Chapter 3 Objectives Discuss corporate and division strategic planing. List major steps in planning the marketing process. Determine how a company can effectively manage the marketing process.

Some Terms to Learn... Describe what might happen in each Let’s Discuss Some Terms to Learn... Describe what might happen in each of the following steps in strategic planning: Strategic plan Division plan 1. Strategic plan - GM Corporate Detroit. Saturn Division in Springfield TN. Business Units may be Saturn North America versus International Operations. Marketing plan will be for Saturn station wagon in Mexico. Business unit strategic plan Marketing plan

Planning, Implementation, and Control Process Corporate planning Division Business Product Implementation Organizing Implementing Control Measuring results Diagnosing Taking corrective action

Corporate Headquarters Planning Let’s Discuss Corporate Headquarters Planning Why might a corporation’s mission change over time? What can a good mission statement yield a business? What are four different types of competitive scopes of a company? Discuss distinct differences between vertical scope and geographical scope. Might become irrelevant, needs to be adapted to the environment. Direction. Page 41. Vertically integrated companies like McDonald’s, Boeing which do a lot of inhouse manufacturing. At the other end, are Levis, Nike, which have less vertical scope. They are essentially design and marketing companies.

The Boston Consulting Group’s Growth-Share Matrix 20%- 18%- 16%- 14%- 12%- 10%- 8%- 6%- 4%- 2%- Market Growth Rate 10x 4x 2x 1.5x 1x Relative Market Share .5x .4x .3x .2x .1x Stars 5 4 3 ? Question marks 2 1 Cash cows 6 Dogs 8 7 SBUs, axes. Build question marks into stars (require investment). Hold cash cows (generate cash). Dogs can be harvested slowly (tobacco) or divested.

The General Electric Model Quick Quiz The General Electric Model Describe market attractiveness and business strength. What would be benefits of the GE and the BCG models? In what areas are the models weak? Market attractiveness is a generalization of market growth, business strength is a generalization of relative market share. 9 cells, more fine-tuned classification. Benefits - good planning tool, helps develop priorities and guide resource allocation. Problems - too much emphasis on growth may compromise the attention paid to current businesses, doesn’t lend itself to exploit synergies between SBUs.

Three Intensive Growth Strategies: Ansoff’s Product-Market Expansion Grid New markets Existing products Market penetration Product development 1. Intensive growth comes from market penetration McDonald’s opening more stores in the US), product development (new menu items yogurt parfait), market development (McDonalds opening in new countries). Market development Diversification

Strategy Formulation Good strategies to think about: Overall cost leadership, differentiation, and focus. Firms that do not produce clear strategies do not perform well. Let’s think -- how could the internet make strategy formulation more challenging? Cost leadership - Costco, Southwest airlines. Differentiation - Intel (power), IBM (service), Sharper image (innovative, entertaining products). Some companies do both (Saturn low-cost & differentiation, Southwest low-cost, differentiation (fun), focus (short-haul routes). Focus (product line or geography) - Harley Davidson high-powered bikes. Peets. Southwest, Walmart started this way then expanded. Internet - compressed time frames. Greater availability of competitive intelligence. ?

Steps in the Marketing Process Quick Quiz Steps in the Marketing Process Describe each step in the marketing process: Analyzing market opportunities Develop marketing strategies Figure 3.4 is for business unit, page 50 has marketing planning process. Plan a marketing program Manage the marketing effort

The Marketing Plan Executive Summary & Table of Contents Current Marketing Situation Opportunity & Issue Analysis Objectives Marketing Strategy 1. Current marketing situation and opportunity & issue analysis also called SWOT. Action Programs Projected Profit-and-loss Controls

Organization of the Marketing Department Functional organization Geographic orientation Product or brand organization © Procter & Gamble

International division Functional specialists and Global Organization Export department International division Functional specialists and geographic units Global organizations

Evaluating and Controlling the Marketing Process Annual-plan control Set goals Monitor performance Determine deviations Take corrective action Profitability control Identify expenses Measure expense Prepare profit/loss 1. Plans reviewed every quarter.

Evaluating and Controlling the Marketing Process Efficiency control Improve marketing efficiency Strategic control Review for effectiveness Conduct marketing audit Rates performance Reviews for ethics and social responsibility 1. With automation e.g. call center CRM, give laptops to the salesforce.