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PRINCIPLES OF MARKETING Eighth Edition Philip Kotler and Gary Armstrong. Chapter 2. Strategic Planning and the Marketing Process. Strategic Planning involves developing an overall company strategy for long-run survival and growth. This process involves:

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Chapter 2

PRINCIPLES OF MARKETING

Eighth Edition

Philip Kotler and Gary Armstrong

Chapter 2

Strategic Planning

and the

Marketing Process


Strategic planning process

Strategic Planninginvolves 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.

Strategic Planning Process


Designing the business portfolio

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 currentbusiness portfolio or Strategic Business Units (SBU’s)

decide which SBU’s should receive more, less, or no investment

develop growth strategies for adding newproducts or businesses to the portfolio

Designing the Business Portfolio


Analyzing current sbu s boston consulting group approach
Analyzing Current SBU’s: strengths and weaknesses to the opportunities in the environmentBoston Consulting Group Approach

Relative Market Share

High Low

  • Stars

  • High growth & share

  • Profit potential

  • May need heavy

  • investment to grow

  • Question Marks

  • High growth, low share

  • Build into Stars/ phase out

  • Requires cash to hold

  • market share

Market Growth Rate

Low High

  • Dogs

  • Low growth & share

  • Low profit potential

  • Cash Cows

  • Low growth, high share

  • Established, successful

  • SBU’s

  • Produces cash


Analyzing current sbu s ge strategic business planning grid

Business Strength strengths and weaknesses to the opportunities in the environment

Strong

Average

Weak

C

High

A

Medium

D

B

Low

Analyzing Current SBU’s:GE Strategic Business-Planning Grid

Industry Attractiveness


Developing growth strategies
Developing Growth Strategies strengths and weaknesses to the opportunities in the environment

Product/ Market Expansion Grid

1. Market

Penetration

3. Product

Development

Existing

Products

New

Products

Existing

Markets

2. Market

Development

4. Diversification

New

Markets


Product market expansion grid

Market Penetration strengths and weaknesses to the opportunities in the environment: increase sales to present customers with current products. How? Cut prices, increase advertising, get products into more stores.

Market Development: develop new markets with current products. How? Identify new demographic or geographic markets.

Product Development: offering modified or new products to current customers. How? New styles, flavors, colors, or modified products.

Diversification: new products for new markets. How? Start up or buy new businesses.

Product/ Market Expansion Grid


Marketing s role in strategic planning

Process of Selecting Target Consumers strengths and weaknesses to the opportunities in the environment

Market Segmentation: determining distinct groups of buyers (segments) with different needs.

Market Targeting: evaluating and selecting which target segments to enter.

Market 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

Marketing’s Role in Strategic Planning


The marketing process

Demographic- strengths and weaknesses to the opportunities in the environment

Economic

Environment

Technological-

Natural

Environment

Marketing

Intermediaries

Marketing

Analysis

Marketing

Planning

Product

Target

Consumers

Suppliers

Place

Price

Publics

Promotion

Marketing

Implementation

Marketing

Control

Political-

Legal

Environment

Social-

Cultural

Environment

Competitors

The Marketing Process


Marketing mix the four p s
Marketing Mix- The Four P’s strengths and weaknesses to the opportunities in the environment

Price

Amount of money

that consumers

have to pay to obtain

the product

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


Managing the marketing effort

Marketing Analysis of Company’s Situation strengths and weaknesses to the opportunities in the environment

Managing the Marketing Effort

Control

Marketing

Implementation

Turn Marketing Plans

into

Action Plans

to Achieve

Marketing

Objectives

Marketing Planning

Develop Marketing

Strategies to

Achieve Marketing

Objectives

Develop

Marketing

Plans & Budget

Measure

Results

Evaluate

Results

Take

Corrective

Action


Elements of a marketing plan

Executive Summary strengths and weaknesses to the opportunities in the environment

Current Marketing Situation

Threats and Opportunities

Objectives and Issues

Elements of a Marketing Plan

Marketing Strategy

Action Programs

Budgets

Controls


Marketing implementation

Marketing Strategy strengths and weaknesses to the opportunities in the environment

Marketing Implementation

Organizational

Structure

Decision

and

Reward

Human

Resources

Marketing Performance

Action

Programs

Climate and

Culture

Implementation


Marketing control

Set Marketing Goals strengths and weaknesses to the opportunities in the environment

Marketing Control

Measure

Performance

Evaluate

Performance

Take Corrective

Action


Marketing audits

Environment strengths and weaknesses to the opportunities in the environment

Strategy

Function

Types

of Marketing

Audits

Productivity

Organization

Systems

Marketing Audits


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