STRATEGIC MARKET PLANNING Marketing 360 Brian Gillespie.

STRATEGIC MARKET PLANNINGMarketing 360Brian Gillespie

Value

Value (from Customer’s Perspective) Sum of benefits we receive from a product

Value (from Seller’s Perspective) Profits…but also, prestige, pride, making community happy Lifetime value of a customer

How much is this customer worth to us in the long-term? Long-term thinking develop relationships with customers

Value (to Shareholders) Created when company has competitive advantage over rivals Distinctive competency (company’s superior capability) Differential benefit (unique benefit of product)

Value (to Society) What is the impact of product/service on society?

The Marketing Mix

Marketing Mix

Price Strategies(what will we charge?)

Promotion Strategies(how will we inform and

encourage customers to buy our product?)

Place Strategies(where will we deliver

product/service?)

Product Strategies

(what will we produce and for

whom?)

Why Study Marketing?

Plays an Important Role in Society Promotes efficient transfer of desired products to meet needs Can be used to promote worthwhile social causes

Fundamental to the Success of Businesses Assessing needs, designing products, pricing product,

promoting products, distribution strategies, servicing customer

Great Career Opportunities Roughly 25-33% of people perform marketing related

activities Marketing Affects You Everyday

Become a wiser consumer

The Dark Side of Marketing

Illegal practices like “bait and switch”

Societal health problems Diabetes, heart disease, cancer, alcoholism, domestic

violence

Psychological Costs Many ads encourage us to feel bad about ourselves

Financial Burdens Consumer debt

Environmental degradation and resource depletion

Ethics in Strategic Market Planning Unethical business decisions impact all

stakeholders Job loss Environmental effects

Most times unethical decisions do not go unnoticed Enron Martha Stewart Sub-prime mortgage meltdown

Preventing Unethical Activities Business ethics

Underlying values and philosophies that dictate actions in an organization

The ethical culture of an organization

Code of ethics Written standards of behavior to which

everyone in the organization must subscribe

Three Levels of Business Planning Strategic Planning

Managerial decision process matching an organization’s resources and capabilities to its market opportunities for long-term growth

Functional (Marketing) Planning Decision process that develops detailed short-

term strategies that support an organization’s strategic plans

Operational Planning Decision process that develops detailed day-to-

day strategies that carry out an organizations functional plans

Strategic Planning

Five steps to strategic planning Step 1: define the mission Step 2: situational analysis Step 3: set organizational or strategic

business unit objectives Step 4: establish the business portfolio Step 5: develop growth strategies

Step 1: Define the Mission

Mission Statement Formal statement in an organization’s strategic plan

that describes overall purpose of the organization and what it plans to achieve in terms of customers, products, resources

Too narrow = marketing myopia Too broad = no direction Could have one for each Strategic Business Unit

(SBU) Individual units in the firm that operate like separate

businesses, each with its own mission, objectives, resources, managers, & competitors

Mission Statements

Washington State University As a public, land-grant and research institution

of distinction, Washington State University enhances the intellectual, creative, and practical abilities of the individuals, institutions, and communities that we serve by fostering learning, inquiry, and engagement.

Starbucks Establish Starbucks as the premier purveyor of

the finest coffee in the world while maintaining our uncompromising principles while we grow.

Creating a Mission Statement In groups, pretend you are opening a

new chain of Mexican – Chinese fusion restaurants in the Pacific Northwest

Create a mission statement for your new concept restaurant

Step 2: Situational analysis

Internal Environment Controllable elements in organization

People, corporate culture, facilities, processes

External Environment Uncontrollable elements outside

organization that may affect performance Both positive and negative

SWOT Analysis

Internal analysis Strengths Weaknesses

External analysis Opportunities Threats

What would a SWOT analysis for The Coug look like?

Step 3: Set Organizational or SBU Objectives Objectives flow from the mission statement

Organization size typically determines whether or not SBUs exist, and if they have their own objectives

Effective objectives are Realistic, specific, measurable, and well-matched with

mission statement

Example Ok: Our objective is to better serve customers Better: Our objective is to obtain customer satisfaction

ratings of at least 90% in 2011, and retain at least 85% of our 2010 customers as repeat customers in 2011

Step 4: Establish the Business Portfolio Portfolio

Collection of brands or units owned by organization that have different income generating potential

Portfolio Analysis Evaluating an organization’s business mix

and assessing the potential of an organization’s SBUs

BCG Growth-Market Share Matrix

17

Product is dominant in

categoryProduct is a

miss

Step 5: Develop Growth Strategies BCG matrix does not address how to grow SBUs, but the Product-

Market Growth Matrix does

Market penetration strategies Designed to increase sales of existing products to current customers,

nonusers, and users of competitors

Market development strategies Strategies that introduce existing products into new markets

Product Development Strategies Strategies that focus on selling new product to existing markets

Diversification Strategies Strategies that emphasize both new products and new markets

Product-Market Growth Model

Market penetration Market penetration

Seek to increase sales of existing products to existing markets

Examples ???

Product development Product development

Create growth by selling new product in existing markets

Examples ???

Market developmentMarket development

Introduce existing products to new markets

Examples ???

Diversification strategies Diversification strategies

Emphasize both new products and new markets to achieve growth

Examples ???

New market

(customers) =No

New product =No New product =Yes

New market

(customers) =Yes

Which Quadrant of the Product-Market Growth Matrix is This?

Which Quadrant of the Product-Market Growth Matrix is This?

Which Quadrant of the Product-Market Growth Matrix is This?

Which Quadrant of the Product-Market Growth Matrix is This?

Functional (Marketing) Planning Decision process that develops detailed

short-term strategies that support an organization’s strategic plans

Step 1: perform a situational analysis Step 2: set marketing objectives Step 3: develop marketing strategies Step 4: implement and control the marketing

plan

Step 3: Develop Marketing Strategies Select a Target Market

Market opportunity analysis – size and sales potential of target group, and assessment of key competitors

Develop Marketing Mix Strategies Product, Price, Promotion, Place of

Distribution

Step 4: Implement and Control the Marketing Plan Action Plans

Implementation of marketing strategies Responsibilities, Time Line, Budget, Measurement and Control

Control Monitoring progress Compare actual performance to marketing objectives and

adjust strategy/objectives as needed Must have good marketing metrics

Marketing audits Evaluation of objectives, strategies, structure, performance of

marketing organization Should be comprehensive, systematic, independent, periodic