CHAPTER 2 – STRATEGY PLANNING

Target Marketing vs. Mass Marketing Marketing mix is tailored to fit specific target customer(s) MASS MARKETING Vaguely aims at "everyone" with the same marketing mix

The Four Ps and Marketing Mix Planning PRODUCT PROMOTION PLACE (DISTRIBUTION) PRICE

Strategy Decision Areas Organized by the 4 Ps © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Essentials of Marketing

Market Strategy = Target Market + Marketing Mix © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Essentials of Marketing

The Marketing Plan Marketing plan: a written statement of a marketing strategy and the time related details for carrying out the strategy. Spells out, in detail: What marketing mix is to be offered To what target market For how long What resources (costs) are needed at what rate What results are expected What control procedures will be used.

Elements of a Firm’s Marketing Program © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Essentials of Marketing

The Marketing Plan Marketing plan: Marketing Mix Target Market Time Resources Measurable Results Control Procedures © 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin—for use only with Essentials of Marketing

Overview of Strategy – Planning Process

Marketing Strategy Planning Process Narrowing down from broad market opportunities that a firm might pursue to a specific strategy Marketing strategy specifies a specific target market and a specific marketing mix Not just “some” strategy, but one that will offer target customers superior value Segmentation helps pinpoint a specific target market

Marketing Strategy Planning Process cont’d Differentiation helps pinpoint a marketing mix that is different from and better than what is available from a competitor Screening criteria make it clear why you select a specific strategy (and why others are “screened out”) S.W.O.T. analysis identifies and lists a firm’s strengths and weaknesses and its opportunities and threats S.W.O.T helps identify relevant screening criteria (what is needed to get a competitive advantage)

Competitive Advantage Superior Customer Value Total Company Effort to Satisfy Customers Customer Satisfaction Customer Retention Profitable Relationships with Customers Customer Acquisition

Competitive Advantage Requires that the firm: understand current competitors' offerings anticipate competitors' likely plans monitor effects of changes in competition REALLY understand the target customers' needs

Examples of Different Types of Opportunities Market Penetration Arm & Hammer promotes new uses of its baking soda Market Development Marriott Hotels target families for weekend "get-aways" to rent rooms filled by business travelers during the week Product Development Microsoft develops a new version of its Windows operating system to appeal to the people who bought an earlier version but now want more features Diversification RJR, the cigarette producer, adds baked goods to its product line to appeal to new customers

Four Basic Types of Opportunities