11/23/2016

MARK1012
Marketing Fundamentals
Lecture 2
Strategic Planning
Written by:

Nicole Lasky
Haodong Gu
Dr Mohammed Razzaque
Dr Jiraporn Surachartkumtonkun

Spoken by:

Nicole Lasky

Highlights of Lecture 2

What is strategy or strategic planning?

Corporate mission statement;

Business portfolio;

Marketing strategies:
Profitable customer relationship;
STP;
Marketing mix;
Marketing management.

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Strategy and Strategic Planning

Strategy and Strategic Planning

Strategic planning is:
The process of developing and maintaining a strategic fit between
the organisations goals and capabilities in the light of changing
marketing opportunities.
It relies on developing a clear:
Company mission
Objectives
Sound Business Portfolio
Coordinated Functional Strategies

Strategies follow a hierarchy

Corporate level
Strategic Business Unit (SBU) Level
Functional Level of SBU (e.g., Marketing Strategy)

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Strategy and Strategic Planning

(Example)
Mission statement: where to go?

UNSW Business Mission: As one of Australias leading business schools, our

mission is to be a globally engaged, high impact and academically
rigorous business school that enhances practice through leading edge
research.

Tactic: the implementation of strategies.

The strategic plan focuses our efforts in three key areas:

An outstanding career-focused student learning

High impact research

Sustainable two-way engagement with Asia

experience

https://www.business.unsw.edu.au/about/b
usiness-school/strategy

Strategy and Strategic Planning

(Hierarchy)

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Strategy and Strategic Planning

(Hierarchy Example)

Bread

Biscuits

Spreads and oils

Mission Statement
A mission statement is a statement of organisations purpose- what it wants to
accomplish in the larger environment (textbook p. 45).

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Mission Statement
(Examples)

Mission Statement
(Examples)
To inspire and nurture the human spirit - one person, one cup and one
neighborhood at a time.

To challenge National Football League players to be lifelong learners while

pursuing continuous improvement in family relations, social interactions,
personal growth and career development during and beyond their careers as
NFL players.

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Mission Statement
(Examples)

To be the best retailer in every market in which we operate.

To pioneer biodynamic beauty by creating superior products with ingredients

from our farms; to build a community committed to authenticity and to an
alternative approach to beauty; to create a rewarding environment that delivers
sustainable growth.

Mission Statement
(Why?)
Think one minute about: Why?
Why a company needs a mission statement?
Is it just a noble sentence to decorate the corporate website?
Write down the reasons of having a mission statement on a
piece of paper.
Answer includes:
Avoid

marketing myopia

Organisation
Lead

culture (management issues);

to strategic planning (knowing where to go);

Stakeholder

relationship (Think about how societal / social marketing concept may

influence the development of mission statement);
And

so forth (many other purposes).

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Basic Corporate Strategy: Business Portfolio

Corporate strategy is a huge topic;
An entire marketing course is dedicated to the design and analysis of strategy;
In MARK1012, we look at the most fundamental corporate strategy: designing the
business portfolio.
Business Portfolio: The collection of businesses and products that make up a company.

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Basic Corporate Strategy: Business Portfolio

Think about: Why companies embrace a business portfolio rather than a single
business or product?
Answer includes:
Financial risks (like stock portfolio);
Consumer preferences (coffee, hot chocolate, tea);
Economy of scale;
By-products (petroleum products);
Supplementary products (Gillette Razor and shave gel);
Attacking and defending (e.g., Qantas and Jetstar?);
And many others.

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Basic Corporate Strategy: Business Portfolio

(Tools)
Tools for designing business portfolio: Boston Consulting Group (BCG) Matrix

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Basic Corporate Strategy: Business Portfolio

(Tools)
Boston Consulting Group (BCG) Matrix Example

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Basic Corporate Strategy: Business Portfolio

(Tools)
Tools for designing business portfolio: Product Expansion (Ansoff) Grid
Current products
Market penetration strategies

Current
markets

Increase market share

Increase product usage
- increase frequency of use
- increase quantity used
- new applications

Product development strategies

Product improvements
Product-line extensions
New products for same market

Market development strategies

New
markets

New products

Expand markets for existing products

- geographic expansion
- target new segments

Diversification strategies
Vertical integration
- forward integration
- backward integration
Diversification into related businesses
(concentric diversification)
Diversification into unrelated businesses
(conglomerate diversification)

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Basic Corporate Strategy: Business Portfolio

(Tools)
Tools for designing business portfolio: Product Expansion (Ansoff) Grid

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Basic Corporate Strategy: SBU Strategy

Corporate strategy is the general planning for the entire company;
SBU strategy is the planning for one specific business unit.
Thank about the difference:

In this course, a large proportion of theorisation focuses on SBU level strategy.

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BASIC BUSINESS UNIT STRATEGY

(SBU)

Porters Generic
Strategy
(Porter 1980)

Where is Virgin Australia?

Does it change?

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Marketing Strategy

Inside out planning

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Marketing Strategy
Core: Profitable customer relationship

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Marketing Strategy
Marketing strategy: STP
Segmentation: the process of dividing a market into distinct groups of buyers who
have different needs, characteristics or behaviours, and who might require separate
products or marketing programs.
Targeting: evaluating each market segments attractiveness and selecting one or more
segments to enter.
Positioning: arranging for a product to occupy a clear, distinctive and desirable place
relative to competing products in the minds of target consumers.

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Marketing Strategy
Marketing mix: delivering value to consumers
Marketing mix includes:
Product;
Price;
Placement;
Promotion.
Develop marketing mix based on STP strategy, not vice versa.

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Marketing Strategy
Marketing management: managing the value delivering function of marketing

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Marketing Strategy
To profile a marketing strategy: Marketing plan

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Marketing Strategy
Implementing marketing plan:
Marketing implementation is the process that turns marketing strategies and plans
into marketing actions in order to accomplish strategic marketing objectives.
Implementation involves day-to-day, month-to-month activities that effectively
put the marketing plan to work.
Whereas marketing planning addresses the what and why of marketing activities,
implementation addresses the who, where, when and how.
Reasons for poor implementation of marketing plans:
Isolated planning
Trade-offs between long and short term objectives
Natural resistance to change lack of financial and marketing integration
Overemphasis on the document.

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Marketing Strategy
Controlling marketing plan and marketing implementation:

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Lecture 2 Summary

Planning can help making sense of

changing environment
Most organisations operate according to formal plans
Managers are often too busy and have no time for
planning

Organisations failing to plan are planning to

fail!

The need for flexibility has led to a resurgence in

the process of scenario planning.

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