Developing And Managing A Strategic Marketing Plan

Published Date: 02 Nov 2017

Candidate Name:

A.H.M . Rehan Kabir

Candidate Number:

0305112409

Centre Name :

Centre No:

East End College of Business & Computing,

10562

Submitted to:

Dr. Ikbal

Assignment Title:

1-Management and Leadership

Course Title & Coursework Title

Level 7, Extended Diploma in Strategic Management & Leadership

Unit 7: Strategic Marketing Management

Word Count

4,696

Submission Date

20/11/2012.

Authentic work declaration

I declare that the attached is my own, authentic work. I am aware of, and accept, all applicable EDEXCEL regulations governing student malpractice, and have referenced my work in accordance with the EDEXCEL Referencing Guidelines.

Plagiarism declaration

I have read and understood the EDEXCEL guideline on plagiarism, as set out in the IAM handbook. In particular I understand that plagiarism, if detected, will lead to a zero mark and possible suspension from EDEXCEL registration.

Table of Contents

Page No.

Introduction

3

Task one: Developing and Managing a Strategic marketing Plan

3

Task 2: Applying strategic marketing management to a market situation

8

Conclusion

15

References

16

Unit 7: Strategic Marketing Management

Unit 7: Strategic Marketing Management

Introduction:

Now a day’s marketing management has become the most popular term in the business world. According to Kotler (2000) marketing management generally deals with exploration and fulfilling human and social needs. Kotler defined marketing as "meeting needs profitably". People who feel overweight and want tasty food but fat free, those who want to buy or sell used car, people who want good furniture at a lower price etc. are the examples of a new business opportunity through marketing. It has been observed that the marketing function implemented under many names within profit and non-profit organizations.

This assignment have two parts, first part is actually made based on scenario given to the author at task one. Here, by the marketing manager in order to present in front of the broad of directors that might be helpful to make a strategic marketing plan for developing the management in the organization. Second part of the report specially highlighted application for the strategic marketing plan at a given situation. Under the task two the author tried to analyze a fast food chain organization in London named as Kebabish.

Task one: Developing and Managing a Strategic marketing Plan

Strategic marketing management and its role in an organization:

Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm's objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm's objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. to achieve organizational goals. It is generally the highest level of managerial activity, usually indicated by the board of directors and executed by the firm's Chief Executive Officer (CEO) and executive team. Strategic management hopes to provide overall direction to the company has ties to the field of organizations. "Strategic management is an ongoing process that assesses the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors; and then reassesses each strategy annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it has succeeded or needs replacement by a new strategy to meet changed circumstances, new technology, new competitors, a new economic environment., or a new social, financial, or political environment (Lamb, 1984).

The most important functions of strategic management are that organizations of all types and sizes continually face changing situations. These changes may be minor or significant, but there is still change to cope with. Being able to cope effectively with these uncertainties in the external and internal environments and achieve expected levels of performance is a real challenge. However, this is where strategic management comes in. by systematically following the strategic management process; strategic decision makers examine all the important aspects in order to determine the most appropriate decisions and actions. The deliberate structure of the strategic management process forces organizational employees to examine relevant variables in deciding what to do and how to do it. In fact, some recent studies of the strategy decision process suggest that the way strategy is developing can make a difference in performance, also. For instance, one study of strategic decision makers found that those who collected information and used analytical techniques made more effective strategic decisions than those who did not. And that's what strategic management is all about, which are analyzing the situation and proceeding from there to develop and implement appropriate strategies (F.W.Gluck et al, 1982).

Moreover, Strategic Management gives a broader perspective to the employees of an organization and they can better understand how their job fits into the entire organizational plan and how it is co-related to other organizational members. It is nothing but the art of managing employees in a manner which maximizes the ability of achieving business objectives. The employees become more trustworthy, more committed and more satisfied as they can co-relate themselves very well with each organizational task. They can understand the reaction of environmental changes on the organization and the probable response of the organization with the help of strategic management. Thus the employees can judge the impact of such changes on their own job and can effectively face the changes. The managers and employees must do appropriate things in appropriate manner. They need to be both effective as well as efficient (www.managementstudyguide.com).

