mm-ii-4 strategic plg & mktg process
TRANSCRIPT
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DEVELOPING MARKETING
STRATEGIES AND PLANS
4
Refer Chapter 2 of Text Book
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Sell the product
The Value-Delivery ProcessThe Value-Delivery Process
Make the product
ProcureDesignproduct Make Price Sell
Advertise/promote Distribute Service
Choose the Value Provide the Value
Communicate the Value
(a) Traditional physical process sequence
(b) Value creation & delivery sequence
Strategic marketing Tactical marketing
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Figure 2.2 Porters Value ChainFigure 2.2 Porters Value Chain
The value chain is a tool for identifying ways to create more customer
value because every firm is a synthesis ofprimary and support activitiesperformed to design, produce, market, deliver, and support its product.
Value chain analysis helps to identify resources and capabilities that can
add value.
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Characteristics of Core CompetenciesCharacteristics of Core Competencies
A source of competitive advantage
Applications in a wide variety of markets
Difficult for competitors to imitate
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What is a Marketing Plan?What is a Marketing Plan?
A marketing plan is the central instrument for
directing and coordinating the marketing effort.
It operates at a strategic and tactical level.
Strategic
Target marketing
decisions
Value proposition
Analysis of
marketing
opportunities
Tactical
Product features
Promotion
Merchandising
Pricing
Sales channels
Service
Strategic Planning is the process of developing and maintaining a
strategic fit between the organizations goals and capabilities and its
changing marketing opportunities, with the objective of long term survival
and growth.
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Figure 2.4 The Strategic Planning,
Implementation, and Control Processes
Figure 2.4 The Strategic Planning,
Implementation, and Control ProcessesLevels of Planning:
Corporate and division strategic planning
Business unit (SBU) planning
Functional Planning (e.g., The marketing plan)
Product level planning
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Steps in Strategic PlanningSteps in Strategic Planning
Statement of an
organizations
purpose; should
be market
oriented
Supporting goals
and objectives to
guide the entire
company.
Collection of
businesses and
products that
make up the
company.
Detailed planning
for each department
designed to
accomplish strategic
objectives.
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Corporate Headquarters PlanningCorporate Headquarters Planning
Corporate Headquarters planning activities:
Define the corporate mission
Establish strategic business units (SBUs) Assign resources to each SBU
Assess growth opportunities Plan new businesses;
downsize older businesses
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Market-Oriented Mission StatementMarket-Oriented Mission Statement
The mission statement is the organizations purpose, whatit wants to accomplish in the larger environment
Market-oriented mission statement defines the business in
terms of satisfying basic customer needs
Mission Statement should answer the following questions:
What is our business?
Who is the customer?
What do our customers value?
What should our business be?
Mission statements should be market oriented, fit the
market environment, realistic, specific, be based on
distinctive competencies, be motivating
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2000 Prentice Hall2-10 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
Good Mission StatementsGood Mission Statements
Focus on limited number of goals
Stress major policies and values
Define major competitive spheres
Take a long-term view
Short, memorable, meaningful
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Table 2.3: Product Oriented vs. Market
Oriented Definitions of Business
Table 2.3: Product Oriented vs. Market
Oriented Definitions of Business
Company Product Market
Missouri-Pacific
Railroad
We run a railroad We are a people-
and-goods mover
Xerox We make copying
equipment
We improve office
productivity
Standard Oil We sell gasoline We supply energy
Columbia Pictures We make movies We entertain
people
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Strategic Business Unit (SBU)Strategic Business Unit (SBU)
A unit of the company that has a separate mission andobjectives and that can be planned independently from
other company businesses.
Can be a company division, a product line within a
division, or sometimes a single product or brand.
