1. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 1 chapter 20 Prepared by Angela Zigras, Seneca College Deborah Baker, Texas Christian University MARKETING STRATEGY: HOW IT ALL FITS TOGETHER

2. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 2 You Will Learn To... 1.Undertake the strategic market planning that leads to the formal, written marketing plan 2. Develop the marketing objectives that will guide the marketing plan 3. Undertake a thorough situation analysis 4. Select strategic alternatives that match the market situation

3. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 3 You Will Learn To... 5. Build a marketing strategy based on customer value 6. Develop a coordinated marketing mix 7. Implement, evaluate, and control the marketing plan 8. Apply several techniques that help make strategic planning effective

4. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 4 Strategic Market Planning Strategic Market Planning PlanningCorporateStrategyCorporateStrategy CompetitiveAdvantageCompetitiveAdvantage Creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities The central business scheme for utilizing the company’s financial, production, R&D, personnel and marketing resources. A capability, superior to that of your competitors, that can be utilized as a central part of the company’s strategic plan.

5. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 5 Formal Marketing Plan  Serves as a road map, guides the organization towards the future  Identifies the roles of individuals  Identifies resources that will be needed  Stimulates thinking  Pinpoints company’s strengths and weaknesses Marketing Plan

6. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 6 Formal Marketing Plan  Helps company better understand its competitors  Creates awareness of problems, opportunities and threats.  Set priorities  Coordinates all marketing activities  Establishes dates and deadlines. Marketing Plan

7. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 7 Marketing Planning Process Mission Statement Mission Statement Objectives SWOT Product Price Promotion Place Target Market Strategy Target Market Strategy Implementation & Evaluation

8. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 8 Define the Business Mission Mission Statement A clear and concise statement that explains the organization's reason for existing.

9. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 9 Measurable Objectives are specific to a marketing plan period Measurable Objectives are specific to a marketing plan period Suitable Marketing objectives support company’s missionSuitable Criteria for Well-Stated Marketing Objectives

10. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 10 Acceptable People within the organization must “buy in” to the plan Acceptable People within the organization must “buy in” to the plan Feasible Marketing Objectives must be feasibleFeasible Criteria for Well-Stated Marketing Objectives

11. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 11 Motivating Objectives should be challenging Motivating Objectives should be challenging Understandable Objectives should be clearly statedUnderstandable Criteria for Well-Stated Marketing Objectives

12. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 12 SWOT Analysis Identifying ©South-Western College Publishing S S W W O O T T Things the company does well. Things the company does not do well. Conditions in the external environment that favour strengths. Conditions in the external environment that do not relate to existing strengths or favour areas of current weakness. Internal External

13. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 13 Elements of a SWOT Analysis.. External Customer analysis Competitor analysis Market Analysis Environmental analysis Internal Performance analysis Determinants of strategic options

14. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 14 SWOT Analysis Examines Brand Competitor A competitor that is very much like you in terms of products offered for sale, price, promotion, dis tribution and the market. Perspective of the consumers What customers think of its reputation, product quality and service.

15. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 15 Strategic Opportunities Identify Strengths StrategicWindowStrategicWindow Identity Opportunities Require Quick Response

16. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 16 Strategic Design RESPOND Product Development Product Development Diversification Market Penetration Market Penetration Market Development Market Development

17. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 17 Portfolio Matrix Management StrategicBusinessUnits Growth Potential Risk ROI Objective Desired Growth Acceptable Risk Profit

18. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 18 Cash Cow A business unit that usually generates more cash than it needs to maintain its market share. Cash Cow A business unit that usually generates more cash than it needs to maintain its market share. Star A business unit that is a fast-growing market leader.Star A business unit that is a fast-growing market leader. Portfolio Matrix Classifications

19. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 19 Dog A business unit that has low growth potential in a small market share.Dog A business unit that has low growth potential in a small market share. Problem Child A business unit that shows rapid growth but poor profit margin. Problem Child A business unit that shows rapid growth but poor profit margin. Portfolio Matrix Classifications

20. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 20 Portfolio Matrix

21. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 21 Portfolio Strategies FourPortfolioStrategiesBUILD Does the SBU have the potential to be a star? HOLD Can you maintain and preserve market share? DIVEST Is it appropriate to dump SBU’s with low-growth potential?. HARVEST Increase the short-term return without impacting long-run prospects.

22. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 22 Market Attractiveness/Company Strength Matrix Insert exhibit 20.8

23. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 23 Sustainable Advantage Superior Skills Unique aspect that causes target consumer to patronize that firm rather than competitors Unique aspect that causes target consumer to patronize that firm rather than competitors Superior Resources

24. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 24 Marketing Strategy Starts with Target Market!

25. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 25 Create Value for the Customer What does VALUE mean to the target market? Customer Benefits +Customer Costs ================ CUSTOMER VALUE ----------------------------

26. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 26 How does the Marketing Manager Implement the Marketing Plan? How does the Marketing Manager Implement the Marketing Plan?  Takes complete responsibility of seeing that each strategy is initiated and undertaken as planned.  Tracks all activities, tactics and strategies, and compares “what is” with “what should be”.  Tracks and adjusts to environmental conditions.

27. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 27 Implementation Intended Strategy The formal marketing strategy as found in the marketing plan. Realized Strategy The marketing strategy put into play in the marketplace

28. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 28 Evaluation Evaluation Gauges the extent of market plan achievements Compares budgeted figures to actual Corrective action bring the plan back in line with plan Evaluation

29. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 29 Evaluation and Control Comprehensive Comprehensive - covers all major issues Systematic Systematic - is orderly sequenced Achieved through Marketing Audit Independent Independent - is objective and has top management support Independent Independent - is objective and has top management support Periodic Periodic - is carried out on a regular schedule

30. Copyright © 2002 by Nelson, a division of Thomson Canada Limited. Chapter 2020 - 30 Effective Strategic Planning Top Management Commitment Top Management Commitment Creativity Ongoing Process