Int To Mktng Ch 2

• 1. Strategic Planning for Competitive Advantage CHAPTER2Marketing 10Lamb, Hair, McDaniel Designed by Prepared by Eric Brengle Amit Shah B-books, Ltd. Frostburg State UniversityCopyright 2009 by Cengage Learning Inc. All rights reserved 1

2. Learning Outcomes Understand the importance of strategic marketingLOI and know a basic outline for a marketing plan Develop an appropriate businessLO2 mission statement Explain the components of a situation analysisLO3 Copyright 2009 by Cengage Learning Inc. All rights reserved 2 3. Learning Outcomes LO4 Explain the criteria for stating good marketing objectivesLO5Identify sources of competitive advantageLO6Identify strategic alternativesLO7Discuss target market strategiesCopyright 2009 by Cengage Learning Inc. All rights reserved3 4. Learning Outcomes LO8 Describe the elements of the marketing mix Explain why implementation, evaluation, andLO9 control of the marketing plan are necessary Identify several techniques that help make LOIO strategic planning effectiveCopyright 2009 by Cengage Learning Inc. All rights reserved4 5. LOI The Nature of Strategic Planning Understand the importanceof strategic marketing and know a basic outline for a marketing plan Copyright 2009 by Cengage Learning Inc. All rights reserved 5 6. LOI Strategic Planning StrategicStrategicPlanningPlanning The managerial process of creating and maintaining a fit between the organizations objectives and resources and evolving market opportunities. The goal is long-term profitability and growth. Copyright 2009 by Cengage Learning Inc. All rights reserved 6 7. Strategic Marketing ManagementWhat is the organizations main activity? How will it reach its goals? THE ANSWER IS A MARKETING PLAN. LOI7 Copyright 2009 by Cengage Learning Inc. All rights reserved 8. LOI Marketing PlanningMarketing PlanMarketing PlanA written document that actsas a guidebook of marketingactivities for the marketingmanager. Copyright 2009 by Cengage Learning Inc. All rights reserved8 9. Why Write a Marketing Plan?Provides a basis for comparison of actualand expected performance Provides clearly stated activities to worktoward common goals Serves as a reference for the success offuture activities Provides an examination of themarketing environment Allows entry into the marketplace with awarenessLOI Copyright 2009 by Cengage Learning Inc. All rights reserved9 10. Marketing Plan ElementsBusiness Mission StatementObjectives Situation or SWOTAnalysis Marketing StrategyTarget MarketStrategy Marketing Mix ProductDistribution Promotion Price ImplementationEvaluationControl LOI Copyright 2009 by Cengage Learning Inc. All rights reserved 10 11. LOI REVIEW LEARNING OUTCOME The Importance of Strategic Marketing What WhatStrategic Planning Strategic Planning Long-term profitability Long-term profitability Why Whyand growth and growth How How Write a marketing plan Write a marketing plan Copyright 2009 by Cengage Learning Inc. All rights reserved 11 12. LO2Defining the Business Mission Develop an appropriate business mission statement Copyright 2009 by Cengage Learning Inc. All rights reserved 12 13. LO2Defining the Business MissionAnswers the question,What business are we in?Focuses on the market(s)rather than the good or serviceStrategic Business Units (SBUs) mayalso have a mission statement13 Copyright 2009 by Cengage Learning Inc. All rights reserved 14. Southwest Airlines Mission Statement SOURCE: http://www.southwestairlines.com/about_swa/missionLO214 Copyright 2009 by Cengage Learning Inc. All rights reserved 15. Strategic Business UnitsLO2(SBUs)Characteristics: [SBU HAS] A distinct mission and specific target market Control over its resources Its own competitors Plans independent of other SBUs15 Copyright 2009 by Cengage Learning Inc. All rights reserved 16. LO2REVIEW LEARNING OUTCOMEBusiness Mission Statement Q: What business are we in?A: Business mission statement Too narrowmarketing myopia Too broad no direction Just rightfocus on markets served and benefits customers seekCopyright 2009 by Cengage Learning Inc. All rights reserved 16 17. LO3 Conducting a Situation AnalysisExplain the components of a situation analysis Copyright 2009 by Cengage Learning Inc. All rights reserved 17 18. LO3 Conducting a Situation Analysis SWOT Analysis Identifying SWOT Analysis internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) Copyright 2009 by Cengage Learning Inc. All rights reserved 18 19. SWOT AnalysisS Internal Things the company does well. Things the company does well.W Things the company does not do well. Things the company does not do well.O External Conditions in the external environment thatConditions in the external environment that favor strengths.favor strengths.Conditions in the external environment that Conditions in the external environment that T do not relate to existing strengths or favor do not relate to existing strengths or favor areasSouth-Western College Publishing areasof current weakness. of current weakness. LO3 Copyright 2009 by Cengage Learning Inc. All rights reserved19 