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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:Boston 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

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

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: 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

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-

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

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

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

Current Marketing Situation

Threats and Opportunities

Objectives and Issues

Elements of a Marketing Plan

Marketing Strategy

Action Programs

Budgets

Controls

marketing implementation

Marketing Strategy

Marketing Implementation

Organizational

Structure

Decision

and

Reward

Human

Resources

Marketing Performance

Action

Programs

Climate and

Culture

Implementation

marketing control

Set Marketing Goals

Marketing Control

Measure

Performance

Evaluate

Performance

Take Corrective

Action

marketing audits

Environment

Strategy

Function

Types

of Marketing

Audits

Productivity

Organization

Systems

Marketing Audits
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