Content

1.6 Fundamentals of Marketing Planning in:

Svend Hollensen, Marc Oliver Opresnik

Marketing, page 36 - 48

A Relationship Perspective

1. Edition 2010, ISBN print: 978-3-8006-3722-5, ISBN online: 978-3-8006-4870-2, https://doi.org/10.15358/9783800648702_36

Bibliographic information
1. Fundamentals of Relationship Marketing22 to accept it as part of marketing’s tool box. It is therefore not TM versus RM or mass marketing versus customer-specific marketing that should be the argument (Kotler, 1997). A more adequate interpretation is that RM is not an appropriate strategy for all customers; moreover, multiple relationship marketing strategies may be necessary for different market segments and situations. The idea of a single, all-embracing, general unified theory of marketing is not suitable as strategies should, in a situational framework, be appropriate to given circumstances (Berry, 2000). Against this background, the subsequent chapters will look at the marketing management process from the perspective of both relational and transactional approach suggesting that a company should in any case pursue an integrative marketing management approach with respect to the specific conditions the company is facing. 1.6 Fundamentals of Marketing Planning Marketing is the organisation function charged with defining customer targets and the best way to satisfy their needs and wants competitively and profitably. Because consumers and business buyers face an abundance of suppliers seeking to satisfy their every need, companies and not-for-profit organisations cannot survive today by simply doing a good job. They must do an excellent job if they are to remain in the increasingly competitive global marketplace. Many studies have demonstrated that the key to profitable performance is knowing and satisfying target customers with competitively superior offers. This process takes place today in an increasingly global, technical, and competitive environment. There are some key reasons why marketing planning has become so important. Recent years have witnessed an intensifying of competition in many markets. Many factors have contributed to this, but amongst some of the more significant are the following (Hollensen, 2006): A growth of global competition, as barriers to trade have been lowered and global • communications improved significantly. Drivers promoting relational strategies Drivers against using relational strategies High acquisition costs relative to retention costs Acquisition/retention cost differential minimal High exit barriers Low exit barriers Buoyant/expanding market Saturated market High risk/high salience products or services Low risk/low salience products or services High emotion involved in exchange Low emotion involved in exchange Satisfaction benficial to retention Repeat behaviour strategy beneficial Source: Adapted from Egan, 2008, modified Table 1.2: Drivers affecting strategic decision-making Kapitel_1.indd 22 03.08.2010 12:45:32 Uhr 1.6 Fundamentals of Marketing Planning 23 the role of the multinational conglomerate has increased. This ignores geographical • and other boundaries and looks for profit opportunities on a global scale. In some economies, legislation and political ideologies have aimed at fostering entre-• preneurial and ‘free market’ values. Continual technological innovation, giving rise to new sources of competition for es-• tablished products, services and markets. The importance of competition and competitor analysis in contemporary strategic marketing cannot be overemphasized. Indeed, because of this we shall be looking at this aspect in more depth in later chapters. This importance is now widely accepted amongst both marketing academics and practitioners. Successful marketing in a competitive economy is about competitive success and that in addition to a customer focus a true marketing orientation also combines competitive positioning. The Marketing Concept holds that the key to achieving organisational goals lies in determining the needs and wants of target markets, and delivering the desired ‘satisfaction’ more effectively and resourcefully than competitors (Hollensen, 2006). Marketing planning is an approach adopted by many successful, market-focused companies. While it is by no means a new tool, the degree of objectivity and thoroughness with which it is applied varies significantly. Marketing planning can be defined as the structured process of researching and analysing the marketing situations, developing and documenting marketing objectives, strategies, and programs, and implementing, evaluating, and controlling activities to achieve the goals. This systematic process of marketing planning involves analyzing the environment and the company’s capabilities, and deciding on courses of action and ways to implement those decisions (Jobber and Fahy, 2009). As the marketing environment is so changeable that paths to new opportunities can open in an instant, even as others become obscured or completely blocked, marketing planning must be approached as an adaptable, ongoing process rather than a rigid, static annual event. The outcome of this structured process is the marketing plan, a document that summarizes what the marketer has learned about the marketplace and outlines how the firm plans to reach its marketing objectives. In