Transcript Chapter 1
Chapter 2 Strategic Planning and the Marketing Process 1 Formal Planning Many companies operate without formal plans, yet these plans can provide many benefits such as: Encouraging management to think ahead systematically. Forcing managers to clarify objectives and policies. Better coordination of company efforts. Clearer performance standards for control. Helping the company to anticipate and respond quickly to environmental changes and sudden developments. 2 Strategic Planning Strategic Planning is the Process of Developing and Maintaining a Strategic Fit Between the Organization’s Goals and Capabilities and Its Changing Marketing Opportunities. 3 Steps in Strategic Planning (Fig. 2.1) Business unit, product, and market level Corporate Level Defining the Company Mission Setting Company Objectives and Goals Designing the Business Portfolio Planning, marketing, and other functional Strategies 4 Defining the Company’s Business and Mission A Mission Statement is a Statement of the Organization’s Purpose. Market Oriented Characteristics of a Good Mission Statement: Realistic Specific Fit Market Environment Distinctive Competencies Motivating 5 Setting Company Objectives and Goals Mission Statement Marketing Objective # 1 Marketing Strategy Marketing Strategy Marketing Objective # 2 Marketing Strategy Marketing Objective # 3 Marketing Strategy Marketing Strategy 6 Designing the Business Portfolio The business portfolio is the collection of businesses and products that make up the company. 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 7 Analyzing Current SBU’s: Boston Consulting Group Approach Relative Market Share Low Market Growth Rate High High Stars • High growth & share • Profit potential • May need heavy investment to grow Cash Cows • Low growth, high share • Established, successful SBU’s •Produce cash Low Question Marks ? • High growth, low share • Build into Stars or phase out • Require cash to hold market share Dogs • Low growth & share • Low profit potential 8 Analyzing Current SBU’s: GE’s Strategic Business-Planning Grid Industry Attractiveness Business Strength Strong Average High Weak C A Medium B D Low 9 Problems With Matrix Approaches Can be Difficult, Time-Consuming, & Costly to Implement Difficult to Define SBU’s & Measure Market Share/ Growth Focus on Current Businesses, But Not future Planning Can Lead to Unwise Expansion or Diversification 10 Developing Growth Strategies in the Age of Connectedness Product/ Market Expansion Grid Existing Products Existing Markets 1. Market Penetration New Markets 2. Market Development New Products 3. Product Development 4. Diversification 11 Product/ Market Expansion Grid Market Penetration: making more sales to current customers without changing its products. How? Add new stores in current market areas, improve advertising, prices, service or store design. Market Development: develop new markets for its current products. How? Identify new demographic or geographic markets. 12 Product/ Market Expansion Grid Product Development: offering modified or new products to current markets. How? New styles, flavors, colors, or modified products. Diversification: new products for new markets. How? Start up or buy new businesses. 13 Discussion Connections Beyond evaluating current business, designing the business portfolio involves finding future businesses and products the company should consider. Apply the product/ market expansion grid to assess how one of the following companies might grow: Dell computer Kodak Levi-Strauss E*Trade online investment services Assign each of the choices to a separate small group, have the group develop the answer, then discuss each approach in class. Planning Cross-Functional Strategies Marketing’s Role in Strategic Planning Guiding Philosophy Inputs to Strategic Planners Designs Strategies 15 The Marketing Process (Fig. 2.5) DemographicEconomic Environment TechnologicalNatural Environment Marketing Intermediaries Product Suppliers Place Target Consumers Price Publics Promotion PoliticalLegal Environment Competitors SocialCultural Environment 16 Connecting With Customers Market Segmentation: determining distinct groups of buyers (segments) with different needs, characteristics, or behavior. Market Targeting: evaluating each segment’s attractiveness and selecting one or more segments to enter. 17 Connecting With Customers Market Positioning: arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. i.e. Chevy Blazer is “like a rock.” 18 Marketing Strategies for Competitive Advantage Strategy a Company Adopts Depends on Its Industry Position 19 Developing the Marketing Mix Price Product Amount of money that consumers have to pay to Obtain the product “Goods-and-service” combination that a company offers a target market Target Customers Intended Positioning Activities that persuade target customers to buy the product Promotion Company activities that make the product available Place 20 The 4 P’s & 4C’s of the Marketing Mix 4 P’s Product Price Place Promotion 4 C’s Customer Solution Customer Cost Convenience Communication 21 Managing the Marketing Effort (Fig. 2.7) Marketing Analysis of Company’s Situation Marketing Planning Marketing Implementation Develop Strategic Plans Carry Out The Plans Develop Marketing Plans Control Measure Results Evaluate Results Take Corrective Action 22 Contents of a Marketing Plan (Table 2.2) Executive Summary Current Marketing Situation Threats and Opportunity Analysis Objectives and Issues Marketing Strategy Action Programs Budgets Controls 23 Marketing Implementation Marketing Strategy Organizational Structure Action Programs Decision and Reward Human Resources Climate and Culture Implementation Marketing Performance 24 Marketing Department Organization Functional Combination Plan Market Management Ways to Carry Out Marketing Activities Geographic Product Management 25 Marketing Control Process (Fig. 2.8) Set Goals Measure Performance Evaluate Performance Take Corrective Action 26 Review of Concept Connections Explain companywide strategic planning and its four steps. Discuss how to design business portfolios and growth strategies. Explain functional planning strategies and asses marketing’s role in strategic planning. Describe the marketing process and the forces that influence it. List the marketing management functions, including the elements of a marketing plan. 27