UNIVERSITY OF GUYANA MARKETING 1101…..MODULE 4 ,WEEK 4

ERIC M. PHILLIPS (MBA, CTP, BSc. Eng.)

SEPT-DECEMBER 2013

STRATEGIC MARKET PLANNING THE GARDEN OF EDEN? TWO UNIVERSAL QUESTIONS???

Tremendous uncertainty about their lives encased in the two universal questions of

“Who am I?”

“What is my Purpose on Earth?”

WHAT IS EDUCATION?

SYDNEY J. HARRIS

“The purpose of education is to turn mirrors into windows”.

MARTIN LUTHER KING JR.

“To save man from the morass of propaganda, in my opinion, is one of the chief aims of education. Education must enable one to sift and weigh evidence, to discern the true from the false, the real from the unreal, and the facts from the fiction." "The function of education, therefore, is to teach one to think intensively and to think critically. But education which stops with efficiency may prove the greatest menace to society.“

“Intelligence plus character--that is the goal of true education” EDUCATION?

SRI SATHYA SAI BABA

“ The end of education is character”.

MARK TWAIN

“Never argue with stupid people. They bring you down to their level then beat you with experience”.

KNOWLEDGE IS POWER……KNOW THYSELF MARKETING & YOU

Marketing is an exciting subject.

A Way of .

We humans are walking, talking Marketers.

FIRST DEFINITION

The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goal.

OVERARCHING DEFINITION

PHILIP KOTLER and GARY ARMSTRONG……………..PRINCIPLES OF MARKETING (14TH EDITION)

MARKETING IS

“CREATING AND CAPTURING CUSTOMER VALUE”

“MANAGING PROFITABLE CUSTOMER RELATIONSHIPS”

THE MARKETING PROCESS COGNITIVE DISSONANCE; PERCETION IS REALITY……..THE POWER OF MARKETING REVISION FROM MODULE 3

OVERVIEW

MARKET INFORMATION SYSTEMS

WHAT IS MARKETING RESEARCH?

THE DIFFERENCE BETWEEN MARKET RESEARCH AND MARKETING RESEARCH

THE MARKETING RESEARCH PROCESS

THE STRATEGIC IMPORTANCE OF MARKETING RESEARCH

A CASE STUDY

THE VALUE OF MARKETING RESEARCH

MARKETING RESEARCH & MARKET RESEARCH

Can we create a luxury vehicle to challenge the world's best?

THE MARKETING RESEARCH PROCESS PRIMARY RESEARCH SAMPLING METHODS FISHBOWL TECHNIQUE OPEN SPACE TECHNIQUE OPEN SPACE TECHNIQUE I AM THE PERFECT PRODUCT MODULE 4… SESSION GOALS

 STRATEGIC MARKETING MANAGEMENT

 STRATEGIC BUSINESS UNITS

 BOSTON CONSULTING MATRIX

 SWOT ANALYSIS

 I AM THE PERFECT PRODUCT……………INDIVIDUAL ASSIGNMENT

 MARKETING PLAN FOR THE THIRD CELLULAR…GROUP EFFORT

 LIFE LESSONS

STRATEGIC PLANNING AND THE MARKETING PROCESS

STRATEGIC PLANNING

 The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

 It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies.

 “If you fail to plan, you are planning to fail.”

 The annual and long-range plans deal with the company’s current businesses and how to keep them going.

TO FAIL TO PLAN IS TO PLAN TO FAIL STEPS IN STRATEGIC PLANNING

Defining the Setting company Designing Planning marketing Company objectives the business and other functional mission and goals portfolio strategies Corporate level Business unit, product and market levels THE MARKETING PROCESS GLOBAL PLANNING IS MORE COMPLICATED

Foreign environment (uncontrollable) Political/legal 1 Economic forces forces Domestic environment (uncontrollable) 2 7 Political/ Competitive legal (controllable) structure Competitive Cultural forces Forces forces Price Product Environmental uncontrollables 7 3 country market A Promotion Channels of distribution Environmental 6 uncontrollables country market B Geography Level of Economic climate and Technology Environmental Infrastructure 4 uncontrollables 5 country Structure of market C distribution STRATEGIC MARKET PLANNING IS AN INTEGRATED AND SOPHISTICATED PROCESS STRATEGIC BUSINESS MANAGEMENT

VISION DIRECTED VISION

“TO BECOME THE

PREMIER AND MOST PROFITABLE CARIBBEAN

MEDIA ENTITY IN NORTH AMERICA”