addition, the marketing plan not only documents the organisation’s marketing strategies and displays the activities that employees will implement to reach the marketing objectives, but it entails the mechanisms that will measure progress toward the objectives and allows for adjustments if actual results take the organisation off course (Hollensen, 2006). Marketing plans generally cover a 1-year-period, although some may project activities and financial performance further into the future. Marketers must start the marketing planning process at least several months before the marketing plan is scheduled to go into operation; this allows sufficient time for thorough research and analysis, management review and revision, and coordination of resources among functions and business units. Marketing planning inevitably involves change. It is a process that includes deciding currently what to do in the future with a full appreciation of the resource position; the need to set clear, communicable, measurable objectives; the development of alternative courses of action; and a means of assessing the best route towards the achievement of specified objectives. Marketing planning is designed to assist the process of marketing decision making under prevailing conditions of risk and uncertainty. Kapitel_1.indd 23 03.08.2010 12:45:32 Uhr 1. Fundamentals of Relationship Marketing24 Above all the process of marketing planning has a number of benefits (Hollensen, 2006): Consistency• : The individual marketing action plans must be consistent with the overall corporate plan and with the other departmental or functional plans. Responsibility• : Those who have responsibility for implementing the individual parts of the marketing plan will know what their responsibilities are and can have their performance assessed against these plans. Marketing planning requires management staff to make clear judgmental statements about assumptions, and it enables a control system to be designed and established whereby performance can be assessed against pre-defined criteria. Communication• : Those implementing the plans will also know that the overall objectives are and how they personally may contribute in this respect. Commitment• : Assuming that the plans are agreed upon by those involved in their implementation, as well as by those who will provide the resources, the plans do stimulate a group commitment to their implementation, and ultimately lead to better strategy-implementation. Plans must be specific to the organisation and its current situation. There is not one system of planning but many systems, and a planning process must be tailor-made for a particular firm in a specific set of conditions. Marketing planning as a functional activity has to be set in a corporate planning framework. There is an underlying obligation for any organisation adopting marketing planning systems to set a clearly defined business mission as the basis from which the organisational direction can develop. Without marketing planning, it is more difficult to guide research and development (R&D) and new product development (NPD); set required standards for suppliers; guide the sales force in terms of what to emphasize, set realistic, achievable targets, avoid competitor actions or changes in the marketplace. Above all, businesses which fail to incorporate marketing planning into their marketing activities may therefore not be in a position to develop a sustainable competitive advantage in their markets (Hollensen, 2006). The Main Stages in Developing a Marketing Plan Marketing planning is a methodical process involving assessing marketing opportunities and resources, determining marketing objectives, and developing a plan for implementation and control. Marketing planning is an ongoing analysis/planning/control process or cycle (see Figure 1.5). Many organisations update their marketing plans annually as new information becomes accessible. Once built-in, the key recommendations can then be presented to key stakeholders within the organisation. The final task of marketing planning is to summarize the relevant findings from the marketing analysis, the strategic recommendations and the required marketing programs in a report: the written marketing plan. This document needs to be concise, yet complete in terms of presenting a summary of the marketplace and the business’s position, explaining thoroughly the recommended strategy and containing the detail of marketing mix activities. The plan should be informative, to the point, while mapping out a clear set of marketing activities designed to satisfactorily implement the desired target market strategy (Hollensen, 2006). Kapitel_1.indd 24 03.08.2010 12:45:32 Uhr 1.6 Fundamentals of Marketing Planning 25 Figure 1.6 illustrates the several stages that have to be gone through in order to arrive at a marketing plan. Each of the stages illustrated here will be discussed in more detail later in this chapter and in later sections of the book. As illustrated in Figure 1.5 the development of a marketing plan is a process, and each step in the process has a structure that enables the marketing plan to evolve from abstract information and ideas into a tangible document that can easily be understood, evaluated, and implemented. The following section is devoted to an in-depth discussion of