Strategic
Marketing Planning:
How Do We Get There
From Here?
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Where are you now?
Where do you want to go?
How will you get there?
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Where are you on the map?
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Gainesville
Drive or fly
Alone or with others
What to pack
Etc., etc.
Make a list of the things you need to do
before leaving
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Why do you want to go there?
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How will it look when you arrive?
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What are your expectations ?
Business? Personal? Beach? Shopping?
Big buildings? A river? Expressways?
Productive? Fun? Exciting? Relaxing?
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Fastest route?
Shortest route?
Most scenic
route?
Best route to
the beaches?
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Highest average
speed
Fewest delays
Least traffic
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Identify your
waypoints
before starting
your trip
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Be Prepared For Detours,
But Avoid Side Roads
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STRATEGIC PLANNING
 Managerial process that helps to develop a strategic and
viable fit between the firm’s objectives, skills, resources
with the market opportunities available. It helps the firm
deliver its targeted profits and growth through its
businesses and products.
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MARKETING PLAN
 Central instrument for directing and coordinating the
marketing effort.
STRATEGIC MARKETING PLAN
 Lays out the target markets and the value proposition
that will be offered, based on analysis of the best market
opportunities.
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IMPORTANCE / BENEFITS OF STRATEGIC MARKETING PLAN
Melville Branch lists the planning benefits as follows:
i. Planning encourages systematic thinking ahead
ii. It leads to a better coordination of company efforts
iii. It leads to the development
control
of performance standards for
iv. It causes the company to sharpen its guiding objectives and
policies
v. Its result in better preparedness for sudden developments
vi. It bring about a more vivid sense in the participating
executives of their interacting responsibilities
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Steps in Strategic Planning
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How to go about it?
 Defining
the corporate mission
 Establishing
 Allocating
 Planning
SBUs
resources for SBUs
for new business
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Corporate Mission
 This
seeks to embody the entire goals of
the organization and the objective of its
existence.
 It seeks to provide a sense of purpose,
direction and opportunity.
 Define the business domain in which the
organizational will operate.
 Business domain can be defined in terms
of products, technologies, customer
group, customer needs or some
combinations.
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5 questions that the firm
must ask itself
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What is our business?
Who is our customer?
What does our customer need?
What will our business be?
What should our business be?
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Good mission statements
have three characteristics
 They
focus on a limited number of goals
 It stresses the major values and policies
the firm desires
 It defines the major competitive scope of
operation
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Major Competitive
 Industry
 Products and application
 Competence
 Market-segment
 Vertical
 Geographic
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Major Competitive
 Industry
• the range of industries in which a company will operate.
• some companies will operate in only one industry; some only in
a set of related industries; some only in industrial goods, consumer
goods or services and some in any industry.
• Example; Siam Cement prefers to operate in the industrial market,
Jollibee concentrates on the consumer market and Matsushita operates
in both industrial and consumer market.
 Products and application
• the range of products and applications a company will supply.
• Sony, Panasonic and Samsung sell electronics from home
entertainment devices like television and DVD players to cell phones;
while Sharp concentrates only on household items like washing
machine and entertainment products but not cell phones.
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Major Competitive
 Competence
• the range of technological and other core competencies that a
company will master and leverage.
• Japan’s NEC has built its core competencies in computing,
communications and components to support production of laptop
computers, television receivers and handheld telephones.
 Market-segment
• the type of market or customers a company will serve.
• example; Porsche markets only expensive cars.
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Major Competitive
 Vertical
• the number of channel levels from raw material to find product and
distribution in which a company will participate.
• at one extreme are companies with a large vertical scope.
• example; Japanese production keiretsus, for instance comprise large
automakers such as Toyota and their suppliers.
 Geographic
• the range of regions, countries or country groups in which a
company will operate.
• at one extreme are companies that operate in a specific city or state.
• at the other are multinationals such as P&G and Sony, which operate
in many countries.
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Setting Company Objectives and Goals
The company’s mission needs to be turned into a
detailed set of supporting objective for each level
of management – management by objectives
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Hierarchy of objectives for the International Minerals and Chemicals
Corporation, Fertilizer Division
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Defining The Business
Industry is a customer satisfying process not a
goods producing process.
 It is important therefore how you redefine your
business.
 Example: Levitt encouraged companies to
redefine their business in terms of needs, not
product.
 Example: IBM redefined itself from a hardware
and software manufacturer to a “builder of
networks.”
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Defining The Business
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Target market definition: focus on selling a
product/service.
Strategic market definition: everyone who
might drink something to quench his/her
thirst.
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SBU
 It
is a company within a company
 The business is differentiated from the
rest of the company
 It has its own set of competitors
 It is a separate profit centre
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Designing The Business Portfolio
Guided by company’s mission statement and objectives, management must
now decide what collection of business and products (business portfolio)
will best fit the company’s strengths and weaknesses to opportunities in its
environment. It must:
i. Analyze the current business portfolio and decide which business
should receive more or less emphasize and resources.
ii. Develop growth strategies for adding new products or businesses to the
portfolio
Business Portfolio Analysis
The major tool in strategic planning to evaluates the business making up
the company
Identify the key businesses making up the company (the Strategic Business
Units – SBUs)
a) Boston Consultant Group (BCG) approach
b) General Electric (GE) approach
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The Boston Consultant Group (BCG) Growth-Share Matrix
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The Boston Matrix

