MARKETING LEADERSHIP AND PLANNING.pdf

MARKETING LEADERSHIP AND PLANNING STUDENT STUDENT NO - 12610882 12610882

MARKETIN MARKETING G LEADERSHI LEADERSHIP P AND PLANNIN PLANNING G DECEMBER 2012

“I confirm that in forwarding this assessment for marking, I understand and have applied the CIM

policies relating relating to word count, plagiarism plagiarism and collusion for all tasks. This assessment assessment is the result of  my own independent work except except where otherwise otherwise stated. Other Other sources are acknowledged acknowledged in the body of the text, a bibliography has been appended and Harvard referencing has been used. I have not shared my work with other candidates. I further confirm that I have submitted an electronic copy of  this assessment assessment to CIM in accordance with with the regulations regulations .”

STUDENT NUMBER – 12610882 ASSIGNMENT WORD COUNT •

Task One

- 2751

•

Task Two

- 3954

•

Task Three

- 1635

•

Total word count  –  8340

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MARKETING LEADERSHIP AND PLANNING STUDENT STUDENT NO - 12610882 12610882

TABLE OF CONTENTS TASK

ONE................................................................................................................................................................................3

REPORT BASED ON STRATEGIC AUDIT ...................... ..................... ..................... ........................ ..................... ......... 3 REPORT....................................................................................................................................................................................4 1.0 EXECUTIVE SUMMERY....................... SUMMERY ....................... ..................... ..................... ........................ ..................... ..................... .......... 4 2.0 INTRODUCTION INTRODUCTION ..................... ..................... ...................... ....................... ..................... ..................... ........................ . 5 2.1 METHODOLOGY METHODOLOGY ........................ ..................... ..................... ........................ ..................... ..................... ..................... 5 2.3 SUMMERY OF STRATEGIC AUDIT FINDINGS.......................................................................................................5 2.3.1 VISION VISION OF LANKEM PAINTS LIMITED ...................... ..................... ..................... ........................ ................... 6 2.3.2 MISSION OF LANKEM PAINTS LIMITED ...................... ..................... ...................... ....................... ................ 6 2.3.3 STRATEGIC RECOMMENDATION RECOMMENDATIONS S TO IMPROVE COMPETITIVE COMPETITIVE POSITIONING POSITIONING ....................... ............ 8 2.3.4 STRATEGIC RECOMMENDATIONS TO IMPROVE RELATIONSHIP MARKETING ORIENTATION OF LANKEM ........................ ..................... ..................... ........................ ..................... ..................... ........................ .......... 10 2.3.5 HOW LANKEM MARKETING STRATEGIES TO BE REVISED....................................................................11 2.3.6 TASK

CONCLUSION.....................................................................................................................................................20

TWO.............................................................................................................................................................................21

STRATEGIC MARKETING PLAN ..................... ..................... ...................... ....................... ..................... ..................... . 21 2.4 MARKETING PLAN FOR YEAR 2013-16.................................................................................................................22 FOR LANKEM PAINTS LIMITED..............................................................................................................................22 2.4.1

VISION.................................................................................................................................................................22

2.4.2 MISSION ....................... ..................... ...................... ........................ ..................... ..................... ........................ .. 22 2.4.3 CORPORATE GOALS.........................................................................................................................................22 2.4.4 STRATEGIC ANALYSIS ....................... ..................... ..................... ........................ ..................... ..................... . 23 2.4.5 STRATEGIC CHOICE.................... CHOICE .................... ...................... ...................... ....................... ..................... ..................... ........ 28 2.4.6 IMPLEMENTATION IMPLEMENTATION ....................... ..................... ..................... ........................ ..................... ..................... ........ 30 2.4.7

CONCLUSION.....................................................................................................................................................35

2.4.8 EVALUATING EVALUATING SUCCESS OF OF THE MARKETING PLAN ...................... ..................... ...................... ............... 36 TASK

THREE.........................................................................................................................................................................38

BRIEFING PAPER FOR BOARD OF DIRECTORS ........................ ...................... ..................... ........................ ............. 38 2.5 BRIEFING PAPER ON LEADERSHIP CHALLENGES AND STYLE FOR IMPLEMENTING MARKETING MARKETING PLAN..................................................................................................................................................................................39 2.5.1 OVERVIEW ...................... ..................... ..................... ........................ ..................... ..................... ....................... 39 2.5.2 CRITICAL EVALUATION OF CURRENT LEADERSHIP PARADIGM.........................................................39 2.5.3 CORPORATE LEVEL LEADERSHIP CHALLENGES FOR IMPLEMENTING RECOMMENDATIONS..... RECOMMENDATIONS..... 41 2.5 4 KEY LEADERSHIP LEADERSHIP SKILLS NEEDED ....................... ..................... ..................... ........................ ..................... 44 2.6 CRITICAL ASSESSMENT OF MY OWN LEADERSHIP STYLE............................................................................44 2.7

CONCLUSION.............................................................................................................................................................46

REFFERNCES....................................................................................................................................................................47 APPENDIX 01- LANKEM ROBBIALAC PAINTS LIMITED........................ ..................... ..................... ....................... 48 APPENDIX 02 – STRATEGIG AUDIT.............................................................................................................................50 APPENDIXS ....................... ..................... ..................... ........................ ..................... ..................... ........................ .......... 54

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MARKETING LEADERSHIP AND PLANNING STUDENT STUDENT NO - 12610882 12610882

TABLE OF CONTENTS TASK

ONE................................................................................................................................................................................3

REPORT BASED ON STRATEGIC AUDIT ...................... ..................... ..................... ........................ ..................... ......... 3 REPORT....................................................................................................................................................................................4 1.0 EXECUTIVE SUMMERY....................... SUMMERY ....................... ..................... ..................... ........................ ..................... ..................... .......... 4 2.0 INTRODUCTION INTRODUCTION ..................... ..................... ...................... ....................... ..................... ..................... ........................ . 5 2.1 METHODOLOGY METHODOLOGY ........................ ..................... ..................... ........................ ..................... ..................... ..................... 5 2.3 SUMMERY OF STRATEGIC AUDIT FINDINGS.......................................................................................................5 2.3.1 VISION VISION OF LANKEM PAINTS LIMITED ...................... ..................... ..................... ........................ ................... 6 2.3.2 MISSION OF LANKEM PAINTS LIMITED ...................... ..................... ...................... ....................... ................ 6 2.3.3 STRATEGIC RECOMMENDATION RECOMMENDATIONS S TO IMPROVE COMPETITIVE COMPETITIVE POSITIONING POSITIONING ....................... ............ 8 2.3.4 STRATEGIC RECOMMENDATIONS TO IMPROVE RELATIONSHIP MARKETING ORIENTATION OF LANKEM ........................ ..................... ..................... ........................ ..................... ..................... ........................ .......... 10 2.3.5 HOW LANKEM MARKETING STRATEGIES TO BE REVISED....................................................................11 2.3.6 TASK

CONCLUSION.....................................................................................................................................................20

TWO.............................................................................................................................................................................21

STRATEGIC MARKETING PLAN ..................... ..................... ...................... ....................... ..................... ..................... . 21 2.4 MARKETING PLAN FOR YEAR 2013-16.................................................................................................................22 FOR LANKEM PAINTS LIMITED..............................................................................................................................22 2.4.1

VISION.................................................................................................................................................................22

2.4.2 MISSION ....................... ..................... ...................... ........................ ..................... ..................... ........................ .. 22 2.4.3 CORPORATE GOALS.........................................................................................................................................22 2.4.4 STRATEGIC ANALYSIS ....................... ..................... ..................... ........................ ..................... ..................... . 23 2.4.5 STRATEGIC CHOICE.................... CHOICE .................... ...................... ...................... ....................... ..................... ..................... ........ 28 2.4.6 IMPLEMENTATION IMPLEMENTATION ....................... ..................... ..................... ........................ ..................... ..................... ........ 30 2.4.7

CONCLUSION.....................................................................................................................................................35

2.4.8 EVALUATING EVALUATING SUCCESS OF OF THE MARKETING PLAN ...................... ..................... ...................... ............... 36 TASK

THREE.........................................................................................................................................................................38

BRIEFING PAPER FOR BOARD OF DIRECTORS ........................ ...................... ..................... ........................ ............. 38 2.5 BRIEFING PAPER ON LEADERSHIP CHALLENGES AND STYLE FOR IMPLEMENTING MARKETING MARKETING PLAN..................................................................................................................................................................................39 2.5.1 OVERVIEW ...................... ..................... ..................... ........................ ..................... ..................... ....................... 39 2.5.2 CRITICAL EVALUATION OF CURRENT LEADERSHIP PARADIGM.........................................................39 2.5.3 CORPORATE LEVEL LEADERSHIP CHALLENGES FOR IMPLEMENTING RECOMMENDATIONS..... RECOMMENDATIONS..... 41 2.5 4 KEY LEADERSHIP LEADERSHIP SKILLS NEEDED ....................... ..................... ..................... ........................ ..................... 44 2.6 CRITICAL ASSESSMENT OF MY OWN LEADERSHIP STYLE............................................................................44 2.7

CONCLUSION.............................................................................................................................................................46

REFFERNCES....................................................................................................................................................................47 APPENDIX 01- LANKEM ROBBIALAC PAINTS LIMITED........................ ..................... ..................... ....................... 48 APPENDIX 02 – STRATEGIG AUDIT.............................................................................................................................50 APPENDIXS ....................... ..................... ..................... ........................ ..................... ..................... ........................ .......... 54

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MARKETING LEADERSHIP AND PLANNING STUDENT STUDENT NO - 12610882 12610882

