1. Marketing Management J. Paul Peter • James H. Donnelly, Jr.
6th Edition
Marketing
Management
Knowledge and Skills

2. Strategic Planning and the Marketing Process
Chapter 1
Strategic Planning and
the Marketing Process

3. The Strategic Planning Process
The Environment
Cooperative
Competitive
Economic
Social
Political
Legal
INFORMATION
IMPLEMENTATION
Organizational
Mission
Objectives
Portfolio Plan
The organization’s strategic plan
Strategies
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.

4. Mission Statements Organization Mission
Goodyear Our mission is constant improvement in products and services to meet our customers’ needs. This is the only means to business success for Goodyear and prosperity for its investors and employees.
Intel Corporation Do a great job for our customers, employees, and stockholders by being the preeminent building block supplier to the computing industry.
(continued)
SOURCE: Patricia Jones and Larry Kahaner, Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark (New York: Doubleday, 1995).

5. Mission Statements Organization Mission
Levi Strauss & Co. The mission of Levi Strauss & Co. is to sustain responsible commercial success as a global marketing company of branded casual apparel. We must balance goals of superior profitability and return on investment, leadership market positions, and superior products and service. We will conduct our business ethically and demonstrate leadership in satisfying our responsibilities to our communities and to society. Our work environment will be safe and productive and characterized by fair treatment, teamwork, open communications, personal accountability, and opportunities for growth and development.
(continued)
SOURCE: Patricia Jones and Larry Kahaner, Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark (New York: Doubleday, 1995).

6. Mission Statements Organization Mission
Merck & Co., Inc. The mission of Merck & Co., Inc., is to provide society with superior products and services— innovations and solutions that satisfy customer needs and improve their quality of life—to provide employees with meaningful work and advancement opportunities and investors with a superior rate of return.
Marriott Grow a worldwide lodging business using total quality management (TQM) principles to continuously improve preference and profitability. Our commitment is that every guest leaves satisfied.
SOURCE: Patricia Jones and Larry Kahaner, Say It and Live It: The 50 Corporate Mission Statements That Hit the Mark (New York: Doubleday, 1995).

7. Sample Organizational Objectives (manufacturing firm)
Area of Performance
1. Market standing
2. Innovations
3. Productivity
4. Physical and financial resources
Possible Objective
To make our brands number one in their field in terms of market share.
To be a leader in introducing new products by spending no less than 7 percent of sales for research and development.
To manufacture all products efficiently as measured by the productivity of the workforce.
To protect and maintain all resources- equipment, buildings, inventory, and funds.
(continued)
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1-2

8. Sample Organizational Objectives (manufacturing firm)
Area of Performance
Possible Objective
To achieve an annual rate of return on investment of at least 15 percent.
To identify critical areas of management depth and succession.
To maintain levels of employee satisfaction consistent with our own and similar industries.
To respond appropriately whenever possible to societal expectations and environmental needs.
5. Profitability
6. Manager performance and responsibility
7. Worker performance and attitude
8. Social responsibility
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1-2

9. Potential Sources of Cross-Functional Conflict for Marketers
What They May What Marketers May
Functions Want to Deliver Want Them to Deliver
Research and Basic research projects Products that deliver customer value
development Product features Customer benefits
Few projects Many new products
Production/ Long production runs Short production runs
operations Standardized products Customized products
No model changes Frequent model changes
Long lead times Short lead times
Standard orders Customer orders
No new products Many new products
(continued)
SOURCE: G. A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers (Burr Ridge, IL: Irwin/McGraw-Hill, 1998), p. 15.

10. Potential Sources of Cross-Functional Conflict for Marketers
What They May What Marketers May
Functions Want to Deliver Want Them to Deliver
Finance Rigid budgets Flexible budgets
Budgets based on return Budgets based on need to on investment increase sales
Low sales commissions High sales commissions
Accounting Standardized billing Custom billing
Strict payment terms Flexible payment terms
Strict credit standards Flexible credit standards
Human resources Trainable employees Skilled employees
Low salaries High salaries
SOURCE: G. A. Churchill, Jr., and J. Paul Peter, Marketing: Creating Value for Customers (Burr Ridge, IL: Irwin/McGraw-Hill, 1998), p. 15.

11. Organizational Growth Strategies
Products
Markets
Present
New
customers
Market
penetration
Product
Development
Diversification
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1-3

12. Strategic Planning and Marketing Planning
The strategic plan
Organizational mission
Organizational objective
Organizational strategies
Organizational portfolio
The marketing plan
Situation analysis
Marketing objectives
Target market selection
Marketing mix
Product strategy
Promotion strategy
Pricing strategy
Distribution strategy
Marketing information
system and marketing
research
Implementation and control
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1-4

13. Criteria for Setting Marketing Objectives
(continued)
SOURCE: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Principles of Marketing, p. 27. Reproduced with the permission of the South- Western Publishing Co. © 1992, Cincinnati, by South-Western Publishing Co. All rights reserved.

14. Criteria for Setting Marketing Objectives
SOURCE: Charles W. Lamb, Jr., Joseph F. Hair, Jr., and Carl McDaniel, Principles of Marketing, p. 27. Reproduced with the permission of the South- Western Publishing Co. © 1992, Cincinnati, by South-Western Publishing Co. All rights reserved.

15. The Cross-Functional Perspective in Planning
The strategic plan
Mission
Objectives
Strategies
Portfolio plan
Objectives
Forecast
Budgets
Strategies
and program
policies
Production plan
Marketing plan
Human
resource plan
Finance plan
Facilities plan
Functional area plans derived from strategic plan
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1-5

16. A Blueprint for Management Action: Relating the Market Plan to the Strategic Plan and the Production Plan
One organizational objective (the profitability objective) from Figure 1-2
Achieve an annual
rate of return
on investment of at
least 15 percent
1. Market penetration
Improve position of present products with present customers
2. Market development
Find new customers for present products
Two possible organizational strategies from the product-market matrix, Figure 1-3
(continued)
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1-6

17. A Blueprint for Management Action: Relating the Market Plan to the Strategic Plan and the Production Plan
Two possible marketing objectives and two possible production objectives derived from the strategic plan
1. Marketing
department objective
Increase rate of purchase by existing customers by 10 percent by year
end
Increase market share by 5 percent by attracting new market segments for existing use by year end.
2. Production
Design additional features into product that will induce new uses by existing buyers
Design additional features into product that will open additional markets with new uses.
Specific course of action of the marketing and production departments designed to achieve the objective
Marketing
strategy and
programs
Production
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure 1-6

18. Experience Curve and Resulting Profit Curve
Profit curve based
on experience curve
Cost
RIO
Market share
Market share
Irwin/McGraw-Hill
Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure A-1

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

20. 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

21. 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