1. The Role of Marketing in Strategic Planning
Marketing for Hospitality and Tourism
Kotler, Bowen and Makens
The Role of Marketing in Strategic Planning
Chapter 3

2. Learning Objectives Explain company-wide strategic planning.
Understand the concepts of stakeholders, processes, resources, and organization as they relate to a high-performing business.
Explain the four planning activities of corporate strategic planning.
Understand the processes involved in defining a company’s mission and setting goals and objectives.
Discuss how to design business portfolios and growth strategies.
Explain the steps involved in the business strategy planning process.

3. Characteristics of a High- Performance Business
Stakeholders
Processes
Resources
Organization
Characteristics of a high-performance business
Stakeholders
Traditionally, most businesses focused on their stockholders
Today businesses increasingly recognize that they must nurture other stakeholders, including customers, employees, suppliers, and the communities where their businesses are located
Processes
Companies are increasingly refocusing their attention on the need to manage processes even more than departments
They are studying how tasks pass from department to department as well as the impediments to creative output
They are now building cross-functional teams that manage core business processes
Resources
To carry out processes, a company needs such resources as personnel, materials, machines, and information
More companies today have decided to outsource less critical sources
Organization
Companies must work hard to align their organization’s structure, policies, and culture to the changing requirements of business strategy

4. Defining the Corporate Mission
A hospitality organization exists to accomplish something
According to Peter Drucker, ask:
What is our business?
Who is the customer?
What do customers value?
What should our business be?
Many organizations develop formal mission statements that answer these questions
A mission statement is a statement of the organization’s purpose—what it wants to accomplish in the larger environment
Management should avoid making a mission too narrow or too broad
The mission should be based on a company’s distinctive competencies
A clear mission statement acts like an “invisible hand” that guides people in the organization
Studies have shown that firms with well-crafted mission statements have better organizational and financial performance

5. Developing Growth Strategies
Market Concentration Strategy
Market Development Strategy
Product Development
Diversification Growth
Integrative Growth
Companies need growth if they are to compete and attract top talent
Marketing must identify, evaluate, and select opportunities and lay down strategies for capturing them
Market Concentration Strategy
Whether a company could gain more market share with its current products in their current markets
Market Development Strategy
Whether a company can find or develop new markets for its current products
Product Development
Offering modified or new products to current markets
Diversification Growth
See Slide 6
Integrative Growth
See Slide 7

6. Diversification Growth
Concentric
Diversification
Conglomerate
Diversification
Horizontal
Diversification
Diversification Growth
Makes sense when good opportunities can be found outside the present businesses
Concentric Diversification Strategy
Seeking new products that have technological or marketing synergies with existing product lines
Horizontal Diversification Strategy
Searching for new products that could appeal to its current customers
Conglomerate Diversification Strategy
Seeking new businesses that have no relationship to the company’s current technology, products, or markets

7. Integrative Growth Backward Horizontal Forward Integrative Growth
Opportunities in diversification, market development, and product development can be seized through integrating backward, forward, or horizontally within that business’s industry
Backward integration
Acquiring a suppliers, such as a food distributor
Forward Integration
Acquiring tour wholesalers or travel agents
Horizontal Integration
Acquiring one or more competitors, provided that the government does not bar the move

8. Customer-Driven Marketing Strategy
Market Segmentation
Market Targeting
Market Differentiation
Market Positioning
To succeed in today’s competitive marketplace, companies need to be customer centered
Each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments
Market Segmentation
The market consists of many types of customers, products, and needs. The marketer must determine which segments offer the best opportunities
Market Targeting
Market targeting involves evaluating each market segment’s attractiveness and selecting one or more segments to enter
Market Differentiation
After a company has decided which market segments to enter, it must decide how it will differentiate its market offering for each targeted segment and what positions it wants to occupy in those segments
Market Positioning
A product’s position is the place the product occupies, relative to competitors’ products, in consumers’ minds
In positioning its product, the company first identifies possible customer value differences that provide competitive advantages on which to build the position

9. Developing an Integrated Marketing Mix
4 Ps
4 Cs
Product
Customer Solution
Price
Customer Cost
Place
Convenience
Promotion
Communication
After deciding on its overall marketing strategy, the company is ready to begin planning the details of the marketing mix, one of the major concepts in modern marketing
The marketing mix consists of everything the firm can do to influence the demand for its product
The many possibilities can be collected into four groups of variables known as the four Ps: product, price, place, and promotion.
Product means the goods-and-services combination the company offers to the target market
Price is the amount of money customers must pay to obtain the product
Place includes company activities that make the product available to target customers
Promotion means activities that communicate the merits of the product and persuade target customers to buy it
However, some critics think that the four Ps may omit or underemphasize certain important activities
The four Ps concept takes the seller’s view of the market, not the buyer’s view
From the buyer’s viewpoint, in this age of customer value and relationships, the four Ps might be better described as the four Cs
Marketers would do well to think through the four Cs first and then build the four Ps on that platform

