Marketing Management
Chapter 2
STRATEGIC PLANNING AND
THE MARKETING PROCESS
1
Strategic Planning
The process of developing and maintaining a
strategic fit between the organization’s goals
and capabilities and its changing marketing
opportunities.
2
Steps in strategic planning
Corporate level
Defining
the company
mission
Setting company
objectives
and goals
Business unit, product, and
market level
Designing the
business
portfolio
Planning, marketing,
and other functional
strategies
3
Mission Statement
A statement of the organization’s purpose –
what it wants to accomplish in the larger
environment.
4
SETTING COMPANY
OBJECTIVES AND GOALS
The company’s mission needs to be turned
into detailed supporting objectives for each
level of management. Each manager should
have objectives and be responsible for
reaching them.
5
DESIGNING THE BUSINESS
PORTFOLIO
Guided by the company’s mission statement and objectives,
management now must plan its business portfolio – the
collection of businesses and products that comprise the
company. The best business portfolio is the one that best fits
the company’s strengths and weaknesses to opportunities in
the environment. The company must (1) analyse its current
business portfolio and decide which businesses should
receive more, less, or no investment, and (2) develop growth
strategies for adding new products or businesses to the
portfolio.
6
ANALYSING THE CURRENT
BUSINESS PORTFOLIO
The major activity in strategic planning is business portfolio analysis,
whereby management evaluates the businesses that make up the
company. The company will want to put strong resources into its more
profitable businesses and phase down or drop its weaker ones.
Portfolio analysis
A tool by which
management identifies
and evaluates the
various businesses that
make up the company
Strategic business unit (SBU)
A unit of the company that
has a separate mission and
objectives and that can be
planned independently from
other company businesses.
An SBU can be company
division, a product line
within a division, or
sometimes a single product
or brand.
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Growth – Share Matrix
A portfolio-planning method that evaluates
a company’s strategic business units
(SBUs) in terms of their market growth rate
and relative market share. SBUs are
classified as stars, cash cows, question
marks, or dogs.
The Boston Consulting Group Approach
Using the Boston Consulting Group (BCG) approach,
company classifies all its SBUs according to the growth
share matrix. On the vertical axis, market growth rate
provides a measure of market attractiveness. On the
horizontal axis relative market share serves as a measure of
company strength in the market. By dividing the growth –
share matrix as indicated, four types of SBUs can be
distinguished:
8
The Boston Counsulting Group Approach) ‫رهيافت گروه مشاورين بوستون‬
Market ‫زياد‬
growth High
rate
‫ستاره‬
Star
‫عالمت سئوال‬
Question mark
‫نرخ رشدبازار‬
‫كم‬
Low
Cash cow
‫گاو‬
Dog
‫سگ‬
‫سهم بازارنسبي‬
Relative market share
Stars
High-growth, high-share businesses or products that often
require heavy investment to finance their rapid growth.
Cash cows
Low-growth, high-share businesses or products;
established and successful units that generate cash that the
company uses to pay its bills and supports other business
units that need investment.
Question marks
Low-share business units in high-growth markets that
require a lot of cash in order to hold their share or
become stars.
Dogs
Low- growth, low-share businesses and products that
may generate enough cash to maintain themselves but
do not promise to be large sources of cash.
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The General Electric
Approach
General Electric introduced a comprehensive
portfolio planning tool called a strategic businessplanning grid. Like the BCG approach, it uses a
matrix with two dimensions – one representing
industry attractiveness (the vertical axis) and one
representing company strength in the industry (the
horizontal axis). The best businesses are those
located in highly attractive industries where the
company has high business strength.
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DEVELOPING GROWTH
STRATEGIES
Existing
products
Existing
markets
New
markets
1. Market
penetration
2. Market
development
New
products
3.Product
development
4. Diversification
Market opportunity identification through the product/ market expansion grid
Market penetration
A strategy for company growth by increasing
sales of current products to current market
segments without changing the product in
any way.
Product development
A strategy for company growth by offering
modified or new products to current market
segments.
Market Development
A strategy for company growth by
identifying and developing new market
segments for current company products.
Diversification
A strategy for company growth by starting up
or acquiring businesses outside the
company’s current products and markets.
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Marketing’s Role in Strategic
Planning
 There is much overlap between overall company strategy and marketing
strategy. Marketing looks at consumer needs and the company’s ability
to satisfy them; these same factors guide the company mission and
objectives.
 Marketing plays a key role in the company’s strategic planning in several
ways. First, marketing provides a guiding philosophy – the marketing
concept – which suggests company strategy should revolve around
serving the needs of important consumer groups. Second, marketing
provides inputs to strategic planners by helping to identify attractive
market opportunities and by assessing the firm’s potential to take
advantage of them. Finally, within individual business units, marketing
designs strategies for reaching the unit’s objectives.
12
Marketing and the Other Business
Functions
Marketers play an important role in delivering
customer value and satisfaction. However,
marketing cannot do this alone. Because consumer
value and satisfaction are affected by the
performance of other functions, all departments
must work together to deliver superior value and
satisfaction. Marketing plays an integral role to help
ensure that all departments work together toward
this goal.
13
THE MARKETING PROCESS
The process of:
1.
2.
3.
4.
Analysing marketing opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing effort
14
Market Segmentation
Dividing a market into distinct groups of
buyers with different needs, characteristics,
or behavior who might require separate
products or marketing mixes.
15
Market Targeting
The process of evaluating each market
segment’s attractiveness and selecting one or
more segments to enter.
16
Market Positioning
Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the mine of target
consumers.
17
Market Segment
A group of consumers who respond in a
similar way to a given set of marketing
stimuli.
18
MANAGING THE MARKETING
EFFORT
1.
2.
3.
4.
Marketing Analysis
Marketing Planning
Marketing Implementation
Marketing Control
19
MARKETING ANALYSIS
Managing the marketing function begins with a
complete analysis of the company’s situation. The
company must analyse its markets and marketing
environment to identify attractive opportunities and
avoid environmental threats. It must analyse
company strengths and weaknesses, as well as
current and possible marketing actions, to
determine which opportunities it can best pursue.
20
MARKETING PLANNING
Through strategic planning, the company
decides what it wants to do with each
business unit. Marketing planning involves
deciding on marketing strategies that will
help the company attain its overall strategic
objectives. A detailed marketing plan is
needed for each business, product, or brand.
21
MARKETING
IMPLEMENTATION
Planning good strategies is only a start
toward successful marketing. A brilliant
marketing strategy counts for little if the
company fails to implement it properly.
Marketing implementation is the process
that turns marketing strategies and plans into
marketing actions to accomplish strategic
marketing objectives.
22
MARKETING CONTROL
The process of measuring and evaluating he results of marketing strategies
and plans, and taking corrective action to ensure that marketing
objectives are attained
Set goals
What do we
want to achieve?
Measure
performance
What is
happening?
Evaluate
performance
Why is it
happening?
Take corrective
action
What should we
do about it?
The control process
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