TASK ONE REPORT BASED ON STRATEGIC AUDIT

WORD COUNT  – 2751

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

REPORT TO

 – MARKETING DIRECTOR

FROM

 – MARKETING MANAGER

SUBJECT  –  RELATIONSHIP ORIENTED COMPETITIVE MARKETING PLAN FOR YEAR 2013-16 FOR LANKEM PAINTS LIMITED DATE

 – OCTOBER 01, 2012

1.0 EXECUTIVE SUMMERY Purpose of this report is to obtain approval for the recommended strategic marketing plan developed focusing on enhancing relationship orientation and competitive positioning of the Lankem Paints Limited for year 2013 -15. Strategic audit finding are summarized in the initial section of the report and current vision and mission have been critically analyzed for becoming more competitive and relationship oriented. Second section consists of revised marketing strategies to support Lankem strategic intents and based on these recommendations strategic marketing plan is developed in next section to achieve following objectives. 1. Increase revenue to 6 billion from 2 billion by year ending 2015 -16 2. Increase profitability to 400 million from 90 million (2011-12) by year ending 2015 -16 3. Increase market share to 30% and to be market leader by year ending 2015 -16 4. Complete product portfolio of Robbialac to 90 % from 79% and Rolac to 30 % from 19% by year ending 2015 -16

Balanced scorecard and millstone method is recommender to evaluate the success of marketing plan. Potential leadership challenges are outlined with recommendations to overcome and as marketing manager my own leadership style is assessed to develop required skills and characteristics to support in the process of implementation.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.0 INTRODUCTION Sri Lankem paints coating industry is becoming highly competitive and customer requirements are exponentially changing. Nearly sixty of paint manufactures are constantly struggling to cater these changes to sustain and achieve growth in the business. Lankem paints Limited, a SBU of Lankem Ceylon PLC, as one of the oldest pioneering coating company needs whole new strategic directional change to the existing business process model to position as sustainably competitive relationship oriented corporate entity.

2.1METHODOLOGY Strategic audit was conducted on existing Lankem vision, mission, corporate values & objectives and key functional strategies to evaluate the cohesion and coherent among them. Audit extended further to evaluate cohesion and coherent nature of vision, mission, corporate objectives between Lankem Ceylon PLC, the parent company and Lankem Paints Limited.(Refer Appendix 03) Resources, competencies, business processes were also audited regarding their capability to achieve intended objectives. Brief summary of the audit finding are presented in this report. (Refer appendix 01 & 02 for full strategic audit details)

2.3 SUMMERY OF STRATEGIC AUDIT FINDINGS This section will initially evaluate the compatibility between visions, mission statements of Lankem Paints Limited, the strategic business unit. Further, this will provide recommendations for improvements in Lankem competitive positioning and relationship market orientation. (Vision , mission statements are derived guidelines of Appendix 04  – Definitions)

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.3.1 VISION OF LANKEM PAINTS LIMITED

2.3.1.1 CURRENT VISION

“To enrich serenity of life by colouring the world and be the chosen provider”

Existing vision of Lankem Paint Limited clearly defines itself as colour provider in broad terms. But colour is a one part of paint and other part is the protection to substrate. This has limited the scope of  the products of company. Current vision is only pursuing to be chosen provider for only decorative paints but not in both decorative and protective paint coatings. Vision does not include inspirational challenging component of it which makes vision statement a truly visionary. Company already has the required resources and competencies (Appendix 02: Figure 11) to reach this vision as it requires only threshold resources and competencies. It only needs to improve its goodwill and brand reputation.

2.3.1.2 PROPOSED VISION

“To be most preferred innovative world class paint coating company which adds protection to substrate and decoration to life ”.

Proposed mission covers both decoration and protection purposes of the paint coating in broad terms while informing visionary inspirational motivation. This vision requires some unique resources and competencies (Appendix 02: Figure 11) to become world class paint company.

2.3.2 MISSION OF LANKEM PAINTS LIMITED

2.3.2.1 CURRENT MISSION

As presented in Appendix 02 Table 01, current mission consist of many factors.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

It has not clearly defined the business but to be present in EU in terms of coatings and related products. It highlights EU as the prospective customers while dominating local markets. Current mission supports current vision of colour the world through developing international presence. So there is a link between how we going to achieve our vision. It also speaks about the corporate social responsibility and strategic intention towards employees which are integral parts of a proper mission statement. But current mission includes short term objective in it which are not characteristics of a mission statement such as “To maximize stakeholders wealth and confidence by increasing market share by 10% by year 2015” and stakeholder should be corrected as shareholders. It also includes non challenging operational objective as to have a state of art manufacturing facility. Mission provide too many factors and hence less directive to proper future. It does not explain how to enrich serenity of life or how to be the chosen provider. There is no strong link between current vision and mission statements. Mission

does

not

encourage

attitude

change

for

better

strategic

impact.

Current mission is unable to provide basis for objectives and strategies. It is clearly visible when considering the links among current vision, mission, objectives and marketing strategy (Appendix 02: Figure 11). Mission has identified most of focal points for stakeholders like shareholders, customers, employees and general public.

2.3.2.2 PROPOSED MISSION Proposed mission statement for parent company ( Refer Appendix 03) can be customized accordingly to suit as followings. “Our mission as a professionally efficient innovative paint coating provider for customer  requirements who never compromises quality for any reason is to ensure well being of customers, employees, wider society and environment while maximizing profits throughout the j ourney to become

world class coating and service provider.”

This mission has covered the lacking areas of existing mission and has strong link to proposed vision and to overall corporate vision and mission intensions. This has clearly defined the purpose, direction of the company to be world class and need for differentiation as a strategy. Currently Lankem Robbialac is stuck among three generic strategies (Appendix 02: Figure 01 and 05)

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.3.3 STRATEGIC RECOMMENDATIONS TO IMPROVE COMPETITIVE POSITIONING

Lankem was the market leader decade back when CIC was acquired by global coating giant Akzo Nobel. Lankem Robbialac as a local player had no chance to compete with Akzo Nobel to defend leader position due to world renowned brand and wide product portfolios of it. Therefore it strategically followed what leader did and still follows what leader does.

Competition is being intensified due to cost driven market conditions with shrinking margins, new regulations to bidding for government projects, VOC (Volatile Organic Compounds) credentials, substitutes like claddings, glass walls and many low cost manufactures etc. ( Refer Appendix 02: figure -08 Porters five forces) Currently Dulux and Robbialac have positioned themselves a as premium brands (Refer Appendix 01: Figure 02) and customers are moving for more economy type of products and due to increasing cost of living even though government claims that it has maintained rate of inflation at a single digit. (Refer Appendix 02: Figure 07- PESTEL). This leads Lankem to compete aggressively with Dulux for shrinking medium and premium market segments. Both Lankem and Dulux possess second quality brands called Rolac and Glidden but Lankem Rolac portfolio is limited to cater and grab substantial share along from it. Therefore Lankem has to challenge both leader and other players to survive in this situation.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

These are recommended competitive strategies for Lankem to be market challenger.

2.3.3.1 FRONTAL ATTACK

This direct head on attack can deploy to both Dulux with Robbilac and others to with Rolac brand. Since this attack is targeting competitors’ strengths it is least advised and most risky one. Frontal

attack is more likely to be successful for Rolac with the existing competencies and resources Lankem possesses ( Refer appendix 02: Figure 11- resources and competencies analysis).Since Rolac brand mainly consists of Lankems’ star and cash cow products competing with Rolac is advisable( Refer Appendix 02 : Figure 10 -Portfolio Analysis).

2.3.3.2 BYPASS ATTACK

This indirect attack bypasses opponents and tries to consolidate uncontested fields. This would be ideal to compete with Dulux avoiding unnecessary attention. If this can be implemented for others substantial benefits can reap with the current capabilities of Lankem. Robbialac can develop new products focusing on Eco friendliness, water based and Nano based technologies. SLINTEC ( Sri Lanka Institute of Nano Technology) provides required information to local players on emerging water based and Nano technologies (Refer Appendix 02: Figure 12Opportunities).Texture pains are also new to Sri Lankan market and recently Asian pants introduced such product called Royale Play. High end customers are willing to buy these products (Refer Appendix 02: Figure 12- Opportunities).New regulations are also encouraging to develop low VOC paints and demand for existing solvent based paints are declining(Refer Appendix 02: Figure 12Threats). This attack can be further strengthening by new geographical market development in North and East provinces which are booming after civil conflict.

2.3.3.3 FLANKING ATTACK

Make moves that competitor will not find threatening enough to respond. It is designed to minimize confrontational losses. Dulux is relatively weak in thinner and turpentine market therefore investing

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

for theses solvents can gain good financial leverage to later on compete with Dulux for its strong auto refinish brand.

2.3.3.4 GUERRILLA ATTACK

This involves making small attacks in different locations while maintaining mobility to avoid any counter attacks. Paint is a dealer based product where customer usually purchases all the hardware items and paints from one dealer. Therefore offering good discounts, POSM material, more credit period and attractive commission schemes to most valuable Dulux dealers to shifts towards Robbialac brand can cause good damage.

2.3.3.5 ENCIRCLEMENT ATTACK

This multifaceted attack intended to dilute defenders ability to retaliate in strength. This attack would be the final attack to re-secure market leadership position Lankem lost at the past by expanding products to all segments catering Robbialac and Rolac through all possible distribution channels. Online purchasing web site can be further added to current distribution model.

