MM-II-4 Strategic Plg & Mktg Process

8/3/2019 MM-II-4 Strategic Plg & Mktg Process

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DEVELOPING MARKETING

STRATEGIES AND PLANS

4

Refer Chapter 2 of Text Book


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Sell the product

The Value-Delivery ProcessThe Value-Delivery Process

Make the product

ProcureDesignproduct Make Price Sell

Advertise/promote Distribute Service

Choose the Value Provide the Value

Communicate the Value

(a) Traditional physical process sequence

(b) Value creation & delivery sequence

Strategic marketing Tactical marketing


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Figure 2.2 Porters Value ChainFigure 2.2 Porters Value Chain

The value chain is a tool for identifying ways to create more customer

value because every firm is a synthesis ofprimary and support activitiesperformed to design, produce, market, deliver, and support its product.

Value chain analysis helps to identify resources and capabilities that can

add value.


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Characteristics of Core CompetenciesCharacteristics of Core Competencies

A source of competitive advantage

Applications in a wide variety of markets

Difficult for competitors to imitate


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What is a Marketing Plan?What is a Marketing Plan?

A marketing plan is the central instrument for

directing and coordinating the marketing effort.

It operates at a strategic and tactical level.

Strategic

Target marketing

decisions

Value proposition

Analysis of

marketing

opportunities

Tactical

Product features

Promotion

Merchandising

Pricing

Sales channels

Service

Strategic Planning is the process of developing and maintaining a

strategic fit between the organizations goals and capabilities and its

changing marketing opportunities, with the objective of long term survival

and growth.


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Figure 2.4 The Strategic Planning,

Implementation, and Control Processes

Figure 2.4 The Strategic Planning,

Implementation, and Control ProcessesLevels of Planning:

Corporate and division strategic planning

Business unit (SBU) planning

Functional Planning (e.g., The marketing plan)

Product level planning


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Steps in Strategic PlanningSteps in Strategic Planning

Statement of an

organizations

purpose; should

be market

oriented

Supporting goals

and objectives to

guide the entire

company.

Collection of

businesses and

products that

make up the

company.

Detailed planning

for each department

designed to

accomplish strategic

objectives.


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Corporate Headquarters PlanningCorporate Headquarters Planning

Corporate Headquarters planning activities:

Define the corporate mission

Establish strategic business units (SBUs) Assign resources to each SBU

Assess growth opportunities Plan new businesses;

downsize older businesses


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Market-Oriented Mission StatementMarket-Oriented Mission Statement

The mission statement is the organizations purpose, whatit wants to accomplish in the larger environment

Market-oriented mission statement defines the business in

terms of satisfying basic customer needs

Mission Statement should answer the following questions:

What is our business?

Who is the customer?

What do our customers value?

What should our business be?

Mission statements should be market oriented, fit the

market environment, realistic, specific, be based on

distinctive competencies, be motivating


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2000 Prentice Hall2-10 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Good Mission StatementsGood Mission Statements

Focus on limited number of goals

Stress major policies and values

Define major competitive spheres

Take a long-term view

Short, memorable, meaningful


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Table 2.3: Product Oriented vs. Market

Oriented Definitions of Business

Table 2.3: Product Oriented vs. Market

Oriented Definitions of Business

Company Product Market

Missouri-Pacific

Railroad

We run a railroad We are a people-

and-goods mover

Xerox We make copying

equipment

We improve office

productivity

Standard Oil We sell gasoline We supply energy

Columbia Pictures We make movies We entertain

people


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Strategic Business Unit (SBU)Strategic Business Unit (SBU)

A unit of the company that has a separate mission andobjectives and that can be planned independently from

other company businesses.

Can be a company division, a product line within a

division, or sometimes a single product or brand.

