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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