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02
Developing Marketing
Strategies and Plans

16/e
 Discussion Questions

1. How is strategic planning carried

out at the corporate and divisional
levels?
2. How is strategic planning carried
out at the business unit level?
3. What does a marketing plan
include?

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 Strategic Planning

• The process of developing and

maintaining strategic fit between the
organization’s goals & capabilities and
its changing marketing opportunities

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 Central Role of Strategic Planning

• Focus on the customer and respond effectively

to changing needs
─ All departments accept that ‘the customer is king’

• Prioritizes in 3 key areas

─ Manage businesses as an investment portfolio
─ Assess market’s growth rate and company’s position
─ Establish a strategy

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 Four Organizational Levels

• Most large organizations consist of four

organizational level
─ Corporate
─ Division
─ Business unit
─ Product

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 Marketing Plan

• The central instrument for directing and

coordinating the marketing effort
– Strategic marketing plan lays out
the target markets and the firm’s
value proposition based on mkt.
opportunity analysis
– Tactical marketing plan specifies
the marketing tactics including 4 Ps

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 The Complete Planning, Implementation,
and Control Cycle of Strategic Planning

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 CORPORATE AND DIVISION
STRATEGIC PLANNING

Define the corporate mission

Establish SBUs

Assign resources to each SBU

Assess growth opportunities

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 Define the Corporate Mission

• Organization’s purpose or reasons to exist

an organization like to make cars
• May change over time to respond to new
opportunities
• Acts as an invisible hand to guide
employees

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 Define the Corporate Mission
Peter Drucker’s 5 classic questions to define
mission
What do
customers value?
What will our
Who is the
business be?
customer?

What should
What is our our business
business? be?

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 Business Definition

• Define business from the perspective of

satisfying customer needs; not in terms
of products
– Products are transient; basic needs and
customer groups endure forever
– Transportation is a need; truck is a product that
meets the need

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 Business Definition

Company Product-oriented Market-oriented

We sell lifestyle and self-
We make
Revlon expression; success and
cosmetics.
status.
We make copying We help improve office
Xerox
equipment. productivity.
We connect people around
We are online the world and help them
Facebook
social network share important moments
in their lives
Paramount
We make movies. We market entertainment.
Pictures

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 Crafting a Mission Statement

• Develop in collaboration with and share with

managers, employees, and customers
• Provide a shared sense of purpose,
directions, and opportunity

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 Five Characteristics of a Good Mission
Statement

1. Focus on a limited number of goals

2. Stress major policies and values
3. Define major competitive spheres
4. Take a long-term view
5. Short, memorable, and meaningful

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 Mission of Google
Vague mission

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 Mission of eBay

“We help people trade anything on earth.

We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.”

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 Establish SBUs(strategic business
unit)
Large firms manage different businesses, each
requiring its own strategy

3 characteristics of an SBU
A single business or
collection of related
businesses
Unique competitors

Leader responsible
for planning and
profitability

The purpose is to develop separate strategies and assign

appropriate funding
 Some SBUs of Square Group

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 Assign Resources to Each SBU

• Decide how to allocate corporate resources to

each SBU
− Building, holding, harvesting, and divesting

BCG’s Growth-Share Matrix

−Classify SBUs based on market growth rate and
relative market share

GE/McKinsey Matrix
−Classify SBUs based on competitive advantage
and industry attractiveness indices

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 BCG Growth-Share Matrix

Building
Holding
Harvesting
Building Divesting

Holding Divesting

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 GE/McKinsey Matrix

GE/McKinsey Matrix
HIGH
Competitive Advantage

MED
LOW

LOW MED HIGH

Industry Attractiveness

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 Assess Growth Opportunities

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 Assess Growth Opportunities

Projected sales
• Grow within current
businesses
• Build or acquire
related businesses
• Add attractive
unrelated businesses

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 Assess Growth Opportunities

• Intensive growth

• Integrative growth

• Diversification growth

• Downsizing and divesting older

businesses

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 Intensive Growth

• Corporate
management should
first review
opportunities for
improving existing
businesses

