Every CEO and marketing executive periodically faces urgent strategic marketing challenges that can affect the future of the company for many years. Frequently these decisions are made without having an opportunity to study the situation and make the best possible decision.
Making spur of the moment strategic decisions reduces the likelihood that these decisions are the best.
A better approach is to perform an annual comprehensive review of markets and opportunities, then make long-term strategic decisions without the distractions of day-to-day marketing and sales activities. Daily decisions then fit into the company's overall strategic marketing goals.
What is Marketing?
To be successful, an organisation must constantly try to match its own capabilities to the needs of its customers both current and potential as well as all of its stakeholders.
Over the years marketing has been defined in many ways:
“Marketing is the management process which identifies, anticipates and supplies customer requirements” (McDonald, 1996)
What is a Strategic Plan?
n It is the managerial process that helps to develop a strategic and viable fit between the firm's objectives, skills, resources with the market opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products.
Entrepreneurs and business managers are often so preoccupied with immediate issues that they lose sight of their ultimate objectives. That's why a business review or preparation of a strategic plan is a virtual necessity. This may not be a recipe for success, but without it a business is much more likely to fail. A sound plan should:
* Serve as a framework for decisions or for securing support/approval.
* Provide a basis for more detailed planning.
* Explain the business to others in order to inform, motivate & involve.
* Assist benchmarking & performance monitoring.
* Stimulate change and become building block for next plan.
For inspiration (and a few smiles), have a look at some of the quotations and examples of bad advice included in other pages!
A strategic plan should not be confused with a business plan. The former is likely to be a (very) short document whereas a business plan is usually a much more substantial and detailed document. A strategic plan can provide the foundation and frame work for a business plan. For more information about business plans, refer to How to Write a Business Plan, Insights into Business Planning and Free-Plan: Business Plan Guide & Template.
A strategic plan is not the same thing as an operational plan. The former should be visionary, conceptual and directional in contrast to an operational plan which is likely to be shorter term, tactical, focused, implementable and measurable. As an example, compare the process of planning a vacation (where, when, duration, budget, who goes, how travel are all strategic issues) with the final preparations (tasks, deadlines, funding, weather, packing, transport and so on are all operational matters).
A satisfactory strategic plan must be realistic and attainable so as to allow managers and entrepreneurs to think strategically and act operationally - see Devising Business Strategies for further insights.
What is Business to Business?
Business-to-business, or B2B, describes a transaction, product or service, or business strategy as targeted to a business rather than the consumer. In contrast, if the target is the consumer, the term business-to-consumer, or B2C, applies. A business-to-business sale means a sale to another business, even of a product normally sold to consumers. For instance, Amazon.com might sell 1000 copies of a book to a Fortune 500 company in a business-to-business sale. Similarly, a business-to-business service is one targeted toward business customers rather than consumers. Outsourced payroll service is an example. A business-to-business organization gets revenues from other businesses, not consumers, such as Boeing. Not all businesses and services are exclusively business-to-business or business-to-consumer. Dell sells computers to both business-to-business and business-to-consumer. Similarly, an auto dealership can sell identical pickup trucks business-to-business and business-to-consumer.
What is Business to Consumer?
Business-to-consumer, or B2C describes a transaction, product or service, or business strategy as targeted to the consumer market rather than the business market. In contrast, if the target is the consumer, the term business-to-consumer, or B2C, applies. A business-to-consumer sale means a sale to a consumer, even of a product normally sold to businesses. For instance, Dell might sell a high-end workstation to a computer game buff in a business-to-consumer sale. Similarly, a business-to-consumer product is one targeted toward consumers rather than businesses. Video games are an example. A business-to-consumer organization, like Proctor and Gamble, gets revenues primarily from consumers, not businesses. Not all businesses and services are exclusively business-to-consumer or business-to-business. Dow Jones has both business-to-consumer and business-to-business information offerings. Similarly, Staples sells printer paper both business-to-consumer and business-to-business.
What is Business to Business Marketing?
Put very simply, business-to-business marketing is the marketing of goods and services to businesses in order to keep those companies operating.
The most common business-to-business markets are manufacturers, resellers, the government and non-profit institutions. Most businesses that fall into these categories do make some money off of a consumer base; however, the majority of their capital is made off of other businesses.
