Contemporary Marketing 15th Edition

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Contemporary Marketing 15th Edition Boone Solutions Manual

Chapter 2 Strategic Planning in Contemporary Marketing 23

CHAPTER 2

STRATEGIC PLANNING IN CONTEMPORARY MARKETING

CHAPTER OVERVIEW

Today’s marketers face strategic questions every day. Planning strategy is a critical part of their jobs. The
marketplace changes continually in response to changes in consumer tastes and expectations,
technological developments, competitors’ actions, economic trends, and political and legal events, as
well as product innovations and pressures from suppliers and distributors.

Although the causes of these changes often lie outside a marketer’s control, effective planning can
anticipate many of them. For example when the price of gas and jet fuel soared recently, travelers opted
to stay close to home instead of enjoying vacations to exotic, faraway places. This represented an
opportunity for places like Ocean City, Maryland, and Branson, Missouri. Any destinations that promoted
itself to potential vacationers within a short drive could find itself adding up the profits.

This chapter lays a foundation for analyzing all aspects of marketing by demonstrating the importance of
gathering reliable information to create an effective plan. These activities provide a structure for a firm to
use its unique strengths. Marketing planning identifies the markets a company can best serve as well as
the most appropriate mix of approaches to satisfy the customers in those markets. While this chapter
focuses on planning, in later chapters the task of marketing research and decision making will be
explored.

Changes in the Updated Edition

The chapter has been updated and revised, with new features in several areas:

 The Opening Vignette and Evolution of a Brand discuss Ford Motor Company, a century old
automobile manufacturer’s dramatic comeback in the world market. Ford is planning to make a
global car—a vehicle that is designed and engineered for consumers worldwide, sold under one
brand and model name, with marketing campaigns tailored to diverse markets. Ford Focus, the
global car, is developed for all the markets, and is environment friendly. Ford, began with the T-
Model more than a century ago, began with a single focus. Then, the organization shifted away
from its signature vehicles—trucks and SUVs. With Focus, the root strategy continues. Ford’s
strategies, goals, and the CEO’s vision will be discussed in “Ford’s Dramatic Comeback: One
Ford, One Team, One Plan, One Goal.”

 Solving an Ethical Controversy analyzes the case of celebrity endorsements. It also discusses
the question “should companies hold the celebrities who endorse their products accountable for
their personal actions?” The issue of brands being identified with celebrities and the effect of
celebrity’s personal life on the performance of their endorsed brand is also analyzed. The pros
and cons of this issue are discussed in “Tiger Woods Drives His Career into the Rough”.

 Marketing Success “In-N-Out Burgers Sell Themselves” describes how the fast food chain that
started with a novel idea of a drive-through 60 years ago, continues to offer just four items in their
menu, and are run by a tightly controlled management. It discusses their product strategy. It also
illustrates how the employees are kept satisfied, and why celebrities from Hollywood prefer In-N-
out Burgers.

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

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24 Part 1 Designing Customer-Oriented Marketing Strategies

 Career Readiness provides some simple guidelines to ensure the success of a conference over
the phone or Internet. For details, refer to “Plan the Most Effective Virtual Meeting.”

 Chapter Case 2.1 How a Stadium Becomes Part of a Marketing Strategy features how
stadiums have become one of the most important components of marketing strategy in
professional sport. It focuses on the use of stadiums to create winning marketing strategies.

 Collaborative Learning Exercises are provided in several areas related to strategic planning
and the marketing process—Planning Throughout the Organization, Defining the Organization’s
Mission and Objectives, Strategic Planning, Formulating a Marketing Strategy, Promotion
Strategy and Pricing Strategy, The Marketing Environment, and BCG Matrix.

 Video Case 2.2 Synopsis includes an overview of strategic planning and the marketing process
at Preserve, a Massachusetts-based consumer products company.