AN INTEGRATED MEDIA ENTITY

INTERNATIONAL CARIBBEAN DIASPORA RADIO CULTURE M R 97.9 HD2 US Markets E A D EDUCATION CARIBBEAN IMPACT D I Newspaper I A O P MUSIC R ONECARIBBEANRADIO.COM S One O Internet Radio & Market Research Caribbean D NEWS E Media Inc. R U C VP RECORDS V T SOCIAL I EVENT MANAGEMENT S ISSUES C CARIBBEAN CULTURAL E THEATRE S

TRI-STATE IN THE CARIBBEAN AREA COMMERCIAL MISSION

To nurture, promote, develop and dominate a cohesive Caribbean Diaspora market for OCM media products and services leading to unprecedented brand loyalty and sustainable profits through exceptional service quality and by anticipating and exceeding customer needs through innovative marketing strategies and unique customer control mechanisms.

SOCIAL MISSION

“ BUILDING CARIBBEAN UNITY BY CREATING A PLATFORM FOR OUR VOICE TO BE HEARD”

Becoming a “Cause” advocacy media entity thereby meeting targeted needs in the Caribbean community while simultaneously partnering with Foundations which are predisposed to these causes on a national and international basis.

Haiti census climate change immigration literacy HIV/AIDS hypertension unemployment drugs teenage pregnancy

WHAT IS A MISSION?

 Mission statement are enduring statements of purpose that distinguish one business from other similar firms.

 A clear mission statement acts as an “invisible hand” that guides people in the organization.

 It identifies the scope of a firm’s operation in product and market terms.

 It promotes a sense of shared expectations in employees and communicates a public image to important stakeholder groups in the company’s task environment.

JOHN FERNANDES LTD

John Fernandes Ltd is a private, limited liability company owned and operated by the Fernandes family. Although in business previously the Company was formally registered in 1959 by the founder and first chairman, John Fernandes Snr.

Today the Company has expanded and along with its subsidiaries, form the John Fernandes Group of Companies. The present management of the Group of Companies are second and third generation family members FERNANDES PRODUCT PORTFOLIO JOHN FERNANDES GROUP OF COMPANIES

Chris Fernandes, Chairman & C. E. O. 88% of current family business owners believe the same family or families

1. Mark Fernandes will control their business in five years, but succession statistics undermine Terminal Director this belief. Only about 30% of family and businesses survive into the second 2. Philip Fernandes Company Secretary generation, 12% are still viable into the third generation, and only about 3%

3. Peter Baker Finance Controller of all family businesses operate into the fourth generation or beyond.

4. Bernie Fernandes Marketing Director The statistics reveal a disconnect between the optimistic belief of today's

5. Alan Fernandes family business owners and the reality of the massive failure of family Operations &Technical Director companies to survive through the generation 7. Shad Fernandes Workshop Manager

8. Jeremy Fernandes Terminal Operations Manager

NEAL AND MASSEY

Our Vision

We shall be a flexible, decisive and opportunistic world class organization, operating globally, listed on a major stock exchange with a well recognized brand image. We shall achieve excellent profitability as an innovative, customer focused, entrepreneurial Company with empowered CEO’s Founded in 1880s 50 Companies Annual revenues (US$ 800 M) Asset base (US$ 1.5 B)

NEAL AND MASSEY

 Parent Company: Neal & Massy Holdings Limited  +A. Lok Jack - Chairman  E.G. Warner - President & Group Chief Executive Officer  *R. Balgobin - Executive Chairman, Quicksilver Convenience Limited  *R. Bermudez - Chairman, Bermudez Biscuit Company Limited  E. Boodasingh - Group Executive Vice President, Neal & Massy Food Group  R.G. Cave - Chairman, Cave Shepherd & Company Limited  A.C. Fields - Chairman, Banks Holdings Limited  G.A.A. King - Group Executive Vice President, Neal & Massy Barbadoss  Paula Rajkumarsingh - Group Executive Vice President, Chief Financial Officer  *B. W. Young - Chairman, Neal & Massy Group Jamaica Limited NEAL & MASSEY GROUP

The Neal & Massy Group is a conglomerate operating in the majority of the English-speaking countries of the Caribbean.

We have been in business for over 85 years. We operate across a wide spectrum of industries, offer a range of quality products and services and represent several international brands.

