Market-Oriented Strategic

Planning

Objectives Resources

Profit
and
Growth
Skills Opportunities
 Levels of Planning
Planning

Strategic Marketing Tactical

Planning Planning Planning
 Strategic Planning

Strategic Planning- “ The process of developing and

maintaining a strategic fit between the
organization’s goals and capabilities and its
changing market opportunities” Philip Kotler.

The strategic plan establishes goals and strategies , delineates

activities and assigns responsibilities for every face of the
organization.
 Strategic Planning….contd’
In other or rather simple words

Strategic planning sets the stage for the

rest of the planning in the company.
 Marketing Planning
Marketing Planning is the operational plan for
a particular product or product line.

This is the detailed scheme of the marketing strategies and

activities associated with each product’s marketing mix.
 Tactical Planning
(Annual Marketing Planning)
Tactical planning involves specifying details which
pertain to organization’s activities for a specific
period of time, usually one year.

A tactic is a means by which a strategy is implemented. It is more

specific , detailed course of action than a strategy
 CEAT
Strategy Tactics
Direct the Sponsor most of the events attended in person
Company’s or watched on TV by this group.
promotion towards MTV Roadies, IPL( Change Ads), ICC World
teenagers. Cup( Idiots Ads)
Basic Elements of Strategic Planning

1.Mission
2.Strategic Business Units
3.Objectives
4.Strategic Planning Tools
5.Marketing Plans
1. Good Mission Statements:

Limited number of goals

Stress major policies & values

Define competitive scopes

 Differences between…..
Mission Statement Vision Statement

A Mission statement talks A Vision statement outlines

about HOW you will get to WHERE you want to be.
where you want to be. Defines Communicates both the purpose
About the purpose and and values of your business.
primary objectives related to
your customer needs and team
values.
It answers the question, “What It answers the question, “Where
Answer do we do? What makes us do we aim to be?”
different?”
A mission statement talks A vision statement talks about
about the present leading to its your future.
Time
future.
 Some Mission Statements
Cadbury India – “To attain leadership position in the
confectionary market and achieve a strong national
presence in the food drinks sector.”
Amazon.com – “We make buying the fastest. Easiest, and
most enjoyable shopping experience possible.”
Unilever- “To make cleanliness commonplace , to lessen
work for women, to foster health and to contribute to
personal attractiveness, so that life becomes more
enjoyable for the people who use our products.”
 2. Strategic Business Units.

A strategic business unit in business strategic

management, is a profit center which focuses on
product offering and market segment. SBUs
typically have a discrete marketing plan, analysis
of competition, and marketing campaign, even
though they may be part of a larger business
entity.
 2. Strategic Business Units.
Most Companies with Multi products lines or different country
operations create SBU’s or smaller divisions to facilitate the
general operations.
An SBU can be a product, one product line or a specific business.
The SBU operates as a separate entity, establish its own mission
statement objectives.
The SBUs have their own management teams and operational goals.
 SBU of HMT Ltd. (Indian)
1. Machine Tools
2. Consumer Products
3. Tractors
4. Engineering components
5. Technology and Information Systems.
 SBU of Reliance
 Reliance Retail
 Reliance Life Sciences
 Reliance Institute of Life Sciences
 Reliance Logistics
 Reliance Clinical Research Services (RCRS
 Reliance Solar
 Relicord
 Reliance Industrial Infrastructure Limited
 Reliance Jio Infocomm
 General Electric (GE) – Portfolio of
SBUs( Global)

1. GE Appliances
2. GE Aircraft engines
3. GE Capital
4. GE Global Services
5. GE Lighting
6. GE Plastics
7. GE Transportation Systems
8. GE Medical
 3. Objectives
“Sales can be increased by improving the market
share of the company in the home country by
entering into new markets or by entering new
Global Markets.”
Such Goals can be the Current Objectives of any
Organization.
“An Objective is simply a desired
Outcome”
 Objectives
Objectives must always be
- Clear
- Concise
- Realistic

Above all… All the objectives come to life

when they are time framed.
 4. Strategic Planning Tools

To help the organization to take

decisions on various strategies there
are many tools which most of the
organizations use. Some of them are
as follows:-
 The Boston Consulting Group’s
Growth-Share Matrix
Market Growth Rate

