Principles of Marketing Chapter 2 (Strategic Planning

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Strategic Planning and

the Marketing Process

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GROUP 2 Principles of MarketingPrinciples of Marketing

Objectives

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What is strategic marketing planning?

Scope and importance of strategic planning

Corporate and division strategic planning

Business unit strategic planningThe marketing processImplementation and control

BYBYMR. JUNAID YUSUFMR. JUNAID YUSUF

Introduction to Strategic Marketing

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Strategic Planning

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Strategic Planning is the Process of Developing and Maintaining a Strategic Fit

Between the Organization’s Goals and Capabilities and Its Changing Marketing

Opportunities.

Strategic planning in market involves

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Where should be the company be in the next 5 to 10 years?

Why do we exist? What are the goals of org?

Which are the market it should serve?What are the products it should offer?Should there any product live or brand extension?

What resources do we need for successful future?

Who will be our customers?

Marketing Strategy

“Marketing Strategy is a series of integrated actions leading to a sustainable competitive advantage.”

John Scully

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BY MISS. SABBA ABBAS

Understanding Corporate Level

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Organizational Marketing Levels

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Hofer and Schendel suggested that organizations develop strategies at three structural levels:

Corporate level—(corporate marketing)

SBU level—(Strategic Marketing)Product/Market level—(Functional Marketing)

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Market OrientedMarket Oriented

RealisticRealistic

Fit Market EnvironmentFit Market Environment

Distinctive CompetenciesDistinctive Competencies

MotivatingMotivating

Specific

A Mission Statement is a Statement of the Organization’s Purpose.

Corporate and Division Strategic Planning

Good Mission Statements:

Limited number of goals

Stress major policies & values

Define competitive scopes

Setting Corporate Objectives and Goals

Designing the Business Portfolio

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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 (SBU’s)

decide which SBU’s should receive more, less, or no investment

develop growth strategies for adding new products or businesses to the portfolio

What is a Strategic Business Unit? (SBU)

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An SBU has three characteristics:It is single business, or a collection of related businesses, that can be planned separately.

It has its own set of competitors.It has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit.

Analyzing the Current Business Portfolio

Analyzing Current SBU’s:Boston Consulting Group Approach

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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

Cash Cows

• Low growth, high share• Established, successful SBU’s•Produce cash

Relative Market ShareHigh Low

Mark

et

Gro

wth

Rate

Low

H

igh ?

Market Attractiveness: Competitive- Position Portfolio Classification

MA

RK

ET

AT

TR

AC

TIV

EN

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SM

AR

KE

T A

TT

RA

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NE

SS

5.005.00

3.673.67

2.332.33

1.001.00

Lo

wL

ow

Med

ium

Med

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Hig

hH

igh

StrongStrong MediumMedium WeakWeakBUSINESS STRENGTHBUSINESS STRENGTH

1.001.002.332.333.673.675.005.00

Invest/growInvest/grow Selectivity/earningsSelectivity/earnings Harvest/divestHarvest/divest

Problems With Matrix Approaches

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Can be Difficult, Time-Consuming, & Costly to Implement

Difficult to Define SBU’s & Measure Market Share/ Growth

Focus on Current Businesses, But Not future Planning

Can Lead to Unwise Expansion or Diversification

BY BY MR. FARHAN MALIKMR. FARHAN MALIK

Assessing Growth Opportunities

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The Strategic-Planning Gap

Integrative growth

Intensive growth

Strategic-Strategic-planningplanning

gapgap

DiversificationDiversification growthgrowth

Developing Growth Strategies

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1. Market Penetration

2. Market Development

3. Product Development

4. Diversification

ExistingMarkets

NewMarkets

ExistingProducts

NewProducts

Product/ Market Expansion Grid

Product/ Market Expansion Grid

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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.

Product/ Market Expansion Grid

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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.

Business Unit Strategic Planning

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Historical review and situation analysis

Purpose: To develop a marketing strategy an

organization requires information on its past and present position.

