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Marketing: An Introduction
Armstrong, Kotler
Chapter Two
Strategic Planning and the
Marketing Process
Looking Ahead
• Explain companywide strategic planning and
its four steps.
• Discuss business portfolio design and
strategies.
• Explain marketing’s role in strategic planning
and the importance of value chains and
networks.
• Describe the elements of a customer-driven
marketing strategy and mix.
• List the marketing management functions and
elements of a marketing plan.
What Is 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.
Steps in Strategic Planning
We look first at the organization’s overall strategic
planning, then we discuss how marketers
guided by the strategic plan, work closely
inside and outside the company to serve
customers, finally we examine marketing
strategy and planning.
Corporate level
1. Define the company mission.
2. Set company objectives and goals.
3. Design the business portfolio. Figure 1
Business unit, product and market levels.
–
Plan marketing and other functional strategies.
Steps in Strategic Planning
Figure 1
Defining the
Company
mission
Setting company
Objectives & goals
Designing the
Business portfolio
Planning marketing
And other functional
strategies
Corporate level
1- Defining a clear company mission: “Purpose”
• Mission Statement of marketing unit ; should be realistic,
specific, motivated, and should fit the market environment.
• Examples;
Company
Disney
Mercedes
Product-oriented definition Market-oriented definition
We run theme Parks
We create fantasies- a
place where is America
still works the way it’s
supposed to.
We build cars
With a leadership position in
the industry comes a
responsibility to give back
Corporate level
2- Setting company objectives and goals
• The company’s mission needs to be turned into
detailed supporting objectives for each level of
management. Mission leads to business objectives
and marketing objectives.
• Example; if the business over all objective is to
“increase the company market share”. marketing
strategic plan might increase products availability
and promotion, and that may require more sales
people and more budget. Figure 2
Figure 2
Marketing
Mission
Statement
Marketing
Objective # 1
Marketing
Strategy
Marketing
Strategy
Marketing
Objective # 2
Marketing
Strategy
Marketing
Objective # 3
Marketing
Strategy
Marketing
Strategy
Market level
3- 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 (SBUs).
– Decide which SBUs should receive more, less
or no investment.. Figure 3
4- Developing strategies for growth and downsizing;
Example; product/ market expansion grid. Figure 4
Analyzing the current business portfolio
Using; growth share matrix
developed by Boston consulting Group ( BCG)
The objective is which question marks can be turned to Starts, and
Which starts can be turned into cash flows, and clear decisions about dogs
Stars
Question Marks
?
• High growth market & high share • High growth, low market share
• Profit potential
“Require a lot of cash to
“May require heavy
hold market share”
investment to grow”
Cash Cows
• Low growth market, high share
• we have to establish, successful
SBU’s
“ Less investment, but a lot
Of cash”
Dogs
• Low growth market & share
• Low profit potential
“ low cash flow may be
generated”
Potential Matrix Problems
• Can be time consuming and costly.
• Difficult to define SBUs and measure
market share and growth.
• Focus on the current business, not future
planning.
• Can place too much emphasis on growth.
• Can lead to poorly planned
diversification.
Market level
4- Developing strategies for growth and downsizing;
Example; product/ market expansion grid. Figure 4
Strategies for growth business
Market penetration; making more sales to current
customers without changing its products. By
improving services, re prices, menu selection.
Market development; opening new market for the
existing products. New market target, international
market.
Product development; new product for current market.
Add a breakfast special, buy one get one free….
Diversification; Buy businesses of outside of its
current products and markets. Starbuck coffee
sells music CDs.
Analyze Opportunities by Tim Horton’s
• Product-Market Expansion Grid identifies
four potential growth areas. Figure 4
Existing
Products
New
Products
Existing
Markets
Market
Penetration
Product
Development
New
Markets
Market
Development
Diversification
Marketing strategy and the marketing mix
Marketing strategy; marketing logic to by which
the company hopes to achieve a profitable lifelong relationship with customers.
It involves deciding which customers to serve
(segmentation and targeting) and with what value
proposition ( differentiation and
positioning),Figure 5
Figure 5
Intermediaries
Competitors
product
place
Customer
price
positioning
promotion
Publics
Suppliers
Factors
Influencing
Company
Marketing
The Four P’s
Market segmentation; dividing the market into different groups
of buyers who have different needs, and who might
require separate products or marketing mix.
Target marketing; the process of evaluation each market
segment’s attractiveness and selecting one ore more
segments to enter.
Market positioning; placing a product to occupy a clear and
desirable place relative to competitors in consumer’s
minds. Blazer “ Like a rock”. Lexus ” The passionate
pursuit of excellence’.
Marketing Mix; set of controllable tactical marketing tools
(Product, price, place, promotion) to influence the
demand for its product in the market.
Create Marketing Mix
• Product – offers the right product,
service or experience.
• Price – controls perceived value and
satisfaction.
• Place – allows customers easy access
to product and support.
• Promotion – communicates the offer
and the value proposition. Figure 6
•
• Developing Marketing Mix
Figure 6
Product
Price
•Varity
•Quality
•Design
•Features
•Brand name
•Packaging
•services
•List price
•Discounts
•Allowances
•Payment period
•Credit terms
Target customers
Promotion
Intended
Positioning
•Advertising
•Personal selling
•Sales promotion
•Public relation
Place
•Channels
•Coverage
•Assortments
•Locations
•Inventory
•Transportation
•Logistics
The Four Ps and the Four Cs
• PRODUCT provides CUSTOMER SOLUTION
• PRICE represents CUSTOMER COST
• PLACE provides CONVENIENCE
• PROMOTION is 2-way COMMUNICATION
Manage Marketing Effort
• Build strong operational marketing plan.
• Carry out the plan.
– Organize marketing department.
– Leverage value chain and value network.
• Exercise control.
– Set goals.
– Measure and evaluation performance.
• Take corrective action. Figure 7
• Marketing analysis;
It’s the process of planning, implementing, and control
Analysis
Planning
Implementation
Control
Develop strategic
plans
Carry out the plan
Measure results
Evaluate results
Develop marketing
plans
Take corrective
Action