Stars Question marks

4
H
3
?2 ? 1
?
I
G
H 5

?
Cash cow Dogs
L
O 8
W 6 7
HIGH LOW
Relative Market Share
Stars - Stars generate large amounts of cash
because of their strong relative market share,
but also consume large amounts of cash
because of their high growth rate; therefore
the cash in each direction approximately nets
out. If a star can maintain its large market
share, it will become a cash cow when the
market growth rate declines. The portfolio of
a diversified company always should have
stars that will become the next cash cows and
ensure future cash generation.
•Cash cows - As leaders in a mature market, cash
cows exhibit a return on assets that is greater than
the market growth rate, and thus generate more
cash than they consume. Such business units
should be "milked", extracting the profits and
investing as little cash as possible. Cash cows
provide the cash required to turn question marks
into market leaders, to cover the administrative
costs of the company, to fund research and
development, to service the corporate debt, and to
pay dividends to shareholders. Because the cash
cow generates a relatively stable cash flow, its value
can be determined with reasonable accuracy by
calculating the present value of its cash stream
using a discounted cash flow analysis.
•Question marks - Question marks are growing rapidly
and thus consume large amounts of cash, but because
they have low market shares they do not generate much
cash. The result is a large net cash comsumption. A
question mark (also known as a "problem child") has the
potential to gain market share and become a star, and
eventually a cash cow when the market growth slows. If
the question mark does not succeed in becoming the
market leader, then after perhaps years of cash
consumption it will degenerate into a dog when the
market growth declines. Question marks must be
analyzed carefully in order to determine whether they are
worth the investment required to grow market share.
•Dogs - Dogs have low market share and a low
growth rate and thus neither generate nor
consume a large amount of cash. However, dogs
are cash traps because of the money tied up in a
business that has little potential. Such businesses
are candidates for divestiture.
 Three Intensive Growth Strategies:
Product/Market Expansion Grid
(Growth Vector Model)( Igor Ansoff’s Model)

Existing New
products products

Existing 1. Market 3. Product

markets penetration development

New 2. Market
markets development 4. Diversification
 Ansoff's Product-Market Expansion Grid

Ansoff has proposed a useful framework called the product/market

expansion grid for detecting new intensive growth opportunities.

There are four strategies, one for each of the quadrants:

Market Penetration Strategy

When the product is in the current market, it can still grow.
There are three major approaches to increasing current
product's market share:
1. Encourage current customers to buy more.
2. Attract competitor’s customers.
3. Convince non-users to use the product.
Market-Development Strategy
When the current product is launched in a new
market, there are three approaches to develop the
market:
1. Expand distribution channels.
2. Sell in new locations.
3. Identify the potential users.

Product-Development Strategy
When a new product is launched in the current
market, the intensive growth strategies could be to:
1. Develop new features.
2. Develop different quality levels.
3. Improve the technology.
Diversification
When a new product is launched in a new market,
diversification makes good sense as better opportunities are
found outside the present business. The diversification
strategies are of three types:
1. Concentric Diversification Strategy: Develop new
products with the earlier technology for new segments
2. Conglomerate Diversification Strategy: Develop new
products for new markets.
3. Horizontal Diversification Strategy: Develop new
products with new technology for old customers.
 Diversification Growth
 Concentric diversification Strategy-For example, a company that
manufactures industrial adhesives might decide to diversify into adhesives to be sold via
retailers. The technology would be the same but the marketing effort would need to
change.
 It also seems to increase its market share to launch a new product that helps the particular
company to earn profit. For instance, the addition of tomato ketchup and sauce to the
existing "Maggi" brand processed items of Food Specialties Ltd. is an example of
technological-related concentric diversification.
 Horizontal Diversification Strategy -The company adds new
products or services that are often technologically or commercially unrelated to current
products but that may appeal to current customers. In a competitive environment, this
form of diversification is desirable if the present customers are loyal to the current
products and if the new products have a good quality and are well promoted and priced.
For example, a company that was making notebooks earlier may also enter the pen market
with its new product.
 Conglomerate diversification strategy -The company markets new
products or services that have no technological or commercial synergies with current
products but that may appeal to new groups of customers. Eg. Reliance Industries.
Concentric
-Same target customers
-Marketing effort changes
-Technologically related or unrelated
Concentric
-Same target customers
(housewife)
-Marketing effort changes
Horizontal
-Will appeal to the same target
customer
-Technologically unrelated
 Integrative Growth
• Backward integration (acquiring a supplier)

• Forward integration (acquiring distributor of your

product)

• Horizontal integration (acquiring a competitor)

©2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition
Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
 5. Marketing Plans

The Marketing plan is a

detailed scheme of the
marketing strategies and
activities associated with each
products marketing mix.
Strategic-Planning, Implementation,
and Control Process
Planning Implementation Control
Corporate Measuring
planning Organizing results
Division
planning Diagnosing
results
Business Implementing
planning
Taking
Product corrective
planning action
 The Strategic-Planning Gap

Desired
Desired
sales
sales
Diversification growth
Strategic-
planning
Integrative growth gap
Sales

