1. 2 Strategic marketing planning
GRAHAM HOOLEY • NIGEL F. PIERCY • BRIGETTE NICOULAUD 2
Strategic marketing planning

2. Strategy is the matching of the activities of an organisation to the environment in which it operates and to its own resource capabilities Johnson and scholes (1988)

3. Introduction
Company’s capabilities are matched to the market environment in which it operates not for today but in foreseeable future
Strategic planning attempts to answer three basic questions
What is the business doing now?
What is happening in the environment?
What should the business be doing?

4. Strategic fit Figure 2.1 Market needs & conditions
Strategy adapted to the needs and requirements of the market
Organizational resources suited to the markets in which it operates
Marketing strategy
Organizational resources
Organizational resources needed for implementation of the strategy

5. Defining the business purpose or mission
Requires asking fundamental questions:
What business are we in?
What businesses do we want to be in?
Who is our major competitor?
What markets are we in?

6. Mission formulation and statement
The strategic intent or vision of where organization want to be in foreseeable future
The values of the organization should be spelled out to guide operations
Articulate distinctive competencies
Market definition, in terms of customer targets
Finally, it should spell out where organization intends to be positioned in marketplace

7. Components of mission Figure 2.2 Strategic intent
Vision of what you want to be
Market definition
Customer targets
Company values
Guiding principles
Mission
Objectives and strategy
Competitive positioning
Differential advantage
Distinctive competencies
Core skills

8. The marketing strategy process
Three main levels:
Establishment of a core strategy
Assessment of companies capabilities (strengths and weaknesses relative to competition – opportunities and threats posed by the environment)
The creation of the company’s competitive positioning
competitive edge in serving customers better than competition is defines
The implementation of the strategy
Department putting strategy into action is created

9. The marketing strategy process
Figure 2.3
The marketing strategy process
Business purpose
Environment analysis
Core strategy
Company analysis
Market target
Competitive positioning
Competitive advantage
Control
Implementation
Organization
Marketing mix

10. Establishing the core strategy

11. Analysis of organizational resources
Creation of long list of resources and many weaknesses that an organization has at its disposal
They may stem from;
Skills of the workforce in assembling products
Skills of management in planning
R&D department in new product ideas
Distinctive competencies may lie in image, market presence or its after sales services (exploitable)

12. Druker’s seven types of businesses
Product portfolio
Druker’s seven types of businesses

13. Druker’s seven types of businesses
Today’s breadwinners
products earning healthy profits now
Tomorrow’s breadwinners
Expected to take breadwinning role in the future
Yesterday’s breadwinners
Supported the company in the past
Developments
Recently developed that may have some future

14. Druker’s seven types of businesses
Sleepers
Have been around for sometime but failed to establish themselves in their markets
Investments in managerial ego
Have strong product champions among influential managers
Failures
Failed to play a significant role in the company’s portfolio

15. Market attractiveness
Figure 2.4
Product types in the portfolio
Tomorrow's breadwinners
Developments
Sleepers
Ego trips
High
Market attractiveness
Life
Cycle
Death
Cycle
Low
Failures
Yesterday’s breadwinners
Today’s breadwinners
High
Low
Business strength

16. Portfolio planning
Diversified organizations need to find methods for assessing the balance of business in its portfolio
Development of business strategies and allocation of resources (both managerial and financial)
Analyzing portfolio balance

17. Balancing the business portfolio
Figure 2.5
Balancing the business portfolio
Long-run corporate health requires a balance of:
Products that generates cash now
Other that use cash now but promise to generate cash in the future

18. Unbalanced, present-focused business portfolio
Figure 2.6
Unbalanced, present-focused business portfolio
A great present but what about the future?
Other that use cash now but promise to generate cash in the future
Products that generates cash now

19. Unbalanced, future-focused business portfolio
Figure 2.7
Unbalanced, future-focused business portfolio
Future prospects good but who pays today’s bills?
Products that generates cash now
Other that use cash now but promise to generate cash in the future

