2- 1

MARKETING MANAGEMENT

Chapter 2
Strategic Planning
and the
Marketing Process
 Copyright 1999 Prentice Hall
Strategic Planning Process 2- 2

• Strategic Planning involves developing an

overall company strategy for long-run
survival and growth.

• This process involves:

– Defining a Mission: Statement of an organization’s
purpose; should be market oriented.
– Setting Company Objectives: Supporting goals and
objectives to guide the entire company.
– Designing a Business Portfolio: Collection of businesses
and products that make up the company.
– Planning Functional Strategies: Detailed planning for
each department designed to accomplish strategic
objectives.

 Copyright 1999 Prentice Hall

 2- 3
2-3
Mission
Mission Statements
Statements 2-3

Market
Market
Oriented
Oriented

Motivating
Motivating Realistic
Realistic
Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements
Distinctive
Distinctive Specific
Specific
Competencies
Competencies
Fit
Fit Market
Market
Environment
Environment


 Copyright
Copyright 1999
1998 Prentice
Prentice Hall
Hall
Designing the Business Portfolio 2- 4

• The best portfolio is the one that best fits

the company’s strengths and weaknesses
to the opportunities in the environment.

• The company must:

–analyze its current business portfolio or
Strategic Business Units (SBU’s)
–decide which SBU’s should receive more, less,
or no investment
–develop growth strategies for adding new
products or businesses to the portfolio

 Copyright 1999 Prentice Hall

Analyzing Current SBU’s: 2- 5

Boston Consulting Group Approach

Relative Market Share

High Low
Stars Question Marks
Market Growth Rate
High

• High growth & share • High growth, low share

• Profit potential • Build into Stars/ phase out
• May need heavy • Requires cash to hold
investment to grow market share

Cash Cows Dogs

• Low growth, high share • Low growth & share
Low

• Established, successful • Low profit potential

SBU’s
•Produces cash

 Copyright 1999 Prentice Hall

Analyzing Current SBU’s: 2- 6

GE Strategic Business-Planning Grid

Business Strength
Industry Attractiveness

Strong Average Weak

C
High
A

Medium
B D

Low

 Copyright 1999 Prentice Hall

Developing Growth Strategies 2- 7

Product/ Market Expansion Grid

Existing New
Products Products
Existing 1. Market 3. Product
Markets Penetration Development

New 2. Market
4. Diversification
Markets Development

 Copyright 1999 Prentice Hall

Product/ Market Expansion Grid 2- 8

• Market Penetration: increase sales to present

customers with current products. How? Cut prices,
increase advertising, get products into more stores.

• Market Development: develop new markets with

current products. How? Identify new demographic
or geographic markets.

• Product Development: offering modified or new

products to current customers. How? New styles,
flavors, colors, or modified products.

• Diversification: new products for new markets.

How? Start up or buy new businesses.
 Copyright 1999 Prentice Hall
Marketing’s Role in Strategic 2- 9

Planning
• Process of Selecting Target Consumers
–Market Segmentation: determining distinct groups
of buyers (segments) with different needs.
–Market Targeting: evaluating and selecting which
target segments to enter.
–Market Positioning: products distinctive and
desirable place in the minds of target segments
compared to competing products.
• Marketing Strategies for Competitive Advantage
– Market-Leader
– Market Challenger
– Market-Follower
– Market-Nicher
 Copyright 1999 Prentice Hall
 2- 10
The Marketing Process

Demographic- Marketing Technological-

Economic Intermediaries Natural
Environment Environment

Product

Target
Suppliers Place Price Publics
Consumers

Promotion

Political- Social-
Legal Competitors Cultural
Environment Environment

 Copyright 1999 Prentice Hall

Marketing Mix- The Four P’s 2- 11

Price
Product
“Goods-and-service” Amount of money
combination that a that consumers
company offers a have to pay to obtain
target market the product

Target
Customers

Intended
Positioning

Activities that Company activities

persuade target that make the
customers to buy product available
the product
Promotion  Copyright 1999 Prentice Hall Place
Managing the Marketing Effort 2- 12

Marketing Analysis of Company’s Situation

Control
Marketing Planning Marketing
Implementation Measure
Develop Marketing Results
Strategies to Turn Marketing Plans
Achieve Marketing into Evaluate
Objectives Action Plans Results
to Achieve
Develop Marketing
Marketing Objectives Take
Corrective
Plans & Budget
Action

 Copyright 1999 Prentice Hall

 2- 13
Elements of a Marketing Plan
Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

 Copyright 1999 Prentice Hall

 2- 14
Marketing Implementation
Marketing Strategy
Decision
and
Reward
Human
Organizational
Resources
Structure
Action Climate and
Programs Culture

Implementation

Marketing Performance
 Copyright 1999 Prentice Hall
 2- 15
Marketing Control

Set Marketing Goals

Measure
Performance

Evaluate
Performance

Take Corrective
Action

 Copyright 1999 Prentice Hall

Marketing Audits 2- 16

Environment

Function Types Strategy

of Marketing
Audits
Productivity Organization

Systems

 Copyright 1999 Prentice Hall