1. Strategic Planning for Competitive Advantage
Chapter 2
Strategic Planning for Competitive Advantage
Strategic Planning for Competitive Advantage
Chapter 2
Prepared by
Deborah Baker
Texas Christian University
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

2. Learning Objectives
1. Understand the importance of strategic marketing and know a basic outline for a marketing plan.
2. Develop an appropriate business mission statement.
3. Describe the criteria for stating good marketing objectives.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

3. Learning Objectives (continued)
4. Explain the components of a situation analysis.
5. Identify sources of competitive advantage.
6. Identify strategic alternatives and describe tools used to help select alternatives.
7. Discuss target market strategies.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

4. Learning Objectives (continued)
8. Describe elements of the marketing mix.
9. Explain why implementation, evaluation, and control of the marketing plan are necessary.
10. Identify several techniques that help make strategic planning possible.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

5. Understand the importance of strategic marketing and know
Chapter 2
Strategic Planning for Competitive Advantage
Learning Objective 1
On Line
Understand the importance of
strategic marketing and know
a basic outline for a marketing plan.
On Line
Coach
How well do you think Coach uses its Web site to build competitive advantage? Compare Coach to its competitors, Louis Vuitton and even Kate Spade.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

6. Chapter 2
Strategic Planning for Competitive Advantage
Strategic Planning 1
On Line
The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities.
On Line
Coke
Pepsi
How are Coke and Pepsi using their Web sites to promote their new flavors? Do you see hints of any future strategies the companies might implement? Where?
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

7. RESOURCES & OBJECTIVES EVOLVING MARKET OPPORTUNITIES
Chapter 2
Strategic Planning for Competitive Advantage
Strategic Planning 1
RESOURCES & OBJECTIVES
EVOLVING MARKET OPPORTUNITIES
LONG RUN PROFITABILITY AND GROWTH
Plus
Notes:
Strategic planning creates and maintains a fit between the organization’s resources and objectives and the evolving market opportunities. The goal is to sustain and increase long-run profitability and growth.
Examples of strategic decisions: a. Sears purchase of Lands’ End b. PepsiCo’s and Coca-Cola’s introductions of new products c. S.C. Johnson’s introduction of Shout Color Catchers d. Kmart Corporation’s filing for Chapter 11 bankruptcy
Strategic planning requires long-term commitment of resources.
Discussion/Team Activity:
Name and discuss strategic planning decisions of other companies.
Discuss why strategic planning is important for these companies.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

8. Strategic Marketing Planning1
What is the organization’s main activity?
How will it reach its goals?
The Marketing Plan
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

9. Planning 1
The process of anticipating future events and determining strategies to achieve organizational objectives in the future.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

10. The Marketing Plan 1
A written document that acts as a guidebook of marketing activities for the marketing manager.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

11. Why Write a Marketing Plan?
Chapter 2
Strategic Planning for Competitive Advantage
Why Write a Marketing Plan? 1
Provides a basis for comparison of actual and expected performance
Provides clearly stated activities to work toward common goals
Serves as a reference for the success of future activities
Allows entry into the marketplace with awareness
Marketing
Plan
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

12. Marketing Plan Process
Chapter 2
Strategic Planning for Competitive Advantage
Marketing Plan Process 1
Marketing Strategy
Product
Promotion
Distribution
Price
Marketing Mix
Business Mission Statement
Objectives
Situation or SWOT Analysis
Implementation Evaluation Control
Target Market Strategy
On Line
On Line
Dmusic
Use Exhibit 2.2 to create a sample summary marketing plan for Dmusic.com, an Internet start-up created by a teenage entrepreneur.
Notes:
Some elements are common to all marketing plans. These include the business mission and objectives, performing a SWOT analysis, determining a target market, and establishing a marketing mix.
Other elements that may be included are budgets, implementation timetables, required marketing research efforts, or elements of advanced strategic planning.
Exhibit 2.2: Example of marketing plan sketch
Exhibit 2.7:
Marketing Plan Outline
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

13. Develop an appropriate business mission statement.
Learning Objective 2
Develop an appropriate
business mission statement.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

14. Defining the Business Mission
Chapter 2
Strategic Planning for Competitive Advantage
Defining the Business Mission 2
On Line
Answers the question, “What business are we in and where are we going?”
Focuses on the market(s) rather than the good or service
Strategic Business Units may also have a mission statement
On Line
AT&T
How does AT&T use its Web site to market its communication technology? Are its long distance products a large part of its strategy? How can you tell?
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

