stategic plananing

8/8/2019 stategic plananing

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Copyright 2000 Prentice Hall

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2- 1

Chapter 2

Chapter 2

Strategic Planning

and the

Marketing Process


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Strategic Planning Process

Strategic Planning Process

Strategic PlanningStrategic Planning is the process of developing and

maintaining a strategic fit between theorganizations goals and capabilities and itschanging marketing opportunities.

This process involves: Defining the Company Mission: Statement of an

organizations purpose - what it wants to accomplish inthe larger environment.

Setting Company Objectives and Goals: Supporting

objectives for each level of management. Designing the Business Portfolio:Collection of

businesses and products that make up the company.

Planning Functional Strategies: Detailed planning foreach department designed to accomplish strategic

objectives.


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Market

Oriented

Market

Oriented

Fit Market

Environment

Fit Market

Environment

Motivating

Motivating Realistic

Realistic

Distinctive

Competencies

Distinctive

CompetenciesSpecific

Specific

Characteristics

of Good MissionStatements

Characteristics

of Good MissionStatements

Mission Statements

Mission Statements


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Designing the Business Portfolio

Designing the Business Portfolio

The best portfolio is the one that best fits the

companys strengths and weaknesses toopportunities in the environment.

A Strategic Business Unit (SBU) is a unit of thecompany:

that has a separate mission and objectives, and

that can be planned independently from othercompany businesses.

The company must:

analyze its currentbusiness portfolio or StrategicBusiness Units (SBUs), and

decide which SBUs should receive more, less, or noinvestment, and

develop growth strategies for adding newproducts

or businesses to the portfolio.


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Analyzing Current SBUs:

Boston Consulting Group

Approach

Analyzing Current SBUs:

Boston Consulting Group

Approach

Question Marks

High growth, low share Build into Stars/ phase out Require cash to hold

market share

Question Marks

High growth, low share Build into Stars/ 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 SBUsProduce cash

Cash Cows Low growth, high share Established, successful SBUsProduce cash

Dogs Low growth & share Low profit potential

Dogs Low growth & share Low profit potential

Relative Market ShareHigh Low

Mark

etGrowt h

Rate

Low

High

?


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

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

Difficult to Define SBUs & Measure Market Share/ Growth

Difficult to Define SBUs & Measure Market Share/ Growth

Focus on Current Businesses, But Not future Planning

Focus on Current Businesses, But Not future Planning

Can Lead to Unwise Expansion or Diversification

Can Lead to Unwise Expansion or Diversification

Problems With Matrix Approaches

Problems With Matrix Approaches


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2- 72- 7Developing Growth StrategiesDeveloping Growth Strategies

1. Market

Penetration

2. MarketDevelopment

3. Product

Development

4. Diversification

ExistingMarkets

New

Markets

ExistingProducts

NewProducts

Product/ Market Expansion Grid



2- 82- 8Product/ Market Expansion GridProduct/ Market Expansion Grid

Market PenetrationMarket Penetration: making more sales to currentcustomers without changing products. How? Cutprices, increase advertising, get products into morestores.

Market DevelopmentMarket Development: identifying and developingnew markets for its current products. How?Identify new demographic or geographic markets.

Product DevelopmentProduct Development: offering modified or new

products to current markets. How? New styles,sizes, colors, or other modified products.

DiversificationDiversification: start up or buy new businesses

outside of its current products and markets.



2- 92- 9Marketings Role in Strategic

Planning

Marketings Role in Strategic

Planning

Provides aGuiding

Philosophy

Provides aGuiding

Philosophy

Provides Inputsto

Strategic Planners

Provides Inputsto

Strategic Planners

Designs Strategiesfor Reaching

Units Objectives

Designs Strategiesfor Reaching

Units Objectives



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A Companys Value ChainA Companys Value Chain

CustomerCustomerPurchasingPurchasing

OperationsOperations

MarketingMarketing

Information SystemsInformation Systems

Each Department in a Company Carries Out

Value-Creating Activities to Design, Produce,Market, Deliver, and Support the Firms Products.



2- 112- 11Speed Bump:

Linking

the Concepts

Speed Bump:

Linking

the Concepts

What does Strategic Planning have to do

with marketing? What are Levi Strauss & Co.s mission and

strategy?

