1. Strategic Planning and the Marketing Process
Chapter 2
Strategic Planning and the Marketing Process

2. Formal Planning
Many companies operate without formal plans, yet these plans can provide many benefits such as:
Encouraging management to think ahead systematically.
Forcing managers to clarify objectives and policies.
Better coordination of company efforts.
Clearer performance standards for control.
Helping the company to anticipate and respond quickly to environmental changes and sudden developments.

3. Strategic Planning
Strategic Planning is the Process of Developing and Maintaining a Strategic Fit Between the Organization’s Goals and Capabilities and Its Changing Marketing Opportunities.

4. Steps in Strategic Planning (Fig. 2.1)
Business unit,
product,
and market
level
Corporate Level
Planning,
marketing,
and other
fuctional
Strategies
Setting Company
Objectives
and Goals
Defining the
Company
Mission
Designing
the Business
Portfolio

5. Fit Market Environment Distinctive Competencies
Defining the Company’s Business and Mission
A Mission Statement is a Statement of the Organization’s Purpose.
Characteristics of a Good Mission Statement:
Market Oriented
Realistic
Fit Market Environment
Distinctive Competencies
Motivating
Specific

6. Setting Company Objectives and Goals

7. Designing the Business Portfolio
The business portfolio is the collection of businesses and products that make up the company.
The company must:
analyze its current business portfolio or Strategic Business Units (SBU’s)
decide which SBU’s should receive more, less, or no investment
develop growth strategies for adding new products or businesses to the portfolio

8. Analyzing Current SBU’s: Boston Consulting Group Approach
Relative Market Share
High Low
Stars
High growth & share
Profit potential
May need heavy
investment to grow
Question Marks
High growth, low share
Build into Stars or phase out
Require cash to hold
market share ?
Market Growth Rate
Low High
Cash Cows
Low growth, high share
Established, successful
SBU’s
Produce cash
Dogs
Low growth & share
Low profit potential

9. Analyzing Current SBU’s: GE’s Strategic Business-Planning Grid
Business Strength
Strong
Average
Weak C
High A
Medium
Industry Attractiveness D B
Low

10. Problems With Matrix Approaches
Can be Difficult, Time-Consuming, & Costly to Implement
Difficult to Define SBU’s & Measure Market Share/ Growth
Problems With Matrix Approaches
Focus on Current Businesses, But Not future Planning
Can Lead to Unwise Expansion or Diversification

11. Developing Growth Strategies in the Age of Connectedness
Product/ Market Expansion Grid
Existing
Products
New
Products
Existing
Markets
1. Market
Penetration
3. Product
Development
New
Markets
2. Market
Development
4. Diversification

12. Product/ Market Expansion Grid
Market Penetration: making more sales to current customers without changing its products.
How? Add new stores in current market areas, improve advertising, prices, service or store design.
Market Development: develop new
markets for its current products.
How? Identify new demographic or geographic markets.

13. Product/ Market Expansion Grid
Product Development: offering modified or new products to current markets.
How? New styles, flavors, colors, or modified products.
Diversification: new products for new markets.
How? Start up or buy new businesses.

14. Planning Cross-Functional Strategies
Marketing’s Role in Strategic Planning
Guiding
Philosophy
Inputs to
Strategic
Planners
Designs
Strategies

15. The Marketing Process (Fig. 2.5)
Demographic-
Economic
Environment
Technological-
Natural
Environment
Marketing
Intermediaries
Target
Consumers
Product
Place
Price
Promotion
Implementation
Marketing
Planning
Control
Analysis
Suppliers
Publics
Political-
Legal
Environment
Social-
Cultural
Environment
Competitors

16. Connecting With Customers
Market Segmentation: determining distinct groups of buyers (segments) with different needs, characteristics, or behavior.
Market Targeting: evaluating each segment’s attractiveness and selecting one or more segments to enter.

17. Connecting With Customers
Market Positioning: arranging for a product to
occupy a clear, distinctive, and desirable place
relative to competing products in the minds of
target consumers. i.e. Chevy Blazer is “like a rock.”

18. Marketing Strategies for Competitive Advantage
Strategy a Company
Adopts
Depends on Its
Industry Position

19. Developing the Marketing Mix
Price
Amount of money
that consumers
have to pay to
Obtain the product
Product
“Goods-and-service”
combination that a
company offers a
target market
Target
Customers
Intended
Positioning
Activities that
persuade target
customers to buy
the product
Promotion
Company activities
that make the
product available
Place

20. The 4 P’s & 4C’s of the Marketing Mix
Product
Price
Place
Promotion
4 C’s
Customer Solution
Customer Cost
Convenience
Communication

21. Managing the Marketing Effort (Fig. 2.7)
Marketing Analysis of Company’s Situation
Managing the Marketing Effort (Fig. 2.7)
Control
Marketing
Planning
Develop Strategic
Plans
Develop
Marketing
Implementation
Carry Out
The
Plans
Measure
Results
Evaluate
Results
Take
Corrective
Action

22. Contents of a Marketing Plan (Table 2.2)
Executive Summary
Current Marketing Situation
Threats and Opportunity Analysis
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

23. Marketing Implementation
Marketing Strategy
Marketing Implementation
Organizational
Structure
Decision
and
Reward
Human
Resources
Marketing Performance
Action
Programs
Climate and
Culture
Implementation

24. Marketing Department Organization
Functional
Combination
Plan
Geographic
Ways to Carry Out Marketing Activities
Market
Management
Product
Management

25. Marketing Control Process (Fig. 2.8)
Measure Performance
Evaluate Performance
Take Corrective Action
Set Goals

26. Discussion
Compare the General Electric strategic business-planning grid and the Boston Consulting Group approach? How do the industry attractiveness and business strength dimensions of the GE grid compare with the market growth rate and relative market share dimensions of the BCG grid? What other similarities and differences do you see? Where would a SBU located in the yellow zone of the GE grid most likely be located in the BCG grid? What strategy might this suggest for the SBU?