We have a long established reputation for integrity and fair play in our business dealings. AUTOMOBILE AND INDUSTRIAL EQUIPMENT NEAL & MASSEY

1 NEAL & MASSY TRANSPORTATION GROUP LTD

2 NEAL & MASSY AUTOMOTIVE LTD

3 CITY MOTORS (1986) LTD

4 TOBAGO SERVICES LTD

5 BEST AUTO LTD

6 AUTOMOTIVE COMPONENTS LTD

7 MASTER SERV LTD

8 TRACMAC ENGINEERING LTD

9 PRES-T-CON LTD

NEAL & MASSEY ENERGY AND INDUSTRIAL GASES NEAL & MASSEY

10 NEAL & MASSY ENERGY LTD 11 NEAL & MASSY ENERGY SERVICES LTD 12 NEAL & MASSY ENERGY RESOURCES LTD 13 NEAL & MASSY Wood Group LTD (Holding 50%) 14 NM INSERTECH (CARIBBEAN) LTD 15 NM INDUSTRIAL GAS HOLDINGS LTD 16 NEAL & MASSY GAS PRODUCTS LTD 17 INDUSTRIAL GASES LTD 18 TRINTOGAS CARBONICS LTD 19 CARIBBEAN INDUSTRIAL GASES UNLIMITED 20 NMAP SERVICES UNLIMITED (Holding 50%) 21 NM PETROCHEMICALS SERVICES LTD 22 NM SUPPLY CHAIN INTEGRATORS (Holding 51%)

FOOD GROUP (FOOD/LOGISTICS/DISTRIBUTION) NEAL & MASSEY

23 HI-LO FOOD STORES DIVISION

24 MARKETING & DISTRIBUTION DIVISION

25 HUGGINS SHIPPING

26 CUSTOMS BROKERAGE LIMITED

27 MELVILLE SHIPPING LTD

28 CMA CGM TRINIDAD LTD (Holding 40%)

FINANCIAL, PROPERTY & OTHERWISE NEAL & MASSEY

29 GENERAL FINANCE CORPORATION LTD

30 NM REMITTANCE SERVICES LTD

31 MAGNA REWARDS (TRINIDAD & TOBAGO) LTD

32 NEALACO PROPERTIES LIMITED

33 NEALCO REAL ESTATE LTD.

INFORMATION TECHNOLOGY, COMMUNICATIONS, OTHER SERVICES (NEAL & MASSEY)

34 NEAL & MASSY ITC GROUP LTD

35 ILLUMINAT (TRINIDAD & TOBAGO) LTD

36 NEALCO DATALINK LTD

37 THREE SIXTY COMMUNICATIONS LTD

38 PEREIRA & COMPANY LTD

39 G4S HOLDINGS (TRINIDAD) LTD

FACTORS FOR MISSION STATEMENT

 Product and technologies eventually become outdated, but basic market needs may last forever.

 Management should avoid making its mission too narrow or too broad. e.g. pencil manufacturer – communication equipment business.

 Missions should be realistic, specific and motivating. Base on organization distinctive competencies and should fit the market environment. OBJECTIVES VS GOALS

 Objectives are the end results of planned activity.

 They states what is to be accomplished by when and should be quantified if possible.

 The achievement of corporate objectives should result in the fulfillment of the corporation’s mission.

 In contrast to objectives, a goal is an open-ended statement of what one wishes to accomplish with no quantification of what is to be achieved and no time frame for completion.

DESIGNING THE BUSINESS PORTFOLIO

 Business portfolio – the collection of businesses and products that make up the company.

 Portfolio analysis – a tool by which management identifies and evaluates the various businesses making up the company.

 SBU – a unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.

The company must 1) Analyze its current business portfolio and decide which businesses should receive more, less, or no investment. 2) Develop growth strategies for adding new products or businesses to the portfolio. THE BOSTON CONSULTING GROUP APPROACH

 A portfolio-planning method that evaluate a company’s SBUs in term of their market growth rate and relative market share.

 SBUs are classified as stars, cash cows, question marks, or dogs.

 One of the four strategies can be pursued for each SBUs.  Invest more in the SBU in order to build its share.  Invest just enough to hold the SBU’s share at its current level.  It can harvest the SBU, milking its short-term cash flow regardless of the long-term effect.  The company can divest the SBU by selling it or phasing it out and using the resources elsewhere.

