For use only with Perreault and McCarthy texts. © 2006 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER TWO CHAPTER TWO Marketing Strategy Planning

1. 1.Understand what a marketing manager does Know what marketing strategy planning is--and why it will be the focus of the book Understand target marketing Be familiar with the four Ps in a marketing mix Know the difference between a marketing strategy, a marketing plan, and a marketing program. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin When we finish this lecture you should

6.Be familiar with the text’s framework for marketing strategy planning—and why it involves a process of narrowing down from broad opportunities to the most attractive marketing strategy. 7.Know four broad types of marketing opportunities that help in identifying new strategies. 8.Understand why strategies for opportunities in international markets should be considered. © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin When we finish this lecture you should

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Management Job in Marketing Implement Marketing Plan(s) and Program Control Marketing Plan(s) and Program Implement Marketing Plan(s) and Program Whole-Company Strategic Management Planning Marketing Planning

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin What is Marketing Strategy Planning? Exhibit 2-2 The marketing mix C

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Selecting a Market-Oriented Strategy Is Target Marketing Exhibit 2-3 Production-oriented manager sees everyone as basically similar and practices “mass marketing” Marketing-oriented manager sees everyone as different and practices “target marketing”

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin An Application of Target Marketing +

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Developing Marketing Mixes for Target Markets Exhibit 2-4 Place Promotion Price Product C

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Product Element of the Marketing Mix +

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Place Element of the Marketing Mix Exhibit 2-6 Examples of Channels of Distribution AOLNissan Del Monte Procter & Gamble Wholesaler Retailer Consumer Wholesaler Retailer

Advertising Publicity Personal Selling Personal Selling Telling and Selling the Customer Personal Selling Personal Selling Advertising Publicity © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Promotion Element of the Marketing Mix Sales Promotion Sales Promotion

Price Flexibility Price Flexibility Price Changes Over the Life Cycle Price Changes Over the Life Cycle Price Flexibility Price Flexibility Price Changes Over the Life Cycle Price Changes Over the Life Cycle Pricing Objectives Pricing Objectives Price Setting Discounts and Allowances Discounts and Allowances Geographic Pricing Terms Geographic Pricing Terms Legal Environment Legal Environment Cost and Demand Cost and Demand Competition and Substitutes Competition and Substitutes Price Sensitivity Price Sensitivity Price of Other Products In the Line Price of Other Products In the Line Pricing Objectives Pricing Objectives Discounts and Allowances Discounts and Allowances Geographic Pricing Terms Geographic Pricing Terms Legal Environment Legal Environment Cost and Demand Cost and Demand Competition and Substitutes Competition and Substitutes Price Sensitivity Price Sensitivity © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Price Element of the Marketing Mix

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interactive Exercise: Marketing Mix ProductPlace Promotion Price C

Selection of Target Market © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin All Four Ps Contribute to the Whole Product Place Promotion Price Understanding the Target Market Leads to Good Strategies!

Target Market Target Market + Marketing Mix Marketing Mix = Marketing Strategy Marketing Strategy + Other Marketing Plans Other Marketing Plans + Time- Related Details Time- Related Details Marketing Plan Marketing Plan = Other Marketing Plans Other Marketing Plans Time- Related Details Time- Related Details Marketing Plan Marketing Plan Target Market Target Market Marketing Mix Marketing Mix Marketing Strategy Marketing Strategy © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Marketing Plan Guides Implementation and Control A Firm’s Marketing Program A Firm’s Marketing Program =

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Importance of Marketing Strategy Planning Strategy Decisions Usually Determine Success and Failure Timex had captured a large market share Low price, dependability, good ads, unconventional channels Stiff competition arose New product refinements

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Creative Strategy Planning Needed for Survival 2%14% 2% (Well below average) PoorFairGoodExceptional (Below average) (Above average) (Well above average) Death-wish marketing Best-practices marketing 68% (Average Marketing Program) Failure

Breakthrough Opportunities Avoid Hit-or-Miss Marketing Competitive Advantage © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin What Are Attractive Opportunities?

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin The Importance of Good Research

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Marketing Strategy Planning Process Highlights Opportunities Exhibit 2-10 External Market Environment

Diversification Market development Product development Market penetration © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Types of Opportunities to Pursue Exhibit 2-11 Present productsNew products Present markets New markets

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Market Penetration +

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Product Development +

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Product Development

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interactive Exercise: Types of Growth Opportunities for Marketing Strategy Diversification Market development Product development Market penetration Present productsNew products Present markets New markets

Early Start Competitive Advantage Better Trends? Smaller World Competitive Advantage Better Trends? © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin International Opportunities Should Be Considered

© 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Global Competitive Advantage +

Marketing management process Strategic (management) planning Marketing strategy Target market Marketing mix Target marketing Mass marketing Channel of distribution © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Personal selling Mass selling Advertising Publicity Sales promotion Marketing plan Implementation Operational decisions Marketing program Breakthrough opportunities Competitive advantage Key Terms

Differentiation S.W.O.T. analysis Market penetration Market development Product development Diversification © 2006 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Key Terms