each step in this process (Gilmore et al., 2001; Day, 2002). Step 1: Mission, Corporate Goals and Objectives An organisation’s mission can be describes as a broadly defined, enduring statement of purpose that distinguishes a company from others of its type (Ackhoff, 1987). It is enduring and specific to the individual organisation and tells what the organisation hopes to The performance gap is sufficiently outsized that a reexamination of the marketing plan is required No Adjust marketing plan if necessary Prepare for next year’s marketing plan Yes Step 2: Assessing the current internal and external situation. The foundation for competitiveness is the firm’s internal resources. These should be matched against the external opportunities. Step 3: SWOT analysis Identification of strengths/weaknesses and opportunities/threats with the objective of identifying key issues that drive performance. Step 7: Marketing budget A marketing budget for the tactical marketing strategy must entail appropriate resource allocation to meet the performance objectives of the strategic market plan. Step 5: Strategic market plan Using a portfolio analysis of market attractiveness and competitive advantage, a strategic market plan and performance goals are determined. Step 6: Tactical marketing plan On the basis of a strategic marketing plan, an appropriate marketing mix is developed to accomplish the performance objectives. Step 4: Segmentation, targeting and positioning. Dividing the market into different segments is the basis for targeting and positioning. Step 1: Mission, corporate goals and objectives Define the business in terms of the benefits the company provides to its customers, rather than in terms of what it produces. Source: Adapted from Hollensen, 2006, modified Step 8: Implementation and performance evaluation Are the strategic market plan and the tactical marketing strategy producing the required performance with respect to market share, revenues, and profitability? Figure 1.5: The stages of building a marketing plan Kapitel_1.indd 25 03.08.2010 12:45:32 Uhr 1. Fundamentals of Relationship Marketing26 accomplish and how it plans to achieve this goal. This expression of purpose provides management with a clear sense of direction. The corporate mission statement needs comprehensive considerations by top management to establish the business, which the company is really in and to relate this consideration to future business intentions. It is a general statement that provides an integrating function for the business, from which a clear sense of business definition and direction can be derived. This stage is often overlooked in marketing planning, and yet without it the plan will lack a sense of contribution to the development of the entire enterprise. By deriving a clear mission statement, boundaries for the ‘corporate entity’ can be conceived in the context of environmental trends that influence the company (Hollensen, 2006). It is useful to establish the distinctive competences of the organisation and to focus upon what customers are buying rather than upon what the company is selling. This will assist in the development of a marketing oriented mission statement. A clear mission statement should include the customer groups to be served the consumer needs to be served and the technologies to be utilized. Essentially, four characteristics are associated with an effective mission statement (Day, 1999): First, it must be based on a solid comprehension of the business, and the vision to • foresee how the forces influencing its operations with alter in the future. Second, the mission should me based upon the deep personal conviction and motiva-• tion of the founder or leader, who has the ability to make his or her vision transmittable. An example is Google’s mission to organize all the world’s information and make it universally accessible and useful. Consequently, the mission must be shared throughout the organisation. Third, effective mission statements should instil the strategic intent of winning • throughout the organisation. This helps to create a sense of common and shared purpose. Finally, mission statements should be enabling. Managers should believe they have • the freedom to make decisions about the strategy. The mission statement provides a framework within which managers decide which opportunities and threats to address, and which to disregard. The general purpose expressed in the organisation’s mission statement must be translated into more specific guidelines as to how these general intentions will operate. Organisations and the people who manage them tend to be more productive when they have established standards to motivate them, specific directions to guide them, and stated achievements levels against which to assess their performance. Step 2: Assessing the Current Internal and External Situation The situation analysis attempts to provide answers to the following questions: ‘Where are we now?’• ‘How did we get here?’• ‘Where are we heading?’