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Mktg6 ie ch02_ppt

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Mktg6 ie ch02_ppt

  1. 1. Lamb, Hair, McDaniel 2012-2013 CHAPTER 2 Copyright ©2012 by Cengage Learning Inc. All rights reserved 1 1 © iStockphoto.com/Dem10 Chapter 1 © AP IMAGES/JENNIFER GRAYLOCK Strategic Planning for Competitive Advantage
  2. 2. Learning Outcomes 1 Understand the importance of strategic planning 2 Define strategic business units (SBUs) 3 Identify strategic alternatives and know a basic outline for a marketing plan 4 Develop an appropriate business mission statement 5 Describe the components of a situation analysis 6 Identify sources of competitive advantage 2
  3. 3. Learning Outcomes 7 Explain the criteria for stating good marketing objectives 8 Discuss target market strategies 9 Describe the elements of the marketing mix 10 Explain why implementation, evaluation, and control of the marketing plan are necessary 11 Identify several techniques that help make strategic planning effective 3
  4. 4. The Nature of Strategic Planning Understand the importance of strategic marketing and know a basic outline for a marketing plan 1 © 2013 by Cengage Learning Inc. All Rights Reserved. 4
  5. 5. Strategic Marketing Management What is the organization’s main activity? How will it reach its goals? The answer is by examining: • SBUs • Marketing Plan • Strategic Alternatives 5 © 2013 by Cengage Learning Inc. All Rights Reserved. 1
  6. 6. Strategic Planning is… the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities. The GOAL of strategic planning is long-term profitability and growth. 6 © 2013 by Cengage Learning Inc. All Rights Reserved. 1
  7. 7. Strategic Business Units Define Strategic Business Units (SBUs) 2 © 2013 by Cengage Learning Inc. All Rights Reserved. 7
  8. 8. Characteristics of Strategic Business Units (SBUs) An SBU HAS…  A distinct mission and specific target market  Control over its resources  Its own competitors  Plans independent of other SBUs 8 © 2013 by Cengage Learning Inc. All Rights Reserved. 2
  9. 9. Strategic Alternatives Identify strategic alternatives and know a basic outline for a marketing plan 3 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
  10. 10. Ansoff’s Opportunity Matrix Market Penetration Increase market share among existing customers Market Development Attract new customers to existing products Product Development Create new products for present markets Diversification 10 Introduce new products into new markets © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  11. 11. Exhibit 2.1 Ansoff’s Strategic Opportunity Matrix Present Product Present Market Market Penetration New Market Market Development Starbucks sells more coffee to customers who register their reloadable Starbucks cards. Starbucks opens stores in Brazil and Chile New Product Product Development Starbucks develops powdered instant coffee Via. Diversification Starbucks launches Hear Music and buys Ethos Water. 3 11 © 2013 by Cengage Learning Inc. All Rights Reserved.
  12. 12. Boston Consulting Group Portfolio Matrix Star Star Cash Cow Cash Cow Portfolio Portfolio Matrix Matrix Question Mark Question Mark Dog Dog 12 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  13. 13. Exhibit 2.2 Portfolio Matrix for a Large Computer Manufacturer 3 13 © 2013 by Cengage Learning Inc. All Rights Reserved.
  14. 14. Portfolio Matrix Strategies Build Build Hold Hold Harvest Harvest Divest Divest 14 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  15. 15. Exhibit 2.3 High Cautiously Invest Invest/Grow Invest/Grow Medium Harvest/Divest Cautiously Invest Invest/Grow Low Market attractiveness Portfolio Matrix for a Large Computer Manufacturer Harvest/Divest Harvest/Divest Cautiously Invest Low Medium High Business Position 15 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  16. 16. What Is a Marketing Plan?  Planning – the process of anticipating future events and determining strategies to achieve organizational objectives in the future.  Marketing Planning – designing activities relating to marketing objectives and the changing marketing environment.  Marketing Plan – a written document that acts as a guidebook of marketing activities for the marketing manager. 16 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  17. 17. Why Write a Marketing Plan?  Provides a basis for comparison of actual and expected performance  Provides clearly stated activities to work toward common goals  Provides an examination of the marketing environment  Serves as a reference for the success of future activities  Allows entry into the marketplace with awareness 17 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  18. 18. Business Mission Statement Exhibit 2.4 Elements of a Marketing Mix Situation or SWOT Analysis Objectives Marketing Strategy Target Market Strategy Marketing Mix Product Distribution Promotion Price Implementation Evaluation Control 18 © 2013 by Cengage Learning Inc. All Rights Reserved.
