Chapter 2Strategic
Planning in Contemporary
Marketing
CHAPTER 2 Strategic Planning in Contemporary Marketing
Chapter Objectives
1. Distinguish between strategic planning and tactical planning.
2. Explain how marketing plans differ at various levels in an organization.
3. Identify the steps in the marketing planning process.
4. Describe successful planning tools and techniques, including Porter’s Five Forces model, first and second mover strategies, SWOT analysis, and the strategic window.
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CHAPTER 2 Strategic Planning in Contemporary Marketing
Chapter Objectives
5. Identify the basic elements of a marketing strategy.
6. Describe the environmental characteristics that influence strategic decisions.
7. Describe the methods for marketing planning, including business portfolio analysis and the BCG matrix.
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Planning - Anticipating future events and conditions and determining the best way to achieve organizational objectiveso Continuous process; creates a blueprint for
everyone in the organization
Marketing Planning: The Basis for Strategy and Tactics
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Marketing planning - Implementing planning activities devoted to achieving marketing objectiveso Many planning activities take place over
the Internet with virtual conferences
o An important trend in marketing planning centers on relationship marketing
Marketing Planning: The Basis for Strategy and Tactics
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CHAPTER 2 Strategic Planning in Contemporary Marketing
Strategic Planningo Determining an
organization’s primary objectives
o Adopting courses of action that will achieve these objectives
o Addresses long-term actions
Strategic Planning Versus Tactical Planning
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Tactical Planningo Guides the
implementation of activities specified in the strategic plan
o Addresses shorter-term actions
CHAPTER 2 Strategic Planning in Contemporary Marketing
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CHAPTER 2 Strategic Planning in Contemporary Marketing
Copyright © 2012 by South Western, a division of Cengage Learning. All rights reserved.
CHAPTER 2 Strategic Planning in Contemporary Marketing
o Defining the organization’s missiono Mission - Essential purpose that
differentiates one company from another
o Examples:
oMicrosoft Office: “Real life tools”
o Sephora: “The beauty authority”
o IBM: “Welcome to the decade of smart”
Steps in the Marketing Planning Process
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Defining the organization’s objectiveso Objectives - Guide the development of
marketing objectives and plans
oExamples:
oGenerate a 15 percent profit over the next 24 months
o Add 25 new outlets within the next year
o Cut manufacturing costs by 10 percent
Steps in the Marketing Planning Process
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Resources include: o Production
o Marketing
o Finance
o Technology
o Employees
Assessing Organizational Resources and Evaluating Environmental Risks and
Opportunities
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o Strengths help planners:o Set objectives
o Develop plans
o Take advantage of marketing opportunities
CHAPTER 2 Strategic Planning in Contemporary Marketing
oMarketing strategy - Selecting and satisfying target consumers through the marketing mix elements
o The final steps of the planning process:o Marketers put the marketing strategy into action
o Marketers monitor performance to ensure that objectives are achieved
Formulating, Implementing, and Monitoring a Marketing Strategy
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Porter’s Five Forces Modelo The threat of new entrants
o The bargaining power of buyers
o The bargaining power of suppliers
o The threat of substitute products
o Rivalry among competitors
Successful Strategies: Tools and Techniques
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CHAPTER 2 Strategic Planning in Contemporary Marketing
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Source: Adapted with permission of The Free Press,a division of Simon and Schuster Adult PublishingGroup. From Competitive Strategy: Techniques forAnalyzing Industries and Competitors by Michael E. Porter. Copyright ©1980, 1998 by The Free Press. All rights reserved.
CHAPTER 2 Strategic Planning in Contemporary Marketing
o First mover strategy – The company first to offer a product in a marketplace will be the long-term market winner
o Second mover strategy – Observing the innovations of first movers and then improving on them to gain advantage in the marketplace
First Mover and Second Mover Strategies
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Helps planners compare internal organizational strengths and weaknesses with external opportunities and threats
SWOT Analysis
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CHAPTER 2 Strategic Planning in Contemporary Marketing
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Limited periods when key requirements of a market and a firm’s particular competencies best fit together
o Requires a thorough analysis of:o Current and projected external environmental
conditions
o Current and projected internal company capabilities
o How, whether, and when the firm can reconcile environmental conditions and company capabilities
The Strategic Window
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o The target market
o Marketing mix variables
Elements of a Marketing Strategy
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o The group of people toward whom the firm directs its marketing efforts and merchandiseo Example: Boeing markets most of their
products to business buyers
o Diversity plays a critical roleo Example: Growing Hispanic population in
United States
The Target Market
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Targeting consumers in specific global markets represents a challenge and an opportunityo Example: In India, Walmart has made a
successful entry into retailing with smaller shops in urban areas and low prices
The Target Market
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Marketing mix - Blending of the four strategy elements to fit the needs and preferences of a specific target marketo Product
o Distribution
o Promotion
o Pricing
Marketing Mix Variables
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CHAPTER 2 Strategic Planning in Contemporary Marketing
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Deciding what goods or services the firm should offer to a group of consumerso Customer service
o Package design
o Brand names, trademarks, patents, and warranties
o Lifecycle of a product
o Product positioning
o New-product development
Product Strategy
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CHAPTER 2 Strategic Planning in Contemporary Marketing
oConsumers find their products in the proper quantities at the right times and places
o Involves modes of transportation, warehousing, inventory control, order processing, and selection of marketing channels
o Technology has opened new channels of distribution in many industries
Distribution Strategy
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Communication link between sellers and buyers
o Firms may communicate messages:
o Directly through salespeople
o Indirectly through advertisements and promotions
o Many companies use integrated marketing communications (IMC)
Promotion Strategy
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Methods of setting profitable and justifiable prices
o Subject to regulation and public scrutiny
o A good pricing strategy:o Creates value for customers
o Builds and strengthens customer relationships with a firm and its products
Pricing Strategy
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Five external dimensions that affect the marketing mix variables:o Competitive
o Political-legal
o Economic
o Technological
o Social-cultural
The Marketing Environment
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Technology continually changes the marketing environment
o Rule of three – The three strongest, most efficient companies dominate 70 and 90 percent of a marketo Example: Cereal manufacturers -
General Mills, Kellogg’s, and Post
The Marketing Environment
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Business portfolio analysiso An evaluation of a company’s products and
divisions to determine the strongest and weakest
Methods for Marketing Planning
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Key business units within diversified firms
o Each strategic business unit (SBU):o Has its own managers, resources, objectives,
and competitors
o Pursues its own distinct mission and develops its own plans independently
o SBUs help focus the attention of company managers
o Companies may have to redefine their SBUs as market conditions dictate
Strategic Business Units
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CHAPTER 2 Strategic Planning in Contemporary Marketing
o Developed by the Boston Consulting Group
o A market share/market growth matrix that plots market share against market growth potential
BCG ANALYSIS
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CHAPTER 2 Strategic Planning in Contemporary Marketing
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CHAPTER 2 Strategic Planning in Contemporary Marketing
Watch Strategic Planning and theMarketing Process at Preserve
o Do you consider Preserve’s strategy for the Preserve brand a first mover or second mover strategy? Explain.
o Perform a SWOT analysis on Preserve. Identify their core competency and their weaknesses in the marketplace.
Video
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