1. Chapter 2 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. STRATEGIC PLANNING IN CONTEMPORA RY MARKETING 1

2. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing 1a. What is Market Planning? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

3. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Planning: The Basis for Strategy and Tactics ▮ Marketing planning - Implementing planning activities devoted to achieving marketing objectives Many planning activities take place over the Internet with virtual conferences 3

4. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing 1b. What is Planning? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

5. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Planning: The Basis for Strategy and Tactics ▮ Planning - Anticipating future events and conditions and determining the best way to achieve organizational objectives Continuous process that includes: Identifying objectives Determining the actions through which a firm can attain those objectives Creates a blueprint for everyone in the organization 5

6. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Planning: The Basis for Strategy and Tactics An important trend in marketing planning centers on relationship marketing A firm’s effort to develop long-term, cost-effective links with individual customers and suppliers for mutual benefit 6

7. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing 2. Define Strategic planning and Tactical planning. Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

8. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Strategic Planning Versus Tactical Planning 8 Strategic Planning Determining an organization’s primary objectives Adopting courses of action that will achieve these objectives Provides long-term direction for its decision makers Tactical Planning Guides the implementation of activities specified in the strategic plan Addresses shorter-term actions

9. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Table 2.1 - Planning at Different Managerial Levels 9

10. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing 3. What are the steps in the marketing process? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

11. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Steps in the Marketing Planning Process ▮ Defining the organization’s mission and objectives Mission - Essential purpose that differentiates one company from another Sephora: “The beauty authority” IBM: “Welcome to the decade of smart” 11

12. Example: Mission Statement Pfizer is a research-based, global pharmaceutical company. We discover and develop innovative, value-added products that improve the quality of life of people around the world and help them enjoy longer, healthier, and more productive lives. The company has three business segments: health care, animal health and consumer health care. Our products are available in more than 150 countries. Pfizer Inc.

13. The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed yet refined ambiance. The Ritz-Carlton experiences enlivens the senses, instills well- being, and fulfills even the unexpressed wishes and needs of our guests. Ritz-Carlton Hotels Example: Mission Statement

14. Apple Computer, Inc., ignited the personal computer revolution in the 1970s with the Apple II, and reinvented the personal computer in the 1980s with the Macintosh. Apple is now committed to its original mission--to bring the best personal computing products and support to students, educators, designers, scientists, engineers, business persons and consumers in over 140 countries around the world. Apple Computer

15. Rubbermaid Commercial Products, Inc. “ Our vision is to be the Global Market Share Leader in each of the markets we serve. We will earn this leadership position by providing to our distributor and end-user customers innovative, high-quality, cost- effective and environmentally responsible products. We will add value to these products by providing legendary customer service through our uncompromising Commitment to Customer Satisfaction.”

16. Motorola “ The purpose of Motorola is to honorably serve the needs of the community by providing products and services of superior quality at a fair price to our customers; to do this so as to earn an adequate profit which is required for the total enterprise to grow; and by doing so, provide the opportunity for our employees and shareholders to achieve their personal objectives.”

17. eBay “We help people trade anything on earth. We will continue to enhance the online trading experiences of all—collectors, dealers, small businesses, unique item seekers, bargain hunters, opportunity sellers, and browsers.”

18. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Trevecca Nazarene University ▮ “Trevecca Nazarene University is a Christian community providing education for leadership and service.”

19. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Steps in the Marketing Planning Process ▮ Objectives - Guide the development of marketing objectives and plans For example: Generate a 15 percent profit over the next 24 months Add 25 new outlets within the next year 19

20. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Assessing Organizational Resources and Evaluating Environmental Risks and Opportunities 20 ▮ Resources include: Production Marketing Finance Technology Employees ▮ Strengths help planners: Set objectives Develop plans Take advantage of marketing opportunities

21. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Formulating, Implementing, and Monitoring a Marketing Strategy ▮ Marketing strategy - Selecting and satisfying target consumers through the marketing mix elements ▮ The final steps of the planning process: Marketers put the marketing strategy into action Marketers monitor performance to ensure that objectives are achieved 21

22. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Successful Strategies: Tools and Techniques ▮ Porter’s Five Forces model The potential of new entrants The bargaining power of buyers The bargaining power of suppliers The threat of substitute products Rivalry among competitors 22

23. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Figure 2.2 - Porter’s Five Forces Model 23

24. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing First Mover and Second Mover Strategies ▮ First mover strategy - The company first to offer a product in a marketplace will be the long-term market winner ▮ Second mover strategy - Observing the innovations of first movers and then improving on them to gain advantage in the marketplace 24

25. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing SWOT Analysis ▮ Helps planners compare internal organizational strengths and weaknesses with external opportunities and threats Provides managers with a critical view of the organization’s internal and external environments Helps them evaluate the firm’s fulfillment of its basic mission 25

26. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Figure 2.3 - SWOT Analysis 26

27. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing SWOT Analysis Strengths Weaknesses Opportunities Threats Figure 2.2

28. DaimlerChrysler ▮ Strengths Leading market position Strong brand portfolio Strong commercial vehicle business ▮ Opportunities New launches Hybrid vehicles Booming car sales in China ▮ Weaknesses Poor performance of Mercedez Benz unit Weak top line growth in Western Europe ▮ Threats Rise in steel prices Slow down in Euro zone Increasing competition from Japanese groups

29. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing The Strategic Window ▮ Limited periods when key requirements of a market and a firm’s particular competencies best fit together ▮ Requires a thorough analysis of: Current and projected external environmental conditions Current and projected internal company capabilities How, whether, and when the firm can reconcile environmental conditions and company capabilities 29

30. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing 4. What are the elements of a marketing strategy? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

31. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Elements of a Marketing Strategy ▮ The target market ▮ Marketing mix variables 31

32. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing The Target Market ▮ The group of people toward whom the firm directs its marketing efforts and merchandise Example: Boeing markets most of their products to business buyers such as Delta Airlines ▮ Diversity plays a critical role Example: Growing Hispanic population in United States 32

33. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing The Target Market ▮ Targeting consumers in specific global markets represents a challenge and an opportunity 33

34. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Marketing Mix Variables ▮ Marketing mix - Blending four strategy elements to fit the needs and preferences of a specific target market Product Distribution Promotion Pricing 34

35. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Figure 2.4 - Element of a Marketing Strategy and Its Environmental Framework 35

36. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Product Strategy ▮ Deciding what goods or services the firm should offer to a group of consumers Customer service Package design Brand names, trademarks, patents, and warranties Lifecycle of a product Product positioning New-product development 36

37. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Distribution Strategy ▮ Consumers find their products in the proper quantities at the right times and places ▮ Involves modes of transportation, warehousing, inventory control, order processing, and selection of marketing channels ▮ Technology has opened new channels of distribution in many industries 37

38. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Promotion Strategy ▮ Communication link between sellers and buyers ▮ Firms may communicate messages: Directly through salespeople Indirectly through advertisements and promotions ▮ Many companies use integrated marketing communications (IMC) 38

39. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Pricing Strategy ▮ Deals with methods of setting profitable and justifiable prices ▮ Subject to regulation and public scrutiny ▮ A good pricing strategy: Creates value for customers Builds and strengthens customer relationships with a firm and its products 39

40. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing 5. What are the various tools for marketing planning? Copyright © 2013 by South Western, a division of Cengage Learning. All rights reserved.

41. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Methods for Marketing Planning ▮ Business portfolio analysis An evaluation of a company’s products and divisions to determine the strongest and weakest 41

42. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Strategic Business Units ▮ Key business units within diversified firms Each strategic business unit (SBU): Has its own managers, resources, objectives, and competitors Pursues its own distinct mission and develops its own plans independently ▮ Help focus the attention of company managers ▮ Companies may have to redefine their SBUs as market conditions dictate 42

43. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing The BCG Matrix ▮ Developed by the Boston Consulting Group ▮ A market share/market growth matrix that plots market share against market growth potential 43

44. © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 2 Strategic Planning in Contemporary Marketing Figure 2.5 - BCG Market Share/Market Growth Matrix 44