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Strategic PIanning Strategic PIanning

and the Marketing and the Marketing
Process Process
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2-2
VaIue Creation and DeIivery VaIue Creation and DeIivery
'alue selection STP
'alue proposition
'alue communication
'alue chain is a tool for identifying ways to
create more customer value
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2-3
THE VALUE CHAIN
SUCk1 AC1IVI1ILS
kIMAk AC1IVI1ILS
irm
Infrastructure
HRM
TechnoIogy
DeveIopment
Procurement
Inbound
Logistics
Cperat|ons
Cutbound
Log|st|cs
Marketing
&
SaIes
Serv|ce
ARGNS
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2-4
1nL VALUL DLLIVLk kCCLSS
Make the Product SeII the Product
Design
Product
Procur
e
Make Price SeII
Advertise/
Promote
Distribut
e
Service
%A) 1rad|t|ona| hys|ca| rocess Sequence
%) Modern hys|ca| rocess Sequence
Choose the Va|ue
Make the Va|ue
rov|de the Va|ue
Customer
Segmentati
on
Market
SeIection/
ocus
VaIue
Positionin
g
Product
DeveIopme
nt
Service
DeveIopment
Pricing
Sourcing
Making
Distributing
SaIes
orce
SaIes
Promotion
Advertisin
g
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2-5
Competitive Advantage Competitive Advantage
Core Competencies
Distinctive Capabilities
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2-6
THE HOILSTIC MARKETING
RAMEWORK
VALUE
EXPLORATIO
N
VALUE
CREATION
VALUE
DELIVERY
COGNITIVE
SPACE
CCML1LNC
SACL
RESOURCE
SPACE
CUSTOMER
DOMAIN
BUSINESS
DOMAIN
BUSINESS
PARTNERS
CRM
IN1LkNAL
kLSCUkCL
MANAGLMLN1
USINLSS
Ak1NLk
MANAGLMLN1
Customer
Iocus
Core
Competenc|es
Co||aborat|ve
Network
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2-7
Strategic Marketing Strategic Marketing
"Mar|c|ing S|ra|cgq is a scrics cf
in|cgra|cd ac|icns |cading |c a
sus|ainao|c ccnpc|i|itc adtan|agc.
]cnn Scu||q
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2-8
Strategic Planning Strategic Planning
.is the managerial process of developing
and maintaining a strategic fit between the
organization's objectives and resources
and its changing market opportunities.
Org Objectives
Resources
Changing Environment
Strategic Fit
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2-9
Marketing PIanning: The Basics for Marketing PIanning: The Basics for
Strategy and Tactics Strategy and Tactics
PIanning: Process of anticipating future
events and conditions and of determining the
best way to achieve organizational goals
Marketing pIanning: mplementing planning
activities devoted to achieving marketing
objectives
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2-10
Strategic PIanning versus TacticaI PIanning Strategic PIanning versus TacticaI PIanning
Strategic pIanning: Process of determining
an organization's primary objectives and
adopting courses of action that will achieve
those objectives
TacticaI pIanning: Process that guides the
implementation of activities specified in the
strategic plan.
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2-11
Strategic PIanning versus TacticaI PIanning Strategic PIanning versus TacticaI PIanning
Top management
Greater proportions of their time engaged
in planning
Usually focus their planning activities on
long-range strategic issues
MiddIe IeveI managers
ocus on operational planning; creating
and implementing tactical plans
Supervisors
Developing the specific programs to meet
goals in their areas of responsibility
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2-12
The RoIe of Strategy The RoIe of Strategy
Corporate
Mission &
Objectives
Strategy:
Corporate
Division
Business
Product
Operating
PIans -
Strategic &
TacticaI
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2-13
Steps in the Marketing PIanning Process Steps in the Marketing PIanning Process
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2-14
Corporate and Division Strategic PIanning Corporate and Division Strategic PIanning
Defining corporate mission
Establishing SBUs
Assigning resources to SBUs
Assessing growth opportunities
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2-15
Defining the Mission of the Organization Defining the Mission of the Organization
Mission Mission the essential purpose that
differentiates one company from others
The mission statement specifies the
organization's overall goals and
operational scope and provides general
guidelines for future management actions
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2-16
Determine OrganizationaI Objectives Determine OrganizationaI Objectives
An organization lays out its basic objectives,
or goals, in its mission statement
These objectives in turn guide development
of supporting marketing objectives and plans
Well-developed objectives should state
specific, quantitative intentions along with
deadlines for achieving them
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2-17
Business Unit Strategic PIanning Business Unit Strategic PIanning
Business mission
SWOT Analysis
Goal ormulation
Strategy formulation
Program formulation and mplementation
eed back and control
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2-18
A SWOT anaIysis SWOT anaIysis is a method of studying
organizational resources and capabilities to
assess the firm's strengths and weaknesses
and scanning its environment to identify
opportunities and threats
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2-19
SWOT SWOT
AnaIysis AnaIysis
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2-20
Strategic ormuIation Strategic ormuIation
