This document discusses defining business units and strategic business plans. It discusses segmenting broad product groups like shampoo into specific units based on factors like target markets, product types, and product-market characteristics. It provides examples of segmenting the shampoo market based on attributes like target customer groups (e.g. mothers, young women, men), product types (e.g. dandruff, dry scalp, ethnic), and defines assessable business units. Guidelines are outlined for determining whether to combine or separate business units based on factors like marketing skills, technology, distribution channels, and competitive positions. Finally, examples are given of how businesses like airlines could be defined through a product-market matrix.

1. Defining the Business (B.2.1.)
Creating and Presenting Strategic Plans

2. What are these products?
• Camera?
• Mobile telephone?
•Computer?
• Shampoo?
• Beer?
•Soft drink

3. Need to break broad groups into units
Strategic Business Units
Industry Labels too Broad
What units?

4. •Pinpoint strategic effort
•Performance measures
•Basis for resource allocation
Strategic Business Units

5. Number available on-line October 2014: 954
Cheapest: Boots Essential Anti-Dandruff Shampoo: £0.62 per 100ml.
Dearest: La Science Anti-Hair Loss Serum: £29.99 per 100 ml.
Dearest = Cheapest x 48.3
Why?
They are in different product-market segments
Shampoos are defined differently
Defining the Shampoo Business

6. Markets
Mothers
Young
Women
Children Babies Men Sports
Family x x x x x
Mild/Baby x x x
Dandruff x x x x
Dry scalp x x x x
Ethnic x x x
Beauty x x
Bounce x x
Shine x x x
Colouring x x
Volumising x
Shampoo &
Conditioner
x x
Frequent
x
Defining the Shampoo Business

7. Markets
Defining the Shampoo Business
Mothers,
Children &
Babies
Young
Women
Men Sports
Family, Mild/Baby, x x x x
Dandruff, Dry Scalp,
Volumising
x x x
Ethnic x x x
Beauty, Bounce, Shine,
Colouring
x x
Shampoo & Conditioner,
Frequent use
x x

8. Segment marketsSegment products
Cluster back
Manageable product-market segments
Repeat
Defining Business Units Stage 1

9. Stage 2: The generic characteristics of the units
1. Well defined contiguous set of products or services
2. Relatively homogeneous group of customers
3. Distinct set of competitors
4. Pinpoint strategic marketing effort
5. Allocate resources and measure performance
Defining the Business: Stage 2

10. 1. Different marketing skills?: Separate
3. Different stages in the life cycle?: Separate
4. Different competitive positions?: Separate
2. Different basic technologies?: Separate
5. Different distribution channels?: Separate
Guidelines to combine or separate

11. MBA Student Definition of Qantas Business

12. MBA Student Definition of Ryanair

13. M1 M2 M3 M4 M5 M6 NM1 Sales
P1
P2
P3
P4
P5
P6
NP1
NP2
Sales
Markets/Customers
A product-market matrix for 201X and 201Z
Develop Your Product Market Matrix
NP1 = New Product 1, NM1 = New Market 1

14. The End