20. Analysis of the markets served
Opportunities and threats facing the company
Stem from two main areas;
The customers (both current and potential) and competitors ( again both current and potential)
Most markets consist of heterogeneous customers (varying needs and demands)

21. SWOT Analysis Figure 2.8 Internal External Strengths
What are we god at relative to competitors?
Opportunities
What changes are creating new options for us?
Good points
Weaknesses
What are we bad at relative to competitors?
Threats
What emerging dangers must we avoid or counter?
Danger points

22. SWOT strategic implications
Figure 2.9
SWOT strategic implications
Opportunities
Threats
Exploit existing strengths in areas of opportunity
Use existing strengths to counter threats
Strengths
Build new strengths first to take advantage of opportunities
Build new strengths to counter threats
weaknesses

23. Core strategy Define the key factors of success
Company sets its marketing objectives
Objectives should be both long and short term
Core strategy varies at different stages of product life cycle
Expand the market (achieved in early growth stages of lifecycle) or to increase share of existing market (pursued during late growth/maturity stages

24. Expand the market
Market expansion can be achieved through attraction of new users to the product or service
Through geographic expansion of the company’s operations (both domestically and internationally)

25. Strategic focus Figure 2.10 Improve performance Increase sales
Improve productivity
Expand market
Increase share.
Expand market
Increase share.
New uses
New users
Increasing use frequently
New products
Win share
Acquire share
Create alliances
Increase price
Add value
Change product mix
Capital costs
Fixed costs
Variable costs

26. Increase share Main routes to increasing share include;
Winning competitors, customers
Merging with (or acquiring) the competitors
Entering into strategic alliances with competitors, suppliers and/or distributors
Increasing usage rate may be viable approach to expanding the market for some products

27. Improving profitability
Through improving margins
Increasing price, reducing cost or both
Removing poorly performing products and concentrating on more financially viable

28. Creating the competitive positioning
Statement of company’s market targets
Where the company will compete and differential advantage
How the company will compete
Market targets
Select those targets most suited to utilizing company’s strengths and minimizing vulnerability due to weaknesses

29. Market targets
Market will generally be more attractive if the following hold;
It is large
It is growing
Contribution margins are high
Competitive intensity and rivalry are low
There are high entry and low exit barriers
The market is not vulnerable to uncontrollable events

30. Differential advantage

31. Cost leadership
Company seek to obtain a cost structure significantly below than that of competitor
Through construction of efficient scale economies, cost minimization in R&D, service, sales force, advertising etc

32. Relative delivered cost
Figure 2.11
Routes to competitive advantage
High
Competitive
advantage
uniqueness
Valued
Competitive
disadvantage
Stuck in the middle
Low
High
Low
Relative delivered cost

33. Differentiation Something that is seen as a unique in the market
Company’s strengths and skills are used to differentiate the company’s offerings than competitors
Differentiation can be achieved through design, style, product or service features, price, image etc

34. Differentiation and cost leadership
Both could be pursued simultaneously (Fulmer and Goodwin, 1988)
Cost leadership may be impossible to sustain due to competitor imitation
Cost leadership requires minimal spending on R&D, product improvement and image creation

35. Implementation
Task of marketing management is to implement those decisions through marketing effort
Three basic elements of implementation;
Marketing mix, organization and control

36. Marketing mix
Each of the element of the mix should be designed to add up to the positioning required
Where elements of the mix do not pull in the same direction but contradict each other, the positioning achieved will be confused and confusing to customers

37. Organization
How the marketing effort and the marketing department are organized will have effect on how well the strategy can be can be carried through
Required manpower and financial resources to be made available

38. Control Monitor and control the effort
Performance can be monitored in two ways;
Market performance (sales, market share, customer attitude and loyalty and changes in them over time)
Financial performance ( monitoring of product contribution relative to the resources employed to achieve it)

39. Amber reports the most important marketing metrics used by companies

40. Marketing metrics Relative perceived quality Loyalty/retention
Total no of customers
Customer satisfaction
Relative price (market share/volume)
Perceived quality/esteem
Complaints (level of dissatisfaction)
Awareness and distribution/availability