Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 1 MKTG 2 CHAPTER Strategic Planning for Competitive Advantage

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 2 Strategic Planning The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities. The goal is long-term profitability and growth. Strategic Planning

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 3 Levels of Strategy  Corporate Level  Business Unit Level SBU’s  Functional Level  Operational Level

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 4 Strategic Planning A …………….that acts as a guidebook of marketing activities for the marketing manager. Marketing Plan

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 5 Marketing Plan Elements Marketing Strategy ProductDistribution Price Marketing Mix Business Mission Statement Objectives Situation or SWOT Analysis Target Market Strategy Implementation Evaluation Control Promotion

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 6 Step 1:Defining the Business Mission  Answers the question, “What business are we in?”  Focuses on the market(s) rather than the good or service  Strategic Business Units (SBUs) may also have a mission statement

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 7 Business Mission Statement Q: What business are we in? A: Business mission statement Too narrow Too broad Just right ……………………. no direction focus on markets served and benefits customers seek

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 8 LO 1 Marketing Plan Elements Marketing Strategy ProductDistribution Price Marketing Mix Business Mission Statement Objectives Situation or SWOT Analysis Target Market Strategy Implementation Evaluation Control Promotion

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 9 Step 2: Defining objectives Marketing Objective A statement of what is to be accomplished through marketing activities.

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 10 Marketing Objectives LO 3  Realistic  Measurable  Time specific  Consistent with and indicating the priorities of the organization “Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction.”

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 11 LO 4 Step 3: Situation or SWOT Analysis Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) SWOT Analysis

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 12 SWOT Analysis ©South-Western College Publishing S S W W O O T T …………………………………………. Things the company does not do well. Conditions in the external environment that favor ……………... Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness. Internal External

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 13 A strength could be: ??

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 14 A weakness could be ??

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 15 LO 4 Environmental Scanning The collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. Environmental Scanning Environmental Scanning

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 16 An opportunity could be ??

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 17 A threat could be ??

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 18 Step 4: Marketing Strategy LO 7 The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets. Marketing Strategy Marketing Strategy

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 19 Identifying opportunities through STP Segmentation……………………Positioning

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 20 Competitive Advantage The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 21 Competitive Advantage: Is there ever no competition? Niche Strategies Cost Product/Service Differentiation Types of Competitive Advantage

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 22 Cost Competitive Advantage Being the low-cost competitor in an industry while maintaining satisfactory profit margins.

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 23 Product/Service Differentiation Product/Service Differentiation Competitive Advantage The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s.

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 24 Niche Competitive Advantage The advantage achieved when a firm seeks to target and effectively serve a small segment of the market. Twitter or Facebook?

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 25 Sources of Sustainable Competitive Advantage Patents Copyrights Locations Equipment Technology Customer Service Promotion Skills and Assets of an Organization Skills and Assets of an Organization

Chapter 2Copyright ©2009 Cengage Learning Inc. All rights reserved. 26 Growth Strategies 6 Diversification = Product development = ________ Market development = ________ Market penetration =share new products new markets

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 27 Portfolio Matrix Stars Cash Cows Problem Children Dogs

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 28 Target Market Strategies Entire Market Multiple Market Segments Single Market Segment Target Market Options

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 29 The Marketing Mix A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. Marketing Mix

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 30 Marketing Mix: The “Four Ps”  The starting point of the “4 Ps”  Includes  Physical unit  Package  Warranty  Service  Brand  Image  Value Product  Products can be…  Tangible goods  Ideas  Services

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 31 Marketing Mix: The “Four Ps”  Product availability where and when customers want them  All activities from raw materials to finished products  Ensure products arrive in usable condition at designated places when needed Place

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 32 Marketing Mix: The “Four Ps” Promotion Online  Role is to bring about exchanges with target markets by:  Informing  Educating  Persuading  Reminding  Includes integration of:  Personal selling  Advertising  Sales promotion  Public relations

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 33 Marketing Mix: The “Four Ps” Price  Price is what a buyer must give up to obtain a product.  The most flexible of the “4 Ps”-- quickest to change  Competitive weapon  Price x Units Sold = Total Revenue

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved Step 5: Following Up on the Marketing Plan  Implementation  Evaluation  Control  Marketing audit is…  Comprehensive  Systematic  Independent  Periodic

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved Check Yourself 1. What are the five steps in creating a marketing plan? 2. What tool helps a marketer conduct a situation analysis? 3. What is STP?

Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved Check Yourself 1. What are the four growth strategies? 2. What type of strategy is growing the business from existing customers? 3. Which strategy is the riskiest?