Strategic Marketing Plan

Jan Surya Sharma

 Strategic Planning Process
• Develop Mission Statement that evolves from the SWOT
analysis Reason to be?
• Product & Technology Terms...outdated Market
Terms...keep in touch with consumer's needs
• Should not be too narrow...or...too broad
• Should be based on distinctive competencies of the
organization, determined from the SWOT analysis
• Develop Corporate Objectives: consistent with
organization's mission statement
– Goals derived from the mission & corporate strategy
derived from the goals.
– Goals must specify the desired end results , that are
measurable & within a particular time frame.
SMAC: Specific.. Measurable… Achievable… Consistent…
 Strategic Planning Process
• Develop corporate strategy: Issues include - SRCC
• Scope of Business-----What Business you are in??
• Resource deployment----How you are going to use your resources??
• Competitive advantage----What are your competitive advantages??
• Coordination of Production, Marketing, Personnel etc.----
– Coordination process??
– Tools for strategic market planning
• BCG Product Portfolio Management:
Star Cash Cow Problem Child (Question Marks) Dog
• SWOT analysis
• Product Life Cycle Concept
• Separate strategy for each SBU
– Intense Growth-mkt penetration/development, product development
in related markets.
– Diversified Growth-new products new markets Horizontal (unrelated
products to current markets)/Concentric (NPNM)
– Integrated growth Forward/Backward/Horizontal Disney's Purchase of
Capital Citys/ABC, a content provider purchasing distribution
 Marketing Planning
• Marketing plans vary by:
– Duration
– Scope
– Method of Development, bottom up/top down
• Objective is to create a Marketing plan. A plan for
each marketing strategy developed.
• Marketing strategy encompasses
– Selecting & analyzing the target market(s) and
– Creating & maintaining appropriate marketing mix for
the target market
 Marketing Planning
• Plan includes:
– Executive summary
– Situation Analysis
– Opportunity & Threat Analysis
– Environmental Analysis
– Company Resources
– Marketing Objectives
– Marketing Strategies to include:
• Target market & its needs on
• Develop a marketing mix
– Financial Projections
– Controls & Evaluations: consists of
• establishing performance standards,
• evaluating the actual performance with the desired standards, and
• reducing the difference between the desired & actual
performance.
Marketing Strategy Process
 Marketing Environment
Marketing in a vacuum?
• Marketing environment: consists of external forces
that directly and/or indirectly impact the
organization. Changes in the environment create
opportunities & threats.

• Environmental scanning to track external forces.

– collects information about external forces. Proper MIS.
– Environmental analysis determines environmental
changes & predicts future changes.
 Marketing Environment
• Six Environmental Forces
– Societal
• Regulatory
– Political
– Legal
• Economic
• Competitive
• Technology
• Natural
 Establishing the Core Strategy
• Analyzing of Organizational Resources
– The product portfolio (driving philosophy of GE)
• Peter Drucker
– 1 Today’s breadwinners.
– 2 Tomorrow’s
– 3 Yesterday’s breadwinners
– 4 Developments
– 5 Sleepers
– 6 Investments in managerial ego.
– 7 Failures
Product Prototypes
 Portfolio Planning
• 1 Development of business strategies & allocation of resources (both
financial & managerial).
• 2 Analyzing portfolio balance
• 3 Analysis of the markets served
• 4 Core Strategy
– Expand the market
– Increase Share
– Improve Profitability
• 5 Creation of Competitive Positioning
– Market Targets
– Differential Advantage
– Cost Leadership
– Differentiation & cost leadership
• 6 Implementation
– Marketing Mix
– Organization
• 7 Control
 Decision-Making Process
• There is no simple formula to assure solution to all
problems at all time, but a systematic decision making
process help increase likelihood of arriving at better
solutions.
• The decision making process described here is called
DECIDE:
– Define the problem
– Enumerate the decision factors
– Consider relevant information
– Identify the best alternative
– Develop a plan for implementing the chosen alternative
– Evaluate the decision and the decision process
 1. Define the Problem
• “A problem well defined is half solved” Statement means:
– Objectives of the decision maker
– Constraints
– Success measure or Goal
• Consider any situation where the company had positioned its line of
products as a high quality brand & used advertising effectively to convey
this message. Shortly two of its competitors began cutting the price of
their similar products. The company lost market share & sales, which led
to reductions in the contribution for advertising & sales promotion. How
the problem be defined in this situation?
– One definition of the Problem:“Should we reduce our price?”
– A much better definition:
“How can we maintain our quality brand image (Objective) & regain
lost market share (success measure), given limited funds for
advertising & sales promotion (Constraint)?
 2. Enumerate the Decision Factors
• Two sets of decision factors to be enumerated in the
decision-making process
– Alternative courses of action &
– Uncertainties in the competitive environment
• Alternative courses of action: controllable decision factors
as the decision maker has complete command of them.
Alternatives are typically product market strategies or
changes in the various elements of the organization’s
marketing mix.
• Uncertainties: uncontrollable factors that the manager
cannot influence. In marketing context, they often include
actions of competitors, market size, & buyer response to
marketing action.
 3. Consider Relevant Information
• Relevant information like the relevant costs, consists of information
that relates to the alternatives identified by the manager as being
likely to affect future events.
• Identifying relevant information is little difficult because of
frequent & overabundance of facts, figures & viewpoints in any
decision-making setting.
• So how can access information & that too access the most relevant
information & differentiate it from the exponentially multiplying
masses of non relevant information is more important.
• Upon the conclusion of the first three steps:
– Complete a situation analysis: search an answer to the synoptic
question,
“Where are we now?”
 4. Identify the Best Alternative
• Make A framework for identifying the best alternative:
– each alternative identified with the uncertainties existing in the environment
& assigns a quantitative value to the outcome associated with each match.
Use of a decision tree & a payoff table to describe the relationship among
alternatives, uncertainties, & potential outcomes.
Suppose that problems are identified with two alternatives:
• 1. Reduce the price of produces
• 2. Maintain the price
hey also recognized two uncertainties:
• 1. Competitors could maintain the lower price
• 2. Competitors could reduce the price further.
• Considering relevant information: the changes in market share &
sales volume would be brought about by the pricing actions.
Calculate the contribution per unit of each product for each
alternative for each competitor response..
 4. Identify the Best Alternative
• DECISION TREE
----------------------------------------------------------------------------------------------
Company Action Competitors Response Financial Outcomes
---------------------------------------------------------------------------------------------
Maintain Price Rs 150,000
Alternate 1(Reduce Price)
Reduce Price Further Rs 110,000