2.3.4 STRATEGIC RECOMMENDATIONS TO IMPROVE RELATIONSHIP MARKETING ORIENTATION OF LANKEM

Relationship marketing concept helps to identify and prioritize stakeholders based on their need and power they possess to influence the Lankem. Though the customer is most important among all relationship of other stakeholders are need to manage carefully. •

It is recommended to adhere following steps because all the stakeholders are equally important when it comes to issues. o

Identify key participants of each stakeholders

o

Research and identify requirements and expectations of them (Appendix 02: Figure -17 Power / Interest map for stakeholder of Lankem)

o

Review current and proposed levels of emphasis for each stakeholder

o

Formulate desired marketing strategy and determine marketing plan for them if  necessary. (Refer Appendix 02: Figure 18- Relationship marketing six market model)

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882 •

Currently Lankem more focuses on establishing and enhancing relationship with dealers, distributors and customers .This need to be extended to internal customers, suppliers, shareholders, governments, pressure groups, media and wider society. Lankem can’t compete and survive on its own. Because when issues occur, the relationship with stakeholders will determine the magnitude of effect it can cause to Lankem.

•

Lankem is advised to educate and train employees specially to change their neutral, negative attitudes to positive relationship oriented at cross functional levels from security guard to CEO on importance of relationship marketing, because for customers and other stakeholders any employee represents the Lankem.

(Relationship orientation if further discussed in below Table 02.)

2.3.5 HOW LANKEM MARKETING STRATEGIES TO BE REVISED

As mentioned (Task 1.1  – Evaluating current vision and mission), there was no link between strategic intent and direction of Lankem Ceylon PLC (Parent company) and Lankem Paints Limited (SBU).Also there was no correlation between vision and mission of Lankem Paints Limited as well. Since vision and mission of Lankem has redefined (Refer Task 1.1) to be more competitive and relationship oriented and it is recommended to be a market challenger from market follower, existing marketing strategies should revise accordingly. Therefore it is clear that current marketing strategies are formulated based on emergent strategies shaped by external environment rather than deliberate strategies to support corporate and organizational objectives.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

This chapter will assess how market strategies should be revised to meet strategic intents of newly proposed vision and mission to become more competitive and relationship oriented. Or else corporate intents will be looking at one direction while marketing strategies will be looking at another direction and time and resources will be wasted putting Lankem in a chaos.

2.3.5.1 KEY SUCCESS FACTORS FOR THE PAINT COATING INDUSTRY

Changing regulations •

•

•

Product/ R&D trends

Keep track of changing chemical

•

Sustainable

regulations and safety standards

•

Low VOC /Odor

Back up claims with scientific

•

Energy saving /efficiency

evidences

•

Added functionality

Labeling requirements

•

R&D on consumer, packaging, process, safety, formulations

Figure 05- Key success

 Key success  factors of   paint coating industr

factors for paint coating industry

Enter new markets •

Create markets needs through

Branding / marketing •

product differentiation, entering new geographies or channels. •

Invest in branding, advertising, promotion and distribution.

•

Exploit opportunities through

Invest in distribution & Brand

demographics, health benefits

equity

and life styles.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

These critical success factors need to incorporate to marketing strategies for succeed in paint coating business.

2.3.5.2 COMPETITIVE STRATEGIES

Based on the strategic audit findings (Refer Appendix 02: Figure 01) Lankem is stuck in the middle of  three generic strategies due to merely following market conditions, leader and negligence of corporate intents.

Figure 06- Differentiation as proposed strategy

Implications of current strategy •

Quality is compromised when seeking inputs at low cost

•

Lack of resources to be industry wide differentiator since large proportion of resources have allocated to position some products as premium

•

Confusion among stakeholders about the corporate personality, profile and identity.

•

Lankem pricing strategy is based on competitor pricing which leads to reduced margins.

•

Inconsistencies of messages delivered at marketing communication campaigns.

•

Unable to establish and develop stakeholder relationships due to lack of focus

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Recommended competitive strategy-  differentiation •

Currently as second market leader Lankem it is too risky to neglect existing industry wide customers and become focus on particular segments. Current premium brand positioning helps to further differentiate Robbialac from others and

•

Dulux (Appendix 01: Figure 02 Price/Quality positioning). •

Current product reputation for quality

•

Access to leading scientific knowledge (Appendix 02: Figure 11 threshold competencies & Figure 12: Opportunities of SWOT analysis)

•

Value addition will help to create price insensitive customers and to regain good margins.

•

Focused organized resources will support to develop unique competencies and resources.

•

Product market strategies

2.3.5.3 PRODUCT MARKET STRATEGIES

Since Lankem is stuck in the middle of generic strategies, market penetration is the only strategy Lankem is able to do. It causes shrinking margins due to price war and increased bargaining power of  distributors and dealers. It is recommended focusing more on other product markets strategies as well. Refer Appendix 02: Figure 09 for proposed strategies for individual products of the portfolio. Table 1 - Product Market Strategies

Product/  Market Strategy

Current status • •

Market penetration •

•

• •

New product Development

•

Most utilized strategy. Shrinking margins due to competition and distributor, dealer bargaining power Posses wide distribution network  Medium and low cost players grabs customers High lead time of NPD Limited products under Rolac brand and more generic conventional products with Robbialac brand Value addition to existing

Recommendations and justifications •

•

•

•

•

•

Develop differentiated products and try to create market pull effect control dealer bargaining power and to maintain margin levels Develop online marketing website to cater increasing number of E marketing buyers. Appoint direct dealers to dilute distributor power and market Lankem products exclusively. Promote economical Rolac brand to retain cost conscious customers. Establish proper communication channels and cross functional teams to coordinate NPD activities because, lack of  collaboration among Marketing, R&D and Operations divisions causing this delay. Constant evaluation of customer requirements and satisfaction towards Lankem products and accordingly broaden product portfolio of Robbialac and Rolac.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

product is weak 

•

Research on how to add value to customers through augmented and potential products for paints like Eco paints, Nano tech paints and texture paints. Only catering to high end Develop a new brand focusing on middle market segment market and low end market where high end and low end customers are compatible with. segments Appoint new direct dealers or convert competitor dealers Limited distribution of  where distributor presence is limited to cater new Distributor based channels geographical markets. Weak in newly open Appoint new distributors for two provinces or if necessary markets like North and develop two potential dealers as distributors. East Provinces Kemokote and Epi-Fix brands have been purchased by No intension of export to Maldives, Bangladesh and south Indian markets hence export suitable export markets as a new strategy. •

•

•

•

New Market Development

•

•

•

•

Diversification

•

Current intension of  Do not diversify in to brush market yet since Lankem is being diversification to paint less competitive in current business and need to rectify this brush market. issue as first priority and it requires greater resources. •

2.3.5.4 BRAND AND POSITION STRATEGIES

Currently Robbialac is positioned for high quality with less product complaints. Though Robbialac quality is on par with Dulux and for some products above Dulux quality, still we priced at lower to Dulux expecting to grab customers from Dulux (refer Appendix 01 :Figure 02). Due to intensive marketing campaigns and with prevailing brand equality of Dulux, existing customers do not shift to Robbialac. Since Robbialac has priced its products lower may imply Dulux customers the correlation of lower price means lower quality. This same mind set can use to position Lankem products as well.

Refer below Figure - 07 for proposed brand positioning.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Since it is not possible to revise price without differentiating Robbialac, by adding value to customers, Lankem needs to match Dulux prices highlighting the quality, additional value it provides. Akzo Nobel as a multinational world paint giant, they can match the value addition of Lankem in short period, but the factor of Lankem being 100% local company and confidence it build over three decades need to use to sustain the position throughout corporate communication messages. Effect of this price revision is expected to handle through proposed new brand ( Menalak) intended to serve middle tier customers. Increased production requirement can be managed with existing production capacity since utilization is calculated as 85% of capacity and with intended operational efficiency of 20% improvement as proposed in this report. (Refer Appendix 02: Figure 11- threshold resources and competencies)

2.3.5.5 GROWTH STRATEGIES

Lankem is advice to joint venturing with PPG industries or other global coating giant to piggy back  the Lankem portfolio to be market leader realistically. Since Akzo Nobel is a global paint coating giant it is not realistic Lankem to compete on existing technology, without access to new knowledge and cutting edge technology. PPG can use Sri Lanka as a test market to enter India where existing 10% of present to be further increased later on. It will allow sharing funding for capital requirements and configure PPG products to tropical climates while Lankem can reduce its learning curve by accessing to technology and knowledge on new fields like Nano technology and water based technologies. It will help to complete the product range (Refer below for Figure 09 Order lead time and Product range positioning of Lankem) and minimize the sales lose due to incomplete range. Dulux, Causeway paints and Asian paints as multinationals, have wider product range than Lankem and this further enforces the requirement to broaden its portfolio. It will cut the risk and time considerably of R&D and profit sharing will create sudden influx of  financial leverage to further enhance unique resources like resource personals and unique competencies to compete by Lankem itself. It a common scenario that most joint ventures ended due to conflicts of interest before achieving its formed objectives. Relationship marketing needs to effectively utilize for this relation to be successful.

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MARKETING LEADERSHIP AND PLANNING STUDENT STUDENT NO - 12610882 12610882

2.3.5.6 CHANNEL CHANNEL STRATEGIES STRATEGIES

Current indirect or passive distribution strategy is recommended to further use, because distribution is not Lankem core competency but to manufacture paints.

