for Developing TADCO Strategic Marketing Plan (2016-2020)

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Plan Deliverables & Enablers

DELIVERABLES:1. Define key target markets in order of priority2. Describe (quantitatively and qualitatively) the value

that is required by each of key target markets3. In each of these key target markets, describe how

your organisation creates this value?ENABLERS:• The relevant senior people in the company must

understand and support the above three points• All of the relevant functions in the company must be

organised in a way that is supportive of delivering the value required by the customer

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The contents of a strategic marketing plan (T+3) (less than 20 pages)

• The purpose statement

• Financial summary• Market overview• SWOT analysis

• Portfolio summary

• Assumptions

• Objectives and strategies

• Budget

© Professor Malcolm McDonald

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The output of the marketing planning process Strategic marketing plan contents

Marketing theory(Structures, frameworks, models)

Mission statement

Financial summary

Issue management

B.C.G. MatrixDirectional policy matrix

McDonald PRODUCTIVITY MATRIXBlake mouton matrix

ForecastingBudgeting

Measurement and review

Marketing planning and marketing theory (structures, frameworks, models etc.)© Copyright, professor Malcolm h.B. McDonald 1987

Downside risk assessment

Market segmentation studiesMarket researchResponse elasticities

Porter matrixAnsoff matrixBcg matrixDirectional policy matrixGap analysis

Key success factors matrixMarket researchMarket segmentation studies

Market overview

Marketing Strategies

Marketing Objectives

Opportunities Threats

Portfolio summary

Assumptions

Resource Requirements

StrengthsWeaknesses

Issues to beAddressed

Market structureMarket trendsKey market segmentsGap analysis

Marketing auditMarket researchMarket segmentation studiesGap analysisProduct life cycle analysisDiffusion of innovationAnsoff matrixForecastingMarket research

ProductPricePromotionPlace

(4 x 4 ps)(Positioning/branding)

Strategic focusProduct mixProduct developmentProduct deletionMarket extensionTarget customer groups

(By product)(By segment)(Overall)(By product)(By segment)(Overall)(By product)(By segment)(Overall)

(By product)(By segment)(Overall)

The marketingPlanning process

Phase 1

Goal setting

Phase 2

Situation review

Phase 3StrategyFormulation

Phase 4ResourceAllocation

And monitoring

Financial theory /Structure

Profitability analysis by products / segmentsComparative analysis of competitor productsExperience curves and cost structures

Cash flows and risk evaluationSensitivity analysis

Integrated financial planning Limiting resource analysis

Sensitivity analysisDecision treesProbability theory

Budgeting and financialplanningZero base budgets

Performance targets / ratiosCost, price, volume (CPV)analysisMarginal and absorption costingActivity base costing

Competitor analysisIndustry/sector analysisRisk evaluationRatio analysis, valuation studiesCost of capitalNPV analysisProject evaluationLife cycle costing

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The Contents of a Strategic Marketing Plan

• Mission or Purpose Statement• Financial Summary

Revenue

Profit

t.0 T+1 T+2 T+5

Products

Mar

kets

Existing New

Ne

wE

xist

ing

1 2

3 4

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Key (revenue and profit growth)

• from productivity• by product for market for existing products from existing markets• from new products in existing markets• from existing products in new markets• from new products in new markets

Plus a few words of commentary

Market Overview/SummaryMarket definitionMarket map showing volume/revenue flows from supplier through toend user, with major decision points highlighted Where appropriate, provide a future market mapInclude commentary/conclusions/implications for the companyAt major decision points, include key segments

The Contents of a Strategic Marketing Plan. Continued

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SWOT Analyses on Key Segments • include pictorial representations of the SWOTs, such as bar charts • highlight major conclusions/issues to be addressed

Portfolio Summaries of the SWOTs • include Directional Policy Matrix (DPM) summaries of:-

- the attractiveness of the segments over the next 3-5 years- the current relative competitive position of your company in

each segment- the planned competitive position of each segment over the

next 3-5 years

Marketing Objectives and Strategies for the next 3-5 years • include objectives (volume, value, market share, profit, as appropriate) for the next 3-5 years for each segment as represented by the planned position of each circle on the DPM • include strategies (the 4XPs) with costs for each objective

