Ch-02-S-Developing Marketing Strategies and Plans

5/19/2022
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: Strategic Planning:

Defining Marketing’s Role Defining Marketing’s Role
• Focus on customers and respond effectively

• The process of developing & maintaining
to changing needs
strategic fit between the organization’s
─ All depts accept that ‘the customer is king’
goals & capabilities and its changing
marketing opportunities • Prioritizes in 3 key areas
̶ Sets the stage for rest of planning in the firm ─ Manage businesses as an investment portfolio
̶ Adapts the firm to take advantage of opportunities ─ Assess market’s growth rate & company’s
in its constantly changing environment 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

Setting a sound mission begins with Drucker’s 5
classic questions:
• 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?
Defining Mission Defining Mission
Company Product-oriented Market-oriented

• Should be market-oriented and defined in
terms of satisfying basic customer needs; We sell coffee and We sell “The Starbucks
Starbucks
NOT in terms of products & technologies snacks Experience”.
– Products & technologies (truck) are transient & We make copying We help improve office
Xerox
become outdated but basic market needs equipment. productivity.
(transportation) may last forever We sell lifestyle and self-
We make
– Focus on customers & the customer experience Revlon expression; success and
cosmetics.
the firm seek to create status.
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 Establish SBUs
3 characteristics of an SBU
• Large firms manage different businesses, A single business or
each requiring its own strategy collection of related
businesses
– Business portfolio is the collection of
businesses & products that make up the company
Unique competitors
– The best business portfolio must fit the firm’s
S/Ws to opportunities in the envt.
Leader responsible
– General Electric has 49 SBUs
for planning and
profitability
The purpose is to develop separate strategies and assign

appropriate funding
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Some SBUs of Square Group Assign Resources to Each SBU
• Evaluate the SBUs & then decide how to allocate

corporate resources to each SBU
− Building, holding, harvesting, and divesting
BCG Growth-Share Matrix

− Classify SBUs based on market growth rate and
relative market share
GE/McKinsey Matrix
− Classify SBUs based on competitive advantage
and industry attractiveness indices
BCG Growth-Share Matrix GE/McKinsey Matrix

Analyzing the Current Business Portfolio
GE/McKinsey Matrix
HIGH
Building Holding
Competitive Advantage
Building
Harvesting Divesting
MED
LOW
Holding
Divesting
LOW MED HIGH
Industry Attractiveness
Problems with Matrix Approaches Assess Growth Opportunities
• Difficulty in defining SBUs and measuring New

market share and growth Businesses
• Time consuming
• Expensive
Opportunities
• Focus on current businesses, not future
planning
• Ignores relationships between SBUs
Eliminate
Downsizing
Businesses
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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
Intensive Growth Ansoff’s Product/Market Expansion Grid
A tool for identifying company growth opportunities
• Corporate Existing New

products products
management should
first review Existing
markets
opportunities for
improving existing
businesses New
markets
FIGURE 2.3 The Product/Market Expansion Grid
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
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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
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
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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…”
SWOT Analysis Goal formulation (MBO)
Favorable Unfavorable
• Turn its broad mission into detailed supporting
goals/objectives for each level of management
Internal
SW
A formal Internal limitations that – Goals are specific objectives with respect to
Internal
capabilities that may interfere magnitude and time

framework for may help a with a company’s
identifying and company reach
ability to achieve – SMART goals/objectives
its objectives
framing its objectives
organizational Current and
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
Strategic Formulation Strategic Formulation

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

achieving objectives
Overall cost • Product or service
Differentiation
leadership alliance
• Promotional alliance
Middle of the • Logistics alliances
Focus
road
• Pricing collaborations
“The essence of strategy is

choosing what not to do.”
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Program Formulation and

Implementation Feedback and control
Measuring and Managing Return on Marketing Investment
• 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
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 2-47

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5/19/2022

1 1. How is strategic planning carried

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

Strategic Planning: Strategic Planning:

• Focus on customers 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

Defining Mission Defining Mission

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 Establish SBUs

The purpose is to develop separate strategies and assign

Some SBUs of Square Group Assign Resources to Each SBU

• Evaluate the SBUs & then decide how to allocate

BCG Growth-Share Matrix

BCG Growth-Share Matrix GE/McKinsey Matrix

LOW MED HIGH

Problems with Matrix Approaches Assess Growth Opportunities

• Difficulty in defining SBUs and measuring New

Assess Growth Opportunities Assess Growth Opportunities

Intensive Growth Ansoff’s Product/Market Expansion Grid

A tool for identifying company growth opportunities

• Corporate Existing New

FIGURE 2.3 The Product/Market Expansion Grid

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)

capabilities that may interfere magnitude and time

organizational Current and

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 2-47

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