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MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2008-2009 2 CHAPTER Strategic Planning for Competitive Advantage
Learning Outcomes Understand the importance of strategic marketing and know a basic outline for a marketing plan Develop an appropriate business mission statement Describe the criteria for stating good marketing objectives LO 1 LO 2 LO 3
Learning Outcomes Explain the components of a situation analysis Identify sources of competitive advantage Identify strategic alternatives Discuss target market strategies LO 4 LO 6 LO 7 LO 5
Learning Outcomes Describe the elements of the marketing mix Explain why implementation, evaluation, and control of the marketing plan are necessary Identify several techniques that help make strategic planning effective LO 8 LO 9 LO 10
The Nature of Strategic Planning Understand the importance of strategic marketing and know a basic outline for a marketing plan LO 1
Strategic Planning LO 1 Strategic Planning The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities. The goal is long-term profitability and growth.
Strategic Marketing Management LO 1 What is the organization’s main activity? How will it reach its goals? THE ANSWER IS A MARKETING PLAN.
Strategic Planning LO 1 Marketing Plan A written document that acts as a guidebook of marketing activities for the marketing manager.
Provides a basis for comparison of actual and expected performance
Provides clearly stated activities to work toward common goals
Serves as a reference for the success of future activities
Provides an examination of the marketing environment
Allows entry into the marketplace with awareness
Marketing Plan Elements LO 1 Marketing Strategy Product Distribution Price Marketing Mix Business Mission Statement Objectives Situation or SWOT Analysis Target Market Strategy Implementation Evaluation Control Promotion
REVIEW LEARNING OUTCOME LO 1 The Importance of Strategic Marketing What Why How Strategic Planning Long-term profitability and growth Write a marketing plan Online http://www.dmusic.com
Defining the Business Mission Develop an appropriate business mission statement LO 2
REVIEW LEARNING OUTCOME LO 2 Business Mission Statement Q: What business are we in? A: Business mission statement Too narrow Too broad Just right marketing myopia no direction focus on markets served and benefits customers seek
Setting Marketing Plan Objectives Describe the criteria for stating good marketing objectives LO 3
Marketing Objective LO 3 Marketing Objective A statement of what is to be accomplished through marketing activities.
Consistent with and indicating the priorities of the organization
“ Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction.”
REVIEW LEARNING OUTCOME LO 3 Criteria for Good Marketing Objectives Realistic, measurable, and time-specific objectives consistent with the firm’s objectives: 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to think clearly 5. Allow for better evaluation of results
Conducting a Situation Analysis Explain the components of a situation analysis LO 4
SWOT Analysis LO 4 Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) SWOT Analysis
Environmental Scanning LO 4 The collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. Environmental Scanning
REVIEW LEARNING OUTCOME LO 4 Components of a Situation Analysis
Strengths Weaknesses INTERNAL ENVIRONMENT
REVIEW LEARNING OUTCOME LO 4 Components of a Situation Analysis
political / legal
Opportunities Threats EXTERNAL ENVIRONMENT
Competitive Advantage Identify sources of competitive advantage LO 5
Competitive Advantage LO 5 The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. Competitive Advantage
Competitive Advantage LO 5 Niche Strategies Cost Product/Service Differentiation Types of Competitive Advantage
Cost Competitive Advantage LO 5 Cost Competitive Advantage Being the low-cost competitor in an industry while maintaining satisfactory profit margins.
Sources of Cost Reduction LO 5 Experience Curves Efficient Labor No-frills Products Government Subsidies Product Design Reengineering Production Innovations New Service Delivery Methods
Product/Service Differentiation LO 5 Product/Service Differentiation Competitive Advantage The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s.
Examples of Product/Service Differentiators LO 5
Demand for Nintendo’s game console, the Wii, has consumers waiting in long lines or paying premium prices on online auctions for the console. Rival products, while popular, haven’t been flying off the shelves. That’s probably because a unique feature on the Wii console provides Nintendo a competitive advantage. That feature, called Mii, is software that allows users to create online characters that look like themselves, or someone else. Fans say they get addicted to the thrill of seeing themselves running around the screen, playing tennis or boxing with Mii characters like George W. Bush or Michael Jackson.
Product line may be focused on a specific product category
Sources of Sustainable Competitive Advantage LO 5 Patents Copyrights Locations Equipment Technology Customer Service Promotion Skills and Assets of an Organization
REVIEW LEARNING OUTCOME LO 5 Sources of Competitive Advantage Sources of Competitive Advantage Cost $ Product/Service Differentiation A vs. B vs. C Niche Strategies
Strategic Directions Identify strategic alternatives LO 6
Strategic Alternatives LO 6 Market Penetration Market Development Product Development Diversification Increase market share among existing customers Attract new customers to existing products Introduce new products into new markets Create new products for present markets
Ansoff’s Strategic Opportunity Matrix LO 6 Present Product New Product New Market Market Penetration Market Development Product Development Diversification Present Market http://www.pg.com Online
Portfolio Matrix LO 6 Stars Cash Cows Problem Children Dogs
Portfolio Matrix Strategies LO 6 Build Hold Harvest Divest
REVIEW LEARNING OUTCOME LO 6 Strategic Alternatives Identify strategic alternatives Diversification = Product development = products Market development = customers Market penetration = share new products + new markets
Describing the Target Market Discuss target market strategies LO 7
Marketing Strategy LO 7 Marketing Strategy The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.
Segment the market based on groups with similar characteristics
Analyze the market based on attractiveness of market segments
Select one or more target markets
Target Market Strategy LO 7
Target Market Strategy LO 7 Appeal to the entire market with one marketing mix Concentrate on one marketing segment Appeal to multiple markets with multiple marketing mixes
REVIEW LEARNING OUTCOME LO 7 Target Market Strategies Entire Market Multiple Markets Single Market Target Market Options
The Marketing Mix Describe the elements of the marketing mix LO 8
The Marketing Mix LO 8 Marketing Mix Product Promotion Price Place A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.
Marketing Mix: The “Four Ps” LO 8 Price Promotion Place Product
Price is what a buyer must give up to obtain a product.
The most flexible of the “4 Ps”-- quickest to change
Price x Units Sold = Total Revenue
REVIEW LEARNING OUTCOME LO 8 Elements of the Marketing Mix
LO 8 Beyond the Book Anatomy of an Ad Market development = sell anti-aging cream to men (not just women) Ads are types of promotion Competitive Advantage? Men = target market Moisturizer = product Clive Owen [celebrity endorsement] = promotion strategy?
Following Up on the Marketing Plan Explain why implementation, evaluation, and control of the marketing plan are necessary LO 9