Presentation on theme: "Strategic Planning and the Marketing Process"— Presentation transcript:
1 Strategic Planning and the Marketing Process Chapter 2Strategic Planning and the Marketing Process
2 Formal PlanningMany 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 PlanningStrategic Planning is the Process of Developing and Maintaining a Strategic Fit Between the Organization’s Goals and Capabilities and Its Changing Marketing Opportunities.
4 Steps in Strategic Planning (Fig. 2.1) Business unit,product,and marketlevelCorporate LevelPlanning,marketing,and otherfunctionalStrategiesSetting CompanyObjectivesand GoalsDefining theCompanyMissionDesigningthe BusinessPortfolio
5 Fit Market Environment Distinctive Competencies Defining the Company’s Business and MissionA Mission Statement is a Statement of the Organization’s Purpose.Characteristics of a Good Mission Statement:Market OrientedRealisticFit Market EnvironmentDistinctive CompetenciesMotivatingSpecific
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 (SBU’s)decide which SBU’s should receive more, less, or no investmentdevelop growth strategies for adding new products or businesses to the portfolio
8 Analyzing Current SBU’s: Boston Consulting Group Approach Relative Market ShareHigh LowStarsHigh growth & shareProfit potentialMay need heavyinvestment to growQuestion MarksHigh growth, low shareBuild into Stars or phase outRequire cash to holdmarket share?Market Growth RateLow HighCash CowsLow growth, high shareEstablished, successfulSBU’sProduce cashDogsLow growth & shareLow profit potential
9 Analyzing Current SBU’s: GE’s Strategic Business-Planning Grid Business StrengthStrongAverageWeakCHighAMediumIndustry AttractivenessDBLow
10 Problems With Matrix Approaches Can be Difficult, Time-Consuming, & Costly to ImplementDifficult to Define SBU’s & Measure Market Share/ GrowthProblems With Matrix ApproachesFocus on Current Businesses, But Not future PlanningCan Lead to Unwise Expansion or Diversification
11 Developing Growth Strategies in the Age of Connectedness Product/ Market Expansion GridExistingProductsNewProductsExistingMarkets1. MarketPenetration3. ProductDevelopmentNewMarkets2. MarketDevelopment4. Diversification
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 newmarkets 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 computerKodakLevi-StraussE*Trade online investment servicesAssign 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 Marketing’s Role in Strategic PlanningGuidingPhilosophyInputs toStrategicPlannersDesignsStrategies
16 The Marketing Process (Fig. 2.5) Demographic-EconomicEnvironmentTechnological-NaturalEnvironmentMarketingIntermediariesTargetConsumersProductPlacePricePromotionImplementationMarketingPlanningControlAnalysisSuppliersPublicsPolitical-LegalEnvironmentSocial-CulturalEnvironmentCompetitors
17 Connecting With Customers 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.
18 Connecting With Customers Market Positioning: arranging for a product tooccupy a clear, distinctive, and desirable placerelative to competing products in the minds oftarget consumers. i.e. Chevy Blazer is “like a rock.”
19 Marketing Strategies for Competitive Advantage Strategy a CompanyAdoptsDepends on ItsIndustry Position
20 Developing the Marketing Mix PriceAmount of moneythat consumershave to pay toObtain the productProduct“Goods-and-service”combination that acompany offers atarget marketTargetCustomersIntendedPositioningActivities thatpersuade targetcustomers to buythe productPromotionCompany activitiesthat make theproduct availablePlace
21 The 4 P’s & 4C’s of the Marketing Mix ProductPricePlacePromotion4 C’sCustomer SolutionCustomer CostConvenienceCommunication
22 Managing the Marketing Effort (Fig. 2.7) Marketing Analysis of Company’s SituationManaging the Marketing Effort (Fig. 2.7)ControlMarketingPlanningDevelop StrategicPlansDevelopMarketingImplementationCarry OutThePlansMeasureResultsEvaluateResultsTakeCorrectiveAction
23 Contents of a Marketing Plan (Table 2.2) Executive SummaryCurrent Marketing SituationThreats and Opportunity AnalysisObjectives and IssuesMarketing StrategyAction ProgramsBudgetsControls
25 Marketing Department Organization FunctionalCombinationPlanGeographicWays to Carry Out Marketing ActivitiesMarketManagementProductManagement
26 Marketing Control Process (Fig. 2.8) Measure PerformanceEvaluate PerformanceTake Corrective ActionSet 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 marketing’s 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.