External environmentMarketCustomerCompetitorsCompany

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SWOT Analysis

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1

4

2

3

HighHigh

LowLow

HighHigh LowLow

Att

ract

iven

ess

Att

ract

iven

ess

Success ProbabilitySuccess Probability

OpportunitiesOpportunities Opportunity Matrix

1. Company develops a more powerful lighting system

2. Company develops a device for measuring the energy efficiency of any lighting system

3. Company develops a device for measuring illumination level

4. Company develops a software program to teach lighting fundamentals to TV studio personnel

Threat Matrix

1 Competitor develops a superior lighting system

2.Major prolonged economic depression

3.Higher costs

4.Legislation to reduce number of TV studio licenses

1

4

2

3

HighHigh

LowLow

HighHigh LowLow

Ser

iou

snes

sS

erio

usn

ess

Probability of OccurrenceProbability of Occurrence ThreatsThreats

BYMISS. IRSA JAVED AKHTER

Marketing Strategy and the Marketing Mix

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Competitive AdvantageBasically, strategy is about two things: deciding where you want your business to go, and deciding how to get there. A more complete definition is based on competitive advantage, the object of most corporate strategy.

Competitive advantage is a company’s ability to

perform in one or more ways that competitors

cannot or will not match.”

Philip Kotler

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Competitors

Marketingintermediaries

PublicsSuppliers

Factors Influencing Company Marketing Strategy

Mar

ketin

g

anal

ysis

Marketing

planning

Marketing

Control Mar

ketin

g

impl

emen

tatio

n

Product

Promotion

Place PriceTargetcustomers

Demographic/Demographic/economiceconomic

environmentenvironment

Social/Social/culturalcultural

environmentenvironment

Technical/Technical/physicalphysical

environmentenvironment

Political/Political/legallegal

environmentenvironment

Customer Driven Marketing Strategy

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Market Segmentation: determining distinct groups of buyers (segments) with different needs, characteristics, or behavior.

Market Targeting: evaluating each segment’s attractiveness and selecting one or more segments to enter.

Market Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

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The Role of Market Segmentation

Market SegmentationMarket SegmentationDivision of the total market into smaller, relatively homogeneous groups

No single marketing mix can satisfy everyone. Therefore, separate marketing mixes should be used for different market segments.

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No Market Segmentation

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Segmented by Sex

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Segmented by Age

Selecting a Target Market

Before a marketing mix strategy can be implemented, the marketer must identify, evaluate, and select a target market.Market:Market: people or institutions with sufficient purchasing power, authority, and willingness to buy

Target market:Target market: specific segment of consumers most likely to purchase a particular product

Positioning

Positioning:Positioning: a marketing strategy that emphasizes serving a specific market segment by achieving a certain position in buyers’ mindsAttributesPrice/qualityCompetitorsApplicationProduct userProduct class9-

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Developing the Marketing Mix

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TargetCustomers

IntendedPositioning

Product“Goods-and-service”combination that a company offers a

target market

PriceAmount of moneythat consumers have to pay to

Obtain the product

Activities that persuade target customers to buy

the productPromotion

Company activitiesthat make the

product available

Place

The Marketing Process

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Analyzing marketing Analyzing marketing opportunitiesopportunities

The strategic planning and business portfolio analysis processes help to identify and evaluate marketing opportunities.

The purpose of the marketing process is to help the firm plan how to capitalize on these opportunities.

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Selecting target marketsSelecting target markets

The segmentation process divides the total market into market segments.

Target marketing determines which segment(s) are pursued.

The market positioning for the product is then determined.

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Developing the marketing Developing the marketing mixmix

Competitor analysis guides competitive marketing strategy development.

Strategy leads to tactics by way of the marketing mix: The “Four Ps” – product, price, place, promotion (seller viewpoint)

The “Four Cs” – customer solution, cost, convenience, and communication (customer viewpoint)

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Managing the marketing Managing the marketing efforteffort

Marketing analysisProvides information helpful in planning, implementation, and control

Marketing planningStrategies and tactics

Marketing implementationTurns plans into action

Marketing controlOperating controlStrategic control

Marketing audit

The Marketing Plan

Executive Summary & Table of Contents

Current Marketing Situation

Threat & Opportunity Analysis

Objectives & Issues

Marketing Strategy

Action Programs

Budgets

Controls

Strategic-Planning, Implementation, and Control Process

Measuringresults

Diagnosingresults

Takingcorrective

action

ImplementationImplementationPlanningPlanning

Corporateplanning

Divisionplanning

Businessplanning

Productplanning

ControlControl

Marketing Implementation

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Marketing Strategy

Marketing Performance

Implementation

Climate andCulture

ActionPrograms

Decisionand

RewardOrganizationalStructure

HumanResources

Marketing Control Process

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Set Goals

Measure Performance

Evaluate Performanc

e

Take Corrective

Action

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