EXAM 1 – Strategic Marketing Planning

Strategic Planning
Strategic planning is the managerial-decision process that matches the organization’s resources and capabilities to its market opportunities for long-term growth.
Functional Planning
Functional planning typically includes both a broad five-year plan to support the firm’s strategic plan and a detailed annual plan for the coming year.
Operational Planning
Operational planning is a decision process that focuses on developing detailed plans for day-to- day activities that carry out an organization’s tactical plans.
What is a Mission Statement? What role does it play in the planning process?
A mission statement is a formal document outlining the organization’s overall purpose and what it hopes to achieve with its customers, products, and resources.

It defines the SCOPE of the firm’s activities and identifies its strategic FOCUS. When the mission statement is constructed correctly it not only spells out the organization’s scope and focus, but it sets the DIRECTION for everyone’s efforts.

What is a SWOT analysis? What role does it play in the planning process?
Internal Environment: SW
External Environment: OT

A SWOT enables a firm to develop strategies that make use of what the firm does best in seizing opportunities for growth, while at the same time avoiding external threats that might hurt the firm’s sales and profits.

What is a strategic business unit (SBU)?
SBU: Self-contained individual units within the firm, each having its own mission, business objectives, resources, managers, and competitors.
How do firms use the Boston Consulting Group model for portfolio analysis in planning for their SBUs?
BCG Matrix:
Q1: Stars – hi growth, hi share
Q2: ?mrk – hi growth, lo share
Q3: $cow – lo growth, hi share
Q4: Dog – lo growth, lo share

Stars: are business units with products that have a dominant market share in high-growth markets. INVEST.
Cash Cows: have a dominant market share in a low-growth potential market. HOLD.
Question Marks: (sometimes called problem children) are products with low market shares in fast-growing markets. RISKY.
Dogs: are products that nobody wants. They have a small share of a slow-growth market. DIVEST.

Business growth strategy: Market Penetration
EXISTING PRODUCT > EXISTING MKT
These strategies seek to increase sales of existing products to current customers, nonusers, and users of competing brands.
Business growth strategy: Market Development
EXISTING PRODUCT > NEW MKT
These strategies introduce existing products to new markets. This can mean reaching new customer segments within an existing geographic market or it may mean expanding into new geographic areas.
Business growth strategy: Product Development
NEW PRODUCT > EXISTING MKT
These strategies create growth by selling new products in existing markets. Product development may mean that the firm improves a product’s performance, or it may mean extending the firm’s product line by developing new variations of the item.
Business growth strategy: Diversification
NEW PRODUCT > NEW MKT
These strategies emphasize both new products and new markets to achieve growth.
Explain the steps in the marketing planning process.
ANALYSIS: SWOT
OBJECTIVES: What to achieve.
STRATEGIES: How to achieve it.
IMPLEMENT: Do it.
MONITOR & CONTROL: How’s it doin?

Perform a Situation Analysis:
SWOT analysis by searching out information about the environment that specifically affects the marketing plan.

Set Marketing Objectives:
Brands, sizes, product features, and other marketing-mix related elements. State what the marketing function must accomplish if the firm is to achieve its overall objectives.

Develop Marketing Strategies:
What activities they must accomplish to achieve the marketing objectives (target mkt, mkt mix, brand image)

Implement Marketing Strategies: Marketing managers now spend time managing the various elements of the marketing plan.

Monitor and Control:
Compare actual performance with the objectives, and adjust accordingly.

Describe the business cycle. How does it influence marketing decisions?
The overall pattern of changes or fluctuations of an economy (prosperity, recession, and recovery).

The business cycle is especially important to marketers because of its effect on customer purchase behavior. During times of prosperity, consumers buy more goods and services. Marketers are busy trying to grow the business and maintain inventory levels and even to develop new products to meet consumers’ willingness to spend. During periods of recession, consumers simply buy less and marketers try to maintain their level of sales.

Discretionary Income Competition
The amount of money people have left after paying for necessities such as housing, utilities, food, and clothing. Marketers must compete with other marketers for this “leftover” money.
Product Competition
Competitors offering different products to attempt to satisfy the same consumer’s needs and wants.
Brand Competition
Brand competition is competition for similar goods or services. They have to make a distinction somehow.
Monopoly
One seller w/ full control over entire market. Entry is impossible.
Oligopoly
Few sellers w/ high control over market with many buyers. Entry is difficult.
Monopolistic Competition
A market structure in which many companies sell products that are similar but not identical. Entry is possible.
Perfect (Pure) Competition
A market structure in which a large number of firms all produce the same product. Entry is easy.