Strategic marketing-plan-copyright-houghton-mifflin-company1839(1)

Definitions of Strategy and Tactics
Strategy:

• An explicit statement of the firm’s vision of its
future, objectives, and purpose
• Provides long-term direction for decisions

• Includes corporate policies, resource
allocations, customer markets, and
competitive environment

Copyright © Houghton Mifflin Company.All rights reserved.

3–2

Definitions of Strategy and Tactics (cont’d)
Tactics:

• Serve as guidelines for implementing the
intent of the strategic plan
• Are the basis for day-to-day operating
decisions (including the marketing mix)
• Have a shorter-term planning horizon than
strategic planning


3–3

Dimensions That Define Strategy
• The product market in which the business will
compete
• The level of investment in a strategic business
unit

• The functional area strategies required for
competing in the chosen market
• The underlying strategic assets and skills (core
competencies) that give the firm a sustainable
competitive advantage


3–4

Marketing, Strategic Planning, and
Organizational Levels
Insert table 3.1


3–5

The Strategic Planning Process
Mission

Feedback

Set Performance Objectives
Environmental and Self Analyses

Strategic Objectives & Strategy Definition
Implementation and Tactics
Execution
Evaluation and Control


3–6

Strategic Perspectives
• Strategic readiness
– Ability to take advantage of unexpected market opportunities
by having a long-term strategic plan and vision in place

• Strategic vision
– Longer-term, futuristic perspective, requires patience and
determination

• Strategic opportunism
– Focus on present, and seizing market opportunities in a
dynamic, uncertain environment


3–7

External Environmental Analysis
• Customers
– Who are most desirable? Should the market be segmented?
– What are their characteristics, preferences, and behaviors?

• Competitor Assessment
– Who are our present and potential competitors?
– How well matched are their strategies and strengths to
–

the market’s key success factors?

– What are their weaknesses?
– How much of a threat are they?


3–8

External Environmental Analysis

(cont’d)

• Market
– What are the market segment characteristics?
– What market trends are occurring?
– What is the current and future size, growth rate,
and direction of the market?

• Environmental scanning and forecasting
– What trends and events are apparent in both the
micro- and macro-environments?
– What will be their impact on us?

3–9

Internal Organizational Analysis
• Financial resources
– Self-assessment of present financial assets
– Sources of funds (sales, interest, loans) and uses
(inventories, interest) of assets

• Physical resources
– Assets presently available and those needed to
implement strategy in the short - and long-run

– Property, plant, equipment, other assets


3–10

Internal Organizational Analysis

(cont’d)

• Human resources
– Talents, skills, and abilities of managers and other personnel
– Outside specialists, suppliers, or others

• Technological resources
– In the form of products and processes

• Organizational resources
– Firm’s structure, systems, and procedures that support the
strategy


3–11

Figure 3.3: Five-Factor
Model of Profitability

Source: Model adapted from Michael Porter, “Industry Structure and Competitive Strategy: Keys to Profitability,” Financial Analysis Journal (July-August 1980) p. 33.

3–12

Strategic Inflection Point:
A Six Forces Adaptation of the Five Forces Model

Imbalance of Environmental Forces (Substitutes)
Existing
Competitors

Complementors*

Customers

The Business  Change  The Business
Suppliers

Substitutes

Potential
Competitors

*Significance: Complementors counteract substitution.
Source: Adapted from Andrew Grove, “Navigating Strategic Inflection Points,” Business Strategy Review (Autumn, 1997), pp.12-13.
Copyright London Business School. Reprinted by permission of Blackwell Publishers.

3–13

Strategic Inflection Point
“During a
Strategic
Inflection Point,
the way a
business
operates, the
very structure
and concept of
the business,
undergoes a
change. But the
irony is that at
this point itself
nothing much
happens.”
Source: Adapted from Andrew Grove, “Navigating Strategic Inflection Points,”
Business Strategy Review (Autumn, 1997), pp.12-13. Copyright London Business
School. Reprinted by permission of Blackwell Publishers.

3–14

What Are the Basic Strategies for Sustainable
Competitive Advantage?

Differentiation

Distinguishing one company’s products from
competitors on the basis of greater perceived
benefits and/or more value

Low
Cost

Marketer achieves cost advantage by controlling
costs of production, inputs, marketing programs, etc.

Focus

Concentration of the business on specific
market segment(s) and/or product group(s)

Preemptive
Move

First-mover advantage from being first to enter
market with a new product, innovation, etc.; creates
barriers to entry for follow-on competitors

Synergy

Combining the assets and skills of two or more units
by sharing business functions, customers,
marketing, personnel, etc.


3–15

Strategic Planning and the
Challenge of Change
• Changes in approaches to strategy development

• Complexity and uncertainty
• Poverty of time
• Need for flexibility and adaptability
• Stakeholder involvement
• Integration of ethics and social responsibility


3–16

Complexity and Uncertainty in
Strategic Market Planning
• Complexity
– The intricacies and relationships of the company
and its industry partners make it difficult to
analyze, understand, or solve complicated
strategic problems.

• Uncertainty
– The vagueness and doubt about a company’s
industry and general operating environment; not
being sure of what is happening now or what to
expect in the future.


3–17

Strategic Planning and
Customer Orientation
• Develop outstanding approaches to delivering
customer satisfaction.
• Plan for value creation from the customer’s
perspective.

• Pursue continuous quality improvement in
products and processes.
• Develop the ability and willingness to re-engineer
(or redesign) goods or services as indicated by
the marketing environment or internal conditions.


3–18

Figure 3.5: Integration of Ethical and Socially
Responsible Plans into Strategic Decision Making

Source: Adapted from Donald Robin and R. Eric Reidenbach, “Social Responsibility, Ethics, and Marketing Strategy: Closing the Gap Between Concept and
Application,” Journal of Marketing 51(1) (January), pp.44-58.Reprinted by permission.

3–19

American Marketing Association
Code of Ethics
• Responsibilities of the marketer to all relevant
publics (consumers, organizations, and society)
• Honesty and fairness; uphold integrity, honor,
and dignity of the marketing profession

• Rights and duties of participants in the marketing
exchange process (including 4P’s and marketing
research)
• Ethical behavior in organizational relationships


3–20

Figure 3.7: The Value Chain


3–21

The Marketing Value Chain
Value = Benefit – Price
Choose
the Value

Communicate
the Value

Provide the Value

Promotion and
Public Relations

Selling

Advertising

Application
Engineering

Pricing

Service

Distribution

Sourcing and
Making

Product/Service
Development

Value Positioning

Select Target(s)

Customer Value
Need Assessment

Source: Redrawn from Anterasian and Phillips in Webster, Market-Driven Management (1994).

3–22

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