  19. 19. Marketing Plan Elements Selecting which alternative to pursue depends on: 1. Philosophy and culture 2. Decision making tools The most common decision making tool is the matrix form. 19 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  20. 20. Writing the Marketing Plan A complete marketing plan can allow an organization to achieve marketing objectives… HOWEVER the marketing plan is only as good as the information, effort, creativity and thought put into it. 20 © 2013 by Cengage Learning Inc. All Rights Reserved. 3
  21. 21. Defining the Business Mission Develop an appropriate business mission statement 4 © 2013 by Cengage Learning Inc. All Rights Reserved. 21
  22. 22. Defining the Business Mission  Answers the question, “What business are we in?”  Focuses on the market(s) rather than the good or service  SBUs may also have a mission statement 22 © 2013 by Cengage Learning Inc. All Rights Reserved. 4
  23. 23. Conducting a Situation Analysis Describe the components of a situation analysis 5 LO3 © 2013 by Cengage Learning Inc. All Rights Reserved. 23
  24. 24. SWOT Analysis Internal External 24 S W O T Strengths --things the company does Strengths things the company does well. well. Weaknesses -- things the company Weaknesses things the company does not do well. does not do well. Opportunities -- conditions in the Opportunities conditions in the external environment that favor external environment that favor strengths. strengths. Threats -- conditions in the external Threats conditions in the external environment that do not relate to environment that do not relate to existing strengths or favor areas of existing strengths or favor areas of ©South-Western College Publishing current weakness. current weakness. © 2013 by Cengage Learning Inc. All Rights Reserved. 5
  25. 25. Components of a SWOT Analysis Examining internal strengths and weaknesses. Focus on organizational resources: • Production costs • Marketing skills • Financial resources • Company or brand image • Employee capabilities • Technology 25 © 2013 by Cengage Learning Inc. All Rights Reserved. 5
  26. 26. Environmental Scanning Helps identify opportunities and threats. Designing a marketing strategy is based on six major environmental forces: • Social • Economic • Technological • Political/Legal • Competitive 26 © 2013 by Cengage Learning Inc. All Rights Reserved. 5 © AP IMAGES/PRNEWSFOTO/PEPSICO • Demographic
  27. 27. Opportunities in Education • Grockit and DreamBox develop integrated web-based educational tools. • Technology-based education solutions offer interactive instruction for less than a private tutor. • Companies like these can use their technological expertise to create and take advantage of opportunities in the recession environment. Source: Joseph De Avila, "Pursuing an Academic Edge at Home," The Wall Street Journal, July 23, 2009, D1-D2. © Cengage Learning Inc. 2013. All Rights Reserved. 27
  28. 28. Competitive Advantage Identify sources of competitive advantage 6 © 2013 by Cengage Learning Inc. All Rights Reserved. 28
  29. 29. Competitive Advantage Cost Cost Types of Types of Competitive Competitive Advantage Advantage Product/Service Product/Service Differentiation Differentiation Niche Niche 29 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
  30. 30. Cost Competitive Advantage  Obtain inexpensive raw materials  Create efficient scale of plant operations  Design products for ease of manufacture  Control overhead costs  Avoid marginal customers 30 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
  31. 31. Sources of Cost Reduction Experience Curves Experience Curves Efficient Labor Efficient Labor Reengineering Reengineering No-frills Products No-frills Products Production Innovations Production Innovations Government Subsidies Government Subsidies 31 Product Design Product Design New Service New Service Delivery Methods Delivery Methods © 2013 by Cengage Learning Inc. All Rights Reserved. 6
  32. 32. Examples of Product/Service Differentiators  Brand names  Strong dealer network  Product reliability  Image  Service 32 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
  33. 33. Niche Competitive Advantage  Used by small companies with limited resources  May be used in a limited geographic market 33 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
  34. 34. Building Sustainable Competitive Advantage  Sustainable competitive advantage is an advantage that cannot be copied by the competition.  A firm that has successfully achieved a competitive advantage will stake out a position unique in some manner from its rivals. 34 © 2013 by Cengage Learning Inc. All Rights Reserved. 6
  35. 35. Sources of Sustainable Competitive Advantage Patents Patents Copyrights Copyrights Locations Locations Equipment Equipment Skills and Assets Skills and Assets of an of an Organization Organization 35 Technology Technology Customer Service Customer Service Promotion Promotion © 2013 by Cengage Learning Inc. All Rights Reserved. 6
