Marketing Management
3.
Marketing Planning
Strategy vs. Tactics
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Strategy: a marketing plan for a period longer than a
year (i.e., long-run). Must be consistent, measurable,
acceptable, and realistic
Stratagus (Greek word) = the art of general (or the art of
thinking in general terms)
Tactics: marketing plan for a period of a year or less
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Focus is on the 4Ps within a given budget and timeframe
Strategic plan handout:
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Test: What are the seven major steps of a marketing plan
Details: for your team projects
Generic Strategies
by Michael Porter
Selecting Strategies:
Managerial Techniques
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Corporate performance objectives (Profits, Sales…)
Portfolio analysis (complex analysis of corporate units)
 BCG Matrix
 GE Matrix
 Ansoff Matrix
SWOT Analysis
PLC (Product Life Cycle)
Gap Analysis (comparing goals vs. actual results)
80/20 rule: focus on 20% of products / customers that
provide about 80% of sales volume and profits
Portfolio Analysis
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SBU: Strategic Business Unit, any part of the
company that can be managed separately
SBUs are often called divisions or departments
In Marketing a product, product line, or a brand
may be an SBU
Portfolio Management: management of SBUs
according to organizational objectives and the
SBU’s contribution to the company’s performance
Ex: investing in selected SBUs vs. eliminating SBUs
BCG: Boston Consulting Group
BCG’s Growth-Share Matrix
High Market
Growth Rate
QUESTION MARKS:
STARS:
Earnings are low &
Earnings are high,
unstable, but growing stable, and growing.
Strategy: Invest or
Strategy: ?
extend product
lines
Low Market
Growth Rate
DOGS:
Earnings are low &
unstable.
Strategy: Divest?
Dimensions
Low relative market
share
CASH COWS:
Earnings are high &
stable
Strategy: “Milk” =
harvest revenues
High relative
market share
BCG Matrix
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Star: Sony Playstation 2 (trendy products)
Cash Cow: Ivory soap for Procter & Gamble (old, stable
brands)
???: MP3 players (relatively new products)
Dogs: Playboy – the magazine (lossmakers to keep or )
The G.E. Matrix:
Indexes of SBU Performance
•Market size
•Market growth
•Comp. pressure
•Price level
•Regulation
•Market share
•Customer knowledge
•Customer satisfaction
•Cost efficiency
•Product quality
•Financial strength
Index of Business Strength
High
Market
Medium
Attractiveness
Low
Index
Strong
Average
Weak
Green
Green
Yellow?
Green
Yellow?
Red
Red
Red
Yellow?
GE Matrix
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Green SBU – go ahead and invest in the long-run
Yellow SBU – be cautious, SBU “maintenance”
Red SBU – stop, drive SBU out of market
Ansoff-Matrix or
Product-Market Expansion Grid
Dimensions
Existing
Markets
New
Markets
Existing Products
New Products
1.1.
Do nothing
2. Withdraw
3. Consolidate
4. Penetrate
Product
Development
(risky + expensive)
Market
Development
(when product is
very competitive)
Diversification
(assuming new
activities)
Ansoff-Matrix
Improving the performance of existing businesses
 “Do Nothing” if the environment is static (short-run only)
 “Withdraw” when there is an irreversible decline in demand or
opportunity costs of staying in a market are too high
 “Consolidation” means concentration of resources and focusing on
existing competitive advantages
 “Penetration” means gaining market share
SWOT Analysis
SWOT is a universal analytical tool developed by the
military:
Matching corporate skills and resources with forecasted
market opportunities
1.
Strengths: Internal Positives (available skills &
competencies)
2.
Weaknesses: Internal Negatives (poor use or lack of
skills)
3.
Opportunities: External Positives (evaluating areas
where advantages may be gained, ex: add a new product,
target new segments)
4.
Threats: External Negatives (evaluating forces that may
prevent the company from accomplishing its objectives, ex:
competition, regulation, customer preferences)