1. 1 Principles of Marketing SESSION - 7,8,9

2. Strategic planning) Goal: Indicates what business unit want to achieve. Businesses have both short-term goal and long-term goals. Strategy: strategy is a game plan to achieve the goal Strategic planning Involves setting up a strategy that your business is going to follow over a defined time period. It can be for a specific part of the business, like planning a marketing strategy, or for the business as a whole 2

3. 3 Strategic Planning Mission: The business purpose is often also called the mission of the business It is a brief statement about why the business exists - what you want to achieve. Nike's Mission Statement, "To be the world's leading sports and fitness company."

4. 4 Strategic planning Strategic Planning at the corporate level involves the following steps 1. Defining the corporate mission 2. Establishing strategic Business Unites 3. Assigning resources to each SBU 4. Planning New businesses, downsizing, or terminating older businesses

5. 5 Strategic Planning 1. Defining the corporate mission:  Mission is what the company aspire to become  Every company will have a mission and all its operations are directed towards the mission

6. 6 ITC’s Mission and Vision Mission: To enhance the Wealth generating capability of the enterprise in a globalizing environment, delivering superior and sustainable stakeholder value Vision :Sustain ITC’s position as one India’s most Valuable corporations through world class performance, creating growing value for the Indian economy and the company stakeholders

7. 7 Strategic Planning 2. Establishing strategic business units:  Companies operate several businesses – Tata Group, Reliance Group etc  Its better if those companies come up with a market oriented definition of business instead of product oriented definition.  Market oriented definition of an asthma curing tablet/syrup can be –” We help you breathe better” than saying we produce medicines for asthma

8. 8 Strategic Planning Characteristics of strategic Business Units: 1. It is a single business or collection of related business that can be planned separately from the rest of the company 2. It has its own set of competitors 3. SBU has its own manager who is responsible for strategic planning to meet its goal

9. 9 Evaluating SBU- Boston Consulting Group Approach ( BCG) Growth - Share Matrix; Cash Cows Dogs Stars Question Mark? Relative Market Share Market Growth Rate

10. 10 Strategic Planning Question Marks: Businesses which operates in high growth markets and have low relative market share A question mark may become the market leader and needs a lot of money spend on it Companies sometimes contemplate to spend money on them

11. 11 BCG Matrix Stars: Market leader in a high growth market It need not generate a lot of cash for the company Companies spend a lot of money on stars to keep pace with the competition

12. 12 Strategic Planning Cash cows: They are normally stars with a declining growth rate and have the largest relative market share Generates a lot of cash for the company Companies will not spend money on them since the growth rate is falling

13. 13 Strategic Planning Dogs: Businesses that have weaker market shares and low growth rates Companies may either hold these businesses or call off

14. 14 Strategic Planning SBU Life cycle : Question Marks stars Cash cows Dogs

15. 15 Strategic Planning 3. Assigning resources to each SBU: companies can do the following depending upon their decisions  Hold - Strong cash cows  Build – cash cows,  Harvest – question marks and dogs  Divest – dogs

16. 16 Strategic Planning 4. Planning new businesses, downsizing older businesses: Depending upon the projected sales and profit for the forthcoming years. Companies can develop or acquire new businesses. They have the following options  Intensive growth – Expand current businesses  Integrative growth – Acquire related new businesses  Diversification growth – Acquire unrelated new businesses

17. 17 Strategic Planning processes – Business Unit Level Business mission SWOT analysis Goal formulation Strategy formulation Program formulation Implementation Feedback and control

18. 18 Strategic Planning processes 1. Mission – What is the purpose of the business 2. SWOT Analysis – Strengths weaknesses opportunities Threats

19. 19 SWOT Analysis SWOT analysis is an important tool for auditing the overall strategic position of a business and its environment. In SWOT, strengths and weaknesses are internal factors. For example: A strength could be:

20. 20 SWOT Analysis - Strengths Technological Skills Leading brands Distribution channels Customer loyalty/relationships Production quality Location of your business.

21. 21 SWOT Analysis - Weaknesses Weak brands Poor access to distribution Low customer retention Unreliable product or service Location of your business Damaged reputation

22. 22 SWOT Analysis -Opportunities Changing customer tastes Liberalization of geographical markets Technological advances Changes in government policies Lower taxes New distribution channels Mergers, Joint Ventures A new international market A market vacated by an ineffective competitor

23. 23 SWOT Analysis - Threats Changing customer tastes Closing of geographical markets Technological advancements Changes in government policies Tax increases A new competitor in your home market Competitor has a new, innovative product or service

24. 24 SWOT Analysis of Dell computers Strengths Is the world’s largest PC maker Highly reputed brand Cuts retailer and sell products directly to consumer Very good customer service– dell connect Weaknesses Dell is not a computer manufacturer, but a computer maker Relies on hi-tech component manufacturers

25. 25 SWOT Analysis of Dell computers Opportunities Being a global company, dell has got a very large market to serve Dell is following diversification strategy, adding new pdts to its range Threats Competition is intense all over the world for dell Exposed to fluctuations in the world currency market, since they need to pay component manufacturers from different part of the world

26. 26 Strategic Planning processes 3. Goal formulation -  To acquire 20% market share in the next five years  To open 20 another stores in Tamilnadu by 2009  To become the No.1 brand for soaps in the Country

27. 27 Strategic Planning processes 4. Strategy formulation  Overall cost strategy  Differentiation strategy  Focus strategy

28. 28 Strategic Planning processes 5. Program formulation and Implementation  Overall cost leadership strategy – Look and organise for suppliers and raw materials that are cheap and with acceptable quality  Technological leadership – strengthen R & D, gather technological intelligence, develop leading edge products and develop ads to communicates its technological leadership

29. 29 Strategic Planning processes 6. Feedback and control  Keeping an eye on the market changes and the competitors offering and change strategies accordingly

30. 30 Contents of The Marketing Plan A Marketing plan will consist of the following 1. Executive Summary & Table of Contents Main goals & Recommendations Table of contents follows executive summary 2. Current marketing situation Will have the sales figure, profit, competitors

31. 31 Contents of The Marketing Plan 3. Opportunity & Issue SWOT Analysis of the product or industry will be given 4. Objectives Marketing goals are outlined here such as expected sales volume by the end of the year, a quarter and the profit expected

32. 32 Contents of The Marketing Plan 5. Marketing strategy Defining target segment Game plan to achieve the target 6. Action programs Should describe actual marketing programme What will be done? When will be done? who will do? Cost of the action and how will it be measured

33. 33 Contents of The Marketing Plan 7. Financial projections Expenses ----- Revenue side = Projected profit 8. Implementation & control