T1 THE STRATEGIC MKT PLANNING PROCESS

How do companies decide their strategies?

WHAT DO COMPANIES LOOK FOR?

 Maximize revenues
 Maximize Benefits
 Maximize Return investment
 Looking for the lowest costs and high profits

STRATEGIC PLAN VS TACTICAL PLAN

 STRATEGIC PLAN: a plan that covers a period beyond the next fiscal year.
o Long term  between 3-5 years

 TACTICAL PLANNING: covers the actions to be taken by whom, during a short term
planning period
o actions in short term that I have to do to reach my goal, my strategy
o the way I’m going to reach my goal, my long term objective

 use both in order to reach my revenues, goals

Where I am going to invest more? Which product gives me more benefits?

 not having any return, a strategy could be to get rid of that product

FIRSTLY WE NEED TO CONSIDER:

1. DEVELOP THE STRATEGIC MARKETING PLAN first. This entails greater emphasis on
scanning the external environment, the early identification of forces emanating from
it, and developing appropriate strategic responses, involving all levels of management
in the process.
2. A STRATEGIC PLAN should cover a period between 3 and 5 years, and only when this
has been developed and agreed should the one-year operational marketing plan be
developed.

3. NEVER WRITE THE ONE-YEAR plan first and try to extrapolate it.

MARKETING PLAN STARTING FROM A STRATEGY

 For who is this so important?

o Marketers
o Forecasters
o Superiors

 everybody from the company needs to get involve

OTHER PLANS

 MKT PKANS: based on marketers and products  how im going to implemate this
in the market

 BUSINESS PLAN: involve the other resources which must be brought to bear in the
identified marketers

 CORPORATE PLANS: involve applying business planning to several units of the

business aggregate

 from the general to the specific

 different marketing plans depending on the number of markets and product
lines
 what do we want for our company in that moment

STRATEGIC PLANNING STEPS

 Distinguish between the steps that should be taken in a strategic MKT planning //
the structure of the MKT plan
 The strategic plan  a process
 The mkt plan  result of the process

Steps for deciding a strategy  that come from the information imputs from the
outside

PHASE 1: GOAL SETTING 

1. MISSION: what an organization is, why it exists and its reason for being
o Role or contribution
o Business definition
o Distinctive competences
 o Indications for the future
o - to inspire and empower people affected by cancer
o - create lasting solutions to poverty, hunger and social injustice

2. CORPORATE OBJECTIVES: have to give answers to the mission

o Gather information  understand the market by making an overview
o The desires level of profitability
o Business boundairs:
o Social responsibility, corporate image…
o They must be SMART
- Specific: objective stated
- Measurable: capable of measurement  if its achievable
- Relevant: objectives should be relevant to the people responsible for
achieving them
- Apply a Time BOUND: should have a time frame in mind  deadlines
realistic
o Ex: IKEA produce cheap and affordable product, better life, low price…
 be specific and clear, direct

PHASE 2: SITUATION REVIEW 

3. THE MARKETING AUDIT

o which are the main types of primary and secondary data
o Primary: qualitative and quantitative
o Secondary: Internal and external Data

4. MARKET OVERVIEW
o Macro or micro.
o Social economic and political situation.
o Know if the market has the technology I need.
o What kind of market is it? How does it work? Key decision points? Segments
within the market?

5. SWOT analyse: we have to

make analyse because we
have to take decisions.
 o to understand and compare which is the best market to go

Positive 
 Strengths: internal capabilities that may help the company reach its objective.
 Opportunities: external factor that the company may be able to exploit to tis
advantage.

Negative 
 Weaknesses: internal limitations that may interfere with the company’s ability
to achieve its objectives.
 Threats: Current and emerging external factors that may challenge the
company’s performance.

PHASE 3: STRATEGY FORMULATION 

6. THE ASSUMPTIONS: I have an information and I get a conclusion

 give the reason for identifying strategies

7. MKT OBJECTIVES AND STRATEGIES: Marketing strategies are the means by

which marketing objectives will be achieved, and are aimed to the elements of
the marketing mix (we studied all the marketing strategies in Principles of
Marketing).

o PRODUCT: The general policies for product deletions, modifications,

additions, design, branding, positioning, packaging...

o PRICE: The general pricing policies to be followed by product groups in

market segments.

o DISTRIBUTION: The general policies for channels and customer service

levels.

o PROMOTION: The general policies for communicating with customers under

the relevant headings, such as advertising, sales promotions, public
relations, or direct response marketing.