The Boston Matrix:
 A means of analysing the product portfolio and
informing decision making about possible
marketing strategies
 Developed by the Boston Consulting Group – a
business strategy and marketing consultancy in
1968
 Links growth rate, market share and cash flow
What do
these terms mean?
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The Boston Matrix - STARS
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Products in markets experiencing high growth
rates with a high or increasing share of the market.
They are typically cash using SBUs cause cash is
necessary to finance their rapid growth.
Eventually their growth will slow down, and they
will turn into cash cows and become major cash
generators supporting other SBUs.
Potential for high revenue growth
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The Boston Matrix – Cash Cows
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Cash Cows:
◦ High market share
◦ Low growth markets
– maturity stage of
PLC
◦ Low cost support
◦ High cash revenue –
positive cash flows
◦ Uses to pay its bills
and support other
SBUs that are cash
using
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The Boston Matrix - Dogs

Dogs:
◦ Products in a low
growth market
◦ Have low or declining
market share (decline
stage of PLC)
◦ Associated with
negative cash flow
◦ May require large
Is your product starting to
sums of money to
embarrass your company?
support
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The Boston Matrix - ? Problem
child
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-
-
Question mark ???
Or Problem Child:
Products having a
low market share in a
high growth market
Need money spent to
develop them
May produce
negative cash flow Problem children – worth spending
good money on?
Potential for the
future?
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Stars – high growth, high share SBUs. They are typically cash using SBUs cause cash
is necessary to finance their rapid growth. Eventually their growth will slow down,
and they will turn into cash cows and become major cash generators supporting
other SBUs
Cash cows – low growth, high share SBUs. They produce a lot of cash that the
company uses to pay its bills and support other SBUs that are cash using
Question marks – low share SBUs in high growth market. They require a lot of cash
to maintain their share, let alone increase it. Management has to think hard about
which question marks it should try to build into stars and which should be phased
down or out
Dogs – low growth, low share SBUs. They may generate enough cash to maintain
themselves but not promise to be large source of cash
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What stage of the Boston Matrix
are these at?
Put these onto a grid
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Boston Matrix Grid
Market Growth
Problem Children
Stars
Dogs
Cash Cows
High
Low
High
Market Share
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Boston Matrix Grid
Market Growth
Problem Children
Stars
Dogs
Cash Cows
High
Video
Low
High
Market Share
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FOUR ALTERNATIVES OBJECTIVES
Build – the objectives is to increase the SBUs market share, even forgoing short-term
earnings to achieve this objectives. Building is appropriate for question marks whose
share has to grow if they are to become stars
Hold – the objective is to preserve the SBUs market share. This objective is
appropriate for strong cash cows if they are to continue to yield a large positive cash
flow
Harvest – the objective is to increase the SBUs short-term cash flow regardless of the
long-term effect. This strategy is appropriate for weak cash cows whose future is
dim and from whom more cash flow is needed. It can also be used with question
marks and dogs
Divest – the objective is to sell or liquidate the business because resources can be
better used elsewhere. This is appropriate for dogs and for question marks that the
company cannot finance
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GE’s Strategic business-Planning Grid
The best businesses are those businesses located in a very attractive
industry in which the company has a high business strength.
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The diagram below illustrates some of the elements that determine industry
attractiveness and business strength / competitive on the UK market.
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Industry Attractiveness Index Factors
Market size – large market are more attractive than small market
Market growth rate – high growth market are more attractive than low growth market
Profit margin – high profit margin industries are more attractive than low profit
margin industries
Competitive intensity – industries with many strong competitor are less attractive
than industries with few weak competitors
Cyclicality – industries are less effected by the business cycle are more attractive than
highly cyclical industries
Seasonality – industries with less seasonal movement are more attractive than highly
seasonal industries
Scale economies – industries where unit costs fall with large plan size and
distribution are more attractive than constants cost industries
