Kotler, Armstrong
Principles of Marketing 4e
Chapter 2
Strategic Marketing and Planning
Chapter Objectives
1. Explain strategic planning.
2. Describe the marketing management and
planning process.
3. Identify the sections of a marketing plan and
specify the contents of each section.
4. Discuss the development of marketing
strategy and its implementation.
5. Explain the ways in which marketing
organisations control and evaluate their
marketing performance.
Marketing Process
• The process of analysing marketing
opportunities, researching and selecting
target markets, designing market
strategies, planning marketing programs,
implementing (including organising) and
controlling the marketing effort.
Strategic Planning
• Most organisations operate according to formal
plans.
• Managers are often too busy and have no time for
planning.
• Planning can help make sense of a changing
environment.
• Organisations failing to plan are planning to fail.
• The need for flexibility has led to a resurgence in the
process of scenario planning.
Strategic Planning
• The process of developing and
maintaining a strategic fit between the
organisation’s goals and capabilities in the
light of changing marketing opportunities.
• It relies on developing a clear:
– Company mission
– Objectives
– Sound Business Portfolio
– Coordinated Functional Strategies
Strategy Hierarchy
1. Corporate Strategy level
2. Strategic Business Unit (SBU) Level
3. Functional Level of SBU (eg Marketing
Strategy)
Figure 2.1 The Strategy Hierarchy
Marketing Management and
Planning
• This involves four levels of decision making:
–
–
–
–
The corporate.
The divisional.
The business unit.
Product levels.
• The organisation’s head office is responsible for a
corporate strategic plan, each division develops a
divisional plan that cover the allocation of funds to
each SBU in the division.
• Marketing plans operate at two levels, the strategic
and tactical.
The company's overall mission and
objectives are defined by the:
A.
B.
C.
D.
E.
functional plan
strategic plan
marketing plan
customer analysis
CEO
Marketing or Business Plan?
• Marketing planning procedures and content
vary considerably among companies.
• The plan is variously called a ‘business plan’,
a ‘marketing plan’ and sometimes an
‘operating plan’.
Marketing or Business Plan?
• The business plan incorporates the plans of all
functions—production, R&D, finance, human
resources, IT and marketing.
1. The marketing plan has its focus on customer acquisition,
retention and the resources required. It include the
resources needed to implement specific marketing
functions (such as selling, advertising, sales promotion
and market research).
2. Most marketing plans cover one year, but some cover a
few years.
3. Plans vary in their length from under ten pages to over 50.
4. Frequently cited shortcomings of marketing plans, are lack
of realism, insufficient market and competitive analysis and
a short-run focus.
Figure 2.2 Analysis, Planning,
Implementation and Control
Table 2.1 Contents of a Marketing
Plan
The Nature and Contents of a
Marketing Plan
Executive Summary
– The marketing plan should open with a brief
summary of the plan.
– This executive summary is aimed at the
senior management to enable them to grasp
quickly the plan’s major thrust, its goals and
recommendations.
– The summary should be no more than one
page long.
The Nature and Contents of a
Marketing Plan
Current marketing situation
– This section presents relevant background
data on the target market, product,
competition, distribution and the macroenvironment.
– The data are drawn from a product fact book
or database maintained by the product
manager.
The Nature and Contents of a
Marketing Plan
• Product Situation
– This states the sales, product prices, contribution margin and
profits for past years.
• Competitive Situation
– Identify and describe the main competitors in terms of size,
goals, market share, product quality, marketing strategies and
other characteristics.
• Distribution Situation
– This presents data on the size and importance of each marketing
(distribution) channel.
• Macro-environment Situation
– A brief summary of the broad macro trends-demographic,
economic, technological, political/legal and sociocultural that
affect the product line’s future.
The Nature and Contents of a
Marketing Plan
Opportunity and issue analysis
– After summarising the current marketing
situation, the product manager proceeds to
identify the major:
• Opportunities and threats,
• Strengths and weaknesses
• Issues analysis
The Nature and Contents of a
Marketing Plan
Objectives
– After the product manager has summarised
the issues involved with the product line, he or
she must decide on the plan’s objectives. Two
types of objectives must be set:
• Financial
• Marketing
The Nature and Contents of a
Marketing Plan
Marketing strategy
– The marketing logic by which the business
unit hopes to achieve its marketing objectives.
Marketing strategy consists of specific
strategies for target markets, marketing mix
and marketing expenditure level.
– The marketing strategy often comes after the
positioning strategy statement.
