Chapter 2 Learning Objectives

LO 2-1: Understand the importance of strategic planning.
Strategic planning: basis for all marketing strategies and decisions
LO 2-2: Define strategic business units (SBUs).
SBU characteristics:
• a distinct mission and a specific target market
• control over its resources
• its own competitors
• a single business
• plans independent from other SBUs in the organization
LO 2-3: Identify strategic alternatives.
Ansoff’s Opportunity Matrix:
• Four options:
• market penetration
• market development
• product development
• diversification
LO 2-3: Identify strategic alternatives.
Portfolio Matrix (BCG Matrix):
• stars
• cash cows
• problem children (question marks)
• dogs
LO 2-3: Identify strategic alternatives.
GE Model:
• companies determine strategic alternatives based on comparisons between business position and market attractiveness
LO 2-4: Understand the marketing planning process.
A marketing plan should:
• define the business mission
• perform a SWOT analysis
• define objectives
• delineate a target market
• establish components of the marketing mix
LO 2-4: Understand the marketing planning process.
Other elements:
• budgets
• implementation timetables
• required marketing research efforts
• elements of advanced strategic planning
LO 2-5: Develop an appropriate business mission statement.
Mission statement:
• establishes boundaries for all subsequent decisions, objectives, and strategies
• focus’ on the market rather than good or service offered
LO 2-6: Describe the components of a situation analysis.
SWOT analysis identifies and examines:
• internal strengths (S)
• internal weaknesses (W)
• external opportunities (O)
• external threats (T)
LO 2-6: Describe the components of a situation analysis.
Six macroenvironmental forces:
• social
• demographic
• economic
• technological
• political and legal
• competitive
LO 2-7: Identify sources of competitive advantage.
Three types of competitive advantage:
• cost
• product/service differentiation
• niche
LO 2-7: Identify sources of competitive advantage.
Cost competitive advantage:
• experience curves
• efficient labor
• no frills goods and services
• government subsidies
• product design
• reengineering
• production innovations
• new methods of service delivery
LO 2-7: Identify sources of competitive advantage.
Product/service differentiation competitive advantage:
• firm provides something unique and valuable beyond low prices
LO 2-7: Identify sources of competitive advantage.
Niche competitive advantage:
• targeting unique segments with specific needs and wants
LO 2-7: Identify sources of competitive advantage.
Goal of all three:
• sustainability
LO 2-8: Explain the criteria for stating good marketing objectives.
Objectives should be:
S: specific
M: measurable
A: attainable
R: realistic
T: time specific
Objectives should also be consistent and indicate priorities of the organization.
LO 2-8: Explain the criteria for stating good marketing objectives.
Good marketing objectives:
• communicate marketing management philosophies
• provide management direction
• motivate employees
• force executives to think clearly
• form a basis for control
LO 2-9: Discuss target market strategies.
Market opportunity analysis (MOA):
• assessment of key competitors in these market segments is performed
• one or more may be targeted by the firm
LO 2-10: Describe the elements of the marketing mix.
Marketing mix:
• product
• place
• promotion
• price
Produces mutually satisfying exchanges with a target market
LO 2-11: Explain why implementation, evaluation, and control of the marketing plan are necessary.
Marketing plan:
• must be implemented
• must be evaluated to see if it has achieved its objectives
• one major aspect of control is the marketing audit
LO 2-12: Identify several techniques that help make strategic planning effective.
1. Management must realize that strategic planning is an ongoing process and not a once-a-year exercise.
2. Good strategic planning involves a high level of creativity.
3. Top management’s support and participation.