Transcript Chapter 2 Strategic Planning and the Strategic Marketing Process

Chapter 2
Strategic Planning and the
Strategic Marketing Process
I. What is Strategic Planning?
• The process of developing and
maintaining a viable fit between the
organization’s objectives and
resources and its changing
environment.
• It involves developing a:
 clear mission
 supporting objectives
 supporting strategies
II. Three Organizational Levels
 Corporate Level
 Business Unit Level
Strategic Business Units
 Functional Level
III. Components of the Strategic Plan
 Organizational Mission – defines the core purpose of
the organization – why it exists.
 Organizational Objectives – statements of what the
organization wishes to accomplish in the on-going, longrun operation of the firm.
Profits
sales
market share
customer satisfaction
 Organizational Strategies – major directions the
organization will take in pursuing its objectives.
Business Portfolio Analysis
WHERE AN “A” IN A CORRESPONDENCE COURSE IN ICE CREAM MAKING
CAN LEAD!
2-5
Business Portfolio Analysis
 A technique which uses market growth rate
and relative market share to identify what
combination of SBUs will best achieve
organizational objectives.
 Market growth rate – annual sales growth
rate of the SBU’s industry.
 Relative market share – the sales of the
SBU divided by the sales of the largest firm
in the industry.

SETTING STRATEGIC DIRECTIONS
WHERE DO WE WANT TO GO?
Business Portfolio Analysis
(BCG) High
Stars
Market Growth Rate
LO4
Cash Cows
Question Marks
Dogs
Low
High
Low
Relative Market Share
2-7
Business Portfolio Analysis (cont.)
 Cash Cows – SBU’s that have a high relative
market share in a low sales growth market.
 Stars – SBU’s that have a high relative market
share in a high sales growth market.
 Question marks – SBU’s that have a low
relative market share in a high sales growth
market.
 Dogs – SBU’s that have a low relative market
share in a low sales growth market.
LO4
Kodak Consumer-Related Products
What SBU type in the BCG growth-share matrix?
Kodak digital camera
Kodak film
Kodak digital photo printer
Kodak digital picture frame
2-9
IV. Strategic Marketing Process
Process whereby an organization
allocates it marketing mix resources
to reach its target markets.
Planning
Implementation
Evaluation
Planning Phase – Situation Analysis
 This is a complete analysis of the firm’s
situation which assesses internal strengths
and weaknesses and external threats and
opportunities (SWOT)
 Internal analysis (controllable factors) –
assess the firm itself to identify strengths and
weaknesses
 External analysis (uncontrollabe factors) –
assess the firm’s external environment to
identify opportunities and threats
 Identify ways to build on a strength, correct a
weakness, exploit an opportunity, or avoid a
threat.
FIGURE 2-6 Ben & Jerry’s: a SWOT analysis to get it
growing again
Slide 2-34
Planning Phase – Marketing
Objectives
 Specific levels of performance desired
for a product or product line to be
achieved by a given date.
 Stated in terms of market share,
sales, profit
 Should be measureable, attainable,
specific, and consistent with
organizational objectives
Planning Phase – Target Market
 One or more specific groups of
potential consumers toward which an
organization directs its marketing
program.
 Why focus on the needs of a
subgroup of a market rather than the
entire market?
Planning Phase: Product
Positioning
 The process where marketers try to
create a product image or identity in
the minds of their target market
relative to competitive products.
Planning Phase: Marketing Mix
Program
 Product – good, service, or idea to satisfy
the consumer’s needs.
 Price – what is exchanged for the product.
 Promotion – means of communication
between the seller and buyer.
 Place – means of getting the product to the
consumer
 Marketing mix decisions are based on the
needs of the target market and the
positioning strategy.
Elements of the marketing mix that comprise a cohesive
marketing program
Slide 2-40
Implementation Phase
 Process of putting the marketing plan
into action.
 Involves great attention to detail
Evaluation
 Involves measuring the results of the
actions from the implementation
phase and comparing them with goals
set in the planning phase.
sales analysis
marketshare analysis
expense to sales analysis