Strategic Planning and Marketing Process - Marketing lecture

Strategic Planning and Strategic Planning and Marketing ProcessMarketing Process

Strategic planningStrategic planningThe process of developing and The process of developing and

maintaining a strategic fit between the maintaining a strategic fit between the

organization’s goals and capabilities organization’s goals and capabilities

and its changing marketing and its changing marketing

opportunities. opportunities.

Planning--what are we Planning--what are we going do and how are we going do and how are we going to do it?going to do it?

Why Plan?Why Plan?• Address changing environment Address changing environment

and consumersand consumers

• Develop shared goals within Develop shared goals within organizationorganization

• Address competitive threatAddress competitive threat

Planning is no Planning is no fun!fun!

Who likes to think Who likes to think

about the future?about the future? It is just an unnatural It is just an unnatural

act!act!

If you fail to plan,If you fail to plan,you plan to fail.you plan to fail.

Planning requires that Planning requires that you:you:

Anticipate the futureAnticipate the future

Determine actions that Determine actions that are needed to achieve are needed to achieve objectivesobjectives

What doyou see?

The Planning The Planning ProcessProcess

Environmental AnalysisEnvironmental Analysis

Mission & Objective SettingMission & Objective Setting

Marketing Strategy DevelopmentMarketing Strategy Development

Action PlansAction Plans

Characteristics Characteristics of a Strategic of a Strategic

PlanPlan

Broad in ScopeBroad in Scope Long Range: 3 - 5 + YearsLong Range: 3 - 5 + Years Focus on Organizational ObjectivesFocus on Organizational Objectives Initiated and Managed by Top ManagementInitiated and Managed by Top Management Becomes Basis for Tactical Planning & Becomes Basis for Tactical Planning &

OperationsOperations

Strategic PlanningStrategic Planning

Conducted by Board, Conducted by Board, CEO, Division VPsCEO, Division VPs

Sets ObjectivesSets Objectives Fundamental StrategiesFundamental Strategies

Tactical Planning Tactical Planning Middle Management - Sales Mgr., Middle Management - Sales Mgr.,

Mkt. Research Director, Advertising Mkt. Research Director, Advertising DirectorDirector

Quarterly & Semi-Annual PlansQuarterly & Semi-Annual Plans Departmental Policies and ProceduresDepartmental Policies and Procedures Budget AllocationsBudget Allocations

Operational PlanningOperational Planning

District Sales Managers, District Sales Managers, Staff Marketing Staff Marketing SupervisorsSupervisors

Daily and Weekly PlansDaily and Weekly Plans Departmental Rules & Departmental Rules &

ProceduresProcedures

It is more important to do It is more important to do what is strategically right what is strategically right than what is immediately than what is immediately

profitable.profitable.

--Phillip Kotler--Phillip Kotler

SWOT AnalysisSWOT AnalysisSStrengthstrengths

WWeaknesseseaknesses

OOpportunitiespportunities

TThreatshreats

Steps in Strategic Steps in Strategic PlanningPlanning

Defining the

CompanyMission

Setting CompanyObjectivesand Goals

Designingthe Business

Portfolio

Planning, marketing,and other functionalStrategies

Corporate LevelBusiness unit,

product,and market

level

Strategic Planning involves Strategic Planning involves developing an overall developing an overall company strategy for long-company strategy for long-run survival and growth.run survival and growth.

This process involves:This process involves: Defining a MissionDefining a Mission: Statement of an organization’s : Statement of an organization’s

purpose; should be market oriented.purpose; should be market oriented. Setting Company ObjectivesSetting Company Objectives: Supporting goals and : Supporting goals and

objectives to guide the entire company.objectives to guide the entire company. Designing a Business Portfolio: Designing a Business Portfolio: Collection of businesses Collection of businesses

and products that make up the company.and products that make up the company. Planning Functional Strategies: Planning Functional Strategies: Detailed planning for Detailed planning for

each department designed to accomplish strategic each department designed to accomplish strategic objectives.objectives.

Defining the Company’s Defining the Company’s Business and MissionBusiness and Mission

Market OrientedMarket Oriented

RealisticRealistic

Fit Market EnvironmentFit Market Environment

Distinctive CompetenciesDistinctive Competencies

MotivatingMotivating

Specific

Characteristics

of a Good Mission

Statement:

A Mission Statement is a Statement of the Organization’s Purpose.

