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CHAPTER TWO STRATEGIC PLANNING DEVELOPING AND IMPLEMENTING A MARKETING PLAN Prepared by: Jack Gifford Miami University (Ohio) STRATEGIC PLANNING

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Chapter two l.jpg
CHAPTER TWO

STRATEGIC PLANNING

DEVELOPING AND IMPLEMENTING A MARKETING PLAN

Prepared by: Jack Gifford

Miami University (Ohio)

2000 South-Western College Publishing


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STRATEGIC PLANNING

  • Strategic Planning is the managerial process of creating and maintaining a fit between the organization’s objectives and resources and the evolving market opportunities.

RESOURCES & OBJECTIVES

EVOLVING MARKET OPPORUNITIES

LONG RUN PROFITABILITY AND GROWTH

PLUS

2000 South-Western College Publishing


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STRATEGIC PLANNING

  • Strategic planning requires the long-run commitment of human and capital resources.

  • Strategic marketing management addresses two questions:

    • What is the organization’s main activity at a particular time?

    • What are its primary goals and how will these be achieved?

  • How do companies go about strategic planning? How do employees know how to implement the long-term goals of the firm? The answer is…...

2000 South-Western College Publishing


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A MARKETING PLAN

  • Is the process of anticipating events and determining strategies to achieve organizational objectives in the future.

  • A written document

  • A guideline over time

  • Benchmark of progress to date

  • The components of a Marketing Plan always should include, at a minimum, the following...

2000 South-Western College Publishing


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THE MARKETING PLAN CONTAINS, AT A MINIMUM….

  • Business Mission Statement

  • Objectives

  • Situation Analysis (SWOT)

  • Marketing Strategy

    • Target Market Strategy

    • Marketing Mix

      • Product

      • Promotion

      • Price

      • Distribution

  • Implementation, Evaluation and Control

2000 South-Western College Publishing


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...AND ALSO OFTEN INCLUDES:

  • Budgets

  • Implementation timetables

  • Required marketing research efforts

  • Other elements of advanced strategic planning

    • Quality control programs

    • Supply chain management systems

    • Organizational structure changes

    • Management Information Systems

    • Others unique to specific industries

2000 South-Western College Publishing


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When we answer the question “What business are we in and where are we going?” we are well on our way to creating a mission statement

The creation and implementation of a mission statement profoundly affects long-run resource allocation, profitability, and survival.

Includes the long-run vision and values of the company

Must be customer oriented

May be for the entire business, or each strategic business unit (SBU)

Must not be too broad…or too narrow in scope

Avoids marketing myopia

THE MISSION STATEMENT

2000 South-Western College Publishing


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MARKETING MYOPIA where are we going?” we are well on our way to creating a mission statement

AT&T =

  • A business that defines itself in terms of its products or services instead of customer satisfaction or too narrowly instead of the markets, organizations, and benefits purchased.

Telephones

Communication

Systems

2000 South-Western College Publishing


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MARKETING GOALS AND OBJECTIVES where are we going?” we are well on our way to creating a mission statement

  • Marketing Objectives

    • What is to be accomplished through marketing activities

    • Realistic, measurable, time specific

    • Internally consistent

    • Indicate the priorities of the organization

2000 South-Western College Publishing


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MARKETING GOALS AND OBJECTIVES where are we going?” we are well on our way to creating a mission statement

  • Marketing objectives serve several functions

    • Communicate marketing management philosophies

    • Provide direction for lower-level management

    • Act as motivators

    • Help clarify executive thinking

    • Create a series of benchmarks and a basis for control

2000 South-Western College Publishing


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CONDUCT A SITUATION ANALYSIS where are we going?” we are well on our way to creating a mission statement

  • Environmental Scan/ Situational Analysis

  • Two major components, the first set being...

    • Internal strengths

    • Internal weaknesses

  • Production costs

  • Marketing and people skills

  • Financial resources

  • Company or brand image

  • Available technology

  • Other

2000 South-Western College Publishing


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CONDUCT A SITUATION ANALYSIS where are we going?” we are well on our way to creating a mission statement

  • MACROENVIRONMENTAL FORCES INCLUDE

  • Social forces

  • Demographic forces

  • Economic forces

  • Technological forces

  • Political forces

  • Legal forces

  • Competitive forces

  • Environmental Scan/ Situational Analysis

  • Two major components, the second set being…

    • External Opportunities

    • External Threats

2000 South-Western College Publishing


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Corporate culture and the external opportunities and threats where are we going?” we are well on our way to creating a mission statement

  • Corporate culture is the pattern of basic assumptions an organization has accepted to cope with the firm’s internal environment and the changing external environment

    • It is revealed by the way it reacts to problems and opportunities

    • These organizational responses can be categorized into four types

2000 South-Western College Publishing


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Prospector where are we going?” we are well on our way to creating a mission statement

Reactor

Defender

Analyzer

Focuses on identifying and capitalizing on emerging market opportunities; emphasizes mkt. research & communications

