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Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 1
MKTG
2CHAPTERStrategic Planning for Competitive Advantage
Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 2
Strategic Planning
The managerial process of
creating and maintaining a fit
between the organization’s
objectives and resources and
evolving market opportunities.
The goal is long-term
profitability and growth.
StrategicPlanning
StrategicPlanning
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Levels of Strategy
Corporate Level Business Unit Level
• SBU’s Functional Level Operational Level
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Strategic Planning
A …………….that acts as a
guidebook of marketing activities
for the marketing manager.
Marketing PlanMarketing Plan
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Marketing Plan
Elements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Objectives
Situation or SWOT Analysis
Target Market Strategy
ImplementationEvaluation
Control
Promotion
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Step 1:Defining the Business Mission
Answers the question, “What business are we in?”
Focuses on the market(s) rather than the good or service
Strategic Business Units (SBUs) may also have a mission statement
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Business Mission Statement
Q: What business are we in?
A: Business mission statement
Too narrowToo broadJust right
…………………….no directionfocus on marketsserved and benefitscustomers seek
Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 8
LO1
Marketing Plan
Elements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Objectives
Situation or SWOT Analysis
Target Market Strategy
ImplementationEvaluation
Control
Promotion
Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 9
Step 2: Defining objectives
Marketing Objective
A statement of what is to
be accomplished through
marketing activities.
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Marketing ObjectivesLO3
Realistic
Measurable
Time specific
Consistent with and indicating the priorities of the organization
“Our objective is to achieve 10 percent dollar market share in the cat food market within 12
months of product introduction.”
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LO4
Step 3: Situation or SWOT Analysis
Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)
SWOT AnalysisSWOT Analysis
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SWOT Analysis
©South-Western College Publishing
SSWWOOTT
………………………………………….………………………………………….
Things the company does not do well.Things the company does not do well.
Conditions in the external environment that favor ……………...Conditions in the external environment that favor ……………...
Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.
Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.
Internal
External
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A strength could be:
?
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A weakness could be
?
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LO4
Environmental Scanning
The collection and
interpretation of information
about forces, events, and
relationships in the external
environment that may affect the
future of the organization or the
implementation of the
marketing plan.
EnvironmentalScanning
EnvironmentalScanning
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An opportunity could be
?
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A threat could be
?
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Step 4: Marketing Strategy
LO7
The activities of selecting and
describing one or more target
markets and developing and
maintaining a marketing mix
that will produce mutually
satisfying exchanges with target
markets.
MarketingStrategy
MarketingStrategy
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Identifying opportunities through STP
Segmentation
……………………
Positioning
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Competitive Advantage
CompetitiveAdvantage
CompetitiveAdvantage
The set of unique features of a
company and its products that
are perceived by the target
market as significant and
superior to the competition.
Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 21
Competitive Advantage: Is there ever no competition?
Niche StrategiesNiche Strategies
CostCost
Product/Service Differentiation
Product/Service Differentiation
Types of Competitive Advantage
Types of Competitive Advantage
Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 22
Cost Competitive Advantage
Cost Competitive Advantage
Cost Competitive Advantage
Being the low-cost
competitor in an industry
while maintaining
satisfactory profit
margins.
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Product/Service Differentiation
Product/ServiceDifferentiation Competitive Advantage
Product/ServiceDifferentiation Competitive Advantage
The provision of
something that is unique
and valuable to buyers
beyond simply offering a
lower price than the
competition’s.
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Niche Competitive Advantage
Niche Competitive Advantage
Niche Competitive Advantage
The advantage achieved
when a firm seeks to
target and effectively
serve a small segment of
the market.
Twitter or Facebook?
Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 25
Sources of Sustainable Competitive Advantage
PatentsPatents
CopyrightsCopyrights
LocationsLocations
EquipmentEquipment
TechnologyTechnology
Customer ServiceCustomer Service
PromotionPromotion
Skills and Assets
of anOrganization
Skills and Assets
of anOrganization
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Growth Strategies
6
Diversification =
Product development = ________
Market development = ________
Market penetration =share
new productsnew markets
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Portfolio Matrix
Stars
Cash Cows
ProblemChildren
Dogs
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Target Market Strategies
Entire MarketMultiple Market
SegmentsSingle Market
Segment
Target Market Options
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The Marketing Mix
A unique blend of product,
distribution, promotion, and
pricing strategies designed to
produce mutually satisfying
exchanges with a target market.
Marketing MixMarketing Mix
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Marketing Mix: The “Four Ps”
The starting point of the “4 Ps”
Includes Physical unit Package Warranty Service Brand Image Value
Product
Products can be… Tangible goods Ideas Services
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Marketing Mix: The “Four Ps”
Product availability where and when customers want them
All activities from raw materials to finished products
Ensure products arrive in usable condition at designated places when needed
Place
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Marketing Mix: The “Four Ps”
Promotion
Online
Role is to bring about exchanges with target markets by: Informing Educating Persuading Reminding
Includes integration of: Personal selling Advertising Sales promotion Public relations
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Marketing Mix: The “Four Ps”
Price Price is what a buyer
must give up to obtain a product.
The most flexible of the “4 Ps”-- quickest to change
Competitive weapon
Price x Units Sold = Total Revenue
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Step 5: Following Up on the Marketing Plan
Implementation
Evaluation
Control
Marketing audit is… Comprehensive Systematic Independent Periodic
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Check Yourself
1. What are the five steps in creating a marketing plan?
2. What tool helps a marketer conduct a situation analysis?
3. What is STP?
Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved
Check Yourself
1. What are the four growth strategies?
2. What type of strategy is growing the business from existing customers?
3. Which strategy is the riskiest?