2Kotler on MarketingIt is more important to do what is strategically right than what is immediately profitable.
3Chapter ObjectivesIn this chapter, we examine the following questions:How is strategic planning carried out at the corporate and division levels?How is planning carried out at the business unit level?What are the major steps in the marketing process?How is planning carried out at the product level?What does a marketing plan include?
4Strategic Planning: Three Key Areas and Four Organization Levels Strategic marketing planTactical marketing planMarketing plan
5Corporate and Division Strategic Planning All corporate headquarters undertake four planning activitiesDefining the Corporate MissionEstablishing Strategic Business Units (SBUs)Assigning resources to each SBUPlanning new businesses, downsizing, or terminating older businesses
6Corporate and Division Strategic Planning Defining the Corporate MissionMission statements define which competitive scopes the company will operate inIndustry scopeProducts and applications scopeCompetence scopeMarket-segment scopeVertical scopeGeographical scope
7Discussion QuestionCan you name a company that has recently changed its product scope or market segment scope in a very public way? Was this an expansion or contraction of scope?
8Corporate and Division Strategic Planning Establishing Strategic Business Units (SBUs)
9Company Product Definition Market Definition Table 4.1: Product-Oriented versus Market-Oriented Definitions of a BusinessCompanyProduct DefinitionMarket DefinitionCanadian National RailwayWe run a railroadWe are a people-and-goods moverXeroxWe make copying equipmentWe help improve office productivityImperial OilWe sell gasolineWe supply energyColumbia PicturesWe make moviesWe market entertainmentEncyclopaediaBritannicaWe sell encyclopediasWe distribute InformationCarrierWe make air conditioners and furnacesWe provide climate control in the home
10Corporate and Division Strategic Planning Three characteristics of SBUsSingle business or collection of related businesses that can be planned for separatelyHas its own set of competitorsHas a manager who is responsible for strategic planning and profit
12Discussion QuestionCan you give an example of a “Star” that skipped “Cash Cow”, and went straight to “Dog” status?
13Corporate and Division Strategic Planning The General Electric Model
14Market Attractiveness Table 4.2: Factors underlying Market Attractiveness and Competitive Position in GE Multifactor Portfolio Model: Hydraulic-Pumps MarketMarket AttractivenessOverall market sizeAnnual market growth rateHistorical profit marginCompetitive intensityTechnological requirementsInflationary vulnerabilityEnergy requirementsEnvironmental impactSocial-political-legalWeight0.200.150.05Must be acceptable1.0Rating =(1-5)4523Value0.801.0.600.300.103.70Business StrengthMarket shareShare growthProduct qualityBrand reputationDistribution network0.400.50See text for complete table
15Corporate and Division Strategic Planning Critique of Portfolio ModelsPlanning New Businesses, Downsizing Older Businesses
16Corporate and Division Strategic Planning Intensive Growth
17Starbucks’ home page: Customers can request a catalog of Starbucks products, subscribe to a newsletter, and shop online
18Corporate and Division Strategic Planning Integrative GrowthDiversification GrowthDownsizing Older Businesses
19Discussion QuestionGive an example of a market segment where integrative growth would be preferable to growth through diversification. Explain why one approach is better than the other.
20Business Unit Strategic Planning Business MissionSWOT AnalysisExternal Environment Analysis (Opportunity and Threat Analysis)Marketing OpportunityBuying opportunity more convenient or efficientMeet the need for more information and adviceCustomize an offering that was previously only available in standard form
21Discussion QuestionGive some examples of companies that have grown to dominate their market segment by using technology to make buying opportunities more convenient and efficient.
22Business Unit Strategic Planning Marketing Opportunity Analysis (MOA)Can the benefits be articulated to a target market?Can the target market be reached with cost-effective media and trade channels?Does the company have the critical capabilities to deliver the customer benefits?Can the company deliver these benefits better than any actual or potential competitors?Will the rate of return meet the required threshold of investment?
25Business Unit Strategic Planning Porter’s Generic StrategiesOverall cost leadershipDifferentiationFocus
26Travelocity’s Web site helps the consumer plan the whole vacation – flights, lodging, and car rental.com
27Business Unit Strategic Planning Operational Effectiveness and StrategyStrategic groupStrategic alliances
28Business Unit Strategic Planning Marketing AlliancesProduct or service alliancesPromotional alliancesLogistical alliancesPricing collaborationsPartner Relationship Management, PRMProgram Formulation and Implementation
29Business Unit Strategic Planning Feedback and Control
30The Marketing Process Steps in the Planning Process Analyzing Market OpportunitiesDeveloping Marketing StrategiesPlanning Marketing ProgramsManaging the Marketing EffortAnnual-plan controlProfitability controlStrategic control
31Figure 4.10: Factors Influencing Company Marketing Strategy
32Product Planning: The Nature and Contents of a Marketing Plan Contents of the Marketing PlanExecutive SummaryCurrent Marketing SituationOpportunity and issue analysisObjectivesMarketing strategyAction programsFinancial projectionsImplementation controls
33Product Planning: The Nature and Contents of a Marketing Plan Sample Marketing Plan: Sonic Personal Digital AssistantCurrent Marketing SituationOpportunity and Issue AnalysisObjectivesAction ProgramsFinancial Projections
34Product Planning: The Nature and Contents of a Marketing Plan Implementation ControlsMarketing StrategyPositioningProduct ManagementPricingDistributionMarketing CommunicationsMarketing Research