Download 20-Strategic Marketing Planning

Dr Zain Yousafzai
Strategic Marketing Planning
Chapter 20 (page 556-581)
Strategic Marketing planning
Planning as Part of Management
The management process, as applied to marketing, consists of following:
The planning stage includes.
Setting goals
Developing both strategies and tactics to reach these goals
The implementation stage entails.
Designing and staffing the marketing organization and then directing the actual operation of the
organization according to the plan
The evaluation stage consists ofAnalyzing past performance in relation to organizational goals
The Nature of Planning
Planning is very important before the decisions. Planning is deciding now what to do later, including how
and when to do it. Without a plan, we cannot get any thing done effectively, because we do not know what
needs to be done or how to do it. Management should first decide what it intends to accomplish as a total
organization and develop a strategic plan to achieve these results.
Essential Planning Concepts  Mission:
An organization’s mission states what customers it serves, what needs it satisfies, and what types of
products it offers. A mission statement indicates, in general terms, the boundaries for an organization’s
activities.
Objectives and Goals: (Differences between objectives and goals)
Goals are the overall achievements of objectives.
An objective is simply a desired outcome.
Effective planning must begin with a set of objectives that are to be achieved by carrying out plans.
Objective should be:
Clear and specific
Stated in writing
Ambitious, but realistic
Consistent with one another
Quantitatively measurable when possible
Tied to a particular time period
Strategies and Tactics:
A strategy is a broad plan of action by which an organization intends to reach its objectives and, in turn, to
fulfill its mission. A tactics is a means by which a strategy is implemented. Tactic is a more specific, detailed
course of action than a strategy. Tactics generally cover shorter periods than strategies.
Key Questions for an Organization:
The concepts of mission, objectives, strategies, and tactics raise important questions that must be
answered by an organization seeking success in business or, more specifically, in marketing.
Scope of Planning
Planning may cover long or short periods. Long range planning deals with company wide issues such as
expanding or contracting production, markets, and product lines. Long range planning typically covers three
years or five years or less and responsibility of top-level management. Short range planning typically
covers one year or less and is the responsibility of middle and lower level managers.
Marketing (Fourteenth Edition)
Etzel, Walker, Stanton.
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Dr Zain Yousafzai
Strategic Marketing Planning
Chapter 20 (page 556-581)
Strategic Company Planning
Strategic company planning consists of four essential steps.
1. Define the organizational mission: The firs step influences subsequent planning. For some firms.
All that needs to be done is to review the existing mission statement and confirm that it is still
suitable. However, this straightforward step is too often ignored.
2. Analyze the situation: A situation analysis consists of gathering and studying information pertaining
to one or more specified aspects of and organization.
3. Set organizational Objective: The third step in strategic company planning, deciding on a set of
objectives, guiding the organization in fulfilling its mission. Objectives also provide standards for
evaluating performance.
4. Select strategies to achieve these objectives: The fourth steps, selecting appropriate strategies,
indicate how the firm is going to get there. Organizational strategies represent broad plans of
action by which an enterprise intends to fulfill its mission and achieve its goals.
Strategic Marketing Planning
Strategic marketing planning is a five-step process:
1. Situation Analysis
The first steps, situation analysis, involves analyzing where the company’s marketing program has been
how it has been doing, and what it is likely to face in the years ahead. The results of this activity enable
management to determine if it is necessary to revise the old plans or devise new ones to achieve the
company’s objectives. Situation analysis normally covers external environmental forces and internal nonmarketing resources. A situation analysis is critical, but it can be costly, time consuming, and frustrating.
2. Marketing Objectives
The next step in the strategic marketing planning is to determine marketing objectives. Marketing goals
should be closely related to company wide goals and strategies. In fact, a company strategy often
translates into a marketing goal. Strategic planning involves matching an organization’s resources with its
market opportunities. Each marketing objective should be assigned a priority based on its urgency and its
potential impact on an area of focus and in turn, the organization. The resources should be allocated in line
with these priorities.
3. Positioning and Differential Advantage
The third step in strategic marketing planning actually entails two complementary decisions: how to position
a product in the market place and how to distinguish it from competitors. Positioning referring to a product’s
image in relation to competing products as well as other products marketed by the same company.
Differential advantage refers to any feature of an organization or brand perceived by customers to be
desirable and different from those of the competition. The concepts of differential advantage and differential
disadvantage apply to both goods and services and, in areas such as retailing, to entire firms.
4. Target Markets and Market Demand
Selecting target markets is the fourth step in marketing planning. A market consists of people or
organizations with needs to satisfy, money to spend, and the willingness to spend it. A target market refers
to a group of people or organizations at which a firm directs a marketing program. To choose one or more
target market, a firm must forecast demand in market segments that appear promising.