Learning curve - industries where unit costs fall as management accumulates
experience in production and distribution are more attractive than industries where
management has reached the limits of its learning
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The business strengths index factors
Relative market share – the higher the company’s market share, the greater its
business strengths
Price competitiveness – the higher the company’s price competitiveness, the
greater its business strengths
Product quality - the higher the company’s product quality’s competitiveness,
the greater its business strengths
Knowledge of customer/ market - the deeper the company’s knowledge of
customer, the greater its business strengths
Sales effectiveness - the greater the company’s sales effectiveness, the greater
its business strengths
Geography - the greater the company’s geographic advantages, the greater its
business strengths
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Assessing Growth Opportunities
1. planning new businesses,
2. downsizing, or
3. terminating older businesses.
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Assessing Growth Opportunities
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Assessing Growth Opportunities
1.
2.
3.
4.
INTENSIVE GROWTH
Integrative Growth
Diversification Growth
Downsizing and Divesting
Older Business
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Assessing Growth Opportunities
1. market-penetration strategy The
company first considers whether it could
gain more market share with its current
products in their current markets .
2. market-development strategy the
company considers whether it can find or
develop new markets for its current
products.
3. product-development strategy the
company considers whether it can
develop new products of potential interest
to its current markets
4. diversification strategy the company will
also review opportunities to develop new
products for new markets.
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Four market-product strategies: alternative ways to expand
sales revenues for Ben & Jerry’s
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Success Probability for each of the 4 basic
strategies:
Diversification strategy 1 in 20
Market-development Strategy is 1 in 4
Product-development strategy 50-50
Market-penetration is the highest
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Assessing Growth Opportunities/
Developing Growth Strategies
Involves determining future businesses and business directions the
company should consider.
Major Classes of Growth Opportunities
I. INTENSIVE GROWTH
II. INTEGRATIVE GROWTH
III. DIVERSIFICATION
GROWTH
A. Market penetration
A. Backward integration
A. Concentric diversification
B. Market development
B. Forward integration
B. Horizontal diversification
C. Product development
C. Horizontal integration
C. Conglomerate
diversification
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Assessing Growth Opportunities
Intensive growth – company has not fully exploited the opportunities
in its current products and market
• Market penetration – the company seeks increased sales for its
current products in its current market through more aggressive
marketing effort ex: increase purchase quantity, attract competitors’
customer and covert new prospects
• Market development – the company seeks increased sales by taking
its current products into new market (new geographical markets,
developing appropriate features and new institutional segments)
• Product development – the company seeks increased sales by
developing closely related new or improved products for its current
market (new and different product, create different regional version
or cassette version)
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Assessing Growth Opportunities
Integrative growth – makes sense if the industry is strong or the
company can gain by moving backward, forward or horizontally in
the industry. Three possibility exist
i. Backward integration – the company seeks ownership or
increased control of its supply systems
ii. Forward integration – the company seeks ownership or
increased control of its distribution systems
iii. Horizontal integration – the company seeks ownership or
increased control of some of its competitors
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Assessing Growth Opportunities
Diversification growth – makes sense if the industry does not present
much opportunity for further company growth or if the opportunities
outside the industry are superior. The company would identify fields
that make use of its distinctive competences of help it overcome
particular weaknesses. Three types of diversification strategies
i. Concentric diversification – the company adds new product that
have technological or marketing synergies with the existing
product line normally appeal to new classes of customer
ii. Horizontal diversification – the company adds new product that
could appeal to its current customer though unrelated to its
current product line
iii. Conglomerate diversification – the company adds new product
that have no relationship to its current technology, products or
market and appeal to new classes of customer
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Business Unit Strategic Planning

