Marketing

Management
BBA Semester – III

Presented by:
Dr. Dignesh S. Panchasara
M.Com. (MM), M.Com. (HRM), GSET, Ph.D.
Assistant Professor,
Department of Commerce and Business Management
Faculty of Commerce
The Maharaja Sayajirao University of Baroda
STRATEGIC MARKETING
PLANNING
Introduction
 “Without a strategy, the organisation is like a ship without a rudder” – Joel
Ross and Michael Kami
 In a hyper competitive marketplace, companies can operate successfully by
creating and delivering superior value to target customers and also
learning how to adapt to a continuously changing market place.
 So to meet changing conditions in their industries, companies need to be
farsighted and visionary, and must develop long-term strategies.
 Strategic planning involves developing a strategy to meet competition and
ensure long-term survival and growth.
 The marketing function plays an important role in this process and it
provides information and other inputs to help in the preparation of the
organization’s strategic plan.
Introduction
 Strategic planning seeks to address three deceptively simple questions,
specifically:
◦ Where are we now? (Situation analysis)
◦ What business should we be in? (Vision and mission)
◦ How should we get there? (Strategies, plans, goals and objectives)
 A fourth question may be added to the list, namely 'How do we know when
we got there?'
 Due to increasing need for accountability, many marketing organizations use a
variety of marketing metrics to track strategic performance, allowing for
corrective action to be taken as required.
 On the surface, strategic planning seeks to address three simple questions,
however, the research and analysis involved in strategic planning is very
sophisticated and requires a great deal of skill and judgment.
Introduction
 Strategic Marketing Planning involves
◦ Brand strategy
◦ Product strategy
◦ Sales strategy
◦ Sales promotion strategy
◦ Advertising strategy
 These strategies have to be carefully formulated and
implemented to ensure long term sustainability of the
business.
Introduction
 Strategic marketing planning is the process of
communicating and sharing data between different
departments of the organization to collectively form
future strategies and implement them with maximum
efficiency.
STRATEGIC MARKETING
PLANNING
CHARACTERISTICS
Strategic Marketing Planning
Characteristics
 Top Management Involvement
◦ Strategic planning or formulation of strategy is directly involved
in building up the future of the company.
◦ Strategic decisions primarily involve development of long-term
objectives and policy formulation of the organization.
◦ Thus, it becomes imperative that these decisions are taken by
the top level management of an organization as it requires a lot
of wisdom and insight on the part of decision-makers.
Strategic Marketing Planning
Characteristics
 Involves Huge Allocation of Resources
◦ Strategic decisions involve commitment of the firm for a long
period of time and on major issues related to overall
organization.
◦ Thus, it requires deployment of resources in huge volumes in
terms of men, material, money, machines and time.
Strategic Marketing Planning
Characteristics
 Impact on Long-Term Survival and Success of
the Firm
◦ Strategic planning, having a long- term commitment in terms of
organizational objectives, are usually said to have a strong impact
on the success of the firm.
◦ A good strategy formulation may bring company to new heights
whereas a weak strategy formulation may ruin the company.
Strategic Marketing Planning
Characteristics
 Future-Oriented
◦ Strategic planning is done for the purpose of implementation in
future.
◦ It is shaping of the future today.
◦ Strategies are proactive plan of actions developed for future
execution.
◦ Strategic planning aims at reducing the total uncertainty of the
future by devising goals and objectives and methodologies to
attain them.
Strategic Marketing Planning
Characteristics
 Sensitive to the Environment
◦ Strategic planning in order to be effective requires maintaining a
balance between internal strengths and weaknesses of an
organization with the external opportunities and threats
stemming from the environment.
◦ The main prerequisite of strategic planning is that it should be
responsive to the environmental factors and be capable of
adapting the changes.
STRATEGIC MARKETING
PLANNING PROCESS
Strategic Marketing Planning
Process
 Strategic marketing planning process consists of
following steps:
◦ 1. Conduct a situation analysis
◦ 2. Determine marketing objectives
◦ 3. Select target markets and measure the market
demand
◦ 4. Design a strategic marketing mix
◦ 5. Prepare an annual marketing plan.
Strategic Marketing Planning
Process
 Situation Analysis:
◦ It is review of company’s marketing programme.
◦ By analysis where the programme has been and where it is now,
management can determine where the programme should go in the
future.
◦ A situation analysis normally includes an analysis of the external
environmental forces and the non-marketing resources that
surrounds the organization’s marketing programme.
◦ A situation analysis also includes a detailed review of the company’s
present marketing mix – its product and pricing situation, its
distribution system and its promotional programme.
Strategic Marketing Planning
Process
 Determine the Marketing Objectives:
◦ The next step in the marketing planning process is to determine
the marketing objectives.
◦ As with organizational objectives, the marketing goals should be
realistic, specific, measurable and mutually consistent.
◦ And they should be clearly stated in writing.
◦ The goals at the marketing level are closely related to the
company wide goals and strategies.
◦ In fact a company strategy often translates into a marketing goal.
Strategic Marketing Planning
Process
 Selection of Target Markets:
◦ Selections of target markets is obviously the key step in
marketing planning.
◦ Management should analyse existing markets in detail and
identify potential markets.
◦ At this point, management also should decide to what extent
and in what manner, it wants to segment its markets.
◦ As part of this step in the planning process, management also
should forecast its sales in its various markets.
Strategic Marketing Planning
Process
 Designing a Strategic Marketing Mix:
◦ Management next must design a strategic marketing mix that
enables the company to satisfy the wants of its target markets
and to achieve its marketing goals.
◦ The design and later the operation of the marketing mix
components, constitute the bulk of a company’s marketing effort.
Strategic Marketing Planning
Process
 Preparing Annual Marketing Plan:
◦ Periodically, the ongoing strategic marketing planning process in an
organization culminates with the preparation of a series of short term
marketing plans.
◦ These plans usually cover a period of a year.
◦ In some industries, it is necessary to prepare these plans for even shorter
time periods because of the nature of the product or market.
◦ A separate annual plan should be prepared for each product line, major
product, brand or market.
◦ An annual marketing plan is the master guide covering a year’s marketing
activity for the given business unit or product.
◦ The plan then becomes, the how-to do it document that guides executives
in each phase of their marketing operations.
STP
MARKETING MODEL
STP Marketing Model
 STP Marketing Model (Segmenting, Targeting, Positioning) is a framework that simplifies
the process of market segmentation.
 Your marketing will be much more successful if you segment your market into groups,
target the right groups, and position your products and services towards those groups.
 Even a company like Coca-Cola, operating in over 200 countries and selling to well over a
billion people per day, offers different products to suit different types of people.
 A mistake many companies make is to think that anyone can be their customer. Taking this
approach can make it difficult to sell your product or service because none of your
prospective customers will feel as though your solution is tailored to them and their
needs.
 To achieve easier sales, you can use the STP marketing model to divide your market into
segments, select the most attractive segments, and then position your product or service
in the marketplace to be the most appealing to your target segments.
STP Marketing Model
STP Marketing Model
 1. Segmentation
◦ The first step of the STP process is to segment your market. In
this step, you divide your market into groups (segments) based
on some criteria. There are a number of criteria you can use to
segment your market:
◦ Demographic: Dividing your market based on any combination
of age, gender, income level, education level, marital status,
occupation, ethnicity, etc.
◦ Geographic: Sorting your market by country, region, state or
province, city or urban area, neighborhood, etc.
STP Marketing Model
◦ Psychographic: Segmenting people by lifestyle, hobbies, activities,
opinions, religious views, political affiliation, entertainment choices,
personality traits, attitudes, etc. While demographic information
explains “who” your potential customer is, psychographic
information explains “why” they buy.
◦ Behavioral: Breaks down your market by how they use the
product, including how the purchase was financed, brand loyalty,
usage level, key benefits sought/key features used, etc.
◦ When you divide your market into segments and then focus your
marketing on a specific segment driven by the information you’ve
gathered about that segment, then you are much more likely to be
successful than if you simply created a one size fits all generic
marketing campaign.
STP Marketing Model
 2.Targeting
◦ Targeting involves deciding which of the segments you’ve
identified are the most attractive. Essentially, you’re trying to
determine the commercial attractiveness of each segment.
◦ There are a number of factors you can consider to do this:
◦ Size: of the segment and it’s potential to grow in size.
◦ Profitability: of the segment. What segments are prepared to
pay the most for your product or service? What is the lifetime
value of a customer (LTV)?
STP Marketing Model
◦ Ease of reach: How easy or difficult it is for you to reach the
market with your marketing? Can your distribution networks
easily reach this segment? What is the cost of acquisition of a
customer for this segment (CAC)?
◦ Ultimately, it isn’t just the size of a segment you should consider
but the overall profitability of each segment. Ideally, you’d like to
find a growing and highly profitable segment where the lifetime
value is large (LTV) and the cost of acquisition (CAC) is low.
◦ PEST analysis and SWOT analysis can be useful strategy tools to
help you think about the opportunities and threats that might
affect each market you are considering.
STP Marketing Model
 3. Positioning
◦ In the final step, positioning, you map out the different variables
considered in the previous two steps and position your product
differently to your competitors in the minds of your customers.
◦ You want your product or service to take a unique position in
the market. In marketing terms, this is called your value
proposition.
◦ There are three standard ways you can position your product to
achieve a competitive advantage.
STP Marketing Model
◦ Functional Positioning: refers to solving a problem or providing
a benefit to customers.
◦ Symbolic Positioning: refers to enhancing the self-image, ego, or
belongingness needs of your customers. Luxury cars market
themselves using symbolic positioning. They get you from A to B just
like any other car, but unlike other cars, they fulfill their customer’s
self-esteem and ego needs.
◦ Experiential Positioning: refers to focusing on those elements of
your product or brand that connect emotionally with your
customers.
◦ Ideally, you want your product or brand to combine all three
positioning factors to put it at a competitive advantage to your
competitors in that segment.
There are a number of advantages and disadvantages
associated with the STP marketing model.

