2-

2-11

Chapter
Chapter 22

Strategic Planning
and the
Marketing Process

 Copyright 2000 Prentice Hall

Strategic
Strategic Planning
Planning Process
Process
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• Strategic Planning is the process of developing and

maintaining a strategic fit between the
organization’s goals and capabilities and its
changing marketing opportunities.

• This process involves:

– Defining the Company Mission: Statement of an
organization’s purpose - what it wants to accomplish in
the larger environment.
– Setting Company Objectives and Goals: Supporting
objectives for each level of management.
– Designing the 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.
 Copyright 2000 Prentice Hall
 2-
2-33

Mission
Mission Statements
2-3
Statements
2-3

Market
Market
Oriented
Oriented

Motivating
Motivating Realistic
Realistic
Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements
Distinctive
Distinctive Specific
Specific
Competencies
Competencies

Fit
Fit Market
Market
Environment
Environment

 Copyright 1998 Prentice Hall

 Copyright 2000 Prentice Hall

Designing
Designing the
the Business
Business Portfolio
Portfolio
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• “The best portfolio is the one that best fits the

company’s strengths and weaknesses to
opportunities in the environment.”
• A Strategic Business Unit (SBU) is a unit of the
company:
– that has a separate mission and objectives, and
– that can be planned independently from other
company businesses.
• The company must:
– analyze its current business portfolio or Strategic
Business Units (SBU’s), and
– decide which SBU’s should receive more, less, or no
investment, and
– develop growth strategies for adding new products
or businesses to the portfolio.
 Copyright 2000 Prentice Hall
Analyzing
Analyzing Current
Current SBU’s:
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SBU’s:
Boston
Boston Consulting
Consulting Group
Group
Approach
Approach
Relative Market Share
High Low
Stars Question
Question Marks
Marks ?
Market Growth Rate
High

• High growth & share ••High

Highgrowth,
growth,low
lowshare
share
• Profit potential ••Build
Buildinto
intoStars/
Stars/phase
phaseout
out
• May need heavy ••Require
Requirecash
cashtotohold
hold
investment to grow market
marketshare
share
Cash
CashCows
Cows Dogs
Dogs
••Low ••Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high
highshare share
Low

share
••Established, ••Low
Lowprofit
profitpotential
Established,successful
successful potential
SBU’s
SBU’s
••Produce
Producecash
cash

 Copyright 2000 Prentice Hall

Problems
Problems With
With Matrix
Matrix Approaches
Approaches
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2-66

Can
Canbe
beDifficult,
Difficult, Time-Consuming,
Time-Consuming, &&Costly
Costlyto
to Implement
Implement

Difficult
Difficultto
toDefine
Define SBU’s
SBU’s&&Measure
Measure Market
Market Share/
Share/ Growth
Growth

Focus
Focus on
on Current
CurrentBusinesses,
Businesses, But
But Not
Notfuture
futurePlanning
Planning

Can
CanLead
Leadto
toUnwise
UnwiseExpansion
Expansion or
or Diversification
Diversification
 Copyright 2000 Prentice Hall
Developing
Developing Growth
Growth Strategies
Strategies
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Product/ Market Expansion Grid

Existing New
Products Products
Existing
Markets 1. Market 3. Product
Penetration Development

New
Markets 2. Market
4. Diversification
Development

 Copyright 2000 Prentice Hall

Product/
Product/ Market
Market Expansion
Expansion Grid
Grid
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• Market Penetration:
Penetration making more sales to current
customers without changing products. How? Cut
prices, increase advertising, get products into more
stores.

• Market Development:
Development identifying and developing
new markets for its current products. How?
Identify new demographic or geographic markets.

• Product Development:
Development offering modified or new
products to current markets. How? New styles,
sizes, colors, or other modified products.

• Diversification:
Diversification start up or buy new businesses
outside of its current products and markets.
 Copyright 2000 Prentice Hall
Marketing’s
Marketing’s Role
Role in
in Strategic
Strategic
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Planning
Planning

Provides
Providesaa Provides
ProvidesInputs
Inputs
Guiding
Guiding to
to
Philosophy
Philosophy Strategic
Strategic Planners
Planners

Designs
DesignsStrategies
Strategies
for
forReaching
Reaching
Unit’s
Unit’sObjectives
Objectives

 Copyright 2000 Prentice Hall

 2-
2-10
A
A Company’s
Company’s Value
Value Chain
10
Chain
Each Department in a Company Carries Out
Value-Creating Activities to Design, Produce,
Market, Deliver, and Support the Firm’s Products.

