1. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 1 MKTG Designed by Amy McGuire, B-books, Ltd. Prepared by Deborah Baker, Texas Christian University Lamb, Hair, McDaniel 2007-2008 2 CHAPTER Strategic Planning for Competitive Advantage

2. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 2 Understand the importance of strategic marketing and know a basic outline for a marketing plan The Nature of Strategic Planning The Nature of Strategic Planning LO 1

3. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 3 Develop an appropriate business mission statement Defining the Business Mission LO 2

4. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 4 LO 2 Defining the Business Mission  Answers the question, “What business are we in?”  Focuses on the market(s) rather than the good or service  Strategic Business Units (SBUs) may also have a mission statement

5. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 5

6. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 6 Describe the criteria for stating good marketing objectives Setting Marketing Plan Objectives LO 3

7. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 7 Marketing Objective LO 3 A statement of what is to be accomplished through marketing activities. Marketing Objective

8. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 8 Marketing Objectives LO 3  Realistic  Measurable  Time specific  Consistent with and indicate the organization’s priorities “Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction.”

9. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 9 REVIEW LEARNING OUTCOME LO 3 Criteria for Good Marketing Objectives Realistic, measurable, and time-specific objectives consistent with the firm’s 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. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 10 Identify sources of competitive advantage Competitive Advantage LO 5

11. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 11 Competitive Advantage LO 5 Competitive Advantage 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.

12. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 12 Competitive Advantage LO 5 Niche Strategies Cost Product/Service Differentiation Types of Competitive Advantage

13. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 13 Cost Competitive Advantage LO 5 Cost Competitive Advantage Being the low-cost competitor in an industry while maintaining satisfactory profit margins.

14. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 14 Cost Competitive Advantage LO 5  Obtain inexpensive raw materials  Create efficient plant operations  Design products for ease of manufacture  Control overhead costs  Avoid marginal customers

15. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 15 Sources of Cost Reduction LO 5 Experience Curves Efficient Labor No-frills Products Government Subsidies Product Design Reengineering Production Innovations New Service Delivery Methods

16. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 16 Product/Service Differentiation LO 5 Product/Service Differentiation Competitive Advantage The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s.

17. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 17 Examples of Product/Service Differentiation LO 5  Brand names  Strong dealer network  Product reliability  Image  Service

18. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 18 Niche Competitive Advantage LO 5 Niche Competitive Advantage The advantage achieved when a firm seeks to target and effectively serve a small segment of the market.

19. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 19 Niche Competitive Advantage LO 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 category

20. Chapter 2Copyright ©2008 by South-Western, a division of Thomson Learning. All rights reserved 20 Sources of Sustainable Competitive Advantage LO 5 Patents Copyrights Locations Equipment Technology Customer Service Promotion Skills and Assets of an Organization Skills and Assets of an Organization