Bus302 Chapter 2

strategic planning
the process of developing and maintaining a strategic fit between the organization’s goals, capabilities, and its changing marketing opportunities
steps in strategic planning
1) defining the company mission
2) setting company objectives and goals
3) designing the business portfolio
4) planning marketing and other functional strategies
mission statement
statement of the organization’s purpose
– market oriented, realistic, and specific
business portfolio
collection of businesses and products that make up the company
steps in business portfolio planning
– analyze the firm’s current business portfolio
– develop strategies to shape the future portfolio
BCG Growth-Share matrix
shows the classification of company’s strategic business units (SBUs) in terms of market growth rate and relative market share
types of SBUs
– cash cow
– dog
– star
– question mark
stars (BCG Growth-Share matrix)
high market growth rate and high relative market share
cash cows (BCG Growth-Share matrix)
low market growth rate and high relative market share
question marks (BCG Growth-Share matrix)
high market growth rate and low relative market share
dogs (BCG Growth-Share matrix)
low market growth rate and low relative market share
problems with BCG Growth-Share matrix
– difficult, time consuming, and costly
– difficult to define and measure
– provides little advice for future planning
product/market expansion grid
refers to a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification
market penetration
exiting markets & existing products
market development
new markets & existing products
product development
existing markets & new products
diversification
new markets & new products
reasons to abandon products or markets
– rapid growth of the company
– lack of experience in a market
– change in market environment
– decline of a particular product
Company departments are links in the company’s internal _____ _____.
value chain
value delivery network
composed of the company, its suppliers, its distributors, and its customers
two key questions of marketing strategy
1) Which customers will we serve? (segmentation and targeting)
2) How will we create value for them? (differentiation and positioning)
Marketing is all about creating _____ _____ and _____ _____ relationships.
customer value; profitable customer
activities for best marketing strategy and mix
– marketing analysis
– planning, implementation, and control
positioning
arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products
differentiating
differentiating the market offering to create superior customer value
marketing mix
the set of tactical marketing tools that the firm blends to product the response it wants in the target market
product
the goods-and-services combination the company offers to the target market
price
the amount of money customers must pay to obtain the product
place
includes the company activities that make the product available to target consumers
promotion
activities that communicate the merits of the product and persuade target customers to buy it
criticisms of the four P’s
– omits or underemphasizes service products
– needs to include packaging as a product decision
– buyer’s perspective would emphasize the four A’s
the four A’s
– acceptability
– affordability
– accessibility
– awareness
Managing the marketing process requires the four marketing management functions:
analysis, planning, implementation, and control
SWOT Analysis
an overall evaluation of a company’s strengths (S), weaknesses (W), opportunities (O), and threats (T)
strengths
internal capabilities that may help a company reach its objectives
weaknesses
internal limitations that may interfere with a company’s ability to achieve its objectives
opportunities
external factors that the company may be able to exploit to its advantage
threats
current and emerging external factors that may challenge a company’s performance
contents of a marketing plan
– executive summary
– current marketing situation
– threats and opportunities analysis
– objectives and issues
– marketing strategy
– action programs
– budgets
– controls
executive summary (marketing plan)
brief summary of the main goals and recommendations
current marketing situation (marketing plan)
gives the market description and the product, competition, and distribution review
threats and opportunities analysis (marketing plan)
helps management to anticipate important positive or negative developments
objectives and issues (marketing plan)
states and discusses marketing objectives and key issues
marketing strategy (marketing plan)
outlines the broad marketing logic and the specific of target markets, positioning, marketing expenditure levels, and strategies for each marketing mix element
action programs (marketing plan)
spells out how marketing strategies will be turned into specific action programs
budgets (marketing plan)
details a supporting marketing budget that is a projected profit-and-loss statement
controls (marketing plan)
outlines the controls that will be used to monitor progress, allow management to review implementation results, and spot products that are not meeting their goals
marketing implementation
turning marketing strategies and plans into marking actions to accomplish strategic marketing objectives
– addresses the who, where, when, and how
functional organization
different marketing activities are headed by a functional specialist
– most common form of marketing organization
geographic organization
sales and marketing people are assigned to specific countries, regions, and districts
product management organization
a product manager develops and implements a complete strategy and marketing program for a specific product or brand
market or customer management organization
best suited for companies that sell one product line to many different types of markets and customers who have different needs and preferences
combination organization
marketing organization that combines functional, geographic, product, and market
marketing control
measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved
operating control
ensures that the company achieves its sales, profits, and other goals
strategic control
involves looking at whether the company’s basic strategies are well matched to its opportunites
marketing return on investment (ROI)
net return from a marketing investment divided by the costs of the marketing investment
Marketing ROI assessment measures:
– standard marketing performance measures
– customer-centered measures