Lankem paints

Distributor

Dealer

Consumer

Figure 08 – Current Channel Strategy

As explained explained (Table 01 Product Market Strategies), Strategies), this model model has given given more barging power power to distributors and dealers shrinking our profit margins. Currently warehouse warehouse is managed managed by Lankem Lankem and institutional institutional business (B2B) deliveries deliveries are handles handles by rented fleet fleet of vehicles vehicles by Lankem itself. In Fridays Fridays and month month ends Lankem Lankem faces difficulties difficulties in delivering for B2B and loading for Distributor vehicles. vehicles. Loading delays delays and inability to PGI in Sap system incur incur sales loses and customer customer dissatisfaction dissatisfaction and reliability reliability issues issues occur. It is recommend outsourcing the warehousing and transportation to functions to best focus on manufacturing and prevent above issues happening. It will bring cost benefits from improved operational efficiencies and enhance the reliability, dependability of the service. Figure Figure 09 shows shows dealers dealers and and distribu distributor tor percept perception ion towards towards Robbiala Robbialacc order order lead time. time.

Causeway is the market market best in terms of short lead time because because it uses own fleet of vehicles vehicles to deliver orders to direct dealer. It has eliminated eliminated the distributor from their distribution distribution channel.

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MARKETING LEADERSHIP AND PLANNING STUDENT STUDENT NO - 12610882 12610882

Therefor Thereforee following following extendin extending g current current channel channel strateg strategy y with e market marketing ing and appoin appointme tment nt of direct direct dealers are recommended recommended (Table 01- Product market strategies). strategies).

Lankem paints

Distributor

Consumer

Dealer

Appoint direct dealers

E - Ma Marketing

Figure 10 – Proposed Channel Strategy

2.3.5.7 STRATEGIC STRATEGIC RELATIONSHIP RELATIONSHIP ORIENTED ORIENTED STRATEGIES

Stake holder Customer

Current status •

•

•

•

•

•

Customer focus has become second priority due to dealer bargaining power. Dealer and Sales force base incentive schemes Customer loyalty to brand is being shaken by aggressive competitor activities. Complaint handling and after sales support is weak  B2B Institutional Business (IB) customer relationship is weak. Focus on customer attraction

Recommendations and justifications •

•

•

•

•

•

Public

• •

•

•

Brand personality is unclear Knowledge on corporate values and Policies are poor. CSR activates done without conforming to predefined theme and are not well communicated to public. Media coverage is low on CSR activities.

•

•

•

•

Add value to customers to crate market pull effect through value creation, value communication and value delivery. Introduce consumer promotions to engage customers with brand Implement CRM using ICT to encourage brand engagement. Dedicated hot line to support customer inquiries and develop field sales force with more technical knowledge. Train and develop current IB executives with fundamentals fundamentals of interior decoration, decoration, architecture architecture and civil engineering knowledge to deal with such professionals and social networking events to enhance personal relationships. Focus more on customer retention, less costly and satisfied customers will be a brand advocate Implement Profile strategy on brand identity to project correct brand personality as premium brand who never compromise quality. Launch corporate marketing campaign to uplift the corporate profile values and policies. Conduct SCR activities under defined themes to secure brand association association and update company company web site, social network fan pages for maximum impact. Deploy relationship marketing to establish good relationship with media to get maximum coverage through Press releases and as news segments. 18

MARKETING LEADERSHIP AND PLANNING STUDENT STUDENT NO - 12610882 12610882

Supplier

• • •

Too many suppliers Transaction orientation Not satisfied due to payment delays

•

•

•

Employee and labour union

• •

•

•

•

Influence markets

•

•

Rivals

•

•

•

Distributor and dealer

•

•

Sales force turnover is high Back office employees are not properly motivated Not properly educate on their importance of their jobs to success. Lack of knowledge of  organizational strategic intents, objectives and values. Information flow is inefficient both vertically and horizontally Acceptable adherence to government regulation on VOC levels and heavy metal Environmental policies are well adhered Maintains good relationship with competitors through paint manufactures association. Head hunting from rivals is not an option among association. Excess raw materials are shared if possible Distributor and dealer favoring rel relationship is prevailing Dealers current knowledge on products are not updated

•

•

•

•

•

•

•

•

•

Retain few reliable suppliers to control the bargaining power and increased volumes will helps to get Economies of scale. Establish and enhance relationship orientation to joint problem solving and helps to obtain longer credit periods and to gain industry information. Improve mutual understanding regarding prevailing working capital issues and negotiate for feasible payments if any or make the payments on time. Develop motive and compensate to retain and reap benefits of investments. Support sales through synergizing marketing activities to ease on their task  Motivate through recognition, empowering, rewarding because they are also interface of Lankem and implementers implementers of relationship relationship marketing marketing and satisfied satisfied employee will make customers satisfy. Communicate on organizational objectives and involve them decision making process and allow them the take initiatives to implement their own suggestions. Encourage information sharing culture and educate on attitude changes while establishing proper communicational channels like intranet. Keep on on followin following g regulati regulations ons while while they they satis satisfy fy authorities they also help to add value to customers. Keep on Improving. Helps to enhance corporate profile and to get positive WOM from environmental groups as a referral market. Keep enhance the relationship where ability of industry lobbying will be stronger. Helps to to leak out sensitive sensitive information information and improve goodwill among rivals. Keep sharing, since 99% dependent on imported raw materials production delays cause by shipment delays can be managed.

Manage the relationship relationship for achieve achieve win- win situation. Conduct dealer conventions training programmes to update product and possible complaint related knowledge.

Table 2- Strategic relationship relationship oriented strategies strategies for stakeholders stakeholders

19

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.3.6 CONCLUSION Recommended vision and mission are formulated to guide Lankem for world class excellence and market challenger strategy is best suit to reach towards this destination after evaluating audit findings regarding current capabilities, resources and competencies. Recommended marketing strategies are assessed for their ability to drive Lankem to meets its objective by being more competitive and relationship oriented. Following marketing plan for year 2013-16 is developed to implement strategic recommendations to be more competitive and relationship oriented.

20

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

TASK TWO STRATEGIC MARKETING PLAN

WORD COUNT-3954

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4 MARKETING PLAN FOR YEAR 2013-16 FOR LANKEM PAINTS LIMITED

This marketing plan is based on revised vision, mission and marketing strategies to achieve strategic intents of Lankem Paints Limited. Refer appendix 05 for planning framework 

2.4.1 VISION

“To be most preferred innovative world class paint coating company which adds protection to  substrate and decoration to life”.

2.4.2 MISSION

“Our mission as a professionally efficient innovative paint coating provider for customer  requirements who never compromise quality for any reason is to ensure well being of customers, employees, wider society and environment while maximizing profits throughout the j ourney to become

world class coating and service provider.”

2.4.3 CORPORATE GOALS

•

Maximize stakeholder satisfaction by fulfilling individual expectations through relationship marketing orientation

•

Maximize profitability of Lankem Paints Limited

•

Ensure sustainable strategic growth of Lankem Paints Limited

•

Position Lankem Paints Limited as world class excellence business entity.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.4 STRATEGIC ANALYSIS

2.4.4 1 STAKEHOLDER EXPECTATIONS As per in detail discussion on stakeholder expectations (Task one Table 10) following are the expectations of key stake holders Customer

Employee

Solutions for their problems Dependable solutions and services Value for money Flexibility, ability get customized solutions

• • • • •

• • •

• • •

Stability in the business relationship Corporation of Lankem Reliable communication On time payments

Job security, responsibility from employer Challenging tasks and proper rewarding recognition Work place ergonomics E ual o ortunities

Paint association / Competitors •

Supplier •

•

• •

participation  joint efforts to solve industry issues Ethical business , marketing and recruitment practices Shareholders •

Authorities and Pressure groups • • •

•

Transparency of actions Responsibility for environment and society Consumer welfare

• •

Profitability, Return on investments Sustainable development of business Ethical business practices Transparent management decisions

Figure 11- Stakeholder expectations In order to fulfill stakeholder expectations support or restrictions of external environment should be analyzed through environmental scanning.

2.4.4.2 ENVIRONMENTAL ANALYSIS

MACRO ENVIRONMENT

•

•

•

•

•

POLITICAL & LEGAL Political stability attracts new foreign direct investments in hotel, civil construction sectors. New regulations on Volatile Organic Compounds (VOC), heavy metals of paints. SLS (Sri Lanka Standards) certifications are essential to bid for government and semi government projects. Fund allocation to SLINTECH (Sri Lanka Institute of Nano Technology) to popularize Nano technology. MOU with Japanese universities and R&D institutes to share knowledge on Nano, Chemical & polymer technology.

•

•

•

•

SOCIAL B2C consumers seek for texture paints with the increased purchasing power and B2B customers like facility managers seek for more durable, easy maintenance paints. Consumers are increasingly aware of volatile organic compounds of paints and willing to pay premium for Eco products. Customers increasingly refer to online and opinion formers & leaders like technical experts, architectures, engineers for information searching rather than paint dealers and applicators. Increased engagement in social media to networking and information sharing 23

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

ECONOMIC Inflation is steadily growing at a rate of 8.9% as per Colombo Consumer Price Index (CCPI). Average GDP is maintaining its’ growth at 6.6% per annum and Purchasing power parity per GDP has reached ever highest $ 5670.00 in 2012. Unemployment has reduced from 4.9% in 2011 Q1 to 3.5% in 2012 Q3. Both deposit and lending interest rates have been increased by 1.8 % to10.9 % and 18.9% respectively in 2012.

TECHNOLOGY

•

•

•

•

•

•

ENVIRONMENT Customers are being aware of importance of  environmental sustainability and this plays major role in purchasing decision. Unpredictable climate changes have forced customers to seek for weatherproof, durable paint coatings. Air purifying, heat reflective, light enhancing abilities of Nano technologically developed Eco paints are increasingly popular in paint industry to ensure environmental sustainabilit .

Low VOC, Water based technologies and Nano technologically developed paints are being popular in Sri Lankan coating industry. Increased usage of internet and mobile technology to gather and share information.