Maintain Price Rs. 175,000

Alternate 2(Maintain Price)
Reduce Price Further Rs. 90,000
• PAYPFF TABLE: Uncertainties
Competitors Maintain Price Competitors Reduce Price
(Probability 90%) (Probability 10%)
Reduce Price 150,000 110,000
Alternatives
Maintain Price 175,000 90,000
 4. Identify the Best Alternative
• DECISION ANALYSIS & THE VALUE OF INFORMATION
Payoff Table Uncertainties
Competitors Maintain Price Competitors Reduce Price
(Probability 90%) (Probability 10%)
Reduce Price 150,000 110,000
Alternates
Maintain Price 175,000 90,000

• Calculations of Expected Monetary Value (EVM)

EMV (A1) = 0.9(150,000) +0.1(110,000) = Rs, 146,000
EVM (A2) = 0.9(175,000) +0.1(90,000)= Rs. 166,500
• Calculations of Expected Monetary Value of Perfect Information
(EVMPI)
EMV(Certainty) = 0.9(175,000) + 0.1(110,000) = $168,500
EMVPI = EVM(Certainty)-EVM(Best Alternative)
EVMPI ( 168,500)- 166,500 = Rs. 2000
 4. Identify the Best Alternative
• The higher average contribution of Rs. 166,500 for maintaining the
price indicates that the management should maintain the price.
• The contribution is higher because competitors are expected to
maintain their prices nine times out of ten.

• Under the same condition (same outcome, same probability

estimates), the company would achieve an average contribution of
Rs. 146,000 if the price reduction alternative were chosen.

• A rational management would, therefore, select the price

maintenance alternatives.
 5. Develop a plan for implementing the
Chosen Alternative
• The execution phase is critical, and planning for it forces the case
analyst to consider resource allocation and timing questions. E.g., if
a new product launch is recommended, it is important to consider
how managerial, financial, and manufacturing resources will be
allocated to this course of action.

• If a price reduction is recommended, it will be important to monitor

whether the reduced prices are reaching the final consumer and not
being absorbed by resellers in the marketing channel.

