1 2. Strategic Planning & The Marketing Process

2 What Is Planning Establish objectives Determine how to accomplish them regardless of what happens in environment Levels of planning: –Strategic –Tactical –Operational

3 Strategic Planning Formal process of developing & maintaining a strategic fit between firm’s goals & competencies and its environment –Point: Obtain best return for expenditure of firm’s resources Five basic steps: –Define corporate mission (“vision”) –Perform SWOT analysis –Set corporate goals & objectives –Design business portfolio –Plan & coordinate functional strategies

4 Strategic Planning: Defining Business & Mission Develop mission/vision statement –Market-oriented definitions are best Define business in terms of satisfying needs of target market –Avoid being too narrow or too broad –Mission statement should: Be market oriented Fit environment Be realistic Indicate competencies Be specific Be motivating

5 Strategic Planning: Perform SWOT Analysis SWOT analysis/situation audit –Strengths/weaknesses Tend to be internal/close to firm –Other departments –Channel members –Competitors –Publics Strengths reflect core competencies –Basis for positioning –Opportunities/threats Come from broader, external environmental forces: –Societal– Competitive– Regulatory –Economic– Technological

6 Strategic Planning: Setting Corporate Objectives & Goals All objectives informed by SWOT analysis Translate mission statement into supporting objectives for each management level –Corporate level, business units, functional level Mission statement leads to hierarchy of objectives –Including business and marketing objectives Make objectives specific

7 Strategic Planning: Designing the Business Portfolio Portfolio: Businesses & products of company Designing involves: –Analyzing current portfolio –Deciding what stays & what goes Developing growth strategies –Add new products/businesses? –Increase sales of existing products/businesses?

8 Designing the Business Portfolio: Analyzing the Current Portfolio Identify key businesses –Strategic business units (SBU’s) Assess attractiveness of various SBU’s –Portfolio planning with BCG matrix Stars Cash cows Question marks Dogs –Determine whether to: Build, hold, harvest, divest

9 Designing the Business Portfolio: Developing Growth Strategies Market-product expansion grid –Vertical axis: Existing market, new market –Horizontal axis: Existing product, new product Depending on grid position, growth strategies include: –Market penetration –Market development –Product development –Diversification

10 Strategic Planning: Planning Functional Strategies Occurs within business units, at functional (departmental) level –E.g., finance, purchasing, marketing, production Departments translate overall SBU mission & objectives into departmental objectives Marketing works to reduce cross-functional conflict

11 Marketing Strategies for Competitive Advantage Strategies geared to consumer needs & competitor strategies –Differentiate by focusing on points of difference –Use marketing mix to position Strategy adopted depends on firm’s industry position: –Market leaders –Market challengers –Market followers –Market nichers

12 Marketing Management Designing & implementing best marketing mix requires: –Marketing analysis –Marketing planning –Marketing implementation –Marketing control

13 Marketing Analysis Marketing requires analysis of consumers/business markets Marketers must: –Divide the total market (market segmentation) –Choose the best segments (market targeting) –Design strategies for outdoing the competition in satisfying target customers (market positioning)

14 Marketing Planning Purpose is to choose marketing strategies to attain company’s strategic objectives –Marketing plan links strategic plan to marketing actions Formal plans include specific sections: –Executive summary –Current marketing situation (market description; product, competition, & distribution reviews) –Threats & opportunity analysis –Objectives & issues –Marketing strategies for attaining objectives –Action programs: what should be done and why –Marketing budget: projected revenues, costs, & profits –Controls: monitor progress (progress checks & corrective action)

15 Marketing Implementation Turns strategies into actions to achieve objectives –Activities constitute marketing program(s) –Include marketing tactics Address specifics of who, where, when, and how Success depends on: –Effective marketing programs that pull resources together –Sound organizational structure –Appropriate decision & reward structure –Alignment of strategies with corporate culture

16 Marketing Control Requires four steps: –Note specific strategic marketing goals –Measure performance –Evaluate performance re. goals –Take corrective action Two forms are important: –Operating control –Strategic control: Marketing audit