Strategic Marketing Management

6. Drafting a Marketing Plan

Chapter 1: Foundation of Strategic

Marketing Management

7. Marketing Ethics and Social

Responsibility

1. Defining the Organizations

Business, Mission, and Goals

Business Definition

Business Mission

Business Goals

2. Identifying and Framing

Organizational Growth
Opportunities

Converting
Environmental
Opportunities into
Organizational
Opportunities
SWOT Analysis

3. Formulating Product-Market
Strategies
Market-Penetration
Strategy
Market-Development
Strategy
Product-Development
Strategy
Diversification
Strategy Selection
The Marketing Mix
4. Budgeting Marketing, Financial,
and Production Resources
5. Developing Reformulation and
Recovery Strategies

The Primary Purpose of Marketing

To create long-term and
mutually beneficial exchange
relationships between an entity and
the publics (individuals and
organizations) with which it interacts.
Expanding Responsibilities of
Marketing Managers
They no longer function solely
to direct day-to-day operations. They
must make strategic decisions as well.
Expanded responsibilities include:

Charting the
direction of the
organization

Contributing to
decisions that will
create and sustain
a competitive
advantage and
affect long-term
organizational
performance

Evolution of the Marketing

Manager
From being only an
implementer.
to being a maker of organization
strategy.
This has prompted the emergence of
Strategic marketing management
as

a course of study and practice.

The particular needs of

those customer groups it
wishes to satisfy

The means or technology

by which the organization
will satisfy the customer
needs

Processes in Strategic Marketing

Management
1. defining the organizations
business, mission, and goals
2. Identifying and framing
organizational growth
opportunities
3. Formulating product-market
strategies
4. Budgeting marketing, financial,
and production resources

Business Mission

Underscores the scope of an

organizations operations
apparent in its business
definition

Reflects managements vision of

what the organization seeks to
do

5. Developing reformulation and

recovery strategies

Process One
Defining the
Organizations
Business
Mission, and
Goals

Business Definition
By defining a business from a
customer or market perspective
An organization is appropriately
viewed as:
a customer - satisfying endeavor not a
product-producing or service delivery
enterprise.
What business are we in?
An organization should define a
business by:

The type of customers it

wishes to serve

Most statements describe:

the organizations purpose

customers, products/services,
markets, philosophy, and
technology

Benefits of Mission Statements

1. Crystallizes managements
vision of the organizations
long-term direction and
character
2. Provides guidance in identifying,
pursuing, and evaluating
market and product
opportunities
3. Inspires and challenges
employees to do those things
that are valued by the
organization and its customers

4. Provides direction for setting

business goals or objectives
Business Goals
Goals or objectives convert the
organizations mission into tangible
actions and results that are to be
achieved, often within a specified time
frame.

Growth
Opportunities
Converting Environmental
Opportunities into Organizational
Opportunities
What might we do?
Sources of environmental opportunity:
Unmet or changing customer
needs

Three major Categories of goals:

1. Production
2. Financial
3. Marketing
Production Goals
Apply to the use of manufacturing and
service capacity and to product and
service quality.
Financial Goals
Focus on return on investment, return
on sales, profit, cash flow, and
shareholder wealth.
Marketing Goals

market share

marketing productivity

sales volume

profit

customer satisfaction

customer value creation

Process Two
Identifying and
Framing
Organizational

Unsatisfied buyer groups

New means or technology for

delivering value to prospective
buyers
What do we do best?

Distinctive Competency describes an

organizations unique strengths or
qualities including:

Skills

Technologies

Resources

that distinguishes it from other

organizations.

What must we do?

Success Requirements are basic tasks
that an organization must perform in a
market or industry to compete
successfully.
If what must be done is inconsistent
with what can be done to capitalize on
an environmental opportunity, an

organizational growth opportunity will

fail to materialize.
SWOT Analysis
A formal framework for
identifying and framing organizational
growth opportunities
Strengths
Weaknesses

= Internal

Opportunities
Threats

=External

Framework for focusing

attention on the fact that an
organizational growth opportunity
results from a good fit between an
organizations INTERNAL CAPABILITIES

1. Which internal strengths

represent distinctive
competencies? Do these
strengths compare favorably
with what are believed to be
market or industry success
requirements?
2. Which internal weaknesses
disqualify the organization from
pursuing certain opportunities?
3. Does a pattern emerge from the
SWOT?

