2. Strategic Planning and the Marketing Management Process
Chapter One
Strategic Planning and the Marketing Management Process
Marketing concept, Customer needs,
The American Marketing Association,
© The McGraw-Hill Companies, Inc., All Rights Reserved.
McGraw-Hill/Irwin
Marketing Management, 8e

3. The Marketing Concept
An organization should seek to make a profit by serving the needs of customers
The purpose of the marketing concept is to rivet (Fix) the attention of marketing managers on serving broad classes of customer needs
The principal task of the marketing function operating under the marketing concept is to find effective and efficient means of making the business do what suits the interests of customers

4. What is Marketing?
“The process of planning and executing conception, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals.”
- The American Marketing Association

5. What is Strategic Planning?
The objectives and strategies established at the top level provide the context for planning in each of the divisions and departments by divisional and departmental managers

6. Major Types of Marketing
Description
Product
Marketing designed to create exchange for tangible products
Service
Marketing designed to create exchanges for intangible products
Person
Marketing designed to create favorable actions toward persons
Place
Marketing designed to attract people to places
Cause
Marketing designed to create support for ideas, causes, or issues or to get people to change undesirable behaviors
Organization
Marketing designed to attract donors, members, participants, or volunteers

7. Strategic Planning and Marketing Management
Includes all activities that lead to the development of a clear organizational mission, objectives, and appropriate strategies
Plays a key role in achieving an equilibrium by balancing acceptable financial performance
Prepares for inevitable changes in markets, technology, and competition, as well as in economic and political arenas

8. The Strategic Planning Process
Mission statement
In developing a mission statement, management must take into account three key elements
The organization’s history
The organization’s distinctive competitiveness
The organization’s environment
Mission statement should be
Achievable
Motivational
Specific

9. Missions vs. Strategic Visions
A strategic vision concerns a firm’s future business path -- “where we are going”
Markets to be pursued
Future technology-product-customer focus
Kind of company that management is trying to create
A mission statement focuses on current business activities -- “who we are and what we do”
Current product and service offerings
Customer needs being served
Technological and business capabilities

10. Vision Statement We want to sell a variety of
products on a daily basis to
every living person on the earth.
PepsiCo.

11. Vision Statement To be the world leader in transportation products
and services.
General Motors Corp.
Source: 1993 Annual Report

12. Absolutely, positively overnight!
Vision Statement
Absolutely, positively overnight!
Federal Express

13. Vision Statement
A computer on every desk and in
every home.
Microsoft

14. Whirlpool Mission Statement
To shape and lead the major home appliance industry globally, becoming one of the world’s great companies while creating value for shareholders, employees, customers, suppliers, government leaders and communities.

15. The Strategic Planning Process

16. The Strategic Planning Process
Create discrete (Distinct) objectives
The end-points of an organization’s mission are what it seeks through on-going, long-run operations
Organizational strategy
Involves the choice of major directions the organization will take in pursuing its objectives.

17. The Strategic Planning Process
Create marketing strategy
Organizational growth strategies

18. The Strategic Planning Process
Organizational growth based on products and markets
Four paths organizations take in order to grow
Market penetration strategies
Market development strategies
Product development strategies
Diversification
Organizational strategies based on competitive advantage
Competitive advantage is an ability to outperform competitors in providing something that the market values
Porter suggests strategies based on cost leadership or a strategy based on differentiation &Focus

19. The Strategic Planning Process
Organizational strategies based on value
“Customer value” has become critical for marketers as well as customers
To succeed firms must seek to build long-term relationships with their customers by offering unique value

20. The Strategic Planning Process
Choosing an appropriate strategy
Management should select those strategies consistent with its mission and capitalize on the organization’s distinctive competencies
A sustainable competitive advantage can be based on either the assets or skills of the organization
The key to sustaining a competitive advantage is to continually focus and build on the assets and skills that will lead to long-term performance gains

21. The Strategic Planning Process
Organizational portfolio plan
Organizations at a particular time are a portfolio of businesses that is, product lines, divisions, schools
Management must decide which businesses to build, maintain, or eliminate, or which new businesses to add
Organizations can create strategic business units (SBU) which could be a single product, product line, or division

22. The Marketing Management Process
The Marketing Management Process can be defined as “the process of planning and executing the conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational objectives.”

23. The Marketing Management Process
Strategic planning and marketing planning

24. The Marketing Management Process
Situation analysis
The cooperative environment
The competitive environment
The economic environment
The social environment
The political environment
The legal environment

25. The Marketing Management Process
Marketing planning
Establishing marketing objectives
Selecting target market
Developing marketing mix

26. The Marketing Management Process
Implementation and control of marketing plan
Implementing the marketing plan involves putting the plan into action and performing marketing tasks according to the predefined schedule.
Controlling the marketing plan involves three basic steps
The results of the implemented marketing plan are measured
These results are compared with objectives
Decisions are made on whether the plan is achieving objectives.

27. The Marketing Management Process
Marketing information systems and marketing research
Throughout the marketing management process, current, reliable, and valid information is needed to make effective marketing decisions

28. The Marketing Management Process
Strategic planning is a top-management responsibility
All strategic planning has marketing implications
Marketing objectives and strategies must be derived from the strategic plan
Planning done in all functional areas of the organization should be derived from strategic plan

29. The Marketing Management Process
Marketing’s role in cross functional strategic plan

30. Corporate Strategy Portfolio Analysis
BCG (Boston Consulting Group) Matrix
Product life cycle and funding decisions
Question marks
Stars
Cash cows
Dogs

31. BCG Matrix

32. GE Business Screen Long-term industry attractiveness
Business strength/competitive position

33. The Market Attractiveness-Business Position Matrix
High
Medium
Low
Invest/
Grow
Selective
Investment
Harvest/
Divest
Figure 7.5

34. Industry attractiveness at
Market size
Market growth
Profitability
Cyclicality
Ability to recover from inflation
World scope

35. Business strength at Business strength Market position
Domestic market share
World market share
Share growth
Share compared with leading competitor
Competitive strengths
Quality leadership
Technology
Marketing
Relative profitability