Responds to emerging market forces when forced to do so

Tries to defend its “turf” or market domain

Combination of a conservative prospector and aggressive defender

FOUR TYPES OF ORGANIZATIONAL RESPONSES TO EXTERNAL OPPORTUNITIES AND THREATS

2000 South-Western College Publishing


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STRATEGIC WINDOW where are we going?” we are well on our way to creating a mission statement

  • Is the limited time period in which there is an optimal FIT between external market Opportunities and internal corporate Strengths

SWOT

Optimal match

2000 South-Western College Publishing


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STRATEGIC OPPORTUNITIES MATRIX EXAMPLE: DAIMLER-CHRYSLER

PRODUCT

PRESENT NEW

PRESENT

MARKET

Product

Development

Market

Penetration

NEW

Market

Development

Diversification

2000 South-Western College Publishing


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PORTFOLIO MATRIX EXAMPLE: MICROSOFT CORPORATION

MARKET SHARE DOMINANCE

HIGH LOW

?

LOW HIGH

MARKET GROWTH RATE

2000 South-Western College Publishing


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Build

Invest in a problem child that has the potential to become a star

Hold

Hold and protect; use cash flow to maintain market share

Harvest

Increase short-term cash flow from any source except stars

Divest

Sell off or close dogs and sometimes problem children that cannot be converted to stars

PORTFOLIO MATRIX (continued)Allocating future resources for each

2000 South-Western College Publishing


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MARKET ATTRACTIVENESS / STRENGTH MATRIX: EXAMPLE KODAK CORPORATION

BUSINESS POSITON

[ STRENGTH MINUS WEAKNESSES ]

STRONG MEDIUM WEAK

MARKET ATTRACTIVENESS

[ OPPORTUNITIES MINUS THREATS ]

LOW MEDIUM HIGH

2000 South-Western College Publishing


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MARKET ATTRACTIVENESS / STRENGTH MATRIX (CONTINUED) CORPORATION

  • To maintain a strong business position in an attractive market (SMILEY FACE), a company must develop a sustainable competitive advantage

    • One or more unique aspects of an organization that are valued by the target market(s) and cannot be easily replicated by competition

      • Superior skills, such as management capabilities and expertise)

      • Superior resources( well known brand name, patents, unique technology, or superior economies of scale)

2000 South-Western College Publishing


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DIFFERENTIAL ADVANTAGE CORPORATION

  • Important to target market(s)

  • Why you purchase “A” instead of “B”

  • Athletic Shoes ???

  • Soft drink ???

Sustainable competitive advantage

2000 South-Western College Publishing


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Marketing Strategy CORPORATION

Target Market Strategy

Identifies which market segment or segments to focus on

This topic will be discussed in detail in Chapter 7

MARKETING PLAN(continued)

Parents of children under 3

Male business executives

Owners of pets

2000 South-Western College Publishing


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TARGET MARKET STRATEGY CORPORATION

  • How do we “cluster” potential customers for our products or services around meaningful buying attributes?

  • Is usually multidimensional

    • SAUDI KINGDOM SHOPPNG CENTRE?

    • TREK BICYCLES?

MEN

1ST FLOOR

WOMEN

2ND FLOOR

???

2000 South-Western College Publishing


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MARKETING PLAN CORPORATION(continued)

  • Marketing Mix: The 4 “Ps”

    • Product strategies

    • Price strategies

    • Promotion strategies

    • Distribution strategies (Place)

  • New triple cutting surface

  • Sold through retailers

  • Introductory price $3.29

  • Promoted on TV, magazines and newspapers

Gillette Mach 3 razor

2000 South-Western College Publishing


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THE MARKETING MIX CORPORATION

PRODUCT OR SERVICE

PROMOTION

PRICE

PLACE

2000 South-Western College Publishing


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IMPLEMENTATION, EVALUATION AND CONTROL CORPORATION

  • Implementation

    • The process that turns marketing plans into action assignments

    • Assures execution in a way that accomplishes the plans’ objectives

  • Evaluation and control

    • Gauging the extent to which marketing objectives have been achieved during the specific time period.

2000 South-Western College Publishing


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EVALUATION AND CONTROL CORPORATION

  • The broadest control device available to marketing managers is the marketing audit

  • A marketing audit is a comprehensive, systematic, periodic, and independent evaluation of the goals, strategies, structure, and performance of the marketing organization

AUDIT

2000 South-Western College Publishing


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EFFECTIVE STRATEGIC PLANNING CORPORATION

  • Effective strategic planning requires continual attention, creativity, and management commitment

    • Should be an ongoing process

    • Is based on information and creativity

    • Requires top management support and participation

2000 South-Western College Publishing


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FOUR COMMON REASONS FOR FAILURE TO ACHIEVE MARKETING OBJECTIVES

  • Objectives were unrealistic

  • Inappropriate objectives for the plan

  • Poor implementation

  • Unanticipated changes in the internal or external environments

  • Violations of any of the three principles of effective strategic planning

2000 South-Western College Publishing


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