1 chapter 2 strategic planning and the marketing process
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Chapter 2
Strategic Planning and the Marketing Process
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Formal Planning Many companies operate without formal
plans, yet these plans can provide many benefits such as: Encouraging management to think ahead
systematically. Forcing managers to clarify objectives and
policies. Better coordination of company efforts. Clearer performance standards for control. Helping the company to anticipate and respond
quickly to environmental changes and sudden developments.
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Strategic Planning
Strategic Planning is the Process of Developing and Maintaining a
Strategic Fit Between the Organization’s Goals and Capabilities
and Its Changing Marketing Opportunities.
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Steps in Strategic Planning(Fig. 2.1)
Defining theCompanyMission
Setting CompanyObjectivesand Goals
Designingthe Business
Portfolio
Planning, marketing,and other functionalStrategies
Corporate LevelBusiness unit,
product,and market
level
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Market OrientedMarket Oriented
RealisticRealistic
Fit Market EnvironmentFit Market Environment
Distinctive CompetenciesDistinctive Competencies
MotivatingMotivating
Specific
Characteristics of a Good Mission
Statement:
A Mission Statement is a Statement of the Organization’s Purpose.
Defining the Company’s Business and Mission
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Setting Company Objectives and Goals
M arke tin gS tra teg y
M arke tin gS tra teg y
M arke tin gO b jec tive # 1
M arke tin gS tra teg y
M arke tin gO b jec tive # 2
M arke tin gS tra teg y
M arke tin gS tra teg y
M arke tin gO b jec tive # 3
M iss ionS ta tem en t
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Designing the Business Portfolio
The business portfolio is the collection of businesses and products that make up the company.
The company must: analyze its current business portfolio or
Strategic Business Units (SBU’s) decide which SBU’s should receive more, less,
or no investment develop growth strategies for adding new
products or businesses to the portfolio
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Question Marks
• High growth, low share • Build into Stars or phase out • Require cash to hold market share
Question Marks
• High growth, low share • Build into Stars or phase out • Require cash to hold market share
Stars
• High growth & share• Profit potential • May need heavy investment to grow
Cash Cows
• Low growth, high share• Established, successful SBU’s•Produce cash
Cash Cows
• Low growth, high share• Established, successful SBU’s•Produce cash
Dogs
• Low growth & share • Low profit potential
Dogs
• Low growth & share • Low profit potential
Relative Market ShareHigh Low
Mark
et
Gro
wth
Rate
Low
H
igh
Analyzing Current SBU’s:Boston Consulting Group Approach
?
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Business Strength
High
Medium
Low
Strong Average Weak
A
B
C
D
Ind
ustr
y
Att
racti
ven
ess
Analyzing Current SBU’s:GE’s Strategic Business-Planning Grid
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Can be Difficult, Time-Consuming, & Costly to ImplementCan be Difficult, Time-Consuming, & Costly to Implement
Difficult to Define SBU’s & Measure Market Share/ GrowthDifficult to Define SBU’s & Measure Market Share/ Growth
Focus on Current Businesses, But Not future PlanningFocus on Current Businesses, But Not future Planning
Can Lead to Unwise Expansion or DiversificationCan Lead to Unwise Expansion or Diversification
Problems With Matrix Approaches
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1. Market Penetration
2. Market Development
3. Product Development
4. Diversification
ExistingMarkets
NewMarkets
ExistingProducts
NewProducts
Product/ Market Expansion Grid
Developing Growth Strategies in the Age of Connectedness
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Product/ Market Expansion Grid
Market Penetration: making more sales to current customers without changing its products. How? Add new stores in current market
areas, improve advertising, prices, service or store design.
Market Development: develop new markets for its current products.
How? Identify new demographic or geographic markets.
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Product/ Market Expansion Grid
Product Development: offering modified or new products to current markets. How? New styles, flavors, colors, or
modified products. Diversification: new products for new
markets. How? Start up or buy new businesses.
Discussion Connections
Beyond evaluating current business, designing the business portfolio involves finding future businesses and products the company should consider.
Apply the product/ market expansion grid to assess how one of the following companies might grow: Dell computer Kodak Levi-Strauss E*Trade online investment services
Assign each of the choices to a separate small group, have the group develop the answer, then discuss each approach in class.
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GuidingPhilosophy
Inputs to StrategicPlanners
Marketing’s Role in Strategic Planning
DesignsStrategies
Planning Cross-Functional Strategies
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TargetConsumers
Product
Place Price
Promotion
Mar
ketin
g
Im
plem
enta
tion
Marketing
Planning
Marketing
Control
Mar
ketin
g
Analysis
Competitors
MarketingIntermediaries
PublicsSuppliers
Demographic-Economic
Environment
Technological-Natural
Environment
Political-Legal
Environment
Social-Cultural
Environment
The Marketing Process (Fig. 2.5)
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Connecting With Customers
Market Segmentation: determining distinct groups of buyers (segments) with different needs, characteristics, or behavior.
Market Targeting: evaluating each segment’s attractiveness and selecting one or more segments to enter.
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Connecting With Customers
Market Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. i.e. Chevy Blazer is “like a rock.”
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Marketing Strategies for Competitive Advantage
Strategy a Company Adopts
Depends on Its Industry Position
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TargetCustomers
IntendedPositioning
Product“Goods-and-service”combination that a company offers a
target market
PriceAmount of moneythat consumers have to pay to
Obtain the product
Activities that persuade target customers to buy
the product
Promotion
Company activitiesthat make the
product available
Place
Developing the Marketing Mix
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The 4 P’s & 4C’s of the Marketing Mix
4 P’s Product Price Place Promotion
4 P’s Product Price Place Promotion
4 C’s Customer Solution Customer Cost Convenience Communication
4 C’s Customer Solution Customer Cost Convenience Communication
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Marketing Planning
Develop StrategicPlans
Develop
MarketingPlans
Marketing Planning
Develop StrategicPlans
Develop
MarketingPlans
MarketingImplementation
Carry OutThe
Plans
MarketingImplementation
Carry OutThe
Plans
Marketing Analysis of Company’s SituationMarketing Analysis of Company’s Situation
Control
MeasureResults
EvaluateResults
TakeCorrective
Action
Managing the Marketing Effort (Fig. 2.7)
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Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
Contents of a Marketing Plan(Table 2.2)
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Marketing StrategyMarketing Strategy
Marketing PerformanceMarketing Performance
Implementation
Climate andCulture
ActionPrograms
Decisionand
RewardOrganizationalStructure
HumanResources
Marketing Implementation
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MarketManagement
CombinationPlan
ProductManagement
Geographic
Functional
Ways to Carry Out Marketing Activities
Marketing Department Organization
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Marketing Control Process
(Fig. 2.8)
Set Goals
Measure Performance
Evaluate Performanc
e
Take Corrective
Action
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Review of Concept Connections
Explain companywide strategic planning and its four steps.
Discuss how to design business portfolios and growth strategies.
Explain functional planning strategies and asses marketing’s role in strategic planning.
Describe the marketing process and the forces that influence it.
List the marketing management functions, including the elements of a marketing plan.
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