1. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-0 Chapter 2 Strategic Planning: Making Choices in a Wired World

2. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-1 Chapter Objectives  Explain the strategic planning process  Tell how firms gain a competitive advantage and describe the factors that influence marketing objectives

3. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-2 Chapter Objectives_2  Describe the steps in the marketing planning process  Explain how marketers implement and control the marketing plan

4. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-3 Strategic Planning: Guiding the Business  Strategic planning is the managerial decision process that matches the organization’s resources and capabilities to its market opportunities for long-term growth  Firms may become multi-product companies with self-contained divisions –Strategic Business Units (SBUs) –Example: The Walt Disney Company

5. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-4 Strategic Planning at the Corporate Level  Defining the Organization’s Mission  Establish Corporate Objectives  Allocate Resources to the SBUs

6. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-5 Defining the Organization’s Mission  A mission may begin with these questions: –What business are we in? –What customers should we serve? –How should we develop the firm’s capabilities and focus its efforts?

7. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-6 Avoiding Marketing Myopia  Describes firms with shortsighted visions and missions  Example: What business is Amtrak in?

8. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-7 Establishing Corporate Objectives  Grow directly from a mission statement  Specify outcomes that an organization seeks to achieve in a certain time period –Example: Altria (Philip Morris) To profitably grow our worldwide tobacco, food, and beer business To enhance shareholder value through a balanced program of dividends and share repurchases

9. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-8 Planning for Growth: The Business Portfolio  For firms with different SBUs, planning also includes allocating resources among the businesses  Each SBU is a separate profit center within the larger corporation  Each SBU is responsible for its own costs, revenues, and profits

10. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-9 Portfolio Management  The range of products owned by a large firm is called a business portfolio  Portfolio analysis allows a firm to assess the potential of its products and businesses –BCG Growth-Market Share Matrix

11. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-10 BCG Matrix  Method focuses on potential for existing products to generate cash that the firm can then use to invest in new products  New products are chosen for their potential to become future cash generators  Two dimensions: –Market growth rate –Relative market share

12. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-11 Strategic Planning at the SBU Level  Evaluating the Environment: SWOT Analysis  Setting Business Objectives  Creating a Competitive Advantage  Developing Growth Strategies

13. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-12 SWOT Analysis  Internal Environment –Strengths –Weaknesses  External Environment –Opportunities –Threats  See Table 2.1 for an example

14. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-13 Setting Business Objectives  SBU objectives must support the overall objectives of the firm –Customer Satisfaction –Profitability –Market Standing –Return on Investment –Revenue and Sales

15. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-14 Creating Competitive Advantage  Identify what a firm does really well Distinctive competency - a firm’s capability that is superior to that of its competitors  Turn a distinctive competency into a differential benefit Differential benefits set products apart from competitors’ products by providing something unique that customers want

16. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-15 Developing Growth Strategies  Product-Market Growth Matrix illustrates different growth strategies –Two dimensions opportunities for growth in existing or new markets allocating resources into existing products or new products –Four strategies result

17. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-16 Tactical Planning: The Marketing Management Process  Analyzing the Marketing Environment  Setting Marketing Objectives  Developing Marketing Strategies –Preparing the Marketing Plan

18. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-17 Developing Marketing Strategies  Selecting a Target Market  Developing Marketing Mix Programs –Product Strategies –Pricing Strategies –Promotion Strategies –Distribution Strategies

19. ©2003 Prentice Hall, IncMarketing: Real People, Real Choices 3rd edition 2-18 Operational Planning: Executing the Marketing Plan  Implementing the Marketing Plan –The Marketing Budget –Organizing the Marketing Function  Controlling the Marketing Plan –Trend Analysis –Marketing Research