Strategic Planning and the Marketing Process

Strategic Planning Process
Strategic Planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.
This process involves:
Defining the Company Mission: Statement of an organization’s purpose - what it wants to accomplish in the larger environment.
Setting Company Objectives and Goals: Supporting objectives for each level of management.
Designing the 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.

Designing the Business Portfolio
“The best portfolio is the one that best fits the company’s strengths and weaknesses to opportunities in the environment.”
A Strategic Business Unit (SBU) is a unit of the company:
that has a separate mission and objectives, and
that can be planned independently from other company businesses.
The company must:
analyze its current business portfolio or Strategic Business Units (SBU’s), and
decide which SBU’s should receive more, less, or no investment, and
develop growth strategies for adding new products or businesses to the portfolio.

Analyzing Current SBU’s:
Boston Consulting Group Approach
Question Marks
High growth, low share Build into Stars/ phase out
Require cash to hold
market share
Stars
High growth & share
Profit potential
May need heavy
investment to grow
Cash Cows
Low growth, high share
Established, successful
SBU’s
Produce cash
Dogs
Low growth & share
Low profit potential
Relative Market Share
High Low
Market Growth Rate
Low High
?

Can be Difficult, Time-Consuming, & Costly to Implement
Difficult to Define SBU’s & Measure Market Share/ Growth
Focus on Current Businesses, But Not future Planning
Can Lead to Unwise Expansion or Diversification
Problems With Matrix Approaches

Developing Growth Strategies
1. Market
Penetration
2. Market
Development
3. Product
Development
4. Diversification
Existing
Markets
New
Markets
Existing
Products
New
Products
Product/ Market Expansion Grid

Product/ Market Expansion Grid
Market Penetration: making more sales to current customers without changing products. How? Cut prices, increase advertising, get products into more stores.
Market Development: identifying and developing new markets for its current products. How? Identify new demographic or geographic markets.
Product Development: offering modified or new products to current markets. How? New styles, sizes, colors, or other modified products.
Diversification: start up or buy new businesses outside of its current products and markets.

Marketing’s Role in Strategic
Planning
Provides a
Guiding
Philosophy
Provides Inputs
to
Strategic Planners
Designs Strategies
for Reaching
Unit’s Objectives

A Company’s Value Chain
Customer
Purchasing
Operations
Marketing
Information Systems
Each Department in a Company Carries Out Value-Creating Activities to Design, Produce, Market, Deliver, and Support the Firm’s Products.

Speed Bump:
Linking
the Concepts
What does Strategic Planning have to do with marketing?
What are Levi Strauss & Co.’s mission and strategy?
What roles do other functional departments play?
How can Levi Strauss’s marketers work more effectively with these other functions to maximize overall customer value?

The Marketing Process
Target
Consumers
Product
Place
Price
Promotion
Marketing
Implementation
Marketing
Planning
Marketing
Control
Marketing
Analysis
Competitors
Marketing
Intermediaries
Publics
Suppliers
Demographic-
Economic
Environment
Technological-
Natural
Environment
Political-
Legal
Environment
Social-
Cultural
Environment

Process of Selecting Target
Consumers
Market Segmentation: process of dividing a market into distinct groups buyers (segments) with different needs, etc. who might require separate products.
Market Segment - consumers who respond in similar way to a given set of marketing efforts.
Market Targeting: evaluating each market segment’s attractiveness and selecting one or more target segments to enter.
Market Positioning: products clear, distinctive and desirable place relative to competing products in the minds of target segments.

Marketing Mix- The Four P’s
Target
Customers
Intended
Positioning
Product
Goods-and-service
combination a
company offers a
target market
Amount of money
consumers have
to pay to obtain
the product
Activities that
persuade target
customers to buy
the product
Company activities
that make the
product available to
target customers
Price
Promotion
Place

Four Marketing Management Functions
Planning
Develop
Strategic
Plans
Develop
Marketing
Plans
Implementation
Carry Out the
Plans
Marketing Analysis of Company’s Situation
Control
Measure
Results
Evaluate
Results
Take
Corrective
Action

Contents of a Marketing Plan
Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

Marketing Implementation
Marketing Strategy
Marketing Performance
Implementation
Climate and
Culture
Action
Programs
Decision
and
Reward
Organizational
Structure
Human
Resources

Marketing Department Organization
Market
Management
Combination
Plan
Product
Management
Geographic
Functional
Ways to Carry Out Marketing Activities

Marketing Control
Set Marketing Goals
Measure
Performance
Evaluate
Performance
Take Corrective
Action

Marketing Audits
Marketing
Productivity &
Profitability
Marketing Mix