Strategic Planning for
2
Competitive Advantage
Canadian Adaptation prepared by
Don Hill, Langara College
Chapter 2
Copyright © 2009 by Nelson Education, Ltd. All rights reserved.
1
Learning Objectives
1. Understand the importance of strategic
marketing and know a basic outline
for a marketing plan
2. Develop an appropriate business
mission statement
3. Describe the criteria for stating good
marketing objectives
Chapter 2
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2
Learning Objectives (continued)
4. Explain the components of a situation
analysis
5. Identify sources of competitive advantage
6. Identify strategic alternatives
7. Discuss target market strategies
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3
Learning Objectives (continued)
8. Describe the elements of the marketing mix
9. Explain why implementation, evaluation, and
control of the marketing plan are necessary
10. Identify several techniques that help make
strategic planning effective
Chapter 2
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4
Learning Objective
1
Understand the importance
of strategic marketing and
know a basic outline for a
marketing plan
Online
http://www.rona.ca
http://www.homedepot.ca
1
Chapter 2
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5
Strategic Planning
Strategic Planning
The managerial process of creating
and maintaining a fit between the
organization’s objectives and
resources and evolving market
opportunities.
Online
http://www.coke.com
http://www.pepsi.com
1
Chapter 2
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6
Strategic Planning
EVOLVING
MARKET
OPPORTUNITIES
LONG RUN
PROFITABILITY
AND GROWTH
RESOURCES
&
OBJECTIVES
1
Chapter 2
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7
Strategic Marketing Planning

What is the organization’s main activity?

How will it reach its goals?
The Marketing Plan
1
Chapter 2
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8
Planning
Planning
The process of anticipating future
events and determining strategies to
achieve organizational objectives in
the future.
1
Chapter 2
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9
The Marketing Plan
Marketing Plan
A written document that acts as a
guidebook of marketing activities
for the marketing manager.
1
Chapter 2
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10
Why Write a Marketing Plan?
 Provides a basis for comparison of actual and
expected performance
 Provides clearly stated activities that help
employees work toward common goals
 Serves as a reference for the
success of future activities
 Allows examination of the marketing environment
in conjunction with the workings of the business
1
Chapter 2
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11
Business Mission
Statement
Marketing Plan
Elements
Objectives
Situation or SWOT
Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product
Distribution
Promotion
Price
Implementation
Evaluation
Control
1
Chapter 2
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Online
http://www.dmusic.com
12
A Strategic Marketing Plan
1
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13
Learning Objective
2
2
Develop an appropriate
business mission statement
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14
Defining the Business Mission
2

Answers the question,
“What business are we in
and where are we going?”

Focuses on the market(s)
rather than the good or service

Strategic Business Units may
also have a mission statement
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15
Canadian Tire’s Vision Statement
Our vision is to create sustainable growth by being a national
Champion and Canada’s most trusted company. We will grow
from our strengths—leveraging our brands, core capabilities,
assets and extraordinary people.
Online
http://www.telus.com
2
Chapter 2
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16
Strategic Business Units (SBUs)
Characteristics
2
1.
A distinct mission and specific target market
2.
Control over their resources
3.
Their own competitors
4.
Plans independent of other SBUs
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17
Review: Develop an appropriate business
mission statement
Q: What business are we in?
A: Business mission statement
Too narrow
Too broad
Just right
2
marketing myopia
no direction
focus on markets
served and benefits
customers seek
Chapter 2
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18
Learning Objective
3
3
Describe the criteria
for stating good
marketing objectives
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19
Marketing Objective
Marketing Objective
A statement of what is to be
accomplished through
marketing activities.
3
Chapter 2
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20
Marketing Objectives
Marketing Objectives Must Be:

3
Realistic

Measurable

Time specific

Consistent with
and indicate the
organization’s
priorities
“Our objective is to achieve
10 percent dollar market
share in the specialty pet
food market within 12
months of product
introduction.”
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21
Examples of Marketing Objectives
3
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22
Review: Describe the criteria for stating good
marketing objectives
Clear and specific 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
3
Chapter 2
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23
Learning Objective
4
4
Explain the components
of a situation analysis
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SWOT Analysis
SWOT Analysis
Identifying internal strengths (S)
and weaknesses (W)
and also examining
external opportunities (O)
and threats (T)
4
Chapter 2
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25
Environmental Scanning
Environmental Scanning
The collection and interpretation of
information about forces, events, and
relationships in the external environment
that may affect the future of the
organization or the implementation
of the marketing plan.
4
Chapter 2
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26
Review: Explain the components of a situation
analysis
INTERNAL
Strengths

production costs

marketing skills

financial resources

image

technology
Weaknesses
4
Chapter 2
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27
Review: Explain the components of a situation
analysis
EXTERNAL
Opportunities

