Chapter 6

Strategic Market Planning

 Objectives
1. Outline the marketing concept
2. Review the evaluation of marketing in
the food and agribusiness industries
3. Present the market planning
framework
4. Discuss the components of a SWOT
analysis
5. Examine the market segmentation
concept
6. Develop the fundamental idea of
positioning
 What is Marketing
 Marketing is the ability to identify and
satisfy customer needs at a profit
 Marketing concentrates on
customer/clients and what they need or
want
 customers are the essence of marketing -
they are the source of sales and profits
Aim of Marketing

 The aim of Marketing is to have:

 the right product or service
 at the right price
 at the right place
 at the right time
Five approaches to Marketing
 Production Approach- produce as much as
possible at lowest possible cost
 Product Approach- produce high quality
product and the world will beat a path to your
door.
 marketing Approach- produce a product that
fills a consumer need, price it correctly, make
readily available and promote it properly and
the marketing success will follow
 Societal Marketing Approach- extend the
marketing approach to consumer's and
society’s well-being
 The Nature of Strategic Planning
LONG RUN
PROFITABILITY
EVOLVING AND GROWTH
MARKET
OPPORUNITIES

RESOURCES
&
OBJECTIVES
 What is a Marketing Plan?

Planning: Process of anticipating future events

Marketing
and determining strategies
Plan

 Marketing planning involves designing activities relating

to marketing objectives and the changing marketing
environment.
 For example: product lines, prices, communication
 Why?
Clearly stated activities to work toward common goals
 Aware of threats and opportunities
The Strategic Market Planning Process

Business Mission Statement

Objectives

Situation or SWOT Analysis

Marketing Strategy
Target Markets
Develop Core Strategy

Marketing Mix
Product Distribution

Promotion Price

Implementation
Evaluation
 Define the Business Mission
 Answers the question:
 What business are we in and where are we going?
Example: PepsiCo’s Business Mission

 Focuses on the market(s) rather than the good or

service
 Marketing myopia if focus is on specific goods/service
 Examples? Frito-Lay is in the snack-food business
 No clear foundation if focus is too broad
 Examples? Amazon?

 Strategic Business Units may also have a mission

statement – characteristics of a SBU
Back
 PepsiCo’s Mission Statement
“

To be the world's premier consumer products company focused on

convenient foods and beverages.  We seek to produce healthy
financial rewards to investors as we provide opportunities for
growth and enrichment to our employees, our business partners
and the communities in which we operate.  And in everything we
do, we strive for honesty, fairness and integrity.”

http:\\www.pepsico.com

Back
 Strategic Business Units
Characteristics

1. A distinct mission and specific target

market

2. Control over their resources

3. Their own competitors

4. Plans independent of other businesses

Back
 Marketing Plan Objectives
Marketing Objectives Must Be:
Realistic
Measurable
For a Defined Period
of Time
Consistent with
Organizational Objectives
“Our objective is to
increase market share
by 40% and to obtain
customer satisfaction
ratings of at least 90%
in 2005.”

Back
 Situation Analysis
Internal S Things
Things the
the company
company does
does well.
well.

W Things
Things the
the company
company does
does not
not do
do well.
well.

O Conditions
Conditions in
environment
in the
environment that
the external
external
that favor
favor strengths.
strengths.
External
Conditions
Conditions inin the
the external
external
T environment
environment that
existing
that do
existing strengths
current
strengths or
current weakness.
weakness.
do not
not relate
or favor
relate to
favor areas
to
areas of of
 Opportunities: Strategic Windows

Limited period when the “fit”

between key requirements of a
market and competencies of the firm
are optimum
 Discovering Strategic Alternatives
(Windows)

Market
Market
Penetration Increase market share among existing customers
Penetration
Market
Market
Development Attract new customers to existing products
Development
Product
Product
Development Create new products for present markets
Development

Diversification
Diversification Introduce new products into new markets
 Selecting a Strategic Alternative

Common Tools Common Goals

 BCG Portfolio Matrix Profitability

 GE Market Attractiveness
Matrix
Market Share
 Marketing Strategy
…involves the activities of selecting and
describing one or more target markets
and developing and maintaining a
marketing mix that will produce
mutually satisfying exchanges with
target markets.
 Marketing Strategy
Target Market Strategy

