str mktg plng tools
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Copyright © 2000 McGraw-Hill Ryerson Limited 3 - 1
•Strategic Marketing Planning – Tools/Models.
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Goals of the topicTo gain an understanding of:• The nature and scope of planning and
how it fits within the management process
• Similarities and differences among mission, objectives, strategies and tactics
• The essential difference between strategic company planning and strategic marketing planning
• The steps involved in strategic marketing planning
• The purpose and contents of an annual marketing plan
• How planning models can be useful aids in developing a marketing program
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PLANNINGAnalyze situationSet goalsSelect strategies and tactics
IMPLEMENTATIONOrganizeStaffDirect
EVALUATIONCompare performance with goals
Feedback, so management can adapt future plans and theirimplementation to the changing environment
The Management Process
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Strategic Business Units (SBU)• To make planning more effective, a
large, diverse organization may divide itself into smaller planning units called Strategic Business UnitsStrategic Business Units
• The unit should:•Be a separately identifiable business•Have a distinct mission•Have separate competitors•Have a separate group of executives
charged with profit responsibility•Have its own strategic plan
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The BCG The BCG ( Boston Consulting Group) MatrixMatrix
• Market Share/ Market Growth Market Share/ Market Growth MatrixMatrix:
• 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 Marks
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(BCG Matrix)
• Using this model, a strategic business unit (SBU) can be classified according to two factors: its market share relative to competitors, and the growth rate of the industry in which the SBU operates.
• The resulting 2 x 2 grid has 4 quadrants that represent distinct categories of SBUs or major products.
• Each category is assigned a name that reflects its market share, industry growth rate, cash needs, and appropriate strategies.
• A company should seek a balanced portfolio of SBUs with a mix of stars, cash cows, and questions marks, but hopefully no dogs.
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Stars
Cash cows Dogs
Question marks
High Low
High
Low
COMPANY’S MARKET SHAREIN
DU
ST
RY
GR
OW
TH
RA
TE
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• “Stars “ and “Qs Marks” are both company business that operate in high growth industries. The difference b/w them is the firm's market share relative to other main operators in the industry.
• Where as a ‘Star’ is a ‘Market Leader’, a ‘Question Mark’ is a ‘follower’.
• “Cash Cows” and “Dogs” are both company business that operates in low-growth industries. It is the market share position that distinguishes a Cash Cow from a Dog, though both operate in low-growth industries.
• A “Cash Cow" is a “market Leader” while “Dog” is a “Poor follower”.
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• Stars: are net users of resources. A Star needs a good deal of investment support as it operates in a high –growth market. It may not bring in immediate profits, but holds out great potential for the future. Strategy: invest more funds for future growth.
• Qs .Marks: : they also are net users of resources. But, their future is uncertain. and they are in the high –risk category. Strategy: Either invest more funds for future or disinvest.
• Cash Cows: are net generator of resources. A cash cow brings a lot of cash and profit to your company, investment needs of a cash cow is minimal being it in a low-growth market. Strategy: milk profits to finance growth of stars & QMs.
• Dogs: dogs are business with weak market share in weak (low-growth) market. they are cash-traps and draggers of your company resources. Stg: Withdraw
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Product-Market Growth Matrix (Ansoff Model)
• This was developed by Igor Ansoff for strategic Planning.
• growth requires examination of both products and markets; what needs changing?
• Should you stay and fight? Or should you forge an alliance to meet the challenge?• market penetrationmarket penetration:: sell more of
present products/services to present markets
• market developmentmarket development:: sell present products to new markets or segments
• product developmentproduct development:: new products/services for existing markets
• diversificationdiversification: new products to new markets
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PRESENT PRODUCTS
PRESENTMARKETS
NEW PRODUCTS
NEWMARKETS
Marketpenetration
Marketdevelopment
Productdevelopment
Diversification
The product-market growth matrix depicts the options available in
considering markets and products.
Product Market Growth Matrix
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• Market penetration strategy tries to achieve growth through Existing products in Existing Markets
• Market development Strategy tries to achieve growth through Existing products in New Markets.
• Product development Strategy tries to achieve growth through Improved Products in Existing Markets.
• Summary : Ansoff model helps strategic Planning in respect of the existing business of a company through the intensification route.