Planning principles involved in developing a marketing strategy

Planning principles involved in developing a merchandising outlineYum Brands IntroductionYum Brands, Inc., found in Louisville, Ky., is the worlds largest restaurant company in terms of agreement restaurants with to a greater extent than 37,000 restaurants in solely everywhere 110 countries and territories and more than 1 million associates. Yum is ranked 239 on the batch 500 List, with nearly $11 billion in revenue in 2009. Four of our restaurant brands KFC, pizza pie Hut, Taco Bell and Long toilet Silvers ar the global leaders of the chicken, pizza, and Mexi bottom of the inning style f are and quick- operate sea sus ten dollar billance categories.The Yum arranging including 3 run segments which are U.S. grocery store, Yum Restaurants International, and China Division. In 2009, the Yum expanded more than 4 late(a) restaurants each day of the year outside of US, making it a leader in international retail information.Results for 2009 once a hand af familyed Yum co nsistent say of success with 13% Earnings Per Share (EPS) growth, which mark the eighth straight year we hold opened at least 13% growth and exceeded our 10% EPS growth target. at heart 2009, the company opened more than 1,400 refreshful restaurants outside the U.S. Moreover, Yum brand maintained their Return on investment funds Capital (ROIC) of 20% and continued to be an industry leader.YUM convergencesKFCKFC is the leader in the chicken segment in the Singapore Quick good Restaurant (QSR) industry. This is possible because rooted to its cores are simple scarce in truth values that eachow KFC to offer still the best its customers.Captivating aroma that triggers your senses.A satisfying fertilise of hearty, mouth watering food specially prepared with the Colonels secret recipe.Generous portions of fresh, succulent side dishes.Salads to counterbalance your diet.At KFC, the restaurant offer full(prenominal) whole tone and great tasting food in a popular array of compl ete meals such(prenominal) as Daily Savers Meals, WOW Meal s and Family Feast, that change the whole family to share a fun and satisfying experience with all affordability and convenience of Quick attend Restaurant.Pizza HutPizza hut operates in 84 countries and territories by means ofout the world under the get word Pizza Hut and features a physical body of pizza with different topping as well as pasta, salads, sandwiches and differentwise food items and beverages. The distinctive decor features a bright red roof.Pizza Hut has been named the figure of speech one national pizza chain in America according to Restaurant Institution 2001 prime(a) in Chains survey. Pizza Hut is the recognized leader of $ 25 billion pizza course of study and has been since 1987.Building the leading pizza company has required innovation, a commitment to quality, and a dedication to service and value. But perhaps as much as anything, it has taken the qualities of entrepreneurship, growth and lea dership, which see characterized its handicraft through more than quaternary decades of success.Taco BellTaco Bell is an American restaurant chain based in Irvine, California. It specializes in Mexican-style food and quick service. Taco Bell serves tacos, burritos, quesadillas, nachos, other specialty items and a variety of lever Menu item.Recently, Taco Bell serves more than 2 billion consumers each year in more than 5,800 restaurants in the U.S., of which more than 80% are owned and operated by independent franchisees.Long rear SilversLong John Silvers, Inc. is a United States-base fast-food restaurant that specializes in seafood. The name and concept were by Robert Louis Stevensons discussion Treasure Island. Its headquarters are in Louisville, Kentucky.A W RestaurantA W Restaurants, Inc. is a chain of fast-food restaurants, distinguished by its draft root beer and root beer floats. AW was arguably the first successful food franchise company, starting franchise in 1921. Today it has franchise locations throughout the world, serving a classifiable fast food menu of hamburgers and fries, as well as hot dogs. A bend of its outlets are drive-in restaurants with carhops. The company name was taken from the last name initials of partners Roy Allen and Frank Wright. The chain is currently owned by Yum Brands.Yum Vision dodgingYum brands are committed to continuing the success realized during our first ten years. Our success has only just begun as we look forward to the future, one which promises a long racecourse for growth, especially on an international level. Yum is building a vibrant global business by nidus on four give away growth strategies.Build leading brands across china in every(prenominal) significant categoryOur experienced and tremendous local team led by our Vice president of Yum Brands and President of China, Sam Su, grew our kale a whopping 25% in 2009 on top of 28% in 2008. You dont regard to be a math major (and Im non) to slowly calculate thats over 50% growth in two years. The good news is that we achieved these results even though our same retention sales were slightly negative as the consumer generally lagged Chinas relatively strong economic growth. We added a record 509 new units in Mainland China and now force water nearly 3,500 restaurants that sustaind near record restaurant margins of 20% in 2009. In spite of this robust profit growth, some investors hit asked Is Yums recent relatively weak same store sales performance in Mainland China an early indicator that something is premature with the business or Yum is growing likewise fast? We believe the answer is definitively NODrive belligerent international expansion and build strong brands everywhere.Yum Restaurants International, which operates in over 110 countries and territories outside the US and China, continues to deliver on this scheme as it delivered 5% system sales and profit