1 Topic 12: Strategic Planning and the Marketing

1 Topic 12: Strategic Planning and the Marketing Process Marketing Copyright © 2003 by South-Western, a division of Thomson Learning, Inc. All rights reserved.

Objectives Distinguish between strategic planning and tactical planning. Explain how marketing plans differ at various levels in an organization. Identify the steps in the marketing planning process. Describe the concept of a SWOT analysis and its major elements.

Objectives Discuss how a strategy can be implemented through marketing plans. Identify the basic elements of a marketing strategy. Describe the environmental characteristics that influence strategy decisions. Explain how the strategic business unit concept, the market share/market growth matrix, the market attractiveness/business strength matrix, and spreadsheet analysis can be used in marketing planning.

Planning The process of anticipating future events and conditions and determining the best way to achieve organizational objectives. A continuous process that includes identifying objectives and includes checkpoints.

Types of planning (Harrell, 2002)

Plans Formulated Within the Marketing Organization Product lines. Pricing decision. Selection of appropriate distribution channels. Promotional campaigns. Planning helps us hit what we aim for.

Strategic Planning The process of determining an organization’s primary objectives. Adopting courses of action that includes allocation of necessary resources. Typically longer term.

Tactical Planning Guides the implementation of activities specified in the strategic plan . Typically address shorter-term actions.

Planning at Different Management Levels

Marketing’s role in strategic planning Much overlap between overall company strategy and marketing strategy Marketing looks at consumer needs and the company’s ability to satisfy them; these factors guide the company mission and objectives. Some companies refer to their strategic planning as ‘strategic marketing planning’. (Kotler et al., 2002)

The planning process (Kotler et al., 2002)

The strategic plan The mission The strategic objectives The strategic audit – external and internal audit SWOT analysis Portfolio analysis Objectives and Strategies (Kotler et al., 2002)

Mission The essential purpose that differentiates the company from others. Specifies the organization’s overall goals and operational scope. Provides general guidelines for future management actions.

SWOT Analysis An important strategic planning tool. Helps planners to compare internal organizational strengths and weaknesses. Acronym for Strengths Weaknesses Opportunities Threats Provides managers with a critical view of the organization’s internal and external environments.

Elements of a Marketing Strategy Basic elements of a marketing strategy consist of: The target market The marketing mix variables of: product distribution promotion price

Marketing Mix Product Strategy Deciding what goods or services the firm should offer to a group of consumers. Includes making decisions about Customer service Package design Brand names Trademarks Patents Warranties Life cycle of a product Positioning the product in the marketplace New product development

Marketing Mix Distribution Strategy Ensures that consumers find their products in the proper quantities at the right times and places. Involves: modes of transportation warehousing inventory control order processing selection of marketing channels

Marketing Mix Promotion Strategy The Communication link between sellers and buyers Communicate messages directly through salespeople or indirectly through advertisements and promotions. Companies use an approach called integrated marketing communications (IMC) so the consumer receives a unified and consistent message.

Marketing Mix Pricing Strategy Methods of setting profitable and justifiable prices. Closely regulated and subject to considerable public scrutiny. A major influence is competition.

Planning Tools for Marketing Four specific tools: Strategic business unit Market share/market growth matrix Market attractiveness/business strength matrix Spreadsheet analysis

Strategic Business Units (SBUs) SBUs are key business units within diversified firms. Each SBU has its own managers, resources, objectives, and competitors. pursues its own distinct mission. develops its own plans independently. focuses the attention of company managers so that they can respond effectively to changing consumer demand.

Market Attractiveness/ Business Strength Matrix Rates SBUs according to the attractiveness of their markets and their organizational strengths. Marketing attractiveness criteria include: Market share Growth Size Stability Potential profitability Extent of government regulations Potential environmental and social impact Competitive conditions

Spreadsheet Analysis Helps planners anticipate marketing performance given specified sets of circumstances Lays out a rigid columns and rows that organize numerical information in a standardized, easily understandable format.

Market Share/Market Growth Matrix A four-quadrant chart that plots market share—the percentage of a market that a firm controls—against market growth potential. Relative Market Share High Low High Low Industry Growth Rate

The business portfolio – BCG matrix (Kotler et al., 2002)

Whom will we compete against? Portor’s Five Forces Ansoff’s Product-Market Matrix

Portor’s Five Forces (Rao and Steckel, 1998)

Ansoff’s Product-Market Matrix (Rao and Steckel, 1998)

Strategies in segmentation Undifferentiated or mass marketing Differentiated marketing Concentration marketing

Summary Discussion has centered around: Strategic and tactical planning Planning at different organizational levels The planning process SWOT Planning tools available

Homework A Group Presentation devoted to -alternative marketing strategies on oil (oil product) market