learning outcomes copyright 2010 by cengage learning inc. all rights reserved 1 describe four...

Learning Outcomes

Copyright 2010 by Cengage Learning Inc. All Rights Reserved

1

Describe four marketing management philosophies

Define the term marketing

Discuss the differences between sales and market orientations

Describe several reasons for studying marketing

LO1

LO2

LO3

LO4

Chapter 2: Strategic Planning for Competitive Advantage

Prepared by Amit Shah, Frostburg State University

Designed by Eric Brengle, B-books, Ltd.

Copyright 2010 by Cengage Learning Inc. All Rights Reserved 2

3

Understand the importance of strategic marketing and know a basic outline for a marketing plan

Develop an appropriate business mission statement

Explain the components of a situation analysis

LO1

LO2

LO3

Learning Outcomes


Learning Outcomes

4

Explain the criteria for stating good marketing objectives

Identify sources of competitive advantage

Identify strategic alternatives

Discuss target market strategies

LO4

LO5

LO6

LO7


The Importance of Strategic Marketing

5

LO1

WhatWhatWhatWhat

WhyWhyWhyWhy

HowHowHowHow

Strategic PlanningStrategic PlanningStrategic PlanningStrategic Planning

Long-term profitability Long-term profitability and growthand growth

Long-term profitability Long-term profitability and growthand growth

Write a marketing planWrite a marketing planWrite a marketing planWrite a marketing plan


GE, Toys R Us, McDonalds

6

Strategic Marketing Management

THE ANSWER IS A MARKETING PLAN.

What is the organization’s main activity?

How will it reach its goals?


7

Marketing Planning

Marketing Plan- A written documentthat acts as a guidebook for the

marketing manager.


Building a marketing plan is more than just meeting and knocking around ideas

haphazardly…

And it’s DEFINITELY more than adopting a strategy just because “all of a sudden” you

decided it seemed like a good idea…

A Marketing Plan is a Roadmap for All of a Company’s Business

Efforts

Marketing Plans are:– Strategic and extensive– Organized and analytical– Either short or long range (depending on the

company)

Marketing Plan Elements

11

Marketing Strategy

Product Distribution

Price

Marketing Mix

Business Mission Statement

Situation or SWOT Analysis

Objectives

Target Market Strategy

ImplementationEvaluation

Control

Promotion



12

LO2

marketing myopiano directionfocus on marketsserved and benefitscustomers seek

Q: What business are we in?

A: Business mission statement

Too narrowToo broadJust right

marketing myopiano directionfocus on marketsserved and benefitscustomers seek


Star Trek EnterpriseWhy is a mission statement important?

LO1

14

Southwest Airlines Mission Statement

SOURCE: http://www.southwestairlines.com/about_swa/mission.html


15

AMA’s Mission Statement

Samples

Find a sample to shareParkway Mission statement

http://www.missionstatements.com/fortune_500_mission_statements.html

http://www.pkwy.k12.mo.us/projectparkway/Lev2.cfm?Lev2ID=215

http://images.google.com/imgres?imgurl=http://cteweb.madison.k12.wi.us/files/teched/images/deca_logo.gif&imgrefurl=http://cteweb.madison.k12.wi.us/student&usg=__RUkKJcJO2--ZDTCf-uuxAXaxlTA=&h=180&w=180&sz=23&hl=en&start=9&tbnid=vckyDna09AwMfM:&tbnh=101&tbnw=101&prev=/images?q=deca+logo&gbv=2&hl=en

16

• Answers the question, “What business are we in?”

• Focuses on the market(s) rather than the good or service

• Strategic Business Units (SBUs) may also have a mission statement

Defining the Business Mission


Strategic Business Unit (SBU)

• GE Technology Infrastructure(healthcare, aviation, transportation)

• GE Energy(energy, oil & gas, water)

• GE Capital(Commercial Finance, GE Money)

• NBC Universal(television, music, film)

TODAY’S ORGANIZATIONS ORGANIZATIONAL STRUCTURE AND STRATEGIES

LO2


18

Marketing Strategy


Price

Marketing Mix



Objectives



Control

Promotion


http://www.franklincollege.edu/pwp/BOdom/SampleWorkStarbucks.pdf

19

Conducting a Situation Analysis

LO3

SWOT Analysis- Identifying internalstrengths and weaknesses and also

examining externalopportunities and threats.