Marketing
Marketing

Purchasing
Purchasing Customer
Customer Information
Information Systems
Systems

Operations
Operations
 Copyright 2000 Prentice Hall
 Speed
Speed Bump:
Bump:
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11

Linking
Linking
the
the Concepts
Concepts

• What does Strategic Planning have to do

with marketing?
• What are Levi Strauss & Co.’s mission and
strategy?
• What roles do other functional departments
play?
• How can Levi Strauss’s marketers work
more effectively with these other functions
to maximize overall customer value?
 Copyright 2000 Prentice Hall
 2-
2-12
The
The Marketing
Marketing Process
Process
12

Demographic- Marketing Technological-

Economic Intermediaries Natural
Environment Environment

M lan
ys ng

ar n
al eti

P
is

ke in
An ark

Product

tin g
M

g
Suppliers Place Target Price Publics
Consumers

n
t io
M Con

en ing
Promotion
ar tr

ta
em et
ke ol

pl rk
tin

Im Ma
g

Political- Social-
Legal Competitors Cultural
Environment Environment

 Copyright 2000 Prentice Hall

Process
Process of
of Selecting
Selecting Target
Target
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13

Consumers
Consumers
• Market Segmentation:
Segmentation process of dividing a market into
distinct groups buyers (segments) with different needs, etc.
who might require separate products.
• Market Segment - consumers who respond in similar way to a given
set of marketing efforts.

• Market Targeting:
Targeting evaluating each market segment’s
attractiveness and selecting one or more target segments to
enter.

• Market Positioning:
Positioning products clear, distinctive and desirable
place relative to competing products in the minds of target
segments.

 Copyright 2000 Prentice Hall

Marketing
Marketing Mix-
Mix- The
The Five
Five P’s
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P’s
14

Product
Product Price
Goods-and-service
Goods-and-service Amount
Amount of of money
money
combination
combination aa consumers
consumers have have
company
company offers
offers aa to
to pay
pay to
to obtain
obtain
target
target market
market the
the product
product

Target
Target
Customers
Customers
Intended
Intended
Positioning Company
Company activities
activities
Positioning
Activities
Activities that
that that
that make
make the
the
persuade
persuade target
target product
product available
available to
to
customers
customers to to buy
buy target
target customers
customers
the
the product
product

PEOPLE

Promotion  Copyright 2000 Prentice Hall Place

Four
Four Marketing
Marketing Management
Management
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15

Functions
Functions
Marketing
Marketing Analysis
Analysis of
of Company’s
Company’s Situation
Situation

Control
Planning
Planning Implementation
Implementation
Measure
Results
Develop
Develop Carry
Carry Out
Out the
the
Strategic
Strategic Plans
Plans Evaluate
Plans
Plans Results

Develop Take
Develop
Marketing Corrective
Marketing Action
Plans
Plans

 Copyright 2000 Prentice Hall

Contents
Contents of
of aa Marketing
Marketing Plan
Plan
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16

Executive Summary

Current Marketing Situation

Threats and Opportunities

Objectives and Issues

Marketing Strategy

Action Programs

Budgets

Controls

 Copyright 2000 Prentice Hall

Marketing
Marketing Implementation
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Implementation
17

Marketing
Marketing Strategy
Strategy

Decision
Human
Organizational and
Resources
Structure Reward

Action Climate and

Programs Culture

Implementation

Marketing
Marketing Performance
Performance
 Copyright 2000 Prentice Hall
 2-
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Marketing
Marketing Department
Department Organization
Organization
18

Functional
Functional

Combination
Combination
Plan
Plan Geographic
Geographic
Ways to
Carry Out
Marketing
Activities

Market
Market Product
Management Product
Management Management
Management

 Copyright 2000 Prentice Hall

 2-
2-19
19
Organizational
Organizational Structure
Structure of
of Mktg
Mktg Deptt.
Deptt.

Functional
Functional Prod/Mktg/Fin./HR
Prod/Mktg/Fin./HR

Geographical
Geographical P.Louis/
P.Louis/ Rodrigues
Rodrigues

Product
Product Beer/Soda/Water
Beer/Soda/Water

 Copyright 2000 Prentice Hall

Marketing
Marketing Control
2-
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Control
20

Set
Set Marketing
Marketing Goals
Goals

Measure
Measure
Performance
Performance

Evaluate
Evaluate
Performance
Performance

Take
Take Corrective
Corrective
Action
Action

 Copyright 2000 Prentice Hall

Marketing
Marketing Audits
Audits
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21

Marketing Marketing
Marketing Marketing
Marketing
Mix Environment Strategy
Environment
Areas
Areas of
of Strategy
Assessment
Assessment
in
in Marketing
Marketing
Marketing Audits
Audits
Productivity &
Profitability
Marketing
Marketing Marketing
Marketing
Systems
Systems Organization
Organization

 Copyright 2000 Prentice Hall

 Rest
Rest Stop:
Stop:
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22

Reviewing
Reviewing
the
the
Concepts
Concepts
• Explain company-wide strategic planning and its
four steps.
• Discuss how to design business portfolios and
develop growth strategies.
• Explain functional planning strategies and
marketing’s role in strategic planning.
• Describe the marketing process and the forces
that influence it.
• List the marketing management functions,
including the elements of a marketing plan.
 Copyright 2000 Prentice Hall