15. AMA’s Mission Statement2
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

16. PepsiCo’s Mission Statement
Chapter 2
Strategic Planning for Competitive Advantage
PepsiCo’s Mission Statement 2
“PepsiCo’s overall mission is to increase the value of our shareholders’ investment. We do this through sales growth, cost controls and wise investment of resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.”
Discussion/Team Activity:
Have the class write mission statements for different organizations, such as the university, business school, or fraternity/sorority, utilizing the characteristics of appropriate mission statements.
Search the Web for the mission statements of various companies, such as Walt Disney, Johnson & Johnson, etc. Discuss.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

17. Strategic Business Units (SBUs)2
Characteristics
A distinct mission and specific target market
Control over their resources
Their own competitors
Plans independent of other SBUs
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

18. Describe the criteria for stating good marketing objectives.
Learning Objective 3
Describe the criteria for stating good marketing objectives.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

19. Marketing Objective 3
A statement of what is to be accomplished through marketing activities.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

20. Marketing Objectives Must Be:3
Marketing Objectives Must Be:
Realistic
Measurable
Time specific
Consistent with Organization’s Priorities
“Our objective is to increase market share by 40% and to obtain customer satisfaction ratings of at least 90% in 2003.”
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

21. Examples of Marketing Objectives3
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

22. Marketing Plan Objectives3
Communicate marketing management philosophies
Provide direction
Serve as motivators
Clarify thinking
Provide basis for control
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

23. Explain the components of a situation analysis.
Learning Objective 4
Explain the components of a situation analysis.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

24. SWOT Analysis 4
Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

25. S W O T SWOT Analysis 4 Internal External
Chapter 2
Strategic Planning for Competitive Advantage
SWOT Analysis 4
©South-Western College Publishing S W O T
Things the company does well.
Things the company does not do well.
Conditions in the external environment that favor strengths.
Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.
Internal
External
Notes:
Performance of a SWOT analysis helps firms identify their competitive advantage.
Strengths and Weaknesses are an internal assessment. Opportunities and Threats are an external environment assessment.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

26. and Weaknesses INTERNAL
Chapter 2
Strategic Planning for Competitive Advantage
SWOT Analysis 4
Production Costs
Marketing Skills
Employee Capabilities
Financial Resources
Available Technology
Company/Brand Image
Strengths
and
Weaknesses
INTERNAL
Notes:
Additional strengths include superiority in manufacturing, service, quality and value perception.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

27. SWOT Analysis 4 Social Demographic And Economic Threats EXTERNAL
Chapter 2
Strategic Planning for Competitive Advantage
SWOT Analysis 4
Opportunities
And
Threats
EXTERNAL
Social
Demographic
Economic
Technological
Political/Legal
Competitive
Notes:
The external environmental forces listed are discussed in detail in Chapter 3.
Discussion/Team Activity:
1. Identify different companies and organizations (such as the university), and perform a SWOT analysis for each.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

28. Environmental Scanning4
Collection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organization or the marketing plan implementation.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

29. Environmental Scanning4
Examination of macroenvironmental forces
Social
Demographic
Economic
Technological
Political / Legal
Competitive
Helps identify market opportunities
Provides guidelines for design of marketing strategy
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

30. competitive advantage
Learning Objective 5
Identify sources of
competitive advantage
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

31. Competitive Advantage5
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 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

32. Competitive Advantage
Chapter 2
Strategic Planning for Competitive Advantage
Competitive Advantage 5
On Line
Niche Strategies
Cost
Product/Service Differentiation
Types of Competitive Advantage
On Line
Travelocity
How would you characterize Travelocity’s competitive advantage based on the company’s Web site? Does it have a sustainable competitive advantage? Why or why not?
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

33. Cost Competitive Advantage
Chapter 2
Strategic Planning for Competitive Advantage
Cost Competitive Advantage 5
Being the low-cost competitor in an industry while maintaining satisfactory
profit margins.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

34. Cost Competitive Advantage
Chapter 2
Strategic Planning for Competitive Advantage
Cost Competitive Advantage 5
Obtain inexpensive raw materials
Create efficient operations
Design products for manufacture
Control overhead costs
Avoid marginal customers
Notes:
Having a cost competitive advantage means being the low-cost competitor in an industry while maintaining satisfactory profit margins. This enables a firm to deliver superior customer value.
Cost competitive advantages are subject to continual erosion.
Discussion/Team Activity:
Identify firms that have a cost competitive advantage and how they deliver superior value. Examples: Chaparral Steel Dell Computers Wal-Mart Corporation DuPont
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

