This chapter includes Marketing process & Strategic Marketing Planning

1. Marketing Management

2. Marketing Process & Strategic
Marketing Planning-Unit 04

3. Construct an
integrated
marketing program
that delivers
superior values
Marketing Process Model
Understanding the
market place and
customer needs and
wants
Design a
customer-
driven
marketing
strategy
Build profitable
relationships and
create customer
delight
Capture value from
customers to create
profits and customer
equity

4. What is Strategic Planning?
 It is the managerial process that helps to develop a strategic and viable fit between the firm’s objectives,
skills, resources with the market opportunities available.
 It helps the firm deliver its targeted profits and growth through its businesses and products.

5. How to go about
it?
• Defining the corporate mission
• Establishing SBUs (Strategic Business Unit)
• Allocating resources for SBUs
• Planning for new business

6. Corporate Mission
• This seeks to embody the entire goals of the organization and the objective of its existence.
• It seeks to provide a sense of purpose, direction and opportunity
• For E.g:e-bay’s mission:
“to provide a global trading platform where practically anyone can trade practically anything”.

7. 5 questions that the firm must ask itself
• What is our business?
• Who is our customer?
• What does our customer need?
• What will our business be?
• What should our business be?

8. Marketing Myopia
Marketing myopia is a term coined in 1960 by the late Harvard Business School marketing professor Theodore
Levitt, describing the common mistake of prioritizing short-term goals over long-term growth and prioritizing
business needs over customer needs.
Marketing myopia strikes in when the short term marketing goals are given more importance than the long term
goals. Some examples are:
•More focus on selling rather than building relationships with the customers.
•Predicting growth without conducting proper research.
•Mass production without knowing the demand.
•Giving importance to just one aspect of the marketing attributes without focusing on what the customer
actually wants.
•Not changing with the dynamic consumer environment.

9. Good mission statements have three characteristics
• They focus on a limited number of goals
• It stresses the major values and policies the firm desires
• It defines the major competitive scope of operation

10. Strategic Business Unit (SBU)
 A strategic business unit is a fully functional, independently operational setup of a particular business. These
units are active and have their vision, growth, and direction.
 The main objective of such a unit is to maximize profits and mainly focus on offering a particular product
targeting a market segment.

11.  Strategic business units (SBU) are separate divisions of a parent company that operates in different industries
and market sectors, offering several product lines or services.
 SBUs are formed within enterprises that usually have huge businesses worldwide providing different goods
and services.
 A strategic business unit operates on three levels-the headquarter or the parent company always remains at the
top, and the SBUs in the middle and below are clustered accordingly.
 An SBU is supposed to submit its business’s performance, results, growth, and revenue from time to time to
the parent company.
 A strategic business unit plan is essential here because it separates the product lines of a common parent
company. In this way, each SBU is known individually, creating more market capitalization than a company
with no business units.
 When a company decides to launch a new product in a different market, the SBU helps in market
analysis, research and development, pricing, and creating market awareness and recognition.

12. Unilever's strategic business units (SBUs) include home care, Personal care, and Food and
drink units.

16. Ceylon Cold Stores
Ceylon Cold Stores (CCS), trading as
Elephant House, is a Sri Lankan
company which produces carbonated
drinks, ice cream and processed meat
products.

17. Ceylon Cold Stores PLC (CCS) a subsidiary of John Keells Holdings PLC, manufactures, markets and
distributes carbonated beverages and frozen confectionery products.
The company’s product portfolio includes carbonated soft drinks, energy drinks, caffeine-based drinks, isotonic
drinks, natural beverages, ice creams and water.
CCS markets its products under Elephant House, IMORICH, Twistee, and Fito brand names. It also operates
retail business through its subsidiary, Jaykay Marketing Services (Private) Ltd under Keells Supermarkets.
The company sells its products through multi-channel network of distributors, modern trade outlets, general
trade outlets, hotels and restaurants. It exports its products to Canada, Switzerland, the UK, Germany and
France. CCS is headquartered in Colombo, Sri Lanka.