social

demographic

economic

technological

political/legal

competitive
Threats
4
Chapter 2
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Learning Objective
5
5
Identify sources of
competitive advantage
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Competitive Advantage
Competitive Advantage
The set of unique features of a company
and its products that are perceived by
the target market as significant and
superior to the competition.
5
Chapter 2
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Competitive Advantage
Cost
Types of
Competitive
Advantage
Product/Service
Differentiation
Niche Strategies
5
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31
Cost Competitive Advantage
Cost Competitive Advantage
Being the low-cost competitor
in an industry while maintaining
satisfactory profit margins.
5
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32
Cost Competitive Advantage
 Obtain inexpensive raw materials
 Create efficient operations
 Design products for ease of manufacture
 Control overhead costs
 Outsourcing and vertical integration
 Avoid marginal customers
5
Chapter 2
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33
Sources of Cost Reduction
5
Experience Curves
Product Design
Efficient Labor
Reengineering
No-frills Products
Production Innovations
Government Subsidies
New Service
Delivery Methods
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34
Product/Service Differentiation
Product/Service Differentiation
Competitive Advantage
Advantage achieved when a firm
provides something that is unique
and valuable to buyers beyond simply
offering a lower price than the competition.
5
Chapter 2
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35
Examples of
Product/Service Differentiation
 Brand names
 Strong dealer network
 Product reliability
 Image
 Service
5
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36
Niche Competitive Advantage
Niche Competitive Advantage
Advantage achieved when a firm
seeks to target and effectively serve a
small segment of the market.
5
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37
Niche Competitive Advantage
 Used by small companies with
limited resources
 May be used in a limited geographic market
 Product line may be focused on a
specific product line
5
Chapter 2
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38
Sustainable
Competitive Advantage
Sustainable Competitive Advantage
An advantage that cannot be readily
copied by the competition.
5
Chapter 2
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39
Sources of Sustainable
Competitive Advantage
Patents
Copyrights
Locations
Equipment
Technology
Organization’s
Skills and Assets
Customer Service
Promotion
5
Chapter 2
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40
Review: Identify sources of competitive
advantage
Sources of
Competitive Advantage
Cost
$
5
Product/Service
Differentiation
A vs. B vs. C
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Niche
Strategies
41
Learning Objective
6
6
Identify strategic
alternatives
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42
Strategic Alternatives
Video Click!
Market
Penetration
6
Increase market share among
existing customers
Market
Development
Attract new customers to
existing products
Product
Development
Create new products for
present markets
Diversification
Introduce new products
into new markets
Chapter 2
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43
Ansoff’s Strategic Opportunity Matrix
Present Product
New Product
Present
Market
Market
Penetration
Product
Development
New
Market
Market
Development
Diversification
Online
www.westernunion.ca
6
Chapter 2
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44
Selecting a Strategic Alternative
Philosophies
Profitability
Market Share
Online
www.clearly.ca
6
Chapter 2
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45
Review Learning Objective 6
Identify strategic alternatives
Market development
=
customers
Market penetration
=
share
Product development
=
products
=
new products
new markets
Diversification
6
Chapter 2
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46
Learning Objective
7
7
Discuss target
market strategies
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47
Marketing Strategy
Marketing Strategy
The activities of selecting and describing
one or more target markets and developing
and maintaining a market mix that will
produce mutually satisfying exchanges with
target markets.
7
Chapter 2
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48
Target Market Strategy
7

Segment the market based on
groups with similar
characteristics

Analyze the market based on
attractiveness of market
segments

Select one or more target
markets
Chapter 2
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49
Target Market Strategies
Appeal to the entire market
with one marketing mix
Concentrate on one
marketing segment
Appeal to multiple markets
with multiple marketing mixes
7
Chapter 2
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50
Review: Target marketing strategies
Entire Market
Single Market
Multiple Markets
7
Chapter 2
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51
Learning Objective
8
8
Describe elements of
the marketing mix
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52
The Marketing Mix
Marketing Mix
A unique blend of product, distribution,
promotion, and pricing strategies
designed to produce mutually satisfying
exchanges with a target market.
8
Chapter 2
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53
Marketing Mix: The “Four Ps”
Price
Promotion
Place
Product
8
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Product Strategies
Product
 The starting point of the
“4 Ps”
 Includes physical unit,
package, warranty, service,
brand, image, and value
8
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55
Distribution (Place) Strategies
Place
 Product availability where
and when customers want
them.
 Involves all activities from
raw materials to finished
products
8
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56
Promotion Strategies
Promotion
 Role is to bring about
exchanges with target
markets
 Includes integration of
personal selling,
advertising, sales
promotion, and public
relations
Online
http://www.paramount.com
http://www.warnerbros.com
http://www.universalstudios.com
8
Chapter 2
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Pricing Strategies
Price
 The most flexible of the
“4 Ps”-- quickest to change
 Competitive weapon
 Price x Units Sold =
Total Revenue
8
Chapter 2
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58
Learning Objective
9
9
Explain why implementation,
evaluation, and control of the
marketing plan are necessary
Chapter 2
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59
Following Up the Marketing Plan

Implementation

Evaluation

Control
 Marketing Audit is…




9
Comprehensive
Systematic
Independent
Periodic
Chapter 2
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Review Learning Objective 9
Implementation
Evaluation
Product
Place
Promotion
Price
Met objectives?
Audits
•
•
•
•
9
Chapter 2
Copyright © 2009 by Nelson Education, Ltd. All rights reserved.
comprehensive
systematic
independent
periodic
61
Learning Objective
10
Identify several techniques that
help make strategic planning
effective
Online
http://www.youngbiz.com
10
Chapter 2
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Effective Strategic Planning
Continual
attention
Creativity
Management
commitment
Effective
Strategic
Planning
10
Chapter 2
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63