SWOT Analysis

20

©South-Western College Publishing

SSWWOOTT

Things the company does well.Things the company does well.

Things the company does not do well.Things the company does not do well.

Conditions in the external environment that favor strengths.Conditions in the external environment that favor strengths.

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.

InternalInternal

ExternalExternal


THE STRATEGIC MARKETING PROCESSTHE PLANNING PHASE

Weaknesses

Strengths

Threats

Opportunities

LO4

• Situation Analysis

• SWOT Analysis

Step 1: Situation (SWOT) Analysis

THE STRATEGIC MARKETING PROCESSTHE PLANNING PHASE

Analyze Competitors

Identify Industry Trends

Research Present and Prospective Customers

Assess the Organization

LO4

• SWOT Analysis Study

Step 1: Situation (SWOT) Analysis

Ben & Jerry’s SWOT analysis serves as the basis for management actions regarding growth

http://marketingteacher.com/lesson-store/lesson-swot.html

Components of a Situation Analysis

24

LO3

production costs

marketing skills

financial resources

image

technology

Strengths

Weaknesses

INT

ER

NA

LIN

TE

RN

AL

EN

VIR

ON

ME

NT

EN

VIR

ON

ME

NT


25

Marketing Objective

A statement of what is

to be accomplished

through marketing activities.


Marketing Objectives

26

Realistic

Measurable

Time specific

Compared to a benchmark

“Our objective is to increase sales of Purina

brand cat food by 15 percent over 2009 sales of

$300 million.”


Criteria for Good Marketing Objectives

27

LO4

Realistic, measurable, and time-specific objectives Realistic, measurable, and time-specific objectives consistent with the firm’s objectives:consistent with the firm’s objectives:

1. Communicate marketing management philosophy

2. Provide management direction

3. Motivate employees

4. Force executives to think clearly

5. Allow for better evaluation of results



28

Marketing Strategy


Price

Marketing Mix



Objectives



Control

Promotion



29

Describing the Target Market

Discuss target market strategies.

LO7


30

Marketing Strategy

Marketing Strategy- The activitiesof selecting and describing one or

more target markets and developingand maintaining a market mix thatwill produce mutually satisfyingexchanges with target markets.



31

Appeal to the entire market with one marketing mix

Appeal to the entire market with one marketing mix

Concentrate on one marketing segment

Concentrate on one marketing segment

Appeal to multiple marketswith multiple marketing mixes

Appeal to multiple marketswith multiple marketing mixes


32

Strategic Directions

Identify strategic alternatives.

LO6


33

Competitive Advantage

Niche StrategiesNiche Strategies

CostCost

Product/Service Differentiation

Product/Service Differentiation

Types of Types of Competitive Competitive AdvantageAdvantage

Types of Types of Competitive Competitive AdvantageAdvantage


34

Cost Competitive Advantage

Cost Competitive Advantage- Being thelow-cost competitor in an industry

while maintaining satisfactoryprofit margins.


Examples:Obtain inexpensive raw materialsDesign products for ease of manufactureControl overhead costs

35

Niche Competitive Advantage



The advantage achieved when

a firm seeks to target and

effectively serve a small

segment of the market.