18. Characteristics of Strategic Business Unit
The characteristics of a strategic business unit are:
•It is designed to target a specific customer base present in the market.
•Since these business units are independently regulated and operational, they have their market competitors
present.
•The SBUs mostly have their shares listed on the stock exchange, separate from their parent companies.
•The customer may or may not know the parent company of an SBU and identify it as a separate entity.
•The SBUs have a manager responsible for all the unit’s planning, profitability, and performance.
•A company can establish many SBUs, each with its own planning. Additionally, they shall report the overall
performance to the parent company.

19. What does FMCG stand for?
FMCG stands for Fast-Moving Consumer Goods products sold quickly and relatively cheaply.
Some examples of FMCG products include:
Packaged foods
Beverages
Toiletries
Cosmetics
Cleaning supplies, and
other low-cost household items.

20. Most Respected Entities 2023
crowns Unilever Sri Lanka as
the No.1 Most Respected
FMCG Company 2023

21. Marketing Theories
BCG Matrix (The Boston Consulting group's product portfolio matrix)
There are four types of strategic business units

22. BCG Matrix
The Boston Consulting group's product portfolio matrix (BCG matrix) is designed to help with long-term
strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to
decide where to invest, to discontinue, or develop products.

23. #Star
Star SBUs represent business divisions that reap high growth and market share of the business in its particular
sector.
Star SBUs are units with a monopoly over a market or big industry giants. They demand high monetary
investment and constant cash flow maintain the strategic business unit structure.
Monopoly
A monopoly is a market where one firm (or manufacturer) is the sole supplier of certain goods or services. This
firm faces no competition due to which it can set its own prices, thereby exercising full control over the market.
The monopolist aims to generate high profits by selling products (or services) that do not have close substitutes.

24. #Cash Cows
A cash cow is the SBU that generates the maximum cash or revenue for the business, dominates the market, yet
has slow growth. Sometimes, one type of SBU turns into another type of SBU. So if a high-growth market settles
down, the star SBU becomes a cash cow.
#3Question Marks
The market experts define some units as question marks when a quintessential question arises with such SBUs that
are high growth functioning with low shares. Such units demand high monetary investment that is diverted from
cash cows. Therefore, corporations always need help understanding whether to invest in or remove such units.
#4Dogs
Dogs are the SBUs that businesses have very low hope of growing in the future, and they can never become star
SBU. They are underachievers with low market shares and diminishing growth. Such business units only generate
enough cash to survive and keep themselves afloat. As a result, these units receive less attention from
corporations.

25. Example:
Martin owns a tech company that manufactures laptops and smartphones. He built the business from scratch
and has been running it for nine years. Martin’s company has a good history on the stock exchange. Now
Martin, looking at the market, has come up with an idea in the automobile industry, manufacturing cars. He
invested much money and set up a completely independent strategic business unit. Now both companies are
listed on the stock market.
From his SBU, Martin was able to manufacture affordable cars for people with low or mid-level households.
This SBU will report to Martin’s parent company and the tech company. Now both are SBUs, but in this way,
he connected with people needing an affordable car and simultaneously has another business set up in the tech
industry.
Thus, he expanded his business and reaped more profits and revenue. In the future, even if the tech market is
problematic and people are more interested in investing in the automobile sector, they can buy Martin’s motor
company shares or vice versa. For Martin, each company operates in a different sector with its product and has
its market competitors. Still, in the real world, it is a much more complex and time-consuming process and
structure demanding critical planning and execution.

26. Advantages And Disadvantages
Here are the main advantages and disadvantages of SBUs:
Advantages
 It gives the organization a chance to create a better future for itself
 It provides an opportunity to identify a strategic direction
 It offers a chance to make better business decisions
 It enhances the longevity of the business
 It allows the parent company to avoid competitive convergence
 It offers financial benefits
Disadvantages
 It is a complex process to develop
 It may create competition within the company
 It can be challenging to implement
 It is a costly process which repeats itself for the organization

27. GE McKinsey matrix strategies
The GE matrix was developed by Mckinsey and Company consultancy group in the 1970s. The nine cell grid
measures business unit strength against industry attractiveness.

28. Industry Attractiveness:
Factors you could choose to base this on include:
•Market size
•Market growth
•Pestel factors
• Political
• Economical
• Social
• Technological
• Environmental
• Legal
•Porters five forces
• Competitive rivalry
• Buyer power
• Supplier power
• Threat of new entrants
• Threat of substitution

29. Business Unit Strength:
Factors to determine how strong a unit is compared to others in its industry include:
•Market share
•Growth in market share
•Brand equity
•Profit margins compared to competition
•Distribution channel process
Grow/Invest:
Units that land in this section of the grid generally have high market share and promise high returns in the future
so should be invested in.
Hold/Selectivity:
Units that land in this section of the grid can be ambiguous and should only be invested in if there is money left
over after investing in the profitable units.
Harvest/Divest:
Poor performing units in an unattractive industry end up in this section of the grid. This should only be invested
in if they can make more money than is put into them. Otherwise they should be liquidated.

30. Ansoff Matrix
The Ansoff Matrix is a strategic planning tool used by marketers to develop effective strategies for the growth and
expansion of products or services and the market. It also lets businesses evaluate risks associated with the strategy
put in place.
The Ansoff Matrix theory first
appeared in the article “Strategies for
Diversification,” published in the
Harvard Business Review in 1957.
Developed by a Russian-American
business manager and applied
mathematician, H. Igor Ansoff, the
matrix formed the basis of strategy
formulation for marketers and
businesses based on new and existing
products or services and markets.

32. 1.Market Penetration:
 It refers to the business strategy adopted or implemented to increase the sale of existing products or services
in the established market.
 It attempts to increase the market share for existing offerings without changing them by reaching present and
potential customers.
 The various ways include providing discounts, enhancing promotional campaigns, improving distribution
channels, and acquiring competing brands.
2.Product Development:
 It is a strategy to introduce new products or services to the existing market.
 The strategy works when firms have complete knowledge about the existing market.
 They develop new products, considering the requirements of existing and potential customers.
 Finally, they introduce them in the existing market after performing extensive market research, entering
strategic partnerships, or acquiring another brand.

33. 3.Market Development:
 It refers to strategies implemented to introduce existing products or services with minimal development into
new markets.
 The compatibility between the offerings and the market exists if they are suitable for each other.
 Businesses introduce attractive prices for different products, select new markets within or beyond local
borders, cater to new customer segments, add new features to the products, choose new product packaging,
adopt new online distribution channels, etc., to make this approach effective.
4.Diversification:
 It includes strategies adopted to introduce new products in a new market.
 However, it requires researching and developing both the market and products.
 Given the high level of risks involved, the diversification quadrant of the Ansoff Matrix is sometimes referred
to as “suicidal cell.”
 But if implemented successfully, this strategy may result in increased business revenues.

34. SWOT Analysis
SWOT analysis, also known as the SWOT matrix, is a strategic planning and management tool individuals or
organizations use to analyze the strengths, weaknesses, opportunities, and threats related to a specific business or
project.
SWOT analysis provides a comprehensive view of the business or personal situation and helps develop a strategic
plan.
This dynamic tool assists in analyzing business strengths, identifying weaknesses, capitalizing on opportunities,
and mitigating threats, ultimately leading to better decision-making and planning for the future.

35. SWOT Analysis Example
Good swot analysis example highlight an entity’s strengths, weaknesses, opportunities, and threats. It uses some
tools and techniques that can evaluate the organization from both internal and external points of view.
Strength and Weaknesses are the internal factors. Some examples of strengths are the unique selling proposition of
the business, the skill and quality of the human resource, the brand image, etc. Weakness include lack of funds,
poor management, old and outdated technology, lack of innovation to keep us with the competitive market, etc.
Opportunity and Threat are external factors. Opportunity includes the high market demand, new technology, peer
partnership to improve quality of goods and services, huge customer base, etc. The threats may include the
economic and political instability.

36. Example
Given below is a perfect swot analysis example for business, which highlights the various aspects of the entity that
identifies the points of improvement and areas that should be utilized for growth and expansion.
Strengths
•Every user of an Apple device takes pride in owning it due to its strong brand image, popularity, and performance
that has been entrusted over the years.
•It is one of the strongest and most valued brands in the world.
•Providing premium devices across product lines comes at a price that allows a higher profit margin per device.
•Innovation in every new device launched makes the product most sought after.

37. Weaknesses
•Apple devices are priced significantly higher than their competitors; the iPhones cost over one grand a piece.
Although the sale dependency is on the middle and high-income brackets, the customers in the lower-income
brackets are kept at bay due to its high pricing.
•Apple does not have a commendable distribution network. The company selects all the authorized sellers for its
products, and as a result, there are not many at the international level. As a result, the market reach is limited to
several authorized sellers.
•Since Apple products are sold at a higher price, the customer base is limited to the middle and the high-income
brackets, thereby restricting the low-income bracket customers, which form the majority.

38. Opportunities
•Apple is the most sought-after brand in mobile phones and laptop segments. The rising demand for mobile
phones will help in increased sales volumes.
•The distribution network can be enhanced and increased. Apple needs to put in more of their authorized sellers
across the globe to allow more and more customers to consider buying an Apple device since there is an
authorized seller in the vicinity.
•Apple needs to lay its hands on new product lines. All its current products are a hit in the market, and adding
new products to the lineup would boost its revenue and increase brand equity.

39. Threats
•First and foremost-competition. It is necessary to go through some department swot analysis examples because
today’s market has cut-throat competition regarding technology and after-sales services. The competitors
provide almost the same technology to the customers at a very economical rate. Therefore, the low-income
bracket, which comprises the major market portion, tends to go for what the competitors offer at an economical
price.
•Appropriation of the innovation by local brands that copy the design and look of the products of Apple;
•An increase in the cost of labor across the globe has resulted in narrowed profits, which has triggered an
increase in the selling price.

40. Porter’s Five Forces
Porter's Five Forces is a model that identifies and analyzes five competitive forces that shape every industry and
helps determine an industry's weaknesses and strengths. Five Forces analysis is frequently used to identify an
industry's structure to determine corporate strategy.
It was created by Harvard Business School professor Michael E. Porter in 1979 and has since become an important
tool for managers.

41. Porter's 5 forces are:
1.Competition in the industry
2.Potential of new entrants into the industry
3.Power of suppliers
4.Power of customers
5.Threat of substitute products

42. Understanding Porter's Five Forces
1.Competition in the Industry
The first of the Five Forces refers to the number of competitors and their ability to undercut a company.
The larger the number of competitors, along with the number of equivalent products and services they offer, the
lesser the power of a company.
Suppliers and buyers seek out a company's competition if they are able to offer a better deal or lower prices.
Conversely, when competitive rivalry is low, a company has greater power to charge higher prices and set the
terms of deals to achieve higher sales and profits.
2.Potential of New Entrants Into an Industry
A company's power is also affected by the force of new entrants into its market. The less time and money it costs
for a competitor to enter a company's market and be an effective competitor, the more an established company's
position could be significantly weakened.
An industry with strong barriers to entry is ideal for existing companies within that industry since the company
would be able to charge higher prices and negotiate better terms.

43. 3.Power of Suppliers
The next factor in the Porter model addresses how easily suppliers can drive up the cost of inputs. It is affected by
the number of suppliers of key inputs of a good or service, how unique these inputs are, and how much it would
cost a company to switch to another supplier. The fewer suppliers to an industry, the more a company would
depend on a supplier.
As a result, the supplier has more power and can drive up input costs and push for other advantages in trade. On
the other hand, when there are many suppliers or low switching costs between rival suppliers, a company can keep
its input costs lower and enhance its profits.
4.Power of Customers
The ability that customers have to drive prices lower or their level of power is one of the Five Forces. It is affected
by how many buyers or customers a company has, how significant each customer is, and how much it would cost a
company to find new customers or markets for its output.
A smaller and more powerful client base means that each customer has more power to negotiate for lower prices
and better deals. A company that has many, smaller, independent customers will have an easier time charging
higher prices to increase profitability.

44. 5.Threat of Substitutes
The last of the Five Forces focuses on substitutes. Substitute goods or services that can be used in place of a
company's products or services pose a threat. Companies that produce goods or services for which there are no
close substitutes will have more power to increase prices and lock in favorable terms. When close substitutes are
available, customers will have the option to forgo buying a company's product, and a company's power can be
weakened.
Difference Between Porter's Five Forces and SWOT Analysis
Porter's 5 Forces and SWOT (strengths, weaknesses, opportunities, & threats) analysis are both tools used to
analyze and make strategic decisions.
Companies, analysts, and investors use Porter's 5 Forces to analyze the competitive environment within an
industry, while they tend to use a SWOT analysis to look more deeply within an organization to analyze its internal
potential.