Steps associated with strategic marketing strategy:pass

Relationship between strategic marketing and corporate strategy:

Market strategy is a process that can allow an organization to concentrates its limited resources on the greatest to increase sales and achieve a sustainable competitive advantage". A marketing strategy should be centred on the key concept that customer satisfaction is the main goal" (Neil Richardson, 2008).

A corporate marketing strategy is a broad marketing plan that creates guidelines to be used throughout the company. Part of this strategy can include company branding and logos. Such a marketing plan is typically designed at the senior management level. The strategy filters down and is followed by all employees who market the company's brand, products, and services. Products and services that follow a corporate marketing strategy are usually easily identified by consumers as coming from that company.

2.1. Value of models used in strategic marketing planning:

Given the demands of today's competitive and dynamic environment, it is quite challenging to understand strategic issues facing organizations and develop the capability for long term organizational success. This report aims to present a critically analysis of three frameworks across organizations: Porter's Five Forces, Value Chain and Balanced Scorecard.

As powerful strategic management tools, Porter's Five Forces, Value Chain and Balanced Scorecard frameworks are linked and interacted each other in a wide circle of business in context. Porter's Five Forces and Value Chain both help strategic managers to make decision on the basis of organizational external environment and internal analysis. The two frameworks are especially valuable for managers to develop and implement long-term strategy for organizations so as to build and maintain competitive advantages in the long run. And Balanced Scorecard can ensure and monitor the executions of strategy made by managers in a set of well-structured measures.

Another important tool of analyzing marketing plan is SWOT Analysis. Here, SWOT means for strength, weakness, opportunities and threat. It is an easy-to-use tool for developing an overview of a company’s strategic situation. Moreover, it forms a basis for matching your company’s strategy to its situation. Again, it provides an overview of the strategic situation. Furthermore, it provides the "raw material" to do more extensive internal and external analysis.

Apart from that, the competitor analysis is another form of techniques that also help a marketing manager to formulating the new strategic planning.

2.3. Merits of relationship marketing:

In the past few decades Customer relationship was none existence with business organization making no effort to build relationships with its customers. But since then strong competition has forced business to form long lasting relationships with its customers, if it needs to stay in business. The term Customer Relationship Marketing first emerged during the 1990’s. It was made possible due to the advancement in IT and the flow of information. IT allowed business to store and retrieve Customer information so thus it lead to the definition information enabled relationship marketing (Ryals & Payne, 2001).   However CRM does have a wide definition but what is important is that CRM is married to advancements in information technology. According to Swift (2000) he explained that CRM is a strategic approach that is concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments.   This wide definition allows, drawing a conclusion that CRM is vital for the business if it wants to make high return on its investments.

CRM as a strategy, as an organizational strategy that will drive functional plans and actions toward building relationships with customers;

CRM as a tool, focused on the role of IT being used to gather, analyze and apply data to build and manage relationships with customers.

The approach of CRM as a philosophy is used to understand and analyze the customer oriented culture of Banks in Singapore.

Now-a-days, the success of any company is highly dependent on how its consumers are served in terms of both product and service. Every company have started adopting the combination of different CRM approaches for customer retention, customer satisfaction and improvement of service quality.

For example, Georgia B & T of Augusta(File 59), uses both approaches of CRM as a technology and as a philosophy. The Bank uses technology approach by implementing Synapsys, a CRM application which helps the fast growing bank staff to execute customer relationship. On the other hand, as a philosophical approach, the bank avoids thinking of expansion of its relationships with a given customer as a sale and believes that it is better to see such transactions as an improvement in its own services to serve customers.

Benefits of CRM

CRM permits businesses to leverage information from their databases to achieve customer retention and to cross-sell new products and services to existing customers. Companies that implement CRM make better relationships with their customers, achieve loyal customers and a substantial payback, increased revenue and reduced cost. Implementation of CRM helps the organization in reduction of its advertising costs. It also makes it easier to target specific customers by focusing on their needs. CRM allows organizations to compete for customers based on service, not prices and also prevents overspending on low-value clients or under spending on high-value ones. CRM improves the use of customer channel, thus making the most of each contact with a customer.

