Chapter 1

STRATEGIC PLANNING AND

THE MARKETING
MANAGEMENT PROCESS

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Introduction
Marketing combines economics, psychology,
anthropology, sociology, statistics and
demographic.
Identifies and provides tools to satisfy need
and wants.
It is around us every day.
Improves quality of life.
Resolves conflicts between consumer and
societal needs/wants.

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The Essence of Marketing

Customer focus: needs and wants
Research emphasis
Exchange process
Relationship basis
Competitive environment
Satisfaction emphasis
Efficiency Process to satisfy needs/wants

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Definition of marketing
Process
Planning and executing
Conception, pricing, promotion and
distribution
Goods and services
Create exchanges
Individuals and organizational goals

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The Complexity of
Marketing
Multiple decision making process
Interrelated factors
Interaction between buyer and seller
Global factor-important for survival

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History of Marketing
Thought
Production Concept-industrial revolution
(late 18th century)
Product Concept-innovation (1920s)
Selling Concept-promotion (1940s)
Marketing Concept-customer satisfaction
(1960s)
Social Responsibility-consumerism and
improve quality of life (1970s)

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Marketing Theory
Goods Vs. services-tangible/intangible
Product categories-durable/nondurable
Consumer Vs. industrial markets
Profit Vs. nonprofit
Intermediaries Vs. end users
Domestic Vs. international
Small firms Vs. large firms

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The Marketing Mix

Product
Place
Price
Promotion

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Selling versus Marketing

Inward-looking Vs. outward-looking
Short-term Vs. long-term
Sales volume Vs. customer satisfaction
Mass production Vs. innovation (needs)
Profit focus Vs. Brand loyalty

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Marketing and Strategic

Planning
Understanding customers
Understanding Competitors
Planning concepts (medium and long term)
Marketing intelligence (need discovery)
Strengths and weaknesses
Strategy assessment-long term goals
Organization response to environmental
challenge

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Marketing and Strategic

Planning (Cont.)
Top management concerns
Follow the environmental changes-Microsoft
Corporation
Global approach-Sears Vs Wall-Mart
The organizational strategic plan:

Organizational

mission
Organizational objectives
Organizational Strategies
Organizational portfolio plans

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Organizational Mission
Organizations history
The organizations distinctive
competencies
The organizations environment

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Organizational Objectives
Market standing
Innovations
Productivity
Physical and financial resources
Profitability
Manager responsibility
Workers performance
Social responsibility

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Organizational Strategies

Strategies based upon product/market

Market

penetration
Market development
Product development
Diversification

Strategies based upon competitive

advantage
Porters

competitive advantage-low cost advantageWal-Mart

Differentiation-Microsoft, Rolex, L.L.Bean
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Organizational
Strategies(Cont.)

Organizational strategies based upon

value
Product

leadership-innovative approach
Operational excellence-Dell computer
Customer intimacy-relationship marketing

Organizational Portfolio Plan

Boston

Consulting Group model

GE model

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Product/Market Strategy
Market penetration-to use more, changing
product offering and positioning:exp. tuna
fish in water.
Product development-adding new features
Market development-taking the product to
a new market: internationalization
Diversification:(a) related, and
(b)unrelated industries.

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Product Portfolios

Criticism of BCG matrix: (1) cash flow is

applicable to limited number of markets,
(2)brand leader should not be milked
because new brand may not be a leader.
Economies of scale-the more are sold, the
more are made, and the lower the unit cost.
Product mix-product width and depth
Product mix decision: 1.line stretching, 2.line
rationalization

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MARKETING MANAGEMENT
PROCESS
Process of planning, execution, pricing,
promotion, distribution of goods and
services.
Situation analysis
Organizational

objectives and mission

Cooperative environment-suppliers, resellers

Competitive environment
Economic environment
Social environment-cultures and traditions
Political and Legal environment

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MARKETING MANAGEMENT
PROCESS (CONT.)

Marketing Planning
Setting

the objectives
Selecting the target market
Developing the marketing mix

Implementation and Control

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