Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2

nd
edition
PowerPoint
to accompany
Chapter 2
Strategic Planning
and the Marketing
Environment
THE ADVANTAGE IS UNDENIABLE
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Objectives for Chapter 2
Explain the strategic planning process

1
2
Describe the steps in the marketing
planning process
3

Explain operational planning

Discuss some of the important aspects of
an organisation’s internal environment
4
5
Explain why marketers scan an
organisation’s external environment
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Business (or corporate) Planning
Business
Planning
An ongoing process of making
decisions that guide the company
both in the short term and in the
long term
Marketing
Plan
A document that describes the:
•Marketing environment
•Marketing objectives
•Strategy
•Staff responsible
Which
guides
the…
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Undertaken by
top-level
management
Undertaken by
top functional
staff
Three Levels of Business Planning
Strategic Planning
(Corporate)
Functional Planning
(SBU)
(strategic business unit)
Operational Planning
Corporate or Business Planning Hierarchy
SBU
Strategy 1
SBU Strategy 2
• Business definition
• Objectives
• Product /market portfolio
• Competitive strategy
• Resource allocation and management
Marketing Strategy
Marketing objectives
Product Strategies
Market Strategies
Corporate
Level
Functional Level of SBU
Strategic
Business
Unit Level
Corporate Strategy
• Mission and vision
• Objectives
• Business portfolio strategy
• Resource development
• Corporate values
SBU
Strategy 3
Finance and
Administration
Strategy

Production
And Operation
strategy

R&D Strategy
Technology
Product
development
Human Resources
Strategy
Wesfarmers’ Business Planning Hierarchy
SBU
Coles
Marketing Strategy
Marketing objectives
Product Strategies
Market Strategies
Corporate
Level
Functional Level of SBU
Strategic
Business
Unit Level
Corporate Strategy
• Chairman
• CEO
• Managing Directors of:
HRM, Business Development,
Corporate Affairs, Finance etc
SBU
Home Improvement &
Office Supplies
Finance and
Administration
Strategy

Production
and Operation
strategy

R&D Strategy
Technology
Product
development
Human Resources
Strategy
SBU
Insurance
SBU
Target
SBU
KMart
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Strategic Planning

1. Define the
Mission
2. Evaluate the
internal and
external
environments
5. Develop
growth strategies
3. Set
organisational
or SBU
objectives
4. Establish
the business
portfolio
A process that matches an
organisation’s resources and
capabilities to its market opportunities

Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Functional (marketing) Planning
1 Perform a
situation
analysis
(SWOT)
2. Set
marketing
objectives
3. Develop
marketing
strategies
4. Implement
marketing
strategies

A decision process that develops
detailed plans for strategies and tactics
to support the strategic plan

5. Monitor and
control marketing
strategies
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Operational Planning
2. Use marketing
metrics to monitor
how the plan is
working

Focuses on developing detailed
plans that carry out functional
plans

1. Develop
action plans to
implement the
marketing plan
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Steps in Strategic Planning
STEP 1: Define the Mission
Answers are documented
in the Mission Statement
What
business
are we in?
What
customers
should we
serve?
How should
we develop
the company's
capabilities?
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Mission Statement Examples
“Our purpose is
to create long-
term value
through the
discovery,
development and
conversion of
natural
resources, and
the provision of
innovative
customer and
market-focused
solutions”
BHP Billiton
“We are an
international
financial services
organisation that
provides a
comprehensive
and integrated
range of financial
products and
services through
our group of
banks”
NAB
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
V8 Supercars Mission Statement
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
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STEP 2: Evaluate the Environment
(a) The Internal Environment
Internal
environment
includes...
People
Technologies
Facilities
Culture
The controllable elements inside an
organisation
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
PEST
Analysis
Analysis of the
external factors that
can affect an
organisation
(b) External Environment
Political
Stability
Attitude to
business
Economic
Growth
Interest rates
Sociocultural
Current trends
Social classes
Technology
Use of Internet
Other trends
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
2a + 2b = SWOT Analysis
Threats Weaknesses
Strengths Opportunities
INTERNAL EXTERNAL
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
STEP 3: Setting SBU
Objectives
Usually
relates to...
Sales
Profitability
Market standing
ROI
Customer
satisfaction
Objectives
should be
SMART...
Specific
Measureable
Attainable
Realistic
Timely
S
M
A
R
T
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Functional
areas
Marketing
Operations
Finance
Functional
areas
Marketing
Operations
Finance
Functional
areas
Marketing
Operations
Finance
STEP 4: Establish The Business
Portfolio
SBU 1
(Mission,
Objectives,
Strategy)
SBU 2
(Mission,
Objectives,
Strategy)
SBU 3
(Mission,
Objectives,
Strategy)
Corporation
(Mission, Objectives)
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Portfolio Analysis

How does a business know which SBU will perform
well or badly?