One great example of this is a non-profit institution. While private donations from individuals like you and me is important to a non-profit's operations, most charitable organizations make the great majority of their money from corporations or through government funding. Because of this, non-profits must make themselves and their products and services attractive not just to individuals, but also to other businesses.
To do this, non-profits and other organizations marketing themselves to other businesses must identify a competitive advantage. In other words, they must demonstrate why a company should buy goods and services from them rather than from their competitors, which is where business-to-business marketing comes in.
The biggest differences between business-to-business and business-to-consumer marketing are the types of goods and services being marketed and the types of entities the goods and services are being marketed to.
Business-to-business marketers promote goods and services that will help other companies run. Some of the things businesses produce for other businesses include equipment, components, raw materials, processing services and supplies.
In addition, because business-to-business marketers target only other companies, they have a significantly more targeted market than business-to-consumer marketers. Even when marketing very specific products for a fairly small subset of individuals, the latter type of marketer has a far larger audience than the former.
By now, you might be thinking that business-to-business marketing and business-to-consumer marketing are two entirely separate things. However, before you do, know that business-to-business marketing, in many instances, is driven largely by consumer demand. In other words, if there are no consumers to purchase a product, there is no reason for a business to exist in order to make it. If that business doesn't exist, it will obviously not need the products and services offered by another business.
Also, the goals of businesses and consumers are often the same. When choosing a company for goods and services, most consumers and businesses will make a decision based upon price, quality, delivery time and their history with the business. Other considerations might be the availability of the product or service and the quality of customer service if something goes wrong.
Business-to-business marketing is currently one of the fastest-growing areas of marketing. As technology brings more businesses together, companies are beginning to court each other far more aggressively. And as technology makes the world a smaller place, it becomes more important for marketing and sales professionals to understand and implement the principles of business-to-business marketing.
What is Business to Consumer Marketing?
B2C marketing – A guide to business to consumer marketing
B2C marketing is one of the most popularly used strategies for effective market communication and profitable business building.
Talking about B2C marketing, it is one of the many marketing campaigns that business houses can use for publicizing their goods and services. For this the company can hire people who can reach out to the general public as company representatives. These representatives can address customers at public places, such as shopping malls or districts and make them aware about company's products and services by distributing flyers containing company's information or by handing over various forms of promotional materials. The company's representatives also undertake door to door marketing to promote company products or services. All these factors make B2C marketing one of the most effective modes of communication. B2C marketing also involves advertising through newspapers, television and radio for better communication. These modes provide the companies with better consumer marketing strategies that can be worked upon to build a bigger market for the products and services and thus achieve a profitable goal.
The B2C internet marketing is one of the most advanced consumer marketing strategies that revolutionized the business world. It not only helps in developing a direct contact between the consumer and business house but also allows the businessman to advertise and sell his products and services in an easy manner.
Now a days with the advent of Internet, a businessman can make use of various online advertising strategies which help to cater to wider section of potential market globally. Online advertising strategies such as PPC and Podcast are counted among the most effective promotion campaigning for any business. These advertisements can be displayed on various search sites so that they are viewed by many people at the same time.
Making aware of company's offerings via websites also helps the business house to successfully cater the potential audience. Also, the online shopping facility provided through the websites make the customers in availing the facilities and buying the products without wasting any time and extra money to visit any physical store for making a desirable purchase.
It is not enough to just establish a business; the business should also flourish and produce profit. To meet the objective, various strategies are used for good publicity. Among various business market strategies, B2B marketing i.e. business to business marketing and B2C marketing i.e. business to consumer marketing are being constantly talked about. A constant debate over the two has created a B2B vs. B2C marketing situation in the business world. Though the purpose of both is same i.e. business development and to generate profits but their approaches are different. While B2B deals with transactions between two businesses, B2C marketing strategy helps the business house in directly targeting the customers.
Key differences between B2B and B2C Marketing
The Market Size: Consumer markets are measured in the “millions” while only a few B2B firms have customer bases over “thousands”. On the other hand, the dollar value of each B2B customer is significantly larger than in the consumer market.
