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Developing Marketing Strategies and Plans

Figure 2.2 The Strategic Planning, Implementation, and Control Processes

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Strategic Planning
Strategic Planning is the process of developing and maintaining a Strategic fit between the organizations goals and capabilities and its changing marketing opportunities. Strategic Planning involves1. Defining the corporate mission 2. Setting objectives 3. Designing business portfolio 4. Coordinating functional efforts

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Corporate Headquarters Planning Activities Define the corporate mission Establish strategic business units (SBUs) Assign resources to each SBU Assess growth opportunities

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1. Defining the corporate Mission

Mission is a statement of the organizations purpose- what it wants to accomplish in the larger environment. It seeks to provide a sense of purpose, direction and opportunity To define the mission, the company should address the following questions: What is our business? Who is the customer? What is of value to the customer? What will our business be? What should our business be?
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Characteristics of Good Mission Statements

Focus on limited number of goals Stress major policies and values

Define major competitive spheres

Take a long-term view Short, memorable, meaningful

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Table 2.3
Product vs. Market Oriented Mission Company
Missouri-Pacific Railroad Xerox Standard Oil Columbia Pictures

Product
We run a railroad We make copying equipment We sell gasoline We make movies

Market
We are a peopleand-goods mover We improve office productivity We supply energy We entertain people

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2. Establishing Strategic Business Units

Strategic Business Unit is a unit of the company that has a separate mission and that can be planned independently from the rest of the company. It can be a company division, a product line within the division, and sometimes a single product or brand.

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Characteristics of SBUs
It is a single business or collection of related businesses It has its own set of competitors It has a manager responsible for strategic planning and profitability

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3. Assigning Resources to Each SBU

The purpose of identifying the company's strategic business units is to develop separate strategies and assign appropriate funding. Two of the best-known business portfolio evaluation approaches are 1. Boston Consulting Group (BCG) Approach 2. The General Electric (GE)Approach

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Boston Consulting Group (BCG) Approach The growth-share matrix is divided into four cells based on market growth rate and relative market share.

Figure: BCG Growth-Share Matrix

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Boston Consulting Group (BCG) Approach

Stars are high-share businesses or products. Cash cows are low-growth, high-share businesses or products. Question marks are low-share business units in high-growth market. Dogs are low-growth, low-share businesses or products
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SBU Strategies
1.Build/Invest- Question Marks 2. Hold/Maintain- Stars and strong Cash cows 3. Harvest- Weak Cash Cows 4. Divest- Dogs

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General Electric (GE) Approach The General Electric Business Screen was originally developed to help marketing managers overcome the problems that are commonly associated with the Boston Matrix (BCG). The GE approach introduces a three by three matrix. It utilizes industry attractiveness as a more inclusive measure than BCG's market growth and substitutes competitive position for the original's market share.

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General Electric (GE) Approach

Market attractiveness depends on: Size of market. Market rate of growth. The nature of competition and its diversity. Profit margin. Impact of technology, the law, and energy efficiency. Environmental impact. Competitive position depends on: Market share. Management profile. R & D. Quality of products and services. Branding and promotions success. Place (or distribution). Efficiency. Cost 2-15 reduction. Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

General Electric (GE) Approach

The GE matrix is divided into nine cells, which in turn fall into three zones upper left corner lower left to upper right corner lower right corner The three cells in the upper left corner indicate strong SBUs in which the company should invest or grow. The diagonal cells stretching from the lower left to upper right indicate SBUs that are medium in overall attractiveness. The company should pursue selectivity & manage for earnings in these SBUs. The three cells in the lower right corner indicate SBUs that are low in overall attractiveness. The company should give serious thought to harvesting or divesting these SBUs.
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3. Planning New Businesses

The company plans for its existing businesses allow it to project total sales & profits. If there is a gap between future desired sales and projected sales corporate management will have to develop or acquire new business to fill it.
Strategic Planning Gap:

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3. Planning New Businesses

Three options are available to fill up the strategic planning gap: The first is to identify opportunities to achieve further growth within current businesses (Intensive growth opportunities) The second is to identify opportunities to build or acquire businesses that are related to current businesses (Integrative growth opportunities) The third is to identify opportunities to add attractive businesses tat are unrelated to current businesses (Diversification growth opportunities)
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Intensive Growth Strategies

Three Intensive Growth Strategies: Ansoffs Product/Market Expansion Grid
Existing products New products

Existing markets

1. Market penetration

3. Product development

New markets
2000 Prentice Hall

2. Market development

4. Diversification

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Integrative Growth strategies

1. Backward integration (integration with the suppliers) 2. Forward integration (integration with the distributors) 3. Horizontal integration (integration with one or more of the competitors)

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Diversification Growth Strategies

Diversification growth makes sense when good opportunities can be found outside the present businesses. Three types of diversification are possible: 1. Concentric diversification strategy ( new products, new market, technology or marketing may be related) 2. Horizontal diversification strategy (new products, new/current market, technology unrelated) 3. Conglomerate diversification strategy (new products, new market, new technology)
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Figure 2.5 The Business Unit Strategic Planning Process

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SWOT Analysis
Strengths Weaknesses Opportunities Threats
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Porters Generic Strategies

Overall Cost Leadership

Differentiation
Focus

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Marketing Plan Contents

Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controls

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