Chapter 2- Developing A Marketing Plan: Levels of Strategic Planning in corporations: -Firms plan their marketing strategies to react to changes

in the environment, the competition and their customers by creating a marketing plan -Strategic planning in most organizations occurs on two levels, the corporate level and the functional level -Corporate level planning is done by the company;s top management and focuses on the overall direction of the entire company -Focuses on long term direction of the company -Large companies that operate several business lines may see each to their strategic business units develop strategic plans for their products and the markets they serve -Marketing can advise SBUs of changing consumer trends or recommend that SBUs develop customer service and loyalty programs Marketing Planning Process: A set of steps a marketer goes through to develop a marketing plan The Marketing Plan: -A written document composed of an analysis of the current marketing situation, opportunities, threats for the firm -A written marketing plan provides a reference point for evaluating whether or not the firm met its objectives -The three major phases of the marketing plan are planning, implementation and control 1. Planning Phase: Marketing executives and other top managers define the mission and objectives of the business and evaluate the situation of the business, and evaluate the situation by assessing how various players, both inside and outside the organization, affect the firms potential for success 2. Implementation Phase: Where marketing managers identify and evaluate different opportunities by engaging in a process knows as segmentation, targeting and positioning. They then develop and implement the marketing mix by using the four Ps 3. Control Phase: The part of the strategic marketing planning process when managers evaluate the performance of the marketing strategy and take any necessary corrective actions Step 1: Define the Business Mission and Objectives: Mission Statement: A broad description of a firms objectives and the scope of activities it plans to undertake, attempts to answer two main questions: What type of business is it? and What does it need to do to accomplish its goals and objectives Step 2: Conduct a Situation Analysis: Situation Analysis: Uses a SWOT analysis that assesses both the internal environment with regard to its strengths and weaknesses and the external environment in terms of its opportunities and threats -Situation Analysis also includes an examination of market trends, customer analysis and competitive analysis -firms should also assess cultural, demographic, social, technological, economic and political forces

-A SWOT analysis is designed to help a firm determine areas in which it is strong and can compete effectively and areas where it is weak and vulnerable to competitive attacks *SWOT analysis for Disney* Step 3: Identify and Evaluate Opportunities by Using STP (Segmentation, Targeting and Positioning) STP: The processes of segmentation, targeting and positioning that firms use to identify and evaluate opportunities for increasing sales and profits 1. Segmentation: -Many types of customers appear in any market, and most firms cannot satisfy everyone's needs Market Segment: A group of consumers who responds similarly to a firms marketing efforts Market Segmentation: The process of dividing the market into distinct groups of customers where each individual group has similar needs, wants, or characteristicswho therefor might appreciate products or services geared especially for them in similar ways -Disney uses demographics such as gender, age and income 2.Targeting: Target Marketing/ Targeting: The process of evaluating the attractiveness of various segments and then deciding which to pursue as a market -firms are most successful when they focus on those opportunities that build on their strengths relative to those of their competition 3. Positioning: -Is what consumers think and feel about a brand or a product in the way the company wants to present it tot them Marketing Position: Involves the process of defining the marketing mix variables so that target customers have a clear, distinct, desirable understanding of what the product does or represents in comparison with competing products Step 4: Implement Marketing Mix and Allocate Resources: -Marketers implement the marketing mix - product, price, promotion, and place- for each product and service on the basis of what it believes its target markets will value Product and Value Creation: -Firms attempt to develop products and services that customers perceive as valuable enough to buy Price and Value for Money: -Marketers should base price on the value that the customer perceives Place and Value Delivery: -Firms must be able to make the product or service readily accessible when and where the customer wants it Promotion and Value Communication: -Marketers communicate the value of their offering, of the value proposition, tot heir customers through a variety of media -Marketers bust consider which are the most efficient and effective methods to communicate with their customers

