Strategic Planning: Developing and Implementing a Marketing Plan

Objectives 1.Understand the importance of strategic marketing. Know the outline for a marketing plan. 2.Define an appropriate business mission statement. 3.Describe criteria for good marketing objectives. 4.Explain components of a situation analysis. 5.Identify strategic alternates and describe tools to select them.

The Nature of Strategic Planning RESOURCES & OBJECTIVES EVOLVING MARKET OPPORUNITIES LONG RUN PROFITABILITY AND GROWTH

Marketing Plan What is a Marketing Plan?  Marketing planning involves designing activities relating to marketing objectives and the changing marketing environment.  For example: product lines, prices, communication  Why? Planning: Process of anticipating future events and determining strategies Basis for comparison of actual and expected performance Clearly stated activities to work toward common goals Aware of threats and opportunities

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

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

Define the Business Mission  Answers the question:  What business are we in and where are we going? Example: PepsiCo’s Business MissionPepsiCo’s Business Mission  Focuses on the market(s) rather than the good or service  Marketing myopia if focus is on specific goods/service  Examples? Frito-Lay is in the snack-food business  No clear foundation if focus is too broad  Examples? Amazon?  Strategic Business Units may also have a mission statement – characteristics of a SBUcharacteristics of a SBU Back

PepsiCo’s Mission Statement “ To be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce healthy financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.” Back

Strategic Business Units 1.A distinct mission and specific target market 2.Control over their resources 3.Their own competitors 4.Plans independent of other businesses Characteristic s Back

Marketing Plan Objectives Realistic Marketing Objectives Must Be: Back “Our objective is to increase market share by 40% and to obtain customer satisfaction ratings of at least 90% in 2005.” Measurable For a Defined Period of Time Consistent with Organizational Objectives

Situation Analysis 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. InternalExternal

Opportunities: Strategic Windows Limited period when the “fit” between key requirements of a market and competencies of the firm are optimum

Discovering Strategic Alternatives (Windows) Present ProductNew Product New Market Market Penetration Market Development Product Development Diversification Present Market Strategic Opportunity Matrix

Discovering Strategic Alternatives (Windows) Market Penetration Increase market share among existing customers Market Development Market Development Attract new customers to existing products Product Development Create new products for present markets Diversification Introduce new products into new markets

Selecting a Strategic Alternative Common ToolsCommon Goals  BCG Portfolio Matrix Market Share Profitability  GE Market Attractiveness Matrix

BCG Portfolio Matrix MARKET GROWTH RATE MARKET SHARE DOMINANCE HIGH LOW LOW HIGH ? $$ Back

BCG Portfolio Matrix MARKET SHARE DOMINANCE HIGH LOW MARKET GROWTH RATE LOW HIGH High growth Market leaders Require cash Low growth High market share High cash flow Low growth Low market share Minimal cash flow High growth Low market share Need cash Poor profit margins $$ Back

Four Basic Strategies for Resource Allocation Build Hold Harvest Divest Provide financial resources if SBU (Problem Child) has potential to be a Star. Preserve market share if SBU is a successful Cash Cow. Use cash flow for other SBUs. Increase short-term cash return. Appropriate for all SBUs except Stars. Get rid of SBUs with low shares in low-growth markets. Back

Market Attractiveness / Company Strength Matrix BUSINESS POSITON STRONG MARKET ATTRACTIVENESS LOW MEDIUM HIGH MEDIUMWEAK Low Attractiveness Medium Attractiveness High Attractiveness Back

Differential Advantage  Unique aspects of an organization that cause target market to patronize firm  A Sustainable Competitive Advantage cannot be copied by the competition. Back to The Marketing Process

Differential or Competitive Advantage  A set of unique features of a company & its products that are perceived by the target market as significant and superior to the competition  Two basic sources are:  Superior skills  Superior resources  A Sustainable Competitive Advantage cannot be copied by the competition. Back to The Marketing Process

Marketing Strategy …involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets.

Marketing Strategy Target Market Strategy –Identify the market segments that are of interest to the firm –Analyze market based on attractiveness of market segments –Select one or more target markets The Marketing Mix –Product Strategies –Distribution (Place) Strategies –Promotion Strategies –Pricing Strategies