It is a single business or collection of related businesses
It has its own set of competitors
It has a leader responsible for strategic planning and
profitability
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Analyzing the Current Business PortfolioAnalyzing the Current Business Portfolio
Identify key businesses (strategic business units, or SBUs)
that make up the company
Assess the attractiveness of its various SBUs
Decide how much support each SBU deserves
The business portfolio is the collection of businesses
and products that make up the companyPortfolio analysis is a major activity in strategic
planning whereby management evaluates the
products and businesses that make up the company
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High growth & share; highprofit potential
May need heavyinvestment to grow
Eventually, growth will slow
Low growth, high share Established successful
SBUs Produces cash
Low share SBUs in highgrowth markets
Require cash to holdmarket share
Build into Stars or phase out
Low growth & share;low profit potential
Generate cash tosustain self
Do not promise to becash sources
Analyzing Current SBUs:
Boston Consulting Groups (BCG)
Growth-Share Matrix
Analyzing Current SBUs:
Boston Consulting Groups (BCG)
Growth-Share Matrix
10x 4x 2x 1.5x 1x .5x .4x .3x .2x .1x
20%-
18%-
16%-
14%-12%-
10%-
8%-
6%-
4%-2%-
0
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MARKETATTRACTIVENESS
MARKETATTRACTIVENESS
5.005.00
3.673.67
2.332.33
1.001.00
Low
Low
Me
dium
Me
dium
Hig
h
Hig
h
Reliefvalve
Flexiblediaphragms
Fuel
pumps
Aerospacefittings
Clutches
Hydraulicpumps
Joints
StrongStrong MediumMedium WeakWeakBUSINESS STRENGTHBUSINESS STRENGTH
1.001.002.332.333.673.675.005.00
Invest/grow Selectivity/earnings Harvest/divest
Analyzing Current SBUs:
GE Strategic Business Planning Grid -MarketAttractiveness Competitive Position PortfolioClassification
Analyzing Current SBUs:
GE Strategic Business Planning Grid -MarketAttractiveness Competitive Position PortfolioClassification
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Figure 2.5 The Strategic Planning GapFigure 2.5 The Strategic Planning Gap
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Three Intensive Growth Strategies:
Ansoffs Product/Market Expansion Grid
Three Intensive Growth Strategies:
Ansoffs Product/Market Expansion Grid
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Growth at StarbucksGrowth at Starbucks
To maintain its phenomenalgrowth in an increasingly over-caffeinated marketplace,Starbucks has brewed up anambitious, multi-pronged growth
strategy.
Product/market
expansion grid is a
tool for identifying
company growth
opportunities through
market penetration,
market development,
product development,
or diversification
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Product/Market Expansion Grid Based
on Starbucks
Product/Market Expansion Grid Based
on Starbucks Market Penetration: More sales to current customers without changing
products.
How? Add new stores in current market areas; improve advertising,
prices, menu, service.
Market Development: Identify and develop new markets for currentproducts.
How? Review new demographic (seniors/ethnic consumers) or
geographic (Asian, European, Australian, & South American) markets.
Product Development: Offer modified or new products to current
markets.
How? Add new flavors, add food offerings, sell coffee in
supermarkets, co-brand products.
Diversification: Start up or buy businesses outside current products and
markets.
How? Making and selling CDs, testing restaurant concepts, or
branding casual clothing.
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2000 Prentice Hall2-20 Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall
Figure 2.7: The Business Unit
Strategic Planning Process
Figure 2.7: The Business Unit
Strategic Planning Process
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SWOT AnalysisSWOT Analysis
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Market Opportunity Analysis (MOA)Market Opportunity Analysis (MOA)
Can the benefits involved in the opportunity be articulatedconvincingly to a defined target market?
Can the target market be located and reached with cost-
effective media and trade channels?
Does the company possess or have access to the criticalcapabilities and resources needed to deliver the customer
benefits?
Can the company deliver the benefits better than any
actual or potential competitors?
Will the financial rate of return meet or exceed the
companys required threshold for investment?
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Threat MatrixThreat Matrix
1. Competitor develops asuperior lighting system
2. Major prolonged economic
depression
3. Higher costs
4. Legislation to reduce
number of TV studio
licenses
1
4
2
3
HighHigh
LowLow
HighHigh LowLow
Ser
iousness
Ser
iousness
Probability of OccurrenceProbability of Occurrence ThreatsThreats
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Porters Generic StrategiesPorters Generic Strategies
Overall Cost Leadership
Differentiation
Focus
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Marketing Plan ContentsMarketing Plan Contents
Executive summary
Table of contents
Current marketing situation analysis
Analysis of threats & opportunities Marketing objectives & issues
Marketing strategy
Acton programs
Marketing budget,
projected profit & loss Implementation controls