Introduction Businesses that succeed do so by creating and keeping customers.

They do this by providing better value for the customer than the competition. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (competitive advantage). The main problem with this process is that the environment in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning. Where does marketing planning fit in with the overall strategic planning of a business? Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.
Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the environment. Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!). However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of

marketing decision-making in such a complex situation? This calls for wellorganised marketing planning. What are the key issues that should be addressed in strategic and marketing planning? The following questions lie at the heart of any marketing and strategic planning process: Where are we now? How did we get there? Where are we heading? Where would we like to be? How do we get there? Are we on course? Why is marketing planning essential? Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected. It makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services. A marketing plan is useful to many people in a business. It can help to: Identify sources of competitive advantage Gain commitment to a strategy Get resources needed to invest in and build the business Inform stakeholders in the business Set objectives and strategies Measure performance

Market analysis - defining the market

Author: Jim Riley Last updated: Sunday 23 September, 2012

All businesses operate in markets. But what is a market? And how can it be defined? It is important to be careful about how a market is defined. The following key marketing processes rely on a relevant market definition: - Measuring market share - Measuring market size and growth - Specifying target customers - Identifying relevant competitors - Formulating a marketing strategy A market can be defined as follows: A market is the set of all actual and potential buyers of a product or service. This definition suggests that a market is the total value and/or volume of products that satisfy the same customer need. For example, if the customer need is eat breakfast, then the relevant market could be defined as the Breakfast Food Market. Many products would be relevant to measuring and analysing such a market: - Breakfast Cereals - Nutrition Bars - Porridge / Oats - Speciality Breads (e.g. croissants) - Fast-food Outlets serving breakfast In defining a market, it is important not to focus only on products/services that currently meet the customer need. For example, the button manufacturer who believed that their market was the button market would have made some poor marketing decisions unless he had seen the arrival of products such as Velcro and zips which also satisfy the same need to fasten clothes. Thinking about customer needs first and then identifying the products that meet those needs is the best way to define a market.

However, it is also important not to define a market too broadly. For example, it is not particularly helpful for a marketing manager to define his or her market as the food market or the transport market. The purpose of market definition is to provide a meaningful framework for analysis and decision-making. For example; consider the entertainment market. The customer need is to be entertained. There are many products and services that can claim to meet that need in different ways: At home: - Television - Radio - Video - DVD - Games Consoles Outside the Home: - Cinema - Theatre - Theme Parks - Opera - Sporting Events It is important to avoid too broad a definition of a market. For example, it will be more manageable for marketing managers in the sporting events market to further refine their market definition into more detailed classes or segments. To help with calculating market share, the following definitions are helpful: Product class e.g. computers, televisions, holidays Product subclass e.g. laptops, digital televisions, long-haul holidays Product brands e.g. Dell, Panasonic, Kuoni Kuoni as a brand, for the purposes of measuring market share, is only concerned with the aggregate of all other travel brands that satisfy the same group of

customers. However, Kuoni also needs to be aware of the trends in long haul holidays and the holiday market in general.

Competitor analysis - types

Author: Jim Riley Last updated: Sunday 23 September, 2012
The tables below lists the kinds of competitor information that would help businesses complete some good quality competitor analysis. You can probably think of many more pieces of information about a competitor that would be useful. However, an important challenge in competitor analysis is working out how to obtain competitor information that is reliable, up-to-date and available legally(!).

What businesses probably already know their competitors Overall sales and profits Sales and profits by market Sales by main brand Cost structure Market shares (revenues and volumes) Organisation structure Distribution system Identity / profile of senior management Advertising strategy and spending Customer / consumer profile & attitudes

Customer retention levels What businesses would really like to know about competitors Sales and profits by product Relative costs Customer satisfaction and service levels Customer retention levels Distribution costs New product strategies Size and quality of customer databases Advertising effectiveness Future investment strategy Contractual terms with key suppliers Terms of strategic partnerships

Strategic management & the link to marketing

Author: Jim Riley Last updated: Wednesday 24 October, 2012
Introduction

Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition. Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (competitive advantage). The main problem with this process is that the environment in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning. Where does marketing planning fit in with the overall strategic planning of a business? Strategic planning is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.
Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the environment. Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!). However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of marketing decision-making in such a complex situation? This calls for wellorganised marketing planning.

