Download What is Strategic Planning?

Chapter 1
Strategic Planning and the Marketing
Management Process
Key Terms
Marketing Concept, Customer Needs, American Marketing
Association, Customers, Employees, Investors, Strategic
Planning, Mission Statement, Organizational Objectives,
Organizational Strategies, Competitive Advantage,
Organizational Portfolio Plan, The Marketing Management
Process, Marketing Planning, Implementation and Control of the
Marketing Plan, Marketing Information Systems and Marketing
Research, Cross-functional Strategic Plan
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The Marketing Concept
 An organization should seek to make a profit by
serving needs of customers
 Purpose of marketing concept is to rivet attention of
marketing managers on serving broad classes of
customer needs
 Principal task of marketing function operating under
marketing concept is to find effective and efficient
means of making the business do what suits
interests of customers
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What is Marketing?
 “The process of planning and executing
conception, pricing, promotion and distribution of
ideas, goods and services to create exchanges that
satisfy individual and organizational goals”
– The American Marketing Association
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What is Strategic Planning?
 True mission of an organization is to provide value
for three key constituencies
 Customers
 Employees
 Investors
 Objectives and strategies established at the top
level provide context for planning in each of the
divisions and departments
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What is Marketing?
Major Types of Marketing
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Strategic Planning and Marketing
Management
 Includes all activities that lead to development of a
clear organizational mission, objectives, and
appropriate strategies
 Plays a key role in achieving an equilibrium
between short and long term, by balancing
acceptable financial performance
 Prepares for inevitable changes in markets,
technology, and competition, as well as in
economic and political arenas
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The Strategic Planning Process
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The Strategic Planning Process
 Mission statement – In developing a mission
statement, management must take into account
 Organization’s history
 Organization’s distinctive competitiveness
 Organization’s environment
 Mission statement should be
 Focused on markets rather than products
 Achievable
 Motivational
 Specific
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The Strategic Planning Process
 Organizational objectives
 End-points of an organization’s mission and are what it
seeks through on-going, long-run operations
 Organizational strategies
 Involves choice of major directions organization will take
in pursuing its objectives
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The Strategic Planning Process
Sample Organizational Objectives (Manufacturing Firm)
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The Strategic Planning Process
 Organizational growth based on products and markets
 Market penetration strategies
 Market development strategies
 Product development strategies
 Diversification
 Organizational strategies based on competitive
advantage
 Ability to outperform competitors in providing something
that the market values
 Porter suggests strategies based on cost leadership and
differentiation
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The Strategic Planning Process
Organizational Growth Strategies
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The Strategic Planning Process
 Organizational strategies based on value
 “Customer value” has become critical for marketers as
well as customers
 Firms must seek to build long-term relationships with their
customers by offering unique value
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The Strategic Planning Process
 Choosing an appropriate strategy
 Management should select those strategies consistent
with its mission and capitalize on the organization’s
distinctive competencies
 Sustainable competitive advantage can be based on
either the assets or skills of the organization
 Key to sustaining a competitive advantage is to
continually focus and build on the assets and skills that
will lead to long-term performance gains
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The Strategic Planning Process
 Organizational portfolio plan
 Organizations at a particular time are a portfolio of
businesses – product lines, divisions, schools
 Management must decide which businesses to build,
maintain, or eliminate, or which new businesses to add
 Organizations can create strategic business units
(SBUs) which could be a single product, product line, or
division
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The Marketing Management Process
 Complete Strategic Plan
 Facilitates development of marketing plans for each
product, product line, or division of the organization
 Marketing plan serves as a subset of strategic plan
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The Marketing Management Process
 Defined as “the process of planning and executing the
conception, pricing, promotion, and distribution of
goods, services, and ideas to create exchanges with
target groups that satisfy customer and organizational
objectives”
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The Marketing Management Process
Strategic Planning and Marketing Planning
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The Marketing Management Process
 Situation analysis
 Cooperative environment
 Competitive environment
 Economic environment
 Social environment
 Political environment
 Legal environment
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The Marketing Management Process
 Marketing planning
 Establishing marketing objectives
 Selecting the target market
 Developing the marketing mix
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The Marketing Management Process
 Implementation and control of marketing plan
 Implementation involves putting the plan into action and
performing marketing tasks according to the predefined
schedule
 Controlling involves three basic steps
 Measuring results of implemented marketing plan
 Comparing results with objectives
 Making decisions on whether plan is achieving objectives
 Marketing information systems and marketing
research
 Need for current, reliable, and valid information
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The Strategic Plan, The Marketing Plan,
and Other Functional Area Plans
 Strategic planning is a top-management responsibility
 All strategic planning has marketing implications
 Marketing objectives and strategies must be derived
from the strategic plan
 Planning done in all functional areas of the
organization should be derived from strategic plan
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The Strategic Plan, The Marketing Plan,
and Other Functional Area Plans
The Cross-Functional Perspective in Planning
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The Strategic Plan, The Marketing Plan,
and Other Functional Area Plans
A Blueprint for Management Action: Relating the Marketing Plan to the
Strategic Plan and the Production Plan
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Appendix – Portfolio Models
Portfolio Theory – Experience Curve and Resulting Profit
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Portfolio Models – BCG Model
The Boston Consulting Group Portfolio Model
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Portfolio Models – The General
Electric Model
The General Electric Portfolio Model
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Portfolio Models – The General
Electric Model
Components of Industry Attractiveness and Business Strength
at GE
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