Setting Company Setting Company Objectives and Goals Objectives and Goals

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M arke tin gS tra teg y

M arke tin gO b jec tive # 1

M arke tin gS tra teg y

M arke tin gO b jec tive # 2

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M arke tin gS tra teg y

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M iss ionS ta tem en t

Designing the Designing the Business PortfolioBusiness Portfolio

Business Portfolio:Business Portfolio:

The collection of business and products that make up the companyThe collection of business and products that make up the company

Portfolio Analysis:Portfolio Analysis:

A tool by which management evaluates the various business making A tool by which management evaluates the various business making up the companyup the company

Strategic Business Unit (SBU):Strategic Business Unit (SBU):

A unit of the company that has a separate mission and objectives and A unit of the company that has a separate mission and objectives and that can be planned independently from other company businessthat can be planned independently from other company business

The best portfolio is the one that best fits the company’s strengths and The best portfolio is the one that best fits the company’s strengths and weaknesses to the opportunities in the environment.weaknesses to the opportunities in the environment.

The company must:The company must: Analyze its Analyze its currentcurrent business portfolio or Strategic Business Units business portfolio or Strategic Business Units

(SBU’s)(SBU’s) Decide which SBU’s should receive more, less, or no investmentDecide which SBU’s should receive more, less, or no investment Develop growth strategies for adding Develop growth strategies for adding newnew products or businesses to products or businesses to

the portfoliothe portfolio

The Boston Consulting The Boston Consulting Group’s Growth-Share Group’s Growth-Share

MatrixMatrix

3 ?

10x 4x 2x 1.5x 1x 10x 4x 2x 1.5x 1x

20%-20%-18%-18%-16%-16%-14%-14%-12%-12%-10%-10%- 8%-8%- 6%-6%- 4%-4%- 2%-2%- 00

Mar

ket

gro

wth

rat

e

Relative market share

Stars

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Question marks

Dogs

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4

2

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7.5x .4x .3x .2x .1x .5x .4x .3x .2x .1x

Marketing ProcessMarketing Process

Product/Market Product/Market Expansion GridExpansion Grid

Market-penetrationstrategy

(Diversificationstrategy)

Product-developmentstrategy

Market-developmentstrategy

CurrentCurrentmarketsmarkets

NewNewmarketsmarkets

CurrentCurrentproductsproducts

NewNewproductsproducts

Product/ Market Expansion Product/ Market Expansion GridGrid

Market Penetration:Market Penetration:

Making more sales to current customers without changing its Making more sales to current customers without changing its products. products.

How? Add new stores in current market areas, How? Add new stores in current market areas, improve advertising, adjust prices, service or store improve advertising, adjust prices, service or store design.design.

Market Development: Market Development:

develop new markets for its current develop new markets for its current products. products.

How? Identify new demographic or How? Identify new demographic or geographic markets.geographic markets.

Product Development:Product Development:

Offering modified or new products to current Offering modified or new products to current markets. markets.

How? New styles, flavors, colors, or modified How? New styles, flavors, colors, or modified products.products.

Diversification:Diversification:

New products for new markets. New products for new markets.

How? Start up or buy new businesses. How? Start up or buy new businesses.

Strategic Planning, Strategic Planning, Implementation, and Implementation, and

Control ProcessControl Process

Corporateplanning

Divisionplanning

Businessplanning

Productplanning

Organizing

Implementing

Measuringresults

Diagnosingresults

Takingcorrective

action

PlanningPlanning ImplementationImplementation ControlControl

Marketing Strategy Marketing Strategy Planning ProcessPlanning Process

Marketing Strategy Marketing Strategy Planning ProcessPlanning Process

CustomersCustomersNeeds and otherNeeds and other

SegmentingSegmentingDimensionsDimensions

CompanyMission, Objectives,

& Resources

CompetitorsCurrent &

Prospective

CustomersCustomersNeeds and otherNeeds and other

SegmentingSegmentingDimensionsDimensions

CompanyMission, Objectives,

& Resources

CompetitorsCurrent &

Prospective

S.W.

O.T.

External Market EnvironmentExternal Market Environment

CustomersCustomersNeeds and otherNeeds and other

SegmentingSegmentingDimensionsDimensions

CompanyMission, Objectives,

& Resources

CompetitorsCurrent &

Prospective

S.W.O.T.

External Market EnvironmentExternal Market Environment

Targeting &Segmentation

Positioning &DifferentiationPositioning &Differentiation

CustomersCustomersNeeds and otherNeeds and other

SegmentingSegmentingDimensionsDimensions

CompetitorsCurrent &

Prospective

S.W.O.T.

External Market EnvironmentExternal Market Environment

Targeting &Segmentation

Positioning &DifferentiationPositioning &Differentiation

Narrowing down to focused strategy with quantitative and qualitative screening criteria

CompanyMission, Objectives,

& Resources