You are on page 1of 34

Chapter 3

The Role of
Marketing in
Strategic
Planning

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for Hospitality and Tourism, 4th edition


Kotler, Bowen, and Makens

Would you tell me, please, which way


I ought to go from here?
-Alice
(from Lewis Carrolls Alice in Wonderland)

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Chapter Objectives
Explain company-wide strategic planning
Understand the concepts of stakeholders,
processes, resources, and organization as
they relate to a high-performing business
Explain the four planning activities of
corporate strategic planning

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Chapter Objectives
Understand the processes involved in
defining a companys mission and setting
goals and objectives

Discuss how to design business portfolios


and growth strategies
Explain the steps involved in the business
strategy planning process
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Market-Oriented Strategic
Planning
Market-oriented strategic planning is the
managerial process of developing and
maintaining a feasible fit between the
organizations objectives, skills and resources
and its changing market opportunities

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Ideas Defining Strategic


Planning
1. Manage companies businesses as an
investment portfolio
2. Assess future profit potential

3. Develop the strategy itself

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Nature of High-Performance
Business

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Stakeholders
Processes
Resources
Organization

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

The Relationship Between


Analysis, Planning,
Implementation, and Control

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

The High Performance Business

(Excerpted from the first quarter 1992 issue of Prism, the quarterly journal for senior managers,
published by Arthur D. Little, Inc.)

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Dynamic Relationships Among Stakeholder


Groups in High Performance Businesses

(Excerpted from the fourth quarter 1992 issue of Prism, the quarterly journal for senior managers,
published by Arthur D. Little, Inc.)

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Corporate Strategic Planning


Corporate headquarters sets planning
process into motion
Greater need for empowerment of
employees
Hospitality and tourism industries are
international and multi-cultural
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Defining the Corporate


Mission
Mission is shaped by History

Resources determine possibilities


Mission should be based on distinctive
competencies
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Competitive Scopes
Industry scope range of industries that the
company will consider
Products and applications scope rang of
products and applications in which the
company will participate
Competencies scope range of
technological and other core competencies
the company will master and leverage

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Competitive Scopes
Market-segment scope the type of market
or customers the company will serve
Vertical scope the number of channel levels
from raw materials to final product and
distribution in which the company will engage
Geographic scope the range of regions,
countries or country groups where the
corporation will operate

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Establishing Strategic
Business Units
A single business or a collection of related
businesses that can be planned for
separately from the rest of the company
It has its own set of competencies

It has a manager who is responsible for


strategic planning and profit performance
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Assigning Resources to
Each SBU
Analytical tools, such as the Boston
Consulting Group (BCG) model, are
used to classify businesses by profit
potential

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Question mark

Cash cow

Dog

High

Star

Low

Market growth rate

BCG Growth-Share Matrix

High

Low

Relative market share


2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Developing Growth
Strategies

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Diversification Growth
Concentric diversification strategy

Horizontal diversification strategy


Conglomerate diversification strategy

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Integrative Growth
Backward integration (acquiring a supplier)
Forward integration (acquiring distributor of
your product)
Horizontal integration (acquiring a
competitor)

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Business Strategy Planning


Business Mission
SWOT Analysis
Strengths, Weaknesses, Opportunities,
Threats

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Business Strategy Planning


Internal Environment Analysis
(Strengths and Weaknesses Analysis)

External Environmental Analysis


(Opportunities and Threats Analysis)

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Business Strategy Planning


Goal Formulation
Arrange from most to least important
State quantitatively
Measurable and realistic
Consistent

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Business Strategy Planning


Strategy Formulation
Strategies are the paths to goals
3 generic types
Overall cost leadership
Differentiation
Focus
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Business Strategy Planning


Strategic Alliances cooperative
agreements between organizations that
allow them to benefit from each others
strengths

What are some strategic alliances in the


hospitality and tourism industry?
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Business Strategy Planning


Program formulation
Formulate programs that support the strategy

Implementation
To implement strategy, required resources
and employee buy-in are necessary

Feedback and Control


Track results and monitor new developments
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Business Strategy Planning


Unique Challenges of the hotel industry
complicate the process of strategic planning
Major chains commonly do not own all
properties that they manage
Owners of hotel-resorts often show little
interest or knowledge of their property (egocapital concept)
Professional managers often are not trained
in strategic planning
Global strategic alliances may further
complicate the planning process
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Best Practices
Howard Schultz brings the European
coffee experience to America via
Starbucks
Focus on growth, new products, new
retail channels to stave off competition

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Best Practices in Strategic


Planning
What did they do?

The Inn on Biltmore Estates


Tricon Global Restaurants (Yum Brands)
Jack in the Box
The Las Vegas Hilton
Hyatt Hotels
Boston Greater Convention and Visitors Bureau

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Ansoff productmarket expansion grid
Backward integration
Competencies scope

Concentric diversification strategy


2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Conglomerate diversification strategy
Corporate mission statement
Forward integration

Geographic scope
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Growthshare matrix
Horizontal diversification strategy
Horizontal integration

Industry scope
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Macroenvironmental forces
Microenvironmental forces
Marketing opportunity

Market-oriented strategic planning

2006 Pearson Education, Inc.


Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens

Key Terms
Market-segment scope
Products and applications
Strategic alliances
Strategic business units (SBUs)
Vertical scope
2006 Pearson Education, Inc.
Upper Saddle River, NJ 07458

Marketing for
Marketing
Hospitality
forand
Hospitality
Tourism,and
4thTourism,
edition 4th edition
Kotler,
Kotler,Bowen,
Bowen,and
andMakens
Makens