1. Chapter Two Strategic Planning and the Marketing Process
Marketing: An Introduction Second Canadian Edition Armstrong, Kotler, Cunningham, Mitchell and Buchwitz
Chapter Two
Strategic Planning and the Marketing Process

2. Looking Ahead
Explain companywide strategic planning and its four steps.
Discuss business portfolio design and strategies.
Explain marketing’s role in strategic planning and the importance of value chains and networks.
Describe the elements of a customer-driven marketing strategy and mix.
List the marketing management functions and elements of a marketing plan.

3. What Is Strategic Planning
Strategic 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
Corporate level
Define the company mission.
Set company objectives and goals.
Design the business portfolio.
Business unit, product and market levels.
Plan marketing and other functional strategies.

5. Strategic Planning Defining a clear company mission. Mission Statement
Setting supporting objectives.
Designing a sound business portfolio.
Coordinating functional strategies.
Mission Statement
States the organization’s purpose.
Market and customer-oriented.
Provides direction to internal stakeholders.

6. Mission Statement Answers
What is our business?
Who is the customer?
What does the customer value?
What should our business be?

7. Successful Mission Statements
Are specific.
Are realistic.
Are motivating.
Are customer-centric.
Fit the market environment.
Are based on distinctive competencies.

8. Strategic Business Unit (SBU)
A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.
Can be a company division, a product line within a division or sometimes a single product or brand.

9. 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 growth or downsizing.

10. Analyze Current Situation
Portfolio analysis.
Evaluates relative strength of all businesses in the company.
Strategic Business Unit analysis.
Evaluates strength of each independent business unit in company.
Growth-Share Matrix key analysis tool.

11. BCG Growth-Share Matrix
Stars
???
Cows
Dogs
Fix or abandon
Use cash to make into a star
Nurture to generate cash
Defend position
Industry attractiveness, market share, cash generation
Business strength, growth rate, cash use

12. Potential Matrix Problems
Can be time consuming and costly.
Difficult to define SBUs and measure market share and growth.
Focus on the current business, not future planning.
Can place too much emphasis on growth.
Can lead to poorly planned diversification.

13. Analyze Opportunities
Product-Market Expansion Grid identifies four potential growth areas.
Market
Penetration
Product
Development
Diversification
Existing
Products
New
Markets

14. Growth at Tim Horton’s
To maintain its phenomenal growth in an increasingly over-caffeinated marketplace, Tim Horton’s uses an ambitious, well-planned multi-pronged growth strategy.

15. Tim Horton’s and PME Grid
Market penetration.
Make more sales to current customers without changing products.
Add new stores in current market areas; improve advertising, prices, menu, service.
Market development.
Develop new markets for current products.
Review new demographic such as women, youth.
Examine large potential U.S. market.

16. Tim Horton’s and PME Grid
Product development.
Offering modified or new products to current markets.
Add lunch offerings and iced drinks, sell coffee in supermarkets, co-brand products.
Diversification.
Start up or buy businesses outside current products and markets.
Making and selling CDs, testing restaurant concepts or branding casual clothing.

17. Marketing’s Role in Strategic Planning
Provide a guiding philosophy.
Provide inputs to strategic planners.
Design strategies to research objectives.
Measure results.

18. The Value Chain/Network
the series of departments which carry out value-creating activities to design, produce, market, deliver and support a firm’s products.
Value delivery network.
the network made up of the company, suppliers, distributors and ultimately, customers who “partner” with each other to improve the performance of the entire system.

19. The Marketing Process Analyze current situation.
Analyze marketing opportunities.
Select target markets.
Develop the marketing mix.
Manage the marketing effort.

20. Select Target Segment Segment market. Target segment. Position.
Divide larger market into groups of people with similar demands and responses.
Target segment.
evaluate segments and select one or more segments to enter.
Position.
Create differentiation relative to competing products in minds of target customers.

21. Market Segmentation
The process of dividing a market into distinct groups of buyers with different needs, characteristics or behaviours who might require separate products or marketing programs.

22. Segmentation Variables
Market segment.
A group of consumers who respond in a similar way to a given set of marketing efforts.
Can be segmented along different dimensions:
Demographic variables
Geographic location
Behavioural variables
Psychographic variables

23. Target Marketing
Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Good target segments must be able to sustain profitability.
Example:
Arm & Hammer’s baking soda
Bayer Aspirin

24. Market Positioning
Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers.
Process begins with differentiating the company’s marketing offer so it gives consumers more value.

25. The Marketing Mix
The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market.

26. Create Marketing Mix
Product – offers the right product, service or experience.
Price – controls perceived value and satisfaction.
Place – allows customers easy access to product and support.
Promotion – communicates the offer and the value proposition.

27. The Four Ps and the Four Cs
PRODUCT provides CUSTOMER SOLUTION
PRICE represents CUSTOMER COST
PLACE provides CONVENIENCE
PROMOTION is 2-way COMMUNICATION

28. Manage Marketing Effort
Build strong operational marketing plan.
Carry out the plan.
Organize marketing department.
Leverage value chain and value network.
Exercise control.
Set goals.
Measure and evaluation performance.
Take corrective action.

29. A Marketing Plan Executive summary. Current marketing situation.
Summary of main goals/recommendations.
Table of contents follows.
Current marketing situation.
Market description.
Product review.
Competitive review.
Review of distribution.

30. Marketing Plan (cont’d)
Threat and opportunity analysis.
External trends and factors in the marketing environment.
May affect the firm and its strategies.
Objectives and issues.
What the company wants to achieve with the plan.
Sales, profits, market share, positioning.

31. Marketing Plan (cont’d)
Marketing strategy.
Marketing mix elements and expenditures.
How the strategy fits the opportunity.
Action program.
How the strategy will be implemented.
Budgets.
Forecasted revenues and expenses.
Controls.

32. Marketing Dept Organization
Functional.
Divided by task e.g.. Sales, advertising, research, customer service.
Each functional area headed by specialist.
Geographic.
Teams focused on particular areas.
Complete set of sales/marketing functions exist within each geographic team.

33. Marketing Dept Organization
Product management.
Teams focused on specific products or brands.
Typical of large companies with many product lines or brands.
Market or customer management.
Teams focused on key customers or markets.
Combination of two or more common.

34. Marketing Control Process
Set goals.
What do we want to achieve?
Measure performance.
What is happening?
Evaluate performance.
Why is it happening?
Take corrective action.
What should we do about it?

35. Looking Back
Explain companywide strategic planning and its four steps.
Discuss business portfolio design and strategies.
Explain marketing’s role in strategic planning and the importance of value chains and networks.
Describe the elements of a customer-driven marketing strategy and mix
List the marketing management functions and elements of a marketing plan.