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Principles of Marketing
SESSION - 7,8,9
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Strategic planning)
Goal: Indicates what business unit want to achieve. Businesses
have both short-term goal and long-term goals.
Strategy: strategy is a game plan to achieve the goal
Strategic planning

Involves setting up a strategy that your business is going to
follow over a defined time period.

It can be for a specific part of the business, like planning a
marketing strategy, or for the business as a whole
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Strategic Planning
Mission:

The business purpose is often also called the mission of the business

It is a brief statement about why the business exists - what you want to
achieve.

Nike's Mission Statement, "To be the world's leading sports and
fitness company."
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Strategic planning
Strategic Planning at the corporate level involves the
following steps
1.
Defining the corporate mission
2.
Establishing strategic Business Unites
3.
Assigning resources to each SBU
4.
Planning New businesses, downsizing, or terminating older
businesses
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Strategic Planning
1.
Defining the corporate mission:

Mission is what the company aspire to become

Every company will have a mission and all its operations are
directed towards the mission
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ITC’s Mission and Vision

Mission: To enhance the Wealth generating
capability of the enterprise in a globalizing
environment, delivering superior and sustainable
stakeholder value

Vision :Sustain ITC’s position as one India’s most
Valuable corporations through world class
performance, creating growing value for the Indian
economy and the company stakeholders
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Strategic Planning
2.
Establishing strategic business units:

Companies operate several businesses – Tata Group,
Reliance Group etc

Its better if those companies come up with a market oriented
definition of business instead of product oriented definition.

Market oriented definition of an asthma curing tablet/syrup
can be –” We help you breathe better” than saying we
produce medicines for asthma
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Strategic Planning
Characteristics of strategic Business Units:
1.
It is a single business or collection of related business that
can be planned separately from the rest of the company
2.
It has its own set of competitors
3.
SBU has its own manager who is responsible for strategic
planning to meet its goal
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Evaluating SBU- Boston Consulting
Group Approach ( BCG)
Growth - Share Matrix;
Market
Growth
Rate
Stars
Cash Cows
Question
Mark?
Dogs
Relative Market Share
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Strategic Planning
Question Marks:

Businesses which operates in high growth markets and have low
relative market share

A question mark may become the market leader and needs a lot of
money spend on it

Companies sometimes contemplate to spend money on them
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BCG Matrix
Stars:

Market leader in a high growth market

It need not generate a lot of cash for the company

Companies spend a lot of money on stars to keep pace with the
competition
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Strategic Planning
Cash cows:

They are normally stars with a declining growth rate and have the
largest relative market share

Generates a lot of cash for the company

Companies will not spend money on them since the growth rate is
falling
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Strategic Planning
Dogs:

Businesses that have weaker market shares and low growth rates

Companies may either hold these businesses or call off
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Strategic Planning
SBU Life cycle :
Question Marks
stars
Cash cows
Dogs
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Strategic Planning
3.
Assigning resources to each SBU:
companies can do the following depending upon their
decisions

Hold - Strong cash cows

Build – cash cows,

Harvest – question marks and dogs

Divest – dogs
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Strategic Planning
4.
Planning new businesses, downsizing older businesses:
Depending upon the projected sales and profit for the forthcoming
years. Companies can develop or acquire new businesses. They
have the following options

Intensive growth – Expand current businesses

Integrative growth – Acquire related new businesses

Diversification growth – Acquire unrelated new businesses
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Strategic Planning processes –
Business Unit Level
Business
mission
SWOT
analysis
Goal
formulation
Strategy
formulation
Program
formulation
Implementation
Feedback and
control
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Strategic Planning processes
1.
Mission –
What is the purpose of the business
2.
SWOT Analysis –
Strengths
weaknesses
opportunities
Threats
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SWOT Analysis

SWOT analysis is an important tool for auditing the
overall strategic position of a business and its
environment.

In SWOT, strengths and weaknesses are internal
factors. For example: A strength could be:
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SWOT Analysis - Strengths






Technological Skills
Leading brands
Distribution channels
Customer loyalty/relationships
Production quality
Location of your business .
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SWOT Analysis - Weaknesses






Weak brands
Poor access to distribution
Low customer retention
Unreliable product or service
Location of your business
Damaged reputation
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SWOT Analysis -Opportunities









Changing customer tastes
Liberalization of geographical markets
Technological advances
Changes in government policies
Lower taxes
New distribution channels
Mergers, Joint Ventures
A new international market
A market vacated by an ineffective competitor
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SWOT Analysis - Threats







Changing customer tastes
Closing of geographical markets
Technological advancements
Changes in government policies
Tax increases
A new competitor in your home market
Competitor has a new, innovative product or service
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SWOT Analysis of Dell
computers
Strengths
 Is the world’s largest PC maker
 Highly reputed brand
 Cuts retailer and sell products directly to consumer
 Very good customer service– dell connect
Weaknesses
 Dell is not a computer manufacturer, but a computer
maker
 Relies on hi-tech component manufacturers
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SWOT Analysis of Dell
computers




Opportunities
Being a global company, dell has got a very large market
to serve
Dell is following diversification strategy, adding new pdts
to its range
Threats
Competition is intense all over the world for dell
Exposed to fluctuations in the world currency market,
since they need to pay component manufacturers from
different part of the world
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Strategic Planning processes
3.
Goal formulation -

To acquire 20% market share in the next five years

To open 20 another stores in Tamilnadu by 2009

To become the No.1 brand for soaps in the
Country
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Strategic Planning processes
4.
Strategy formulation

Overall cost strategy

Differentiation strategy

Focus strategy
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Strategic Planning processes
5.
Program formulation and Implementation

Overall cost leadership strategy – Look and organise for
suppliers and raw materials that are cheap and with
acceptable quality

Technological leadership – strengthen R & D, gather
technological intelligence, develop leading edge products
and develop ads to communicates its technological
leadership
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Strategic Planning processes
6.

Feedback and control
Keeping an eye on the market changes and
the competitors offering and change
strategies accordingly
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Contents of The Marketing Plan
A Marketing plan will consist of the following
1.
Executive Summary & Table of Contents
•
Main goals & Recommendations
Table of contents follows executive summary
•
2.
•
Current marketing situation
Will have the sales figure, profit, competitors
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Contents of The Marketing Plan
3.
Opportunity & Issue
•
SWOT Analysis of the product or industry will be given
4.
Objectives
•
Marketing goals are outlined here such as expected sales
volume by the end of the year, a quarter and the profit
expected
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Contents of The Marketing Plan
5.
Marketing strategy


Defining target segment
Game plan to achieve the target
6.
Action programs

Should describe actual marketing programme
What will be done? When will be done? who will do? Cost of
the action and how will it be measured

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Contents of The Marketing Plan
7.
Financial projections
•
Expenses ----- Revenue side = Projected profit
8.
Implementation & control
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