What are the key issues that should be addressed in strategic and marketing planning? The following questions lie at the heart of any marketing and strategic planning process: Where are we now? How did we get there? Where are we heading? Where would we like to be? How do we get there? Are we on course? Why is marketing planning essential? Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected. It makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services. A marketing plan is useful to many people in a business. It can help to: Identify sources of competitive advantage Gain commitment to a strategy Get resources needed to invest in and build the business Inform stakeholders in the business Set objectives and strategies Measure performance

Competitor Analysis - Meaning, Objectives and Significance

Organizations must operate within a competitive industry environment. They do not exist in vacuum. Analyzing organizations competitors helps an organization to discover its weaknesses, to identify opportunities for and threats to the organization from the industrial environment. While formulating an organizations strategy, managers must

consider the strategies of organizations competitors. Competitor analysis is a driver of an organizations strategy and effects on how firms act or react in their sectors. The organization does a competitor analysis to measure / assess its standing amongst the competitors. Competitor analysis begins with identifying present as well as potential competitors . It portrays an essential appendage to conduct an industry analysis. An industry analysis gives information regarding probable sources of competition (including all the possible strategic actions and reactions and effects on profitability for all the organizations competing in the industry). However, a well-thought competitor analysis permits an organization to concentrate on those organizations with which it will be in direct competition, and it is especially important when an organization faces a few potential competitors.

Michael Porter in Porters Five Forces Model has assumed that the competitive environment within an industry depends on five forces- Threat of new potential entrants, Threat of substitute product/services, bargaining power of suppliers, bargaining power of buyers, Rivalry among current competitors. These five forces should be used as a conceptual background for identifying an organizations competitive strengths and weaknesses and threats to and opportunities for the organization from its competitive environment. The main objectives of doing competitor analysis can be summarized as follows:
To study the market;

To predict and forecast organizations demand and supply;

To formulate strategy;

To increase the market share;

To study the market trend and pattern;

To develop strategy for organizational growth;

When the organization is planning for the diversification and expansion plan;

To study forthcoming trends in the industry;

Understanding the current strategy strengths and weaknesses of a competitor can suggest opportunities

and threats that will merit a response;

Insight into future competitor strategies may help in predicting upcoming threats and opportunities.

Competitors should be analyzed along various dimensions such as their size, growth and profitability, reputation, objectives, culture, cost structure, strengths and weaknesses, business strategies, exit barriers, etc.

Strategy formulation refers to the process of choosing the most appropriate course of action for the realization of organizational goals an objectives and thereby achieving the organizational vision. The process of strategy formulation basically involves six main steps . T these steps do not follow a rigid chronological order, however they are very rational and can be easily followed in this order. 1.

Setting Organizations objectives - The key component of any strategy statement is to set the long-term objectives of the org is known that strategy is generally a medium for realization of organizational objectives. Objectives stress the state of being the Strategy stresses upon the process of reaching there. Strategy includes both the fixation of objectives as well the medium to be realize those objectives. Thus, strategy is a wider term which believes in the manner of deployment of resources so as to achie objectives.

While fixing the organizational objectives, it is essential that the factors which influence the selection of objectives must be analyzed before the selection of objectives. Once the objectives and the factors influencing strategic decisions have been determined, it is easy to take strategic decisions. 2. Evaluating the Organizational Environment - The next step is to evaluate the general economic and industrial environment in which the organization operates. This includes a review of the organizations competitive position. It is essential to conduct a qualitative and quantitative review of an organizations existing product line. The purpose of such a review is to make sure that the factors important for competitive success in the market can be discovered so that the management can identify their own strengths and weaknesses as well as their competitors strengths and weaknesses. After identifying its strengths and weaknesses, an organization must keep a track of competitors moves and actions so as to discover probable opportunities of threats to its market or supply sources. 3. Setting Quantitative Targets - In this step, an organization must practically fix the quantitative target values for some of the organizational objectives. The idea behind this is to compare with long term customers, so as to evaluate the contribution that might be made by various product zones or operating departments. Aiming in context with the divisional plans - In this step, the contributions made by each department or division or product category within the organization is identified and accordingly strategic planning is done for each sub-unit. This requires a careful analysis of macroeconomic trends. Performance Analysis - Performance analysis includes discovering and analyzing the gap between the planned or desired performance. A critical evaluation of the organizations past performance, present condition and the desired future conditions must be done by the organization. This critical evaluation identifies the degree of gap that persists between the actual reality and the long-term aspirations of the organization. An attempt is made by the organization to estimate its probable future condition if the current trends persist. Choice of Strategy - This is the ultimate step in Strategy Formulation. The best course of action is actually chosen after considering organizational goals, organizational strengths, potential and limitations as well as the external opportunities.

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