The success of a Customer Relationship Management (CRM) strategy is often measured in terms of customer retention (i.e., the longevity of the customer’s relationship with the marketer), customer share development (i.e., the proportion of customer purchases in a particular product or service category a marketer can capture), and customer advocacy (i.e., generation of word of mouth referrals.) (Menon & Connor, 2007, p.157)

Reason for CRM

Customer relationship management (CRM) is a popular concept because of its wider in theory research and practical application. Many studies focus on finding a way to building and improving CRM in companies and companies themselves pay interest in CRM because of its benefits. There are many reasons for doing CRM in companies.

First, it helps companies earn more profit from current customers. Typically a business will lose 15-20 percent of its customer base each year. But as the company lowers rate of customer losing, the average customer lifetime increases and profits increase even more. For example, if a company with an annual defection rate of 10 percent cuts that rate in half, the average lifetime of a customer will double from 10 to 20 years and profit increase from $300 to $525 and so on (Vavra, 1995, p217).

Second, it helps companies improve the marketing communication effectiveness between companies and its customers. Then companies can design marketing programmes appropriate with its targeted customers (Kumar and Reinartz, 2006).

Task 2: Applying strategic marketing management to a market situation

About Organization:

Kebabish Original Restaurant was established for more than 20 years with 60 restaurants situated in various cities in U.K. All the restaurants of Kebabish Original are listed online for customers’ convenience to locate them with contact numbers and opening timings. Kebabish Restaurant food is inspired by the traditions. The restaurant is largely famous for its Punjabi and Indian cuisines. Their speciality lies in the mouth-watering curries and the thrill of the grill. Every Kebabish restaurant has a visible flame grill and open kitchen view which poses a live theatre by the cooks. This adds to the exciting experience of the restaurant. Disabled are also welcomed and arrangements are made for their convenience. The restaurants are air-conditioned and have a welcoming and relaxed atmosphere.

Internal SWOT Analysis of Sam’s Chicken (AC.4.2):

SWOT analysis provides a detail illustration about current situation of the business. It particularly will help to make further marketing strategies.

The details analyses are given below:

Strength:

Food is cheaper than other competitor.

This brand has a strong image.

The service style is new.

Very strong trademarks recipes

It gains the highest rank among all chicken restaurant chain convenience and different menu varieties of items.

It generates £30 million every year.

Weakness:

Its rank failed to be in top 20 in growth rate in 2000 in UK.

Due to lack of knowledge about their values of customer.

Due to the question of over franchising it leads to loss of quality and control.

Opportunities:

Restaurant is located in excellent location.

Competitor is not performing well around those areas where they are operation.

Threats:

The more growth in dinner house was come from new unit construction in small towns and suburban market.

Steak n shake and cracker Barrel expend its restaurant by more than 10% in family restaurant.

Impact of changes in the external environment (AC 4.1):

Political factors: Political factors include laws, agencies and groups that influence and limit organisations and individuals in a given society. The dimensions being evaluated include the government attitude to foreign markets, the stability and financial policies of a country and government bureaucracy.

Economic factor: Economic factors include factors that affect consumer purchasing power and spending patterns. Economic trends are again, to a large extent, bound up in government policy and area crucial issue to businesses and marketers because of the way they affect consumer spending power. In periods of relative prosperity, a consumer’s disposable incomes will be relatively high and, therefore, there is a willingness to spend more money. Price becomes less sensitive issue and this affects marketing strategy itself. During a recession, however, spending power decreases making price more relevant. The differences that exist between countries in different stages of economic and industrial development have a profound influence on price setting. Differences in income levels may suggest the desirability of systematic price variations. It is, therefore, important for Kebabish management to understand that, in countries with a lower stage of economic development, it is necessary to set a lower price.

