Ch-02-S-Developing Marketing Strategies and Plans

10/23/2020
Discussion Questions
1 1. How is strategic planning carried

out at the corporate and divisional
02 levels?
Developing Marketing 2. How is strategic planning carried
Strategies and Plans out at the business unit level?
3. What does a marketing plan
include?
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1. 2-2
Strategic Planning Central Role of Strategic Planning
• Focus on the customer and respond effectively

to changing needs
• The process of developing and
─ All departments accept that „the customer is king‟
maintaining strategic fit between the
organization‟s goals & capabilities and • Prioritizes in 3 key areas
its changing marketing opportunities ─ Manage businesses as an investment portfolio
─ Assess market‟s growth rate and company‟s
position
─ Establish a strategy
Copyright © 2020 Pearson Education, Inc. Publishing as Prentice Hall 2-3 Copyright © 2020 Pearson Education, Inc. Publishing as Prentice Hall 2-4
Four Organizational Levels Marketing Plan
• The central instrument for directing and

• Most large organizations consist of four coordinating the marketing effort
organizational level
– Strategic marketing plan lays
─ Corporate out the target markets and the
─ Division firm‟s value proposition based on
mkt. opportunity analysis
─ Business unit
– Tactical marketing plan
─ Product specifies the marketing tactics
including 4 Ps
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The Complete Planning, Implementation, CORPORATE AND DIVISION

and Control Cycle of Strategic Planning STRATEGIC PLANNING
1 Define the corporate mission
2 Establish SBUs
3 Assign resources to each SBU
4 Assess growth opportunities
Define the Corporate Mission Define the Corporate Mission

Peter Drucker‟s 5 classic questions to define
mission
• Organization‟s purpose or reasons to exist
an organization like to make cars What do
customers value?
• May change over time to respond to new
opportunities What will our
Who is the
business be?
• Acts as an invisible hand to guide customer?
employees
What should
What is our our business
business? be?
Business Definition Business Definition
Company Product-oriented Market-oriented

We sell lifestyle and self-
• Define business from the perspective of We make
Revlon expression; success and
satisfying customer needs; not in terms cosmetics.
status.
of products We make copying We help improve office
Xerox
equipment. productivity.
– Products are transient; basic needs and
customer groups endure forever We connect people around
We are online the world and help them
Facebook
– Transportation is a need; truck is a product social network share important moments
that meets the need in their lives
Paramount
We make movies. We market entertainment.
Pictures
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Five Characteristics of a Good Mission

Crafting a Mission Statement Statement
1. Focus on a limited number of goals

• Develop in collaboration with and share with
managers, employees, and customers 2. Stress major policies and values
• Provide a shared sense of purpose, 3. Define major competitive spheres

directions, and opportunity
4. Take a long-term view
5. Short, memorable, and meaningful
Mission of Google Mission of eBay

Vague mission
“We help people trade anything on earth.

We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.”
Establish SBUs Some SBUs of Square Group

Large firms manage different businesses, each
requiring its own strategy
3 characteristics of an SBU
A single business or
collection of related
businesses
Unique competitors
Leader responsible
for planning and
profitability
The purpose is to develop separate strategies and assign

appropriate funding
Copyright © 2020 Pearson Education, Inc. Publishing as Prentice Hall 2-18
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Assign Resources to Each SBU BCG Growth-Share Matrix
• Decide how to allocate corporate resources to

each SBU Building
− Building, holding, harvesting, and divesting Holding
Harvesting
Divesting
BCG‟s Growth-Share Matrix Building
− Classify SBUs based on market growth rate and
Holding Divesting
relative market share
GE/McKinsey Matrix
− Classify SBUs based on competitive advantage
and industry attractiveness indices
GE/McKinsey Matrix Assess Growth Opportunities

GE/McKinsey Matrix
New
Businesses
HIGH
Competitive Advantage
MED
Opportunities
LOW
LOW MED HIGH Eliminate

Downsizing
Industry Attractiveness Businesses
Assess Growth Opportunities Assess Growth Opportunities
• Intensive growth
• Integrative growth
Projected sales
• Grow within current • Diversification growth
businesses
• Build or acquire
related businesses
• Downsizing and divesting older
• Add attractive businesses
unrelated businesses
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Intensive Growth Ansoff‟s Product-Market Expansion Grid
A tool for identifying company growth opportunities
• Corporate
management should
first review
opportunities for
improving existing
businesses
Integrative Growth Diversification Growth

A firm can increase sales and profits through backward,
• Diversification growth makes sense when
forward, or horizontal integration within its industry
good opportunities exist outside the
present businesses
Wholesaler
Supplier Business
Competitor
Horizontal Integration
Diversification Growth Growth Strategy of Starbucks

New products having technological or
An ambitious, multi-pronged growth strategy to maintain
marketing synergies with existing product
Concentric its phenomenal growth
lines (Compact Disc+ Laser Disk)
Strategy
Through appealing to a different group
of customers
Unrelated new products that requires a

Horizontal different manufacturing process (DVD
Strategy Disc + Plastic Disc)
Through appealing to current customers
New businesses having no relationships

Conglomerate
(DVD Disc + Application software)
Strategy
Appealing to any customer groups
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Growth Strategy of Starbucks