In which areas should the business expand or
contract?

Which SBUs should receive more resources (eg,
money)?

Which SBUs are more in line with the mission
statement?
One Portfolio Analysis model is:
The BCG Growth-Market Strategy Matrix

Portfolio Analysis
The BCG Growth-Market Strategy Matrix
STEP 5: Develop Growth Strategies
Strategy = Market
penetration
Seek to increase sales
of existing products to
existing markets
Strategy = Product
development
Create growth by selling
new products in
existing markets

Strategy = Market
development
Introduce existing
products to new markets

Strategy =
Diversification
Emphasise both
new products and
new markets to achieve
growth
Existing products
New products
Product Emphasis
E
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t
i
n
g

m
a
r
k
e
t
s

N
e
w

m
a
r
k
e
t
s

M
a
r
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E
m
p
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a
s
i
s

Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Internal and
External
Business
Environments
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The Internal Environment
The controllable
elements inside an
organisation
Corporate culture
Set of values,
norms and beliefs
Influences the behaviour of
everyone in the organisation
Example:
Level of risk taking
towards trying
new ideas
Example:
Attitudes toward
staff
Attitudes of staff
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
The External Environment
1. Economic Environment
Economic
environment
Business cycles
Inflation
Consumer confidence
Business cycle
The overall pattern of change in the
economy that affects consumer and
business purchasing power
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
2a The Competitive Micro-Environment
(buyer choices/alternatives)
Competitive
intelligence
Gathering and analysing
publicly available
information
News
Internet
Government
Sales Reps
Advertising
Compete for
discretionary income
Product competition
Brand competition
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nd
edition
2b The Competitive Macro-Environment
(market structures in the industry)
Monopoly
A company – the only supplier of a product
– can control price and supply
Perfect Competition
Many small sellers, similar products, all unable to
impact price or supply
Oligopoly
Small number of sellers, each with a
major market share
Monopolistic Competition
Many companies, with slightly different
products, offering unique benefits
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
3. The Technological Environment
Examples =
Internet, phones,
MP3, barcodes
(a) May provide
competitive
advantages
Fast moving
Can quickly transform
industries.
Patents
(b) Helps develop
customer
databases
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
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4.The Legal Environment
The Trade
Practices Act
(1974)
Australian
Competition
and Consumer
Commission
(ACCC)
Australian Consumers’
Association
(Choice magazine)
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Choice Magazine
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
5. The Sociocultural Environment
Demographics
Statistics that
measure
observable
aspects of a
population
Example:
More people
living alone
Need for:
Smaller cars
City apartments
Ready-to-eat-meals
Sociocultural = Characteristics of
society, its people, and the culture that
reflects its values and beliefs
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
THE MARKETING PLAN
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Marketing Plan –
Step 1. Situation Analysis
Detailed review of...
Competitors Customers
and build on information
from Strategic Plan...

SWOT


PEST

2
1
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Marketing Plan –
Step 2. Objectives
More
specific to...
Brands
Product
features
Customers
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Marketing Plan –
Step 3. Develop Strategies
1. Select segment and target market
2. Develop marketing mix strategies
Product
Design
Branding
Packaging
Support
services
Price
Represents
value
Distribution
Where/when
product is
available
Promotion
Advertising
Sales promotion
Public relations
Direct marketing
Personal selling
Copyright ©2011 Pearson Australia (a division of Pearson Australia Group Pty Ltd) –9781442525207/Solomon/Marketing/2
nd
edition
Marketing Plan –

Step 4. Implement


Step 5. Monitor and Control
measuring actual performance against
marketing objectives, and making
adjustments if necessary
Need for marketing metrics
(measurements at different stages)
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nd
edition
Operational Plans
Day-to-day execution
of the marketing plan
Usually only covers a
few months
Performed by first-
line supervisors
Includes detailed
directions – who and
when and $’s