• Answers to these key questions depend upon an analysis of the internal and external environment of a business (Jobber, 2010). Thus, the situation analysis encompasses the forces that shape market attractiveness, competitive position, and present performance. Kapitel_1.indd 26 03.08.2010 12:45:33 Uhr 1.6 Fundamentals of Marketing Planning 27 The basis for competitiveness is the firm’s internal resources, capabilities and competences (Chapter 2 in this book). These should be matched with the external opportunities (Chapter 2 in this book), and altogether it sums up to step 3 – the SWOT analysis. Step 3: SWOT Analysis A SWOT analysis is a structured tool to evaluating the strategic position of a company by identifying its strengths, weaknesses, opportunities and threats. The subsequent steps will be only as good as the situation analysis and key performance issues that are uncovered in the situation and SWOT analysis. In assessing current situations, SWOT analysis attempts to identify one or more strategic relationships or match-ups between strategic business units (SBU) current strengths or weaknesses and its present or future opportunities and threats. Corporations face strategic windows in which key requirements of a market and the particular competencies of the organisation best fit together. Identifying these limited time periods is a rationale for employing a SWOT analysis. The tool provides a simple method of synthesizing the results of the internal and external analysis undertaken in step 2. Strengths are the bases for building company competences and finally competitiveness. An internal organisational check attempts to ascertain the type and degree of each SBU’s strengths and weaknesses. By recognizing their special capabilities and limitations, firms are better able to adjust to the external environmental conditions of the marketplace. In this respect, it is of key importance to always question the strengths identified for their impact on customer satisfaction. ‘Know yourself and your competence’ is the basic tenet that guides this assessment of the abilities and deficiencies of the organisation’s internal operations. It is also the basic tenet in the so-called Resource Based View (RBV), which will be further discussed in Chapter 2. All businesses do have weaknesses. Successful businesses try to minimize their shortcomings. A weakness can be any business function or operation that is not able to resist external forces or withstand attack. A weak business function or operation is one that is deficient or inferior in its ability to reap the benefits presented by an external opportunity. Weaknesses are most viewed in comparative terms; a company has a weakness when it is unable to perform a business function or conduct a business operation as effectively and efficiently as its competitors (Hollensen, 2006). The internal factors that may be viewed as strengths or weaknesses depending upon their impact on the organisation’s positions (they may represent a strength for one organisation but a weakness, in relative terms, for another), may include all of the four elements of the marketing mix, as well as other functions such as personnel, finance etc.. The second part of a SWOT analysis involves the organisation’s external environments. This environmental scanning process involves the opportunities and threats that are part of a SWOT analysis. The external factors, which again may be threats to one organisation whereas they offer opportunities to another, may include factors such as technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. Opportunities are unsatisfied customer needs that the organisation has a good chance of meeting successfully. For an environmental occurrence to be considered an opportunity Kapitel_1.indd 27 03.08.2010 12:45:33 Uhr 1. Fundamentals of Relationship Marketing28 by a particular business, a favourable juncture of circumstances must exist. A unique business strength must fit an attractive environmental need in order to create a high probability of a successful match, as when a low-cost producer identifies an unserved market of low-income consumers. Good opportunities are needs that the company can satisfy in a more complete fashion than can existing competitors. In this context it has to emphasized that these opportunities are indeed external factors which are not controllable by the company such as demographic change, the fitness trend etc.. Threats are finally aspects of the external environment that create challenges posed by an unfavourable trend or development that would lead, in the absence of defensive marketing action, to lower sales or profit (Kotler et al., 2006). Once a SWOT analysis has been completed management has to evaluate how to turn weaknesses into strengths and threats into opportunities. For example, a perceived weakness in customer focus might suggest the need for extensive staff training to create a new strength. Because these activities are designed to convert weaknesses into strengths and threats into opportunities they are called conversion strategies. Another option provided is to match strengths with opportunities. An example of a company that successfully matched strengths with opportunities in the UK clothing retailer Next, which identified an opportunity in the growing demand for telemarketing services. One of the company’s strengths was the fact that it had run its own call centres for more than a decade to service its own home shopping operation. As a result, Next has created a profitable business running call centres for other organisations (Jobber, 2010). These activities are called matching strategies. The