Strategic Marketing


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Strategic Marketing

  1. 1. <ul><li>Strategic Marketing Planning – Tools/Models. </li></ul>
  2. 2. Goals of the topic <ul><li>To gain an understanding of: </li></ul><ul><li>The nature and scope of planning and how it fits within the management process </li></ul><ul><li>Similarities and differences among mission, objectives, strategies and tactics </li></ul><ul><li>The essential difference between strategic company planning and strategic marketing planning </li></ul><ul><li>The steps involved in strategic marketing planning </li></ul><ul><li>The purpose and contents of an annual marketing plan </li></ul><ul><li>How planning models can be useful aids in developing a marketing program </li></ul>
  3. 3. PLANNING Analyze situation Set goals Select strategies and tactics IMPLEMENTATION Organize Staff Direct EVALUATION Compare performance with goals Feedback, so management can adapt future plans and their implementation to the changing environment The Management Process
  4. 4. Strategic Business Units (SBU) <ul><li>To make planning more effective, a large, diverse organization may divide itself into smaller planning units called Strategic Business Units </li></ul><ul><li>The unit should : </li></ul><ul><ul><li>Be a separately identifiable business </li></ul></ul><ul><ul><li>Have a distinct mission </li></ul></ul><ul><ul><li>Have separate competitors </li></ul></ul><ul><ul><li>Have a separate group of executives charged with profit responsibility </li></ul></ul><ul><ul><li>Have its own strategic plan </li></ul></ul>
  5. 5. The BCG ( Boston Consulting Group) Matrix <ul><ul><li>Market Share/ Market Growth Matrix : </li></ul></ul><ul><ul><li>a marketing planning tool that classifies a firm’s SBU’s or products according to industry growth rates and market shares relative to competing products </li></ul></ul><ul><ul><ul><li>Stars </li></ul></ul></ul><ul><ul><ul><li>Cash Cows </li></ul></ul></ul><ul><ul><ul><li>Dogs </li></ul></ul></ul><ul><ul><ul><li>Question Marks </li></ul></ul></ul>
  6. 6. (BCG Matrix ) <ul><li>Using this model, a strategic business unit (SBU) can be classified according to two factors: its market share relative to competitors , and the growth rate of the industry in which the SBU operates. </li></ul><ul><li>The resulting 2 x 2 grid has 4 quadrants that represent distinct categories of SBUs or major products. </li></ul><ul><li>Each category is assigned a name that reflects its market share, industry growth rate, cash needs, and appropriate strategies . </li></ul><ul><li>A company should seek a balanced portfolio of SBUs with a mix of stars, cash cows , and questions marks , but hopefully no dogs . </li></ul>
  7. 7. Stars Cash cows Dogs Question marks High Low High Low COMPANY’S MARKET SHARE INDUSTRY GROWTH RATE
  8. 8. <ul><li>“ Stars “ and “Qs Marks ” are both company business that operate in high growth industries. The difference b/w them is the firm's market share relative to other main operators in the industry. </li></ul><ul><li>Where as a ‘ Star’ is a ‘Market Leader ’, a ‘Question Mark ’ is a ‘ follower’. </li></ul><ul><li>“ Cash Cows” and “Dogs” are both company business that operates in low-growth industries . It is the market share position that distinguishes a Cash Cow from a Dog, though both operate in low-growth industries. </li></ul><ul><li>A “Cash Cow&quot; is a “ market Leader ” while “ Dog ” is a “ Poor follower ”. </li></ul>
  9. 9. <ul><li>Stars: are net users of resources. A Star needs a good deal of investment support as it operates in a high –growth market. It may not bring in immediate profits, but holds out great potential for the future. Strategy: invest more funds for future growth . </li></ul><ul><li>Qs .Marks : : they also are net users of resources. But, their future is uncertain. and they are in the high –risk category. Strategy: Either invest more funds for future or disinvest. </li></ul><ul><li>Cash Cows : are net generator of resources. A cash cow brings a lot of cash and profit to your company, investment needs of a cash cow is minimal being it in a low-growth market. Strategy: milk profits to finance growth of stars & QMs . </li></ul><ul><li>Dogs : dogs are business with weak market share in weak (low-growth) market. they are cash-traps and draggers of your company resources. Stg: Withdraw </li></ul>
  10. 10. Product-Market Growth Matrix (Ansoff Model) <ul><li>This was developed by Igor Ansoff for strategic Planning. </li></ul><ul><li>growth requires examination of both products and markets; what needs changing? </li></ul><ul><li>Should you stay and fight? Or should you forge an alliance to meet the challenge? </li></ul><ul><ul><li>market penetration : sell more of present products/services to present markets </li></ul></ul><ul><ul><li>market development : sell present products to new markets or segments </li></ul></ul><ul><ul><li>product development : new products/services for existing markets </li></ul></ul><ul><ul><li>diversification : new products to new markets </li></ul></ul>
  11. 11. PRESENT PRODUCTS PRESENT MARKETS NEW PRODUCTS NEW MARKETS Market penetration Market development Product development Diversification The product-market growth matrix depicts the options available in considering markets and products. Product Market Growth Matrix
  12. 12. <ul><li>Market penetration strategy tries to achieve growth through Existing products in Existing Markets </li></ul><ul><li>Market development Strategy tries to achieve growth through Existing products in New Markets. </li></ul><ul><li>Product development Strategy tries to achieve growth through Improved Products in Existing Markets . </li></ul><ul><li>Summary : Ansoff model helps strategic Planning in respect of the existing business of a company through the intensification route. </li></ul>