1. 1 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Prepared by Deborah Baker Texas Christian University 2 Strategic Planning for Competitive Advantage

2. 2 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 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

3. 3 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Learning Objectives (continued) 4.Explain the components of a situation analysis 5. Identify sources of competitive advantage 6. Identify strategic alternatives 7. Discuss target market strategies

4. 4 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Learning Objectives (continued) 8. Describe the 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 effective

5. 5 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Strategic Planning RESOURCES & OBJECTIVES EVOLVING MARKET OPPORTUNITIES LONG RUN PROFITABILITY AND GROWTH 1

6. 6 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Marketing Plan Elements On Line http://www.dmusic.com Marketing Strategy Product Promotion Distribution Price Marketing Mix Business Mission Statement Objectives Situation or SWOT Analysis Implementation Evaluation Control Target Market Strategy 1

7. 7 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Defining the Business Mission 2 Q: What business are we in? A: Business mission statement Too narrow Too broad Just right marketing myopia no direction focus on markets served and benefits customers seek

8. 8 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Marketing Objectives 3 Marketing Objectives Must Be:  Realistic  Measurable  Time specific  Consistent with and indicate the organization’s priorities “Our objective is to achieve 10 percent dollar market share in the specialty pet food market within 12 months of product introduction.”

9. 9 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Review Learning Objective 3 3 Clear and specific objectives: 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to think clearly 5. Allow for better evaluation of results

10. 10 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 SWOT Analysis ©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 favor strengths. Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness. Internal External 4

11. 11 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Competitive Advantage Niche Strategies Cost Product/Service Differentiation Types of Competitive Advantage On Line http://www.travelocity.com http://www.expedia.com 5

12. 12 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Ansoff’s Strategic Opportunity Matrix Present ProductNew Product New Market Market Penetration Market Development Product Development Diversification Present Market On Line http://www.pg.com 6

13. 13 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Review Learning Objective 6 6 Identify strategic alternatives Diversification = Product development = products Market development = customers Market penetration = share new products new markets

14. 14 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Target Market Strategy  Segment the market based on groups with similar characteristics  Analyze the market based on attractiveness of market segments  Select one or more target markets 7

15. 15 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Targeting Strategies Entire Market Single Market Multiple Markets 7

16. 16 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Marketing Mix: The “Four Ps” Price Promotion Place Product 8

17. 17 Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 2 Following Up the Marketing Plan 9 Product Place Promotion Price Product Place Promotion Price Met objectives? ImplementationEvaluation Audits comprehensive systematic independent periodic Audits comprehensive systematic independent periodic