Chapter 2 Strategic Planning for Competitive Advantage

Strategic Planning The process of maintaining a “fit” between an organization’s resources and objectives AND evolving market opportunities The goal is LONG-TERM profitability and growth The Marketing Plan is the blueprint for implementing the long-term goals of the company.

The Market Plan Involves designing marketing activities to meet marketing objectives Considers changing marketing environment Contains decisions for all elements of the marketing strategy AND the basis for those decisions

4 Marketing Plan Elements Marketing Strategy ProductDistribution Price Marketing Mix Business Mission Statement Objectives Situation or SWOT Analysis Implementation Evaluation Control Target Market Strategy Implementation Evaluation Control Promotion

Writing the Marketing Plan Step 1 Define the Business Mission What business are we in? Focus on the market rather than the good or service May need to be defined by strategic business unit (SBU) A mission that is too narrow may be the result of marketing myopia A mission that is too broad doesn’t provide direction

Writing the Marketing Plan Step 2 – Setting the marketing plan objectives Must be: Realistic Measureable Time specific Consistent with the organizational mission and priorities

Writing the Marketing Plan Step 3 – Conduct a situation analysis (SWOT) ©South-Western College Publishing S S W W O O T T Things the company does well. Things the company does not do well. Conditions in the external environment that favor strengths. Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness. Internal External

Writing the Marketing Plan Step 4 – Identify the firm’s competitive advantage Competitive advantage is the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.

Types of Competitive Advantage Cost-based Product/service differentiation Niche strategies

Sources of Cost Reduction Experience Curves Efficient labor No frills goods and services Government subsidies Design technology Reengineering Production innovations New product delivery methods

Product/Service Differentiation to Create Competitive Advantage Exists when a firm provides something unique to buyers other than low price. E.g. Maytag offers innovative designs and product reliability

Niche Competitive Advantage The organization targets and effectively serves a single segment of the market. The Scooter Store

Sustainable Competitive Advantage Competitive advantage that cannot be copied by the competition.

Writing the Marketing Plan Step 5 – Select a strategic alternative Tools to help include: Strategic opportunity matrix (Product/Market matrix) Portfolio matrix (BCG matrix)

Strategic Opportunity Matrix (Market/Product Matrix) Old/Existing Markets New Markets Old/Existing Products New Products MARKETPENETRATIONMARKETDEVELOPMENT PRODUCTDEVELOPMENTDIVERSIFI-CATION

16 Portfolio Matrix Stars Cash Cows Problem Children Dogs

Writing the Marketing Plan Step 6 – Select and describe one or more target markets Segment the market based on groups with similar characteristics Analyze the market based on groups with similar characteristics Select one or more target markets

Target market Strategies Entire MarketMultiple MarketsSingle Market Target Market Options

Writing the Marketing Plan Step 7 – Develop and state the marketing mix (4 Ps) strategies. Product Price Place (Distribution) Promotion

Step 8 - Implementation of the Marketing Plan Implementation activities include job assignments, activity descriptions, timelines, budgets, etc. Turns the written marketing plan into actions.

Step 9 - Evaluation and Control Did we accomplish what we planned to accomplish? Why or why not? May require a marketing audit