1. Strategic Market Planning: Take the Big Picture
Chapter 2
Strategic Market Planning: Take the Big Picture

2. Chapter Objectives Explain the strategic planning process
Describe the steps in marketing planning
Explain operational planning
Explain the key role of implementation and control on marketing planning
Discuss some of the important aspects of an organization’s internal environment
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

3. Real People, Real Choices: Decision Time at PaperBackSwap
Which trend should Richard latch onto in order to launch his new service into the limelight?
Option 1: Market the site as a way to help the environment
Option 2: Use PaperBackSwap as a vehicle to promote literacy
Option 3: Position the site as a cheap source of entertainment
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

4. Business Planning: Compose the Big Picture
Business Planning: Ongoing process of making decisions that guides the firm both in the short term and for the long haul
Identifies/builds on firm’s strengths
Helps managers make informed decisions
Develops objectives before action is taken
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5. Ethics and Marketing Planning
Unethical marketing decisions damage the firm, society, and stakeholders
Business ethics:
Rules of conduct for an organization
Code of ethics:
Written standards of behavior to which everyone in the organization must subscribe
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

6. Three Levels of Business Planning
Strategic planning:
Undertaken by top-level corporate management
Functional planning:
Conducted by top functional-level managers such as the chief marketing officer
Operational planning:
Done by supervisory managers
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7. Strategic Planning
Managerial decision process that matches firm’s resources and capabilities to its market opportunities for long-term growth and survival
Top management defines firm’s purpose and objectives
Example: increase firm’s total revenues by 20% over next five years
Strategic Business Units (SBUs)
Self-contained divisions
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8. Functional (Tactical) Planning
Accomplished by various functional areas of firm, such as marketing
Typically includes:
A broad 5-year plan to support strategic plan
A detailed annual plan
Example: marketing plan objective—to gain a 40% share of a particular market with three new products during coming year
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

9. Operational Planning
First-line managers focus on day-to-day execution of functional plans
Such planning includes detailed annual, semiannual, or quarterly plans
Example: an objective may be set in terms of units of a product a particular salesperson needs to sell per month (sales quota)
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

10. All Business Planning Is an Integrated Activity
Strategic, functional, and operational plans must work together to benefit the whole firm
Marketers must fully understand how they fit with the organization’s direction and resources
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

11. Strategic Planning: Frame the Picture
Very large multiproduct firms may have divisions called strategic business units (SBUs)
SBUs operate like separate businesses with their own mission, business objectives, resources, managers, and competitors
Strategic planning is done at both the corporate and SBU levels
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

12. Strategic Planning Step 1: Define the Mission
Answer three key questions:
What business are we in?
What customers should we serve?
How do we develop firm’s capabilities and focus its efforts?
Mission statement:
A formal document that describes the firm’s overall purpose and what it hopes to achieve in terms of its customers, products, and resources
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

13. Step 1: Define the Mission
Examples of mission statements
MADD: “to stop drunk driving, support the victims of this violent crime, and prevent underage drinking.”
National Book Swap: “to become the nation’s largest book club and in the process bring a lifetime of reading material to every American.”
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

14. Step 2: Evaluate the Internal and External Environments
Situational analysis (business review)
An assessment of a firm’s internal and external environments
Internal environment: controllable elements inside of an organization
External environment: uncontrollable elements outside of an organization that may affect its performance either positively or negatively
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

15. Internal Environment
Controllable elements inside a firm that influence how well the firm operates include:
People (human capital), physical facilities, financial stability, corporate reputation, quality products, strong brands, technologies, etc.
These elements represent the key strengths and weaknesses of the firm
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

16. External Environment
Elements outside the firm that may affect it either positively or negatively include:
Economic, competitive, technological, legal/political/ethical, and sociocultural trends
Trends manifest as opportunities or threats
Firm cannot directly control external factors but can respond to them via planning
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

17. SWOT Analysis
An analysis of an organization’s strengths (S) and weaknesses (W) and the opportunities (O) and threats (T) in the external environment
SWOT enables the firm to develop strategies that maximize strengths and capitalize upon opportunities
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

18. Step 3: Set Organizational or SBU Objectives
Organizational/SBU Objectives:
What the firm hopes to accomplish with long-range business plan
Need to be specific, measurable, attainable and sustainable
May relate to sales, profitability, product development, market share, productivity, ROI, customer satisfaction, or social responsibility
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

19. Step 4: Establish the Business Portfolio
The group of different products or brands owned by a firm and having different income-generating and growth capabilities
Portfolio analysis:
Assessing the potential of a firm’s SBUs
Helps make decisions regarding which SBUs should receive more or less of the firm’s resources
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

20. Step 5: Develop Growth Strategies
Product-market growth matrix:
Characterizes different growth strategies according to type of market (new vs. existing) and type of product (new vs. existing).
Matrix yields four potential strategies:
Market penetration
Product development
Market development
Diversification
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21. Marketing Planning: Steps 1 and 2
Perform a situation analysis
Builds on SWOT; identifies how environmental trends affect the marketing plan
Set marketing objectives
Specific to the firm’s brands and other marketing mix-related elements
States what the marketing function must accomplish if firm is to achieve its overall business objectives
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

22. Marketing Planning: Step 3
Develop marketing strategies to achieve marketing objectives
Select target market(s) where the firm’s offerings are best suited
Develop marketing mix strategies:
Marketing mix strategies: how marketing will accomplish its objectives in the firm’s target market by using product, price, promotion, and place (distribution)
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

23. Marketing Mix Strategies
Product strategies:
Include product design, packaging, branding, support services, and product variations and features
Pricing strategies:
Include setting prices for final consumers, wholesalers, and retailers based on costs, demand, or competitors’ prices
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

24. Marketing Mix Strategies
Promotion strategies:
Advertising, sales promotion, public relations, direct marketing, personal selling
Distribution (place) strategies:
How, when, and where the product is available to targeted customers
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

25. Step 4: Implement and Control the Marketing Plan
Measuring actual performance, comparing performance to the objectives, making adjustments
Marketing metrics:
Return on marketing investment (ROMI)
Action plans:
Support plans that guide implementation and control of marketing strategies
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26. Create and Work with a Marketing Plan
Written marketing plans encourage concrete objectives and strategies
Operational plans focus on the day-to-day execution of the marketing plan
A firm’s corporate culture determines much of its internal environment—the values, norms, and beliefs that influence everyone in the firm
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

27. Real People, Real Choices: Decision Made at PaperBackSwap
Richard chose both option 1 and 3
Richard felt that positioning the firm as a provider of inexpensive entertainment while doing something positive for the environment stood the best chance of success
Implementation: incorporated recycling symbol into corporate logo; encouraged use of Media Mail; members promoted to others
Measuring success: over 5 million books posted; usage increased by 55%
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

28. Keep It Real: Fast-Forward to Next Class Decision Time at eBay
Meet Robert Chatwani, General Business Manager of eBay
eBay is developing a new online marketplace to help small producers and artisans gain global access
The decision to be made: Select a course of action that would maximize long-term revenue and social impact
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

29. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2009 Pearson Education, Inc.  
Publishing as Prentice Hall
Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall