Chapter 2 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,...

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Chapter 2

© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

STRATEGIC PLANNING IN CONTEMPORARY MARKETING


Chapter 2 Strategic Planning in Contemporary Marketing

1a. What is Market Planning?

Copyright © 2013 by South Western, a division of Cengage Learning. All rights

reserved.

3© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.


Marketing Planning: The Basis for Strategy and Tactics▮ Marketing planning - Implementing planning

activities devoted to achieving marketing objectives

• Many planning activities take place over the Internet with virtual conferences



1b. What is Planning?


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Marketing Planning: The Basis for Strategy and Tactics▮ Planning - Anticipating future events and

conditions and determining the best way to achieve organizational objectives• Continuous process that includes:

• Identifying objectives

• Determining the actions through which a firm can attain those objectives

• Creates a blueprint for everyone in the organization



Marketing Planning: The Basis for Strategy and Tactics

• An important trend in marketing planning centers on relationship marketing

• A firm’s effort to develop long-term, cost-effective links with individual customers and suppliers for mutual benefit



2. Define Strategic planning and Tactical planning.


reserved.



Strategic Planning Versus Tactical Planning

Strategic Planning

• Determining an organization’s primary objectives

• Adopting courses of action that will achieve these objectives

• Provides long-term direction for its decision makers

Tactical Planning

• Guides the implementation of activities specified in the strategic plan

• Addresses shorter-term actions



Table 2.1 - Planning at Different Managerial Levels



3. What are the steps in the marketing process?


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Steps in the Marketing Planning Process

▮ Defining the organization’s mission and objectives

• Mission - Essential purpose that differentiates one company from another

• Sephora: “The beauty authority”

• IBM: “Welcome to the decade of smart”

Example: Mission Statement

Pfizer is a research-based, global pharmaceutical company.

We discover and develop innovative, value-added products that improve the quality of life of people around the world and help

them enjoy longer, healthier, and more productive lives.

The company has three business segments: health care, animal health and consumer health care. Our products are available

in more than 150 countries.

Pfizer Inc.

The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission.

We pledge to provide the finest personal service and facilities for our guests who will always enjoy a warm, relaxed yet refined

ambiance.

The Ritz-Carlton experiences enlivens the senses, instills well-being, and fulfills even the unexpressed wishes and needs of

our guests.

Ritz-Carlton Hotels



Apple Computer, Inc., ignited the personal computer revolution in the 1970s with the Apple II, and reinvented the personal

computer in the 1980s with the Macintosh.

Apple is now committed to its original mission--to bring the best personal computing products and support to students,

educators, designers, scientists, engineers, business persons and consumers in over 140 countries around the world.

Apple Computer

Rubbermaid Commercial Products, Inc.

“Our vision is to be the Global Market Share Leader in each of the markets we serve. We will earn this leadership position by providing to our distributor and end-user customers innovative, high-quality, cost-effective and environmentally responsible products. We will add value to these products by providing legendary customer service through our uncompromising Commitment to Customer Satisfaction.”

Motorola

“The purpose of Motorola is to honorablyserve the needs of the community by providingproducts and services of superior quality at a fair price to our customers; to do this so as toearn an adequate profit which is required forthe total enterprise to grow; and by doing so, provide the opportunity for our employees andshareholders to achieve their personal objectives.”

eBay

“We help people trade anything on earth.We will continue to enhance the onlinetrading experiences of all—collectors, dealers, small businesses, unique itemseekers, bargain hunters, opportunitysellers, and browsers.”



Trevecca Nazarene University

▮ “Trevecca Nazarene University is a Christian community providing education for leadership

and service.”



Steps in the Marketing Planning Process

▮ Objectives - Guide the development of marketing objectives and plans

• For example:

• Generate a 15 percent profit over the next 24 months

• Add 25 new outlets within the next year



Assessing Organizational Resources and Evaluating Environmental Risks and Opportunities

▮ Resources include:• Production• Marketing• Finance• Technology• Employees

▮ Strengths help planners:• Set objectives• Develop plans• Take advantage of

marketing opportunities



Formulating, Implementing, and Monitoring a Marketing Strategy▮Marketing strategy - Selecting and satisfying

target consumers through the marketing mix elements

▮The final steps of the planning process:

• Marketers put the marketing strategy into action

• Marketers monitor performance to ensure that objectives are achieved



Successful Strategies: Tools and Techniques

▮ Porter’s Five Forces model• The potential of new entrants• The bargaining power of buyers• The bargaining power of suppliers• The threat of substitute products• Rivalry among competitors



Figure 2.2 - Porter’s Five Forces Model



First Mover and Second Mover Strategies

▮ First mover strategy - The company first to offer a product in a marketplace will be the long-term market winner

▮ Second mover strategy - Observing the innovations of first movers and then improving on them to gain advantage in the marketplace



SWOT Analysis

▮ Helps planners compare internal organizational strengths and weaknesses with external opportunities and threats• Provides managers with a critical view of the

organization’s internal and external environments • Helps them evaluate the firm’s fulfillment of its

basic mission



Figure 2.3 - SWOT Analysis



SWOT Analysis

Strengths

Weaknesses

Opportunities

Threats

Figure 2.2

DaimlerChrysler

▮ Strengths• Leading market position• Strong brand portfolio• Strong commercial vehicle

business

▮ Opportunities• New launches• Hybrid vehicles• Booming car sales in China

▮ Weaknesses• Poor performance of

Mercedez Benz unit• Weak top line growth in

Western Europe

▮ Threats• Rise in steel prices• Slow down in Euro zone• Increasing competition from

Japanese groups



The Strategic Window

▮ Limited periods when key requirements of a market and a firm’s particular competencies best fit together

▮ Requires a thorough analysis of:• Current and projected external environmental

conditions• Current and projected internal company capabilities• How, whether, and when the firm can reconcile

environmental conditions and company capabilities



4. What are the elements of a marketing strategy?


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Elements of a Marketing Strategy

▮ The target market▮ Marketing mix variables



The Target Market

▮ The group of people toward whom the firm directs its marketing efforts and merchandise

• Example: Boeing markets most of their products to business buyers such as Delta Airlines

▮ Diversity plays a critical role

• Example: Growing Hispanic population in United States



The Target Market

▮ Targeting consumers in specific global markets represents a challenge and an opportunity



Marketing Mix Variables

▮ Marketing mix - Blending four strategy elements to fit the needs and preferences of a specific target market

• Product

• Distribution

• Promotion

• Pricing



Figure 2.4 - Element of a Marketing Strategy and Its Environmental Framework



Product Strategy

▮ Deciding what goods or services the firm should offer to a group of consumers

• Customer service

• Package design

• Brand names, trademarks, patents, and warranties

• Lifecycle of a product

• Product positioning

• New-product development



Distribution Strategy

▮ Consumers find their products in the proper quantities at the right times and places

▮ Involves modes of transportation, warehousing, inventory control, order processing, and selection of marketing channels

▮ Technology has opened new channels of distribution in many industries



Promotion Strategy

▮ Communication link between sellers and buyers

▮ Firms may communicate messages:

• Directly through salespeople

• Indirectly through advertisements and promotions

▮ Many companies use integrated marketing communications (IMC)



Pricing Strategy

▮ Deals with methods of setting profitable and justifiable prices

▮ Subject to regulation and public scrutiny

▮ A good pricing strategy:

• Creates value for customers

• Builds and strengthens customer relationships with a firm and its products



5. What are the various tools for marketing planning?


reserved.



Methods for Marketing Planning

▮ Business portfolio analysis• An evaluation of a company’s products and

divisions to determine the strongest and weakest



Strategic Business Units

▮ Key business units within diversified firms• Each strategic business unit (SBU):

• Has its own managers, resources, objectives, and competitors

• Pursues its own distinct mission and develops its own plans independently

▮ Help focus the attention of company managers▮ Companies may have to redefine their SBUs

as market conditions dictate



The BCG Matrix

▮ Developed by the Boston Consulting Group▮ A market share/market growth matrix that

plots market share against market growth potential



Figure 2.5 - BCG Market Share/Market Growth Matrix

Chapter 2 © 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated,...

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