© 2000 South-Western College Publishing
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CHAPTER TWO
STRATEGIC PLANNING
DEVELOPING AND IMPLEMENTING A MARKETING
PLAN
Prepared by: Jack GiffordMiami University (Ohio)
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STRATEGIC PLANNING
Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.
RESOURCES &
OBJECTIVES
EVOLVING MARKET
OPPORUNITIES
LONG RUN PROFITABILITY AND GROWTH
PLUS
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STRATEGIC PLANNING
Strategic planning requires the long-run commitment of human and capital resources.
Strategic marketing management addresses two questions:– What is the organization’s main activity at a particular
time?– What are its primary goals and how will these be
achieved?
How do companies go about strategic planning? How do employees know how to implement the long-term goals of the firm? The answer is…...
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A MARKETING PLAN
Is the process of anticipating events and determining strategies to achieve organizational objectives in the future.
A written document A guideline over time Benchmark of progress to date The components of a Marketing Plan always
should include, at a minimum, the following...
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THE MARKETING PLAN CONTAINS, AT A MINIMUM…. Business Mission Statement Objectives Situation Analysis (SWOT) Marketing Strategy
– Target Market Strategy– Marketing Mix
• Product• Promotion• Price• Distribution
Implementation, Evaluation and Control
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...AND ALSO OFTEN INCLUDES:
Budgets Implementation timetables Required marketing research efforts Other elements of advanced strategic planning
– Quality control programs– Supply chain management systems– Organizational structure changes– Management Information Systems– Others unique to specific industries
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THE MISSION STATEMENT When we answer the question “What business are
we in and where are we going?” we are well on our way to creating a mission statement– The creation and implementation of a mission statement
profoundly affects long-run resource allocation, profitability, and survival.
– Includes the long-run vision and values of the company
– Must be customer oriented
– May be for the entire business, or each strategic business unit (SBU)
– Must not be too broad…or too narrow in scope
– Avoids marketing myopia
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MARKETING MYOPIA
A business that defines itself in terms of its products or services instead of customer satisfaction or too narrowly instead of the markets, organizations, and benefits purchased.
AT&T =
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MARKETING GOALS AND OBJECTIVES
Marketing Objectives– What is to be
accomplished through marketing activities
– Realistic, measurable, time specific
– Internally consistent– Indicate the priorities of
the organization
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MARKETING GOALS AND OBJECTIVES
Marketing objectives serve several functions– Communicate marketing
management philosophies– Provide direction for lower-
level management– Act as motivators– Help clarify executive thinking– Create a series of benchmarks
and a basis for control
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CONDUCT A SITUATION ANALYSIS
Environmental Scan/ Situational Analysis
Two major components, the first set being...– Internal strengths– Internal weaknesses
•Production costs
•Marketing and people skills
•Financial resources
•Company or brand image
•Available technology
•Other
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CONDUCT A SITUATION ANALYSIS
Environmental Scan/ Situational Analysis
Two major components, the second set being…– External Opportunities– External Threats
MACROENVIRONMENTAL FORCES INCLUDE
•Social forces
•Demographic forces
•Economic forces
•Technological forces
•Political forces
•Legal forces
•Competitive forces
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Corporate culture and the external opportunities and threats
Corporate culture is the pattern of basic assumptions an organization has accepted to cope with the firm’s internal environment and the changing external environment– It is revealed by the way it reacts to
problems and opportunities– These organizational responses can be
categorized into four types
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FOUR TYPES OF ORGANIZATIONAL RESPONSES TO EXTERNAL OPPORTUNITIES AND THREATS
Prospector
Reactor
Defender
Analyzer
Focuses on identifying and capitalizing on emerging market opportunities; emphasizes mkt. research & communications
Responds to emerging market forces when forced to do so
Tries to defend its “turf” or market domain
Combination of a conservative prospector and aggressive defender
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STRATEGIC WINDOW Is the limited time
period in which there is an optimal FIT between external market Opportunities and internal corporate Strengths
SWOT
Optimal match
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STRATEGIC OPPORTUNITIES MATRIX EXAMPLE: DAIMLER-CHRYSLER
PRODUCT
MARKET
PRESENT NEW
PRESENT
NEW
MarketPenetration
Market
Development
Product
Development
Diversification
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PORTFOLIO MATRIX EXAMPLE: MICROSOFT CORPORATION
MARKET SHARE DOMINANCEM
AR
KE
T G
RO
WT
H R
AT
EHIGH LOW
L
OW
HIG
H
?
