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pin5.gif (218 bytes) Presentation 12

  1. 1. Strategic Market Planning “ Strategic market planning sets the strategic direction for a business and plays a critical part in achieving a business’s long-run objectives of sales growth, profit performance, and share position.” Best 2000
  2. 2. Market-Based Management Tactical Marketing Strategies Market Analysis Strategic Market Planning Marketing Planning, Implementation and Performance
  3. 3. Strategic Market Planning Process The strategic market plan sets the strategic direction and provides broad guidelines for resource allocation . A tactical market strategy is a short-term marketing strategy with a one-year time horizon. The primary purpose of a strategic market plan is to provide a strategic direction from which to set performance objectives and guide the development of a tactical marketing strategy .
  4. 4. Offensive vs. Defensive Strategic Market Planning Offensive strategic market plans require investment for growth , which limits short-run profit performance while building sales revenue and improving share position. A defensive strategy to protect share should not be misinterpreted to mean a strategy of holding resources constant.
  5. 5. Offensive vs. Defensive Strategic Market Plans <ul><li>Offensive -- Growth-oriented built around: </li></ul><ul><li>Share penetration or market growth of existing markets </li></ul><ul><li>Plans to enter new existing or emerging markets. </li></ul>Critical to business growth and future market position and profitability
  6. 6. Offensive vs. Defensive Strategic Market Plans (cont.) <ul><li>Defensive -- Designed to protect market positions and profitability : </li></ul><ul><li>Protecting profitable market positions </li></ul><ul><li>Reducing market focus to improve profitability </li></ul><ul><li>Harvesting and divestment </li></ul>Critical to current share, sales, and profit performance
  7. 7. Product – Market Diversification <ul><li>A Diverse Portfolio Offers Opportunities for </li></ul><ul><li>Increased Growth and Risk Reduction </li></ul><ul><li>Offers new market and segment opportunities </li></ul><ul><li>Reduces dependence on any single product-market </li></ul><ul><li>Can smooth overall performance by offsetting competitive conditions and product life cycles with different product-markets </li></ul>Each product-market in a business’s portfolio of offerings in some way contributes to both the short-run and the long-run performance of the business.
  8. 8. Strategic Marketing Planning Process <ul><li>Starts with an assessment of: </li></ul><ul><li>Current Business Performance </li></ul><ul><li>Market Attractiveness </li></ul><ul><li>Competitive Advantage </li></ul>
  9. 9. Figure 11.3 Strategic Marketing Planning Process 1. 2. 3.
  10. 10. The Boston Consulting Group’s Growth-Share Matrix 1. Business Performance 20%- 18%- 16%- 14%- 12%- 10%- 8%- 6%- 4%- 2%- 0 Market Growth Rate 10x 4x 2x 1.5x 1x Relative Market Share .5x .4x .3x .2x .1x Dogs 8 7 3 ? Question marks ? ? 2 1 Cash cows 6 Stars 5 4
  11. 11. Figure 11.4 Factors That Shape Market Attractiveness 2. Market Attractiveness
  12. 12. Fig 11.5: Indexing Market Attractiveness of a Market
  13. 13. Determinants of a Competitive Advantage <ul><li>Differentiation Advantage – a sustainable product or service advantage that translates into a benefit important to target customer </li></ul><ul><li>Cost Advantage – A sustainable lower cost relative to competition </li></ul><ul><li>Marketing Advantage – A sustainable advantage over competitors in either channels of distribution, sales force, or marketing communications </li></ul>
  14. 14. Fig 11.6 Determinants Competitive Advantage 3. Competitive Advantage
  15. 15. Fig 11.7 Indexing a Competitive Advantage
  16. 16. Fig 11.8: Portfolio Analysis & Strategic Mrktg Plans Nine Cell Market Attractiveness-Competitive Advantage Matrix
  17. 17. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Grow - Invest to improve or grow competitive advantage. In an underdeveloped or emerging market, this can also mean to invest in order to grow the market, and hence, its attractiveness. Entry – Invest to enter an attractive market to establish a desired competitive advantage. This strategy could also require investment to accelerate the growth of a new or underdeveloped market.
  18. 18. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Grow - Invest to improve or grow competitive advantage. In an underdeveloped or emerging market, this can also mean to invest in order to grow the market, and hence, its attractiveness. Protect – Invest to protect or hold a competitive advantage. Businesses often fail to invest in hold strategies, and the result is an erosion of competitive advantage.
  19. 19. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Protect – Invest to protect or hold a competitive advantage. Businesses often fail to invest in hold strategies, and the result is an erosion of competitive advantage.
  20. 20. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Grow - Invest to improve or grow competitive advantage. In an underdeveloped or emerging market, this can also mean to invest in order to grow the market, and hence, its attractiveness. Protect – Invest to protect or hold a competitive advantage. Businesses often fail to invest in hold strategies, and the result is an erosion of competitive advantage. Harvest – Adjust prices and marketing expenses to gradually exit the market while attempting to maximize profits during this gradual exit.
  21. 21. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Grow - Invest to improve or grow competitive advantage. In an underdeveloped or emerging market, this can also mean to invest in order to grow the market, and hence, its attractiveness. Protect – Invest to protect or hold a competitive advantage. Businesses often fail to invest in hold strategies, and the result is an erosion of competitive advantage. Focus – Selectively narrow market focus to profitable segments or niches within a segment in order to capture profits while limiting the resources committed to this market.
  22. 22. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Grow - Invest to improve or grow competitive advantage. In an underdeveloped or emerging market, this can also mean to invest in order to grow the market, and hence, its attractiveness. Protect – Invest to protect or hold a competitive advantage. Businesses often fail to invest in hold strategies, and the result is an erosion of competitive advantage. Focus – Selectively narrow market focus to profitable segments or niches within a segment in order to capture profits while limiting the resources committed to this market.
  23. 23. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Divest – Quick divestment from a market. When there are no short-term profits to be gained with a divest strategy, an immediate exit strategy is appropriate. Harvest – Adjust prices and marketing expenses to gradually exit the market while attempting to maximize profits during this gradual exit.
  24. 24. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Divest – Quick divestment from a market. When there are no short-term profits to be gained with a divest strategy, an immediate exit strategy is appropriate. Harvest – Adjust prices and marketing expenses to gradually exit the market while attempting to maximize profits during this gradual exit.
  25. 25. Figure 11.8: Portfolio Analysis and Strategic Marketing Plans Protect – Invest to protect or hold a competitive advantage. Businesses often fail to invest in hold strategies, and the result is an erosion of competitive advantage. Harvest – Adjust prices and marketing expenses to gradually exit the market while attempting to maximize profits during this gradual exit.
  26. 26. Figure 11.11 Zi-Techs Acoustics’ Current Performance Protect Grow Focus Harvest Divest
  27. 27. Figure 11.12: Zi-Tech Portfolio Analysis and Strategic Market Plan

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