20. LO3Environmental ScanningEnvironmentalEnvironmental The collection and interpretationScanning Scanning of information about forces,events, and relationships in theexternal environment that mayaffect the future of theorganization or the implementationof the marketing plan. Copyright 2009 by Cengage Learning Inc. All rights reserved20 21. LO3 REVIEW LEARNING OUTCOME Components of a Situation Analysis StrengthsENVIRONMENTproduction costsINTERNALmarketing skillsfinancial resourcesimagetechnology Weaknesses Copyright 2009 by Cengage Learning Inc. All rights reserved21 22. LO3 REVIEW LEARNING OUTCOME Components of a Situation AnalysisOpportunitiessocial ENVIRONMENTEXTERNALdemographiceconomictechnologicalpolitical / legalcompetitiveThreats Copyright 2009 by Cengage Learning Inc. All rights reserved 22 23. LO4 Setting Marketing Plan Objectives Explain the criteria for statinggood marketing objectives Copyright 2009 by Cengage Learning Inc. All rights reserved 23 24. LO4 Marketing ObjectiveA statement of what is to be Marketingaccomplished through Objectivemarketing activities. Copyright 2009 by Cengage Learning Inc. All rights reserved24 25. LO4Marketing ObjectivesRealistic Our objective is to Measurableincrease sales of Purina brand cat food by 15 Time specificpercent over 2009 sales of$300 million. Compared to a benchmark 25 Copyright 2009 by Cengage Learning Inc. All rights reserved 26. LO4REVIEW LEARNING OUTCOME Criteria for Good Marketing ObjectivesRealistic, measurable, and time-specific objectivesconsistent with the firms objectives: 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to think clearly 5. Allow for better evaluation of results Copyright 2009 by Cengage Learning Inc. All rights reserved 26 27. LO5Competitive Advantage Identify sources ofcompetitive advantage Copyright 2009 by Cengage Learning Inc. All rights reserved 27 28. LO5Competitive AdvantageCompetitiveCompetitive The set of unique features of aAdvantage Advantagecompany and its products thatare perceived by the targetmarket as significant andsuperior to the competition. Copyright 2009 by Cengage Learning Inc. All rights reserved 28 29. Competitive Advantage Cost CostTypes ofTypes ofProduct/ServiceProduct/ServiceCompetitiveCompetitiveDifferentiation DifferentiationAdvantage Advantage Niche StrategiesNiche StrategiesLO5 29 Copyright 2009 by Cengage Learning Inc. All rights reserved 30. LO5 Cost Competitive AdvantageCost CostCompetitiveCompetitiveBeing the low-cost competitor Advantage Advantage in an industry while maintaining satisfactory profit margins. Copyright 2009 by Cengage Learning Inc. All rights reserved30 31. LO5 Cost Competitive Advantage Obtain inexpensive raw materialsCreate efficient plant operationsDesign products for ease ofmanufactureControl overhead costsAvoid marginal customers 31 Copyright 2009 by Cengage Learning Inc. All rights reserved 32. LO5Sources of Cost ReductionExperience CurvesExperience CurvesProduct Design Product DesignEfficient Labor Efficient LaborReengineeringReengineeringNo-frills Goods and No-frills Goods andProduction InnovationsProduction Innovations ServicesServicesNew ServiceNew Service Government Subsidies Government Subsidies Delivery MethodsDelivery Methods 32 Copyright 2009 by Cengage Learning Inc. All rights reserved 33. LO5Product/Service Differentiation Product //Service Product Service The provision of somethingDifferentiationDifferentiation that is unique and valuable Competitive Competitive to buyers beyond simplyAdvantage Advantage offering a lower price than the competitions. Copyright 2009 by Cengage Learning Inc. All rights reserved33 34. LO5 Examples of Product/Service Differentiation Brand namesStrong dealer networkProduct reliabilityImageService 34Copyright 2009 by Cengage Learning Inc. All rights reserved 35. LO5 Niche Competitive Advantage Niche Niche The advantage achieved whenCompetitiveCompetitivea firm seeks to target and Advantage Advantage effectively serve a single segment of the market. Copyright 2009 by Cengage Learning Inc. All rights reserved35 36. LO5Niche Competitive Advantage Used by small companies with limited resources May be used in a limited geographic market Product line may be focused on a specific product category36 Copyright 2009 by Cengage Learning Inc. All rights reserved 37. LO5Sources of SustainableCompetitive Advantage Patents Patents Copyrights CopyrightsLocationsLocations Equipment Equipment Technology TechnologySkills and AssetsSkills and Assetsof an of an Customer Service Customer Service Organization OrganizationPromotionPromotion Copyright 2009 by Cengage Learning Inc. All rights reserved37 38. LO5REVIEW LEARNING OUTCOMESources of Competitive AdvantageSources of Sources ofCompetitive AdvantageCompetitive AdvantageProduct/ServiceProduct/ServiceCostCost NicheNiche Differentiation Differentiation $$Strategies StrategiesA vs. B vs. CA vs. B vs. CCopyright 2009 by Cengage Learning Inc. All rights reserved38 39. LO6Strategic Directions Identify strategic alternativesCopyright 2009 by Cengage Learning Inc. All rights reserved 