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Strategic Planning and the Marketing Process

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Chapter 2 Strategic Planning and the Marketing Process Formal Planning Many companies operate without formal plans, yet these plans can provide many benefits such as ... – PowerPoint PPT presentation

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Title: Strategic Planning and the Marketing Process


1
Chapter 2
  • Strategic Planning and the Marketing Process

2
Formal Planning
  • Many companies operate without formal plans, yet
    these plans can provide many benefits such as
  • Encouraging management to think ahead
    systematically.
  • Forcing managers to clarify objectives and
    policies.
  • Better coordination of company efforts.
  • Clearer performance standards for control.
  • Helping the company to anticipate and respond
    quickly to environmental changes and sudden
    developments.

3
Strategic Planning
  • Strategic Planning is the Process of Developing
    and Maintaining a Strategic Fit Between the
    Organizations Goals and Capabilities and Its
    Changing Marketing Opportunities.

4
Steps in Strategic Planning (Fig. 2.1)
Business unit, product, and market level
Corporate Level
Planning, marketing, and other
fuctional Strategies
Setting Company Objectives and Goals
Defining the Company Mission
Designing the Business Portfolio
5
Defining the Companys Business and Mission
A Mission Statement is a Statement of the
Organizations Purpose.
6
Setting Company Objectives and Goals
7
Designing the Business Portfolio
  • The business portfolio is the collection of
    businesses and products that make up the company.
  • The company must
  • analyze its current business portfolio or
    Strategic Business Units (SBUs)
  • decide which SBUs should receive more, less, or
    no investment
  • develop growth strategies for adding new products
    or businesses to the portfolio

8
Analyzing Current SBUs Boston Consulting Group
Approach

Relative Market Share High
Low
  • Question Marks
  • High growth, low share
  • Build into Stars or phase out
  • Require cash to hold
  • market share
  • Stars
  • High growth share
  • Profit potential
  • May need heavy
  • investment to grow

Market Growth Rate Low High
  • Dogs
  • Low growth share
  • Low profit potential
  • Cash Cows
  • Low growth, high share
  • Established, successful
  • SBUs
  • Produce cash

9
Analyzing Current SBUs GEs Strategic
Business-Planning Grid
Business Strength



Strong
Average
Weak
C



High
A



Medium
Industry Attractiveness
D
B
Low
10
Problems With Matrix Approaches
Can be Difficult, Time-Consuming, Costly to
Implement
Difficult to Define SBUs Measure Market Share/
Growth
Focus on Current Businesses, But Not future
Planning
Can Lead to Unwise Expansion or Diversification

11
Developing Growth Strategies in the Age of
Connectedness
Product/ Market Expansion Grid
Existing Products
New Products
1. Market Penetration
3. Product Development
Existing Markets
4. Diversification
2. Market Development
New Markets
12
Product/ Market Expansion Grid
  • Market Penetration making more sales to current
    customers without changing its products.
  • How? Add new stores in current market areas,
    improve advertising, prices, service or store
    design.
  • Market Development develop new
  • markets for its current products.
  • How? Identify new demographic or
    geographic markets.

13
Product/ Market Expansion Grid
  • Product Development offering modified or new
    products to current markets.
  • How? New styles, flavors, colors, or modified
    products.
  • Diversification new products for new markets.
  • How? Start up or buy new businesses.

14
Discussion Connections
  • Beyond evaluating current business, designing the
    business portfolio involves finding future
    businesses and products the company should
    consider.
  • Apply the product/ market expansion grid to
    assess how one of the following companies might
    grow
  • Dell computer
  • Kodak
  • Levi-Strauss
  • ETrade online investment services
  • Assign each of the choices to a separate small
    group, have the group develop the answer, then
    discuss each approach in class.

15
Planning Cross-Functional Strategies
Marketings Role in Strategic Planning
Guiding Philosophy
Inputs to Strategic Planners
Designs Strategies
16
The Marketing Process (Fig. 2.5)
Demographic- Economic Environment
Technological- Natural Environment
Marketing Intermediaries
Publics
Suppliers
Political- Legal Environment
Social- Cultural Environment
Competitors
17
Connecting With Customers
  • Market Segmentation determining distinct groups
    of buyers (segments) with different needs,
    characteristics, or behavior.
  • Market Targeting evaluating each segments
    attractiveness and selecting one or more segments
    to enter.

18
Connecting With Customers
Market Positioning arranging for a product to
occupy a clear, distinctive, and desirable place
relative to competing products in the minds of
target consumers. i.e. Chevy Blazer is like a
rock.
19
Marketing Strategies for Competitive Advantage
Strategy a Company Adopts Depends on Its
Industry Position
20
Developing the Marketing Mix
Price Amount of money that consumers have to pay
to Obtain the product
Product Goods-and-service combination that a
company offers a target market
Target Customers Intended Positioning
Activities that persuade target customers to
buy the product Promotion
Company activities that make the product
available Place

21
The 4 Ps 4Cs of the Marketing Mix
  • 4 Ps
  • Product
  • Price
  • Place
  • Promotion
  • 4 Cs
  • Customer Solution
  • Customer Cost
  • Convenience
  • Communication

22
Managing the Marketing Effort (Fig. 2.7)
Marketing Analysis of Companys Situation
Control
Marketing Planning Develop Strategic Plans
Develop Marketing Plans
Marketing Implementation Carry
Out The Plans

Measure Results
Evaluate Results
Take Corrective Action
23
Contents of a Marketing Plan (Table 2.2)
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
24
Marketing Implementation
Marketing Strategy
Organizational Structure
Decision and Reward
Human Resources
Marketing Performance
Climate and Culture
Action Programs
Implementation
25
Marketing Department Organization
Functional
Combination Plan
Geographic
Ways to Carry Out Marketing Activities
Market Management
Product Management
26
Marketing Control Process (Fig. 2.8)
Measure Performance
Evaluate Performance
Take Corrective Action
Set Goals
27
Review of Concept Connections
  • Explain companywide strategic planning and its
    four steps.
  • Discuss how to design business portfolios and
    growth strategies.
  • Explain functional planning strategies and asses
    marketings role in strategic planning.
  • Describe the marketing process and the forces
    that influence it.
  • List the marketing management functions,
    including the elements of a marketing plan.
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