Strategy is a game plan to achieve the objectives
of the business unit
Porter's Generic strategies
- Overall cost leadership
- Differentiation
- ocus
Strategic and arketing Alliances
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2-21
ImpIementation ImpIementation
A great marketing strategy can be sabotaged by
poor implementation
McKinsey's 7-S ramework for business success incIudes
ard ware strategy, structure and systems
Soft ware style, skills, staff and shared values
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2-22
Monitoring Monitoring
Track the results and monitor new developments
arket environment changes faster than the
company's 7-S
Thus, a company remains efficient (do the things
right), while losing effectiveness (do the right thing)
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2-23
ormuIating, ImpIementing, and ormuIating, ImpIementing, and
Monitoring a Marketing Strategy Monitoring a Marketing Strategy
Marketing strategy a firm's overall
program for selecting and satisfying a
target market
A marketing strategy is aimed at satisfying
consumers in the selected target market
through a careful balance of the elements
of the marketing mix each of which
represents a subset of the overall
marketing strategy
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2-24
Characteristics of a viabIe SBU Characteristics of a viabIe SBU
Unique business mission
Definable set of competitors
ntegrative planning done independently
Responsible for resource management in all
areas
Large enough but not so large as to become
bureaucratic
(Source. Subhash Jain, Marketing Planning & Strategy, 6
th
Ed.)
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2-25
1. Describe successful planning tools and
techniques including Porter's ive orces
model, first and second mover strategies and
the strategic window.
2. dentify the basic elements of a marketing
strategy.
3. Describe the environmental characteristics that
influence strategy decisions.
4. Describe the methods for marketing planning,
including business portfolio analysis and the
BCG matrix.
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2-26
SuccessfuI Strategies: TooIs and SuccessfuI Strategies: TooIs and
Techniques Techniques
All planning strategies have the goal of
creating a sustainabIe competitive
advantage for a firm.
An advantage where other companies cannot
provide the same offering or value.
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2-27
Porter's Porter's
ive orces ive orces
ModeI ModeI
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2-28
irst Mover and Second Mover Strategies irst Mover and Second Mover Strategies
irst mover strategy Theory advocating
that the company that is first to offer a
product in a marketplace will be the long-
term market winner.
Second mover strategy Theory that
advocates observing closely the
innovations of first movers and then
introducing new products that improve on
the original offering to gain advantage in
the marketplace.
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2-29
The Strategic Window The Strategic Window
A limited period with an optimal fit between
the key requirements of a market and the
particular competencies of a firm
HR BIock HR BIock recognizes the strategic window
of their business.
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2-30
EIements of a Marketing Strategy EIements of a Marketing Strategy
Blending the four strategy elements of
marketing decision-making to satisfy chosen
target markets
Product
Price
Distribution
Promotion
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2-31
Target Market Target Market
Group of
people
toward
whom the
firm decides
to direct its
marketing
efforts
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2-32
Marketing Mix VariabIes Marketing Mix VariabIes
Product Strategy Product Strategy
What goods or services to offer
Customer service
Package design
Brand names
Trademarks
Warranties
Product Life Cycle
Positioning
New-product development
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Marketing Mix VariabIes Marketing Mix VariabIes
Distribution Strategy Distribution Strategy
Planning that ensures that consumers find
their products in the proper quantities at the
right times and places.
odes of transportation
Warehousing
nventory control
Order processing
arketing channels
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2-34
Marketing Mix VariabIes Marketing Mix VariabIes
PromotionaI Strategy PromotionaI Strategy
Blending together the various elements
of promotion to communicate most
effectively with the target market
nforming, persuading, and influencing a
consumer's purchase decision.
IMC
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Marketing Mix VariabIes Marketing Mix VariabIes
Pricing Strategy Pricing Strategy
Deals with the methods of setting profitable
and justifiable prices
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2-36
The Marketing Environment The Marketing Environment
Competitive
Political Legal
Economic
Technological
Social Cultural
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2-37
Methods for Marketing PIanning Methods for Marketing PIanning
Business PortfoIio AnaIysis Business PortfoIio AnaIysis
Strategic Business Units Strategic Business Units (SBUs) are key
business units within diversified firms
A division, product line, or single product
may define an SBU
irms redesign their SBUs as market
conditions dictate
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2-38
BOSTON CONSULTING
GROUP MATRIX
?