Consolidated Budget for the next 3-5 years • this will be a consolidation of all the revenues, costs and profits for the next 3-5 years and should accord with the financial summary provided earlier

The Contents of a Strategic Marketing Plan. Continued

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Definemarkets/segments

Evaluate market/segment attractiveness

Choose markets/segmen

ts

Define objectives

Estimate expected results

Value required

Value delivered

Value received

How value delivered/

communicated

Define markets & understand value

Understand value required

Understand competitor value

positioning

Define price/value proposition

Define marketing strategies

Determine value proposition

Outbound logistics

Operations

Service

Design/implement marketing communication

programmes

Design program Negotiate/ tailor

Initiate dialogue Commit

Exchange information Exchange value

Monitor marcom

programmes

Deliver product/service

Exchange Information

Inbound logistics

R&D

Deliver value

Monitor value

Analysis

Marketing

Plan(s)

Customer

information

Plan

Effectiveness

Communicate value

Overview of marketing map

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Analytical Models to be used for Developing the strategic Marketing Plan

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SBU Mission Statement

A brief statement should be made to cover the following points:

1. Role or contribution of the SBU: e.g. main profit generator

2. Definition of the Business: e.g. the need it satisfied or benefit provided (should not be too specific or too general)

3. Distinctive Competence: A characteristic that applies only to the unit and shared by competitors)

4. Indication for the future: The principal position that SBU strive to move to in future.

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Types of mission statements

•Type I ‘Motherhood’ - usually found inside annual reports. Designed to ‘stroke’ shareholders, otherwise no practical use

•Type II The real thing. A meaningful statement, unique to the organization concerned, which ‘impacts’ on the behavior of the executives at all levels

•Type III This is a ‘purpose’ statement ( or lower level mission statement). It is appropriate at the state/branch/or departmental level of the organization.

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SBU Vision Statement

A brief statement showing the big goal the SBU is striving to achieve during the strategy period

It could be divided in as et of Objectives covering the following:•

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Strategic marketing planning exercise - SWOT analysis

1

2

3

4

5

You Comp A Comp B Comp C Comp D

Total 100

1

2

3

4

5

1. SEGMENT DESCRIPTIONIt should be a specific part of the business and should be very important to the organisation

2. CRITICAL SUCCESS FACTORSIn other words, how do customers choose?

3. WEIGHTING(How importantis each of theseCSFs? Scoreout of 100)

1

2

3

4

5

THREATS

5. OPPORTUNITIES / THREATSWhat are the few things outside your direct control that have had, and will have, an impact on this part of your business?

6. KEY ISSUES THAT NEED TO BE ADDRESSEDWhat are the really key issues from the SWOT that need to be addressed?

OP

PO

RT

UN

ITIE

S

4. STRENGTHS / WEAKNESSES ANALYSISHow would your customers score you and each of your main competitors out of 10 on each of the CSFs?Multiply the score by the weight.

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MarketAttractiveness

KEYPresentposition

Forecastposition in3 years

High Low

Low

High

Invest/Build

Maintain

Manage for Cash

?

ResearchExecMBA

C.S.G.M.Ps

DistanceEducation/

CMR

MANDAS

DirectorsSeminars

C.S.

Full-TimeMBA

Our competitive position /business strength

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Market attractiveness evaluation

This form illustrates a quantitative approach to evaluating market attractiveness. Each factor is score multiplied by the percentage weighting and totaled for the overall score. In this example, an overall score of 7 out of 10 places this mark in the highly attractive category.

1.

2.

3.

4.

5.

6.

