Strategic Planning and the Marketing Process

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Chapter 2

• Strategic Planning and the Marketing Process

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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.

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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.

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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
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Defining the Companys Business and Mission
A Mission Statement is a Statement of the
Organizations Purpose.
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Setting Company Objectives and Goals
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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

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Analyzing Current SBUsBoston 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

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Analyzing Current SBUsGEs Strategic
Business-Planning Grid
Business Strength



Strong
Average
Weak
C



High
A



Medium
Industry Attractiveness
D
B
Low
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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

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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
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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.

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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.

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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.

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Planning Cross-Functional Strategies
Marketings Role in Strategic Planning
Guiding Philosophy
Inputs to Strategic Planners
Designs Strategies
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The Marketing Process (Fig. 2.5)
Demographic- Economic Environment
Technological- Natural Environment
Marketing Intermediaries
Publics
Suppliers
Political- Legal Environment
Social- Cultural Environment
Competitors
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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.

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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.
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Marketing Strategies for Competitive Advantage
Strategy a Company Adopts Depends on Its
Industry Position
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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

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The 4 Ps 4Cs of the Marketing Mix

• 4 Ps
• Product
• Price
• Place
• Promotion

• 4 Cs
• Customer Solution
• Customer Cost
• Convenience
• Communication

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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
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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
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Marketing Implementation
Marketing Strategy
Organizational Structure
Decision and Reward
Human Resources
Marketing Performance
Climate and Culture
Action Programs
Implementation
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Marketing Department Organization
Functional
Combination Plan
Geographic
Ways to Carry Out Marketing Activities
Market Management
Product Management
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Marketing Control Process (Fig. 2.8)
Measure Performance
Evaluate Performance
Take Corrective Action
Set Goals
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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.