Intensive growth

Current
Current
portfolio
portfolio

0 5 10
Time (years)
 Ways to beat Competition
1. Reducing Competition- Acquisition & Merger
2. Joining Competition- Joint venture
3. Pre-empting Competition.
4. Creating Barriers-
5. Differentiate the product.
6. To improve the speed of response-
7. Divest from regular activities.
8. To improve efficiency.
 Nature of Marketing Strategies
1. They are dynamic
2. They are futuristic
3. They are complex
4. They provide direction
5. They are all covering
6. They are interpretive
7. They are the Top Management Blue-print.
 Essentials of Marketing Strategies

1. It should be consistent
2. It should be workable
3. It should be suitable
4. It should not be risky
5. It should be resource based
6. It has a time horizon
 The McKinsey 7-S Framework
Structure
Structure

Strategy
Strategy Systems
Systems

Shared
Shared
values
values
Skills
Skills Style
Style

Staff
Staff
 The McKinsey 7-S Framework
The 7S model can be used in a wide variety of situations
where an alignment perspective is useful, for example to
help you:
- Improve the performance of a company.
- Examine the likely effects of future changes within a
company.
- Align departments and processes during a merger or
acquisition.
- Determine how best to implement a proposed strategy.
 The McKinsey 7-S Framework
The Seven Elements

The McKinsey 7S model involves seven interdependent factors which

are categorized as either "hard" or "soft" elements:

Hard Elements Soft Elements

Strategy Shared Values
Structure Skills
System Styles
Staff
 The McKinsey 7-S Framework
Structure
Structure

Strategy
Strategy Systems
Systems

Shared
Shared
values
values
Skills
Skills Style
Style

Staff
Staff
 The McKinsey 7-S Framework
“Hard” elements are easier to define or identify
and management can directly influence them:
These are strategy statements; organization
charts and reporting lines; and formal processes
and IT systems.

“Soft" elements, on the other hand, can be more

difficult to describe, and are less tangible and
more influenced by culture. However, these soft
elements are as important as the hard elements if
 The McKinsey 7-S Framework
Let's look at each of the elements specifically

Strategy: the plan devised to maintain and build competitive advantage

over the competition.
Structure: the way the organization is structured and who reports to
whom.
Systems: the daily activities and procedures that staff members engage
in to get the job done.
Shared Values: called "super ordinate goals" when the model was first
developed, these are the core values of the company that are evidenced
in the corporate culture and the general work ethic.
Style: the style of leadership adopted.
Staff: the employees and their general capabilities.
Skills: the actual skills and competencies of the employees working for
the company.
 The Value-Delivery Process
(a) Traditional physical process sequence
Make the product Sell the product
Design Procure Make Price Sell Advertise/
product promote Distribute Service

(b) Value creation & delivery sequence

Choose the Value Provide the Value Communicate the Value

Strategic marketing Tactical marketing

 The Marketing Plan
Objectives of a Marketing Plan:-

1. To define the Current situation facing the Product.

2. To define the problems and opportunities facing the
business.
3. To establish Objectives.
4. To define strategies and programs.
5. To pinpoint responsibility for achieving product
objectives.
6. To encourage careful and disciplined thinking.
7. To establish a customer- competitor orientation.
Steps in Marketing Planning
 Steps in Marketing Planning
Step 1. – Analysis of the Marketing Situation
 Components of The Marketing
Plan
Executive Summary & Table of Contents
Current Marketing Situation
Opportunity & Issue Analysis
Objectives
Marketing Strategy
Action Programs
Projected Profit-and-loss
Controls
 Marketing
Strategy Marketing
intermediaries
Demographic/ M Technical/
economic pl ark physical
sy ann etin

st at ng
environment environment

n
em io
sy rm eti
st in g
em g
fo rk
in Ma Product

Suppliers Place Target Price Publics

customers

ti o n d
en ion g

n
ta a
M ga yst

em at tin
or s
ar ni em

Promotion

pl niz ke
ke za

im ga ar
tin tio

Political/ or M Social/
g n

legal cultural
environment environment
Competitors
 Modern Marketing
Organization
1. Simple Sales Department

2. Sales Department with some Marketing Function

3. Separate Marketing Department

4. Integrated Marketing Department

5. Modern Marketing Oriented Organization

 Types of Marketing
Organizations
General Manager

Manufacturing Marketing Finance Public

Relations

Product Advertising Sales Marketing

Marketing Promotion Research

Functional Organizational Structure

 Product Oriented Organizational
Structure

General Manager

Manufacturing Marketing Finance Public Relations

Marketing Product Support

Research Management

Manager- Manager- Manager-

Product A Product B Product C
BUSINESS PLAN
COMPETITION
YOUR GROUP WANTS TO START OF A
NEW IDLY VADA BUSINESS.