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Strategic Market Planning

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2-1 2-1 Dr S.L Gupta

Chapter

Strategic Market Planning

Strategic Market Planning

Strategic market planning (also mentioned as Strategic Planning
or Strategic Market-Oriented Planning, or Strategic Marketing Planning in some texts) essentially refers to planning that is conceptually and functionally long-term, typically covering a period of five years or more for the entire corporation. Strategic market planning is a process yielding a marketing strategy that is the framework for a marketing plan.

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Dr S.L Gupta

L Gupta .Strategic Market Planning Corporate Mission Opportunities Objectives Resources Corporate & SBU Strategy Marketing Objectives Marketing Strategies Selection & Analysis of Target Markets Marketing Mix Decisions Elements of Strategic Market Planning 2-3 Dr S.

4. 2-4 Dr S. Establishing Strategic Business Units.Strategic Market Planning Corporate Mission and Objectives Four planning activities are undertaken at corporate level: 1. 2. 3. Establishing Corporate Mission. Establishing Corporate Objectives. Resource Allocation to Strategic Business Units.L Gupta .

aspirations and reasons for being.L Gupta .Strategic Market Planning Establishing Corporate Mission The mission statement is a long-term view of what the corporation wants to become. It describes the corporation’s values. 2-5 Dr S.

  Objectives serve as performance standards to compare actual results.Strategic Market Planning Establishing Corporate Objectives  Objectives provide direction to stay focused on common purpose. 2-6 Dr S. Every activity is directed towards the objectives and every individual contributes to accomplish the objectives. They make behaviours in an organisation more rational and coordinated and thus more effective.  Objectives coordinate the activities and keep them on the right track.L Gupta . Objectives provide a basis for motivation of employees to be result oriented because they know towards what ends they are working.

Strategic Market Planning Planning Corporate and Strategic Business Unit (SBU) Strategies A Strategic Unit may be a division. and in some cases a single product. a product line or a number of related products. a profit centre.L Gupta . 2-7 Dr S.

Strategic Market Planning Resource Allocation to Strategic Business Units 2-8 Dr S.L Gupta .

2x Low 0 8 9 2-9 Dr S.L Gupta .Strategic Market Planning Boston Consulting Group (BCG) Approach . 10% Stars High 4 1 3 2 Question Marks (Problem Children) 5 Growth-Share Matrix developed by Boston Consulting Group Market Growth Rate 5% Cash Cows Dogs (Cash Traps) 6 7 Low 0 10x 8x High Relative Market Share 6x 4x 2x 1x 0.6x 0.4x 0.8x 0.

MARKET Medium Invest (4) Protect (5) Harvest (6) High (1) Invest heavily Medium Low (2) Invest (3) Protect High ATTRACTIVENESS Low (7) Protect (8) Harvest (9) Divest 2-10 Dr S.Strategic Market Planning General Electric Approach BUSINESS STRENGTH Industry AttractivenessBusiness Strength Model Developed by General Electric.L Gupta .

Strategic Market Planning Porter’s Generic Strategies High Focus Lower Cost or Differentiation Cost Leadership Differentiation Competitive Advantage No Differentiation No Cost Leadership No Focus Low Narrow Target Competitive Scope Broad Target Porter’s Generic Strategies Model 2-11 Dr S.L Gupta .

L Gupta . then prices it at a level that is less than the competitors’ prices.Strategic Market Planning Cost Leadership The company targets a broad market and aims to become the lowest- cost producer of a standard product and produces large quantities. 2-12 Dr S.

Strategic Market Planning Differentiation Strategy of differentiation involves developing a competitive advantage by offering a product that has broad appeal because. emotional dimensions. innovative design. 2-13 Dr S.L Gupta . the product is perceived as persuasively valuable and distinct by customers. service. etc. perhaps even unique in some way such as quality.

2-14 Dr S.L Gupta .Strategic Market Planning Focus Focus strategy refers to accomplishing a competitive advantage in a part of market to satisfy customer needs either through cost leadership or differentiation by offering a low-priced product or a high-priced but highly distinctive product.

Strategic Market Planning Value Chain Analysis: Michael Porter views the total economic system in an industry as a value creating system and should be used to identify ways and means to deliver more value to its customers. producing (operations). and supporting its product. Value Chain in a Company 2-15 Dr S. marketing. Every business is involved in designing (product development).L Gupta . delivering.

1980)]. or profit centre within its parent company.L Gupta .” [The PIMS Programme (Cambridge. operating costs.Strategic Market Planning Profit Impact of Market Strategy (PIMS) Profit Impact of Market Strategy is perhaps a novel approach to strategic market planning and the development of competitive strategies. and strategic plans. PIMS is a research programme developed by Strategic Planning Institute (SPI). selling a distinct set of products and/or services to an identifiable group of customers. 2-16 Dr S. in competition with a well-defined set of competitors. and for which meaningful separation can be made of revenues. “Each business is a division. product line. Mass: Strategic Planning Institute. investments.

CONVERT Strength MATCH Opportunity CONVERT The Four-Cell SWOT Matrix 2-17 Dr S.L Gupta Weakness Threat . weaknesses. opportunities and threats (SWOT) analysis to spot the right opportunities to match the business unit’s strengths and also identify weaknesses and serious threats and their likelihood of occurrence that may hamper the business unit’s growth prospects.Strategic Market Planning Strategic Business Unit (SBU) Strategy An important exercise undertaken by many businesses at this level is to conduct strengths.

3.Strategic Market Planning Growth Strategies Intensive Growth: Intensive growth strategies are appropriate when current products and current markets show the potential for sales increase. Market Penetration. Market development. Product development. 2. There are three main strategic options that seem to be appropriate to accomplish intensive growth: 1. PRODUCT Current Current Market penetration New Product development MARKET New Market development Diversification Growth Strategies 2-18 Dr S.L Gupta .

L Gupta . Markets Present Markets Unrelated to Current Products New Products Related to Current Products Integrated diversification Concentric diversification Horizontal diversification New Markets Conglomerate diversification Diversification Strategies 2-19 Dr S.Strategic Market Planning Diversification Growth This strategy involves developing new products to be sold in new markets.

and promoting products that meet the needs of specific customer groups. 2-20 Dr S. distributing.L Gupta .Strategic Market Planning Marketing Objectives and Strategy Marketing objectives are determined on the basis of current business analysis and specify what is to be accomplished through marketing activities. pricing. Marketing strategy refers to actions for developing.

prepared detailing the activities essential to implement the chosen marketing strategies.L Gupta . 2-21 Dr S.Strategic Market Planning Developing Marketing Plan A marketing plan is a formal written document.