Strategic planning:
 Developing a strategic fit between
 organizational goals and capabilities, and
 changing marketing opportunities
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Business Unit Strategic Planning
Business Mission
 Each business unit needs to define its specific
mission within the broader company mission.
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Ben & Jerry’s: a SWOT analysis to get it growing again
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Strategic Business Planning
SWOT Analysis
Opportunities
and threats
stemming from
the external
environment
 Internal
strengths and
weaknesses

Monitoring key
forces for trends
 For each trend,
conduct an
MOA - Marketing
Opportunity
Analysis

Strategic Business Planning
SWOT Analysis
Opportunities
and threats
stemming from
the external
environment
 Internal
strengths and
weaknesses

Brand awareness,
image,
reputation
 Distribution,
pricing, customer
loyalty, product
benefits
 Finance, R&D,
manufacturing

Business Strategic Planning
Goal Formulation
 Develop specific goals for the planning period.
 Describe objective that are specific with
respect to magnitude and time.

Effective goals should be formulated so that
they are:
◦ Arranged hierarchically from broader to more
specific objectives
◦ Stated in quantitative terms
◦ Realistic
◦ Consistent with each other and the company
mission
Business Strategic Planning
Strategic Formulation

Strategy dictates the game plan for
achieving goals. Porter’s generic
strategies offer a starting point for
strategic thinking:
◦ Overall cost leadership
◦ Differentiation
◦ Focus
Business Strategic Planning
Program Formulation and Implementation

Program formulation and implementation
involves:
◦ Developing supporting programs
◦ Estimating implementation costs
◦ Carefully managing the details so
great strategy isn’t ruined by poor
implementation
Business Strategic Planning
Feedback and Control

Feedback and control is crucial
Product Planning: The Nature and
Contents of a Marketing Plan
 Contents of the Marketing Plan
 Executive Summary & Table of Contents
- brief summary of the main goals and
recommendations
- table of contents that outlines the rest of the
plan and all supporting rationale and
operational detail.
Product Planning: The Nature and
Contents of a Marketing Plan
 Contents of the Marketing Plan
 Situation Analysis
- relevant background data on sales, costs,
the market, competitors and the various
forces in the macro environment.
- carry out on a SWOT
 Marketing strategy
- defines the mission, marketing and financial
objectives.
Product Planning: The Nature and
Contents of a Marketing Plan
 Contents of the Marketing Plan
 Financial projections
- sales forecast, an expense forecast and a
break-even analysis.
 Implementation controls
- for monitoring and adjusting implementation
of the plan.
Product Planning: The Nature and
Contents of a Marketing Plan
 Sample Marketing Plan: Sonic Personal
Digital Assistant:
 Current Marketing Situation
 Opportunity and Issue Analysis
 Objectives
 Action Programs
 Financial Projections
Product Planning: The Nature and
Contents of a Marketing Plan
 Implementation Controls
 Marketing Strategy
 Positioning
 Product Management
 Pricing
 Distribution
 Marketing Communications
 Marketing Research
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