Chapter 1

STRATEGIC PLANNING AND

THE MARKETING
MANAGEMENT PROCESS

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Introduction
 Marketing combines economics, psychology,
anthropology, sociology, statistics and
demographic.
 Identifies and provides tools to satisfy need and
wants.
 It is around us every day.
 Improves quality of life.
 Resolves conflicts between consumer and
societal needs/wants.

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The Essence of Marketing
 Customer focus: needs and wants
 Research emphasis
 Exchange process
 Relationship basis
 Competitive environment
 Satisfaction emphasis
 Efficiency Process to satisfy needs/wants

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Definition of marketing
 Process
 Planning and executing
 Conception, pricing, promotion and
distribution
 Goods and services
 Create exchanges
 Individuals and organizational goals

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The Complexity of Marketing
 Multiple decision making process
 Interrelated factors
 Interaction between buyer and seller
 Global factor-important for survival

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History of Marketing Thought
 Production Concept-industrial revolution
(late 18th century)
 Product Concept-innovation (1920s)
 Selling Concept-promotion (1940s)
 Marketing Concept-customer satisfaction
(1960s)
 Social Responsibility-consumerism and
improve quality of life (1970s)

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Marketing Theory
 Goods Vs. services-tangible/intangible
 Product categories-durable/nondurable
 Consumer Vs. industrial markets
 Profit Vs. nonprofit
 Intermediaries Vs. end users
 Domestic Vs. international
 Small firms Vs. large firms

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The Marketing Mix
 Product
 Place
 Price
 Promotion

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Selling versus Marketing
 Inward-looking Vs. outward-looking
 Short-term Vs. long-term
 Sales volume Vs. customer satisfaction
 Mass production Vs. innovation (needs)
 Profit focus Vs. Brand loyalty

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Marketing and Strategic
Planning
 Understanding customers
 Understanding Competitors
 Planning concepts (medium and long term)
 Marketing intelligence (need discovery)
 Strengths and weaknesses
 Strategy assessment-long term goals
 Organization response to environmental
challenge

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Marketing and Strategic
Planning (Cont.)
 Top management concerns
 Follow the environmental changes-Microsoft
Corporation
 Global approach-Sears Vs Wall-Mart
 The organizational strategic plan:
 Organizational mission
 Organizational objectives
 Organizational Strategies
 Organizational portfolio plans

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Organizational Mission
 Organization’s history
 The organization’s distinctive
competencies
 The organization’s environment

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Organizational Objectives
 Market standing
 Innovations
 Productivity
 Physical and financial resources
 Profitability
 Manager responsibility
 Workers performance
 Social responsibility

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Organizational Strategies
 Strategies based upon product/market
 Market penetration
 Market development
 Product development
 Diversification
 Strategies based upon competitive advantage
 Porter’s competitive advantage-low cost advantage-
Wal-Mart
 Differentiation-Microsoft, Rolex, L.L.Bean

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Organizational
Strategies(Cont.)
 Organizational strategies based upon
value
 Product leadership-innovative approach
 Operational excellence-Dell computer
 Customer intimacy-relationship marketing
 Organizational Portfolio Plan
 Boston Consulting Group model
 GE model

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Product/Market Strategy
 Market penetration-to use more, changing
product offering and positioning:exp. tuna
fish in water.
 Product development-adding new features
 Market development-taking the product to
a new market: internationalization
 Diversification:(a) related, and
(b)unrelated industries.

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Product Portfolios
 Criticism of BCG matrix: (1) cash flow is
applicable to limited number of markets,
(2)brand leader should not be milked
because new brand may not be a leader.
 Economies of scale-the more are sold, the
more are made, and the lower the unit cost.
 Product mix-product width and depth
 Product mix decision: 1.line stretching, 2.line
rationalization

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MARKETING
MANAGEMENT PROCESS
Process of planning, execution, pricing,
promotion, distribution of goods and
services.
 Situation analysis
 Organizational objectives and mission
– Cooperative environment-suppliers, resellers
– Competitive environment
– Economic environment
– Social environment-cultures and traditions
– Political and Legal environment

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MANAGEMENT
PROCESS (CONT.)
 Marketing Planning
 Setting the objectives
 Selecting the target market
 Developing the marketing mix
 Implementation and Control

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