35. Sources of Cost Reduction
Chapter 2
Strategic Planning for Competitive Advantage
Sources of Cost Reduction 5
Experience Curves
Efficient Labor
No-frills Products
Government Subsidies
Product Design
Reengineering
Production Innovations
New Delivery Methods
Notes: Sources of Cost Reduction
Experience Curves: Costs decline as experience with a product increases, and encompasses marketing, manufacturing, and administration costs.
Efficient Labor: Labor costs in low-skill, labor-intensive industries can be reduced by going offshore or by outsourcing.
No-frills Products: Removing frills and options can reduce costs.
Government subsidies: Governments may provide grants and interest-free loans for target industries.
Product design: Cutting-edge design and reverse engineering can offset costs.
Reengineering: Reengineering can make firms more efficient by pruning product lines, closing obsolete factories, and renegotiating supplier contracts.
Product innovations: New technology and simplified production techniques can reduce production costs.
New methods of service delivery: Examples include: * Outpatient surgery and walk-in clinics in the medical industry * Internet ticket booking and “ticketless” travel in the airline industry
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

36. Product/Service Differentiation5
Advantage achieved when a firm provides something that is unique and valuable to buyers beyond simply offering a lower price
than the competition.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

37. Examples of Product/Service Differentiation
Chapter 2
Strategic Planning for Competitive Advantage
Examples of Product/Service Differentiation 5
Brand names
Strong dealer network
Product reliability
Image
Service
Notes:
Product/Service Differentiation tends to provide a longer lasting competitive advantage than does cost competitive advantage.
Discussion/Team Activity:
Discuss companies that have a product/service differentiation for:
Brand name: Lexus Mercedes Benz Dell Computer Rolex
Strong dealer network: Caterpillar Tractor Oreck
Product reliability: Maytag Acura Lexus
Image: Ritz Carlton Hotels Rolex BMW Neiman Marcus Johnson & Johnson
Service: Federal Express Nordstrom
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

38. Niche Competitive Advantage5
Advantage achieved when a firm seeks to target and effectively serve a small segment of the market.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

39. Niche Competitive Advantage
Chapter 2
Strategic Planning for Competitive Advantage
Niche Competitive Advantage 5
Used by small companies with limited resources
May be used in a limited geographic market
Product line may be focused on a specific product line
Notes:
An example of a niche marketer is The Orvis Company, a specialist in fly fishing manufacturing and sales.
Discussion/Team Activity:
Discuss how a small firm serving a particular niche market can successfully compete against larger, global firms with greater resources. (For example, how might a small bookstore owner compete with Barnes & Noble and Amazon.com?)
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

40. Sustainable Competitive Advantage5
An advantage
that cannot be copied
by the competition.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

41. Sources of Sustainable Competitive Advantage
Chapter 2
Strategic Planning for Competitive Advantage
Sources of Sustainable Competitive Advantage 5
Patents
Copyrights
Locations
Equipment
Technology
Customer Service
Promotion
Organization’s
Skills and Assets
Notes:
Companies need to build their own competitive advantage instead of copying the competition.
A sustainable competitive advantage lasts only as long as the time it takes a competitor to imitate the strategy and plans.
Marketing managers should continually look for skills and assets that create and sustain competitive advantage.
Discussion/Team Activity:
Discuss examples of firms that have sustainable competitive advantage in each skill and asset source listed.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

42. Learning Objective 6
Identify strategic alternatives and describe tools used to help select alternatives.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

43. Strategic Alternatives
Chapter 2
Strategic Planning for Competitive Advantage
Strategic Alternatives 6
Market Penetration
Market
Development
Product Development
Diversification
Increase market share among
existing customers
Attract new customers to
existing products
Create new products for
present markets
Notes:
Examples of Strategic Alternatives
Market Penetration: Grocery Triple Coupons McDonald’s Happy Meals with Ty’s Teeny Beanie Babies
Market Development: Expansion into global markets by companies such as McDonald’s, Coca-Cola, and Pepsi
Product Development Nike Watches Beer Microbreweries
Diversification: Sony’s acquisition of Columbia Pictures Sara Lee’s ownership of L’eggs Hanes Bali
Introduce new products
into new markets
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

44. Strategic Opportunity Matrix
Chapter 2
Strategic Planning for Competitive Advantage
Strategic Opportunity Matrix 6
On Line
Present Product
New Product
New Market
Market
Penetration
Development
Product
Diversification
Present Market
On Line
Procter & Gamble
Explore Procter & Gamble’s Web site and identify how it uses each of the four strategic alternatives. Create a portfolio matrix for P&G based on the information available on its Web site.
Notes:
1. Exhibit 2.5 is an example of Ansoff’s Strategic Opportunity Matrix for McDonald’s.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