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 Ansoff’s Product-Market Expansion Grid

A tool for identifying company growth opportunities

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 Integrative Growth
A firm can increase sales and profits through backward,
forward, or horizontal integration within its industry

Business
ion For
at wa
t egr rd I
nte
n
ar dI gra
ti
w on
ck
Ba
Competitor

Horizontal Integration

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 Diversification Growth

• Diversification growth makes sense when

good opportunities exist outside the
present businesses

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 Diversification Growth
New products having technological or
marketing synergies with existing product
Concentric lines (Compact Disc+ Laser Disk)
Strategy
Through appealing to a different group
of customers

Unrelated new products that requires a

Horizontal different manufacturing process (DVD
Disc + Plastic Disc)
Strategy
Through appealing to current customers

New businesses having no relationships

Conglomerate (DVD Disc + Application software)
Strategy
Appealing to any customer groups

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 Growth Strategy of Starbucks

An ambitious, multi-pronged growth strategy to maintain

its phenomenal growth

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 Growth Strategy of Starbucks
• Market penetration: Make – How? Add new stores in current
more sales to current market areas; improve ad, prices,
customers without changing menu, service, attract competitors’
products customers.

• Market development: Identify – How? Review new demographic

(seniors/ethnic consumers) or
and develop new markets for
geographic (Asian, European, &
current products
South American) markets; convert
non-users to users in current
• Product development: Offer market.
modified or new products to
– How? Add food offerings, sell
current markets
coffee in supermarkets, co-brand
• Diversification: Start up or products in current markets.
buy businesses outside current – How? Make and sell CDs, testing
products and markets restaurant concepts, or branding
casual clothing
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 Downsizing and Divesting Older
Businesses
• Carefully prune, harvest, or divest the tired old
businesses to release needed resources for
other uses and reduce costs

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 Organization and Organizational
Culture
• A company’s organization consists of its structures,
policies, and corporate culture, all of which can become
dysfunctional in a rapidly changing business
environment

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 Corporate Culture

… is the shared experiences, stories, beliefs,

and norms that characterize an organization.

Strategic planning
is done within the
context of a
company’s
structures, policies,
and corporate
culture

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 Marketing Innovation

• Marketing innovation is crucial

(BlackBerry)
– Innovation by 3 unrepresented
groups
– Challenge company orthodoxy
and stimulate new ideas

• Develop strategy by choosing

the firm’s view of the future
– Scenario analysis by asking
“What if…”

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 Business Unit Strategic
Planning Process

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 SWOT Analysis

Favorable Unfavorable

SW
Internal
Internal
A formal limitations that

Internal
capabilities that may interfere
framework for may help a with a company’s
company reach
identifying and its objectives ability to achieve
its objectives
framing

OT
organizational Current and
External factors that emerging external
growth
External

the company may factors that may

opportunities be able to exploit to challenge a
its advantage company’s
performance

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 Goal formulation (MBO)
• Goals are specific objectives with respect to
magnitude and time

Ranked

Consistent Quantified

Realistic

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 Strategic Formulation
Porter’s Generic Strategies

Strategy is a game plan for

achieving objectives

“The essence of strategy is

choosing what not to do.”

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 Strategic Formulation

Strategic Alliances

• Product or service
alliance
• Promotional alliance
• Logistics alliances
• Pricing collaborations

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 Program Formulation and
Implementation

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 Feedback and control

• Peter Drucker: it is more

important to “do the right
thing”—to be effective—than
“to do things right”—to be
efficient
– The most successful
companies, however, excel at
both Strong leadership

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 Contents of a Marketing Plan

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 Evaluating a Marketing Plan

 Is the plan simple/succinct?

 Is the plan specific?
 Is the plan realistic?
 Is the plan complete?

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 Marketing Debate

1. What good is a mission statement?

2. What implications do Porter’s value chain
and the holistic marketing orientation model
have for marketing planning?
3. Take a position:
(a) Mission statements are critical to a successful
marketing organization.
(b) Mission statements rarely provide useful
marketing value.

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