Downsizing and Divesting Older
Businesses
• Market penetration: Make – How? Add new stores in current
more sales to current market areas; improve ad, prices, • Carefully prune, harvest, or divest the tired old
customers without changing menu, service, attract competitors‟
customers.
businesses to release needed resources for
products
other uses and reduce costs
– How? Review new demographic
• Market development: Identify
(seniors/ethnic consumers) or
and develop new markets for geographic (Asian, European, &
current products South American) markets; convert
non-users to users in current
• Product development: Offer market.
modified or new products to – How? Add food offerings, sell
current markets coffee in supermarkets, co-brand
• Diversification: Start up or products in current markets.
buy businesses outside – How? Make and sell CDs, testing
current products and markets restaurant concepts, or branding
casual clothing
Organization and Organizational Corporate Culture

Culture
• A company‟s organization consists of its structures,
policies, and corporate culture, all of which can … is the shared experiences, stories, beliefs,
become dysfunctional in a rapidly changing and norms that characterize an organization.
business environment
Strategic planning
is done within the
context of a
company‟s
structures, policies,
and corporate
culture
Marketing Innovation Business Unit Strategic

Planning Process
• Marketing innovation is crucial
(BlackBerry)
– Innovation by 3 unrepresented
groups
– Challenge company orthodoxy
and stimulate new ideas
• Develop strategy by choosing

the firm‟s view of the future
– Scenario analysis by asking
“What if…”
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SWOT Analysis Goal formulation (MBO)

• Goals are specific objectives with respect to
Favorable Unfavorable magnitude and time
Internal Ranked
SW
Internal
A formal limitations that
Internal
capabilities that may interfere
framework for may help a with a company‟s
company reach
identifying and its objectives ability to achieve
framing its objectives
organizational Current and Consistent Quantified
OT
External factors that emerging external
growth
External
the company may factors that may

opportunities be able to exploit to challenge a
its advantage company‟s
performance
Realistic
Strategic Formulation Strategic Formulation

Porter’s Generic Strategies
Strategy is a game plan for Strategic Alliances

achieving objectives
• Product or service
alliance
• Promotional alliance
• Logistics alliances
• Pricing collaborations
“The essence of strategy is

choosing what not to do.”
Program Formulation and

Implementation Feedback and control
• Peter Drucker: it is more

important to “do the right
thing”—to be effective—than
“to do things right”—to be
efficient
– The most successful
companies, however, excel at
both Strong leadership
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Contents of a Marketing Plan Evaluating a Marketing Plan
Executive Summary and table of contents
Situation analysis  Is the plan simple/succinct?

 Is the plan specific?
Marketing strategy and tactics
 Is the plan realistic?
Financial projections
 Is the plan complete?
Implementation controls
Marketing Debate
1. What good is a mission statement?

2. What implications do Porter‟s value chain
and the holistic marketing orientation model
have for marketing planning?
3. Take a position:
(a) Mission statements are critical to a successful
marketing organization.
(b) Mission statements rarely provide useful
marketing value.
Copyright © 2020 Pearson Education, Inc. Publishing as Prentice Hall 2-45

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10/23/2020

1 1. How is strategic planning carried

16/e Copyright © 2020 Pearson Education, Inc. Publishing as Prentice Hall

Strategic Planning Central Role of Strategic Planning

• Focus on the customer and respond effectively

Four Organizational Levels Marketing Plan

• The central instrument for directing and

The Complete Planning, Implementation, CORPORATE AND DIVISION

1 Define the corporate mission

3 Assign resources to each SBU

4 Assess growth opportunities

Define the Corporate Mission Define the Corporate Mission

Business Definition Business Definition

Company Product-oriented Market-oriented

Five Characteristics of a Good Mission

1. Focus on a limited number of goals

• Provide a shared sense of purpose, 3. Define major competitive spheres

Mission of Google Mission of eBay

“We help people trade anything on earth.

Establish SBUs Some SBUs of Square Group

The purpose is to develop separate strategies and assign

Assign Resources to Each SBU BCG Growth-Share Matrix

• Decide how to allocate corporate resources to

GE/McKinsey Matrix Assess Growth Opportunities

LOW MED HIGH Eliminate

Assess Growth Opportunities Assess Growth Opportunities

Intensive Growth Ansoff‟s Product-Market Expansion Grid

A tool for identifying company growth opportunities

Integrative Growth Diversification Growth

Diversification Growth Growth Strategy of Starbucks

Unrelated new products that requires a

New businesses having no relationships

Growth Strategy of Starbucks

Organization and Organizational Corporate Culture

Marketing Innovation Business Unit Strategic

• Develop strategy by choosing

SWOT Analysis Goal formulation (MBO)

organizational Current and Consistent Quantified

the company may factors that may

Strategic Formulation Strategic Formulation

Strategy is a game plan for Strategic Alliances

“The essence of strategy is

Program Formulation and

• Peter Drucker: it is more

Contents of a Marketing Plan Evaluating a Marketing Plan

Executive Summary and table of contents

Situation analysis  Is the plan simple/succinct?

1. What good is a mission statement?

Copyright © 2020 Pearson Education, Inc. Publishing as Prentice Hall 2-45

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