Assess the practical value of strategic marketing planning models to today’s marketing managers. The four P’s are essential for any company wanting to implement the marketing concept, unfortunately these tools only concern the operational side of an organisation (they identify the wants and needs of a customer and then present them as a product). If a company wants to succeed and survive in the future they must focus on marketing planning, this concept concentrates on where the company currently is both internally and externally and the best way for long term progression.
Its purpose has been described by McDonald,(1989) as “to find a systematic way of identifying a range of options, to choose one or more of them, then to schedule and cost out what has to be done to achieve the objectives” (Brassington, F & S Pettitt, 2007, p422). There are two levels of planning involved in marketing, the annual plan and the strategic plan. The annual plan concerns short term prospects over one year.
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It is based on specific goals and objectives and concentrates on the companies financial budget and the action plans used to achieve the such goals (during this stage it is not uncommon for some of the four P’s to be continuously adjusted to adapt to on going change). The strategic plan is focused on the long term and takes a more corporate view, it reviews a company’s internal and external environments using a market audit, looks at resources for both the present and the future and has strategic goals to adhere to, all of which follow the businesses mission statement.
Although finance is important in companies a qualitative rather than quantitative approach is beneficial and helps both types of plan to grow. The marketing audit, a definition, “the systematic audit is a comprehensive systematic, independent & periodic examination of an organisations marketing environment, objectives, strategies and activities, with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s performance” Kotler. This is normally the first part of planning that then leads onto the marketing planning models used by market managers today.
It analyses the macro environment concerning SLEPT factors, the Social, Legal, Economic, Physical/Political and technological concerns of a business and the external micro environment; the suppliers, customers, competitors and distributors. The internal audit focuses on decisions and whether the marketing actions and allocated resources are appropriate for opportunities and constraints (Brassington, F & S Pettitt, 2007, p426). When all aspects of the audit is complete a SWOT analysis is performed to assess the results. SWOT deals with the internal strengths and weaknesses and the external opportunities and threats.
The strengths and weaknesses concern the four P’s and the package offered to the public or target audience. It involves competition between companies especially when concerning price and quality i. e. a strength would be a lower price but a weakness if the price was lower due to competition forcing you to do so. The threats and opportunities focus more on the future, a company may look to get costs down (an opportunity) whereas competitors would see this as a threat. This analysis allows companies to find out where they are now, identifying what to do next.
This planning model is practical and a useful tool in todays business world as it identifies all areas of concern and highlights where focus should be. Unfortunately although weaknesses can be overcome by opportunities, strengths can be overcome by threats! Portfolio models also known as marketing planning models must look at the corporate picture as a whole and when looking at the product itself decide whether a company has enough strong products to out number the weaker ones and if not design new ideas in order to replace those declining.
A good way to do such analysis is using the product life cycle. This model identifies where your product is. It is comprised of five stages; the pre launch, this is the advertising and non profitably side of a launch (I. e the current James Bond movie) money is spent marketing the product just before its introduction, the next stage. At this point the product starts to make some of the profit back, it becomes more established and ales slowly rise over time as the target segment become more aware of what’s on offer ( the mac book).
This leads onto the growth stage, profits rise considerably and the product becomes established, the competition become aware and analyse the threat posed to them (the new Xbox). Competitors will try to divert attention away which could effect the rate of the growth curve (Brassington, F & S Pettitt, 2007, p204). As a product reaches maturity (an example would be coca cola) if a secure fan base has emerged the supplier must now look at keeping them interested. If a product begins to date or tire a newer, more desirable one must be available.
If this is not the case the product will go into decline, the profits will fall and the marketing or management will be to blame (the digital free view box). The BCG Matrix also known as the Boston Box relates well to the product life cycle. It is comprised of two dimensions, the first looks at the growth of a product in the market and then the market share. There are four elements, the dog, this has a low growth and a low share with little chance of improvement, it either diminishes or moves into the next sector of the matrix the question mark.
This has a low share still but a high growth yet is still at its introduction stage. Establishing yourself further at this point has to be cost effective and successful for the product to become a star. The product now has a high growth and high share it is the market leader and can sustain itself, but it still needs high levels of support eventually the star may become the cash cow, the last dimension of the matrix. Not as much support is needed as the share is still high yet the growth would have tailed off.
These positions remain dominant. When analysing the practical use of such planning models to today’s marketing managers the marketing audit allow you to interpret aspects of the world that indefinately affect the product about to be marketed. It identifies the legalities concerning already existing products and government standards (I. e. with health and safety), evaluates the social demographics, public opinions and the economic situation of society before release.
As the WI progresses in maturity the extended versions such as WI fitness must be released at a time there is economic stability, the idea must not be copy righted and the consumer must be ready for a next stage in development. Swot analysis allow already existng firms to evaluate where to go next. Once the strenghs and weaknesses have been identified new opportunities can be taken advantage of, e. g Tesco. Once established they were able to posion services such as car insurance and home delivery and create own brand products where other supermarkets failed.
Without such marketing planning models there would be no identification of strenghs and weakenesses and they wouldn’t have gained such competitive advantage. Strenghs encourage the product where weaknesses avoid economical change and identify threats. The product life cycle allow the distributor to follow a new product from start to finish, the pre launch menat the money spent on marketing for James Bond lead onto a positive introduction of the product.
Although James Bond as a brand is at maturity it still reintroduce new extensions to avoid ever going into decline. The BCG is similar as it evaluates the share and growth at each stage and allows investment tp be monitored effectively. Coca cola is established as a star but also falls into the category of a cash cow as more products are reinvented I. e with lemon to keep the brand on top. Although successful the BCG matrix identified a product successful in launch, Ki ora and relised it would not progress so discontinued it avoiding unnessacery loss of investment.