MKTG 2 CHAPTER Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved Strategic Planning for Competitive Advantage 1 Strategic Planning Strategic Planning The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities. The goal is long-term profitability and growth. Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 2 Levels of Strategy Chapter 2 Corporate Level Business Unit Level • SBU’s Functional Level Operational Level Copyright ©2009 Cengage Learning Inc. All rights reserved. 3 Strategic Planning Marketing Plan A …………….that acts as a guidebook of marketing activities for the marketing manager. Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 4 Marketing Plan Elements Business Mission Statement Objectives Situation or SWOT Analysis Marketing Strategy Target Market Strategy Marketing Mix Product Distribution Promotion Price Implementation Evaluation Control Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 5 Step 1:Defining the Business Mission Answers the question, “What business are we in?” Focuses on the market(s) rather than the good or service Strategic Business Units (SBUs) may also have a mission statement Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 6 Business Mission Statement Q: What business are we in? A: Business mission statement Too narrow Too broad Just right Chapter 2 ……………………. no direction focus on markets served and benefits customers seek Copyright ©2009 Cengage Learning Inc. All rights reserved. 7 Marketing Plan Elements Business Mission Statement Objectives Situation or SWOT Analysis Marketing Strategy Target Market Strategy Marketing Mix LO1 Chapter 2 Product Distribution Promotion Price Implementation Evaluation Control Copyright ©2009 Cengage Learning Inc. All rights reserved. 8 Step 2: Defining objectives Marketing Objective A statement of what is to be accomplished through marketing activities. Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 9 LO3 Marketing Objectives Realistic Measurable Time specific Consistent with and indicating the priorities of the organization “Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction.” Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 10 Step 3: Situation or SWOT Analysis SWOT Analysis Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) LO4 Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 11 SWOT Analysis Internal External Chapter 2 S W O T …………………………………………. Things the company does not do well. Conditions in the external environment that favor ……………... Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness. ©South-Western College Publishing Copyright ©2009 Cengage Learning Inc. All rights reserved. 12 A strength could be: ? Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 13 A weakness could be ? Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 14 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. LO4 Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 15 An opportunity could be ? Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 16 A threat could be ? Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 17 Step 4: Marketing Strategy Marketing Strategy LO7 Chapter 2 The activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets. Copyright ©2009 Cengage Learning Inc. All rights reserved. 18 Identifying opportunities through STP Segmentation …………………… Positioning Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 19 Competitive Advantage Competitive Advantage Chapter 2 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. Copyright ©2009 Cengage Learning Inc. All rights reserved. 20 Competitive Advantage: Is there ever no competition? Cost Types of Competitive Advantage Product/Service Differentiation Niche Strategies Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 21 Cost Competitive Advantage Cost Competitive Advantage Chapter 2 Being the low-cost competitor in an industry while maintaining satisfactory profit margins. Copyright ©2009 Cengage Learning Inc. All rights reserved. 22 Product/Service Differentiation Product/Service Differentiation Competitive Advantage Chapter 2 The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s. Copyright ©2009 Cengage Learning Inc. All rights reserved. 23 Niche Competitive Advantage Niche Competitive Advantage The advantage achieved when a firm seeks to target and effectively serve a small segment of the market. Twitter or Facebook? Chapter 2 Copyright ©2009 Cengage Learning Inc. All rights reserved. 24 Sources of Sustainable Competitive Advantage Patents Copyrights Locations Equipment Technology Skills and Assets of an Organization Chapter 2 Customer Service Promotion Copyright ©2009 Cengage Learning Inc. All rights reserved. 25 Growth Strategies Market development = Market penetration = Product development = Diversification 6 Chapter 2 = ________ share ________ new products new markets Copyright ©2009 Cengage Learning Inc. All rights reserved. 26 Portfolio Matrix Chapter 2 Stars Problem Children Cash Cows Dogs Copyright ©2010 Cengage Learning Inc. All rights reserved 27 Target Market Strategies Target Market Options Entire Market Chapter 2 Multiple Market Segments Copyright ©2010 Cengage Learning Inc. All rights reserved Single Market Segment 28 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. Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 29 Marketing Mix: The “Four Ps” The starting point of the “4 Ps” Includes Physical unit Package Warranty Service Brand Image Value Chapter 2 Product Products can be… Tangible goods Ideas Services Copyright ©2010 Cengage Learning Inc. All rights reserved 30 Marketing Mix: The “Four Ps” Product availability where and when customers want them Place All activities from raw materials to finished products Ensure products arrive in usable condition at designated places when needed Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 31 Marketing Mix: The “Four Ps” Role is to bring about exchanges with target markets by: Informing Educating Persuading Reminding Includes integration of: Personal selling Advertising Sales promotion Public relations Chapter 2 Promotion Online Copyright ©2010 Cengage Learning Inc. All rights reserved 32 Marketing Mix: The “Four Ps” Price is what a buyer must give up to obtain a product. Price The most flexible of the “4 Ps”-- quickest to change Competitive weapon Price x Units Sold = Total Revenue Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved 33 Step 5: Following Up on the Marketing Plan Implementation Evaluation Control Marketing audit is… Comprehensive Systematic Independent Periodic Chapter 2 Copyright ©2010 Cengage Learning Inc. All rights reserved Check Yourself Chapter 2 1. What are the five steps in creating a marketing plan? 2. What tool helps a marketer conduct a situation analysis? 3. What is STP? Copyright ©2010 Cengage Learning Inc. All rights reserved Check Yourself Chapter 2 1. What are the four growth strategies? 2. What type of strategy is growing the business from existing customers? 3. Which strategy is the riskiest? Copyright ©2010 Cengage Learning Inc. All rights reserved