2-

2-11

PRINCIPLES OF MARKETING

Chapter
Chapter 22
Strategic Planning
and the
Marketing Process

Strategic
Strategic Planning
Planning Process
Process
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2-22

• Strategic Planning involves developing an

overall company strategy for long-run
survival and growth.

• This process involves:

– Defining a Mission: Statement of an organization’s
purpose; should be market oriented.
– Setting Company Objectives: Supporting goals and
objectives to guide the entire company.
– Designing a Business Portfolio: Collection of businesses
and products that make up the company.
– Planning Functional Strategies: Detailed planning for
each department designed to accomplish strategic
objectives.

Mission
Mission Statements
2-2-3
2- 32-3
Statements
3

Market
Market
Oriented
Oriented

Motivating
Motivating Realistic
Realistic
Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements
Distinctive
Distinctive Specific
Specific
Competencies
Competencies
Fit
Fit Market
Market
Environment
Environment


 Copyright 1998 Prentice Hall
Designing
Designing the
the Business
Business Portfolio
Portfolio
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• The best portfolio is the one that best fits the

company’s strengths and weaknesses to the
opportunities in the environment.

• The company must:

– analyze its current business portfolio or Strategic
Business Units (SBU’s)
– decide which SBU’s should receive more, less, or no
investment
– develop growth strategies for adding new products
or businesses to the portfolio


Analyzing
Analyzing Current
Current SBU’s:
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SBU’s:
Boston
Boston Consulting
Consulting Group
Group
Approach
Approach
Relative Market Share
High Low
Stars Question
QuestionMarks
Marks
Market Growth Rate
High

• High growth & share ••High

Highgrowth,
growth,low
lowshare
share
• Profit potential ••Build
Buildinto
intoStars/
Stars/phase
phaseout
out
• May need heavy ••Requires
Requirescash
cashtotohold
hold
investment to grow market
marketshare
share
Cash
CashCows
Cows Dogs
Dogs
••Low ••Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high
highshare share
Low

share
••Established, ••Low
Lowprofit
profitpotential
Established,successful
successful potential
SBU’s
SBU’s
••Produces
Producescash
cash


Analyzing
Analyzing Current
Current SBU’s:
SBU’s:
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GE
GE Strategic
Strategic Business-Planning
Business-Planning
Grid
Grid
Business Strength
Industry Attractiveness

Strong Average Weak

C
High
A

Medium
B D

Low


Developing
Developing Growth
Growth Strategies
Strategies
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Product/ Market Expansion Grid

Existing New
Products Products
Existing 1. Market 3. Product
Markets Penetration Development

New 2. Market
4. Diversification
Markets Development


Product/
Product/ Market
Market Expansion
Expansion Grid
Grid
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• Market Penetration:
Penetration increase sales to present
customers with current products. How?

• Market Development:
Development develop new markets with
current products. How?
• Product Development:
Development offering modified or new
products to current customers. How?
• Diversification:
Diversification new products for new markets.


Marketing’s
Marketing’s Role
Role in
in Strategic
Strategic
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Planning
Planning
• Process of Selecting Target Consumers
– Market Segmentation:
Segmentation determining distinct groups of
buyers (segments) with different needs.
– Market Targeting:
Targeting evaluating and selecting which
target segments to enter.
– Market Positioning:
Positioning products distinctive and
desirable place in the minds of target segments
compared to competing products.
• Marketing Strategies for Competitive Advantage
– Market-Leader
– Market Challenger
– Market-Follower
– Market-Nicher


 2-
2-10
The
The Marketing
Marketing Process
Process
10

Demographic- Marketing Technological-

Economic Intermediaries Natural
Environment Environment

M lan
si g
l y ti n

ar n
P
s

ke in
na e
A ark
Product

tin g
M

g
Target
Suppliers Place Consumers Price Publics

n
ti o
en ing
M Con

Promotion
ar tr

ta
em et
ke ol

pl rk
ti n

Im Ma
g

Political- Social-
Legal Competitors Cultural
Environment Environment


Marketing
Marketing Mix-
Mix- The
The Four
Four P’s
P’s
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11

Price
Product
“Goods-and-service” Amount of money
combination that a that consumers
company offers a have to pay to obtain
target market the product

Target
Customers

Intended
Positioning

Activities that Company activities

persuade target that make the
customers to buy product available
the product
Promotion  Place
Managing
Managing the
the Marketing
Marketing Effort
Effort
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12

Marketing
Marketing Analysis
Analysis of
of Company’s
Company’s Situation
Situation

Control
Marketing
MarketingPlanning
Planning Marketing
Marketing
Implementation
Implementation Measure
Develop
DevelopMarketing
Marketing Results
Strategies
Strategiesto
to Turn
TurnMarketing
MarketingPlans
Plans
Achieve
AchieveMarketing
Marketing into
into Evaluate
Objectives
Objectives Action
ActionPlans
Plans Results
to
toAchieve
Achieve
Develop
Develop Marketing
Marketing
Marketing Objectives Take
Marketing Objectives Corrective
Plans
Plans&& Budget
Budget Action


Elements
Elements of
of aa Marketing
Marketing Plan
Plan
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13

Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls


 2-
2-14
Marketing
Marketing Implementation
Implementation
14

Marketing
Marketing Strategy
Strategy
Decision
and
Reward Human
Organizational
Resources
Structure

Action Climate and

Programs Culture

Implementation

Marketing
Marketing Performance
Performance

Marketing
Marketing Control
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2-15
Control
15

Set
Set Marketing
Marketing Goals
Goals

Measure
Measure
Performance
Performance

Evaluate
Evaluate
Performance
Performance

Take
Take Corrective
Corrective
Action
Action


Marketing
Marketing Audits
Audits
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2-16
16

Environment

Function Strategy
Types
Types
of
of Marketing
Marketing
Audits
Audits
Productivity Organization
Systems