Figure 12 – PESTEL analysis

•

•

•

MICRO ENVIRONMENT  Bargaining power of suppliers –  Low •

•

• • •

• • •

Supplier concentration  – High (chemicals, packing material, label printing, corrugated carton, foreign paint & related machinery supplier) Availability of substitute inputs  – Medium ( similar chemicals) Buyers’ switching cost to other inputs - Low Importance of supplier inputs  – High Suppliers product differentiation  – Low (generic chemicals) Paint industrys’ importance to supplier - Medium Buyers threat of backward integration – Low Suppliers threat of forward integration  – Medium

Threat of substitutes - Medium

Relative price of substitute - High except wallpapers (granites, tiles, cladding, powder coating,) Relative quality of substitute - High . Switching cost to buyers - Medium

•

• •

 Bargaining power of customers - High • • • • • •

 Rivalry among paint manufactures - High •

• • • • •

Six major players are competing with balanced market share (Appendix 02-figure 01) Industry growth rate is hovering around 15-20% Product differentiation  – Medium Buyers switching cost – Low Diversity of competitors  – Low Exit barriers – Medium (specialized machinery, high tock levels with distributors & dealers, debt collection

Threats of new entrants - Low •

• • •

• • • •

Figure 13 – Porters ‘five forces analyses

Number of B2B & B2C buyers – High Paint product differentiation  – Medium Switching cost of paint buyers- Low Buyers use of multiple paint suppliers- Medium Buyers threat of backward integration – Low Sellers threat of forward integration -Low

•

Barriers to entry- High (specialized machinery, knowledge, R&D facilities, high initial investment) Economies of scale  – High Product differentiation  – Medium Initial & working capital (45 -90 days credit) requirement  – High Switching cost to buyers  – Low Access to distribution channels- Low Government policies on paint chemicals  – Medium Incumbents’ defense of market share - High Industry growth rate – Medium (15 -20 %) 24

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.4.3 OPPORTUNITIES & THREATS ANALYSIS

After considering macro and micro environmental factors, following situational analysis is developed Opportunities •

•

•

•

•

•

•

Threats

Paint market expansion with foreign direct investments of construction industry. SLS certification is essential to bid government projects Information access to Nano technology through SLINTEC Scholarships to paint industry to study chemical, nano, polymer technologies. Purchasing power is increased and willingness to pay premium for Eco, special effect paints. Customers are increasingly aware of VOC levels, environmental sustainability. Increased use of internet and mobile technology to information gathering

•

•

•

•

•

•

•

•

Figure 14 – O &T analysis

New regulations in volatile organic compounds (VOC) forced rivals to new product developments. Lending interest rates have increase for business loans Demand for existing solvent based products are declining Nano technologically developed paints can be introduced by multinational rivals quicker than Robbialac. Tiles, granites , claddings like substitutes to paint are being popularized Paint industry players are in a price war damaging margins. Devalue of the Sri Lankan Rupee caused in shrunken margins. Local player Nippolac is on a verge on acquiring by Japanese coating giant Nippon paints.

Opportunities and threats of situational analysis are used to identify possible scenarios

2.4.4 4 SCENARIO PLANNING

Following scenarios are identified as possible scenarios.

Acquisition of Nippolac by Japanese global coating giant

Credential of the products,

Current price war will be

conformity to standards will

fierce and dealer distributor

be basics and value addition

domination

through

unprofitable business if not

augmented

and

will

cause

Nippon paints will fierce the competition

and

introduces

Nano, Eco paints to the market.

potential products will be

differentiated.

Relationship

expected

Good demand for Eco, Nano

values chain will be key success

paints and texture paints

factors for surviving in this

decline demand for solvent

competition

Figure 15- Possible scenarios

based paints

marketing

and

25

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.4.5 OBJECTIVES FOR LANKEM PAINTS LIMITED

Objectives are derived considering the strategic intents of Lankem and evaluating scenario planning. •

Increase revenue to 6 billion from 2 billion by year ending 2015 -16

•

Increase profitability to 400 million from 90 million (2011-12) by year ending 2015 -16

•

Improve operational effectiveness and efficiency to achieve 45 % cost reduction to support profitability by year ending 2015 -16

•

Increase average product gross margins to 45% to current 23% by year ending 2015 -16

•

Increase market share to 30% and to be market leader by year ending 2015 -16Complete product portfolio of Robbialac to 90 % from 79% and Rolac to 30 % from 19% by year ending 2015 -16

•

Introduce middle tier brand with 55 % complete product portfolio. by year ending 2015 -16

2.4.4.6 STRENGTHS AND WEAKNESSES ANALYSIS

Following strengths and weaknesses are identified to shape marketing strategies based on identified objectives as per scenarios.

Strengths • • • • • • • •

• • •

•

• •

Experienced human resources R&D capability Wide distribution network & 6 own outlets Partnerships with foreign paint companies 28 years of industry experience Established foreign acquired brand name Second market leader with 18% market share ISO 9001 & 14001, Sri Lanka Standards certification Up and running Sap ERP system Financial backing of the parent company Customized colour preparation ability of  Robbialac dealers Lankem Industrial , a sister company is in chemical business Solid corporate profile due to SCR activities Eco product range is accepted in market

Weaknesses •

• • •

•

• • • • • • •

•

Traditional change obstructive organizational culture Inability retain skilled human resources High lead time of new product developments Limited space to warehousing (paint is a seasonal product) Manual colour matching hence high colour variations Product oriented marketing strategies Over utilized production capacity. Limited B2B customer base Lack of digital and new media usage Inefficiencies in payment collections Issues with working capital management Inefficiency and less transparency in information communication Limited collaboration among sales, marketing, and R&D and operations divisions.

Figure 16- S &W analysis

26

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.4.7 GAP ANALYSIS

Gap analysis should be done to identify possible gaps which obstruct Lankem from achieving its strategic intents. Marketing strategies should formulate in order to bridgeing prevailing gaps.

Current situation •

Market following

•

Stuck

in

Ideal situation

middle

of

competitive

strategy •

More focus on market penetration

•

Current brand positioning

•

Incomplete product portfolio

•

Limited

access

to

cutting

Dealer domination channel

•

Inefficient supply chain

•

Transaction orientation

•

Change resisting culture

•

Centralized

decision

Market challenging

•

Differentiation strategy

•

Market penetration, new product and market development

Gap

•

Premium positioning

•

Three brands to cater upper , middle and lower market segments

edge

technology and knowledge •

•

•

Strategic partnership with industry giants

•

Controlled

dealer

domination

in

distribution channel

making

autocratic leadership style

and

•

Relationship marketing orientation

•

Empowered, distributed authority and democratic leader ship style

Figure 17- Gap analysis Marketing strategies should bridge gaps

Following strategic choices are recommended for implementation.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.5 STRATEGIC CHOICE

2.4.5.1 HOW TO COMPETE Competitive positioning

Figure 18 proposed Competitive positioning As recommended in report (refer 2.3.5.2) competitive positioning should be market challenger strategy to become market leader to pursue for world class excellence. Hence it is acceptable among stakeholders. As second market leader and to become market leader challenger is the most suitable strategy. As explained, this strategy is feasible due to ability of Lankem to deploy offensive attacks (refer Report 2.3.3).

Differentiation strategy As discussed in report (2.3.5.2) Lankem has stuck in the middle of generic competitive strategies and it is acceptable among stakeholder to use this because Robbialac is perceived as premium brand (Refer Report Figure 07) and in order to get rid of price war, differentiation will be best suit. Distributed resources for cost leadership can be used to differentiate and proposed relationship orientation can further support this.

Figure 19Proposed competitive strategy

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Value chain Purpose of using this value chain concept is to highlight the activities which can add value to gain sustainable competitive advantages. Relationship marketing is advised to use to enhance relationship with involving stakeholders (Refer Report 2.3.5.7 Table 02). SAP ERP system links these actives together for robust functionality and improves communication. Figure shows how value is added in each function to achieve margins of 45 %.

Figure 20- Value chain analysis

•

Outsourcing warehouse and distribution will improve inbound and outbound operation

•

Technology is what Lankem is lacking and hope to transfer knowledge and technology through  joint venturing with PPG or other industry giant.

2.4.5.2WHERE TO COMPETE

Ansoff s’ strategies As explained in Table 01- Product market strategies, following strategies are recommended. •

Penetration

•

New Product development

•

New market development

29

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Figure 21Ansoffs’ growth

matrix

Diversification is not recommended due to high risk and more resources will be consumed for market challenger strategy.

2.4.5.3 METHOD OF GROWTH

Joint venturing

Based on the Lankem financial situation and lack of unique resources and competencies (Refer Appendix 02: Figure 11- Resources and competencies) , It is not feasible to become market leader by purely organic growth hence joint venturing with PPG industries as most suitable partner is recommended.(Refer Report 2.3.5.5).

2.4.6 IMPLEMENTATION Implementation is the most crucial and difficult part of the strategic marketing planning process. No matter how good Lankem is in planning and recommending strategic choices, if can’t properly implement through change managing.

30

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Consideration of following aspects of resource planning and operations planning are vital for successful marketing plan implementation and McKinsey’s 7S model is advised to further adhere in

implementation process.

