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CHAPTER TWO

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  1. CHAPTER TWO STRATEGIC PLANNING DEVELOPING AND IMPLEMENTING A MARKETING PLAN Prepared by: Jack Gifford Miami University (Ohio) 2000 South-Western College Publishing

  2. 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

  3. 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

  4. 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

  5. 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

  6. ...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

  7. 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

  8. MARKETING MYOPIA 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

  9. MARKETING GOALS AND OBJECTIVES • 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

  10. MARKETING GOALS AND OBJECTIVES • 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

  11. CONDUCT A SITUATION ANALYSIS • 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

  12. CONDUCT A SITUATION ANALYSIS • 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

  13. Corporate culture and the external opportunities and threats • 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

  14. Prospector 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

  15. STRATEGIC WINDOW • 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

  16. STRATEGIC OPPORTUNITIES MATRIX EXAMPLE: DAIMLER-CHRYSLER PRODUCT PRESENT NEW PRESENT MARKET Product Development Market Penetration NEW Market Development Diversification 2000 South-Western College Publishing

  17. PORTFOLIO MATRIXEXAMPLE: MICROSOFT CORPORATION MARKET SHARE DOMINANCE HIGH LOW ? LOW HIGH MARKET GROWTH RATE 2000 South-Western College Publishing

  18. 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

  19. 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

  20. MARKET ATTRACTIVENESS / STRENGTH MATRIX (CONTINUED) • 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

  21. DIFFERENTIAL ADVANTAGE • Important to target market(s) • Why you purchase “A” instead of “B” • Athletic Shoes ??? • Soft drink ??? Sustainable competitive advantage 2000 South-Western College Publishing

  22. Marketing Strategy 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

  23. TARGET MARKET STRATEGY • 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

  24. MARKETING PLAN(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

  25. THE MARKETING MIX PRODUCT OR SERVICE PROMOTION PRICE PLACE 2000 South-Western College Publishing

  26. IMPLEMENTATION, EVALUATION AND CONTROL • 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

  27. EVALUATION AND CONTROL • 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

  28. EFFECTIVE STRATEGIC PLANNING • 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

  29. 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