THE BOSTON MATRIX Market Growth High Problem Children Stars

Dogs Cash Cows

Market Share Low High THE BOSTON MATRIX

 Problem Child:

- Products having a low market share in a high growth market

- Need money spent to develop them

- May produce negative cash flow

- Potential for the future? Problem children – worth spending good money on? THE BOSTON MATRIX

 STARS – products in markets experiencing high growth rates with a high or increasing share of the market

- Potential for high revenue growth THE BOSTON MATRIX

 Dogs: – Products in a low growth market

– Have low or declining market share (decline stage of PLC)

– Associated with negative cash flow

– May require large sums of money to support Is your product starting to embarrass your company? THE BOSTON MATRIX

 Cash Cows: – High market share

– Low growth markets – maturity stage of PLC

– Low cost support

– High cash revenue – positive cash flows Product Life Cycles and the Boston Matrix

Sales

Effects of Extension Strategies

Time PRODUCT LIFE CYCLES AND THE BOSTON MATRIX Sales/Profits PLC and Profits

PLC

Profits

Time Losses Break Even

ANSA McAL

4 DIVISIONs or SBUs  BEVERAGES  CONSUMER GOODS  PHARMACEUTICALS  CONSTRUCTION SOLUTIONS ANSA McAL BEVERAGES

 CARIB  MACKESON  STAG  SMALTA  CARIB MALTA  RIUNITE WINES  NURISHMENT  MAGNUM ANSA McAL CONSUMER GOODS

 TRINCHLORO  HEFTY BAGS  BUMBLEBEE  ARIEL  BOUNTY  PRINGLES  CHEEKIES  LUCAZADE  TROPICAL RYTHYMS ANSA McAL PHARMACEUTICALS

OLAY NICE & EASY HERBAL ESSENCE GILLETTE SECRET THE COLA WARS COKE IS LIFE THE COKE STORY PepsiCo Inc.

 Our products can be found in more than 200 countries around the globe. PepsiCo is a global food and beverage leader with a diverse product portfolio that includes 22 brands that each generate more than $1 billion each in annual retail sales. Take a closer look at the brands and products that make up the PepsiCo portfolio THE PEPISCO MISSION

Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity THE VISION

PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today." PepisCo’s Americas Beverages

Pepsi was founded in 1898 by , a New Bern, North Carolina, druggist, who first formulated Pepsi-Cola. Today, Brand Pepsi is part of a portfolio of beverage brands that includes carbonated soft drinks, juices and juice drinks, ready-to-drink teas and coffee drinks, isotonic sports drinks, bottled water and enhanced waters. PepsiCo Americas Beverages (PAB) has well known brands such as , , , Tropicana Pure Premium, water, , Mug, Tropicana juice drinks, Propel, SoBe, , Dole, Tropicana Twister and Tropicana Season's Best SCOPE OF OPERATIONS

Pepsi Beverages Company (PBC) is PepsiCo's beverage manufacturing, sales and distribution operating unit in the United States, Canada and Mexico.

PBC handles approximately 75 percent of PepsiCo's North America beverage volume. Its diverse portfolio includes some of the world's most widely recognized beverage brands, including:

Pepsi, Mountain Dew, Sierra Mist, Aquafina, Gatorade, SoBe, , and Amp Energy. In many markets, PBC also manufactures and/or distributes non-Pepsi brands, including Dr Pepper, Crush, , and Muscle Milk. The operating unit is headquartered in Westchester County, New York and employs approximately 70,000 people. PEPSI FOODS

 PepsiCo Americas Foods (PAF) is PepsiCo's food and snack business in North and South America. Its portfolio of businesses includes Frito-Lay North America, Quaker Foods & Snacks, , Gamesa and Latin America Foods.  FRIT 0LAY NORTH AMERICA includes LAY'S® and ® potato chips, ® tortilla chips, ® tortilla chips and dips, ® cheese flavored snacks, ® corn chips, ® pretzels, SUNCHIPS® multigrain snacks, ® candy coated popcorn.  QUAKER FOODS NORTH AMERICA .Its brands today include Quaker oatmeal, Life and Cap'n Crunch ready-to-eat cereals, mixes and syrups, and Rice-A-Roni, Pasta Roni and Near East side dishes  SABRITAS :Headquartered in Mexico City, Sabritas is a leader in the Mexican snack and fun food market. the business manufactures and markets several local brands such as Crujitos, Poffets, Rancheritos and Sabritones. Sabritas controls around 80% of the Mexican snacks market.  GAMESA :Headquartered in Monterrey, Mexico, Gamesa is a global leader in the cookies market, and Mexico's largest manufacturer of cookies. The company has offered its consumers a wide variety of high-quality products for every lifestyle, producing pastries, oats, cereals and other related products. It has production facilities in five states across Mexico. Among its most successful brands are Marías Gamesa, Emperador, Arcoiris, Mamut, Chokis, and Maizoro.