Marketing (Fourteenth Edition)
Etzel, Walker, Stanton.
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Dr Zain Yousafzai
Strategic Marketing Planning
Chapter 20 (page 556-581)
5. Marketing Mix
For each market, management must design a marketing mix, which is the combination of multiple aspects
of four elements.
1. A product,
2. How it is distributed,
3. Promoted,
4. In addition, its price.
These four elements are intended to the target markets and to achieve the organizations marketing
objectives. Each marketing mix element contains numerous options. Further, decisions regarding one
element affect the others. Marketers need to consider these options and relationships when designing a
marketing mix for a particular target market.
Annual Marketing Planning
An annual marketing plan is the blueprint for a year is marketing activity for a specified organizational
division or major product.
Purposes and Responsibilities
An annual marketing plan serves several purposes:
It summarizes the marketing strategies and tactics that will be used to achieve specified objectives in the
upcoming year. Thus it becomes the “how to do it” guide for executives and other employees involved in
marketing.
The plan also points to what needs to be done with respect to the other steps in the management process
implementation and evaluation of the marketing program.
The plan should outline who is responsible for which activities, when they are to be carried out, and how
much time and money can be spent.
Recommended Contents
Annual planning has a shorter period and is more specific with respect to the plans laid. In an annual plan,
more attention is devoted to tactical details than in other levels of planning. As an example, strategic
marketing planning might stress personal selling within the marketing mix. If so, the annual plan might
recommend increased college recruiting as a source of additional sales people.
Selected Planning Models
Models have been designed to assist with strategic planning. Most of these models can be used with both
strategic company planning and strategic marketing planning. We briefly discuss several planning models
that have received ample attention.
Strategic Business Units
More effective planning and operations, a multidivisional or multi product organization should be divided
according to its major markets or products. Each such entity is called a strategic business unit (SUB). Each
SBU may be a major division in an organization, a group of related product, or even a single major product
or brand.
To make planning more effective, a large, diverse organization may divide itself into smaller planning
units called Strategic Business Units
The unit should:
Be a separately identifiable business
Have a distinct mission
Marketing (Fourteenth Edition)
Etzel, Walker, Stanton.
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Dr Zain Yousafzai
Strategic Marketing Planning
Chapter 20 (page 556-581)
Have separate competitors
Have a separate group of executives charged with profit responsibility
Have its own strategic plan
Product Market Growth Matrix
There are four fundamental product market growth strategies
1. Market penetration: A company tries to sell more of its present products to its present markets.
Supporting tactics might include greater spending on advertising or personal selling.
2. Marketing development: A firm continues to sell its present products, but to a new market. Firms
that depend to a large degree on just a few customers often engage in market development to
spread their risk.
3. Product Development: An organization develops new products to sell too its existing markets.
Such moves are intended to better satisfy, and generate more revenues from existing customers.
4. Diversification: A company new develops new products to sell to new markets. As market,
conditions change over time. A company may shift product market growth strategies.
BCG Matrix (Boston Consulting Group)
A model developed by a management-consulting firm, the Boston Consulting Group. The BCG matrix dates
back over years. Using this model, an organization classified each of its SBUs according to two factors. Its
market share relative to competitors and the growth rate of the industry in which the SBU operates.
According to two factors its market share relative to competitors and the growth rate of the industry in which
the SBU operates. When the factors are divided simply into high and low categories, a 2x2 grid is created.
Stars:
High market shares and high industry growth rates typically of SBUs or major products
Cash cows (Sources of income)
These SBU’s have high market share and low growth
Question marks:
SBUs characterized by low market shares but high industry growth rates fit in this category.
Dogs:
These SBUs have low market shares operate in industries with low growth rates.
GE Business Screen
GE Business screen appears to be very similar to the BCG matrix. This planning model, developed by
General Electric with the assistance of the McKinsey consulting firm, also involves two factors and result a
grid. Management can use the GE business screen to classify SBUs or major produces based on two
factors such as
1. “Market attractiveness”
2. “Business position.”
Invest Strategy
Protect Strategy
Harvest Strategy
Divest Strategy
Marketing (Fourteenth Edition)
Etzel, Walker, Stanton.
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Dr Zain Yousafzai
Strategic Marketing Planning
Chapter 20 (page 556-581)
Assessment of the Planning Models
These planning models have been praised and criticized. The models for helpful planning aids are ongoing.
Two consultants urged firms to develop their organizational strategies in terms of value disciplines.
According to these models, a firm must increase the value offered to customers by
cutting prices,
Improving products,
Or enhancing service.
The three value disciplines of the models
1. Operational excellence,
2. Product leadership,
3. Or customer intimacy
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