The Buying Process: In the business market the buying process is much longer and involves many people. It's not unusual to have a 6-9 month buying cycle involving 5-10 people as both decision makers and influencers.
The Selling Process: Vastly different than in consumer markets, B2B sales organizations are characterized by well-paid field sales people, distributors, and business partners or independent representatives who are not only engaged in the selling but in the fulfillment of the product or services.
The Cost of A Sale: As a result of the selling process, the cost of a B2B sale is much higher. Average sales call costs now average of $350-400. A complex solution may require 8-10 calls to close a sale plus the advertising and marketing expense to generate inquiries and qualify leads.
The Value of A Sale: Balancing out the cost of B2B selling is the value of the sale.
The initial transaction value is measured in hundreds or thousands of dollars and the likelihood of on-going sales is quite high. As a result, the lifetime value of a B2B customer can span many years and add up to hundreds of thousands if not millions of dollars.
Data Quality: In general, the quality of B2B data is far below consumer standards.
One key reason: research indicates that 72% of business people have had one or more changes in their business card during a 12-month period. Unfortunately, no National Change of Address card exists for business addresses.
Lead Generation vs. Sale. Most B2B campaigns are devoted to generation of an inquiry that is subsequently qualified to a lead. In consumer marketing only a small fraction of communications are for lead generation while the majority is for direct sale. This places a greater emphasis on creating offers that are much different than those used in consumer programs.
Steps of The Strategic Marketing Planning Process
McDonald (1996) suggests that several stages have to be completed in order to arrive at a strategic marketing plan. These are summarised in the diagram below:
The extent to which each part of the above process needs to be carried out depends on the size and complexity of the business.
In an un diversified business, where senior management have a strong knowledge and detailed understanding of the overall business, it may not be necessary to formalise the marketing planning process.
By contrast, in a highly diversified business, top level management will not have knowledge and expertise that matches subordinate management. In this situation, it makes sense to put formal marketing planning procedures in place throughout the organisation.
1. Mission: A company's mission is its reason for being. The mission often is expressed in the form of a mission statement, which conveys a sense of purpose to employees and projects a company image to customers. In the strategy formulation process, the mission statement sets the mood of where the company should go.
2. Corporate Objectives: Objectives are concrete goals that the organization seeks to reach, for example, an earnings growth target. The objectives should be challenging but achievable. They also should be measurable so that the company can monitor its progress and make corrections as needed.
3. Marketing Audit: Identification, measurement, collection, and analysis of all facts and opinions that affects a company's problem. The application of judgement to uncertain areas that remain after the initial analysis.
4. SWOT Analysis: A SWOT analysis is a tool, used in management and strategy formulation. It can help to identify the Strengths, Weaknesses, Opportunities and Threats of a particular company. Strengths and weaknesses are the internal factors that create value or destroy value. Opportunities and threats are the external factors that create value or destroy value.
5. Marketing Assumptions: There are certain key determinants of success in all companies about which assumptions have to be made before the planning process can proceed. For example, it would be no good receiving plans from two product managers, one of whom believed the market was going to increase by 10 percent, while the other believed the market was going to decline by 10 percent.
6. Marketing Objectives and Strategies: Marketing objectives can be defined for each product-market segment in terms of revenue, volume or market share whereas product, price, place and promotion define the marketing strategies.
7. Forecasts of Expected Results: Having completed this major planning tasks, it is normal at this stage to employ judgement, analogous experience, field tests and so on to test out the feasibility of the objectives and strategies in terms of market share, costs, profits, etc.
8. Create Alternative Plans: It is also normal at this stage that alternative plans and mixes are considered, if necessary.
9. Marketing Budget: The incremental marketing expense can be considered to be all costs that are incurred after the product leaves the factory, other than costs involved in physical distribution, the costs of which usually represent a discrete subset.
10. Detailed Action Plan: The general marketing strategies would be developed into specific sub-objectives, each supported by more detailed strategy and action statements. For example, a product-based company might have a product plan, with objectives, strategies and tactics for price, plan and promotion as necessary.
B2B Marketing :
Wipro enables their oil customers to provide significant customer value proposition to create differentiation and value added services for their end consumers.
The business objectives are to improve
How Wipro Helps
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