 Identify the market segments that are of
interest to the firm
 Analyze market based on attractiveness of

market segments
 Select one or more target markets

• The Marketing Mix

– Product Strategies
– Distribution (Place) Strategies
– Promotion Strategies
– Pricing Strategies
Marketing Mix
product
 The first "P" of the marketing mix deals
with the product.
 The positioning, packaging, etc.
 The Marketing Mix
 PRODUCT - what is it that you are going to sell.
 Product Mix - range of PRODUCTS or SERVICES
offered for sale
 Product Features- color, packaging, quality, brand
name
 Product Support - maintenance, after-sales Service,
pre-sale like advice and Quotations
Price
 The second "P" of the marketing mix is
price. 
 There are several options to consider
regarding price:
 1) price matching, 2) price making, 3)
introductory penetration pricing, and 4)
a competitive upgrade price strategy.
 The Marketing Mix
Pricing - not just how much you charge for a
product but how the price fits your target
market and the image you wish to develop.
 Pricing Methods you choose depends on:

 competition in the market and your marketing

strategies
 demand for your product
 controlled pricing
 your costs
 perceived value
Place
 The 3rd "P" of the marketing mix deals
with product placement--the width of
distribution
 The Marketing Mix
 Distribution - how your products or
services reach your customers
 Distribution Methods
 Customers come to you
 You take the product/service direct to the
customer
 You use an agent merchant franchise etc.
to reach your customer
 The Marketing Mix
 LOCATION - the place of the business
"locate your business where the market
is".
 Factors in Selecting an area:
 Customer accessibility
 Adequacy of transport/communication
facilities
 Supply of skilled labor
 Population Trends
Promotion
   Our promotions are designed to create
demand. 
 PR, Online Marketing, Advertising,
Direct Marketing and Event Marketing.
The Marketing Mix
 ADVERTISING and PROMOTION - are
aimed at Making potential customers
aware of the existence of your
business, your product and services and
to encourage them to buy from you.
 The Marketing Mix
 Different Methods of promoting your product or
service
 Public Relations - establishing a favorable image

 Publicity - feeding media of information that is Of

public interest (free advertisement)

 Sales Promotions

 Merchandising - point-of-sale display

 The Marketing Mix

 Advertising - purpose is to inform

people how best they can satisfy their
needs and wants and how they can
benefit by buying your goods and
services.
The Marketing Mix

 What advertising can do

Principle of AIDA
A - Attention
I - Interest
D- Desire
A - Action
The Marketing Mix
 Advertising Options  Yellow Pages
 Local Press Directory
 General Press  Radio

 Brochures  Television

  Cinema
Catalogues/Letterbox drops
 Direct Mail  Telephone

 Trade Journals  Outdoor

 Magazines Advertising
 Billboards
 Directories

The Business Plan
The Values Consumer Needs

The Firm’s Purpose:

What the firm is going to do

The Firm’s Objective:

How the firm is going to accomplish its purpose

The Marketing Plan

• Establish the marketing mix
• Analyze the current market situation, the
opportunities and issues, the implementation,
finance, and the control
 Analyzing Market Potential
 The transition from mass to target
marketing
 Estimating market potential
 The macroeconomic approach
 The population approach
 The consumption approach
Discussion Questions
1. Explain the difference between a product- or sales-
oriented firm and a market-oriented firm. Why is this
difference important to agribusiness manager?
2. A key part of the SWOT analysis is evaluating the
impact of broad market factors such as government
policies, international trade developments, new
technologies, and so on. For the agribusiness industry
of your choice, identify five key trends in the industry
marketplace and describe the opportunities and
threats each trend represents for agribusiness firms
in that industry.
 Discussion Questions
3. How can an agribusiness manager evaluate the strengths and
weaknesses of their organization? Why is it important to
understand what an agribusiness does well and those areas
where performance is not as strong?
4. What is meant by a market segment? U-pick fruit and vegetable
farms (farms where customers harvest their own fruit and
vegetables) probably appeal more to some market segments
than to others. Identify and describe two market segments that
you believe might be important to this type of agribusiness.
What are the key needs of those two segments that a marketing
manager for the U-pick farm would need to focus on?
Discussion Questions
5. Focusing on one of the target markets you identified for the
U-pick farm described in question 4, what position should the
firm take in the market? Based on the key needs you
identified for one of the market segments, write a positioning
statement for the firm. What key themes will you stress in
your statement?
6. Two types of competitive advantage are described in the
chapter. Identify a of food or agribusiness firm pursuing a
differential advantage. Also, identify a food or agribusiness
firm pursuing a cost advantage. Compare and contrast these
two strategies. What is similar about the two firms? What is
different?
Discussion Questions
8. The use of the marketing approach in an
agribusiness leads to greater economic
efficiency and greater consumer
satisfaction. Do you agree or disagree
with this statement? Explain why you feel
this way.
9. Identify the 4 P’s of the marketing mix and
explain why they are called controllable.
Explain why you would want to control
them.
Discussion Questions
10. What is the difference between
business planning and strategic
planning?
11. Describe how information technology
has changed the marketing
management process. Explain your
answer.