Strategic Marketing Strategic Marketing

and Planning Management

w The mark of an excellent company is how it
responds to a continuously changing environment
w Benefits of planning
n management becomes proactive
n facilitates integration
n communicates management intent
n ensures activities are goal-oriented
n monitor progress towards goals

Strategic Planning Planning hierarchy

w Strategic planning is the managerial process of Three levels:

developing and maintaining a viable fit between the
w Corporate strategic plan
organisation’s objectives and resources, and its
changing market opportunities w Strategic Business Unit plan
w The aim of strategic planning is to shape and w Marketing plan
reshape the company’s businesses and products to
produce satisfactory profits and growth

The Strategy Hierarchy

Corporate Strategy Corporate Strategic Plans
Corporate • Mission and vision
Level • Objectives
• Business portfolio strategy
• Resource development
• Corporate values

Corporate strategic planning concerns the

SBU Strategy
Strategic SBU
Business SBU • Business definition
Strategy
organisation as a whole and ultimately deals
Strategy • Objectives
Unit Level
• Product market portfolio with the allocation of funds across SBUs and
• Competitive strategy

Functional
• Resource allocation and management returns generated on those funds
Level of
SBU Marketing Strategy
R&D Strategy Production Finance and
Marketing Technology and operation administration Human resources
objectives Product strategy Strategy Strategy
Product markets
development
strategies

1
 Steps in Strategic Planning
Defining the
Corporate Level Company Mission

w 4 planning activities
Defining Company
Objectives and Goals n define mission
n identify SBUs
Designing the n analyse and evaluate the current portfolio of
Business Portfolio
businesses
n identify new business arenas to enter
Business Level Planning, Marketing and
Other Functional Strategies

Strategic Business Units

w The mission statement provides direction for the
company
n What business are we in?
n Who do we serve?
n What benefits do we provide?
w Elaborating on the mission
w The mission statement acts as an invisible hand to
guide geographically remote operations
w Companies too often describe their business in
terms of a product they make
w Levitt argues that a business must be viewed as a
customer-satisfying process, not a goods-producing
process
w SBU business domain (Abell)
w Purpose is to assign strategic planning
responsibilities to these units

SBUs Planning tools

w The General Electric (GE) approach GE Business Screen

w Definition of SBUs can be at any level of the
company
w At the corporate level, decisions are made
concerning which SBUs to build, maintain,
harvest, and divest
w If either market attractiveness or business strength
is weak, the company will not produce outstanding
results
w SBUs have a life cycle
w May be used to forecast SBU position
w Corporate decisions
(Build;Hold;Harvest;Divest)

2
 The GE Planning Grid Strategic Planning Gap
Business Strength
Strong Average Weak
Industry Attractiveness

C
High The output of portfolio analysis of SBUs is
A the identification of any gaps between future
desired sales and projected sales. If a gap
Medium
D exists, corporate management must plan to
B
either develop or acquire new businesses to
Low fill the gap

Corporate, Business and

Closing the strategic gap Marketing Strategy Model
• Business portfolio Corporate Strategy
• Capital investments and
• Building core Focus Shareholde
resource allocation
competencies r
• Corporate culture
w Major classes of growth opportunities • Corporate structure
Economic
value added
Value

n Intensive growth
• Product/market portfolio Business Strategy
n Integrative growth • Resource allocation Focus
• Distinctive competencies Business
• Product- markets
• Developing competitive Value
n Diversification growth • Business culture Economic
position
• Strategic cost value added
• Competitive advantage
management

Marketing Strategy
• Markets
Focus
• Products and services • Developing market Customer
• Profit- yielding strategies position Customer value Value
• Brand management • Customer satisfaction creation,
• Profit improvement maintenance and
defence

Marketing Strategy
Strategic Planning Process
& the Marketing Plan
w Linear and iterative w Planning is conducted at two levels
w SWOT analysis n annual plan
n Performance-Importance matrix n long term plan
w Goals should be SMART w It contains much greater detail than the
w Strategy corporate plan
w Programs and action plans w It takes direction from the strategic plan
w Implementation

3
 Planning tool Business Portfolios

Market Growth Rate

High
Stars Question Marks

? ????
BCG Product Portfolio Matrix
w Used at the product market level
w Components Cash Cows Dogs

Low
w Is the portfolio balanced?

