2. 2- 2
After this session, you will be able to:
• Describe the components &
relevance of Strategic Planning.
• Write market oriented business
definition.
• Position a SBU of company on BCG
Matrix.
• Position product of a company on
Ansoff Matrix.
Learning Outcomes
7. 2- 7
What is a Marketing Plan?
A marketing plan is the central instrument for directing and
coordinating the marketing effort.
It operates at a strategic and tactical level.
8. 2- 8
Strategic Planning Process
• Strategic Planning involves developing an
overall company strategy for long-run
survival and growth.
• This process involves:
– Defining a Mission: Statement of an organization’s
purpose; should be market oriented.
– Setting Company Objectives: Supporting goals and
objectives to guide the entire company.
– Designing a Business Portfolio: Collection of businesses
and products that make up the company.
– Planning Functional Strategies: Detailed planning for
each department designed to accomplish strategic
objectives.
9. 2- 9
Product Orientation vs. Market Orientation
Company Product Market
Missouri-Pacific
Railroad
We run a railroad We are a people-
and-goods mover
Xerox We make copying
equipment
We improve office
productivity
Standard Oil We sell gasoline We supply energy
Columbia Pictures We make movies We entertain
people
10. 2- 10
Good Mission Statements
Focus on limited number of goals
Stress major policies and values
Define major competitive spheres
Take a long-term view
Short, memorable, meaningful
11. 2- 11
2-3
2-3
Market
Oriented
Market
Oriented
Fit Market
Environment
Fit Market
Environment
Motivating
Motivating Realistic
Realistic
Distinctive
Competencies
Distinctive
Competencies
Specific
Specific
Characteristics
of Good Mission
Statements
Characteristics
of Good Mission
Statements
Mission Statements
Mission Statements
12. 2- 12
Motorola
“The purpose of Motorola is to honorably
serve the needs of the community by providing
products and services of superior quality at a
fair price to our customers; to do this so as to
earn an adequate profit which is required for
the total enterprise to grow; and by doing so,
provide the opportunity for our employees and
shareholders to achieve their personal
objectives.”
13. 2- 13
Rubbermaid Commercial Products, Inc.
“Our vision is to be the Global Market Share
Leader in each of the markets we serve. We
will earn this leadership position by
providing to our distributor and end-user
customers innovative, high-quality, cost-
effective and environmentally responsible
products. We will add value to these products
by providing legendary customer service
through our uncompromising Commitment
to Customer Satisfaction.”
14. 2- 14
Designing the Business Portfolio
• Business Portfolio: Collection of business &
products
• The best portfolio is the one that best fits
the company’s strengths and weaknesses to
the opportunities in the environment.
• The company must:
–analyze its current business portfolio or
Strategic Business Units (SBU’s)
–decide which SBU’s should receive more, less,
or no investment
–develop growth strategies for adding new
products or businesses to the portfolio
15. 2- 15
• Business Portfolio: Collection of business & products
• Process:
–Analyse its current business portfolio
–Shape the future portfolio by developing strategies
for growth and downsizing
Designing Business Portfolio
ITC Portfolio
16. 2- 16
Analyzing Current SBU’s:
Boston Consulting Group Approach
Question Marks
• High growth, low share
• Build into Stars/ phase out
• Requires cash to hold
market share
Stars
• High growth & share
• Profit potential
• May need heavy
investment to grow
Cash Cows
• Low growth, high share
• Established, successful
SBU’s
•Produces cash
Dogs
• Low growth & share
• Low profit potential
Relative Market Share
High Low
Market
Growth
Rate
Low
High
17. 2- 17
Marketing’s Role in Strategic
Planning
• Process of Selecting Target Consumers
–Market Segmentation: determining distinct groups
of buyers (segments) with different needs.
–Market Targeting: evaluating and selecting which
target segments to enter.
–Market Positioning: products distinctive and
desirable place in the minds of target segments
compared to competing products.
• Marketing Strategies for Competitive Advantage
– Market-Leader
– Market Challenger
– Market-Follower
– Market-Nicher
19. 2- 19
• Product/market expansion grid is a tool for
identifying company growth opportunities through
market penetration, market development, product
development, or diversification
Developing Strategies for Growth and Downsizing
20. 2- 20
Ansoff’s Product/ Market Expansion Grid
• Market Penetration: increase sales to present
customers with current products. How?
• Market Development: develop new markets with
current products. How?
• Product Development: offering modified or new
products to current customers. How?
• Diversification: new products for new markets.
21. 2- 21
• Multi Category food company manufacturing over
250 innovative products and marketing in 35 countries.