growth both excluding immaterial currency trans lation which negatively impacted our reported profits by 11 percentage points in 2009. We treasure this divisions high return franchising model with over 90% of our new restaurants built by franchisees that generate over $650 million in franchise fees, requiring minimal capital on our part. Driven by this franchisee development machine, we opened nearly 900 new restaurants in over 75 countries. Thats the tenth straight year we have opened more than 700 new units and our pipeline remains strong as we go into 2010.Dramatically purify U.S. Brand Positions, Consistency and Returns.Theres no research 2009 was a very disappointing year for our US business. overall our same store sales declined 5% as we grew profits only 1%, led to begin with by a restructuring initiative we took the prior year which yielded a $65 million decrease in our general and administrative expenses. Neverthe slight, we remain confident were winning the right steps to deliver stronger brand positioning, higher( prenominal) returns and consistent growth performance to tap the inherent sales opportunity and ultimate value in our 18,000 restaurants. And the good news is we have the selling strength to do so with category leading brands along with outstanding unit economics on a stand-alone basis. We also have a system that generates a steady earnings stream of over $700 million in franchise and licensing fees. As we go forward, our dodge is to soften leverage our large US restaurant asset base and all our restaurants somewhat the world with what we have coined incremental sales layers in these 5 areas1) More options for consumers across our menu.2) More present-day(a) beverage options unique desserts.3) Expanded day parts, especially breakfast.4) Broader protein offerings.5) Contemporary assets.Drive Industry-leading Long-term Shareholder and Franchisee ValueExtremely proud and continue to be a leader among consumer companies with return on invested capital at 20%. The companies defined a global cash machine, with each of our divisions generating free cash flow or effectively funding their own capital investments. As this capital is deployed to high growth opportunities.Planning principles merchandise homework is the process that leads to the creation of a selling plan. The marketing plan is a systematic be after for achieving the objectives of creating value for customers and competitive return, growth, and improvementousness for the organization. Steps of the planning principle can be described as pursuitStrategy Before TacticsDevelop the strategic marketing plan first. This entails emphasis on scanning the external environment, identifying early forces emanating from it, and developing appropriate strategic responses. Involve all levels of management in the process. A strategic plan covers a period of three to fiver years. Only when this plan has been authentic and agreed upon is a one-year operational marketing plan developed. Never write the one-plan first and infer it.Situate merchandise Within OperationsFor the purpose of marketing planning, put marketing a pissed as possible to the customer. When practical, have both marketing and sales report to the same person, who is not the oral sex executive officer.Shared Values About MarketingMarketing is a management process whereby the resources of the inbuilt organization are use to satisfy the necessarily of selected customer groups to achieve the objectives of both parties. Marketing is an office of mind rather than a series of functional activities.Structure Around MarketsOrganize company activities nearly customer group if possible rather than around functional activities, and conduct marketing planning through with(p) in these strategic business units. Without excellent marketing planning in strategic business units, corporeal marketing planning is of limited value.Scan The Environment ThoroughlyThe quest are requirements for an effective marketing audit Checklists of questions customized according to level in the organization are prepared.The checklists form the basis of the organizations Marketing information System (MIS). The marketing audit is required activity. Managers a not allowed to hide behind vague term, such as poor economic conditions.Managers are encouraged to incorporate the tools of marketing in their audits, such as product life cycles and portfolios.Summarize Information In SWOT AnalysesInformation is the foundation on which a marketing plan is built. From information ( upcountry and external) comes intelligence. A SWOT psychoanalysis does the followingFocuses on each item segment of crucial importance to the organizations futureIs a summary emanating from the marketing audit.Is brief, interesting, and concise.Focuses on differentiate factors only.Lists key external opportunities and threats only.Identifies the real issues, is not a list of unrelated points.Is clear enough for reader to apprehend instantly the main thrust of the business, even to the point of being able to write marketing objectives.Answers the implied question which mean that..? to get the real implications.Does not leave out all-important(prenominal) fact, questions, and issues.Skills and KnowledgeEnsure that all those responsible for marketing have necessary marketing receiptledge and skills for the job. In particular, ensure that they understand and bonk how to sue the tools of marketing, such as the followingInformation and scanning.Positioning.Market segmentation.Targeting.Product life cycle analysis.Portfolio management. scissure analysis.Boston Consulting Group matrix.Directional policy matrix.Four Ps of management-product, harm, place, promotion.Marketing personnel also need communication and interpersonal skills.Systematize The ProcessIt is essential to have a set of written procedures and a well-argues common format for marketing planning. The purposes