2.4.6.1 ORGANIZATIONAL RESOURCES PLANNING

Technology & Knowledge

Machinery & Vehicles

IT infrastructure

Resource Planning

Human Resources

Capital

Supplies

Figure 22- Resource planning Above figure shows possible resource planning requirements for varies aspects. Human resource- since changes are implemented by people required skills, competencies should be developed of hired from outside like consultants. Adequate human resources should be allocated to tasks and their job role needed to be clarified. Technology & knowledge- cutting edge technology and access to latest knowledge will provide competitive advantages and technology and knowledge transfer is proposed through joint venturing. IT infrastructure  –  Usage of IT infrastructure is average in Lankem due to generation gaps and need to provide more user friendly graphical user interfaces to improve interaction and use the power of  Sap for panning and decision making. Machinery and Vehicles- existing machineries need to preventively maintain to minimize any production delays and Lankem needs to take policy decision to limit purchasing own vehicles but renting out for medium term contracts to obtain cost benefits and get rid of burden.

31

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Supplies-currently Lankem and other rivals directly import 70% of chemicals and through Paint Manufactures Association it is recommended to develop a local partner who keeps stocks with him to minimize delays occurred by shipment delays. This will benefit the whole industry. Capital-the critical resource for any implementation and hoped to fund raise through equities of parent company by informing the benefits and ensuring lucrative ROI.Another major propotion is hoped to get via proposed joint venture.

2.4.6.2 OPERATIONS PLANNING

Production

Logistics & Distribution

Operations Planning

Customer Care

Support Functions

Marketing & Sales

R&D

Figure 23 – Operations Planning

Industry best practices are recommended to implement for each and every operation functions and further to reconfigure Sap systems to facilitate these best practices. Cross functional teams are hoped to form for implementing improved business process and if necessary reengineer the business process operations to improve effectiveness, efficiency to be a learning organization to pursuit world class excellence.

32

MARKETING LEADERSHIP AND PLANNING TUDENT NO - 12610882

Refer Appendix 02: Figure 16 for current analysis of McKinsey’s 7 S

odel and following

recommendations should be configured to implement marketing plan to successf ully achieve strategic intents.

Figure 24- McKinseys’ 7 S

2.4.6.3 STRATEGY

The most important part that wi ll lead to be market leader and for long term vi sion. Revised vision, mission, corporate objectives, values and strategies need to be well communic ted to employees to  justify the need of being more ompetitive and relationship oriented. Benefits of implementation for employees and other stakeholders need to be communicated to get synergy from their jobs.

2.4.6.4 STRUCTURE

Current functional hierarchical structure should be flattening further to link top management and operations management for better communication, improve involvement in d cision making. This empowerment will help to take r esponsibility for their own opinions and to be self motivated. Multi disciplinary and function t eams need to be formed base on requirements like decision making in  joint venturing, outsourcing war housing and distribution operations etc.

33

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.6.5 SYSTEMS

Already implemented ERP system covers entire organizational activates and is developed based on industry best practices .Lankem needs to adapt to these systems to pursuit world class excellence by stop configuring Sap to support traditional systems but to reconfiguring to practice world class business practices again. Still few key employees handle the sap system and true power of Sap needs to reap by further training and developing all users.

2.4.6.6 SHARED VALUES

Shared values are the heart of Lankem which pumps blood to other components to work together. Currently Lankem has not defined any shared values and following are the recommend shared values. •

Teamwork 

•

Customer satisfaction

•

Trust and respect for each other

•

Professionalism

These values need to be accepted by all employees and it should be the initial step of implementing the marketing plan Attitude changing and team spirit building , professionalism development should be facilitated accordingly.

2.4.6.7 STAFF

Staff will be the most resisting factor for effective implementation and current staff should be educated on proposed strategies, structures, leadership style, systems

should be compatible and

required skills need to be developed for them to work with job satisfaction. Shared values of staff will unite the organization for one intended direction to reach its destination.

34

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.6.8 STYLE

Management style plays major role in strategy implementation. Since management style effects to the whole organization, it need to be democratic to accept and work on suggestions and critics. Current management style is revealed to be more autocratic and need to change.

2.4.6.9 SKILLS

Skills are set of competencies, employees including managers should possess with themselves to perform their job role with high level of professional efficiency to achieve objectives and goals. Identified gaps in skills need to be bridged by training and developing internal staff or recruiting new blood to Lankem.

Please refer briefing paper for implementation barriers (2.5)

2.4.7 CONCLUSION

Capital and other resources will hope to procure from parent company as one of Lankem Ceylon PLCs’ star category SBU need more funds to be a cash cow in future. Technology and knowhow hope

to procure by joint venturing. If not managed properly these 7S factors will be the obstructive factors to implement and if managed properly same will drive Lankem to world class excellence.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.4.8 EVALUATING SUCCESS OF THE MARKETING PLAN

2.4.8.1 Marketing plan itself 

Marketing plan itself can be used to evaluate the success of achieving objectives by dividing main objectives to sub objectives as milestones. Objectives by year ending 2015 -16

2013-14

Increase revenue to 6 billion from 2 billion 2.7 Bn Increase profitability to 400 million from 120 million 180Mn Improve operations to achieve 45 % cost reduction 20 % Increase average product net margins to 45% to current 23% 28 % Increase market share to 30% by 12 % and to be market 21% leader Complete product portfolio Robbialac 83% of Robbialac to 90 % from 79% and Rolac to 30 % Rolac 24% from 19% Introduce middle tier Menalak brand with 55 % complete 20% portfolio

2014-15

2015-16  

4 Bn 270Mn 35% 35% 25%

6 Bn 400Mn 45% 45% 30%

86%

90%

27%

30%

35%

55%

(Menalak brand is derived by rearranging Lankem) Milestone method is used to evaluate marketing and financial objectives and Balances score card is proposed to evaluated overall evaluation of the marketing plan.

2.4.8.2 BALANCED SCORE CARD

"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must  make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation." 

-

Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard as a Strategic Management System,” Harvard Business Review (January -February 1996): 76.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Learning and growth •

Measure R&D as a percentage of sales

•

Measure number of employee suggestions

•

Measure for faults and mistakes to identify routine faults and causes for faults

•

Measure lead time for NPD

•

Measure number of new idea throwing away due to lack of technology and know how

Customer/dealer perspective

Financial perspective Lankem Paints

•

New customer/ dealer acquisitions

•

Customer/ dealer retention

•

Level of customer satisfaction

•

Number of customer inquiries

•

Number of customer complaints

Limited Vision Market strategies for improved competitiveness and relationship orientation

•

Sales growth rate

•

Sales revenue

•

Profits

•

Return on investment

•

Margin levels

•

Market share

Internal business processes •

Identifying critical business process of customer satisfaction

•

Improve any bottlenecks or process for effective, efficient, flexibility and time , cost savings

•

Diagnose the accuracy of quality inspections

•

How well products and services fulfill customer requirements

•

Evaluate overall business performance

Fi ure 25- Balances scorecard for Lankem

2.4.8.3 CRITICAL SUCCESS FACTORS

Above mentioned (2.3.5.1 Figure 05) critical success factors should constantly monitor and control to ensure the correct path.

37

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

TASK THREE BRIEFING PAPER FOR BOARD OF DIRECTORS

WORD COUNT- 1525

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.5 BRIEFING PAPER ON LEADERSHIP CHALLENGES AND STYLE FOR IMPLEMENTING MARKETING PLAN Briefing paper on leadership challenges and style for implementing marketing plan 2013-16 By- Marketing Manager, Lankem Paints Limited (2012. 11.15)

2.5.1 OVERVIEW

This briefing paper will outline the potential leadership challenges of implementing marketing plan and recommendations. It will also assess how my own leadership style and personal development need to change to support recommendations.

2.5.2 CRITICAL EVALUATION OF CURRENT LEADERSHIP PARADIGM

It is revealed that current leadership paradigm in more into management perspective rather than being a visionary leadership. We lost our market position as market leader and became market follower not giving enough effort to challenge Dulux to regain brand prestige we lost decade back. If so Lankem could have done what needed to be done by creating and identifying new ideas and trends and establishing a vision for clear direction. Management ability of Lankem has been supported us to survive and sustain as a second market leader and since visionary leadership orientation of competitors are now posing greater challenge to Lankem and leadership is required to defend ourselves and to achieve strategic intents. Leaders of Lankem is focused more on day to day tactical actives like managing working capital when they should be looking at a big picture. Current leaders are not flexible enough to adapt to changes and improve their skills and knowledge to suit the current environment. This is causing Lankem to be rigid in a dynamic environment loosing competitiveness. Leaders have the power and authority and what they are lacking is a vision to be properly directed. 39

MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Encouragement from organizational culture is less to emerge leaders form the Lankem itself. Refer figure 25 - Cultural web.

Stories

Evolvement of Lankem, Stories of important events & personalities, Reputation among stakeholders,

Control systems

Biased performance appraisal & rewards, Lack of research in stakeholders to keep them satisfied

 Rituals & Routines

Lack in initiative, preventive actions, risk  taking, reluctant to adapt to changes, frequently occurring events, functions

The Paradigm

Traditional formal rigid culture

Symbols

Lankem logo, Cyan blue- corporate colour, Formal dress code with company ID

 Power structure Organizational structures

Functional hierarchical structure, rigid line of  command and high span of  control

Finance director highly influences Lankem; marketing director challenges decisions, seniority based power

Figure 26- Cultural web for Lankem

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.5.3

CORPORATE

LEVEL

LEADERSHIP

CHALLENGES

FOR

IMPLEMENTING RECOMMENDATIONS

2.5.3.1 MANAGING INTERNAL POWER AND POLITICS

Internal power and politics causes many good marketing plans, strategies to be useless due to fears of   job security, considering personal agendas and divisional, functional performances over overall organizational performances etc. All the managerial positions across the functions need to be well educated on importance of  collaborating together for better greater outcomes. Multifunctional, multidisciplinary decision making teams will reduce the difficulties of integrating efforts across functions and will help to control the internal power and politics and to get synergy from efforts. Collaboration among leader, managers and staff is essential because strategy requires few people to formulate bur implementation needs each and every head and hands to be accountable and responsible for the job.