SWOT-analysis is just one tool to assess the current situation. It has its own weaknesses in that it tends to persuade companies to compile lists rather than to think about what is really important to their business. It also presents the resulting lists without clear prioritization, so that, for example, weak opportunities may appear to balance strong threats. The aim of any SWOT analysis should be to identify potential ‘strategic windows’ and isolate what will be important to the future of the organisation and that subsequent marketing planning will address. Step 4: Segmentation, Targeting and Positioning In addition to analyzing the environment, marketers need to analyze their markets and their customers, whether consumers or businesses. This means looking closely at market trends, changing customer behaviour, product demand and future projections, buying habits, needs and wants, customer attitudes, and customer satisfaction. Marketers have to apply their knowledge of the market and customers – acquired through research – to determine which parts of the market, known as segments, should be targeted for marketing activities as marketing is not about chasing any customer at any price. A decision has to be made regarding those groups of customers respectively segments that are attractive to the business (Jobber, 2010). This implies dividing the overall market into separate groupings of customers, based on characteristics such as age, gender, geography, needs, behaviour, or other variables. The purpose of segmentation is to group customers with similar needs, wants, behaviour, or other characteristics that affect their demand for or usage of the good or service being marketed. Kapitel_1.indd 28 03.08.2010 12:45:33 Uhr 1.6 Fundamentals of Marketing Planning 29 Once the market has been segmented, the next set of decisions focuses on targeting , including whether to market to one segment, to several segments, or to the entire market, and how to cover these segments. The company also needs to formulate a suitable positioning , which means using marketing to create a competitively distinctive place (position) for the brand or product in the mind of targeted customers. This positioning must effectively set the product apart from competing products in a way that is meaningful to customers. Step 5: Strategic Market Plan (Marketing Strategy) At this point in the marketing planning process, the company has examined its current situation, looked at markets and consumers, set objectives, and identified segments to be targeted and an appropriate positioning. Now management can create the marketing strategies, effectively combining the basic marketing mix tools of product, place, price, and promotion, enhanced by service strategies to build stronger customer relationships. Marketing strategies must be consistent with the organisation’s overall corporate goals and objectives. As marketing objectives are essentially about the match between products and markets they must be based on realistic customer behaviour in those markets. To be most effective, objectives must be measurable. The measurement may be in terms of sales volume, turnover volume, market share, or percentage penetration of distribution outlets. As it is measured, it can, within limits, be unequivocally monitored and corrective action taken as appropriate. Usually marketing objectives must be based, above all, on the organisation’s financial objectives; financial measurements are converted into the related marketing measurements. An example of a measurable marketing objective might be ‘to enter market X with product Y and capture 15 percent of the market by value within the first three years.’ In principle, the strategic market plan describes how the firm’s marketing objectives will be achieved. It is essentially a pattern or plan that integrates an organisation’s major goals, policies, and action sequences into a cohesive whole. Marketing strategies are generally concerned with the 4Ps: 1. Product strategies Developing new products, repositioning or re-launching existing ones, and scrapping • old ones Adding new features and benefits• Balancing product portfolios• Changing the design or packaging• 2. Pricing strategies Setting the price to skim or to penetrate• Pricing for different market segments• Deciding how to meet competitive pricing• 3. Promotional strategies Specifying the advertising platform and media• Deciding the public relations brief• Organizing the sales force to cover new products and services or markets• Kapitel_1.indd 29 03.08.2010 12:45:33 Uhr 1. Fundamentals of Relationship Marketing30 4. Place distribution strategies Choosing the channels• Deciding levels of customer service• One often-overlooked aspect of the marketing strategy is timing. Choosing the best time for each element of the strategy is often vital. Sometimes, taking the right action at the wrong time can be almost as bad as taking the wrong action at the right time. Timing is, therefore, an essential part of any plan and should normally appear as a schedule of planned activities (Hollensen, 2006). Step 6: Tactical Marketing Plan The next step in the marketing planning process is the development of a tactical marketing plan to put the strategic market plan into operation. Although the overall marketing strategy to protect, grow, harvest, enter, or