Opening Slide

Fundamentals of Marketing

Module 2:
Marketing Strategy & Planning
 Module 2 Learning Objectives

1. Discuss the five key elements of planning

2. Describe strategic, marketing, and tactical levels of planning
3. Explain the six fundamental steps in the strategic planning
process
1. Key Elements in Planning
Key Elements in Planning

Timing
Tasks
Responsibility
Follow-Up
Budgeting
Key Elements in Planning

Timing

• Planning must occur well in

advance of the activity
• Planning put off until the last
minute will only have negative
results
Key Elements in Planning

Tasks

• Every activity is comprised of a

number of specific tasks
• All details about each task must be
planned for the entire activity to be
successful
Key Elements in Planning

Responsibility

• Every task needs a specific

coordinator
• If one person is not held
accountable, the task may not get
done
Key Elements in Planning

Follow-Up

• Even if the responsibility for each task

has been delegated, one individual must
follow up on and coordinate the
progress of the overall activity

.
Key Elements in Planning

Budgeting

• Budget needs to be developed

through cost estimation
• The budget needs to be tracked
over time
2. Levels of Planning
 Levels of Planning

Strategic Planning

Marketing Planning

Tactical Planning

.
Levels of Planning:
Strategic Planning
Strategic Planning

• Strategic planning or the overall game plan

has a 3-5 year time horizon

• Corporate strategy takes place at the highest

levels of the organization.
• Business strategy attempts to achieve and
maintain competitive advantages in specific
product-market domains.
Levels of Planning:
Strategic Planning
Levels of Planning

Strategic Planning

Marketing Planning

Tactical Planning
Levels of Planning:
Marketing Planning
Marketing Planning

• Marketing planning has a shorter time

horizon, 1 year, than strategic planning

• Performed at the marketing level of what

otherwise could be termed the product or
product-line level of the organization.

.
Levels of Planning

Strategic Planning

Marketing Planning

Tactical Planning
Levels of Planning:
Tactical Planning
Tactical Planning

Tactical planning has a shorter time horizon, less

than one year, than marketing planning

• Involves specifying details that pertain to the

organization’s activities for a certain period of
time.
• Detailed account of the short-term activities of a
firm
3. Fundamental Steps in the Strategic
Planning Process
Fundamentals of
Strategic Planning
1. Establishing the
Organizational Mission
2. Defining Strategic Business
Units
3. Specifying Organizational
Objectives
4. Analyzing Strategic Business Unit
Performance
5. Assessing Organizational Growth
Opportunities

6. Developing Marketing Plans Objective 2

.
Fundamentals of Strategic Planning
1. Establishing the
Organizational Mission

• Mission statement is a guideline for the

organization’s decision making for both the short
and long run.
 Coca-Cola’s Mission Statement

All of us in the Coca-Cola family wake up each morning

knowing that every single one of the world’s 7.7 billion
people will get thirsty that day... and that we are the ones with
the best opportunity to refresh them. Our task is simple: make
Coca-Cola and our other products available, affordable, and
acceptable to them, quenching their thirst and providing them
a perfect moment of relaxation. If we do this... if we make it
impossible for these 7.7 billion people to escape Coca-Cola...
then we assure our future success for many years to come.
Doing anything else is not an option.
Fundamentals of Strategic Planning

2. Defining Strategic Business

Units

• Strategic Business Units (SBUs) or smaller divisions,

to facilitate planning and general operations
• Clear market focus
• Identifiable strategy
• Separate management team
• Identifiable set of competitors
Fundamentals of Strategic Planning
3. Specifying Organizational
Objectives

• Well developed organizational

objectives should be SMART
• Specific
• Measurable
• Achievable
• Relevant
• Time-bound
Fundamentals of Strategic Planning
4. Analyzing Strategic Business Unit
Performance

• Five resource allocation strategies

1) Build—improve the SBU’s position in the

marketplace by investing additional resources.

2) Maintain—hold steady the SBU’s current position in

the market place.
Fundamentals of Strategic Planning

4. Analyzing Strategic Business Unit

Performance

3) Niche—narrow the focus of the SBU’s intended

market.

4) Harvest—utilize the SBU to generate resources for

other SBUs.