of such a system are as followsTo ensure that all key issues are s ystematically consideredTo pull together the essential elements of the strategic plan in a consistent mannerIn a multi business enterprise, to help corporate management to compare different businesses and to understand the overall condition of and prospects for the organization.Sequence ObjectivesEnsure that all objectives are prioritized according to their impact on the organization and their urgency and that resource are allocated accordinglyStyle and CultureMarketing planning is not effective without the active support and participation of top management. But even with this support, the lawsuit of marketing planning has to be appropriate for phase of the organizational lifeline. This phase is measured before an attempt is made to predate marketing planning.Accurately describe and critically evaluate a range of tools and techniques use to produce a strategic marketing planMarketing AuditMarketing audit can be easily identified as an essential part of an efficient marketing plan ning process. It is a very important process that is not only carried out at the begging but also at fifty-fifty intervals during the actual marketing planning process. A marketing audit has a lot of influence upon the marketing planning process through the various external and internal factors. There are a number of tools and techniques that are employ during a marketing audit. Some of the tools areSWOT analysis One of the most(prenominal) important tools of marketing audit is the SWOT or Strengths, Weakness, Opportunities and Threats analysis. This tool is of a lot of help to the marketers and is used at the beginning of the marketing audit process. The SWOT analysis comes along with a lot of advantages but it has some drawbacks as well. Some of the drawbacks of SWOT analysis are that it is very subjective and cannot be relied upon too much. Thus, it has always been recommended that the SWOT analysis be used as a guide in the marketing planning process and not as a prescriptio n to the various problems.PEST Analysis This is the analysis of the various factors that have an effect upon the marketing process. The organization undergoing a marketing analysis should be taking into consideration all the environmental factors and give it a thorough analysis. These environmental factors whitethorn be internal or external. The internal factors compromise of the staff and queries related to them. The external would be the external customers and the various distributors committed to the concern and the political and economic factors are also taken into consideration. usher Five mash Analysis This is an analysis that enables the marketer to have a clear picture of the competition outside in the market. This type of analysis has some similarities with the PEST analysis and is different in the sense that it rivetes its attention upon a case-by-case business or a single concern. In this analysis the marketer basically goes through five basic areas of concern. These a reas can be classified as the areas of treat of entry, the suppliers power the power of the buyers and also the threats revealed by the competitors and the rivals. Some of the advantages associated with this analysis are that it leads to economies of large scale with the help of mass purchase and sales. The various dissemination channels can also be easily accessed and also finds out if the terms of switching over to some other supplier is low or not.Yum Brands, Inc. SWOT AnalysisThe Yum Brands, Inc. SWOT Analysis examines the companys key business structure and operations, history and products, and provides summary analysis of its key revenue lines and dodging.StrengthsThe Companys continuous expansion into Asia and other regions.Well-developed restaurant brands and exceptionally efficient and ever- up(a) restaurant operations.The idea of multi-branding which causes one establishment to charm to varying customers. tender advertising campaigns.Constant updating of menus and spe cials to appeal to current trends and fads.WeaknessesSome brands (concepts) may weigh down profits of top performing ones.Sensitivity to market fluctuations.OpportunitiesInternational expansion and growth.In domestic markets, turning one-brand units into multi-brand units to appeal to more customers, which volition cut into competitors revenues.Improvement of operations.ThreatsThe highly competitive nature of the restaurant industry.Entry of competitors into strange markets first.Menu appeal.Yum Brands (Yum Brands) operates franchises and licenses a chain of restaurant brands including Kentucky Fried Chicken (KFC), Pizza Hut, Taco Bell, Long John Silvers (LJS) and All America Food (AW). The company operates in over 110 countries around the globe. It is headquartered in Louisville, Kentucky and employs roughly 336,000 people. The company recorded revenues of $11,279 million during fiscal year ending December 2008 (FY2008), an increase of 8.3% over FY2007. The operating profit of the company was $1,506 million during FY2008, an increase of 11% over FY2007. The net profit was $964 million in FY2008, an increase of 6.1% over FY2007. lying-in 2Examine A Range of Marketing Strategy Options explicate with clarity a range of marketing strategy options available and evaluate their benefits and l caricatures, using supporting examples.4.1. The Porter Generic Strategy ModelIf the primary determinant of a firms profitability is the attractiveness of the industry in which it operates, an important secondary determinant is its position within that industry. thus far though an industry may have below- clean profitability, a firm that is optimumly positioned can generate superior returns.A firm positions itself by leverage its strengths. Michael Porter has argued that a firms strengths ultimately fall into one of two headings cost advantage and specialisation. By