45. Selecting a Strategic Alternative
Chapter 2
Strategic Planning for Competitive Advantage
Selecting a Strategic Alternative 6
Common Tools
Philosophy
Portfolio Matrix
Profitability
Goals
Notes:
Selecting the strategic alternative depends on the company philosophy and culture, and the tool used to make the decision. Philosophies may be either to increase market share or to pursue profits, both being compatible goals.
One of the tools used to select a strategic alternative is the Portfolio Matrix, from the Boston Consulting Group. $
Market Share
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

46. Chapter 2
Strategic Planning for Competitive Advantage
Portfolio Matrix 6
Tools for allocating resources among products or strategic business units on the basis of relative market share and market growth rate. ? $
Notes:
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

47. MARKET SHARE DOMINANCE
Chapter 2
Strategic Planning for Competitive Advantage
BCG Portfolio Matrix 6
MARKET GROWTH RATE
MARKET SHARE DOMINANCE
HIGH LOW
LOW HIGH ? $
Notes:
The Boston Consulting Group Portfolio Matrix classifies each SBU by its growth rate and market share, both strongly linked.
Relative market share is a measure of the ratio between the company’s share and the share of the largest competitor.
The categories used for the matrix are: Stars Cash Cows Problem Children (question mark) Dogs
After classifying each SBU in the matrix, the next step is the allocation of future resources, with possible strategies shown on Slide 50.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

48. MARKET SHARE DOMINANCE
Chapter 2
Strategic Planning for Competitive Advantage
BCG Portfolio Matrix 6
MARKET SHARE DOMINANCE
HIGH LOW
MARKET GROWTH RATE
LOW HIGH
High growth
Market leaders
Require cash
Large profits
High growth
Low market share
Need cash
Poor profit margins $
Notes:
Stars: High growth market leaders with large profits, but need a lot of cash to finance growth. The best marketing tactic is to protect existing market share by reinvesting earnings in product improvement, better distribution, more promotion, and production efficiency.
Cash Cow: Generates more cash than it needs to maintain market share. Maintains a dominant market share in a low growth market. The strategy for a cash cow is to maintain its market dominance through price leadership and technological improvements in the product. Allocate excess cash to product categories where growth prospects are greatest.
Problem Children: Rapid growth, but poor profit margins. Low market share in a high growth industry. Needs a lot of cash, or may become dogs. Strategy options are to invest heavily to gain market share, acquire competitors, or drop the SBU. Product repositioning may be helpful to move them to star category status.
Dogs: Low growth potential, small market share, and eventually leave marketplace. Strategy options for dogs are to harvest or divest.
Discussion/Team Activity:
Identify products that fit each of the BCG Portfolio Matrix classifications. Determine a resource allocation strategy for each after discussing the four resource allocation options described on Slide 50.
Low growth
High market share
High cash flow
Low growth
Low market share
Minimal cash flow
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

49. BCG Portfolio Matrix Example6
Sub-Notebooks and Hand-Held Computer
Integrated phone/Palm devices
Laptop and Personal Computers
Mainframe Computer
MARKET GROWTH RATE
LOW HIGH
MARKET SHARE DOMINANCE
HIGH LOW
STAR
PROBLEM CHILD
CASH COW
DOG
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

50. Strategies for Resource Allocation6
Build
Hold
Harvest
Divest
Provide financial resources if SBU (Problem Child) has potential to be a Star.
Preserve market share if SBU is a successful Cash Cow. Use cash flow for other SBUs.
Increase short-term cash return. Appropriate for all SBUs except Stars.
Get rid of SBUs with low shares in low-growth markets.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

51. Discuss target market strategies.
Learning Objective 7
Discuss target market strategies.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

52. Marketing Strategy 7
The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

53. Target Market Strategy7
Segment the market based on groups with similar characteristics
Analyze the market based on attractiveness of market segments
Select one or more target markets
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

54. Target Market Selections
Chapter 2
Strategic Planning for Competitive Advantage
Target Market Selections 7
Appeal to the entire market with one marketing mix
Concentrate on one marketing segment
Notes:
Three strategies for selecting target markets are shown here. These strategies are discussed in detail in Chapter 7.
Discussion/Team Activity:
1. Discuss the differences in McDonald’s and Wendy’s target markets.
Appeal to multiple markets with multiple marketing mixes
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

55. Target Market Strategy
Chapter 2
Strategic Planning for Competitive Advantage
Target Market Strategy 7
Develop a marketing mix that will produce satisfying exchanges with target markets
Product
Place
Promotion Price
Notes:
Once a target market is selected, a marketing mix is developed that will produce mutually satisfying exchanges.
The marketing mix is also called “The Four Ps”—Product, Place (distribution), Promotion, and Price.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