5) Divest—discontinue all investment in an SBU so that

resources can be redirected to other SBUs.
Strategic Planning Tools

Problem
Star
Child Boston
Consulting
Cash
Dog Group’s Product
Cow
Portfolio Analysis

.
 Elements in Strategic Planning
Problem Child
• Low market share
Star
Problem • Poor profit margins
Child
• Risk of becoming a dog

Cash Strategy:
Dog
Cow – Build
– Niche
– Divest

Boston Consulting
Group’s Product
Portfolio Analysis
 Elements in Strategic Planning
Star
• High market share
Problem • High market growth
Star
Child • Generates substantial
cash flows
Cash
• Requires large investment
Dog Strategy:
Cow
– Build
– Maintain

Boston Consulting
Group’s Product
Portfolio Analysis
 Elements in Strategic Planning
Cash Cow
• High market share
• Low market growth
Problem
Star
Child • Generates profits and cash
flows
• Maintains superiority
Cash Strategy:
Dog – Maintain
Cow
– Harvest

Boston Consulting
Group’s Product
Portfolio Analysis
 Elements in Strategic Planning
Dog
• Low market share
• Low market growth
Problem
Star
Child • Generates little profits

Strategy:
Cash – Niche
Dog – Divest
Cow
– Maintain

Boston Consulting
Group’s Product
Portfolio Analysis
Fundamentals of Strategic Planning
5. Assessing Organizational Growth
Opportunities

• Three avenues for growth

1) Developing growth within current operations—intensive

growth
2) Achieving growth by acquiring other businesses that are
directly related to existing operations—integrative growth
3) Developing growth by acquiring other businesses not
directly related to existing operations—diversification
growth
Fundamentals of Strategic Planning
5. Assessing Organizational Growth
Opportunities

1) Intensive Growth Strategies

a) Market penetration—sell more of existing products to
existing markets
b) Market development—find new markets for existing
products
c) Product development—develop new products for
existing markets
d) Product diversification—develop new products for new
markets
Intensive Growth Strategies

Markets
Existing New
Existing

Market
Market Development
Penetration
Products

Product
Product Development
Diversification
New
Fundamentals of Strategic Planning
5. Assessing Organizational Growth
Opportunities

2) Integrative Growth Strategies

a) Backward integration
b) Horizontal integration
c) Forward integration

.
Fundamentals of Strategic Planning
5. Assessing Organizational Growth
Opportunities

Diversification Growth Strategies

• Growth through the acquisition of other businesses
that are not directly related to existing operations.
• Can be accomplished through
• concentric diversification,
• horizontal diversification
• conglomerate diversification
Fundamentals of
Strategic Planning
1. Establishing the
Organizational Mission
2. Defining Strategic Business
Units
3. Specifying Organizational
Objectives
4. Analyzing Strategic Business Unit
Performance
5. Assessing Organizational Growth
Opportunities

6. Developing Marketing Plans Objective 2

.
Fundamentals of Strategic Planning
6. Developing Marketing Plans

• Marketing plans should logically flow

from the overall strategic plan
Fundamentals of Marketing Planning

• Variations in Marketing Planning

• Marketing plans vary in Scope

• Marketing plans vary in Length

• Marketing plans vary in Formality

Fundamentals of Marketing Planning

1. Executive Summary
The Traditional
Marketing Plan
2. Market Situation Analysis

3. SWOT Analysis
Formulation of Marketing Strategy
Fundamentals of Marketing Planning

1. Executive Summary

2. Market Situation Analysis

The Traditional
Marketing Plan
3. SWOT Analysis

4. Specification of
Marketing Objectives
Specification of Marketing Objectives

• SMART
• Specific
• Measurable
• Achievable
• Relevant
• Time-bound
Fundamentals of Marketing Planning

5. Formulation of Marketing
Strategies

The Traditional
6. Preparation of Action
Marketing Plan Programs and Budgets

7. Development of Control
Procedures
In-class Participation Quiz

a. Market penetration h. Conglomerate diversification

b. Market development i. Horizontal diversification
c. Product development j. Concentric diversification
d. Product diversification
e. Backward integration
f. Forward integration
g. Horizontal integration

44
 Module 2 Learning Objectives

1. Discuss the five key elements of planning

2. Describe strategic, marketing, and tactical levels of planning
3. Explain the six fundamental steps in the strategic planning
process