by jeff tanner and mary anne raymond principles of marketing

by Jeff Tanner and Mary Anne Raymondby Jeff Tanner and Mary Anne Raymond

Principles of Marketing

Chapter 2Chapter 2Strategic PlanningStrategic Planning

©2010 Flat World Knowledge, Inc.


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Developing plans and strategies for

products and their pricing promotion delivery

The Value PropositionThe Value Proposition

A 30-second “elevator speech”*

Here are the benefits of our product

This is why it is superior to other ones


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*Getting your point across to someone before the elevator reaches the bottom .

Supporting The Value PropositionSupporting The Value Proposition


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What is the strategy that enables the value?

How do businesses develop and document this strategy?

Who develops this strategy?

This is planning

Plans and PlanningPlans and Planning


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Levels of planning

The Marketing PlanThe Marketing Plan


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This is the revenue producing element in the corporate or strategic plan

It describes:where we are going with products, and how we will get there!

The Planning ProcessThe Planning Process


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The mission statement is the leading planning phrase. It answers the question—“why does this company exist?”

A situation analysis is conducted to assess the current business environment.

Internal factors such as the company’s strengths and weaknesses relative to this environment are explored.

External factors such as opportunities and threats are identified.

A SWOT

analysi

s

The SWOT Analysis—InternalThe SWOT Analysis—Internal


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Internal factors are strengths and/or weaknesses (companies can control these factors)

• Strengths could be: 1. financial 2. market position 3. patents 4. management 5. costs

• Weaknesses could be: 1. competitive position 2. organization structure 3. supplier dependency 4. product line 5. brand awareness

Key actions: Capitalize on a strength Address a weakness

The SWOT Analysis—ExternalThe SWOT Analysis—External


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External factors are opportunities and threats (companies can’t control these factors)

• Opportunities can be: 1. global markets 2. enabling technologies 3. growing consumer wealth 4. currency exchange rates 5. government spending

• Threats can be: 1. economic contraction 2. government regulations 3. social and political changes 4. trade barriers 5. taxes and mandated expenses

Actions required stay informed on global markets and issues anticipate and prepare for government actions monitor technology advances

ObjectivesObjectives


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An objective is something you want to have or some place you want to be.

• At a specific time in the future

• It must be measureable and achievable

Examples of a marketing objective:

• ABC, Inc. will increase its sales by 5% by the end of the next plan year.

• PepsiCo will increase the market share of Gatorade by 4% during the next year.

Marketing objectives must be consistent with other company’s objectives.


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Strategies are the means for accomplishing objectives.• they are the activities that the plans detail

Companies often employ several strategies to reach objectives.

Example:

• Wal-Mart has a pricing strategy of everyday low pricing (EDLP).

• Wal-Mart also has a strategy for opening new stores rapidly—globally.

StrategiesStrategies

Strategic ChoicesStrategic Choices


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There are different types of product and market-entry strategies that a firm can pursue in order to meet objectives.

Other choices include:• licensing• franchising• contract manufacturing• joint ventures• direct investment• diversification strategies

Key TakeawaysKey Takeaways


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Strategic Portfolio PlanningStrategic Portfolio Planning


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Two popular approaches

Boston Consulting GroupBoston Consulting Group


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low market share high

low

mark

et

gro

wth

hig

h

Cash Cow

Question Mark

Dog

Stars

Use cash cow funds t

o invest

in high growth

products

Harvest or ceaseproduction

R.L. Sharman Lone Star College

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Evaluate SBU’s on the following factors:

1. Market share2. Growth of the SBU3. Size of the opportunity4. Potential for profit5. Environmental factors6. Competitive conditions

Green—invest for growth

Yellow—status quo

Red —divest

high med low

hig

hm

ed

low

Business strength (fit)

Mark

et

att

ract

iveness

investmaintain

dump

GE Market Attractiveness ModelGE Market Attractiveness Model


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The strategic planning process includes: 1. the company’s mission (why it exists) 2. the desired objectives for the plan period -- must be measureable and achievable 3. description of strategies for reaching objectives a. market penetration b. market development c. product development d. diversification

Note: strategies should capitalize on a strength, or address a weakness

Key TakeawaysKey Takeaways


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4. A group of businesses (SBUs) is called a portfolio.

5. Portfolio planning -- organizations with multiple SBUs must allocate limited resources -- two planning tools that can be used are BCG and GE

6. BCG—Boston Consulting group -- a four quadrant matrix for market share and market growth -- positioning products in the matrix establishes importance -- helps make decisions regarding resource allocation 7. GE—General Electric industry attractiveness

-- nine cell matrix using stop light concept for investing, harvesting

More Key TakeawaysMore Key Takeaways


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“Plans are nothing, planning is everything!”D.D. Eisenhower, General of the Army

Many times “plans” are not an accurate precursor to events encountered. -- changes are required in order to reach objectives

Through the process of “planning the plan,” knowledge is acquired that allows the timely altering of strategies and tactics for effect. -- the planning process itself can identify contingency actions -- enacting changes to meet the contingencies requires plan flexibility

Planning EpiloguePlanning Epilogue

by jeff tanner and mary anne raymond principles of marketing

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