exit a market position is set by the strategic market plan, more-specific tactical marketing strategies need to be developed. Marketing managers have at their disposal four marketing tools with which they can match their products and services to customer’s requirements. These marketing mix decisions consist of evaluations about price levels, the blend of promotional techniques, the distribution channels and the types of products to manufacture (Jobber, 2010). Therefore, the firm’s overall marketing strategies need to be developed into detailed plans and programs. Although these detailed plans may cover each of the 4Ps, the focus will vary, depending on your organisation’s specific strategies. A product-oriented company will focus its plans for the 4Ps around each of its products. A market or geographically-oriented company will concentrate on each market or geographical area. Each will base its plans on the detailed needs of its customers and on the strategies chosen to satisfy these needs. The most important element is the detailed plans, which spell out exactly what programs and individual activities will take place over the period of the plan (usually over the next year). Without these specified – and preferably quantified – activities the plan cannot be monitored, even in terms of success in meeting its objectives. Step 7: Marketing Budget The traditional quantification of a marketing plan appears in the form of budgets. The purpose of a marketing budget is to pull all the revenues and costs involved in marketing together into one comprehensive file. It is a managerial tool that balances what is needed to be spent against what can be afforded and helps make choices about priorities. It is then used in tracking the performance in practice. Resources need to be allocated in a marketing budget based on the strategic and operational marketing plan. Without adequate resources, the tactical marketing strategies cannot succeed, and, as a consequence, performance objectives cannot be achieved. Specifying a marketing budget is perhaps the most difficult part of the market planning process. Although specifying the budget is not a clear-cut process, there must be a logical connection between the strategy and performance objectives and the marketing budget. Each area of marketing activity should be allocated to centres of responsibility. Indeed, as a key functional area of business the marketing budget is one of the key budgets to concentrate towards the total budgetary control system of the organisation. Kapitel_1.indd 30 03.08.2010 12:45:33 Uhr 1.6 Fundamentals of Marketing Planning 31 In many organisations, budgeting is the transitional step between planning and implementation, because the budget, and allocated centres within it, will project the cost of each activity over the specified period of time, and also act as a guide for implementation and control (Hollensen, 2006). Step 8: Implementation and Performance Evaluation The best marketing plan is useless unless it ‘degenerates into work’ (Drucker, 1993, p. 128). Consequently, the business must design an organisation that has the capability of implementing the strategy and the tactical plan. Once strategies and plans are implemented, the company needs to plan for ways to determine effectiveness by identifying mechanisms and metrics to be used to measure progress toward objectives. Most companies use sales forecasts, schedules, and other tools, to set and record standards against which progress can be assessed. By comparing actual results against daily, weekly, monthly, quarterly, and yearly projections, management can see where the firm is ahead, where it is behind, and where it needs to make adjustments to get back on the right path. In the course of reviewing progress, marketers also should look at what competitors are doing and what the markets are doing so they can put their own outcomes into context. To control implementation, marketers should start with the objectives they have set, establish standards for measuring progress toward those targets, measure the performance of the marketing programs, diagnose the results, and then take corrective action if results fail to measure up. This is the marketing control process. The control process is iterative; managers should expect to retrace their steps as they systematically implement strategies, assess the results, and take action to bring performance in line with expectations. Companies use this control process to analyse their marketing implementation on the basis of such measures as market share, sales, profitability, and productivity. There are three main marketing planning approaches, in terms of involvement of the organisation as a whole. They are: Top-down planning• : Here top management sets both the goals and the plan for lowerlevel management. While decision making may be immediate at the top level, implementation of the plans may not be as swift because it takes time for various units (division, groups, and departments) to learn about the plans and to reorganize their tasks accordingly to accomplish the new goals. Bottom-up planning• : In this approach, the various units of the organisation create their own goals and plans, which are then approved (or not) by higher management. This can lead to more creative approaches, but it can also pose