10. Managing the Marketing Process
Analysis
Planning
Implemen-tation
Control
Managing the marketing process requires the four marketing management functions: analysis, planning, implementation, and control
Marketing Analysis
Managing the marketing function begins with a complete analysis of the company’s situation. The marketer should conduct a SWOT analysis and understand the goals and objectives (See Slides 11-12)
Marketing Planning
Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives
Implementation
To implement a strategy, the firm must have the required resources, including employees with the necessary skills to carry out that strategy
Feedback and Control
All companies need to track results and monitor new developments in the environment

11. Internal Environmental Analysis External Environmental Analysis
SWOT Analysis
Strengths
Weaknesses
Internal Environmental Analysis
Opportunities
Threats
External Environmental Analysis
SWOT analysis evaluates the company’s overall strengths (S), weaknesses (W), opportunities (0), and threats (T)
Strengths
Internal capabilities, resources, and positive situational factors that may help the company to serve its customers and achieve its objectives
Weaknesses
Internal limitations and negative situational factors that may interfere with the company’s performance
Opportunities
Favorable factors or trends in the external environment that the company may be able to exploit to its advantage
Threats
Unfavorable external factors or trends that may present challenges to performance.
Internal Environmental Analysis (Strengths and Weaknesses Analysis)
Each business needs to evaluate its strengths and weaknesses periodically
Management or an outside consultant reviews the business’s marketing, financial, manufacturing, and organizational competencies
External Environmental Analysis (Opportunity and Threat Analysis)
The business manager now knows the parts of the environment to monitor if the business is to achieve its goals
Macroenvironmental forces
Demographic-economic
Technological
Political-legal
Social-cultural
Microenvironmental forces
Customers
Competitors
Distribution channels
Supplies

12. Goal Formulation Strategies
Overall Cost Leadership
Differentiation
Focus
After the business unit has defined its mission and conducted a SWOT analysis, it can proceed to develop specific objectives and goals. Michael Porter has condensed them into three generic types that provide a good starting point for strategic thinking:
Overall cost leadership
The real key is for the firm to achieve the lowest costs among those competitors adopting a similar differentiation or focus strategy
Differentiation
The business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market
Focus
The business focuses on one or more narrow market segments rather than going after a large market

13. Key Terms
Ansoff product–market expansion grid A matrix developed by cell, plotting new products and existing products with new products and existing products. The grid provides strategic insights into growth opportunities.
Backward integration A growth strategy by which companies acquire businesses supplying them with products or services (e.g., a restaurant chain purchasing a bakery).
Concentric diversification strategy definition to look like this. Definition to look like this.
Conglomerate diversification strategy A product growth strategy in which a company seeks new businesses that have no relationship to the company’s current product line or markets.
Corporate mission statement A guide to provide all the publics of a company with a shared sense of purpose, direction, and opportunity, allowing all to work independently, yet collectively, toward the organization’s goals.
Forward integration A growth strategy by which companies acquire businesses that are closer to the ultimate consumer, such as a hotel acquiring a chain of travel agents.

14. Key Terms (cont.)
Horizontal diversification strategy A product growth strategy whereby a company looks for new products that could appeal to current customers that are technologically unrelated to its current line.
Horizontal integration A growth strategy by which companies acquire competitors.
Macroenvironmental forces Demographic, economic, technological, political, legal, social, and cultural factors.
Market development strategy Finding and developing new markets for your current products.
Market segmentation The process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behavior who might require separate products or marketing programs.
Marketing opportunity An area of need in which a company can perform profitably.
Marketing strategy The marketing logic by which the company hopes to create this customer value and achieve these profitable relationships.
Microenvironmental forces Customers, competitors, distribution channels, and suppliers

15. Key Terms (cont.)
Product development Offering modified or new products to current markets.
Strategic alliances Relationships between independent parties that agree to cooperate but still retain separate identities.
Strategic business units (SBUs) A single business or collection of related businesses that can be planned separately from the rest of the company.
Strategic planning The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.
SWOT analysis Evaluates the company’s overall strengths (S), weaknesses (W), opportunities (O), and threats (T)