1. STRATEGIC PLANNING AND THE MARKETING MANAGEMENT PROCESS
Chapter 1
STRATEGIC PLANNING AND THE MARKETING MANAGEMENT PROCESS

2. Introduction
Marketing combines economics, psychology, anthropology, sociology, statistics and demographic.
Identifies and provides tools to satisfy need and wants of target market.
It is around us every day.
Improves quality of life.
Resolves conflicts between consumer and societal needs/wants.

3. The Essence of Marketing
Customer focus: needs and wants
Research emphasis
Exchange process
Relationship basis
Competitive environment
Satisfaction emphasis
Efficiency Process to satisfy needs/wants of consumers and society

4. Definition of marketing
Process
Planning and executing
Conception, pricing, promotion and distribution
Goods and services
Create exchanges
Individuals and organizational goals

5. The Complexity of Marketing
Multiple decision making process
Interrelated factors
Interaction between buyer and seller
Global factor-important for survival

6. History of Marketing Thought
Production Concept-industrial revolution (late 18th century)
Product Concept-innovation (1920s)
Selling Concept-promotion (1940s)
Marketing Concept-customer satisfaction (1960s)
Social Responsibility-consumerism and improve quality of life (1970s)

7. Marketing Theory Goods Vs. services-tangible/intangible
Product categories-durable/non-durable
Consumer Vs. industrial markets
Profit Vs. nonprofit
Intermediaries Vs. end users
Domestic Vs. international
Small firms Vs. large firms

8. The Marketing Mix
Product
Place
Price
Promotion

9. Selling versus Marketing
Inward-looking Vs. outward-looking
Short-term Vs. long-term
Sales volume Vs. customer satisfaction
Mass production Vs. innovation (needs satisfaction)
Profit focus Vs. Brand loyalty

10. Marketing and Strategic Planning
Focus to entire organization
Future oriented
Understanding customers
Understanding Competitors
Planning concepts (medium and long term)
Marketing intelligence (need discovery)
Strengths and weaknesses
Strategy assessment-long term goals
Organization response to environmental challenge

11. Marketing and Strategic Planning (Cont.)
Top management concerns
Follow the environmental changes-Microsoft Corporation
Global approach-Sears Vs Wall-Mart
The organizational strategic plan:
Organizational vision and mission
Organizational objectives
Organizational Strategies
Organizational portfolio plans

12. Organizational Mission
Organization’s history
Reason for existence
The organization’s distinctive competencies
Shows the direction that the organization is heading
The organization’s environment
It becomes absolute overtime

13. Mission Statements The most widely used management tool:
What is our business?
Who is the customers?
What do customers value?
What will our business be?
Focus on market rather than product
Achievable
Motivational
Specific

14. Organizational Objectives
End points of an organization’s mission and they must be specific, measurable and action oriented:
Market standing
Innovations
Productivity
Physical and financial resources
Profitability
Manager responsibility
Workers performance
Social responsibility

15. Organizational Strategies
Strategies based upon product/market
Market penetration
Market development
Product development
Diversification
Strategies based upon competitive advantage
Porter’s competitive advantage-low cost advantage-Wal-Mart
Differentiation-Microsoft, Rolex, L.L.Bean

16. Product/Market Strategy
Market penetration-to use more, changing product offering and positioning:exp. tuna fish in water.
Product development-adding new features
Market development-taking the product to a new market: internationalization
Diversification:(a) related, and (b)unrelated industries.

17. Organizational Strategies(Cont.)
Organizational strategies based upon value
Product leadership-innovative approach
Operational excellence-Dell computer
Customer intimacy-relationship marketing
Organizational Portfolio Plan
Boston Consulting Group model
GE model

18. The Boston Consulting Group Portfolio Model
Relative Market Share
High
Low
Stars
Question
Marks
Cash
cows
Dogs
Market
Growth
Rate
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure A-2

19. The General Electric Portfolio Model
Business Strength
Strong
Average
Weak
Industry
Attractiveness B A
High C
Medium
Low
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure A-3

20. Components of Industry Attractiveness and Business Strength at GE
Market size
Market Growth
Profitability
Cyclicality
Ability to recover from inflation
World scope
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
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure A-4

21. Product Portfolios
Criticism of BCG matrix: (1) cash flow is applicable to limited number of markets, (2)brand leader should not be milked because new brand may not be a leader.
Economies of scale-the more are sold, the more are made, and the lower the unit cost. Product mix-product width and depth
Product mix decision: 1.line stretching, 2.line rationalization

22. MARKETING MANAGEMENT PROCESS
Process of planning, execution, pricing, promotion, distribution of goods and services.
Situation analysis
Organizational objectives and mission
Cooperative environment-suppliers, resellers
Competitive environment
Economic environment
Social environment-cultures and traditions
Political and Legal environment

23. MARKETING MANAGEMENT PROCESS (CONT.)
Marketing Planning
Setting the objectives
Selecting the target market
Developing the marketing mix
Implementation and Control