applying these strengths in either a broad or narrow scope, three generic strategies result cost leadership, differentiation, and focus. These strategies are applied at the business unit level. They are called generic strategies because they are not firm or industry dependent. The following table illustrates Porters generic strategiesTarget ScopeAdvantageLow CostProduct UniquenessBroad(Industry Wide)Cost LeadershipStrategyDifferentiationStrategyNarrow(Market Segment)FocusStrategy(low cost)FocusStrategy(differentiation)Cost Leadership StrategyThis generic strategy calls for being the low cost producer in an industry for a given level of quality. The firm sells its products either at average industry prices to earn a profit higher than that of rivals, or below the average industry prices to gain market share. In the event of a price war, the firm can maintain some profitability while the competition suffers losses. Even without a price war, as the industry matures and prices decline, the firms that can produce more cheaply allow remain profitable for a longer period of time. The cost leade rship strategy usually targets a broad market.Some of the ways that firms acquire cost advantages are by improving process efficiencies, gaining unique access to a large source of lower cost materials, making optimal outsourcing and vertical integration decisions, or avoiding some costs altogether. If competing firms are unable to lower their costs by a similar amount, the firm may be able to sustain a competitive advantage based on cost leadership.Firms that succeed in cost leadership often have the following internal strengthsAccess to the capital required making a significant investment in output assets this investment represents a barrier to entry that many firms may not overcome.Skill in design products for efficient manufacturing, for example, having a small component count to shorten the assembly process.High level of expertness in manufacturing process engineering.Efficient distribution channels.Each generic strategy has its risks, including the low-cost strategy. For exam ple, other firms may be able to lower their costs as well. As technology improves, the competition may be able to leapfrog the production capabilities, thus eliminating the competitive advantage. Additionally, several firms following a focus strategy and targeting various narrow markets may be able to achieve an even lower cost within their segments and as a group gain significant market share.Differentiation StrategyA differentiation strategy calls for 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. The value added by the uniqueness of the product may allow the firm to charge a premium price for it. The firm hopes that the higher price will more than cover the extra costs incurred in offering the unique product. Because of the products unique attributes, if suppliers increase their prices the firm may be able to pass along the costs to its customers who cannot find substitute products easily.Firms that succeed in a differentiation strategy often have the following internal strengthsAccess to leading scientific research.Highly skilled and creative product development team.Strong sales team with the ability to successfully communicate the perceived strengths of the product.Corporate reputation for quality and innovation.The risks associated with a differentiation strategy include imitation by competitors and changes in customer tastes. Additionally, various firms pursuing focus strategies may be able to achieve even greater differentiation in their market segments.Focus StrategyThe focus strategy concentrates on a narrow segment and within that segment attempts to achieve either a cost advantage or differentiation. The premise is that the needs of the group can be better serviced by focusing solely on it. A firm using a focus strategy often enjoys a high degree of customer loyalty, and this entrenched loyalty disco urages other firms from competing directly.Because of their narrow market focus, firms pursuing a focus strategy have lower volumes and therefore less bargaining power with their suppliers. However, firms pursuing a differentiation-focused strategy may be able to pass higher costs on to customers since close substitute products do not exist.Firms that succeed in a focus strategy are able to tailor a broad range of product development strengths to a relatively narrow market segment that they know very well.Some risks of focus strategies include imitation and changes in the target segments. Furthermore, it may be somewhat easy for a broad-market cost leader to adapt its product in order to compete directly. Finally, other focusers may be able to carve out sub-segments that they can serve even better.A combine of Generic Strategies Stuck in the Middle?These generic strategies are not necessarily compatible with one another. If a firm attempts to achieve an advantage on all fronts, i n this attempt it may achieve no advantage at all. For example, if a firm differentiates itself by supplying very high quality products, it risks undermining that quality if it seeks to become a cost leader. Even if the quality did not suffer, the firm would risk projecting a confusing image. For this reason, Michael Porter argued that to be successful over the long-term, a firm must select only one of these three generic strategies. Otherwise, with more than one single generic strategy the firm will be stuck in the middle and will not achieve a competitive advantage.Porter argued that firms that are able to succeed at multiple strategies often do so by creating separate business units for each strategy. By separating the strategies into different units having different policies and even different cultures, a corporation is less plausibly to become stuck in the middle.However, there exists a viewpoint that a single generic strategy is not always best because within