Example:

Sensodyne/Polident/Poligrip

Orvis—fishing company


Product differentiation

• Brand Names –Lexus• Product Reliability -Maytag• Strong Dealer Network -Caterpillar tractor• Service -Fed Ex• Image –Neiman Marcus• Nike---Product Innovation -Nike Air and

Nike Shox

36

37

Strategic AlternativesMarket

Penetration

MarketDevelopment

Product Development

Diversification

Increase market share among existing customersMcDonalds: Beanie Babies

Attract new customers to existing productsCoke in India 850/350

Introduce new products into new marketsSony-Columbia pictures

Create new products for present marketsJoseph A. Banks Suits


38

Ansoff’s Strategic Opportunity Matrix

Present Product New Product

New Market

Market PenetrationMcDonalds sells

More happy mealsWith Disney promo

MarketDevelopmentMcDonalds opens

Restaurants in China

ProductDevelopment

McDonalds introducesSalads and premium water

Diversification

McDonalds introducesLine of children’s

clothing

Present Market

Online


Four alternative market-product strategies for Ben & Jerry’s to expand sales revenues using diversification analysis

Strategic Alternatives

40

LO6

Identify strategic alternativesIdentify strategic alternatives

Diversification =

Product development = products

Market development = customers

Market penetration = share

new products +new markets


SETTING STRATEGIC DIRECTIONSWHERE DO WE WANT TO GO?

LO3

Business Portfolio Analysis (BCG)

Mar

ket

Gro

wth

Rat

e

Stars

Cash Cows Dogs

Question Marks

Relative Market Share

High

High Low

Low

BCG business portfolio analysis for Kodak’s consumer SBUs for 2003 (solid circle) and 2011 (hollow circle)

Kodak digitalphoto printer

Kodak digitalpicture frame

① ④

③

Kodak film sales: US,Canada, & W. Europe

Kodak digitalcamera

②

43

BCG Portfolio Matrix

StarsHandheld/Computers

Cash CowsLaptops/Personal computer

ProblemChildren/Question

MarksPalm Pilots

DogsMainframe computer


44

Portfolio Matrix Strategies

Build

Hold

Harvest

Divest


45

Segmentation study tells us how pet owners feel about their pets and the role food plays in that relationship.

Their attitudes influence the brands they purchase and their sensitivity to price, promotion, and assortment.

How do we Understand the Pet Owner’s Attitudes?How do we Understand the Pet Owner’s Attitudes?

There are distinct segments of pet owners and they all shop in your stores: 7Practical Providers

They like pets, but are not goo-goo about them.

Look for convenient, practical, affordable food

High price sensitivity - Will switch for a good deal

Uninvolved Owners Food must be:

- Affordable- Quick- Easy to feed

Very high price sensitivity

Expert Driven Providers

Expert advice – from veterinarian, breeder or other perceived expert – is very important.

Information seekers Nutrition focused Primarily feed dry food Very low price sensitivity

Basic Food FeedersPet most likely belongs to the children, but needs to be fed.

Food that looks like human food is more appealing

High price sensitivity-look for sales

Healthy Habitualists

Look for something easy and nutritious.

Very brand loyal Not as worried about taste

Indulgent Nutritionists

Still searching for right balance of taste and nutrition.

Try new products Mix wet and dry Like variety Below average price sensitivity

Pampering Preparers

Homemade food is used to show love.

Store-bought food alone does not suffice Nutrition is important, but taste is paramount Food = Love Average price sensitivity

Segmentation ExampleFemale Department Shoppers classified into five groups based upon demographics, values, and attitudes. For Example:

1. Fashion Statement-most affluent and educated, use credit cards, expect to be treated well by retail personnel.

2. Wanna-Buys –similar to a fashion statement but with less income. Enjoy buying on

impulse.

Segmentation Example3. Family Values – represent large families, often are professionals, buying focuses on children or the home

4. Down to Basics – Most likely to have children, not college educated, careful spenders, prefer not to use credit, like coupons.

5. Matriarchs- older often retired, they like department stores but are risk adverse

and have few purchase plans.

Who’s Who?