problems for coordination. More pragmatically, strategy all too frequently emerges from a consolidation of tactics. Goals-down-plans-up-planning• : This is the most common approach, at least among the organisations that invest in such sophisticated planning processes. Top management set the goals, but the various units create their own plans to meet these goals. These plans are then typically approved as part of the annual planning and budgetary process. Kapitel_1.indd 31 03.08.2010 12:45:33 Uhr 1. Fundamentals of Relationship Marketing32 Summary This chapter has looked at the development of relationship marketing (RM) and the significant interest it has created among academics, consultants and practitioners alike. It examined the roots of RM and reviewed the perceived problems with traditional marketing in the light of changing and complex markets. A definition of RM was presented as a reference point upon which future analysis is based. Loyalty as a concept close to the heart of RM was elaborated upon and it was suggested that loyalty schemes may play a part in relationship maintenance but cannot realistically taken as a proxy for the RM philosophy. Additionally, this chapter investigated the arguments surrounding the costs of customer acquisition versus the costs of customer retention and summarized that whereas in many industries it can be stated that the cost of acquisition exceeds that of retention, this is always dependant on company and environment specific factors and not a universally applicable truth. The benefits of relationship longevity, including stages theories, the concept of lifetime value as well as the switching costs associated with relationship longevity where also discussed in this chapter. A number of perceived drivers to relational and transactional strategies were discussed. The existence of high risk, high salience and, consequently, high emotion in an exchange transaction suggest that RM strategies would be beneficial as the customer may perceive that a close relationship is required in such situations. The perceived need for trust and commitment in close relationships provided another indicator of situations where relational strategies may be successful. The concept of customer satisfaction was examined and it was concluded, that the perceived need for positive customer satisfaction in a relationship may, in general, prove a reasonable driver of the benefits of relational strategies. Furthermore, this chapter investigated the arguments for a ‘strategy continuum’. It concluded that while RM may be beneficial in some situations, it may not be relevant to all. RM is to be best regarded not as a dominant and all-embracing marketing paradigm but as an instrumental and more integrative perspective in marketing. Consequently, the suggestion is made, that a strategy continuum exists with traditional marketing and relational marketing at either end. Any company, at any point in time, may adopt one or more of a ‘hybrid’ range of strategies that may be dominated by one or other end of the strategy continuum. The chapter suggests that although RM may not be a new marketing paradigm its approach can help marketers and non-marketers to adopt a more integrative perspective. This chapter finally described marketing planning as the structured process companies use to research and analyse their marketing situation; develop and document marketing objectives, strategies, and programs and then implement, evaluate, and control marketing activities to achieve their marketing objectives. The marketing plan, which documents the results of the marketing planning process, serves as an important coordination function by helping to develop internal consensus, providing internal direction, encouraging internal collaboration, coordinating resource allocation, and outlining the tasks, timetable, and responsibilities needed to reach the marketing objectives. There are many benefits to a good marketing plan. The process of market planning can lead a business to discovery of new market opportunities, to better utilization of assets and capabilities, to a well-defined market focus, to improved marketing productivity, and to a baseline from which to evaluate progress toward goals. Kapitel_1.indd 32 03.08.2010 12:45:33 Uhr 1.6 Fundamentals of Marketing Planning 33 The eight broad steps in developing a marketing plan are: 1. Mission, corporate goals and objectives 2. Assessing the current internal and external situation 3. SWOT analysis 4. Segmentation, targeting and positioning 5. Strategic market plan (marketing strategy) 6. Tactical/operational marketing plan 7. Marketing budget 8. Implementation and performance evaluation The development of a marketing plan involves process and structure, creativity and form. The process begins with a broad view of market opportunities that encourages a wider consideration of many market opportunities. For each market opportunity, a strategic market objective is set, based on market attractiveness and competitive advantage attained or attainable in the market. For each market to be pursued, a separate situation analysis and marketing plan is required. The situation analysis enables the business to uncover key issues that limit performance. These key performance issues are the basic guidelines from which marketing strategies are developed. With the marketing strategy and budget set, an estimate of market and financial performance metrics must be projected over a specified time frame. If the marketing plan fails to produce desired levels of performance, the marketing strategy needs to be re-examined. Questions for discussion 1. What were the influences that led to the development of relationship marketing? 