High Low
Relative Market Share

Closing the marketing plan gap Sales

Ansoff’s Gap Analysis Chart
Objectives
w Market opportunity identification
n Ansoff’s Product/Market expansion grid
Projected
Diversification
w Market opportunity evaluation Projected
Gap to be
closed
Gap to be
n Is the opportunity compatible with company closed
objectives?
Competitive Gap
n Is the opportunity compatible with company
resources? Forecast (No change strategy)
Past Now Future
w Target market strategy Source: D.T. Brownlie & C.K. Bart, Products and Strategies, MCB University Press, Vol.11, No.1, 1985, p.29

Using the Ansoff Matrix in the

Ansoff’s Growth Vector Matrix Objective -setting Process
PRODUCTS / SERVICES PRODUCTS / SERVICES
Present New
Established New
Market penetration (1) Product / Service
Established
Present

Product / Service development (2)

Market penetration
MARKET

development
MARKET

Market
New

Diversification
New

development High Risk

Market
development (3) Diversification (4)
Source: D.T. Brownlie & C.K. Bart, Products and Strategies, MCB University Press, Vol.11, No.1, 1985, p.29

4
 Profit improvement optionsProfit Improvement Marketing Plan contents
Sales Growth Productivity Improvement

Market Market Product Change Existing

w Sales objectives w Operations plan
Penetration Development Development Asset base Assets
w Target market w Promotion
Improve
w Marketing objectives n Advertising message
Increase
Take
New Convert Existing New Cost
asset
utilisation Increase
Improve
product
and strategies n Media
competitors’
usage
customers
Segments non-users Markets Markets Reduction (experience
and
Price sales
mix w Positioning n Merchandising
efficiency ( margin)
n PR
Growth focus w Product & Branding
w Budget/payback
Cash and margin focus

w Price
Investment Divestment analysis/calendar
• innovation • redeployment of
w Distribution
• diversification capital resources
w Evaluation measures
Capital utilisation focus

Extended Marketing Mix

3. PEOPLE
1. PRODUCT 2. PRICE
& SERVICE
List price
Discounts
People interacting with people
is how many service situations Guest Speaker
Variety might be described.
Quality Allowances Relationships are important in
Design Settlement and marketing
Features credit terms
Brand name
Packaging
4. PROCESS David Burke
Sizes In the case of ‘high-contact’
Add-ons
TARGET CUSTOMERS
services, customers are Australian Institute for Enneagram Studies
Warranties INTENDED involved in the process.
Returns POSITIONING Technology is also
important in conversion
operations and service

7. PROMOTION
delivery Ph: 32191071
6. PLACEMENT 5. PHYSICAL EVIDENCE
for customer
Advertising service Services are mostly intangible. aies@enneagram.com.au
Personal selling Demand chain T hus the meaning of other
Direct marketing
Synchronous
management
Logistics
tools and techniques used in
measures of satisfaction are
enneagram.com.au
marketing management important
Channel
management

Planning the Migration Demographic-

The Marketing
Marketing
Process
Technological-
Planning dimensions: Economic Natural
Channels
Environment Environment
• Management Process Desired Future
Ma lan

Position
sis g

• Technology
rk nin

Key milestones:
aly tin

eti g
An arke

Product
ng

• Culture ‘Space’
M

• People strategy
• Information Target
Suppliers Place Price Publics
• Marketing Strategy Consumers
Key milestones:
Ma on

en ng

‘Place’ strategy Promotion

ion
rk trol
C

m eti
tat
eti

ple ark
ng

Im M

th
Pa Political- Social-
on
Present rati Legal Competitors Cultural
g
Position Mi Environment Environment