LECTURE OUTLINE

Opening Vignette and Evolution of a Brand— Ford Motor Company started with a single focus more than a
century ago. Now, they are back to their roots, promoting their global car, named Ford Focus. “The Focus
represents the first tangible evidence of a global strategy.”
Chapter Objective 1: Distinguish between strategic planning and tactical planning.
Key Terms: planning, marketing planning, strategic planning, tactical planning
PowerPoint Basic: 4
PowerPoint Expanded: 4, 5
1. Marketing planning: the basis for strategy and tactics
a. Definition of planning: the process of anticipating future events and
conditions and then determining the best way to achieve
organizational objectives
b. Planning is important for both large and small companies
Career Readiness—
Planning Virtual c. Marketing planning
Meetings. Ask i. Marketing planning refers to implementing planning
students to provide a activities devoted to achieving marketing objectives
few other suggestions ii. An important trend in marketing planning centers on
to ensure that relationship marketing
participants stay
d. Good relationships with customers can arm a firm with vital
focused during virtual
strategic weapons
meetings.
e. Many companies now include relationship-building goals and
strategies in their marketing plans, maintaining databases to track
customer preferences
2. Strategic planning versus tactical planning
a. Strategic planning is defined as the process of determining an
organization’s primary objectives and adopting courses of action
that will achieve these objectives
b. Strategic planning includes allocation of resources, and provides
long-term directions for the decision makers
c. Tactical planning, a complementary approach to strategic
planning, guides the implementation of activities specified in the
strategic plan
d. It addresses shorter-term actions, focusing on activities that need
to be completed so that larger strategies can be implemented

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

Chapter 2 Strategic Planning in Contemporary Marketing 25

Assessment check questions

1. Define planning. Planning is the process of anticipating future events and

conditions and of determining the best way to achieve organizational objectives.

2. Give an example of strategic planning and tactical planning. To survive in a

challenging environment of soaring fuel costs, several airlines have decided to
merge as part of their strategic planning. Tactical plans include cutting the number
of flights and charging passengers extra for checked baggage.

Chapter Objective 2: Explain how marketing plans differ at various levels in an organization.
Key Terms: none
PowerPoint Basic: 5
PowerPoint Expanded: 6, 7
1.
Table 2.1 Planning at
Different Managerial
Levels. Which
managers focus most
on broad goals and
2.
long-term planning?
Which managers focus
most on planning for
day-to-day tasks?
3.
Note: Discuss how two
companies
approached a similar
problem differently,
with different results.
How Yahoo and
Microsoft approached
competing against
Google is one good
example. Assessment check questions
Planning at different organizational levels
a. Managers at all organizational levels devote some of their
attention to planning activities
b. The amount of time spent on planning activities and the types of
planning vary by organizational level
Top management (CEO and functional vice-presidents)
a. Spend more of their time on planning than do lower-level
managers
b. Usually focus more on long-range strategic issues
Middle management
a. Tend to focus on operational planning, which includes creating
and implementing tactical plans for their own departments
b. Supervisors often develop specific programs to meet goals in their
areas of responsibility
c. To be most effective, the planning process includes input from a
wide range of sources, including employees, suppliers and
customers

1. How do marketing plans vary at different levels of the organization? Top

managers usually focus their planning activities on long-range strategic issues. In
contrast, middle-level managers focus on operational planning, which includes
creating and implementing tactical plans for their own units. Supervisors develop
specific programs to meet goals in their areas of responsibility.

2. Why is it important to get input from others when planning? Input from a variety
of sources—other employees, suppliers, or customers—helps ensure that many
ideas are considered. Involving those people in planning can also turn them into
advocates for the plan.

Chapter Objective 3: Identify the steps in the marketing planning process.

Key Terms: mission, marketing strategy
PowerPoint Basic: 6-10
PowerPoint Expanded: 8-12
1. Steps in the marketing planning process
a. Define the mission

Copyright ©2012 by South-Western, a division of Cengage Learning. All rights reserved.

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