MARK101 Week 2 Notes

Lecture Outline

  • NPD (New Product Development) and the Marketing Plan assignment.
  • Marketing Strategy
  • Company-wide strategic planning
  • Recap - What is Marketing?

Reading

  • Chapter 2

Roadmap

  • Weeks 2, 3, & 4: Tutorials 1-4
  • Weeks 5-10: Tutorials 4-6
  • Week 11: International Business

Company-wide Strategic Planning: Defining Marketing’s Role

  • Strategic planning is the process of developing and maintaining a strategic fit between the organisation’s goals and capabilities and its changing marketing opportunities.
  • Figure 2.1 Steps in strategic planning

Defining a Market-Oriented Mission

  • A mission statement is a statement of the organisation’s purpose – what it wants to accomplish in the larger environment.
  • A mission statement should:
    • Be market-oriented.
    • Be defined in terms of satisfying basic customer needs.
    • Be meaningful and specific, yet motivating.
    • Emphasise the organisation’s strengths in the marketplace.
    • Not be stated as making more sales or profits.
  • This can also be referred to as organization-wide strategic planning.

Marketing Myopia

  • Traditional, but inappropriate products or technology-based definitions of business:
    • Railways
    • Oil
    • Computers
    • Photocopiers
  • Appropriate customer need-based definitions of the business:
    • Transportation
    • Energy
    • Information Processing
    • Office Productivity
  • Myopic Thinking

Market-Oriented Business Definitions (Table 2.1)

  • Starbucks
    • Product-oriented definition: We sell coffee and snacks.
    • Market-oriented definition: We sell ‘The Starbucks Experience’, one that enriches people’s lives one moment, one human being, one extraordinary cup of coffee at a time.
  • Cinnabon
    • Product-oriented definition: We sell cinnamon buns baked fresh in our stores.
    • Market-oriented definition: Our mission is to spread warmth – not only in our bakeries but also in our community.
  • Instagram
    • Product-oriented definition: We are a social networking app for posting photos and videos.
    • Market-oriented definition: We help people capture and share the world’s moments.
  • Ikea
    • Product-oriented definition: We offer a wide range of well-designed, functional home-furnishing products at prices so low that as many people as possible will be able to afford them.
    • Market-oriented definition: We help people create a better everyday life at home.
  • Triple J
    • Product-oriented definition: We are the national youth broadcaster for young Australians.
    • Market-oriented definition: We champion new music and artists, and bring young Australians the ‘latest, greatest music and the stories that matter’.
  • Sephora
    • Product-oriented definition: We are a beauty products retailer.
    • Market-oriented definition: We sell lifestyle and self-expression by helping customers to unlock their beauty potential.
  • Ritz Carlton
    • Product-oriented definition: We rent rooms.
    • Market-oriented definition: We create ‘The Ritz Carlton experience’ – a memorable stay that far exceeds guests’ already-high expectations.

Patagonia’s Mission

  • Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.
  • We’re in business to save our home planet.
  • The company expresses its reason for being in existence as one that is consistent with the "use of all its resources to protect life on Earth."

Setting Company Objectives and Goals

  • Organisations need to turn their mission into detailed supporting objectives for each level of management.
  • Corporate Objectives (high-level) versus Marketing Objectives (lower-level)

Identifying and Analysing the Business Portfolio

  • The business portfolio is the collection of businesses and products (SBUs) that make up the company.
  • Example of SBUs: Cotton On group brands (Cotton On, Cotton On Kids, Cotton On Body, Factorie, Rubi, Typo, Supré, Ceres Life).

Definitions: Developing Strategies for Growth

  • Market penetration is company growth by increasing sales of current products to current market segments without changing the product.
  • Market development is company growth by identifying and developing new market segments for current company products.
  • Product development is company growth by offering modified or new products to current market segments.
  • Diversification is company growth through starting up or acquiring businesses outside the company’s current products and markets.

Customer Value-Driven Marketing Strategy and the Marketing Mix

  • Market segmentation
  • Market targeting
  • Differentiation
  • Positioning
  • Example: Red Bull

The Marketing Plan Assignment (Fix and Fogg)

  • Role: Marketing manager for Fix and Fogg.
  • Task: Develop a new product for Fix and Fogg and prepare a marketing plan.
  • Launch: New Zealand by March 2026.
  • Target Market: New Zealand.
  • Requirements:
    • Conduct research to identify a new product opportunity.
    • Identify and justify an appropriate opportunity for Fix and Fogg.

New-Product Development Strategy

  • A business can obtain new products in two ways:
    • Through acquisition, i.e. by buying a whole company, a patent or a license to produce someone else’s product.
    • Through the firm’s own new-product development.
  • New-product development refers to the development of original products, product improvements, product modifications and new brands though the company’s own research and development (R&D) efforts.

Branding Decisions for New Product Development

  • Brands can be developed in three main ways:
    • Line extensions refer to extending an existing brand name to new forms, colours, sizes, ingredients or flavours of an existing product category.
    • Brand extensions refer to extending an existing brand name to new product categories.
    • Multibrands refers to marketing many different brands in a given product category.
    • New brand names arise to update a waning brand name, or are created when a company enters a new product category.

Four Brand Strategies

  • Line Extension: Existing Brand Name, Existing Product Category
  • Brand Extension: Existing Brand Name, New Product Category
  • Multibrands: New Brand Name, Existing Product Category
  • New Brands: New Brand Name, New Product Category

Vitaminwater Examples

  • Line extension examples: different flavours (tropical citrus, tropical mango, kiwi strawberry, orange-orange)

Gap Examples

  • Brand extension: Gap Kids.

Unilever Examples

  • Multibrands: Hellmann’s, Dove, Axe, Knorr, Vaseline, etc.

Lexus Examples

  • New Brands.

Four Brand Strategies (Revisited)

  • Line Extension: Existing Brand Name, Existing Product Category
  • Brand Extension: Existing Brand Name, New Product Category
  • Multibrands: New Brand Name, Existing Product Category
  • New Brands: New Brand Name, New Product Category

The Marketing Plan

  • Situational Analysis
    • Macro-environmental Analysis
    • Customer Analysis
    • Channels & Logistics Analysis
    • Competitive Analysis
    • Product Analysis
    • TOWS Analysis
  • Marketing Objectives
    • Need to understand the Brand’s Identity
  • Marketing Strategies & Tactics
    • Market Targeting & Positioning Strategies
    • Product Programme
    • Pricing Programme
    • Communication Programme
    • Distribution Programme
  • Action Programmes
    • Implementation Plans, Evaluation & Control
  • Budget
  • Controls
  • Organisation Strategy
  • Organisation Mission, Goals & Objectives

Key Takeaways

  • Strategic Planning
  • Marketing Strategy
  • New Product Development and the Marketing Plan Assignment