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2. Strategic Planning &The Marketing Process

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What Is Planning

• Establish objectives

• Determine how to accomplish them regardless of what happens in environment

• Levels of planning:– Strategic– Tactical– Operational

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Strategic Planning

• Formal process of developing & maintaining a strategic fit between firm’s goals & competencies and its environment– Point: Obtain best return for expenditure of firm’s

resources

• Five basic steps:– Define corporate mission (“vision”)– Perform SWOT analysis– Set corporate goals & objectives– Design business portfolio– Plan & coordinate functional strategies

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Strategic Planning:Defining Business & Mission

• Develop mission/vision statement– Market-oriented definitions are best

• Define business in terms of satisfying needs of target market

– Avoid being too narrow or too broad– Mission statement should:

• Be market oriented • Fit environment• Be realistic • Indicate

competencies• Be specific • Be motivating

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Strategic Planning:Perform SWOT Analysis

• SWOT analysis/situation audit– Strengths/weaknesses

• Tend to be internal/close to firm– Other departments– Channel members– Competitors– Publics

• Strengths reflect core competencies– Basis for positioning

– Opportunities/threats• Come from broader, external environmental forces:

– Societal – Competitive – Regulatory– Economic – Technological

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Strategic Planning: Setting Corporate Objectives & Goals

• All objectives informed by SWOT analysis• Translate mission statement into supporting

objectives for each management level– Corporate level, business units, functional level

• Mission statement leads to hierarchy of objectives– Including business and marketing objectives

• Make objectives specific

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Strategic Planning: Designing the Business Portfolio

• Portfolio: Businesses & products of company

• Designing involves:– Analyzing current portfolio– Deciding what stays & what goes

• Developing growth strategies– Add new products/businesses?– Increase sales of existing products/businesses?

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Designing the Business Portfolio:Analyzing the Current Portfolio

• Identify key businesses– Strategic business units (SBU’s)

• Assess attractiveness of various SBU’s– Portfolio planning with BCG matrix

• Stars

• Cash cows

• Question marks

• Dogs

– Determine whether to:

• Build, hold, harvest, divest

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Designing the Business Portfolio:Developing Growth Strategies

• Market-product expansion grid– Vertical axis: Existing market, new market

– Horizontal axis: Existing product, new product

• Depending on grid position, growth strategies include:– Market penetration

– Market development

– Product development

– Diversification

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Strategic Planning: Planning Functional Strategies

• Occurs within business units, at functional (departmental) level– E.g., finance, purchasing, marketing,

production

• Departments translate overall SBU mission & objectives into departmental objectives

• Marketing works to reduce cross-functional conflict

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Marketing Strategies forCompetitive Advantage

• Strategies geared to consumer needs & competitor strategies– Differentiate by focusing on points of difference– Use marketing mix to position

• Strategy adopted depends on firm’s industry position:– Market leaders– Market challengers– Market followers– Market nichers

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Marketing Management

• Designing & implementing best marketing mix requires:– Marketing analysis– Marketing planning– Marketing implementation– Marketing control

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Marketing Analysis

• Marketing requires analysis of consumers/business markets

• Marketers must:– Divide the total market (market segmentation)– Choose the best segments (market targeting)– Design strategies for outdoing the competition

in satisfying target customers (market positioning)

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Marketing Planning

• Purpose is to choose marketing strategies to attain company’s strategic objectives– Marketing plan links strategic plan to marketing actions

• Formal plans include specific sections:– Executive summary– Current marketing situation (market description; product, competition,

& distribution reviews)– Threats & opportunity analysis– Objectives & issues– Marketing strategies for attaining objectives– Action programs: what should be done and why– Marketing budget: projected revenues, costs, & profits– Controls: monitor progress (progress checks & corrective action)

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Marketing Implementation• Turns strategies into actions to achieve objectives

– Activities constitute marketing program(s)– Include marketing tactics

• Address specifics of who, where, when, and how• Success depends on:

– Effective marketing programs that pull resources together

– Sound organizational structure– Appropriate decision & reward structure– Alignment of strategies with corporate culture

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Marketing Control

• Requires four steps:– Note specific strategic marketing goals– Measure performance– Evaluate performance re. goals– Take corrective action

• Two forms are important:– Operating control– Strategic control: Marketing audit