2.5.3.2 CONVINCE AND FORM NEW EXPECTATIONS

Leaders should communicate, educate and convince followers for possible benefits of the change and ensure their job security. Leader should justify how corporate goals and values are compatible with personal goals and values to motivate them to get support for the implementation.

2.5.3.3 CREATE LEARNING OPPORTUNITIES FOR FOLLOWERS AND EMPOWER, MOTIVATE TEAM TO PROBLEM SOLVING

Leaders should create learning opportunities for followers and organizational culture should facilitate this by being a learning organization. This will ensure reduced learning curve for followers; empowerment can be introduced by reducing span of control. This will lead to take proactive initiatives for problem preventing and effort for continuous improvement.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

2.5.3.4 CREATE AND ENHANCE EMOTIONAL INSPIRATION FOR IMPLEMENTATION

Motivation and inspiration for world class excellence may dilute over time and it is really challenging to maintain and enhance the emotional inspiration among followers. Leader need to constantly remind the goals and values Lankem pursue to sustain motivation and need to properly identify and fulfill needs of the followers. Maslows’ hierarchy of needs theory can assist leaders on this matter.

Self Actualization Esteem Social Security Physiological

Fi ure 27- Maslows hierarch of needs

2.5.3.5 SHAPING THE WORK ENVIRONMENT AND CORPORATE CULTURE TO FIT THE STRATEGY

This can be considered as most important challenge for implementing the recommendations. Relationship orientation is directly correlated with the organizational culture “way usually things done here”. Followers should encourage rationalizing the each and every action by incorporating scientific

thinking and correct logics to decision making. They need to be convinced that there is no need to following systems, procedures and traditions is they do not add value to the journey of world class excellence.

2.5.3 6 DIFFERENT STAKEHOLDER MANAGEMENT

As well as managing internal customers for implementation different stakeholders should be managed at corporate level.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Customers  –  attraction and retention of customers as the main reason for implementing, current

intention for value added products and services need to be well communicated to establish positive and welcoming perception toward the change. Because it is not easy to change an established perception and therefore leader need to use credential and credible communication, improved quality standards to convince this. Shareholders  –  shareholders and board of directors need to be informed regarding the strategic

change and obtain their approval. Marketing plan also hopes the financial back up of parent company. Because, by being market challenger, risks the company resources and convincing for results to shareholders will invest more on equities and more funds can be raised as well. Suppliers, dealers and distributors - need to establish good relationship as with them because

proposed strategy will need extensive reliability and dependability of them. Leader should influence them to work together and they need to be educated on regarding the importance of their value chain actives to add value to customers and their suggestions and critiques will helpful to shape the operations.  Advertising and research agencies  –  Lankem need to get maximum contribution from research

agencies to get accurate customer and competitor information for controlling strategies, tactic of  proposed plan. Advertising agencies need to be clearly briefed on new challenger strategy, branding position to communicate coherent and consistent messages to stakeholders.  Media, authorities and pressure groups  –  Communicate and inform relevant parties regarding the

upcoming changes when and in the progression status regarding the key milesstone achieved, new products and services offered , ongoing CSR and environmental sustainability activities to uplift the corporate profile of Lankem.

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2.5 4 KEY LEADERSHIP SKILLS NEEDED

Following set of skill and traits are needed to be exhibited by leaders for successful implementation. Skills/ Characteristics/Traits Importance of Skills/ Characteristics/Traits Self confidence and energy

Self confidence of final result and to inspire others confidently. Energy for initiate and lead the followers for final destination

Tolerance

of

stress

and

To cope up stressful situation of managing people and issues.

willing

Leader has to take the responsibility of training and development of 

to assume responsibility

individuals while coping up the stress.

Persistence

and

determination

To ensure new strategy implementing will make Lankem more competitive and relationship oriented. Determined enough to withstand resistance until change is implemented clearing issues and bottle necks.

Decisive, assertive and fair

To understand personal agendas and their variances and solve issues

Adaptable and co-operative

To understand the personal feelings, competency levels for establishing confidence and develop individuals by being co operative.

Organizations

and

co-

Organizing, coordinating and facilitating teams and stake holders in

ordination

issues and misunderstandings.

Conceptually skilled and

Identify aims and visions for the group, purpose and

creative

direction

Diplomatic, tactful and

To handle issues and create win  – win situation is possible to solve

persuasive

problems effectively

Humility

To be perceived as humble, to earn respect of others and enhance influencing ability

Fluent and articulate

To clearly express yourself and inspire other in problem solving and motivating.

2.6 CRITICAL ASSESSMENT OF MY OWN LEADERSHIP STYLE “Know yourself and your opponent to be  guaranteed victory”

-War strategist Sun Tzu

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

According to Sun Tzu, I need to assess myself as the final piece to be aware of as other pieces were well audited and formulated strategies accordingly for implementation. As per the evolution of leadership styles I need to assess what describes me best and then to identify how to change my style to best suit for what implementation requires from me to be.

Strengths of style •

Weaknesses of style

Proactively identifies possible problems and do

•

what is required.

Effectives

of

short

term

project

implementation.

•

Authority and decisions shared with employees

•

Risk is taken if and only if necessary

•

People oriented and believe in work with people

•

Unable to build strong emotional bonds

•

Willingness to share knowledge and develop

•

Too

people Earn respect by giving respect

•

Communication is considered as key to build

•

relationship.

•

Satisfaction

sensitive

for

issues

and

overreacting

•

•

much

through

problem

solving

and

Need of continuous follow up for already distributed tasks

•

Less tolerance for ambiguity

•

Second thoughts in hiring smarter people

ownership of my suggestions to implement

from outside and over believe in training and

Inspired by the team spirit and put extra effort to

developing internal staff.

be key member of the team

Based on the assessment it revealed that my current leadership style is more in to active transactional approach and since marketing plan requires transformational leadership to direct to new vision, I need to be open minded about my current style and be flexible enough to think and decides how transformational leader will cope up with such issues. It is recommend sustaining and enhancing the strengths of my leadership style, applying them more to be a good leader whenever possible and understand weakness of my style and try to minimize them by being opening up for many alternatives. It is also recommend organizing friendly discussion sessions on personal development among colleagues to describe one or two top of mind good personality and leadership characteristics and discouraging personality and leadership characteristics. This will helps to understand others true perception towards me and vice versa to assess more accurate picture.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

According to the saying “Leaders are born not made” this is true that some people posses certain

characteristics from birth but I believe still people can be good leaders if they want to be and if they have understand themselves well. Understanding yourself is the initial step and by learning and practicing and through experience we can eventually adapt to good practices which will make us good leaders. Following recommendation need to be constantly follow in order to inculcate required style to my behavior. It is recommended to try to inculcate entrepreneurial style if possible and ultimately I will be ending up being good transformational leader. •

Believing on my own fate is in my hand ( Internal locus of control)

•

Tolerance of ambiguity

•

Willingness to hire smarter people outside if internal staff does not have potential at the moment and justifying internal staff regarding this.

•

Consistent drive to create, build or change not motive by money but by challenge and betterment of all

•

Passion for achieving results

•

Optimism and risk taking

•

Sense of urgency, to finish as soon as possible without waiting.

•

Perseverance to see Lankem as world class business entity.

•

Resilience, change Lankem culture to accept mistakes and learn through them but take actions on repeated same mistakes.

•

Sense of humor about oneself 

2.7 CONCLUSION Though leaders are born still ordinary people can be leaders if they really need to be one by continuous assessment of themselves and practicing best practices. Skills and competencies will helps to be a leader but charisma itself will not help. Effective communication is the key to successfully implement marketing plan and working proactively with people and lead by example with clear visionary thinking will help Lankem to achieve its goals.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

REFFERNCES •

•

•

•

•

Strategic finance division Lankem Ceyon PLC. Strategic finance division Lankem Ceyon PLC. Strategic finance division Lankem Ceyon PLC. Strategic finance division Lankem Ceyon PLC.

(2012)  Annual report 2011/12 . [report] Colombo 02: (2011)  Annual report 2010/11 . [report] Colombo 02: (2010)  Annual report 2009/10 . [report] Colombo 02: (2009)  Annual report 2008/09 . [report] Colombo 02:

Lankem.lk (n.d.)  Lankem.lk . [online] Available at: http://www.lankem.lk [Accessed: 15 Nov 2012].

•

Lankemrobbialac.lk

(n.d.)

 Lankem

ROBBIALAC .

[online]

Available

at:

http://www.lankemrobbialac.lk [Accessed: 18 Nov 2012]. •

Kotler, Philip, Marketing Management: Analysis, Planning, Implementation and Control, 9th ed. Prentice-Hall, Upper Saddle River NJ, 1997. p 68

•

Riley,J(2012) Business objectives.[online] Available at: http://  www.tutor2u.net/business/strategy/objectives.htm[Accessed :22 Nov 2012]

•

(Drucker, Peter F., "The Practice of Management", 1954. ISBN 0-06-011095-3)

•

Johnson and Scholes (Exploring Corporate Strategy)

•

Multilac.com (1981)  Multilac, The World Class High Quality Paints Exported From Sri  Lanka. [online] Available at: http://www.multilac.com/ [Accessed: 11 Nov 2012].

•

Dulux.lk (2012) Dulux. [online] Available at: http://www.dulux.lk [Accessed: 11 Nov 2012].