56. Describe elements of the marketing mix.
Learning Objective 8
Describe elements of the marketing mix.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

57. The Marketing Mix 8
A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

58. Marketing Mix: The “Four Ps”8
Price
Promotion
Place
Product
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

59. The starting point of the “4 Ps”
Chapter 2
Strategic Planning for Competitive Advantage
Product Strategies 8
The starting point of the “4 Ps”
Includes physical unit, package, warranty, service, brand, image, and value
Product
Notes:
The product is the starting point of the marketing mix. It is difficult to decide on a promotion campaign, determine a price, or design a distribution strategy until the product offering and product strategy are defined.
The product is not only the physical unit but also the packaging, warranty, after-sale service, brand name, company image, value, and other factors.
Products may be tangible goods, services, and ideas.
Product decisions are discussed in Chapter 9 and 10, services marketing in Chapter 11.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

60. Distribution (Place) Strategies
Chapter 2
Strategic Planning for Competitive Advantage
Distribution (Place) Strategies 8
Product availability where and when customers want them.
Involves all activities from raw materials to finished products
Place
Notes:
The goal of distribution is to ensure products arrive in usable condition at the right place when customers need them.
Distribution is covered in Chapters 12 and 13.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

61. Role is to bring about exchanges with target markets
Chapter 2
Strategic Planning for Competitive Advantage
Promotion Strategies 8
On Line
Role is to bring about exchanges with target markets
Includes integration of personal selling, advertising, sales promotion, and public relations
Promotion
On Line
Paramount
Warner Brothers
Universal Studios
How do movie companies use their Web sites as part of their promotion strategies? Visit the sites for the movie studios listed to see what films they are promoting heavily. Also look at movie-specific sites. Are there differences how the movie-specific site (like the Scooby Doo site at promotes the film and how the umbrella site (in this case, Warner Brothers) promotes the film? Explain what you find.
Notes:
Promotion includes personal selling, advertising, sales promotion, and public relations.
Each element of the promotion mix is coordinated with the others to create a promotional blend. Integrated Marketing Communications is discussed in Chapters 14, 15, and 16.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

62. The most flexible of the “4 Ps”
Chapter 2
Strategic Planning for Competitive Advantage
Pricing Strategies 8
The most flexible of the “4 Ps”
Price X Units Sold = Total Revenue
Price
Notes:
Price is an important competitive weapon and is often the most flexible of the marketing mix. It is the quickest of the Four Ps to change.
Pricing decisions are discussed in Chapters 17 and 18.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

63. Explain why implementation, evaluation, and control of the
Chapter 2
Strategic Planning for Competitive Advantage
Learning Objective 9
On Line
Explain why implementation, evaluation, and control of the
marketing plan
are necessary.
On Line
Youngbiz.com
Visit the YoungBiz Web site’s list of Top 100 entrepreneurs. Select one of the entrepreneurial ventures listed and create a marketing plan for it using the concepts and strategies discussed in this chapter. Refer to Exhibit How would you implement, evaluate, and control the plan?
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

64. Following Up the Marketing Plan
Chapter 2
Strategic Planning for Competitive Advantage
Following Up the Marketing Plan 9
Implementation
Evaluation
Control
Marketing Audit
Comprehensive
Systematic
Independent
Periodic
Notes:
Implementation is the process that turns marketing plans into action assignments. These activities may involve job assignments, activity descriptions, timelines, budgets, and lots of communication.
Implementation is essentially “doing what you said you were going to do.”
The marketing audit provides the mechanisms for evaluating marketing results compared to the plan’s goals.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

65. The Marketing Audit 9
A thorough, systematic, periodic evaluation of the goals, strategies, structure, and performance of the marketing organization.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

66. Identify several techniques that help
Learning Objective 10
Identify several techniques that help
make strategic planning effective.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning

67. Effective Strategic Planning
Chapter 2
Strategic Planning for Competitive Advantage
Effective Strategic Planning 10
Management Commitment
Continual
Attention
Creativity
Requirements for Effective Strategic Planning
Notes:
Strategic planning is not an annual event, but an ongoing process. The environment is continually changing, and the firm’s internal resources and capabilities are continually evolving.
Strategic planning is based on creativity. Assumptions about the firm and the environment should be challenged and new strategies established to sustain competitive advantage.
Management support is critical.
Chapter 2 Marketing 7e Lamb Hair McDaniel
©2004 South-Western/Thomson Learning