Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Gilbert A. Churchill, Jr. J. Paul Peter Chapter 4 Marketing Planning and Organization Strategy Marketing

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Strategic Planning Responsibilities Slide 4-1 definition: activities that lead to the development of a clear organizational mission, organizational objectives and the strategies that enable the organization to achieve its objectives. Strategic Planning Top Management Long Term

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Tactical Planning Responsibilities Slide 4-2 definition: involves the creation of objectives and strategies aimed at attaining goals for specific divisions or departments over a medium time frame. Strategic Planning Top Management Tactical Planning Middle Management Medium Term

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Operational Planning Responsibilities Slide 4-3 definition: involves the creation of objectives and strategies for individual operating units over a short time span. Operational Planning Tactical Planning Strategic Planning Top Management Middle Management Lower Management Short Term

The Strategic Planning Process Slide 4-4 Figure 4.1 Organizational Mission Organizational Objectives Organizational Strategies Organizational Portfolio Plan The Organizations Strategic Plan The Environment InformationImplementation Source: J. Paul Peter and James H. Donnelly, Jr., A Preface to Marketing Management, 7th ed. (Burr Ridge, Ill.: Irwin, 1997), p. 10.

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Growth Strategies: Product Market Matrix Slide 4-5 Figure 4.3 Market Penetration Product Development Diversification Market Development Present Customers New Customers Present Products New Products Markets Products

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Examples of SWOT Issues Slide 4-6 Table 4.1 Internal Environment Financial Resources Well-known brands Technological Skills StrengthsWeaknesses Lack of Strategic Direction High Costs Obsolete Facilities External Environment OpportunitiesThreats Potential New Markets Potential New Products Falling International Trade Barriers New Competition Slow Market Growth New Regulations

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 The Boston Consulting Group Matrix Slide 4-7 Industry Growth Rate High Low HighLow Market Share

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Are the objectives clear? Specific? Measurable? Challenging, but achievable? Written? Have the industries that are growing been identified? Those that are stagnant? Those that are declining? Who are the principal competitors? What are the organization’s strengths? Weaknesses? Does the plan take advantage of the organization’s special competencies and vulnerabilities? What are the target markets? Do our products and services appeal to the needs and wants of the target markets? What are the best ways to promote the products to customers? Where do customers like to purchase? How do our prices compare with the competition? What are the costs and benefits of the plan? Some Questions for Evaluating a Marketing Plan Slide 4-8 Table 4.2

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Forecasting Techniques Slide 4-9a Table 4.3 Technique Jury of Executive Opinion Quick; simple; opinions come from executives with expertise in different departments; useful for new or innovative products Data typically must be broken down by product. region, etc.; consumes time of executives; may not give greatest weight to those with most expertise. Sales Force Composite Survey of Buyer Intentions Qualitative Methods BenefitsLimitations Salespeople have a vested interest, so they may give biased estimates. Providing number can motivate salespeople; salespeople know customers, product and competitors. Based on estimates obtained directly from buyers; can provide detailed information; often provides insight into buyer’s thinking; can be used for new products. Intention to buy may not result in actual purchase; expensive; time consuming; useful only when there are a few, well- defined potential customers. Delphi Technique Estimators less likely to succumb to group pressure. Time consuming; expensive.

Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1998 Slide 4-9b Table 4.3 Technique Trend Analysis Quick; inexpensive; effective when demand and environmental factors are stable. Assumes future is continuation of past; does not consider marketing plans or changes in environment; not useful for new or innovative products. Exponential Smoothing Market Tests Quantitative Methods BenefitsLimitations Same limitations as trend analysis but not as severe because of emphasis on more recent data. Same benefits as trend analysis but emphasizes more recent data. Provide more realistic information because based on actual purchases rather than intent to buy; permits assessment of effects of marketing plan; useful for new or innovative products. Time consuming; expensive; alerts competition to organization’s plans. Forecasting Techniques