2. Strategic Planning
• Strategic Planning
– The process of developing and maintaining a
strategic fit between the organization’s goals
and capabilities and its changing marketing
opportunities.
– It involves defining a clear company mission,
setting supporting objectives, desinging a
sound business portfolio, and coordinating
functional strategies.
3. Steps in Strategic Planning
Defining the
company
mission
Setting
company
objectives
and goals
Designing
the business
portfolio
Planning
marketing
and other
functional
strategies
Corporate Level Business unit,
product and
market level
4. Steps in Strategic Planning
• What is our business?
• Who is our customer?
• What do consumers value?
• What should our business be?
• Mission Statement
– A statement of the organization’s purpose – what it
wants to accomplish in the larger environment
• Example
– Hill’s Pet Nutrition does more than sell pet food. Its mission is “to help enrich and
lenghten the special relationships between people and their pets”.
• Missions should be realistic, be specific, fit the market environment, based
on its distinctive competencies, be motivating, be market oriented.
• American Online: Product oriented: We provide online auctions.
• Market oriented: We create customer connectivity, anytime, anywhere
5. Mission
• Focus on customer needs
• Realistic
• Specific
• Fit the market environment
• Base on distinctive competencies
• Be motivating
6. Setting Company Objectives and Goals
• Each manager should have objectives and be
responsible for reaching them.
• Possible objectives
– To creat environmentally better products
– To get the products to market faster at lower costs
– To improve profits
– To improve the market share
– To enter new markets
– Etc.
7. Desining the Business Portfolio
• Business portfolio
– The collection of businesses and products that
make up the company
– The best business portfolio is the one that best
fits the company’s strengths and weaknesses to
opportunities in the environment.
– Two steps
• Analyze its current business portfolio
• Shape the future portfolio
8. Analyzing the Current Business Portfolio
• Portfolio analysis
– A tool by which management identifies and evaluates the various
businesses making up the company
• Steps to identify the key businesses
– To identify the key businesses that make up the company
• Stragic business : A unit of the company that a separate mission and
objectives and that can be planned independently from other company
business
– To assess the atractiveness of various SBUS
– SBU: a unit of the company that has a seperate mission and
objectives and that can be planned independently from other
company businesses
– SBU: a company division, a product line, a single product or brand
9. Portfolio Planning Method
• Growth-share matrix (Boston Consulting Group’s)
– A portfolio-planning method that evaluates a
company’s strategic business units in terms of
their market growth rate and relative market
share.
– SBUs are classified as stars, cash cows,
question marks, or dogs
10. STAR QUESTION MARK
CASH COW DOG
Growth-share matrix
Market
growth
rate
Low
High
Relative Market Share
High Low
11. Growth-share matrix
• Stars
– High-growth, high-share business or products
– Need heavy investment to finance rapid growth
– Eventually their growth will slow down, and they will turn into cash cows
• Cash cows
– Low-growth, high-share businesses or products
– Produce a lot of cash
– Supports other SBUs that need investment
• Question marks
– Low-share business units in high-growth markets
– Require a lot of cash
– Management has to think hard about which question marks it should try to
build into stars and which should be phased out.
• Dogs
– Low-growth, low-share, businesses or products
– Genarate enough cash
– Do not promise
12. The product/market expansion grid
Existing products New products
Existing
markets
Market
penetration
Product
development
New
markets
Market
development
Diversification
14. The product/market expansion grid
Existing
products
New products
Existing
markets
Market
penetration
Product
development
New markets Market
development
Diversification
15. The product/market expansion grid
• A portfolio planning tool for identifying company growth opportunities through market
penetration, market development, product development, or diversification.
• Market penetration
– A strategy for company growth by increasing sales of current products to current market
segments without changing the product
• Market development
– A strategy for company growth by identifying and developing new market segments for
current company products
• Product development
– A strategy for company growth by offering modified or new products to current market
segments
• Diversification
– A strategy for company through starting up or acquiring business outside the company’s
current products and markets
• Downsizing
– Reducing the business portfolio by eliminating produtcs or business units that are not
profitable or that no longer fit the company’s overall strategy
16. Partnership
• Working closely with partners in other company departments
and outside the company to jointly bring greater value to
customers
• Marketing provides
– A guiding philisophy
– Inputs to strategic planning
– Strategies for reaching the unit’s objectives
• Value chain
– The series of departments that carry out value-creating activities to
design, produce, market, deliver, and support a firm’s products
• A company’s value chain is only as strong as its weakest link.
• A company’s different functions should work in harmony to
produce value for consumers
17. Value-delivery network
• The network made up of the company, suppliers,
distributors, and ultimately customers who
partner with each other to improve the
performance of the entire system
• Competition takes place between the entire
value-delivery networks created by these
competitors not between individual competitors.
18. Marketing Strategy and the Marketing Mix
• Marketing strategy
– The marketing logic by which the business unit hopes to achieve its
marketing objectives
– The company designs an integrated marketing mix made up of
factors under its control (product, price, place, promotion)
• Marketing process
– The process of
• (1) analyzing marketing opportunities,
• (2) selecting target markets,
• (3) developing the marketing mix, and
• (4) managing the marketing effort
• Consumers stand in the center.
19. Marketing Strategy and the Marketing Mix
• Companies must be customer centered.
• Companies know that they cannot profitably serve all consumers in a given market.
• Market segment
– A group of consumers who respond in a similar way to a given set of marketing
efforts
• Market segmentation
– Dividing a market into distinct groups of buyers who have distinct needs,
charecteristics, or behavior and who might require separate products or
marketing mixes
• Differentiation
– Differentiating the marketing offering to create superior customer value
• Target marketing
– The process of evaluating each market segment’s attractiveness and selecting
one or more segments to enter
• Market positioning
– Arranging for a product to occupy a clear, distinctive, and desirable place relative
to competing products in the minds of target consumers
20. Marketing Strategies for Competitive Advantage
• The company must do a better job than competitors of
satisfying target consumers.
• Designing competitive marketing strategies begins with
thorough competitor analysis.
• The competitive marketing strategy a company adopts
depends on its industry position.
– Market leader
• Microsoft
– Market challenger
• Aggressively attacks competitors (Kola Turka)
– Market followers
• Follow competitors
– Market nicher
• They specialize.
21. Marketing Mix
• The set of controllable tactical marketing tools-
product, price, place, and promotion- that the
firm blends to produce the response it wants in
the target market.
22. Marketing Mix (Four P’S)
PRODUCT
Variety
Quality
Design
Features
Brand name
Packaging
services
PROMOTION
Advertising
Personal selling
Sales promotion
Public relations
PLACE
Channels
Coverage
Assortments
Locations
Inventory
Transportation
logistics
PRICE
List price
Discounts
Allowances
Payment period
Credit terms
Target
customers
Intended
positioning
23. Managing the Marketing Effort
• Marketing Analysis
– Managing the marketing function begins with a complete analysis of
the company’s situation.
– SWOT analysis
• Marketing Planning
– The marketing logic by which the business unit hopes to achieve its
marketing objectives
• Marketing Implementation
– The process that turns marketing strategies and plans into marketing
actions in order to accomplish strategic marketing objectives
• Marketing Control
– The process of measuring and evaluating the results of marketing
strategies and plans and taking corrective action to ensure that
objectives are achieved.