Chapter 2

Strategic Planning and the

Marketing Process

1
 Formal Planning
 Many companies operate without formal plans,
yet these plans can provide many benefits such
as:
 Encouraging management to think ahead
systematically.
 Forcing managers to clarify objectives and policies.
 Better coordination of company efforts.
 Clearer performance standards for control.
 Helping the company to anticipate and respond quickly
to environmental changes and sudden developments.

2
 Strategic Planning

Strategic Planning is the Process of

Developing and Maintaining a Strategic
Fit Between the Organization’s Goals
and Capabilities and Its Changing
Marketing Opportunities.

3
 Steps in Strategic
Planning
(Fig. 2.1)
Business unit,
Corporate Level product,
and market
level

Planning,
Defining the Setting Designing marketing,
Company Company the Business
Objectives
and other
Mission Portfolio
and Goals fuctional
Strategies

4
 Defining the Company’s
Business and Mission
A Mission Statement is a Statement of the Organization’s
Purpose.
Market
MarketOriented
Oriented
Characteristics of
Realistic
Realistic a Good Mission
Statement:
Specific

Fit
FitMarket
MarketEnvironment
Environment

Distinctive
DistinctiveCompetencies
Competencies

Motivating
Motivating
5
 Designing the Business
Portfolio
 The business portfolio is the collection of
businesses and products that make up the
company.
 The company must:
 analyze its current business portfolio or
Strategic Business Units (SBU’s)
 decide which SBU’s should receive more, less,
or no investment
 develop growth strategies for adding new
products or businesses to the portfolio
6
 Analyzing Current SBU’s:
Boston Consulting Group
Approach
Relative Market Share
High Low
Market Growth Rate

Stars Question
Question Marks ?
High

Marks
• High growth & share ••High
Highgrowth,
growth,low
lowshare
share
• Profit potential ••Build
Buildinto
intoStars
Starsor
orphase
phaseout
out
• May need heavy ••Require cash to hold
Require cash to hold
investment to grow market
marketshare
share
Cash
Cash Cows
Cows Dogs
Dogs
••Low • Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high
highshare
share ••Low share
Low

••Established, profit potential

Established,successful
successful • Low profit potential
SBU’s
SBU’s
••Produce
Producecash
cash

7
 Analyzing Current SBU’s:
GE’s Strategic Business-Planning
Grid

Business Strength
Strong Average Weak
C
Attractiveness

High
A
Medium
Industry

B D

Low

8
 Problems With Matrix
Approaches
Can
Can be
be Difficult,
Difficult, Time-Consuming,
Time-Consuming, &
& Costly
Costly to
to Implement
Implement

Difficult
Difficult to
to Define
Define SBU’s
SBU’s &
& Measure
Measure Market
Market Share/
Share/ Growth
Growth

Focus
Focus on
on Current
Current Businesses,
Businesses, But
But Not
Not future
future Planning
Planning

Can
Can Lead
Lead to
to Unwise
Unwise Expansion
Expansion or
or Diversification
Diversification
9
 Developing Growth
Strategies in the Age of
Connectedness
Product/ Market Expansion Grid

Existing New
Products Products
Existing 1. Market 3. Product
Markets Penetration Development

New 2. Market
4. Diversification
Markets Development

10
 Product/ Market
Expansion Grid
 Market Penetration: making more sales to
current customers without changing its
products.
 How? Add new stores in current market areas,
improve advertising, prices, service or store design.

 Market Development: develop new

markets for its current products.
 How? Identify new demographic or
geographic markets.
11
 Product/ Market
Expansion Grid
 Product Development: offering
modified or new products to current
markets.
 How? New styles, flavors, colors, or
modified products.
 Diversification: new products for new
markets.
 How? Start up or buy new businesses.

12
 Discussion
Connections
 Beyond evaluating current business, designing the
business portfolio involves finding future businesses
and products the company should consider.
 Apply the product/ market expansion grid to assess
how one of the following companies might grow:
 Dell computer
 Kodak
 Levi-Strauss
 E*Trade online investment services
 Assign each of the choices to a separate small
group, have the group develop the answer, then
discuss each approach in class.
 Planning Cross-Functional
Strategies

Marketing’s Role in Strategic Planning

Inputs to
Guiding Designs
Strategic
Philosophy Strategies
Planners

14
 The Marketing Process
(Fig. 2.5)
Demographic- Marketing Technological-
Economic Intermediaries Natural
Environment Environment
ys ng

M la n
ar n
al eti

P
is

ke i n
An a r k

Product

tin g
M

g
Target
Suppliers Place Price Publics
Consumers

n
tio
en g
M Co n

ta
em i n
ar tr

Promotion

pl ket
ke o l

Im ar
t in

M
g

Political- Social-
Legal Competitors Cultural
Environment Environment
15
 Connecting With
Customers
 Market Segmentation: determining distinct
groups of buyers (segments) with different
needs, characteristics, or behavior.

 Market Targeting: evaluating each segment’s

attractiveness and selecting one or more
segments to enter.

16
 Connecting With Customers

Market Positioning: arranging for a product to

occupy a clear, distinctive, and desirable place
relative to competing products in the minds of
target consumers. i.e. Chevy Blazer is “like a rock.”

17
Marketing Strategies for
Competitive Advantage

Strategy a Company
Adopts
Depends on Its
Industry Position

18
 Developing the Marketing
Mix
Product Price
“Goods-and-service” Amount of money
combination that a that consumers
company offers a have to pay to
target market Obtain the product

Target
Customers

Intended
Positioning

Activities that Company activities

persuade target that make the
customers to buy product available
the product
Promotion Place 19
 The 4 P’s & 4C’s of the
Marketing Mix
 44 P’s
P’s  44 C’s
C’s
 Product
Product  Customer Solution
Customer Solution
 Price Customer Cost
Cost
Price  Customer

 Place Convenience
Place  Convenience

 Promotion Communication
Promotion  Communication

20
 Managing the Marketing
Effort (Fig. 2.7)
Marketing
Marketing Analysis
Analysis of
of Company’s
Company’s Situation
Situation

Contro
Marketing
Marketing Marketing
Marketing l
Planning
Planning Implementation
Implementation Measure
Results
Develop
Develop Strategic
Strategic Carry
Carry Out
Out
Plans The Evaluate
Plans The
Plans Results
Plans
Develop
Develop
Marketing Take
Marketing Corrective
Plans
Plans Action

21
 Contents of a Marketing
Plan
(Table 2.2)
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
22
Marketing
Implementation
Marketing
Marketing Strategy
Strategy

Decision
Human
Organizational and
Resources
Structure Reward

Action Climate and

Programs Culture

Implementation

Marketing
Marketing Performance
Performance 23
 Marketing Department
Organization

Functional

Combination
Plan Geographic
Ways to
Carry Out
Marketing
Activities
Market Product
Management Management
24
 Marketing Control Process

(Fig. 2.8)

Set Measure Evaluate Take

Goals Performanc Performanc Corrective
e e Action

25
 Review of Concept
Connections
 Explain companywide strategic planning
and its four steps.
 Discuss how to design business portfolios
and growth strategies.
 Explain functional planning strategies and
asses marketing’s role in strategic planning.
 Describe the marketing process and the
forces that influence it.
 List the marketing management functions,
including the elements of a marketing plan.
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