-An increasing number of companies are using the Internet and their own websites to advertise and communicate with their customers and build closer relationships -Canadian consumers are increasingly becoming more value-conscious -Spending on sales promotion has exceeded spending on advertising in Canada Step 5: Evaluate Performance by Using Marketing Metrics: -Metrics are used to explain why things happened and to project the future Who is Accountable for Performance? -At each level of the organization, the business unit and its manager should be held accountable only for the revenues, expenses, and profits tat they can control -Expenses that effect several levels of the organization shouldn't be arbitrarily assigned to lower levels -Performance evaluations are used to pinpoint problem areas; reasons why performance may be above or below planned levels Performance Objectives and Metrics: -One approach is to compare a firm's performance over time or to competing firms using common financial metrics such as sales and profits Financial Performance Metrics: -Commonly used metrics to assess performance include revenues, or sales, and profits -An attempt to maximize one metric might lower another -A company should use more than one metric because it tells a better story -The metrics used to evaluate a firm vary depending on the level of the organization at which the decision is made and the resources the manager controls. Social Responsibility Performance Metric: -There is an increasing number of companies report corporate social responsibility metrics -Impact on the environment, ability to diversify their workforce, energy conservation initiatives, polices on protecting human rights Strategic Planning Is Not Sequential: Portfolio Analysis: -management evaluates the firms various products and businesses and allocates resources according to which products are expected to be the most profitable for the firm in the future. Usually performed at the SBU or Product Line Strategic Business Unit (SBU): A division of the company that can be managed somewhat independently from other divisions since it markets a specific set of of products to a clearly defined group of customers. Product Line: A group of products that consumers may use together or perceive as similar in some way -Loblaw Companies consist of general merchandise, drugstores, Presidents Choice brand and financial products Boston Consulting Groups Portfolio Analysis: -Requires that firms classify all their products into a two-by-two matrix Relative Market Share: A measure of the products strength in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm n the industry

Market Growth Rate: The annual rate of growth of the specific market in which the product competes -measures how attractive a particular market is -Stars often require a heavy resource investment in such things as promotions and new production facilities to fuel their rapid growth- ipad -Cash Cows, because these products have already received heavy investments to develop their high marker share, they have excess resources that can be spun off to those products that need it - soft drinks -Question marks appear in high growth markets but have low market shares and thus they require significant resources to maintain and potentially increase their market share. -Sony tablet -Dogs are in low growth markets and have low market shares - corvette -Should be phased out unless they are needed to complement or boost the sales of another product or for competitive purposes Growth Strategies: -Firms consider pursuing various market segments as part of their overall growth strategies Market Penetration: Market Penetration Strategy: A growth strategy that employes the existing marketing mix and focuses the firms efforts on existing customers -Want more shares etc.../ Tim Hortons opening up another store -Generally requires greater marketing distribution efforts Market Development: Market Development Strategy: A growth strategy that employes the existing marketing offering to reach new market segments, whether domestic or international or segments not currently served -International expansion is much riskier than domestic expansion because firms must deal with differences in government regulations Product Development: Product Development Strategy: A growth strategy that offers a new product or service to a firms current target market Diversification: Diversification Strategy: A growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently have -In related diversification opportunity, the firm might be able to purchase from existing vendors and use the same distribution system -In an unrelated diversification, the new business lacks any common elements with the present business -A market penetration strategy is the easiest to implement since it focuses on promotion existing products to existing customers -With market development and product development, marketers have experience with one element and have to learn the other -Diversification requires marketers to go outside of both their current products and markets

Downsizing: Exiting markets, reducing product portfolios or closing certain businesses or store or plant locations Marketing Strategy and Sustainable Competitive Advantage: Marketing Strategy: Identifies a firms target markets, a related marketing mix- the four p s and the bases upon which the firm plans to build a sustainable competitive advantage Sustainable Competitive Advantage: Something the firm can persistently do better than its competitors that is not easily copied and thus can be maintained over a long period of time Building A Sustainable Competitive Advantage: Customer Excellence: Focuses on retaining loyal customers and excellent customer service Retaining Loyal Customers: -Having a strong brand, unique merchandise and superior customer service -Loyalty is more than preferring to purchase form one firm instead of another, it means that customers are reluctant to patronize competitive firm -Benefits to consumer of loyalty program are limited but loyalty programs are a boom to marketers. Customer Service: -Once a marketer has earned a good service reputation, it can sustain this advantage for a long time because a competitor is hard pressed to develop a comparable reputation Operational Excellence: Achieved through efficient operations and excellent supply chain and human resource management Efficient Operations: -Telus -Vendor relations must be developed over the long term and generally cannot be easily offset by the competitor -knowledgeable and skilled employees committed to the firms objectives are critical assets that support the success of companies Product Excellence: Having products with high perceived value and effective branding and positioning Locational Excellence: Having a good physical location and Internet presence Consumerism: The organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers Environmentalism: is a broad philosophy, ideology and social movement regarding

concerns for environmental conservation and improvement of the health of the environment, particularly as the measure for this health seeks to incorporate the concerns of non-human elements.
-Pollution prevention -Product stewardship -Design for environment -New clean technologies -Sustainability Vision

These are Not the same thing Vision and mission Google: We help you organize the worlds information and make it universally accessible and useful Starbucks: To inspire and nurture the human spirit- one person, one cup and one neighborhood at a time Product includes the design and the users experience to it, name Competitive AdvantageOverall cost leadership- Walmart Differentiation- apples ipad Focus- niche Middle of the Road- Doesnt work