Technological Factors: Technological developments have made international travel and communication more accessible to consumers and led to a situation in which social habits and fashions change much quicker. Moreover, lifestyles and attitude changes cause changes in product demand and how products can be sold to customers. Technological factors include forces that create new technologies, creating new product and market opportunities. It is based on considerations as to whether the local market has sufficiently developed technologies to take full advantage of the product. It should be noted that high technologies are required to make full use of the variety of promotional methods using alternative advertising media such as television or websites (Vrontis and Vronti, 2004). Kebabish’s successful internationalisation can be partly attributed to the way the company has overcome technological problems. The systematic substitution of equipment for people and the carefully planned use and positioning of technology have helped each franchise to be of the same high standard.

Social Factors: Shifts in spending power are also affected by sociological demographic trends. Analysis of population fluctuation suggests to marketers in which age groups there is going to be the largest demand for particular goods. A baby boom, for example, will increase the need for baby products initially then, in following years, a greater demand for toys, educational products and children’s clothes etc. Another emerging trend is the changing family, with the traditional family unit of mother, father and two children in decline. The increase in one person households creates different needs in home products as homes require smaller products and money is spent due to more frequent home movement. Changes in demographics can, therefore, affect things such as the development, designing, packaging and promotion of products. It could also shape the organisational setting of strategies and strategic planning for Kebabish future product planning.

Environmental factors: The climate and physical terrain of a country are important environmental conditions which have a significant effect on the demand and the type of product made available. Prior to entry into a new market, it is very important for Kebabish’s to consider the physical terrain and climate in the appraisal. Altitude, relative temperatures and humidity are some of the climatic conditions that can affect products in foreign markets.

Appropriate Marketing techniques to ascertain growth opportunities (AC 3.1):

As long as environmental forces remain constant position can remain constant. Positional advantage can take the form of size or scale, differentiation from competitors and successful trading names. To be successful, a company needs to get both its strategy and tactics working in harmony to provide the optimum return bounded by efficiency (McDonald and Leppard, 1993). Both strategy and tactics should be designed after a careful consideration of the situational environment.

The firm has to consider more than the industry structure, it also has to take an appropriate position within the industry. This positioning will determine the competitive advantage a firm can have, namely low cost or differentiation against competitive scope at the broad or narrow market (see Figure 1)

http://www.mindtools.com/media/Diagrams/GenericStrategies.jpg

The Kebabish’s positioning in the cost leadership quadrant is achieved not only through economies of scale in research, development and promotion but also through learning, knowledge and experience in production and operational processes as well as the way it manages its franchises. Vignali (2001) provides an explanation of the pricing decisions of Kebabish’s.

Strategic marketing planning makes use of a number of analytical models that help to develop a strategic view of the business and, thus, can be used as decision-making aids. The Boston Consulting Group (BCG) matrix (see Figure 2) is one of these models:

http://www.valuebasedmanagement.net/images/picture_bcg_matrix.gif

Figure: The Boston Consulting Group matrix

If the correct decision is made and the product selected achieves a high market share, it becomes a BCG matrix star. Stars have high market share in high-growth markets. Stars generate large cash flows for the business but also require large infusions of money to sustain their growth. Stars are often the targets of large expenditures for advertising and research and development to improve the product and to enable it to establish a dominant position in the industry. Cash cows are business units that have high market share in a low-growth market. These are often products in the maturity stage of the product life cycle. They are usually well-established products with wide consumer acceptance, so sales revenues are usually high. The strategy for such products is to invest little money into maintaining the product and divert the large profits generated into products with more long-term earnings potential, i.e. question marks and stars. Dogs are businesses with low market share in low-growth markets. These are often cash cows that have lost their market share or question marks the company has elected not to develop. The recommended strategy for these businesses is to dispose of them for whatever revenue they will generate and reinvest the money in more attractive businesses (question marks or stars).Having used the Boston Consulting Group matrix above, it should also be noted that the BCG matrix suffers from limited variables on which to base resource allocation decisions among the businesses making up the corporate portfolio. The BCG matrix is best used, then, as a beginning point but certainly not as the final determination for resource allocation decisions as it was perhaps originally intended for Kebabish market position.