Market Size (£ millions)

Volume Growth (Units)

Competitive Intensity

Industry Profitability

Vulnerability

Cyclicality

10³£250

³10%

Low

> 15%

Low

Low

5

£51.250

5.9%

Medium

10.15%

Medium

Medium

0

< £50

< 5%

High

< 10%

High

High

Factor Scoring Criteria

Score

5

10

6

8

3

2.5

Weighting

15

25

10

25

15

10

Total

Ranking

0.75

2.5

0.6

2.0

0.9

0.25

7.0

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Programme guidelines suggested for different positioning on the directional policy matrix

Maintain or increasedominance

Differentiation - lineexpansion

Lead - Aggressivepricing for share

Aggressivemarketing

Broadendistribution

Tight control - go forscale economies

Expand, invest (organicacquisition, joint venture)

Expand - invest

Upgrade managementin key functional areas

Fund growth

Reduce in process -extend credit

Maintain or slightlymilk for earnings

Prune for less successfuldifferentiate for segments

Stabilise prices / raise

Limit

Hold widedistribution pattern

Emphasise cost reductionviz. variable costs

Maximise capacityutilisation

Focus on specificprojects

Maintain, reward efficiency,tighten organisation

Limit fixed investment

Tighten Credit- reduceaccounts receivableincrease inventory turn

Maintain selectivity-segment

Emphasise productquality

Maintain or raise

Maintain selectively

Segment

Tight control

Increase productivitye.g. specialisation

Invest selectively

Allocate key managers

Invest selectively

Reduce

Forego share for profit

Aggressively prune

Raise

Minimise

Gradually withdrawdistribution

Aggressively reducefixed & variable

Free up capacity

None

Cut back organisation

Minimise & divestopportunistically

Aggressively reduce

Invest selectivelyin share

Differentiation - lineexpansion

Aggressive - price forshare

Aggressivemarketing

Limited coverage

Tight - but not at expenseof entrepreneurship

Invest

Invest

Invest

Fund growth

Invest

Products

Market Share

Price

Distribution

Promotion

Cost Control

R & D

Production

Personnel

Investment

Working Capital

Investfor growth

Maintain marketposition, manage

for earnings SelectiveManagefor cash

Opportunisticdevelopment

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Market/segment selection criteria

Business StrengthsBusiness Strengths

Market / segmentattractiveness

Market / segmentattractiveness

- Size- Growth- Profitability- Competitive intensity

- Product Range- Product Efficacy- Service Quality (Including distribution)- Price- Associated Services (e.g. Technical advice)- Reputation / Image

High Low

Low

High

Maintain/manage forsustainedearnings

Invest /Grow

Manage forCash /

Withdraw

SelectivelyInvest


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Strategic planning exercise (gap analysis)1 revenue

3 . G A P A N A LY SIS


A N S O F F P R O D U C T /M A R K E T (M A R K E T P E N E T R AT IO N )

A N S O F F P R O D U C T /M A R K E T M AT R IX (N E W P R O D U C T S / N E W M A R K E T S )

(A ) L is t p r in c ip l e p ro d u c ts o n th e h o r iz o n ta l a x is a n d p r in c ip le m a rk e t s o n th e v e r tic a l ax is . In e a c h s m a lle r s q u a re w rit e in c u rre n t s a le s a n d a c h i ev a b le s a l es v a lu e d u r in g th e p l an n in g p e r io d .

(B ) N e x t , p lo t th e m ar k e t p e n e t ra t io n p o s iti o n , p o in t C . T h is p o in t w il l b e t h e a d d i tio n o f a ll th e v a lu e s in th e r ig h t h a n d h a lf o f th e s m a ll b o x e s i n th e A n s o ff M a tr ix . I f th e re is a g ap , p ro ce e d to 4 b e lo w . P le as e n o te , re v e n u e f ro m (1 ) (2 ) (3 ) a n d (4 ) f ro m th e p ro d u c tiv ity b o x s h o u ld b e d e d u c te d f r o m th e m a rk e t p e n e tra tio n to ta l b e fo re p lo tt in g p o in tC .

N e x t, li s t th e v a lu e o f a n y n e w p ro d u c ts y o u m ig h t d e v e lo p w h ic h y o u m ig h t s e ll to e x i st in g m a rk e t s . A lte rn a tiv e ly, o r a s w e l l a s , i f n ec e s s a ry, lis t th e v a lu e o f a n y e x is ti n g p ro d u c t s th a t y o u m ig h t s e ll to n e w m a rk e ts . P lo t th e to ta l v a lu e o f th e s e o n th e G a p A n a ly si s G ra p h a b o v e , p o in t D . I f th e re i s s t ill a g a p p ro c e ed to 5 .

