Chapter 2

Strategic Planning: Making

Choices in a Wired World

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-0
 Chapter Objectives

Explain the strategic planning

process
Tell how firms gain a competitive
advantage and describe the
factors that influence marketing
objectives
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-1
 Chapter Objectives_2

Describe the steps in the marketing

planning process
Explain how marketers implement
and control the marketing plan

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-2
 Strategic Planning:
Guiding the Business
Strategic planning is the managerial
decision process that matches the
organizations resources and capabilities
to its market opportunities for long-term
growth
Firms may become multi-product
companies with self-contained divisions
Strategic Business Units (SBUs)
Example: The Walt Disney Company
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-3
 Strategic Planning at the
Corporate Level
Defining the Organizations
Mission
Establish Corporate Objectives
Allocate Resources to the SBUs

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-4
 Defining the Organizations
Mission
A mission may begin with these
questions:
What business are we in?
What customers should we serve?
How should we develop the firms
capabilities and focus its efforts?

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-5
 Avoiding Marketing Myopia

Describes firms with

shortsighted visions and
missions
Example: What business is
Amtrak in?

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-6
 Establishing Corporate
Objectives
Grow directly from a mission statement
Specify outcomes that an organization
seeks to achieve in a certain time period
Example: Altria (Philip Morris)
To profitably grow our worldwide tobacco,
food, and beer business
To enhance shareholder value through a
balanced program of dividends and share
repurchases

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-7
 Planning for Growth:
The Business Portfolio
For firms with different SBUs,
planning also includes allocating
resources among the businesses
Each SBU is a separate profit center
within the larger corporation
Each SBU is responsible for its own
costs, revenues, and profits

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-8
 Portfolio Management

The range of products owned by

a large firm is called a business
portfolio
Portfolio analysis allows a firm
to assess the potential of its
products and businesses
BCG Growth-Market Share Matrix
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-9
 BCG Matrix

Method focuses on potential for existing

products to generate cash that the firm
can then use to invest in new products
New products are chosen for their
potential to become future cash
generators
Two dimensions:
Market growth rate
Relative market share
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-10
 Strategic Planning at the
SBU Level
Evaluating the Environment:
SWOT Analysis
Setting Business Objectives
Creating a Competitive
Advantage
Developing Growth Strategies
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-11
 SWOT Analysis

Internal Environment
Strengths
Weaknesses
External Environment
Opportunities
Threats
See Table 2.1 for an example
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-12
 Setting Business
Objectives
SBU objectives must support the
overall objectives of the firm
Customer Satisfaction
Profitability
Market Standing
Return on Investment
Revenue and Sales
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-13
 Creating Competitive
Advantage
Identify what a firm does really well
Distinctive competency - a firms
capability that is superior to that of its
competitors
Turn a distinctive competency into a
differential benefit
Differential benefits set products apart
from competitors products by providing
something unique that customers want
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-14
 Developing Growth
Strategies
Product-Market Growth Matrix
illustrates different growth strategies
Two dimensions
opportunities for growth in existing
or new markets
allocating resources into existing
products or new products
Four strategies result
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-15
Tactical Planning: The Marketing
Management Process

Analyzing the Marketing

Environment
Setting Marketing Objectives
Developing Marketing Strategies
Preparing the Marketing Plan

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-16
 Developing Marketing
Strategies
Selecting a Target Market
Developing Marketing Mix
Programs
Product Strategies
Pricing Strategies
Promotion Strategies
Distribution Strategies
2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-17
 Operational Planning:
Executing the Marketing Plan
Implementing the Marketing Plan
The Marketing Budget
Organizing the Marketing Function
Controlling the Marketing Plan
Trend Analysis
Marketing Research

2003 Prentice Hall, Inc Marketing: Real People, Real Choices 3rd edition 2-18