1.Fashion Statement,2.Family Values,3. Wanna Buy’s,4. Matriach5.Down-to-Basics

http://images.google.com/imgres?imgurl=http://msnbcmedia3.msn.com/j/msnbc/Components/Photos/050928/050928_cossey_vmed_8a.widec.jpg&imgrefurl=http://www.msnbc.msn.com/id/9505511/&h=431&w=298&sz=28&hl=en&start=2&sig2=50cO5lwDCQsA9NYa7TRthA&tbnid=K2VNhyZZFJhXIM:&tbnh=126&tbnw=87&ei=aZLqRp3DMKS8eLeb2L4G&prev=/images?q=low+income+mothers+shopping&gbv=2&ndsp=20&svnum=10&hl=en&sa=N

http://images.google.com/imgres?imgurl=http://images.jupiterimages.com/common/detail/33/94/23459433.jpg&imgrefurl=http://www.jupiterimages.com/itemDetail.aspx?itemID=23459433&h=250&w=167&sz=25&hl=en&start=12&sig2=Si-jnbzd51sakPQdXTdhDg&tbnid=cdGhXBs7rgBkpM:&tbnh=111&tbnw=74&ei=MZPqRp6yG6PEePGfgMQG&prev=/images?q=affluent+women+shopping&gbv=2&svnum=10&hl=en&sa=G

Who’s Who?

Wanna Buy’s

Down-to-BasicsMatriach

Fashion Statement

Family Values

http://images.google.com/imgres?imgurl=http://msnbcmedia3.msn.com/j/msnbc/Components/Photos/050928/050928_cossey_vmed_8a.widec.jpg&imgrefurl=http://www.msnbc.msn.com/id/9505511/&h=431&w=298&sz=28&hl=en&start=2&sig2=50cO5lwDCQsA9NYa7TRthA&tbnid=K2VNhyZZFJhXIM:&tbnh=126&tbnw=87&ei=aZLqRp3DMKS8eLeb2L4G&prev=/images?q=low+income+mothers+shopping&gbv=2&ndsp=20&svnum=10&hl=en&sa=N

http://images.google.com/imgres?imgurl=http://images.jupiterimages.com/common/detail/33/94/23459433.jpg&imgrefurl=http://www.jupiterimages.com/itemDetail.aspx?itemID=23459433&h=250&w=167&sz=25&hl=en&start=12&sig2=Si-jnbzd51sakPQdXTdhDg&tbnid=cdGhXBs7rgBkpM:&tbnh=111&tbnw=74&ei=MZPqRp6yG6PEePGfgMQG&prev=/images?q=affluent+women+shopping&gbv=2&svnum=10&hl=en&sa=G


50

Marketing Strategy


Price

Marketing Mix



Objectives



Control

Promotion



51

Marketing Mix: The “Four Ps”

Price

Promotion

Place

Product

52


The starting point of the

“4 Ps”

Includes Physical unit Package Warranty Service Brand Image Value

Product

Products can be… Tangible goods Ideas Services

53


Product availability where and when customers want them

All activities from raw materials to finished products

Ensure products arrive in usable condition at designated places when needed

Place

54


Promotion Role is to bring about

exchanges with target markets by:

Informing Educating Persuading Reminding

Includes integration of:

Personal selling

Advertising

Sales promotion

Public relations

55


Price

Price is what a buyer must give up to obtain a product.

The most flexible of the “4 Ps”-- quickest to change

Competitive weapon

Price x Units Sold = Total Revenue

The elements of the marketing mix must be blended to produce a cohesive marketing program

57

LO10

Techniques for Effective Strategic Planning

Effective Strategic Planning

Effective Strategic Planning

Continualattention

Continualattention CreativityCreativity Management

commitment

Managementcommitment


Following Up the Marketing Plan

• Implementation

• Evaluation

• Control

• Marketing audit is…• Comprehensive• Systematic• Independent• Periodic

58Copyright 2010 by Cengage Learning Inc. All Rights Reserved

59

LO9

Product PlacePromotionPrice

Product PlacePromotionPrice

Met objectives?

Met objectives?

Implementation Evaluation

Audits• comprehensive• systematic• independent• periodic

Audits• comprehensive• systematic• independent• periodic

Implementation, Evaluation, and Control


learning outcomes copyright 2010 by cengage learning inc. all rights reserved 1 describe four...

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