  36. 36. Setting Marketing Plan Objectives Explain the criteria for stating good marketing objectives 7 © 2013 by Cengage Learning Inc. All Rights Reserved. 36
  37. 37. Marketing Objectives  Realistic  Measurable  Time specific  Compared to a benchmark “Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction.” 37 © 2013 by Cengage Learning Inc. All Rights Reserved. 7
  38. 38. Criteria for Good Marketing Objectives Carefully specified objectives serve several functions: 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to clarify their thinking 5. Form a basis for control 38 © 2013 by Cengage Learning Inc. All Rights Reserved. 7
  39. 39. Describing the Target Market Discuss target market strategies 8 © 2013 by Cengage Learning Inc. All Rights Reserved. 39
  40. 40. Describing the Target Market Marketing Strategy involves… the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets. Marketing Opportunity Analysis (MOA) involves… the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments. 40 © 2013 by Cengage Learning Inc. All Rights Reserved. 8
  41. 41. Target Market Strategy  Segment the market based on groups with similar characteristics  Analyze the market based on attractiveness of market segments  Select one or more target markets 41 © 2013 by Cengage Learning Inc. All Rights Reserved. 8
  42. 42. Target Market Strategy Appeal to the entire market Appeal to the entire market with one marketing mix with one marketing mix Concentrate on one Concentrate on one marketing segment marketing segment Appeal to multiple markets Appeal to multiple markets with multiple marketing mixes with multiple marketing mixes 42 © 2013 by Cengage Learning Inc. All Rights Reserved. 8
  43. 43. The Marketing Mix Describe the elements of the marketing mix 9 © 2013 by Cengage Learning Inc. All Rights Reserved. 43
  44. 44. The Marketing Mix is… a unique blend of product, place (distribution), promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. The elements of the marketing mix are often referred to as the “Four Ps” 44 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
  45. 45. Marketing Mix: The “Four Ps” The starting point of the “4 Ps” Includes: Physical unit Package Warranty Service Brand Image Value 45 Product Products can be…  Tangible goods  Ideas  Services © 2013 by Cengage Learning Inc. All Rights Reserved. 9
  46. 46. Marketing Mix: The “Four Ps” Place Product availability where and when customers want them All activities from raw materials to finished products Ensure products arrive in usable condition at designated places when needed 46 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
  47. 47. Marketing Mix: The “Four Ps” Includes integration of: Promotion Advertising Public relations  Role is to bring about Sales promotion exchanges with target Personal selling markets by:  Informing  Educating  Persuading  Reminding 47 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
  48. 48. Marketing Mix: The “Four Ps” Price Price is what a buyer must give up to obtain a product. The most flexible of the “4 Ps”—quickest to change Competitive weapon Price x Units Sold = Total Revenue 48 © 2013 by Cengage Learning Inc. All Rights Reserved. 9
  49. 49. Whole Foods Changes Its Pricing Strategy • As customers face financial struggles, Whole Foods is changing its pricing strategy by: – highlighting deals and sales – pricing items individually instead of per pound – bundle items in bulk discounts Source: Katy McLaughlin and Timothy Martin, "As Sales Slip, Whole Foods Tries Health Push," Wall Street Journal, August 5, 2009, B1 9 © 2013 by Cengage Learning Inc. All Rights Reserved. 49
  50. 50. Following Up on the Marketing Plan Explain why implementation, evaluation, and control of the marketing plan are necessary 10 © 2013 by Cengage Learning Inc. All Rights Reserved. 50
  51. 51. Following Up on the Marketing Plan  Implementation  Evaluation and Control  Marketing audit is…     51 Comprehensive Systematic Independent Periodic © 2013 by Cengage Learning Inc. All Rights Reserved. 10
  52. 52. Effective Strategic Planning Identify several techniques that help make strategic planning effective 11 © 2013 by Cengage Learning Inc. All Rights Reserved. 52
  53. 53. Techniques for Effective Strategic Planning Continual Continual attention attention Creativity Creativity Management Management commitment commitment Effective Effective Strategic Strategic Planning Planning 53 © 2013 by Cengage Learning Inc. All Rights Reserved. 11
  54. 54. Chapter 2 Video Recycline CA Webb discusses Recycline’s strategic decisions that help the company have a sustainable competitive advantage— giving customers sustainable, environmentally friendly products without sacrificing any features of the traditional product. CA Webb also discusses her use of SWOT, and how it helps Recycline make strong choices for the new brand. © Cengage Learning Inc. 2013. All Rights Reserved. 54

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