5 . G A P A N A LY SIS(D ivers ification )

6 . G A P A N A LY SIS (C apita l U tilisa tion)

F in a l ly, lis t th e v a lu e o f a n y n e w p ro d u c t s y o u m ig h t d e v e lo p f o r n e w m a rk e ts u n til p o in t E is re a c h e d . (S t ep s 3 , 4 a n d 5 re p re se n t a s a le s g ro w th f o c u s ) .

I f n o n e o f th is g iv e s th e re q u i red r e tu rn o n in v es tm en t c o n s id e r c h an g in g th e a s s e t b as e . T h is c o u ld b e(A ) A cq u is iti o n(B ) J o in t Ve n tu re(S te p 6 re p r es e n ts a c a p i ta l u til is a tio n fo c u s )

1 . O B JE C T IV E(A ) S ta r t b y p lo tt in g th e s a l e s p o s it io n y o u w is h to a c h ie v e a t th e e n d o f th e p l an n in g p e r io d , p o in t E .(B ) N e x t p lo t th e fo re c a s t re v e n u e p o s iti o n , p o in t A

2 . G A P A N A LY SIS (P rod uctiv ity )A re th e r e a n y a c tio n s y o u c an ta k e to c lo s e th e g a p u n d e r th e fo llo w in g h e a d in g s ? P lo t th e to ta l v a lu e o f t h e s e o n th e G a p A n a ly si s G ra p h o n th e le f t, p o in t B . (T h e s e re p re s e n t c a s h an d m a rg in fo cu s ) . N o w p ro c e ed to 3 b e lo w .

M arke t 1

E (O bjec tive)

D (N ew Produc ts/M arke ts )

C (M arke t Pene tra tion)

B (Productiv ity )

A (Forecast)

B ette r P roduct M ix (1 )

B ette r Sa les C alls (4 )

C harge For D elive ries

B ette r C ustom er M ix (2 )

Increase P rice

M ore Sales C alls (3 )

R educe D iscounts

Tota l

R evenueProductiv ity (N B : N ot a llfac to rs are m utually exc lusive)

R ev /Vol.

t + 0 t + 1 t + 2 t + 3 (budge t)

M arke t 1

M arke t 10

P roduct 1

Product 1

P roduct 1

0

Product 2

P roduct 2

Product 1

1

Product 3

Product 3

P roduct 1

2

E tc .E tc.

E tc.

M arke t 3M arke t 3

M arke t 12

M arke t 2 M arke t 2

M arke t 11

Ec t.

A :\m m 5\s pex e rc1 .cd r

Ect.

Ec t.

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Strategic planning exercise (gap analysis)2 profit



A N S O F F P R O D U C T /M A R K E T (M A R K E T P E N E T R AT IO N )

A N S O F F P R O D U C T /M A R K E T M AT R IX (N E W P R O D U C T S / N E W M A R K E T S )

(A ) L is t p r in c ip l e p ro d u c ts o n th e h o r iz o n ta l a x is a n d p r in c ip le m a rk e t s o n th e v e r tic a l ax is . In e a c h s m a lle r s q u a re w rit e in c u rre n t p ro f it a n d a c h ie v a b le p ro f i t v a lu e d u r in g t h e p la n n in g p e r io d .

(B ) N e x t , p lo t th e m ar k e t p e n e t ra t io n p o s iti o n , p o in t C . T h is p o in t w il l b e t h e a d d i tio n o f a ll th e v a lu e s in th e r ig h t h a n d h a lf o f th e s m a ll b o x e s i n th e A n s o ff M a tr ix . I f th e re is a g ap , p ro ce e d to 4 b e lo w .

N e x t, li s t th e v a lu e o f a n y n e w p ro d u c ts y o u m ig h t d e v e lo p w h ic h y o u m ig h t s e ll to e x i st in g m a rk e t s . A lte rn a tiv e ly, o r a s w e l l a s , i f n ec e s s a ry, lis t th e v a lu e o f a n y e x is ti n g p ro d u c t s th a t y o u m ig h t s e ll to n e w m a rk e ts . P lo t th e to ta l v a lu e o f th e s e o n th e G a p A n a ly si s G ra p h a b o v e , p o in t D . I f th e re i s s t ill a g a p p ro c e ed to 5 .

5 . G A P A N A LY SIS(D ivers ifica tion )

6 . G A P A N A LY SIS (C apita l U tilisa tion)

F in a l ly, lis t t h e p ro f it v a lu e o f a n y n e w p ro d u c ts y o u m ig h t d ev e lo p fo r n e w m a rk e t s u n t il p o in t E is re a c h ed . (S te p s 3 , 4 a n d 5 re p r es e n t a s a le s g r o w th fo c u s) .

I f n o n e o f th is g iv e s th e re q u i red r e tu rn o n in v es tm en t c o n s id e r c h an g in g th e a s s e t b as e . T h is c o u ld b e(A ) A cq u is iti o n(B ) J o in t Ve n tu re(S te p 6 re p r es e n ts a c a p i ta l u til is a tio n fo c u s )

1 . O B JE C T IV E(A ) S ta r t b y p lo t tin g th e p ro f it p o s i tio n y o u w is h t o a ch ie v e a t th e e n d o f th e p l an n in g p e r io d , p o in t E .(B ) N e x t p lo t th e fo re c a s t p ro f i t p o s i tio n , p o in t A

2 . G A P A N A LY SIS (P rod uctiv ity )A re th e r e a n y a c tio n s y o u c an ta k e to c lo s e th e g a p u n d e r th e fo llo w in g h e a d in g s ? P lo t t h e to ta l p ro f it v a lu e o f th e s e o n th e G a p A n a ly si s G ra p h o n th e le f t, p o in t B . (T h e s e re p re s e n t c a s h an d m a rg in fo cu s ) . N o w p ro c e ed to 3 b e lo w .

M arke t 1

E (O bjec tive)

D (N ew Produc ts/M arke ts )

C (M arke t Pene tra tion)

B (P roductiv ity )

A (Forecast)

B ette r P roduct M ix

B ette r Sa les C alls

C harge For D elive ries

B ette r C ustom er M ix

Increase P rice

R educe D eb tor D ays

M ore Sales C alls

R educe D iscounts

C ost R eduction

O thers (S pec ify )

Tota l

P ro fitP roductiv ity (N B : N ot a llfac to rs are m utually exc lusive)

R ev /Vol.

t + 0 t + 1 t + 2 t + 3 (budge t)

M arke t 1

M arke t 10

P roduct 1

Product 1

P roduct 1

0

Product 2

P roduct 2

Product 1

1

Product 3

Product 3

P roduct 1

2

E tc .E tc.

E tc.

M arke t 3M arke t 3

M arke t 12

M arke t 2 M arke t 2

M arke t 11

Ec t.Ec t.

Ec t.

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Marketing Strategies for achieving Plan Objectives

Profit improvement

Productivity improvement Sales growth

Productdevelopment

Marketdevelopment

Marketpenetration

Changeasset base

Existingassets

Costreduction

Improveasset

utilisation(experience

andefficiency)

Increaseprice /reduce

discounts

Improveproduct /sales mix(margins)

Newmarkets

Existingmarkets

Convertnon-users

Newsegments

Takecompetitors’customers

Increaseusage

Growth focusCash and margin focus

Investment• Innovation• Diversification

Divestment• Redevelopment of capital resources

Capital Utilisation focus

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The route to Sustainable Competitive Advantage (SCA)

Differentiation HighPrice

HighVolume

Sales Revenue

Low BusinessRisk

Low FinancialRisk

PositiveNPV SCA

Economiesof Scale

LearningCurve

High CashFlows

GearingInterest CoverWorking Capital RatioOperational Leverage

Financial

OperationsLowerCosts

Source: From Sri Srikanthan, Cranfield School of Management

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There are only three ways to create value

• Reduce costs

• Buy profitable (or sell unprofitable) business

• Create long-term demand from consumers

• Done to death

• Limited opportunities

• The only sustainable future

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Five Genuine Business Differentiators

• We take the long view– We are not tied to short term targets , we are committed to our

client’s long life value.• Our structure

– Our business structure and processes are designed to deliver the top quality, service, and speed expected by our clients . We further makes all our capabilities and technical readily accessible by our clients.

• Contracts & on time delivery– We engage with our clients using flexible contracts that meets

client’s long term timeframes.• Customer Satisfaction

– We manage our customers relations in away that eliminate complaints and ensure satisfaction.

• Products:– We deliver products that meets client’s specifications and

guarantees delivery of the desired the value.–

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Mass media

- objectives

- message strategy

- media strategy

Direct mail

- objectives

- strategy

Telephone

- objectives

- strategy

Personal contact

- objectives

- strategy

Electronic

- objectives

- strategy

PlaceDistribution

Strategy

e.g test drive,demonstration,5 senses

Integrated marketingcommunications plan

Channel/Medium Choice

Other

- PR

- POS

- etc

Define marketing strategy for promotion

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Quality and share both drive profitability

3827

20

25 2013

2114

7

High 60% 25% LowLow

High

40%

-1%

Relative Market Share

Relative ProductQuality

ROI (%)

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Strategy Period proforma income Statement

Performance ( Mn SAR)

Base year 2015

2016 2017 2018 2019 2020

Sales Revenue

COGS

GM

G&A Exp

Mkting Exp

R&D

Net Profit

NPM %

ROA %

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Potato Market Growth Rate During Strategy Period


Base year 2015

2016 2017 2018 2019 2020

Total Market Growth %

• Potato Sales %• Market Share %

• Customer Retention%• New Customers%• Dissatisfied Customers%

Relative Product Quality+/-Relative Service Quality+/-

R. New Products Sales+/-

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Onion Market Growth Rate During Strategy Period


Base year 2015

2016 2017 2018 2019 2020


• Onion Sales %• Market Share %




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Product X Market Growth Rate During Strategy Period


Base year 2015

2016 2017 2018 2019 2020


• Onion Sales %• Market Share %




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How TADCO Should Respond to Market & Customer’s Needs?

Product/Service

Customers

Processes

ProfessionalMarketing People

(UnderstandingMarket Needs)

(Creativity)

(Core Value) (Efficiency)

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Key Elements of World Class Marketing

1. A deep understanding of the market place2. Correct needs-based segmentation and

prioritisation3. Segment-specific propositions4. Powerful differentiation, positioning and branding5. Effective strategic marketing planning processes6. Long-term integrated marketing strategies7. A deep understanding of the needs of major

customers8. Market/customer-driven organisation structures9. Professionally-qualified marketing people10. Institutionalised creativity and innovation

Source: Professor Malcolm McDonald ©

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Are you getting these essential deliverables from your strategic marketing plan?

Score out of 10Market structure and segmentation• Is there a clear and unambiguous definition of the market we are

interested in serving?• Is it clearly mapped, showing product/service flows, volumes/values in

total, our shares and critical conclusions for our organisation?• Are the segments clearly described and quantified? These must be

groups of customers with the same or similar needs, not sectors.• Are the real needs of these segments properly quantified with the relative

importance of these needs clearly identified?Differentiation• Is there a clear and quantified analysis of how well our company satisfies

these needs compared to competitors?• Are the opportunities and threats clearly identified by segment?


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Detailed checklist of essential deliverablesfrom a strategic marketing plan

Score out of 10Scope· Are all the segments classified according to their relative potential for growth

in profits over the next three years and according to our company’s relative competitive position in each?

· Are the objectives consistent with their position in the portfolio? (volume, value, market share, profit)

· Are the strategies (including products, services and solutions) consistent with the objectives?

· Are the measurement metrics proposed relevant to the objectives and strategies?

· Are the key issues for action for all departments clearly spelled out as key issues to be addressed?

Value capture· Do the objectives and strategies add up to the profit goals required by our

company?· Does the budget follow on logically and clearly from all the above,

or is it merely an add on?


strategic marketing plan framework-adapted

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