Chapter 4 Winning Markets Through Market-Oriented Strategic Planning by

Objectives Corporate and division strategic planing Business unit planning The marketing process Product level planning The marketing plan

Kotler on Marketing It is more important to do what is strategically right than what is immediately profitable.

Three Key Areas and Four Organization Levels Strategic Planning Three Key Areas and Four Organization Levels Strategic marketing plan Tactical marketing plan Marketing plan

Market-Oriented Strategic Planning Objectives Resources Skills Opportunities

Market-Oriented Strategic Planning Objectives Resources Profit and Growth Skills Opportunities

Table 4.1: Product-Oriented versus Market-Oriented Definitions of a Business Company Product Definition Market Definition Missouri-Pacific Railroad We run a railroad We are a people-and-goods mover Xerox We make copying equipment We help improve office productivity Standard Oil We sell gasoline We supply energy Columbia Pictures We make movies We market entertainment Encyclopaedia We sell encyclopedias We distribute Information Carrier We make air conditioners and furnaces We provide climate control in the home

Corporate Headquarters Planning Define the corporate mission Establish strategic business units (SBUs) Assign resources to SBUs Plan new business, downsize older businesses

Strategic-Planning, Implementation, and Control Process Corporate planning Division Business Product Organizing Implementing Measuring results Diagnosing Taking corrective action

Good Mission Statements: Limited number of goals Stress major policies & values Define competitive scopes

Business Unit Strategic Planning Business Mission SWOT Analysis External Environment Analysis (Opportunity and Threat Analysis) Marketing Opportunity Buying opportunity more convenient or efficient Meet the need for more information and advice Customize an offering that was previously only available in standard form

The Boston Consulting Group’s Growth-Share Matrix 20%- 18%- 16%- 14%- 12%- 10%- 8%- 6%- 4%- 2%- Market Growth Rate Stars 5 4 3 ? Question marks 2 1 Cash cow 6 Dogs 8 7 10x 4x 2x 1.5x 1x Relative Market Share .5x .4x .3x .2x .1x

Market Attractiveness: Competitive- Position Portfolio Classification Strong Medium Weak BUSINESS STRENGTH 1.00 2.33 3.67 5.00 MARKET ATTRACTIVENESS 5.00 3.67 2.33 1.00 Low Medium High Clutches Hydraulic pumps Joints Flexible diaphragms Fuel pumps Aerospace fittings Relief valve Invest/grow Selectivity/earnings Harvest/divest

Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid penetration Existing markets products 3. Product development New products 2. Market development New markets 4. Diversification

The McKinsey 7-S Framework Strategy Structure Systems Skills Shared values Staff Style

The Marketing Plan Executive Summary & Table of Contents Current Marketing Situation Opportunity & Issue Analysis Objectives Marketing Strategy Action Programs Projected Profit-and-loss Controls

Factors Influencing Company Marketing Strategy Competitors Marketing intermediaries Publics Suppliers Marketing information system planning organization organization and implementation Demographic/ economic environment Social/ cultural Technical/ physical Political/ legal Product Promotion Place Price Target customers