Strategic Planning and the Marketing Management Process Chapter 1 Strategic Planning and the Marketing Management Process

The Marketing Concept An organization should seek to make a profit by serving the needs of customer groups The purpose is to rivet the attention of marketing managers on customer orientation, rather than on product orientation or selling orientation The principal task of the marketing function - Find effective and efficient means of making the business do what suits the interests of customers

Marketing The activity, set of institutions, and process for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Figure 1.1 - Major Types of Marketing

Strategic Planning and Marketing Management All the activities that lead to the development of a clear organizational mission Organizational objectives Appropriate strategies to achieve the objectives for the entire organization

Figure 1.2 - The Strategic Planning Process

Organizational Mission In developing a statement of mission, management must take into account three key elements: The organization’s history The organization’s distinctive competitiveness The organization’s environment

Organizational Mission An effective mission statement should be: Focused on markets rather than products Achievable Motivating Specific

Organizational Objectives Objectives must be: Specific Measurable Action commitments

Organizational Objectives If formulated properly, organizational objectives: Can be converted into specific action Will provide direction Can establish long-run priorities for the organization Can facilitate management control

Figure 1.3 - Sample Organizational Objectives

Organizational Strategies Organizations can pursue various strategies based on: Products and markets Competitive advantage Value

Figure 1.4 - Organizational Growth Strategies

Organizational Strategies Based on Competitive Advantage Cost leadership strategy - A firm would focus on being the low-cost company in its industry Strategy based on differentiation - A firm seeks to be unique in its industry or market segment along particular dimensions that the customers value

Strategies Based on Value Three value strategies: Best price Best product Best service

Choosing an Appropriate Strategy Management should: Select those strategies consistent with its mission Capitalize on the organization’s distinctive competencies Sustainable competitive advantage can be based on either the assets or skills of the organization

Organizational Portfolio Plan The first step in this approach is to identify the various divisions, product lines, and so on that can be considered a business Also called strategic business units (SBUs) The next step is to establish methods to determine how resources should be allocated among the various SBUs Known as portfolio models

The Marketing Management Process Process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational objectives

Figure 1.5 - Strategic Planning and Marketing Planning

Situation Analysis Involves analysis of the past, present, and likely future in six major areas of concern: Cooperative environment - Includes all firms and individuals who have a vested interest in the firm’s accomplishing its objectives Competitive environment - Includes primarily other firms in the industry that rival the organization for both resources and sales

Situation Analysis Economic environment - State of the macroeconomy and changes in it also bring about marketing opportunities and constraints Social environment - Includes general cultural and social traditions, norms, and attitudes Political environment - Includes the attitudes and reactions of the general public, social and business critics, and other organizations

Situation Analysis Legal environment - Includes a host of federal, state, and local legislation directed at protecting both business competition and consumer rights

Marketing Planning Produces three outputs: Establishing marketing objectives Selecting the target market Developing the marketing mix Marketing mix: A set of controllable variables that must be managed to satisfy the target market and achieve organizational objectives

Implementation of the Marketing Plan Involves putting the plan into action and performing marketing tasks according to the predefined schedule

Control of the Marketing Plan Involves three basic steps: Measuring results of implemented marketing plan Comparing results with objectives Making decisions on whether plan is achieving objectives

Marketing Information Systems and Marketing Research Throughout the marketing management process, current, reliable, and valid information is needed to make effective marketing decisions Providing this information is the task of the marketing information system and marketing research

Strategic planning is a top-management responsibility The Strategic Plan, The Marketing Plan, and Other Functional Area Plans Strategic planning is a top-management responsibility Ways in which marketing executives are involved in the strategic planning process: They influence the process by providing important inputs in the form of information and suggestions relating to customers, products, and middlemen They must always be aware of what the process of strategic planning involves as well as the results

Marketing’s Role in Cross-Functional Strategic Planning More organizations are bringing managers and employees together to participate in cross- functional teams All personnel working in a cross-functional team participate in creating a strategic plan to serve customers The greatest advantage of cross-functional team is the ability of team members to consider a situation from a number of viewpoints

Marketing’s Role in Cross-Functional Strategic Planning Strategic planning results in a clearly defined blueprint for management action in all functional areas of the organization

Figure 1.6 - The Cross-Functional Perspective in Planning

Figure 1.7 - A Blueprint for Management Action