The Nature and Contents of a
Marketing Plan
Action programs
– The marketing plan must specify the broad
marketing programs designed to achieve the
business objectives. Each marketing strategy
element must now be elaborated to answer:
•
•
•
•
What will be done?
When will it be done?
Who will do it?
How much will be spent?
The Nature and Contents of a
Marketing Plan
Projected profit-and-loss statement
– Action plans allow the product manager to
build a supporting budget.
• On the revenue side, this budget shows the
forecast sales volume in units and the average price.
• On the expense side, it shows the cost of production,
physical distribution and marketing broken down into
finer categories. The difference between revenues and
sales is the projected profit.
Action programs outline:
A.
B.
C.
D.
E.
what will be done
when it will be done
who will do it
how much will be spent
all of the above
The Nature and Contents of a
Marketing Plan
Controls
– This section outlines the controls for monitoring the plan’s
progress. Typically, the goals and budget are spelled out
for each month or quarter.
– Senior management can review the results of each period
and identify businesses that are not attaining their goals.
– Managers of lagging businesses must explain what is
happening and the actions they will take to improve plan
fulfillment.
– A contingency plan outlines the steps that management
would take in response to specific adverse developments.
The purpose of contingency planning is to encourage
managers to think about difficulties that might lie ahead.
The Nature and Contents of a
Marketing Plan
• Analysing market opportunities
– Requires a reliable marketing information system.
– This is includes market research to gather
information about the marketing environment
(macro and micro).
– Requires understanding of consumer markets.
– Requires close attention to competitors.
Evaluating the Marketing Plan
•
How does your marketing plan measure up? Before implementing the
marketing plan it can be useful to evaluate it by answering the following
questions:
– Do your marketing objectives relate directly to the company’s strategic
initiatives?
– Do your marketing objectives relate directly to what you learned in your
situational analysis?
– Do your marketing objectives relate directly to the capacity of your
current marketing mix to handle them?
– Do your marketing objectives relate directly to your business’s strengths
and to the opportunities available?
– Do your marketing objectives relate directly to your business’s
weaknesses and to the threats that endanger it?
Evaluating the Marketing Plan
– Are your marketing objectives clear, measurable
statements of what is to be achieved?
– Do your marketing objectives, strategies and tactics relate
to each other?
– Does each strategy in your marketing plan contain a
cost/benefit evaluation?
– Is every person involved in implementation included in the
marketing planning process in some way?
– Is the plan clearly visible on your desk every day?
– Is your business’s vision truly a ‘shared vision’?
If you can answer all these questions
positively you have a powerful marketing plan
ready for implementation.
Implementing Marketing Plan
• Marketing implementation is the process that turns
marketing strategies and plans into marketing
actions in order to accomplish strategic marketing
objectives.
• Implementation involves day-to-day, month-to-month
activities that effectively put the marketing plan to
work.
• Whereas marketing planning addresses the:
– what and why of marketing activities,
– implementation addresses the who, where, when and how
Reasons For Poor Implementation of
Marketing Plans
• Isolated Planning
• Trade-offs Between Long and Short Term
Objectives
• Natural Resistance To Change
• Lack of Financial and Marketing
Integration
• Overemphasis on the Document
Factors For Successful
Implementation
• Action program that pulls all the people and
activities together.
• Formal organisation structure.
• A company’s decision and reward systems
(operating procedures that guide planning,
budgeting, remuneration and other activities).
• Careful human resources planning.
• Marketing strategies must fit with its company
culture.
Company culture is a system of values and beliefs
shared by people in an organisation—the company’s
collective identity and meaning.
Figure 2.3 Functional Organisation
Figure 2.4 Geographic
Organisation
Figure 2.5 Project Management
Organisation
Table 2.3 Possible Future Scenarios
for Brand Management
Controlling and Evaluating
Performance
• Marketing control is the process of measuring and
evaluating the results of marketing strategies and
plans, and taking corrective action to ensure that
marketing objectives are attained.
• Operating control involves checking ongoing
performance against the annual plan and taking
corrective action when necessary.
• Strategic control involves looking at whether the
company’s basic strategies are well matched to its
opportunities.
Controlling and Evaluating
Performance
• Marketing Audit is a comprehensive,
systematic, independent and periodic
examination of a company’s strategies and
activities to determine problem areas and
opportunities and to recommend a plan of
action to improve the company’s
marketing performance.
Figure 2.6 The Control Process
Which of the following is not part of
a corporate strategy?
A. mission and vision
B. objectives
C. resource deployment
D. tactics
E. corporate values