8. ESTIMATE EXPECTED RESULTS AND IDENTITY ALTERNATIVE PLANS

9. BUDGET: costs
 o Marketing strategies have a cost, and such cost should be cost out. In most
cases, there would be a budget for the full three years (the usual time
period for a marketing plan), but there would also be a very detailed budget
for the first year of the plan, which would be included in the one-year
operational plan.

10. FIRST YEAR IMPLEMENTATION

o the general marketing strategies would be developed into specific sub-

objectives, each one supported by by more detailed strategy and action
statements.

THE STRUCTURE OF A MKT PLAN

STRATEGIC BUSINESS UNITS (SBU)

 Are all the business units the same?

 Same profit, same importance, treated the same?  what’s important for a
company
 HOW CAN WE KNOW IF A SPECIFIC BUSINESS WITHIN A CORPORATION IS A SBU?

o If it is a unique business, or a group of related businesses which can be planned

independently form the other businesses of the corporation.
o If it has its own competitors.
o If it is managed by its own director, who is responsible for its strategic planning
and objectives, and who controls most of the factors affecting profits.

 pursued objective in identifying the strategic business units of a company is to

develop specific strategies for each of these units, as well as to determine its
appropriate resources.

 WHAT MUST IT INCLUDE?

1. Role or contribution of the SBU: For example, profit generator, service

department, opportunity seeker...
2. Business definition: For example, the needs that this SBU satisfies or the
benefits that it provides. You do not need to be too specific (“We produce
printers”) or too general (“We are In the engineering business”).

3. Distinctive competences: This should be a brief statement that applies only to

your specific SBU. A statement that could be equally applied to any competitor
is unsatisfactory.
 4. Indications for the future: A brief statement of the principal things that your
SBU would give serious considerations to for example, “moving into a new
segment”.

RECOMMENDED STEPS TO PERFORM A GOOD PORTFOLIO SUMMARY

1. Decide which segments/markets are the most attractive for your SBU
2. Draw a business strengths segments attractiveness matrix
3. Place the segments on the matrix
4. Analyse the strengths of the SBU for each of the segments
5. Place the strengths on the matrix
6. Place and gauge the circles
7. Do the predictions

T2 THE MARKETING AUDIT

When you have your product, you need to start making decisions, order of auditing:
 Tools to analyse, ways I’m going to treat my strategy

The MARKETING AUDIT is a fundamental part of the marketing planning process. It is

conducted not only at the beginning of the process, but also at a series of points during
the implementation of the plan. The marketing audit considers both internal and
external influences on marketing planning, as well as a review of the plan itself.
First thing to audit:

1) WHO AM I GOING TO COMMUNICATE WITH?

 the customer must be the one that needs to be audited first, they are the ones that
are going to buy your product
 consider the difference CUSTOMER VS CONSUMER we do not use the same
strategies you have to send different messages.
o Are we going to use the same channels?
o Same messages?
o EX: one message for the parents and one for the students (entering in a
university)
o One directly to my customer and one to the consumer  I need to generate an
interest for my product

2) MARKET SHARE

 Percentage of the sales in a market, regarding the leadership

 Used as a measure of a company’s market leadership and their success relative to
other companies in the same market
 create strategic decisions depending on how much my competitor of the cake
 objective of increasing share
 COMPONENTS:
o market leader (Samsung)
o market challenger
o market follower
o market niche

3) RELATIVE MARKET SHARE

 is a marketing metric used to compare the firm’s market share to the largest
competitor in the market. When calculating relative market share, the market
leader’s market share is used as the benchmark

 the position of one of each brand or products respect the leadership

 position you have regarding the leadership
o for forecasting we need to consider how much do we want of that market
share?
o Part that we are compared with the leader and if we are the leader with the
rest
o We need to consider:

1. MARKET LEADER
2. MARKET CHALLENGER
3. MARKET FOLLOWER
4. MARKET NICHERS

4) PARETO ANALYSIS
 that approximately 20 per cent of any activity will result in approximately 80 per
cent of the output

 To optimize your investments, the force of the company  where we should put
our focus
 Invest in something that doesn’t helps me to reach my objectives?
 Focus in that percentage that is giving me profit
 For avoiding wasting time
 EXAMPLES:
o 80% of profits come from 20% of customers
o 80% of product sales from 20% of products
o 80% of customer complaints from 20% of customers

 DECISION RELATED ON HOW YOU ARE ORIENTADED

 While the exact proportion will naturally vary, the majority of outcomes you’re
looking to achieve (or avoid in the case of complaints) are prompted by a
disproportionately small input or effort.