39 40. LO6 Strategic Alternatives Market Increase market share amongPenetrationexisting customers MarketAttract new customers to Development existing products Create new products for Product Development present markets Introduce new products Diversification into new markets40 Copyright 2009 by Cengage Learning Inc. All rights reserved 41. Ansoffs Strategic Opportunity Matrix Present ProductNew Product PresentMarketProductMarketPenetration Development New MarketDiversificationMarketDevelopmentLO6 Copyright 2009 by Cengage Learning Inc. All rights reserved41 42. Portfolio MatrixProblemStarsChildren Cash Cows Dogs LO6 42 Copyright 2009 by Cengage Learning Inc. All rights reserved 43. Portfolio Matrix StrategiesBuild Hold Harvest DivestLO643 Copyright 2009 by Cengage Learning Inc. All rights reserved 44. LO6REVIEW LEARNING OUTCOME Strategic Alternatives Identify strategic alternativesMarket development= customersMarket penetration= shareProduct development = products new products + Diversification = new marketsCopyright 2009 by Cengage Learning Inc. All rights reserved44 45. LO7 Describing the Target Market Discuss targetmarket strategies Copyright 2009 by Cengage Learning Inc. All rights reserved 45 46. LO7Marketing Strategy Marketing Marketing The activities of selecting and StrategyStrategy describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets. Copyright 2009 by Cengage Learning Inc. All rights reserved46 47. LO7 Target Market Strategy Segment the market based on groups with similar characteristics Analyze the market based on attractiveness of market segments Select one or more target markets47 Copyright 2009 by Cengage Learning Inc. All rights reserved 48. LO7 Target Market StrategyAppeal to the entire marketAppeal to the entire marketwith one marketing mixwith one marketing mixConcentrate on oneConcentrate on onemarketing segment marketing segmentAppeal to multiple markets Appeal to multiple markets with multiple marketing mixes with multiple marketing mixes 48 Copyright 2009 by Cengage Learning Inc. All rights reserved 49. LO7REVIEW LEARNING OUTCOME Target Market StrategiesTarget Market OptionsEntire Market Multiple Markets Single MarketCopyright 2009 by Cengage Learning Inc. All rights reserved 49 50. LO8The Marketing Mix Describe the elementsof the marketing mixCopyright 2009 by Cengage Learning Inc. All rights reserved 50 51. LO8 The Marketing Mix Marketing Mix Marketing Mix A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. Copyright 2009 by Cengage Learning Inc. All rights reserved51 52. Marketing Mix: The Four PsPricePromotionPlaceProductLO852 Copyright 2009 by Cengage Learning Inc. All rights reserved 53. Marketing Mix: The Four PsThe starting point of the4 PsProductIncludes Physical unit Products can be PackageTangible goods Warranty Ideas ServiceServices Brand Image ValueLO8 53 Copyright 2009 by Cengage Learning Inc. All rights reserved 54. Marketing Mix: The Four PsProduct availability whereand when customers wantthemPlace All activities from rawmaterials to finishedproducts Ensure products arrive inusable condition atdesignated places whenneededLO854 Copyright 2009 by Cengage Learning Inc. All rights reserved 55. Marketing Mix: The Four Ps Role is to bring about exchanges with targetPromotion markets by:Informing Includes integration of: EducatingPersonal selling Persuading RemindingAdvertisingSales promotionPublic relationsLO855 Copyright 2009 by Cengage Learning Inc. All rights reserved 56. Marketing Mix: The Four Ps Price is what a buyer must give up to obtain a product.Price The most flexible of the 4 Ps-- quickest to change Competitive weapon Price x Units Sold = Total RevenueLO856 Copyright 2009 by Cengage Learning Inc. All rights reserved 57. LO8REVIEW LEARNING OUTCOMEElements of the Marketing MixCopyright 2009 by Cengage Learning Inc. All rights reserved 57 58. LO9 Following Up on the Marketing Plan Explain why implementation,evaluation, and control of the marketing plan are necessary Copyright 2009 by Cengage Learning Inc. All rights reserved 58 59. LO9 Following Up the Marketing Plan Implementation Evaluation Control Marketing audit is Comprehensive Systematic Independent Periodic 59Copyright 2009 by Cengage Learning Inc. All rights reserved 60. LO9REVIEW LEARNING OUTCOME Implementation, Evaluation, and ControlImplementation Evaluation Product Product Place Place MetMet Promotion Promotionobjectives?objectives? Price Price Audits Audits comprehensive comprehensive systematic systematic independent independent periodic periodicCopyright 2009 by Cengage Learning Inc. All rights reserved 60 61. LOIO Effective Strategic Planning Identify several techniques that help make strategicplanning effectiveCopyright 2009 by Cengage Learning Inc. All rights reserved 61 62. LOIO REVIEW LEARNING OUTCOME Techniques for Effective Strategic PlanningContinualContinualManagement ManagementCreativityCreativityattention attention commitment commitment Effective Effective Strategic Strategic Planning PlanningCopyright 2009 by Cengage Learning Inc. All rights reserved62