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Chapter 2 Developing Marketing Strategies And Plans


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Chapter 2 Developing Marketing Strategies And Plans

  1. 1. Part 1 : Understanding Marketing Chapter 2 - Developing Marketing Strategies and Plans
  2. 2. Establishing Strategic Business Unit <ul><li>An SBU has three characteristics: </li></ul><ul><li>It is a single business or related business that can be planned separately from the rest of the company </li></ul><ul><li>It has its own set of competitors </li></ul><ul><li>It has a manager who is responsible for strategic planning and profit performance and who controls most of the factors affecting profit </li></ul>
  3. 3. Business Unit Strategic Planning Process <ul><li>Business Mission </li></ul><ul><li>External environment (opportunity and threat analysis) </li></ul><ul><li>Internal environment (strength and weakness analysis)  b and c applied to SWOT analysis </li></ul><ul><li>Goal formulation </li></ul><ul><li>Strategy formulation </li></ul><ul><li>Program formulation </li></ul><ul><li>Implementation </li></ul><ul><li>Feedback and control </li></ul>
  4. 4. An Example of Mission Statement <ul><li>Rubbermaid Commercial Products, Inc.: </li></ul><ul><li>“ 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 customer 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” </li></ul>
  5. 5. Business Unit Strategic Planning <ul><li>Goal formulation: Most business units pursue a mix of objectives including profitability, sales growth, market share improvement </li></ul><ul><li>The Business unit set these objective and manages by objective (MBO), with 4 criteria: </li></ul><ul><li>They must be arranged hierarchically or priority </li></ul><ul><li>Objective should be stated quantitatively </li></ul><ul><li>Goals should be realistic (not wishful thinking) </li></ul><ul><li>Objectives must be consistent (priority) </li></ul>
  6. 6. Business Unit Strategic Planning <ul><li>Strategic Formulation (based on Michael Porter): </li></ul><ul><li>Overall Cost Leadership </li></ul><ul><li>Differentiation </li></ul><ul><li>Focus </li></ul><ul><li>Program formulation and Implementation (McKinsey 7’s Framework): </li></ul><ul><li>Strategy, Structure, and System (as hardware) </li></ul><ul><li>Style, Skill, Staff & Shared values (as software) </li></ul><ul><li>Feedback and Control: if the marketplace will change, the company will review and revise </li></ul>
  7. 7. Product Planning: the Nature & Contents of a marketing plan <ul><li>Each product level within a business unit must develop a marketing plan for achieving its goals. </li></ul><ul><li>Contents of the marketing plan: </li></ul><ul><li>Executive summary. It is an overview of the market opportunity and strategy for meeting needs of targeted market segment. It includes marketing or financial objectives to be achieved. </li></ul><ul><li>Situation analysis. It focuses on the definition of market and competitors. Also, current capability of the company to serve the market. Thus it needs the SWOT analysis. </li></ul><ul><li>Marketing strategy. All marketing strategies start with targeting and positioning (differentiation is needed). Then strategies in specific areas such as product, pricing, distribution, and marketing communications. </li></ul><ul><li>Financial projection. It includes a sales forecast, an expense forecast, and a break even analysis. </li></ul><ul><li>Implementation control. Typically, the management can review budget versus actual in each period’s results. The correction is needed if there is no profit. </li></ul>