• Timing is crucial, since a marketing plan takes time to develop and

implement.
 6. Evaluate the Decision & the Decision
Process
• 1. Did the problem defined adequately?
• 2. Did all the pertinent alternatives and uncertainties identified?
Were the assumptions realistic?
• 3. Did all the information relevant to the case considered?
• 4. Did the appropriate course of action reco0mmended? If so was
the logic consistent with the recommendation? If not, were the
assumptions different from the assumptions made by others? Did
an important piece of information overlooked?
• How my recommendation could be implemented? Did it was
considered?
Honest answers to these questions will improve the chances of making
better decisions in the future.
 "Developing & Enacting
Strategic Marketing Plans”
• Objectives:
– Define strategic plan & its importance
– Total quality approach & its relevance to marketing
– Different kinds of strategic plans & relationships b/w marketing
& other functional
– Describe the steps in the strategic planning process;
• defining organizational mission,
• establishing strategic business units,
• setting marketing objectives,
• performing situation analysis,
• developing marketing strategy,
• implementing tactics &
• monitoring
 “Why Strategic Marketing Plans Critical”
• Marketing plan is in context of a firm’s broader
strategic business plan.
– Describes the overall direction an organization to
pursue & guides the allocation of resources.
– Integrates the perspectives of functional departments
& operating units to common direction.
– Outlines the actions necessary:
• who is responsible,
• when & where to be completed,
• how will be coordinated.
 “Why A Total Quality Approach”?
• A process & output related philosophy, striving to satisfy
customers effectively.

• Always:
– Seeks to satisfy customers
– Top management commitment
– Emphasizes continuous improvement
– Requires support from employees, suppliers, & distribution
intermediaries
 “Strategic Planning Process”
• 1. Define Organizational Mission
• 2. Establish SBUs
• 3. Set Marketing Objectives
• 4. Perform Situation Analysis
• 5. Develop Marketing Strategy
• 6. Implement Tactical Plans
• 7. Monitoring Results
• 8. Get Feedback, Restructure & Consolidate the Marketing
Plan
 Strategic Planning Process
STEP One : Defining the organizational mission
• Mission: A long-term commitment to a type of business &
a place in the market.

“Describes the scope of the firm & its dominant emphasis &
values,”
It must be based on:
- firm’s history,
- current management preferences,
- resources, & distinctive competence, &
- environmental factors.
 Strategic Planning Process
STEP Two : Establish Strategic Business Units

• Each Strategic Business Units (SBU ) has six attributes:

– 1. A specific target market
– 2. Its own senior marketing executive
– 3. Control over its resources
– 4. Its own marketing strategy
– 5. Clear-cut competition
– 6. Distinct differential advantages
 Strategic Planning Process
STEP Three : Set Marketing Objectives
• Establish the firm’s goals for each SBU.

• Objectives to be described in both

– Quantitative terms (sales, percentage profit growth, & market
share),
– Qualitative terms (image, level of innovativeness, & industry
leadership role).

• Without clearly identified objectives, firms often fail.

 Strategic Planning Process
STEP Four : Perform Situation Analysis
• Situation Analysis aka SWOT Analysis

– Internal factors include:

• Strengths
• Weaknesses
– External factors include:
• Opportunities
• Threats

• SWOT analysis is a continuous review of a firm’s market position.

 Strategic Planning Process
STEP Five : Develop Marketing Strategy
• Marketing strategy outlines the way in which the
marketing mix is used to attract & satisfy the target
market.
• A separate strategy is necessary for each SBU.

• Strategic Planning approaches:

– Product/Market Opportunity Matrix
– Boston Consulting Group Matrix
– General Electric Business Screen
– Porter Generic Strategy Model
 Strategic Planning Process
STEP Six : Implement Tactical Plan
• A tactical plan: specifies the short-run actions (tactics)
that a firm undertakes in implementing a given marketing
strategy.

• Basic elements:
– Specific Tasks
– Time Frame
– Resource Allocation
 Strategic Planning Process
STEP Seven : Monitoring Results
• Monitoring results: compares the actual performance of a
firm, SBU, or product against the planned performance for
a specified period.

• Successful companies employ the following strategies:

– Continuous monitoring of performance
– Regular use of proper strategy adjustments
– Maintenance of a customer-oriented focus
– Stressing positive written & oral communication among
employees and channel members.
 Strategic Planning Process
STEP Eight :
Get Feedback, & Restructure (if required)
&
Consolidate Plan Objectives
 Strategic Marketing Planning
Guidelines
• Executive Summary • Marketing objectives &
• Mission Statement performance – SMART Goals
• Specific
• Situational Analysis
• Measurable
– Product/services
• Achievable
– Unique Selling Proposition
• Relevant
– Best Prices
• Timely
– Marketing Objectives &
Performance • Product Strategies
– Challenges • Pricing Strategies
– Competitor Analysis • Distribution Strategies
– SWOT Analysis
• Promotion Strategies
• Target Markets
• Budgeting
• Buyer Personas
• Conclude
ALL THE BEST!