Process Three
Formulating
Product-Market
Strategies

Product-Market strategies

(Strengths & Weaknesses) and

its EXTERNAL ENVIRONMENT
(Opportunities & Threats)
Strength

Weakness

Opportuni
ties

Threats

What the organization is

good at doing or a
characteristic that gives
it an important capability
What an organization
lacks or does poorly
relative to competitors
Developments or
conditions in the
environment that have
favorable implications for
the organization
Pose dangers to the
welfare of the
organization

Questions to be asked once SWOT

has been identified

Existing
markets
New
markets

Existing
Product
Market
Penetrati
on
Market
Developm
ent

New
Products
Product
Developm
ent
Diversifica
tion

Market Penetration Strategy

Seeking a larger market share in a
market in which organization already
has an offering
This strategy involves:

Attempts to increase present

buyers usage or consumption
rates of the offering

Attracting buyers of competing

offerings

Stimulating product trial among

potential consumers

Product line extension

broaden the existing line of
offerings by adding different
sizes, forms, flavors, etc.

Market Development Strategy

Diversification Strategy

Introducing its existing offerings to

markets other than those that the
organization is currently serving.

Development or acquisition of
offerings new to the organization and
introducing those offerings to publics
not previously served by the
organization.

Reaching new markets requires:

Carefully considering competitor

strengths and weaknesses and
competitor retaliation potential

Modification of the basic

offering

Different distribution outlets

Change in sales effort and

advertising

Market Development in the

International Arena
Exporting
Joint Venture or
Strategic Alliance

Growing trend in recent years

High-risk strategy because both

the offering and market served
are new to the organization

Strategic Selection- Sample

Decision tree
Action
MarketPenetration
Strategy

Licensing
Direct Investment

Product Development Strategy

MarketDevelopme
nt Strategy

Creating new offerings for existing

markets.
This approach may be taken for:

Response
Aggressive
Competitio
n
Passive
Competitio
n
Aggressive
Competitio
n
Passive
Competitio
n

Outcome
Estimated
profit of $2
million
Estimated
profit of $3
million
Estimated
profit of $1
million
Estimated
profit of $4
million

The Marketing Mix

Product Innovation develop

totally new offerings

Product
Strategy

Product Augmentation
enhance the value to
customers of existing offerings

Price
Strategy

Communicati
ons Strategy
Customer

Process Four

Channel
Strategy

 Budgeting
Marketing,
Financial, and
Production
Resources
The Budget

Process Five
Developing
Reformulation
and Recovery
Strategies
The Marketing Audit

A formal, quantitative expression of an

organizations planning and strategy
initiatives expressed in financial terms

Financial,

Comprehensive, systematic,
independent, and periodic
examination of a companys marketing
environment, objectives, strategies,
and activities to recommend a plan of
action to improve the companys
marketing performance.

Production, and

Helps answer the questions:

Marketing Resources

so that overall organizational goals or

objectives are attained.

Are we doing the

right things?

Are we doing
things right?

A well-prepared budget meshes and

balances an organizations

Components of a Budget
1. Operating Budget

Also referred to as
a pro forma
Income Statement

Focuses on an
organizations
income statement

2. Financial Budget

Focuses on the
effect that the
operating budget
and other
initiatives will have
on the
organizations cash
position

The Marketing Plan

A formal written document that
describes the context and scope of an
organizations marketing effort to
achieve defined goals or objectives
within a specified future time period.

Focus can be on a business,

product, or brand

Time Dimension can be shortrun (typically one year) or longrun (multi-year)

Marketing Ethics and Social

Responsibility

Marketing decisions reflect an

organizations orientation
toward the publics with which
it interacts

The marketplace is populated

by individuals with diverse
value systems

Their actions will be judged

publicly by others with different
values