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PORTFOLIO MATRIX (continued)Allocating future resources for each
Build– Invest in a problem
child that has the potential to become a star
Hold– Hold and protect; use
cash flow to maintain market share
Harvest– Increase short-term
cash flow from any source except stars
Divest– Sell off or close dogs
and sometimes problem children that cannot be converted to stars
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MARKET ATTRACTIVENESS / STRENGTH MATRIX: EXAMPLE KODAK CORPORATION
BUSINESS POSITON[ STRENGTH MINUS WEAKNESSES ]
MA
RK
ET
AT
TR
AC
TIV
EN
ESS
[ O
PP
OR
TU
NIT
IES
MIN
US
TH
RE
AT
S ]
LO
W
ME
DIU
M
HIG
H
STRONG MEDIUM WEAK
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MARKET ATTRACTIVENESS / STRENGTH MATRIX (CONTINUED)
To maintain a strong business position in an attractive market (SMILEY FACE), a company must develop a sustainable competitive advantage– One or more unique aspects of an organization that are
valued by the target market(s) and cannot be easily replicated by competition
• Superior skills, such as management capabilities and expertise)
• Superior resources( well known brand name, patents, unique technology, or superior economies of scale)
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DIFFERENTIAL ADVANTAGE Important to target market(s) Why you purchase “A” instead of “B” Athletic Shoes ??? Soft drink ???
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MARKETING PLAN (continued)
Marketing Strategy– Target Market Strategy
• Identifies which market segment or segments to focus on
• This topic will be discussed in detail in Chapter 7
Owners of pets
Male business executives
Parents of children under 3
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TARGET MARKET STRATEGY
How do we “cluster” potential customers for our products or services around meaningful buying attributes?
Is usually multidimensional– SAUDI KINGDOM SHOPPNG CENTRE?
– TREK BICYCLES?
MEN
1ST FLOOR
WOMEN 2ND FLOOR
???
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MARKETING PLAN (continued)
Marketing Mix: The 4 “Ps”– Product strategies– Price strategies– Promotion strategies– Distribution strategies (Place)
Gillette Mach 3 razor
•New triple cutting surface
•Sold through retailers
•Introductory price $3.29
•Promoted on TV, magazines and newspapers
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THE MARKETING MIX
PRODUCT OR
SERVICE
PRICE
PROMOTION
PLACE
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IMPLEMENTATION, EVALUATION AND CONTROL
Implementation– The process that turns marketing plans into
action assignments– Assures execution in a way that accomplishes
the plans’ objectives Evaluation and control
– Gauging the extent to which marketing objectives have been achieved during the specific time period.
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EVALUATION AND CONTROL
The broadest control device available to marketing managers is the marketing audit
A marketing audit is a comprehensive, systematic, periodic, and independent evaluation of the goals, strategies, structure, and performance of the marketing organization
AUDIT
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EFFECTIVE STRATEGIC PLANNING
Effective strategic planning requires continual attention, creativity, and management commitment– Should be an ongoing process– Is based on information and creativity– Requires top management support and participation
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FOUR COMMON REASONS FOR FAILURE TO ACHIEVE MARKETING OBJECTIVES
Objectives were unrealistic Inappropriate objectives for the plan Poor implementation Unanticipated changes in the internal or external
environments Violations of any of the three principles of effective
strategic planning
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