 Advantages
◦ It allows you to increase sales by defining a precise target market
and then positioning products directly at these segments.
◦ It helps you to identify gaps in the market.
◦ It helps you avoid wasting money by advertising to the whole
market.
◦ The STP marketing model allows small companies and startups,
who can’t compete with the bigger whole-market players, to find
success in niche markets.
There are a number of advantages and disadvantages
associated with the STP marketing model.

 Disadvantages
◦ Costs can increase if you have to produce multiple versions of
your product or service.
◦ You will need to create different marketing campaigns and
collateral for each segment you decide to target. Again, this
increases your costs.
◦ You may need to use different distribution channels to reach
different customer segments.
Conclusion
 The STP Marketing Model is a three-step process
designed to help you identify your most profitable
customers and then tailor your marketing to the needs
of those customers.
 The three steps of the STP process are:
◦ Segmentation: Divide your market into segments.
◦ Targeting: Identify the most attractive segments to your
organization.
◦ Positioning: Position your product or service to appeal to your
target audience.
 Presented by:
Dr. Dignesh S. Panchasara
M.Com. (MM), M.Com. (HRM), GSET, Ph.D.
Assistant Professor,
Department of Commerce and
Business Management, Faculty of
Commerce, The Maharaja Sayajirao
University of Baroda
E-Mail: digneshpanchasara@gmail.com
Mobile No.: +91 7874122777