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  • 1. Strategic Marketing Plan
  • 2. Definitions of Strategy and Tactics Strategy: • An explicit statement of the firm’s vision of its future, objectives, and purpose • Provides long-term direction for decisions • Includes corporate policies, resource allocations, customer markets, and competitive environment Copyright © Houghton Mifflin Company.All rights reserved. 3–2
  • 3. Definitions of Strategy and Tactics (cont’d) Tactics: • Serve as guidelines for implementing the intent of the strategic plan • Are the basis for day-to-day operating decisions (including the marketing mix) • Have a shorter-term planning horizon than strategic planning Copyright © Houghton Mifflin Company.All rights reserved. 3–3
  • 4. Dimensions That Define Strategy • The product market in which the business will compete • The level of investment in a strategic business unit • The functional area strategies required for competing in the chosen market • The underlying strategic assets and skills (core competencies) that give the firm a sustainable competitive advantage Copyright © Houghton Mifflin Company.All rights reserved. 3–4
  • 5. Marketing, Strategic Planning, and Organizational Levels Insert table 3.1 Copyright © Houghton Mifflin Company.All rights reserved. 3–5
  • 6. The Strategic Planning Process Mission Feedback Set Performance Objectives Environmental and Self Analyses Strategic Objectives & Strategy Definition Implementation and Tactics Execution Evaluation and Control Copyright © Houghton Mifflin Company.All rights reserved. 3–6
  • 7. Strategic Perspectives • Strategic readiness – Ability to take advantage of unexpected market opportunities by having a long-term strategic plan and vision in place • Strategic vision – Longer-term, futuristic perspective, requires patience and determination • Strategic opportunism – Focus on present, and seizing market opportunities in a dynamic, uncertain environment Copyright © Houghton Mifflin Company.All rights reserved. 3–7
  • 8. External Environmental Analysis • Customers – Who are most desirable? Should the market be segmented? – What are their characteristics, preferences, and behaviors? • Competitor Assessment – Who are our present and potential competitors? – How well matched are their strategies and strengths to – the market’s key success factors? – What are their weaknesses? – How much of a threat are they? Copyright © Houghton Mifflin Company.All rights reserved. 3–8
  • 9. External Environmental Analysis (cont’d) • Market – What are the market segment characteristics? – What market trends are occurring? – What is the current and future size, growth rate, and direction of the market? • Environmental scanning and forecasting – What trends and events are apparent in both the micro- and macro-environments? – What will be their impact on us? Copyright © Houghton Mifflin Company.All rights reserved. 3–9
  • 10. Internal Organizational Analysis • Financial resources – Self-assessment of present financial assets – Sources of funds (sales, interest, loans) and uses (inventories, interest) of assets • Physical resources – Assets presently available and those needed to implement strategy in the short - and long-run – Property, plant, equipment, other assets Copyright © Houghton Mifflin Company.All rights reserved. 3–10
  • 11. Internal Organizational Analysis (cont’d) • Human resources – Talents, skills, and abilities of managers and other personnel – Outside specialists, suppliers, or others • Technological resources – In the form of products and processes • Organizational resources – Firm’s structure, systems, and procedures that support the strategy Copyright © Houghton Mifflin Company.All rights reserved. 3–11
  • 12. Figure 3.3: Five-Factor Model of Profitability Source: Model adapted from Michael Porter, “Industry Structure and Competitive Strategy: Keys to Profitability,” Financial Analysis Journal (July-August 1980) p. 33. Copyright © Houghton Mifflin Company.All rights reserved. 3–12
  • 13. Strategic Inflection Point: A Six Forces Adaptation of the Five Forces Model Imbalance of Environmental Forces (Substitutes) Existing Competitors Complementors* Customers The Business  Change  The Business Suppliers Substitutes Potential Competitors *Significance: Complementors counteract substitution. Source: Adapted from Andrew Grove, “Navigating Strategic Inflection Points,” Business Strategy Review (Autumn, 1997), pp.12-13. Copyright London Business School. Reprinted by permission of Blackwell Publishers. Copyright © Houghton Mifflin Company.All rights reserved. 3–13
  • 14. Strategic Inflection Point “During a Strategic Inflection Point, the way a business operates, the very structure and concept of the business, undergoes a change. But the irony is that at this point itself nothing much happens.” Source: Adapted from Andrew Grove, “Navigating Strategic Inflection Points,” Business Strategy Review (Autumn, 1997), pp.12-13. Copyright London Business School. Reprinted by permission of Blackwell Publishers. Copyright © Houghton Mifflin Company.All rights reserved. 3–14
  • 15. What Are the Basic Strategies for Sustainable Competitive Advantage? Differentiation Distinguishing one company’s products from competitors on the basis of greater perceived benefits and/or more value Low Cost Marketer achieves cost advantage by controlling costs of production, inputs, marketing programs, etc. Focus Concentration of the business on specific market segment(s) and/or product group(s) Preemptive Move First-mover advantage from being first to enter market with a new product, innovation, etc.; creates barriers to entry for follow-on competitors Synergy Combining the assets and skills of two or more units by sharing business functions, customers, marketing, personnel, etc. Copyright © Houghton Mifflin Company.All rights reserved. 3–15
  • 16. Strategic Planning and the Challenge of Change • Changes in approaches to strategy development • Complexity and uncertainty • Poverty of time • Need for flexibility and adaptability • Stakeholder involvement • Integration of ethics and social responsibility Copyright © Houghton Mifflin Company.All rights reserved. 3–16
  • 17. Complexity and Uncertainty in Strategic Market Planning • Complexity – The intricacies and relationships of the company and its industry partners make it difficult to analyze, understand, or solve complicated strategic problems. • Uncertainty – The vagueness and doubt about a company’s industry and general operating environment; not being sure of what is happening now or what to expect in the future. Copyright © Houghton Mifflin Company.All rights reserved. 3–17
  • 18. Strategic Planning and Customer Orientation • Develop outstanding approaches to delivering customer satisfaction. • Plan for value creation from the customer’s perspective. • Pursue continuous quality improvement in products and processes. • Develop the ability and willingness to re-engineer (or redesign) goods or services as indicated by the marketing environment or internal conditions. Copyright © Houghton Mifflin Company.All rights reserved. 3–18
  • 19. Figure 3.5: Integration of Ethical and Socially Responsible Plans into Strategic Decision Making Source: Adapted from Donald Robin and R. Eric Reidenbach, “Social Responsibility, Ethics, and Marketing Strategy: Closing the Gap Between Concept and Application,” Journal of Marketing 51(1) (January), pp.44-58.Reprinted by permission. Copyright © Houghton Mifflin Company.All rights reserved. 3–19
  • 20. American Marketing Association Code of Ethics • Responsibilities of the marketer to all relevant publics (consumers, organizations, and society) • Honesty and fairness; uphold integrity, honor, and dignity of the marketing profession • Rights and duties of participants in the marketing exchange process (including 4P’s and marketing research) • Ethical behavior in organizational relationships Copyright © Houghton Mifflin Company.All rights reserved. 3–20
  • 21. Figure 3.7: The Value Chain Copyright © Houghton Mifflin Company.All rights reserved. 3–21
  • 22. The Marketing Value Chain Value = Benefit – Price Choose the Value Communicate the Value Provide the Value Promotion and Public Relations Selling Advertising Application Engineering Pricing Service Distribution Sourcing and Making Product/Service Development Value Positioning Select Target(s) Customer Value Need Assessment Source: Redrawn from Anterasian and Phillips in Webster, Market-Driven Management (1994). Copyright © Houghton Mifflin Company.All rights reserved. 3–22