Chapter 2

Strategic Planning and the

Marketing Process

1
Road Map: Previewing the Concepts
Explain companywide strategic planning
and its four steps.
Discuss how to design business
portfolios and growth strategies.
Explain functional planning strategies
and asses 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 2
Strategic Planning
Many companies operate without
formal plans, yet these plans can
provide many benefits such as:
encouraging management to think ahead
systematically,
forcing managers to clarify objectives and
policies, and
helping the company to anticipate and
respond quickly to environmental changes
and sudden developments.
3
Strategic Planning

Strategic Planning is the

Process of Developing and
Maintaining a Strategic Fit
Between the Organization’s
Goals and Capabilities and Its
Changing Marketing
Opportunities.
4
Steps in Strategic Planning
(Fig. 2-1)

5
 3M
A mission
statement is a
statement of an
organization’s
purpose.
“… 3M solves
people’s problems
by putting
innovation to work
for them.”
6
Setting Company Objectives
and Goals
M is s io n
S ta te m e n t

M a r k e t in g M a r k e t in g M a r k e t in g
O b je c t iv e # 1 O b je c t iv e # 2 O b je c t iv e # 3

M a r k e t in g M a r k e t in g M a r k e t in g M a r k e t in g M a r k e t in g
S tra te g y S tra te g y S tra te g y S tra te g y S tra te g y

7
Designing the Business Portfolio
The business portfolio is the collection of
businesses and products that make up the
company.
The company must:
analyze its current business portfolio or
Strategic Business Units (SBU’s),
decide which SBU’s should receive more, less,
or no investment,
develop growth strategies for adding new
products or businesses to the portfolio.
8
 Analyzing Current SBU’s:
BCG Growth-Share Matrix (Fig. 2-2)
Relative Market Share
High Low
Market Growth Rate

Stars Question Marks

?
High

• High growth & share • High growth, low share

• Profit potential • Build into Stars or phase out
• May need heavy • Require cash to hold
investment to grow market share
Cash Cows Dogs
• Low growth, high share • Low growth & share
Low

• Established, successful • Low profit potential

SBU’s
• Produce cash

9
Problems With Matrix Approaches
Can be Difficult, Time-Consuming, Costly to Implement

Difficult to Define SBU’s & Measure Market Share/Growth

Focus on Current Businesses, But Not Future Planning

Can Lead to Unwise Expansion or Diversification

10
Form students into groups of three to
five members. Each group should
answer the following questions
pertaining to the opening chapter
material on Intel, then discuss in class:
Why has Intel been so successful?
What has been the company’s primary
strategy?
What role has innovation played in Intel’s
success?
11
Product/Market Expansion
Grid (Fig. 2-3)

Existing New
Products Products
Existing
Markets 1. Market 3. Product
Penetration Development
New
2. Market
Markets 4. Diversification
Development

12
Product/Market Expansion Grid
Based on Starbucks
Market Penetration: making more
sales to current customers without
changing its products.
How? Add new stores in current market
areas, improvements in advertising,
prices, etc.
Market Development: identify and
develop new markets for its current
products.
How? Review new demographic (senior
consumers) or geographic (Asian, 13
Product/Market Expansion Grid
Based on Starbucks
Product Development: offering
modified or new products to current
markets.
How? Increasing food offerings, sell
coffee in supermarkets, extend to
Frappuccino drinks.
Diversification: start up or buy
businesses outside current products
and markets.
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Planning Cross-Functional
Strategies
Marketing’s Role in Strategic Planning

Inputs to
Guiding Design
Strategic
Philosophy Strategies
Planners

15
Value Delivery Network
Company’s
Value
Chain

Customers Suppliers

Distributors

16
The Marketing Process
(Fig. 2-4)

17
Connecting With Customers
Market Segmentation: determining distinct
groups of buyers (segments) with different
needs, characteristics, or behavior.
Market Targeting: evaluating each segment’s
attractiveness and selecting one or more
segments to enter.
Market Positioning: arranging for a product
to occupy a clear, distinctive, and desirable
place relative to competing products in the
minds of target consumers. i.e. Chevy Blazer
18
What is the difference between a
market segment and a market
target?

19
Developing the Marketing Mix
(Fig. 2-5)

20
The 4 P’s & 4 C’s of the
Marketing Mix
4 P’s 4 C’s
Product Customer Solution
Price Customer Cost
Place Convenience
Promotion Communication

21
Managing the Marketing Effort
(Fig. 2-6)

22
Contents of a Marketing Plan
(Table 2-2)
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls 23
Marketing Department
Organization Functional
Organization

Combination Formats for Geographic

Plan Organizing the Organization
Department
Include:

Market or Customer Product Management

Organization Organization
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Marketing Control Process
(Fig. 2-7)

25
Review of Concept
Connections
Explain companywide strategic planning
and its four steps.
Discuss how to design business portfolios
and growth strategies.
Explain functional planning strategies and
assess 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.
26