It is a single business or collection of related businesses

It has its own set of competitors

It has a leader responsible for strategic planning and

profitability


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Analyzing the Current Business PortfolioAnalyzing the Current Business Portfolio

Identify key businesses (strategic business units, or SBUs)

that make up the company

Assess the attractiveness of its various SBUs

Decide how much support each SBU deserves

The business portfolio is the collection of businesses

and products that make up the companyPortfolio analysis is a major activity in strategic

planning whereby management evaluates the

products and businesses that make up the company


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High growth & share; highprofit potential

May need heavyinvestment to grow

Eventually, growth will slow

Low growth, high share Established successful

SBUs Produces cash

Low share SBUs in highgrowth markets

Require cash to holdmarket share

Build into Stars or phase out

Low growth & share;low profit potential

Generate cash tosustain self

Do not promise to becash sources

Analyzing Current SBUs:

Boston Consulting Groups (BCG)

Growth-Share Matrix


Boston Consulting Groups (BCG)

Growth-Share Matrix

10x 4x 2x 1.5x 1x .5x .4x .3x .2x .1x

20%-

18%-

16%-

14%-12%-

10%-

8%-

6%-

4%-2%-

0


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MARKETATTRACTIVENESS

MARKETATTRACTIVENESS

5.005.00

3.673.67

2.332.33

1.001.00

Low

Low

Me

dium

Me

dium

Hig

h

Hig

h

Reliefvalve

Flexiblediaphragms

Fuel

pumps

Aerospacefittings

Clutches

Hydraulicpumps

Joints

StrongStrong MediumMedium WeakWeakBUSINESS STRENGTHBUSINESS STRENGTH

1.001.002.332.333.673.675.005.00

Invest/grow Selectivity/earnings Harvest/divest


GE Strategic Business Planning Grid -MarketAttractiveness Competitive Position PortfolioClassification


GE Strategic Business Planning Grid -MarketAttractiveness Competitive Position PortfolioClassification


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Figure 2.5 The Strategic Planning GapFigure 2.5 The Strategic Planning Gap


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Three Intensive Growth Strategies:

Ansoffs Product/Market Expansion Grid

Three Intensive Growth Strategies:

Ansoffs Product/Market Expansion Grid


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Growth at StarbucksGrowth at Starbucks

To maintain its phenomenalgrowth in an increasingly over-caffeinated marketplace,Starbucks has brewed up anambitious, multi-pronged growth

strategy.

Product/market

expansion grid is a

tool for identifying

company growth

opportunities through

market penetration,

market development,

product development,

or diversification


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Product/Market Expansion Grid Based

on Starbucks

Product/Market Expansion Grid Based

on Starbucks Market Penetration: More sales to current customers without changing

products.

How? Add new stores in current market areas; improve advertising,

prices, menu, service.

Market Development: Identify and develop new markets for currentproducts.

How? Review new demographic (seniors/ethnic consumers) or

geographic (Asian, European, Australian, & South American) markets.

Product Development: Offer modified or new products to current

markets.

How? Add new flavors, add food offerings, sell coffee in

supermarkets, co-brand products.

Diversification: Start up or buy businesses outside current products and

markets.

How? Making and selling CDs, testing restaurant concepts, or

branding casual clothing.


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Figure 2.7: The Business Unit

Strategic Planning Process

Figure 2.7: The Business Unit

Strategic Planning Process


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SWOT AnalysisSWOT Analysis


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Market Opportunity Analysis (MOA)Market Opportunity Analysis (MOA)

Can the benefits involved in the opportunity be articulatedconvincingly to a defined target market?

Can the target market be located and reached with cost-

effective media and trade channels?

Does the company possess or have access to the criticalcapabilities and resources needed to deliver the customer

benefits?

Can the company deliver the benefits better than any

actual or potential competitors?

Will the financial rate of return meet or exceed the

companys required threshold for investment?


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Threat MatrixThreat Matrix

1. Competitor develops asuperior lighting system

2. Major prolonged economic

depression

3. Higher costs

4. Legislation to reduce

number of TV studio

licenses

1

4

2

3

HighHigh

LowLow

HighHigh LowLow

Ser

iousness

Ser

iousness

Probability of OccurrenceProbability of Occurrence ThreatsThreats


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Porters Generic StrategiesPorters Generic Strategies

Overall Cost Leadership

Differentiation

Focus


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Marketing Plan ContentsMarketing Plan Contents

Executive summary

Table of contents

Current marketing situation analysis

Analysis of threats & opportunities Marketing objectives & issues

Marketing strategy

Acton programs

Marketing budget,

projected profit & loss Implementation controls

MM-II-4 Strategic Plg & Mktg Process

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Transcript of MM-II-4 Strategic Plg & Mktg Process