•

Strategic Planning (1979). George Steiner. Free Press

•

Nippolacpaints.com

(2008)

 Nippolac

Paints.

[online]

Available

at:

http://www.nippolacpaints.com/ [Accessed: 13 Nov 2012]. •

The Rise and fall of Strategic Planning (1994). Henry Mintzberg. Basic Books

•

Causewaypaints.com (n.d.) Causeway Paints Lanka Limited . [online] Available at: http://www.causewaypaints.com [Accessed: 12 Nov 2012].

•

Data and statistcs unit (2012) Central bank report 2011/12. [report] Colombo: State printing corporation.

•

Data and statistcs unit (2011) Central bank report 2010/11. [report] Colombo: State printing corporation.

•

Marketing division (2012)  Marketing and sales analysis. [report] Colombo 02: Lankem Paints Limited.

•

Robert S. Kaplan and David P. Norton, “Using the Balanced Scorecard a s a Strategic Management System,” Harvard Business Review (January -February 1996): 76.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

APPENDIX 01- LANKEM ROBBIALAC PAINTS LIMITED ABOUT LANKEM ROBBIALAC Lankem Paints Limited is one of the leading decorative and protective coatings manufacturers in Sri Lanka founded in 1984 under the wings of  Lankem

Ceylon

PLC,

the

parent

company.

Company acquired a international brand name ‘Robbialac’, and it was the first paint company in

Sri Lanka to be awarded ISO 9001:2000 Quality Management

Systems,

ISO

14001:2004

Environment Management and SLS (Sri Lanka Lankem Robbialac also Standards)

Product

Quality.

Lankem

product

portfolio consists of own products and imported products to complete the range, from global coating giants like Akzo Nobel( Netherland), Du Pont ( USA), Alcea and Candis( Italy)

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APPENDIX 02

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52

Product/ R&D trends • • • • •

 Figure 19-Key  success factors  of paint indusrty

Sustainable Low VOC /Odour Energy saving /efficiency Added functionality R&D on consumer, packaging, rocess, safet , for mulations

MARKETING LEADERSHIP AND PLANNING TUDENT NO - 12610882

Changing reg lations •

•

•

Keep  track of changing chemical regula tions and safety standards Back up claims with scientific eviden ces Labeling  requir ments

Branding / marketing •

•

Invest in branding, advertising, promotion and distribution. Exploit opportunities through demographics, health benefits and life st les.

Enter new markets •

•

Create markets needs through product differentiation, entering new geographies or channels. Invest in distribution & Brand e uit

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

APPENDIX 03 1.1 CURRENT VISION OF THE PARENT COMPANY

“To be the front runner in the chemical industry in Sri Lanka”

Based on the characteristics a vision should have, current vision is inspirational to be the front runner but it restricts the company being expanded across the borders by saying in Sri Lanka. This vision was formulated three decades back when the parent company started in Chemical business but today it has diversified to hospitality, plantation sectors as well. Hence it should generalize accordingly to suit all the SBUs.

1.2 PROPOSED VISION FOR THE PARENT COMPANY

“To be the world class in each and every business and territories we operate in”

This new vision has generalized the intension of being world class whatever the business Lankem Ceylon PLC operates in irrespective of geographical boundaries.

1.3 CURRENT MISSION OF THE PARENT COMPANY “Our mission as a manufacturer and formulator of chemical products is to expand our business through value addition and quality assurance with a commitment to society to continuously improve

management and performance in the areas of health, safety and the environment”

While vision defines the broad long term inspirational direction, mission should describe the path of  reaching intended destination. But this mission statement does not define how exactly Lankem is going to reach its inspirational destination. Current mission defines the type of business the company is in by saying a manufacture and formulator of chemical products. For a diversified business model like Lankem Ceylon PLC this business type should be generalized covering both production ( Chemicals, Agro chemicals Paints, bitumen, FMCG goods, plantations) and services ( hospitality, construction) aspects.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

Current mission strives towards the current vision by expanding the business, which is expected to be an integral part of mission statement but through value addition and quality assurance. This statement is applicable only to customers for products and services as it suggests but not to entire stake holders. Mission clearly defines its intention to excel on corporate social responsibility in terms of health, safety and environment. Mission does not imply Lankem intention towards employees, suppliers, and shareholders. Values are not clearly defined for parent company as well.

1.3 PROPOSED MISSION FOR PARENT COMPANY

“Our mission as a professionally efficient innovative solution provider for customer requirements who never compromise quality for any reason is to ensure well being of customers, employees, wider  society and environment while maximizing profits and shareholder wealth throughout the journey to

become world class business entity.”

This proposed new mission statement covers all aspects existing mission is lacking of. It has given firm direction as world class and shows how Lankem can reach its destination. It also presents organizational beliefs towards stakeholders, values of the organization inspirational motivation for becoming world class entity.

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MARKETING LEADERSHIP AND PLANNING STUDENT NO - 12610882

APPENDIX 04 1.0 DEFINITIONS

1.1VISION According to De Wit and Mayer (2005) strategic vision outlines the desired future at which the organization hopes to arrive. This means that it provides foresight to see the future, helps to define Lankems’ position in projected

future. It serves as a concrete foundation for Lankem to derive mission, objectives and strategies.

1.2 MISSION The word “Mission “comes from the Latin word mittere that means “to send” “The mission underpins the vision and describes how it wil l be realized. This means that it needs to be more specific and reflect the organization’s standards in areas such as customer service, employee relations, product or service quality and reliability, and profitability”

-Kotler, Philip, Marketing Management: Analysis, Planning, Implementation and Control, 9th ed. Prentice-Hall, Upper Saddle River NJ, 1997. p 68 De Wit and Mayer (2005) identify another three components of the corporate mission. •

Organizational beliefs- Stakeholders work in unison with common understanding

•

Organizational values – Compatibility of organizational values and personal values

•

Definition of the business – as an example Lankem is in paint coating business

According to Camplell and Yeung (1991) following four functional elements will determine the strength of the mission.

•

Direction  – Strategic direction of the organization

•

Legitimization - Legitimates its activities to stakeholders

•

Motivation  – Inspire employees to work together

•

Strategic change – Support to change attitudes of employees to lead towards new direction

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1.3 OBJECTIVES

"Objectives are statements of specific outcomes that are to be achieved" 

-Riley,J(2012) Business objectives.[online] Available at: http://  www.tutor2u.net/business/strategy/objectives.htm[Accessed :22 Nov 2012]

Peter Ducker Suggested that corporate objectives should consist of eight components Market standing

Market share, customer satisfaction, product range

Innovation

New products, better processes, using technology

Productivity

Optimum use of resources, focus on core activities

Physical & financial resources

Factories, business locations, finance, supplies

Profitability

Level of profit, rates of return on investment

Management

Management structure; promotion & development

Employees

Organizational structure; employee relations

Public responsibility

Compliance with laws; social and ethical behavior (Drucker, Peter F., "The Practice of Management", 1954. ISBN 0-06-011095-3)

Many business textbooks suggest that both corporate and functional objectives need to conform to a set of criteria referred to as an acronym SMART. Specific

The objective should state exactly what is to be achieved.

Measurable An objective should be capable of measurement  –  so that it is possible to determine whether (or how far) it has been achieved Achievable

The objective should be realistic given the circumstances in which it is set and the resources available to the business.

Relevant

Objectives should be relevant to the people responsible for achieving them

Time

Objectives should be set with a time-frame in mind. These deadlines also need to be

Bound

realistic

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1.4 STRATEGIES

Strategy comes from the ancient Greek word meaning the art of leading an army. The concept of  strategy was being applied to business after World War II in the USA. "Strategy is the direction and scope of an organization over the long-term: which achieves advantage  for the organization through its configuration of resources within a challenging environment, to meet  the needs of markets and to fulfill stakeholder expectations".

- Johnson and Scholes (Exploring Corporate Strategy) “Strategy is that which top management does that is of great importance to the organization. Strategy refers to basic directional decisions, that is, to purposes and missions. Strategy consists of the important actions necessary to realize these directions. Strategy answers the question: “What should  the organization be doing?” Strategy answers the question: “What are the ends we seek and how should we achieve them?””

- Strategic Planning (1979). George Steiner. Free Press. “Strategy is a plan, a "how," a means of getting from here to there. Strategy is a pattern in actions over time; for example, a company that regularly markets very expensive products is using a "high end" strategy. Strategy is position; that is, it reflects decisions to offer particular products or services in particular markets. Strategy is perspective, that is, vision and direction.”

- The Rise and fall of Strategic Planning (1994). Henry Mintzberg. Basic Books. There are many definitions for the term” Strategy” and when accumulating the cream of all definitions

we can identify three major aspects a strategy. Strategy should reflect following characteristics. •

Strategy should provide widespread in their effect on the organization to which the strategy refers

•

Strategy should define the position of the organization relative to its environment

•

Strategy should have the capability to move the organization closer to its long-term goals

Strategy is more than a single decision .It is the total pattern of the decisions and actions that influence the long-term direction of the business. Observing the total pattern of decisions gives an indication of  the actual strategic behavior

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1.5 RELATIONSHIP ORIENTATION

“Process of identifying and establishing, maintaining, enhancing, and when necessary terminating  relationships with customers and other stakeholders, at a profit, so that the objectives of all parties involved are met, where this is done by a mutual giving and fulfillment of promises.”

-

Gronroos (1997)

“Relationship marketing refers to all marketing activities directed toward establishing, developing, and maintaining successful relational exchanges.”

-Morgan and Hunt (1994)

“Relationship marketing is the process of identifying, developing, maintaining, and terminating  relational exchanges with the purpose of enhancing performance.”

-

Robert w. palmatier (2008)

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