PEPSI IN EUROPE

 PepsiCo Europe is one of the region’s leading food and beverage companies. Encompassing over 60,000 employees, almost 900 million consumers, 11 time zones and 45 countries, the business spans from Russia west to Portugal, and Turkey north to Norway.

 With estimated net revenues of $13 billion, PepsiCo Europe brings to the market some of the world’s most respected household names – brands including Quaker Oats, Tropicana, Gatorade, , Lay’s and Pepsi-Cola, as well as local favourites such as Walkers, Fruktovy Sad, Ya, Tonus, Hrusteam, Russky Dar, Yedigun, Alvalle, Kas, , Benenuts, Star Chips, Duyvis and .

PEPSI…ASIA, AFRICA & THE MIDDLE EAST

 PepsiCo Asia, Middle East & Africa (“AMEA”) makes, markets and sells a number of leading snack food brands including Lay’s, , Chipsy, Doritos, Smith’s, Cheetos, Red Rock Deli and Ruffles, through consolidated businesses as well as through noncontrolled affiliates. Further, either independently or through contract manufacturers, AMEA makes, markets and sells many Quaker-brand cereals and snacks.

 AMEA also makes, markets and sells beverage concentrates, fountain syrups and finished goods, under various beverage brands including Pepsi, , 7UP and Mountain Dew. These brands are sold to authorized bottlers, independent distributors and retailers. However, in certain markets, AMEA operates its own bottling plants and distribution facilities. In addition, AMEA licenses the Aquafina water brand to certain of its authorized bottlers. AMEA also, either independently or through contract manufacturers, makes, markets and sells ready-to-drink tea products through an international joint venture with Unilever (under the Lipton brand name).

CULTURE WARS

PRODUCT PORTFOLIO MATRIX ANALYZING YOUR SBUs MAPPING THE FUTURE ANSOFF MATRIX Developing Growth Strategies

Existing New products products

Market Product Existing Penetration Development markets

Market New Diversification Development markets MARKET PENETRATION

THIS IS A STRATEGY FOR COMPNAY GROWTH BY INCREASING SALES OF CURRENT PRODUCTS TO CURRENT MARKET SEGMENTS WITHOUT CHANGING THE PRODUCT.

THIS CAN BE DONE THROUGH INCREASING THE NUMBER OF OUTLETS OR REDUCING PRICE

MARKET DEVELOPMENT

A STRATEGY FOR COMPANY GROWTH BY IDENTIFYING AND DEVELOPING NEW PRODUCTS TO CURRENT MARKET SEGMENTS PRODUCT DEVELOPMENT

A STRATEGY FOR COMPANY GROWTH BY OFFERING MODIFIED OR NEW PRODUCTS TO CURRENT MARKET SEGMENTS DIVERSIFICATION

A STRATEGY FOR COMPANY GROWTH THROUGH STARTING UP OR ACQUIRING BUSINESSES OUTSIDE THE COMPANYS CURRENT PRODUCTS AND MARKETS Factors Influencing Company Marketing Strategy

Marketing Demographic- Intermediaries Technological- economic natural environment environment Product

Publics Place TARGET Price Suppliers CONSUMERS

Promotion

Political- Social- legal Competitors cultural environment environment MARKET SEGMENTATION

DIVIDING THE MARKET INTO DISTINCT GROUP OF BUYERS WHO HAVE

DISTINCT NEEDS, CHARACTERISTICS OR BEHAVIOUR AND WHO MIGHT REQUIRE

SEPARATE OR SPECIFIC PRODUCTS OR MARKETING MIX The four Ps of Marketing Mix

Product Variety Price Quality List price Design Discounts Features Allowances Brand name Payment period Packaging Credit terms Services Target customers

Intended positioning Place Promotion Channels Advertising Coverage Personal selling Assortments Sales promotion Locations Public relations Inventory Transportation Logistics The Marketing Environment and Competitor Analysis

SWOT analysis PEST analysis Five forces analysis SWOT analysis

Strengths (internal) Weaknesses (internal) Opportunities (external) Threats (external) PEST analysis

Political factors Economic factors Socio-cultural factors Technological factors

STRATEGIC MARKET PLANNING End of week 4