the same product customers often seek multi-dimensional satisfactions such as a combination of quality, style, convenience, and price. There have been cases in which high quality producers faithfully followed a single strategy and then suffered greatly when another firm entered the market with a lower-quality product that better met the overall needs of the customers.Generic Strategies and Industry ForcesThese generic strategies each have attributes that can serve to defend against competitive forces. The following table compares some characteristics of the generic strategies in the context of the Porters five forces.Generic Strategies and Industry ForcesIndustryForceGeneric StrategiesCost LeadershipDifferentiationFocusEntryBarriersAbility to cut price in retaliation deters potential entrants.Customer loyalty can discourage potential entrants.Focusing develops core competencies that can act as an entry barrier.BuyerPowerAbility to offer lower price to coercive buyers.Large buyers have less power t o negotiate because of few close alternatives.Large buyers have less power to negotiate because of few alternatives.SupplierPowerBetter insulated from powerful suppliers.Better able to pass on supplier price increases to customers.Suppliers have power because of low volumes, but a differentiation-focused firm is better able to pass on supplier price increases.Threat ofSubstitutesCan use low price to defend against substitutes.Customers become attached to differentiating attributes, reducing threat of substitutes.Specialized products core competency protect against substitutes. rivalryBetter able to compete on price.Brand loyalty to keep customers from rivals.Rivals cannot meet differentiation-focused customer needs.SourcesTask 3Explore the implications of changes in the marketing environment of organizationsAssess the current changes in the marketing environment for an organization changing Marketing EnvironmentProfessional marketing has become more important as advanced countries have shifted from a supply to a demand environment. For most of history the world has been characterised by insufficient supply not enough food and material goods to meet human requirements. The key precedence in the past has been improving production, purchasing and finance of trade. Today this has all changed. Now, the advanced countries are characterised by excessive supply. The central problem is attracting demand, not meeting it. Faced with an array of alternatives, the customer is spoiled for choice. The priority in management is how to identify and develop goods and services that are more attractive to customers than those of competitors.As the market environment changes, managers have to adapt their strategies and organization. Unless these changes are made obsolete by changes in customer wants, new technologies and new competitors that have adapted more effectively.Fashionisation In the past fashion was identified with womens clothing. But directly more and more markets watches, motorcycles, beer, cars, pharmaceuticals, cinema music, electronics goods, even management courses are characterised by annual model changes, quick obsolescence and an unpredictable and fickle demand. Companies that cannot handle novelty, rapid model replacement, fashion and style see their market shares move and their profit margins. Without novelty and continual feature enhancement, the company will see its prices and market share unrelentingly chiselled away. The original iPod was launched in 2001 and updated twice within the next year. By mid -2005 the range had grown to four basic models all targeted at different uses and users and positioned as the music fashion accessory.Micro-markets The old textbooks to postulate that a company could between a differentiated and an undifferentiated strategy. An undifferentiated strategy is where a company makes a single product for the whole market. The usual example was Coca-Cola, which, it was said, offered one product, in on e bottle size, at one price and with one advertising message to all customers, everywhere in the world. No longer. Even Coca-Cola is today offered in an increasing and bewildering variety of forms-new Coke, classic and cherry, with or without caffeine, diet Coke, in cans or in numerous bottle sizes, all advertised in various style and formats. Todays customers expect the manufacture to customize the product and service to their specific needs.engineering has made this variety expansion economically viable for companies. sunrise(prenominal) flexible systems, such as computer-aided design and manufacturing and customised software, permit ever-finer market segmentation and product range expansion.Finally, the new communications technology makes it possible to deliver individual messages.Rising expectationChanging environment Marketing strategy Organization for marketingFashionisation Speed Breaking HierarchiesMicro-Markets Customisation Small Business UnitsRising Expectations Quality Selt-Managing TeamsTechnology Information Networks Re-EngineeringCompetition Core Competences Strategic AlliancesGlobalisation Think Global Transnational OrganisationService Software Augmentation Learning OrganisationCommoditisation Partnerships Account ManagementErosion Of Brands Innovation Expeditionary Marketing sassy Constraints Stakeholders Role of the BroadThe changing marketing environment and its implication3.2 Analyse how an organization could respond to the changesChanging Organization for Marketing The rapidly changing business environment makes existing products and marketing strategic obsolete. Companies have to become faster, more flexible, more innovative and capable of forging new partnerships with customer and suppliers. To put in place such strategies, however, requires sweeping organizational changes.Yesterdays giant organizations such as Marks Spencer, General Motors, ICI, national Bank, Sears an