2. What are the major differences between traditional and relationship marketing? 3. What part do loyalty schemes play in relationship development? 4. What are the different cost drivers associated with customer acquisition and customer retention? 5. What are the potential advantages to be gained from long-term supplier-customer relationships? 6. What effect do switching costs have on a relationship? 7. Explain the association between risk, salience and emotion! 8. Explain the association between trust and commitment! 9. Take three companies with which you are familiar. Where would you place them on the hypothetical RM/TM continuum? What factors led to your decision to place them there? 10. How could businesses engaged in no market planning or in highly formalized market planning miss meaningful market insights? 11. What are the differences between marketing objectives and marketing strategies? What should marketing strategies cover? 12. What is the relationship between the mission statement and the SWOT analysis? What is the relationship between the mission statement and the firms objectives? 13. What is the role of a SWOT analysis in the market planning process? What is the role of key issues in the SWOT analysis? 14. Why is the development of a marketing budget so important to the success of the marketing plan? 15. What is the purpose of the performance evaluation? What role should it play in the successful implementation of a marketing plan? 16. In which ways may the organisation be involved in the marketing planning? Kapitel_1.indd 33 03.08.2010 12:45:33 Uhr 1. Fundamentals of Relationship Marketing34 Case 1 Nordex AG The German wind turbine manufacturer seeks new business opportunities in • the world market Wind energy, as a power generation technology, greatly aids in offsetting carbon (CO) emissions from burning of 2 fossil fuels for electricity generation. The 122 Giga Watt (GW) (122,000 MW) of global wind capacity, installed by the end of 2008 will produce 260 terawatt hours (TWh) of electricity and save 158 million tonnes of CO every year. (Source: Global 2 Wind 2008 Report: GWEC). Wind energy has become increasingly cost-competitive when compared with conventional modes of power generation, with improvements in efficiency and increased scale of both turbine sizes and project capacities. It also is one of the most promising sources of energy. Critical in terms of the global resource availability vs. installed base, availability of capital equipment and manpower, and employment generation potential. Even a single Nordex multi-megawatt turbine can supply enough energy to cover the requirements of up to 3,000 four person households. Once in operation, each wind turbine provides clean energy for around 20 years. Nordex AG Nordex was founded in 1985 in Give, Denmark. The two founders were Carsten and Jens Pedersen of Thyregod, only a few kilometres from ‘BONUS Capital’ Brande. In 2000 they moved their headquarters to Germany and became Nordex A.G. and launched their IPO in 2001. Today, their primary production facilities are in Rostock, Germany, and they also have manufacturing joint ventures in China. Nordex produces around 20 % of its wind power turbines in its own facilities. As a system integrator, it sources around 80 % of the components from its suppliers with whom it develops the necessary system components on the basis of its own specifications in close consultation. With an export ratio of more than 90 per cent, Nordex occupies a strong international position, particularly in the growth regions of the world. For instance, in Great Britain Nordex has a market share of about 30 per cent and in France of around 20 per cent. Nordex is also one of the largest project developers in France. Worldwide, the company has offices and subsidiaries in 18 countries, employing around 2,200 people (beginning of 2010). The group holding company is based in Germany, running three operative units: Nordex Europe, Nordex North America and Nordex China. Nordex has already established production facilities in the key markets of Europe and China; the first turbines are due for production in the USA from 2010. The location of the new factory is Jonesboro, Arkansas. Kapitel_1.indd 34 03.08.2010 12:45:34 Uhr

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Zusammenfassung

Marketing – A Relationship Perspective

Moderne Grundlange zum Marketing

Das Lehrbuch behandelt eines der wichtigsten und aktuellsten Themenfelder des modernen Marketings. Der Ansatz verbindet dabei den klassischen Ansatz der strategischen Marketingplanung und seiner Instrumente mit dem neuen Ansatz des Relationship Marketing. Der ganzheitliche Ansatz des Buches umfasst dabei die aktuellen Marketing-Grundlagen, Praxisbeispiele sowie anwendungsorientierte Fallstudien und eignet sich somit ideal sowohl für Manager und Entscheidungsträger im Marketing-Bereich, Studenten in Bachelor- und Materstudiengängen sowie Dozenten und Trainer.