5) MARKET SEGMENTATION

 Group of customers within a market who share a similar level of interest in the
same, or comparable.
 we need to go more specific: people want products for them nowadays  to
supply ones
 Macro Segmentation
o Geographic
o Demographic
o Psychographic
o Behavioural
 Micro segmentation from the general to the specific
o Segmenting in little pieces
 we need to go more specific

TO RECAP… PRODUCT, SERVICE, BRAND THAT IS PART OF THE PRODUCT

THE PRODUCT
 A product (or service) is the total experience of the customer or consumer when
dealing with an organization

A BRAND
 a name or a symbol which identifies a product. A successful brand identifies a
product as having sustainable, competitive advantage

KEY DIAGNOSTIC TOOLS:

1. WHATS THE POSITIONING OF MY PRODUCT

 lifecycle analysis: A product lifecycle plots the volume or value of sales of product
from its launch to its decline and withdrawal.
o decline face I decide to stop producing is the consequences of that
o revenues in the faces are the consequences of what the market is telling me

2. WHATS HAPPENING WITH OUR PRODUCT:

 Boston matrix product strategy (BCG-Boston Consulting Group)

o Classifies a firm’s product according to their cash usage and their cash
generation using market growth and relative market share to categorize them
in the form a box matrix.

 you need to look the relative

market share
 classify the product in 4 ways:

1. DOGS: hold low market share

compared to competitors and
operate in a slowly growing
market.
 strategic choices:
retrenchment, divestiture,
liquidation

2. CASH COWS: the most

profitable brands and should
be “milked” to provide as
much cash as possible 
should be invested into stars to support their further growth

 Strategic choices: Product development, diversification, divestiture, retrenchment

3. QUESTION MARKS: are the brands that require much closer consideration. They
hold low market share in fast growing markets consuming large amount of cash
and incurring losses.  spinner, made for a moment

 Strategic choices: Market penetration, market development, product

development, divestiture

o GROWTH RATE regarding to the profit

o MARKET SHARE regarding to the leadership
 what’s behind the information
 Porter’s Five Forces: helps organizations to understand the factors affecting
profitability in a specific industry, and can help to inform decisions relating to:
whether to enter a specific industry; whether to increase capacity in a specific
industry; and developing competitive strategy

o Supplier power: An assessment of how easy it is for suppliers to drive up

prices. This is driven by the: number of suppliers of each essential input;
uniqueness of their product or service; relative size and strength of the
supplier; and cost of switching from one supplier to another.

o Buyer power: An assessment of how easy it is for buyers to drive prices down.
This is driven by the: number of buyers in the market; importance of each
individual buyer to the organization; and cost to the buyer of switching from
one supplier to another. If a business has just a few powerful buyers, they are
often able to dictate terms.

o Competitive rivalry: The main driver is the number and capability of

competitors in the market. Many competitors, offering undifferentiated
products and services, will reduce market attractiveness.

o Threat of substitution: Where close substitute products exist in a market, it

increases the likelihood of customers switching to alternatives in response to
price increases. This reduces both the power of suppliers and the
attractiveness of the market.

o Threat of new entry: Profitable markets attract new entrants, which erodes
profitability. Unless incumbents have strong and durable barriers to entry, for
example, patents, economies of scale, capital requirements or government
policies, then profitability will decline to a competitive rate.

PART 4. THE PRICING PLAN

4.1 INTRODUCTION TO THE PRICING PLAN

PRICE & PRICING

PRICE  A value that will purchase a finite quantity, weight, or other measure of a
good or service. Is determinated by:
 A buyer is willing to pay.
 A seller is willing to accept.
 The competition is allowing to be charged.

PRICING  method adopted by a firm to set its selling price.

 Depends on the firm’s cost and the customer’s perceived value of the product.
  Affects on the quantity sold through its influence on demand.
 Affects the margin through its impact on revenue.

 PRICING STRATEGY  activities aimed at finding a product’s optimum price,

typically including overall marketing objectives, consumer demand, product
attributes, competitors pricing…

4.2 FACTORS AFFECTING PRICING DECISIONS

CORPORATE AND MARKETING OBJECTIVES

The setting of marketing objectives for any particular product is the

starting point in any consideration of pricing.