Appropriate strategic marketing objectives for a market (AC 3.3):

Markides (1999) further states that behind every successful company there is superior strategy. The company may have developed this strategy through formal analysis, trial and error, intuition or even pure luck. No matter how it was developed, it is the strategy that underpins the success of the company. Strategists have a tremendous amount of both latitude and responsibility in developing and balancing the strategic options of an organisation. The countless decisions required of these managers can be overwhelming considering the potential consequences of incorrect decisions. One way to deal with this complexity is through categorisation; one categorisation scheme is to classify corporate-level strategy decisions into three different types or grand strategies (Porter, 1985). These grand strategies involve efforts to expand business operations (growth strategies), decrease the scope of business operations (retrenchment strategies) or maintain the status quo (stability strategies).

More specifically, growth strategies are designed to expand an organisation’s performance, usually as measured by sales, profits, product mix, market coverage, market share or other accounting and market-based variables. Typical growth strategies involve one or more of the following:

With a concentration strategy the firm attempts to achieve greater market penetration by becoming highly efficient at servicing its market with a limited product line (e.g. Kebabish in fast foods).

By using a vertical integration strategy, the firm attempts to expand the scope of its current operations by undertaking business activities formerly performed by one of its suppliers (backward integration) or by undertaking business activities performed by a business in its channel of distribution (forward integration).

A diversification strategy entails moving into different markets or adding different products to its mix. If the products or markets are related to existing product or service offerings, the strategy is called concentric diversification. If expansion is into products or services unrelated to the firm’s existing business, the diversification is called conglomerate diversification.

Use marketing strategy options in a market by developing suitable marketing mix (AC. 3.2): The concept of the 4 P's of the marketing mix is a timeless technique of categorizing the various strategies. By keeping these 4 P's in mind any marketer can adopt and reap the benefits. Failure to adhere to these can result in disaster and failure for the organization.

Product: The most important thing is the product. It has to be useful, and innovative. There has to be a need for this specific type of product in the minds of the customer. Product engineering focuses on making the best possible products in order to satisfy the customer. Kebabish has got some unique food that may stand out from other competitors. Management of Kebabish should additionally continue their innovative product invention which may give them a unique place in the market.

Price: The next most important thing is the price of the product. If a product is overpriced, customers will search and opt for cheaper alternatives. The quality of the product should be worth the price and vice versa. Kebabish should be aware of pricing their foods.

Place: This refers to the channels of distribution of the product, and developing channel partners and reliable suppliers so as to make the product reach the customer as quickly and as easily as possible. As we have seen earlier that Kebabish is located in most of the public transit place that already gave them strength for their business.

Promotion: Lastly, the promotional activities that are undertaken by the Kebabish will make their presence felt in the market and using various means to do this is a key element of the most strategies.

Proposed strategic marketing responses for Kebabish (AC.4.3):

When developing a marketing plan for Kebabish stability, it should evaluate the dynamics of your overall business. This includes identifying potential market, comparing competitor, defining your customer base, exploring other customer based opportunities, implementing focused marketing efforts for new and repeat business, identifying your competitive edge, determining menu price points, and implementing up-sell strategies. Kebabish can introduce new technology and more options for online order and delivery service for their customers at their door step. In case of inventing new food items the food nutrition ingredients should keep as a prime consideration. Healthy options should include all types of required food options from child menu to adult menu. The trade policy should be relative to the local law and it should not breach the local law of that particular state.

Conclusion:

Finally it can be said that effective marketing strategy involves studying the market elements and thus devising a proper marketing solution which will help an organisation to reach its desired position in time. At present all the food business organisations specially the restaurants that are able to keep growing their profit margin above the line knows that there is no alternative to the appropriate marketing strategies for the growth of business and profitability, besides Kebabish has proven in certain sector with their potentiality. However the company has failed to achieve it target profit margin. This is because they have to adjust their decision of selling costly quality food at different location. The managers of different outlets has to study the market first and then the ability of the target customer as well to adjust their price and products. Besides this, the particular restaurant need to identify why it losing customers and downturn in the profit as well.