What roles do other functional departmentsplay?

How can Levi Strausss marketers workmore effectively with these other functions

to maximize overall customer value?



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The Marketing ProcessThe Marketing Process

TargetConsumers

Product

Place Price

Promotion

Marke

ting

Im

plem

entatio

n

Marketin

g

Planning

Marke

ting

Control

M

arke

ting

An

alysis

Competitors

MarketingIntermediaries

PublicsSuppliers

Demographic-Economic

Environment

Technological-Natural

Environment

Political-Legal

Environment

Social-Cultural

Environment



2- 132- 13Process of Selecting Target

Consumers

Process of Selecting Target

Consumers

Market SegmentationMarket Segmentation: process of dividing a market intodistinct groups buyers (segments) with different needs, etc.who might require separate products.

Market SegmentMarket Segment - consumers who respond in similar way to a givenset of marketing efforts.

Market TargetingMarket Targeting: evaluating each market segmentsattractiveness and selecting one or more target segments toenter.

Market PositioningMarket Positioning: products clear, distinctive and desirableplace relative to competing products in the minds of targetsegments.



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Marketing Mix- The Five PsMarketing Mix- The Five Ps

TargetCustomers

IntendedPositioning

TargetCustomers

IntendedPositioning

ProductGoods-and-service

combination acompany offers a

target market

ProductGoods-and-service

combination acompany offers a

target market

Amount of money

consumers haveto pay to obtain

the product

Amount of money

consumers haveto pay to obtain

the product

Activities that

persuade targetcustomers to buy

the product

Activities that

persuade target

customers to buy

the product

Company activities

that make the

product available totarget customers

Company activities

that make the

product available to

target customers

Price

Promotion Place

PEOPLE



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Four Marketing Management

Functions

Four Marketing Management

Functions

Planning

Develop

Strategic

Plans

Develop

Marketing

Plans

Planning

Develop

Strategic

Plans

Develop

Marketing

Plans

Implementation

Carry Out the

Plans

Implementation

Carry Out the

Plans

Marketing Analysis of Companys SituationMarketing Analysis of Companys Situation

Control

MeasureResults

EvaluateResults

TakeCorrective

Action



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Contents of a Marketing PlanContents of a Marketing Plan

Executive Summary

Current Marketing Situation

Threats and Opportunities

Objectives and Issues

Marketing Strategy

Action Programs

Budgets

Controls



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Marketing ImplementationMarketing Implementation

Marketing StrategyMarketing Strategy

Marketing PerformanceMarketing Performance

Implementation

Climate and

Culture

Action

Programs

Decision

and

Reward

Organizational

Structure

Human

Resources



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Marketing Department OrganizationMarketing Department Organization

MarketManagement

MarketManagement

Combination

Plan

Combination

Plan

ProductManagement

ProductManagement

GeographicGeographic

FunctionalFunctional

Ways toCarry OutMarketingActivities



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Organizational Structure of Mktg Deptt.

Functional Prod/Mktg/Fin./HR

Geographical P.Louis/ Rodrigues

Product Beer/Soda/Water

Organizational Structure of Mktg Deptt.

Functional Prod/Mktg/Fin./HR

Geographical P.Louis/ Rodrigues

Product Beer/Soda/Water

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Marketing ControlMarketing Control

Set Marketing GoalsSet Marketing Goals

Measure

Performance

Measure

Performance

Evaluate

Performance

Evaluate

Performance

Take Corrective

Action

Take Corrective

Action

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M k ti A dit


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2- 212- 21Marketing AuditsMarketing Audits

Marketing

Organization

MarketingOrganization

Marketing

Environment

Marketing

Environment

MarketingSystems

MarketingSystems

Marketing

Strategy

Marketing

Strategy

Areas ofAssessment

in Marketing

Audits

Areas of

Assessment

in Marketing

AuditsMarketing

Productivity &

Profitability

MarketingMix

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R t St


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C i ht 2000 P ti H ll

2- 222- 22Rest Stop:

Reviewing

theConcepts

Rest Stop:

Reviewing

theConcepts

Explain company-wide strategic planning and itsfour steps.

Discuss how to design business portfolios anddevelop growth strategies.

Explain functional planning strategies and

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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stategic plananing