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PRINCIPLES OF MARKETING
Philip Kotler and Gary Armstrong

Chapter
Chapter 22
Strategic Planning
and the
Marketing Process
Copyright 1999 Prentice Hall
Strategic
Strategic Planning
Planning Process
Process
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Strategic Planning involves developing an


overall company strategy for long-run
survival and growth.

This process involves:


Defining a Mission: Statement of an organizations
purpose; should be market oriented.
Setting Company Objectives: Supporting goals and
objectives to guide the entire company.
Designing a Business Portfolio: Collection of businesses
and products that make up the company.
Planning Functional Strategies: Detailed planning for each
department designed to accomplish strategic objectives.

Copyright 1999 Prentice Hall


Mission
Mission Statements
2-2-3
2- 32-3
Statements
3

Market
Market
Oriented
Oriented

Motivating
Motivating Realistic
Realistic
Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements
Distinctive
Distinctive Specific
Specific
Competencies
Competencies
Fit
Fit Market
Market
Environment
Environment

Copyright 1999 Prentice Hall


Copyri ght 1998 Prentice Hall
Designing
Designing the
the Business
Business Portfolio
Portfolio
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The best portfolio is the one that best fits the


companys strengths and weaknesses to the
opportunities in the environment.

The company must:


analyze its current business portfolio or Strategic
Business Units (SBUs)
decide which SBUs should receive more, less, or no
investment
develop growth strategies for adding new products or
businesses to the portfolio

Copyright 1999 Prentice Hall


Analyzing
Analyzing Current
Current SBUs:
SBUs:
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Boston
Boston Consulting
Consulting Group
Group Approach
Approach

Relative Market Share


High Low
Stars Question
Question Marks
Market Growth Rate

Marks
High

High growth & share High


Highgrowth,
growth,low
lowshare
share
Profit potential Build
Buildinto
intoStars/
Stars/phase
phaseout
out
May need heavy Requires
Requirescash
cashtotohold
hold
investment to grow market
marketshare
share
Cash
CashCows
Cows Dogs
Dogs
Low Low
Lowgrowth
growth&&share
Lowgrowth,
growth,high
highshare
Low

share share
Established, Low
Lowprofit
profitpotential
Established,successful
successful potential
SBUs
SBUs
Produces
Producescash
cash

Copyright 1999 Prentice Hall


Analyzing
Analyzing Current
Current SBUs:
SBUs:
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GE
GE Strategic
Strategic Business-Planning
Business-Planning
Grid
Grid
Business Strength
Industry Attractiveness

Strong Average Weak


C
High
A

Medium
B D

Low

Copyright 1999 Prentice Hall


Developing
Developing Growth
Growth Strategies
Strategies
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Product/ Market Expansion Grid

Existing New
Products Products
Existing 1. Market 3. Product
Markets Penetration Development

New 2. Market
4. Diversification
Markets Development

Copyright 1999 Prentice Hall


Product/
Product/ Market
Market Expansion
Expansion Grid
Grid
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Market Penetration:
Penetration increase sales to present customers
with current products. How? Cut prices, increase
advertising, get products into more stores.

Market Development:
Development develop new markets with current
products. How? Identify new demographic or
geographic markets.

Product Development:
Development offering modified or new products
to current customers. How? New styles, flavors, colors,
or modified products.

Diversification:
Diversification new products for new markets. How?
Start up or buy new businesses.

Copyright 1999 Prentice Hall


Marketings
Marketings Role
Role in
in Strategic
Strategic
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Planning
Planning
Process of Selecting Target Consumers
Market Segmentation:
Segmentation determining distinct groups of
buyers (segments) with different needs.
Market Targeting:
Targeting evaluating and selecting which target
segments to enter.
Market Positioning:
Positioning products distinctive and desirable
place in the minds of target segments compared to
competing products.
Marketing Strategies for Competitive Advantage
Market-Leader
Market Challenger
Market-Follower
Market-Nicher

Copyright 1999 Prentice Hall


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The
The Marketing
Marketing Process
Process
10

Demographic- Marketing Technological-


Economic Intermediaries Natural
Environment Environment

M lan
ys n g

ar n
P
al eti
is

ke in
An ark
Product

tin g
M

g
Target
Suppliers Place Consumers Price Publics

n
tio
en i n g
M Con
ar tr

Promotion

ta
em et
ke ol

p l rk
tin

Im Ma
g

Political- Social-
Legal Competitors Cultural
Environment Environment

Copyright 1999 Prentice Hall


Marketing
Marketing Mix-
Mix- The
The Four
Four Ps
Ps
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Price
Product
Goods-and-service Amount of money
combination that a that consumers
company offers a have to pay to obtain
target market the product

Target
Customers

Intended
Positioning

Activities that Company activities


persuade target that make the
customers to buy product available
the product
Promotion Copyright 1999 Prentice Hall
Place
Managing
Managing the
the Marketing
Marketing Effort
Effort
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12

Marketing
Marketing Analysis
Analysis of
of Companys
Companys Situation
Situation

Marketing Marketing Control


MarketingPlanning
Planning Marketing
Implementation
Implementation Measure
Develop
Develop Marketing
Marketing Results
Strategies
Strategiesto
to Turn
Turn Marketing
MarketingPlans
Plans
Achieve
AchieveMarketing
Marketing into
into Evaluate
Objectives
Objectives Action
Action Plans
Plans Results
to
toAchieve
Achieve
Develop
Develop Marketing
Marketing
Marketing Objectives Take
Marketing Objectives
Plans Corrective
Plans&&Budget
Budget Action

Copyright 1999 Prentice Hall


Elements
Elements of
of aa Marketing
Marketing Plan
Plan
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Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

Copyright 1999 Prentice Hall


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Marketing
Marketing Implementation
Implementation
14

Marketing
Marketing Strategy
Strategy

Decision
and Human
Organizational Reward
Resources
Structure

Action Climate and


Programs Culture

Implementation

Marketing
Marketing Performance
Performance
Copyright 1999 Prentice Hall
Marketing
Marketing Control
Control
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Set
Set Marketing
Marketing Goals
Goals

Measure
Measure
Performance
Performance

Evaluate
Evaluate
Performance
Performance

Take
Take Corrective
Corrective
Action
Action

Copyright 1999 Prentice Hall


Marketing
Marketing Audits
Audits
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Environment
Function Strategy
Types
Types
of
of Marketing
Marketing
Audits
Audits
Productivity Organization
Systems

Copyright 1999 Prentice Hall