4
4
ReIative market share
11
Market Share/ Market Market Share/ Market
Growth Matrix Growth Matrix
A marketing planning
tool that classifies a
firm's SBU's or products
according to industry
growth rates and market
shares relative to
competing products
Stars
Cash Cows
Dogs
Question arks
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2-39
BCG arket Share/arket Growth atrix
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2-40
General Electric atrix General Electric atrix
(G.E. odel) (G.E. odel)
G.E. involves SBU being positioned on a
matrix on the basis of market attractiveness
and business strength.
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2-41


Protect
Position

Invest to
Build

Build
Selectively

Build
Selectively
Selectivity /
Manage Ior
earnings
Limited
expansion Ior
harvest


Protect and
ReIocus

Manage Ior
earnings

Divest
usiness Strength
M
a
r
k
e
t

A
t
t
r
a
c
t
i
v
e
n
e
s
s

L
o
w


M
e
d
i
u
m

H
i
g
h

Strong Medium Weak
GE Model
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2-42
The Arthur D. Little odel The Arthur D. Little odel
This model is based on competitive position and
stage of industry maturity. The competitive position is
recognised in five main categories
(a) Dominant, -Strong,
(c) avorable /Tenable, and
(e) Weak.
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2-43
%he Arthur D. Little Strategic Condition Matrix

Embryonic Growth Mature Ageing


Grow Iast
Build barriers
Act oIIensively.
Grow Iast
Aim Ior cost leadership
DeIend position Act
oIIensively.
DeIend position
Increase the
importance oI cost
Act oIIensively.
DeIend
position
Focus
Consider
withdrawal.
Grow Iast
DiIIerentiate.
Lower cost
DiIIerentiate
Attack small
Iirms.
Lower costs
DiIIerentiate
Focus.
Harvest
Grow Iast
DiIIerentiate.
Focus
DiIIerentiate
DeIend.
Focus
DiIIerentiate
Hit smaller Iirms.
Harvest
Grow with the
industry
Focus.
Hold on or
withdraw
Niche
Aim Ior growth.
Niche.
Hold on or
withdraw
Withdraw
Search Ior a niche
Attempt to catch
others.
Niche or withdraw Withdraw Withdraw
Dominant
Strong
Favourable
Tenable
Weak
Stage of Industry Maturity
C
o
m
p
e
t
i
t
i
v
e

P
o
s
i
t
i
o
n