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Developing Marketing Strategies and Plans

Figure 2.2 The Strategic Planning, Implementation, and Control Processes

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Strategic Planning Strategic Planning is the process of developing and maintaining a Strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. Inc. Coordinating functional efforts 2-3 Copyright © 2009 Pearson Education. Publishing as Prentice Hall . Setting objectives 3. Designing business portfolio 4. Defining the corporate mission 2. Strategic Planning involves1.

Inc. Publishing as Prentice Hall .Corporate Headquarters’ Planning Activities • Define the corporate mission • Establish strategic business units (SBUs) • Assign resources to each SBU • Assess growth opportunities 2-4 Copyright © 2009 Pearson Education.

direction and opportunity To define the mission. Defining the corporate Mission Mission is a statement of the organization’s purpose. Inc.what it wants to accomplish in the larger environment.1. It seeks to provide a sense of purpose. Publishing as Prentice Hall . the company should address the following questions: • What is our business? • Who is the customer? • What is of value to the customer? • What will our business be? • What should our business be? 2-5 Copyright © 2009 Pearson Education.

memorable. meaningful 2-6 Copyright © 2009 Pearson Education. Publishing as Prentice Hall . Inc.Characteristics of Good Mission Statements Focus on limited number of goals Stress major policies and values Define major competitive spheres Take a long-term view Short.

Publishing as Prentice Hall .3 Product vs. Market Oriented Mission Company Missouri-Pacific Railroad Xerox Standard Oil Columbia Pictures Product We run a railroad We make copying equipment We sell gasoline We make movies Market We are a peopleand-goods mover We improve office productivity We supply energy We entertain people 2-7 Copyright © 2009 Pearson Education. Inc.Table 2.

2-8 Copyright © 2009 Pearson Education. a product line within the division.2. It can be a company division. and sometimes a single product or brand. Inc. Publishing as Prentice Hall . Establishing Strategic Business Units • Strategic Business Unit is a unit of the company that has a separate mission and that can be planned independently from the rest of the company.

Publishing as Prentice Hall .Characteristics of SBUs • It is a single business or collection of related businesses • It has its own set of competitors • It has a manager responsible for strategic planning and profitability 2-9 Copyright © 2009 Pearson Education. Inc.

Publishing as Prentice Hall . Assigning Resources to Each SBU • The purpose of identifying the company's strategic business units is to develop separate strategies and assign appropriate funding. Two of the best-known business portfolio evaluation approaches are 1.3. Boston Consulting Group (BCG) Approach 2. Inc. The General Electric (GE)Approach 2-10 Copyright © 2009 Pearson Education.

Publishing as Prentice Hall . Inc. Figure: BCG Growth-Share Matrix 2-11 Copyright © 2009 Pearson Education.Boston Consulting Group (BCG) Approach The growth-share matrix is divided into four cells based on market growth rate and relative market share.

• Dogs are low-growth. • Cash cows are low-growth. Inc.Boston Consulting Group (BCG) Approach • Stars are high-share businesses or products. high-share businesses or products. • Question marks are low-share business units in high-growth market. Publishing as Prentice Hall . low-share businesses or products 2-12 Copyright © 2009 Pearson Education.

Dogs 2-13 Copyright © 2009 Pearson Education.Stars and strong Cash cows 3.Weak Cash Cows 4.Build/Invest. Divest. Harvest. Publishing as Prentice Hall . Inc.SBU Strategies 1.Question Marks 2. Hold/Maintain.

General Electric (GE) Approach The General Electric Business Screen was originally developed to help marketing managers overcome the problems that are commonly associated with the Boston Matrix (BCG). The GE approach introduces a three by three matrix. Publishing as Prentice Hall . Inc. 2-14 Copyright © 2009 Pearson Education. It utilizes industry attractiveness as a more inclusive measure than BCG's market growth and substitute’s competitive position for the original's market share.

Copyright © 2009 Pearson Education. •Impact of technology. Quality of products and services. •Profit margin. and energy efficiency. Competitive position depends on: Market share. Inc. Branding and promotions success. Publishing as Prentice Hall . R & D. Efficiency. •Environmental impact. •The nature of competition and its diversity. Place (or distribution).General Electric (GE) Approach Market attractiveness depends on: •Size of market. Cost 2-15 reduction. Management profile. the law. •Market rate of growth.

Publishing as Prentice Hall . The company should give serious thought to harvesting or divesting these SBUs. The three cells in the lower right corner indicate SBUs that are low in overall attractiveness. The company should pursue selectivity & manage for earnings in these SBUs. Inc. 2-16 Copyright © 2009 Pearson Education. The diagonal cells stretching from the lower left to upper right indicate SBUs that are medium in overall attractiveness. which in turn fall into three zones• upper left corner • lower left to upper right corner • lower right corner • The three cells in the upper left corner indicate strong SBUs in which the company should invest or grow.General Electric (GE) Approach The GE matrix is divided into nine cells.

If there is a gap between future desired sales and projected sales corporate management will have to develop or acquire new business to fill it. Strategic Planning Gap: 2-17 Copyright © 2009 Pearson Education. Publishing as Prentice Hall . Planning New Businesses • The company plans for its existing businesses allow it to project total sales & profits. Inc.3.

Inc.3. Publishing as Prentice Hall . Planning New Businesses Three options are available to fill up the strategic planning gap: • The first is to identify opportunities to achieve further growth within current businesses (Intensive growth opportunities) • The second is to identify opportunities to build or acquire businesses that are related to current businesses (Integrative growth opportunities) • The third is to identify opportunities to add attractive businesses tat are unrelated to current businesses (Diversification growth opportunities) 2-18 Copyright © 2009 Pearson Education.

Inc.Intensive Growth Strategies Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid Existing products New products Existing markets 1. Product development New markets ©2000 Prentice Hall 2. Publishing as Prentice Hall . Diversification 2-19 Copyright © 2009 Pearson Education. Market development 4. Market penetration 3.

Forward integration (integration with the distributors) 3.Integrative Growth strategies 1. Publishing as Prentice Hall . Horizontal integration (integration with one or more of the competitors) 2-20 Copyright © 2009 Pearson Education. Backward integration (integration with the suppliers) 2. Inc.

Horizontal diversification strategy (new products. new market. Publishing as Prentice Hall . Three types of diversification are possible: 1.Diversification Growth Strategies Diversification growth makes sense when good opportunities can be found outside the present businesses. Inc. new technology) 2-21 Copyright © 2009 Pearson Education. Concentric diversification strategy ( new products. new market. Conglomerate diversification strategy (new products. new/current market. technology or marketing may be related) 2. technology unrelated) 3.

Inc. Publishing as Prentice Hall .Figure 2.5 The Business Unit Strategic Planning Process 2-22 Copyright © 2009 Pearson Education.

SWOT Analysis Strengths Weaknesses Opportunities Threats 2-23 Copyright © 2009 Pearson Education. Publishing as Prentice Hall . Inc.

Inc.Porter’s Generic Strategies Overall Cost Leadership Differentiation Focus 2-24 Copyright © 2009 Pearson Education. Publishing as Prentice Hall .

Publishing as Prentice Hall .Marketing Plan Contents  Executive summary  Table of contents  Situation analysis  Marketing strategy  Financial projections  Implementation controls 2-25 Copyright © 2009 Pearson Education. Inc.