Marketing 2 Strategic Planning

2.1 Strategic planning for competitive advantage Planning marketing activities Changing role of marketing Strategic Planning-2

Strategic Planning The managerial process of creating and maintaining fit between the organization’s objectives and resources and the evolving market opportunities. (or threats)

Strategy vs. Tactics Strategy Long term Long term Big picture Big picture Designed to achieve organizational goals Designed to achieve organizational goalsTactics Short term Details Designed to achieve strategy

Elements of the Marketing Plan Must have Definition of Mission and Objectives Definition of Mission and Objectives Situational Analysis Situational Analysis Identify Target Market (segment) Identify Target Market (segment) Positioning using Marketing Mix Positioning using Marketing Mix Should have Budget Budget Timetable Timetable Research needed Research needed

2.2 Marketing Plan I Company mission Raison d’etre Raison d’etre Establishes boundaries for decisions, objectives, and strategies. Establishes boundaries for decisions, objectives, and strategies. Focus on markets rather than goods or services; customer needs vs. technology. (myopia) Focus on markets rather than goods or services; customer needs vs. technology. (myopia) Don’t be too broad. Say something useful. (Scott Adams) Don’t be too broad. Say something useful. (Scott Adams)

2.2 Marketing Plan II Company goals and objectives Business portfolio and strategic business units Business portfolio and strategic business units Must be realistic, measurable, and time specific. Must be realistic, measurable, and time specific. Must be consistent with organizational priorities. Must be consistent with organizational priorities.

2.3 Meaningful Goals & Objectives Are... Supportive of the Organization’s Mission Challenging but Attainable Measurable Time sensitive

Marketing Plan III Situation Analysis/SWOT Strengths Strengths Weaknesses Weaknesses Opportunities Opportunities Threats Threats Strengths and Weaknesses are INTERNAL Opportunities and Threats are EXTERNAL

2.7 SWOT Analysis OPPORTUNITIES THREATS STRENGTHSWEAKNESSES Strategy External Internal

Marketing Plan IV Identify Target Market Segment Positioning Marketing Mix Product Product Place Place Price Price Promotion Promotion

2.4 The Internal Marketing Strategy Total Quality Management Organizational Structure & Re- engineering Teamwork and Employee Empowerment

2.5 The External Marketing Strategy Product Development and Differentiation Valuation and Pricing Channel and Value-Chain Management Integrated Marketing Communication

2.6 Marketing in business organizations Develop marketing plans Portfolio PortfolioSBU Product marketing plan Product marketing plan Identify market opportunities Strategic windows Strategic windows Factors that make markets attractive Factors that make markets attractive Environmental scanning Environmental scanning

Environmental Scanning The collection and interpretation of information about forces, events, and relationship in the external environment that may affect the future of the organization or the implementation of the marketing plan.

Marketing Plan V Implementation Monitor and Control Monitor and Control Adjust as necessary to reach objectives Adjust as necessary to reach objectives Planning is everything. The plan is nothing. Dwight D. Eisenhower Planning is everything. The plan is nothing. Dwight D. Eisenhower

2.8 Competitive Advantage Unique features of the company or product that are significant and superior to the competition Sources of Competitive Advantage Better than competitors Better than competitors Sustaining Competitive Advantage Cannot be copied, substituted for, or surpassed by competition. Cannot be copied, substituted for, or surpassed by competition.

Resource Advantage Theory Relative Resource-Produced Value LowerParitySuperior LowerIndeterminate Position Competitive Advantage Competitive Advantage (Nirvana) Relative Resource Cost ParityCompetitive Disadvantage Parity Position Competitive Advantage HigherCompetitive Disadvantage (The Pits) Competitive Disadvantage Indeterminate Position Resource Advantage Theory (Hunt and Morgan 1996) Competitive Position Matrix

Porter’s Typology of Strategy Low Cost DifferentiationNicheMiddle-of-the-Road =

2.9 Cost competitive advantages Low cost competition Can offer lower prices while maintaining same profit margins, or Can offer lower prices while maintaining same profit margins, or Can make higher profits, with same or slightly lower prices. Can make higher profits, with same or slightly lower prices. Sources of Cost Competitive Advantage Experience Experience Efficiency Efficiency Simpler market offerings Simpler market offerings Government subsidies Government subsidies Product design Product design Reengineering Reengineering Product innovation Product innovation Logistics Logistics

2.10 Product/service differentiation Offer something unique and valuable Brand Names Brand Names Dealer Network Dealer Network Product Reliability Product Reliability Image Image Service Service

2.10 Niche Competitive Advantage Target and effectively serve a small segment Expertise Expertise Full service in market Full service in market Significant share of niche Significant share of niche Too small to be noticed/attractive Too small to be noticed/attractive

2.12 Selecting Marketing Alternatives CORPORATE AND SBU LEVEL BCG Portfolio Analysis BCG Portfolio AnalysisStar Question mark/Problem child Dog Cash cows Allocation of Resources Allocation of Resources

2.13 BCG Growth-share matrix High Low High Low Market growth rate ? Star Question Mark Cash Cow Dog Relative market share

Growth Strategies Market Penetration Existing Products/Existing Customers Existing Products/Existing Customers Market Development Existing Products/New Customers Existing Products/New Customers Product Development New Products/Existing Markets New Products/Existing MarketsDiversification New Products/New Markets New Products/New Markets

2.14 Marketing Strategy Target Market Strategy Market Opportunity Analysis Market Opportunity Analysis Size and potential of market segments One Marketing Mix to All Market Segments One Marketing Mix to All Market Segments One Marketing Mix to One Market Segment One Marketing Mix to One Market Segment Different Marketing Mixes to Multiple Market Segments Different Marketing Mixes to Multiple Market Segments Marketing Mix Strategy Marketing Mix Strategy Must work together Complementary and Synergistic Details to follow in Chapters 9-18

2.15 Following Up Planning Implementation Tactics and all the details. Tactics and all the details. Evaluation and Control Audit and Adjust Audit and Adjust Marketing Audit Comprehensive Comprehensive Systematic Systematic Independent Independent Periodic Periodic

2.16 Customer Centered Company Strategic Planning n Customer value n Customer satisfaction n Employee creativity and commitment

2.17 Changing Role of Marketing MARKETING MUST: Assess market attractiveness Assess market attractiveness Promote customer orientation Promote customer orientation Determine the firm’s distinctive competence Determine the firm’s distinctive competence At corporate level At SBU level

2.18 Basics of Relationship Marketing n Relationships are based on open communication. n Relationships are built on reliability. n Relationships are strengthened when the parties stay in contact. n Relationships depend on trust, honesty, and ethical behavior. n Partners in relationships show they care.