Marketing 301 | Chapter 2: Strategic Planning for Competitive Advantage

Strategic Planning
the managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities.
The Goal of Strategic Planning
long term profitability and growth.
Levels of Strategy
– Corporate
– Business Unit
– Functional
Market Plan
a written document that acts as a guidebook of marketing activities for the marketing manager.
Why Write a Marketing Plan?
– Provides a basis for comparison of actual and expected performance
– Provides clearly stated activities to work toward common goals
– Serves as a reference for the success of future activities
– Provides an examination of the marketing environment
– Allows entry into the marketplace with awareness of problems and opportunities
Marketing Plan Elements
– Implementation Evaluation Control
– Marketing Strategy
– Target Market Strategy
– Marketing Mix (Product, Distribution, Promotion, Price)
– Situation or SWOT Analysis
– Objectives
– Business Mission Statement
What Defines the Business Missions?
– Answers the question “What business are we in?”
– Focuses on the market(s) rather than the good or service.
– Strategic Business Units (SBUs) may also have a mission statement
Marketing Objective
A statement of what is to be accomplished through marketing activities.
Marketing Objectives Elements
– Realistic
– Measurable
– Time specific
– Consistent with and indicating the priorities of the organization
4 pieces of Marketing
Product
Price
Place
Promotion
Product (WWWHHW)
What – what products do you need?
Why – What need does it fill?
When – When you you need it?
How – How will the product fill the need?
How Much – Product cost, volume to be sold, etc?
Who – Customer segments to be targeted?
Price (WWWHHW)
What – What price will you sell for?
Why – Why is that the right price?
When – How long will that price be valid?
How – How will the price develop over time?
How much – how much sales and margin will be created?
Who – how do different segments use different channels?
Place (WWWHHW)
What – how will products be distributed?
Why – why choose these channels?
When – when do customers choose different channels?
How – how will we create or enter these channels?
How much – What are the cost/benefits of these channels?
Who – how do different segments use different channels?
Promotion (WWWHHW)
What – what types of promotion be used?
Why – why choose these activities?
When – Timing; Launch; lifestyle, etc.
How – how will the promotions be executed
How much – costs/benefits of the promotions
Who – target groups for various promotions?
SWOT Analysis
identifying internal strengths, weaknesses, examining external opportunities, and threats.
Internal SWOT Analysis
Strengths and Weaknesses (SW)
External SWOT Analysis
Opportunities and Threats (OT)
S in SWOT
Things the company does well.
W in SWOT
Things the company does not do well.
O in SWOT
Condition in the external environment that favor strengths.
T in SWOT
Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.
A strength could be:
– Your specialist marketing expertise.
– A new, innovative product or service.
– Location of your business.
– Quality processes and procedures.
– Any other aspect of your business that adds value to your product or service.
A weakness could be:
– Lack of marketing expertise.
– Undifferentiated products or services (i.e. in relation to your competitors).
– Location of your business.
– Poor quality goods or services.
– Damaged reputation.
An opportunity could be:
– A developing market such as the Internet.
– Mergers, joint ventures or strategic alliances.
– Moving into new market segments that offer improved profits.
– A new international market.
– A market vacated by an ineffective competitor.
A threat could be:
– A new competitor in your home market.
– Price wars with competitors.
– A competitor has a new, innovative product or service.
– Competitors have superior access to channels of distribution.
– Taxation is introduced on your product or service.
Competitive Advantage
the set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.
Types of Competitive Advantage
– Cost
– Product/Service Differentiation
– Niche Strategies
Cost Competitive Advantage
being the low-cost competitor in an industry while maintaining satisfactory profit margins at the same time.
Product/Service Differentiation Competitive Advantage
the provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s.
Niche Competitive Advantage
the advantage achieved when a firm seeks to target and effectively serve a small segment of the market.
Niche Competitive Advantage Pros
– Used by small companies with limited resources.
– May be used in a limited geographic market.
– Product line may be focused on a specific product category.
Sources of Sustainable Competitive Advantage
– Patents
– Copyrights
– Locations
– Equipment
– Technology
– Customer Service
– Promotion
Marketing Strategy
the activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.
Target Market Stategies
– Entire Market
– Multiple Markets
– Single Market
Marketing Mix
a unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.
Following up on the Market Plan
– Implementation
– Evaluation
– Control
– Marketing audit
Marketing audits are….
– Comprehensive
– Systematic
– Independent
– Periodic
Market share
a company’s sales expressed as a percentage of the sales for the total industry.

– DOES NOT always mean profitability

Relative Market Share =
a market share of specific brand / market share of the leader in the market
Portfolio Matrix Strategies
– Build
– Hold
– Harvest
– Divest
Build
develop it.
Hold
keep it as it is.
Harvest
gather more information and add on.
Divest
get rid of it.
Strategic Alternatives
– Market Penetration
– Market Development
– Product Development
– Diversification
Market Penetration
Increase market share among existing customers.
Market Development
Attracting new customers to existing products.
Product Development
Creating new products for present markets.
Diversification
Introducing new products into new markets.
Metamarket
are closely related to markers but are different set of industries.
– edmunds.com
Marketplace
represent the physical place where we make things change.
Marketspace
represents a physical place where the competition is increased.
Stars
high industry growth, high relative market
Cash Cows
low industry growth, high relative market share
Problem Child (aka question mark)
high industry growth, low relative market share
Dogs
low industry growth, low relative market place