THE PRODUCT LIFE-CYCLE

THE PRODUCT’S
POSITION IN THE MARKET

Price is one of the clearest signals customer have of the value of the offer
that a Company is offering them, and there has to be a sensible
relationship between the two.

COMPETITORS

If two products are the same, it is obvious that the one with the lowest
price will win most of the time.

COST
  A price should be set at the point where marginal cost equals
marginal revenue.
 The additional unit is equivalent to the additional revenue earned
from its sales.

DISTRIBUTION CHANNELS

 TRADE DISCOUNT: discount given against the price list for services
made available by the intermediaries, holding inventory…
 QUANTITY DISCOUNT: a quantity discount is offered to
intermediaries who order in large lots.
 PROMOTIONAL DISCOUNT: discount given to distributors to
encourage them to share jointly in the promotion of the product
involved.
 CASH DISCOUNT: in order to encourage prompt payment of
accounts.

PART 7. FORECASTING

FORECASTING  predicting the future as accurately as possible, given all of the

information available, including historical data and knowledge of any future
events that might impact the forecasts.

GOALS  what you would like to happen.

 Goals should be linked to forecast and plans, but this does not always.
 Goals are set without any plan for how to achieve them, and no forecasts for
whether they are realistic.

PLANNING  is a response to forecast and goals.

 Planning involves determining the appropriate actions that are required to
make your forecasts match your goals.

FORECAST

1- SHORT-TERM: are needed for the scheduling of personnel, production and

transportation.
 a. Forecasts of demand are often required.

2- MEDIUM-TERM: are needed to determine future resource requirements, in order to

purchase raw materials, hire personnel, or buy machinery and equipment.

3- LONG-TERM: are used in strategic planning.

a. Decisions must take account of market opportunities, environmental
factors and internal resources.

WHAT TO FORECAST

In the early stages of a forecasting project decisions need to be made about what
should be forecast.
FORECASTING DATA AND METHODS

 The appropriate forecasting methods depend largely on what data are

available.
 In case, the data available is not relevant, the qualitative forecasting methods
must be used.
 Quantitative forecasting can be applied when:
o Numerical information about the past is available.
o It is reasonable to assume that some aspects of the past patterns will
continue into the future.

CROSS-SECTIONAL FORECASTING

 We are wanting to predict the value of something we have not observed, using
the information on the cases that we have observed.
 Models are used when the variable to be forecast exhibits a relationship with
one or more other predictor variables.
 The purpose is to describe the form of the relationship and use it to forecast
values of the forecast variable that have not been observed.

TIME SERIES FORECASTING

Time series data are useful when you are forecasting something that is changing over
time.
When forecasting time series data, the aim is to estimate how the sequence of
observations will continue into the future.

PART 8. SALES MANAGEMENT

PERSONAL SELLING

 Is an important strategic role to play in communicating between a company

and its customers.
  Personal selling is promotion via a person-to person conversation, whether it
be at the customer’s premises, on the telephone…
 The efficiency of any element of communication depends on achieving a match
between information required and information given.
 Advantages over other elements of the communication mix:
o It’s a two-way form of communication, giving the prospective purchaser
the opportunity to ask questions of the salesperson about the product.
o The sales massage itself can be made more flexible and be more closely
tailored to the needs of individuals customers.
o The product or service can be tailored to the customer, a dialogue can
take place about how best to do this.
o Salespeople can ask for an order and negotiate on price, delivery or
special requirements.

DETERMINING THE ROLE OF SALESPEOPLE

Sales force objectives can be either quantitative or qualitative.

HOW TO MANAGE KEY ACCOUNTS

A key account is a business-to-business customer identified by the selling company as

of strategic importance.
 The key account management.
 The key account manager.

SELLER’S FUNCTIONS

MISSION  representing the company in front of the market, to sell with profitability
the whole range of products, contributing to the market and the market the precise
information, in time and form.

BEFORE SALE  prepare the visit, set goals, define strategy, seller functions, arrange
interviews, prepare material and prepare the route.

DURING  detect, presentation, listening, argumentation, objections and closing.

AFTER  complete documentation, report to the company, threats or opportunities,

strengths and weaknesses, process monitoring, self-evaluation of results, personal
improvement plan.

THE SELLER

INTRODUCTION TO THE SELLER PROFILE

THE SELLER’S QUALITY

 KNOWLEDGE: training and information.

 MOTIVATION: motivation – stimulus.
 ABILITY: skills, media experience