• Started with basic spices
• In 1970 introduced branded & packaged spices in Pakistan
• Market Penetration: (Making more sales without changing its
original product)
– Marketing mix improvement-design, advertising, pricing &
distribution efforts
– Broad range: Chili, Coriander, Kasuri methi & Turmeric
powder
– Added key accounts managers to handle cash and carry
giants like Metro etc
– Used internet to reach consumers
Example-National Foods Ltd.
22. 2- 22
• Market Development: (Identifying &
developing new markets for its current
products)
– Explored new geographic markets:
Middle east, North America, Australia,
India
• Product Development: (Offering modified or
new products to current markets)
– Added Tomato Katchup, Chinese Sauces,
Pickles, Jams, desserts
– Diet versions of products
• Diversification: (Starting up or buying
businesses outside of its current products
and markets)
– Ronaq brand of ready to eat meals
Example-National Foods Ltd.
23. 2- 23
Ansoff Matrix: Give one example each in case of Coca Cola.
Market Penetration
Product
Development
Market
Development
Diversification
24. 2- 24
Identify the strategy used by Anchor when they started
manufacturing Tooth Paste?
Question
Diversification
26. 2- 26
• The Business Mission
• SWOT Analysis
• Goal Formulation
• Strategy Formulation
• Program Formulation & Implementation
• Feedback & Control
Business Unit Strategic Planning
Business
Mission
Internal
Environ
ment
External
Environ
ment
Feedback
& Control
Implemen
tation
Program
Formulat
ion
Strategy
Formulat
ion
Goal
Formulat
ion
SWOT
27. 2- 27
Role of Strategic Planning
To use strengths, overcome the weaknesses to
capitalize upon the opportunities and avert threats.
WEAKNESS THREAT
STRENTH OPPORTUNITY
Strategic Planning
Internal External
28. 2- 28
• Opportunity
• Area of buyer need & interest that a company has a high
probability of profitably satisfying. Three main sources of
Opportunity:
– Offer something that is in shot supply-Problem Detection
Method
– Supply existing product or service in a new or superior way-
Ideal Method
– Chart their steps in acquiring, using & disposing of a
product-Consumption Chain Method
• Threat
• Challenge posed by an unfavourable trend or development that
in the absence of defensive marketing acton, would lead to
lower sales or profit.
• Internal Environment (Strengths & Weakness)
SWOT Analysis-External Environment
30. 2- 30
• Goals indicate what business unit want to achieve
• Goals are objectives that are specific with respect to
magnitude and time.
• Example: Profitability, sales growth, market share
improvement, innovation and reputation.
• Business units set these objectives and then manage
by objectives (MBO)
Goal Formulation
31. 2- 31
Porter’s Generic
Strategies
Strategy Formulation
Low-cost Differentiation
Strategic advantage
Narrow
Broad Differentiation
Focused cost
leadership
Focused
differentiation
Low-cost
leadership
Goals indicate what business unit want to achieve; strategy is a game plan for
getting there.
32. 2- 32
Low cost Differentiation Focus
Low cost culture
Economies of scale
Eliminate unnecessary
costs
Enjoy high profits
through cost advantage
Adding value through
• product features
• product quality
• distinctive offering
Offer something new or
different
High costs but charge
premium price
Niche markets
Targeting
Limited territory
Focus on a specific
group of customers
Either cost leader or
differentiation with in
the segment
Porter’s Generic Strategies
33. 2- 33
INDIA TO USA: Which plane would you fly?
33
COST LEADERSHIP DIFFERENTIATION
FOCUS
35. 2- 35
The Marketing Process
Target
Consumers
Product
Place Price
Promotion
Competitors
Marketing
Intermediaries
Publics
Suppliers
Demographic-
Economic
Environment
Technological-
Natural
Environment
Political-
Legal
Environment
Social-
Cultural
Environment
36. 2- 36
Marketing Mix- The Four P’s
Target
Customers
Intended
Positioning
Product
“Goods-and-service”
combination that a
company offers a
target market
Price
Amount of money
that consumers
have to pay to obtain
the product
Activities that
persuade target
customers to buy
the product
Promotion
Company activities
that make the
product available
Place
37. 2- 37
Managing the Marketing Effort
Marketing Planning
Develop Marketing
Strategies to
Achieve Marketing
Objectives
Develop
Marketing
Plans & Budget
Marketing
Implementation
Turn Marketing Plans
into
Action Plans
to Achieve
Marketing
Objectives
Marketing Analysis of Company’s Situation
Control
Measure
Results
Evaluate
Results
Take
Corrective
Action
38. 2- 38
Marketing Implementation
Marketing Strategy
Marketing Performance
Implementation
Climate and
Culture
Action
Programs
Decision
and
Reward
Organizational
Structure
Human
Resources
40. 2- 40
Elements of a Marketing Plan
Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls
