Principles of Management

2. Lesson 1
Strategic
Marketing
Process
Tactical
Marketing
Process

3. Mission
Identification
Strategic Marketing Process
Situation
Analysis
Objective
Setting
Marketing
Strategy
Development
Strategy
Evaluation and
Control

4. The company’s mission
statement is articulated. A
mission statement defines
what an organization is,
why it exists, its reason for
being, its primary
customers, the products and
services it produces, and its
geographical area of
operation.
STEP 1: Mission
Identification
Strategic Marketing Process

5. The company’s mission
statement is articulated. A
mission statement defines
what an organization is,
why it exists, its reason for
being, its primary
customers, the products and
services it produces, and its
geographical area of
operation.
STEP 1: Mission
Identification
This step assesses and
evaluates the market,
customers, competitors, and
the company’s internal and
external environment. The
objective is to identify the
company’s strengths and
weaknesses, as well as the
available opportunities and
possible threats.
STEP 2: Situation
Analysis
Strategic Marketing Process

6. Objectives are marketing targets
that are Specific, Measurable,
Attainable, Realistic, and
Time-bound (SMART). These
enable a company to control its
marketing plan and provide a
consistent focus all functions of an
organization. These objectives
include sales revenues, market
share, and profits. They are used as
basis for strategy selection and
development.
STEP 3: Objective
Setting
Strategic Marketing Process

7. Objectives are marketing targets
that are specific, Measurable,
Attainable, Realistic, and
Time-bound (SMART). These
enable a company to control its
marketing plan and provide a
consistent focus all functions of an
organization. These objectives
include sales revenues, market
share, and profits. They are used as
basis for strategy selection and
development.
STEP 3: Objective
Setting
The development of a
marketing strategy involves
market segmentation,
identification of target market,
positioning, selection of broad
marketing strategies, and the
translation of strategies into
action plans.
Strategy can be broadly
classified into three categories.
These are cost leadership,
differentiation, and focused.
STEP 4: Marketing
Strategy Development
Strategic Marketing Process

8. This is a strategy
primarily for achieving
low cost leadership
among industry
competitors. Cost
leadership can be
achieved through low
cost supply contracts,
overhead expense control,
economics of scale, and
comprehensive cost
cutting efforts, among
others.
01 Cost Leadership
Differentiation seeks
to achieve superior
product attributes
and features that
are different from
industry competitors.
This results in
pronounced
consumer
preferences for the
company’s products.
02 Differentiation
STEP 4: Marketing Strategy Development
03 Focused
Efforts are
concentrated on a
relatively small but
profitable market.
The development
of products and
services primarily
ensures that the
needs and want of
this addressed and
that satisfaction is
provided.

9. Cost leadership, differentiation, and focused strategies may be
implemented through the following sub-categories of strategies:
STEP 4: Marketing Strategy Development
1. Forward Integration - This involves gaining ownership or increased control over
distributors or retailers. Example: A known newspaper company buying 418 newspaper
stands in Metro Manila.
2. Backward Integration - This involves gaining ownership or increased control over
suppliers. Example: A consumer goods company in the Philippines purchasing a cow
farm and dairy facility in General Santos City.
3. Horizontal Integration - This involves purchase of or increased control over competitors.
Example: A pizza company buying a controlling interest in another pizza company.
4. Market Penetration - The objective of this strategy is to increase market share of
current products or services in current markets through greater and more intensive
marketing efforts. Example: A doughnut company launching a P 56 million advertising
campaign directed at current customers.

10. Cost leadership, differentiation, and focused strategies may be
implemented through the following sub-categories of strategies:
STEP 4: Marketing Strategy Development
5. Market Development- This strategy involves the introduction of existing products or
services into a new geographical area or market. Example: A private learning
institution opening a campus in Cebu City.
6. Product Development - This strategy involves the improvement of current products
or services or the development of new products with the purpose of increasing sales.
Example: : A company on carbonated beverages introducing its product line in tetra
pack.
7. Related Diversification - This involves introducing new but related products or
services. Example: Battery manufacturers introducing solar powered automotive
batteries.
8. Unrelated Diversification - This involves introducing new but unrelated products or
services. Example: A bank opening a chain of ice cream parlors.

11. Cost leadership, differentiation, and focused strategies may be
implemented through the following sub-categories of strategies:
STEP 4: Marketing Strategy Development
9. Retrenchment - This involves halting or reversing declining sales and
profits through cost or asset reduction. Example: A shopping mall
selling off its hardware department and laying off 847 of its
department store employees.
10. Divestiture- This involves selling a division or part of an organization.
Example: A conglomerate selling an airline.
11. Liquidation- This involves selling all of a company’s assets, in parts or
as a whole, for their tangible worth. Example: A prime holdings
company selling all its companies.

12. After the strategy is
developed, periodic
monitoring and evaluation
are needed. This is
necessary to identify
deviations and necessary
adjustments and corrections.
STEP 5: Strategy
Evaluation and Control
Strategic Marketing Process

13. Marketing
Strategies
Action
Plans/Tactics
Marketing
Activities
Responsibility/
Accountability
Activity
Budgets
Tactical Marketing Process
Monitoring and
Control
Activity
Timetables
Completing the strategic marketing process, the tactical marketing process
determines the means or tactics to implement the strategies. It involves the identification
of specific activities, timetables, responsibilities, and budgets and their implementation. The
objective is to ensure that the strategies are implemented successful.

14. Tactical Marketing Process
Situational example: A company determines to increase sales by
10% by the end of the calendar year. After careful consideration, it
selects market penetration as its strategy. The current task is to
identify the tactics, or activities that it should undertake to ensure
that the strategy will be successful. The firm may decide to
increase selling prices. It may opt to do intensive promotions, or it
may invest in heavy product advertising.
Once the tactics and activities are identified, they are
developed into an action plan. An action plan is a sequential
series of marketing activities. It includes timetables for each
activity, pinpointed responsibilities or accountability for each, and
the corresponding budgets. Oftentimes, it is necessary to utilize
two or more action plans to ensure successful implementation.
These are monitored regularly to ensure effectiveness.

15. END