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Marketing
Chapter 4
Marketing Planning and
Organization Strategy
Gilbert A. Churchill, Jr.
Irwin/McGraw-Hill
J. Paul Peter
© The McGraw-Hill Companies, Inc., 1998
Slide
4-1
Strategic Planning Responsibilities
Top
Management
Strategic
Planning
Long
Term
definition: activities that lead to the development of a clear organizational mission,
organizational objectives and the strategies that enable the organization to achieve its
objectives.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998
Slide
4-2
Tactical Planning Responsibilities
Top
Management
Strategic
Planning
Middle
Management
Tactical
Planning
Medium
Term
definition: involves the creation of objectives and strategies aimed at attaining goals
for specific divisions or departments over a medium time frame.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998
Slide
4-3
Operational Planning Responsibilities
Top
Management
Strategic
Planning
Middle
Management
Tactical
Planning
Lower
Management
Operational
Planning
Short
Term
definition: involves the creation of objectives and strategies for individual operating
units over a short time span.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998
Slide
4-4
Figure
4.1
The Strategic Planning Process
Information
Implementation
The Environment
The Organizations Strategic Plan
Organizational
Mission
Organizational
Objectives
Organizational
Strategies
Source: J. Paul Peter and James H. Donnelly, Jr., A Preface to Marketing
Management, 7th ed. (Burr Ridge, Ill.: Irwin, 1997), p. 10.
Organizational
Portfolio Plan
Slide
4-5
Figure
4.3
Growth Strategies:
Product Market Matrix
Present
Products
New
Products
Present
Customers
Market
Penetration
Product
Development
New
Customers
Market
Development
Diversification
Products
Markets
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998
Slide
4-6
Table
4.1
Examples of SWOT Issues
Internal Environment
Strengths
Weaknesses
Financial Resources
Lack of Strategic Direction
Well-known brands
High Costs
Technological Skills
Obsolete Facilities
External Environment
Opportunities
Threats
Potential New Markets
New Competition
Potential New Products
Slow Market Growth
Falling International Trade
Barriers
New Regulations
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998
Slide
4-7
The Boston Consulting Group Matrix
High
Industry
Growth
Rate
Low
High
Irwin/McGraw-Hill
Market Share
Low
© The McGraw-Hill Companies, Inc., 1998
Slide
4-8
Table
4.2
Some Questions for Evaluating
a Marketing Plan
• Are the objectives clear? Specific? Measurable? Challenging, but
achievable? Written?
• Have the industries that are growing been identified? Those that are
stagnant? Those that are declining?
• Who are the principal competitors?
• What are the organization’s strengths? Weaknesses?
• Does the plan take advantage of the organization’s special
competencies and vulnerabilities?
• What are the target markets?
• Do our products and services appeal to the needs and wants of the
target markets?
• What are the best ways to promote the products to customers?
• Where do customers like to purchase?
• How do our prices compare with the competition?
• What are the costs and benefits of the plan?
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998
Slide
4-9a
Table
4.3
Forecasting Techniques
Technique
Benefits
Qualitative Methods
Limitations
Jury of
Executive
Opinion
Quick; simple; opinions come
from executives with expertise in
different departments; useful for
new or innovative products
Data typically must be broken
down by product. region, etc.;
consumes time of executives;
may not give greatest weight
to those with most expertise.
Sales Force
Composite
Providing number can
motivate salespeople;
salespeople know customers,
product and competitors.
Salespeople have a vested
interest, so they may give
biased estimates.
Survey of
Buyer
Intentions
Based on estimates obtained
directly from buyers; can
provide detailed information;
often provides insight into
buyer’s thinking; can be used
for new products.
Intention to buy may not result
in actual purchase; expensive;
time consuming; useful only
when there are a few, welldefined potential customers.
Delphi
Technique
Estimators less likely to
succumb to group pressure.
Time consuming; expensive.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998
Slide
4-9b
Table
4.3
Forecasting Techniques
Technique
Benefits
Quantitative Methods
Limitations
Trend
Analysis
Quick; inexpensive; effective
when demand and environmental
factors are stable.
Assumes future is
continuation of past; does not
consider marketing plans or
changes in environment; not
useful for new or innovative
products.
Exponential
Smoothing
Same benefits as trend
analysis but emphasizes more
recent data.
Same limitations as trend
analysis but not as severe
because of emphasis on more
recent data.
Market Tests
Provide more realistic
information because based on
actual purchases rather than
intent to buy; permits
assessment of effects of
marketing plan; useful for new
or innovative products.
Time consuming; expensive;
alerts competition to
organization’s plans.
Irwin/McGraw-Hill
© The McGraw-Hill Companies, Inc., 1998