Video Transcript: Marketing Planning Process

Hello, welcome. We're going to discuss the marketing planning process.  Elements of marketing planning. Marketing does not take place in a vacuum,  right? We can't control who sees it when they see it, so we need to make sure  that we always have a positive image and that when potential consumers have  an opportunity to see our marketing ads that we're in a position to take  advantage of that a mission statement articulates an organization's purpose or  reason for existence. Most mission statements also include a discussion of what the company would like to become in the future, known as its strategic vision.  Elements of marketing planning goals eventually become refined into specific,  measurable and hopefully attainable objectives for the firm. So our marketing is  going to really be pushing our revenue, our sales generating what will be in the  end, our net profit. So we need to make sure that our marketing is strategically  planned and put in place to where we'll be able to capitalize on any weakness in the market and hopefully take market share from the competition. Organizational strategies, a strategy is a comprehensive plan stating how the organization will  achieve its mission and objective. A firm's generic strategy is its overall  directional strategy at the business level. So let's discuss the elements of  marketing planning, right, competitive strategy, options, cost leadership, right?  Number one. Basically, this means it's the lowest cost of operation in the  industry. Cost leadership is often driven by company efficiency, size, scale,  scope and cumulative experience. So if we've been a long term player, we do a  lot of bulk we can buy inputs cheap, right? So therefore our cost of goods sold  can go down, and we can generate margin, marginal profits, right? So by being  a cost leader, minimizing costs, being the cheapest in the industry, we can also  offer cheaper prices than the competition, because we have more room for  flexibility on the margins, and because our costs are lower than theirs,  differentiation the development of a product or service that offers unique  attributes that are valued by customers and that customers perceive to be better than or different from the products of the competition. You heard me speak  earlier about differentiation being different or unique from the market gives you a competitive advantage where customers can readily identify your products  versus theirs. So a niche market, right? Or a focus market, this describes  enterprise strategies that are focused closely on serving segment specific niche  markets. But business strategy may alternatively be based on the process of  product or service differentiation across a range of markets and market  segments. So we're trying to find a niche. We're trying to find some place to  operate. We're trying to find some place on the margin where we can find a  customized consumer base that will be solely focused on buying our product  because it served their specific demand. Competitive Strategy options. A firm's  relative position within its industry determines whether a firm's profitability is  above or below the industry average. The fundamental basis of average, above  average profitability in the long run is sustainable competitive advantage. There 

are two basic types of competitive advantage a firm can possess. One, low cost  or differentiation, as we just discussed, the two basic types of competitive  advantage combined with the scope of activities for which a firm seeks to  achieve them, lead to three generic strategies for achieving above performance  in an industry. One, cost leadership, two, differentiation and three, focus, as we  just discussed, the focus strategy has two variants, cost, focus and  differentiation. Focus, competitive advantage can be identified as lower cost and differentiation. Now we can also identify competitive scope with a broad target or a narrow target, right? So these are the competitive strategy options. So let's  discuss Porter's value chain. This kind of puts all of the operational concepts  into one kind of identifiable chart that we can use to kind of see the process and  flow of support activities and primary activities that help us deliver at a greater  profit margin. If you notice from the chart, support activities the firm,  infrastructure, right? We're going to be talking about, you know, the CEO, CFO,  upper management, right? That's the infrastructure all the way down to the  hierarchy of management, human resources management, you know, we're  developing our human resources, our labor skills, technology development,  research and development, innovation and using new technologies to help us  develop better products at cheaper costs. The procurement piece to the support  activities, basically helps us to get our raw materials at a good price, and helps  us to have our working capital in place. So if we look down at the primary  activities, inbound logistics, how do we get our raw materials? What are the  prices involved in that? Transportation Operations? How are we developing our  products, outbound logistics? How are we shipping it, marketing and sales once  it's on the shelves? How are we selling our product and then once it's on the  shelves, how is our service related to the product? Now, if all of these things go  smoothly, we can get our profit margin and we can grow it or shrink it based on  how efficient and effective these support and primary activities are. So let's look  again. Primary activities, inbound logistics involves relationships with suppliers  and include all the activities required to receive, store and disseminate inputs.  Operations are all the activities required to transform inputs into outputs our  products and our services. Outbound logistics include all the activities required  to collect, store and distribute the output. Marketing and sales activities inform  buyers about products and services, induce buyers to purchase them, and  facilitate their purchase. Number five is service, includes all the activities  required to keep the product or service working effectively for the buyer after is  sold and delivered. So secondary activities, procurement is the acquisition of  inputs or resources for the firm. Human Resources Management consists of all  activities involved in recruiting, hiring, training, developing, compensating and, if  necessary, dismissing or laying off personnel. Number three, technological  development pertains to the equipment, hardware, software, procedures and  technical knowledge brought to bear in the firm's transformation of inputs into 

outputs and infrastructure serves the company's need and ties its various parts  together. It consists of functions or departments such as accounting, legal,  finance, planning, Public Affairs, government relations, quality assurance and  general management. You've heard me mention through various videos about  strengths, weaknesses, opportunities and threats. This is known as a SWOT  analysis. SWOT analysis is a useful technique for understanding your strengths  and weaknesses and for identifying both the opportunities and threats that are in the market. So let's look at these right internal, positive strengths, opportunities,  external, positive, right? So these are both positive, right, strength opportunity  strategies, which of the company strengths can be used to maximize the  opportunities you identified? Right? So we identify the opportunities we need to  know how to capitalize on those opportunities by knowing what our strengths  are and developing those strengths to get even better, strengths, threats,  strategies. How can you use the company's strengths to minimize the threats  you identified? It's a good question. We need to know our competition. We need  to know who's in the market. How can we subdue market share from them? So  let's look at weaknesses, internal and negative the weakness opportunity  strategies. What actions can you take to minimize the company's weaknesses  using the opportunities you identified? So we also need to know what our  weaknesses are, not just the competition, and we need to be able to improve on those weaknesses systematically throughout the organization, by making a plan  and having a strategy, weaknesses, threat strategy, how can you minimize the  company's weaknesses, to avoid the threat, to identify again, knowing your  company what its weaknesses are, how to develop those weaknesses, how to  get better, and knowing the threats from the outside competition and how they  can expose your weaknesses too and be ready to mitigate that risk.