CHAPTER 2:
ELEMENTS OF
MARKETING
STRATEGY AND
PLANNING
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McGraw-Hill
Education
Part 1: Discover Marketing Management
Learning Objectives
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Examine the concept of value and the elements and role of
the value chain.
Understand the conditions required for successful marketing
planning, that marketing planning is focused on the value.
proposition, and that marketing planning is a dynamic process.
Identify various types of organizational strategies.
Conduct a situation analysis.
Use the framework provided for marketing planning, along
with the content in future chapters, to build a marketing plan.
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Value Is At
The Core Of Marketing
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
Value is a ratio of benefits to costs, as viewed from
the eyes of the beholder (the customer).
Form
utility
Place utility
Time utility
Ownership
utility
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Value Is At
The Core Of Marketing
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

Value proposition is the firm’s communication of the
unique value of its products to its customers.
The value message may include the whole bundle
of benefits the company promises to deliver – not
just the benefits of the product itself.
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Value Is At
The Core Of Marketing
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
A firm’s value proposition must be strong enough
to move customers past satisfaction.
Customer
Satisfaction
Customer Loyalty
Customer Retention
Customer Switching
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Value Is At
The Core Of Marketing
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
The Value Chain
serves as a
means for firms
to identify ways
to create,
communicate,
and deliver
more customer
value within a
firm.
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EXHIBIT
2.1
Porter’s Value Chain
Support
Activities
Primary Activities
Source: Michael E. Porter, Competitive Advantage (New York: Simon & Schuster, 1985).
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Value-Creating Activities
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
Primary activities
Inbound Logistics
Operations
Outbound Logistics
Marketing and Sales
Service
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Value-Creating Activities
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
Support activities
Firm Infrastructure
Human Resource Management
Technology Development
Procurement
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Marketing Planning
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
Marketing planning is the ongoing process
of developing and implementing marketdriven strategies for an organization.
The resulting document
that records the
marketing planning
process in a useful
framework is the
marketing plan.
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Marketing Planning Is Both
Strategic And Tactical
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Marketing (Big M) serves as a core driver
of business strategy.
 marketing (little m) represents the
specific programs and tactics aimed at
customers and other stakeholder
groups.

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For Effective
Marketing Planning
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

Everyone in an
organization must
understand and support
the concept of customer
orientation.
All internal organizational
processes and systems
must be aligned around
the customer.
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Framework for
Marketing Planning
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
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Marketing plan is connected to the firm’s business
plan
Conduct a situation analysis
Perform any needed market research
Establish marketing goals and objectives
Develop marketing strategies
Marketing mix strategies
Develop implementation plans
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Connecting the Marketing
Plan to the Firm’s Business
Plan
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
Market-driven strategic planning is often
used to describe the process at the
corporate or strategic business unit
(SBU) level of marshaling the various
resource and functional areas of the firm
toward a central purpose around the
customer.
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Elements Of
Marketing Planning
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
Portfolio analysis views SBUs and
sometimes even product lines as a series
of investments from which it expects
maximization of returns.
 Boston
Consulting Group (BCG) GrowthShare Matrix
 GE Business Screen
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EXHIBIT
2.3
Boston Consulting Group Growth-Share Matrix
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EXHIBIT
2.4
GE Business Screen
Market Attractiveness
High
Low
Invest/
Grow
Med
Med
Selective
Investment
Low
Business Position
High
Harvest/
Divest
“GE Business Screen,” Business Resource Software Online, www.brs-inc.com/pwxcharts.asp?32, accessed May 16, 2008.
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Elements Of
Marketing Planning
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
Marketing planning does not occur in a
vacuum
A
mission statement articulates an organization’s
purpose, or reason for existence.
 Most mission statements also include a discussion
of what the company would like to become in the
future – its strategic vision.
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Elements Of Marketing
Planning
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
Goals eventually become refined into specific,
measurable, and (hopefully) attainable objectives for
the firm.
Jet Blue’s goal “to fly
new planes” may be
refined into an
objective “to purchase
15 new aircraft over
two years”.
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Elements Of
Marketing Planning
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
Organizational Strategies
A
strategy is a comprehensive plan stating
how the organization will achieve its mission
and objectives.
 A firm’s generic strategy is its overall
directional strategy at the business level.
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Elements Of
Marketing Planning
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
Three primary categories
of competitive strategy:
1. Cost Leadership—
Low Cost
2. Differentiation
3. Focus (or Niche)
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Generic Business Strategies
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Growth
Retrenchment
Concentration
Generic
Business
Strategies
Stability
Diversification
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EXHIBIT
2.7
Competitive Strategy Options
Lower Cost
Differentiation
Broad Target
Cost Leadership
Differentiation
Narrow Target
Competitive Scope
Competitive Advantage
Cost Focus
Focus
Differentiation
Source: Michael E. Porter, Competitive Advantage (New York: Simon & Schuster, 1985).
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Elements Of
Marketing Planning
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Core competencies
 Distinctive competencies
 Sustainable competitive advantage

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Miles and Snow’s
Strategy Types
Prospectors
Reactors
Strategic
Types
Analyzers
Defenders
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Situation Analysis
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Political, Legal,
and Ethical
Socio-Cultural/
Demographic
Technological
Economic
Natural
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Situation Analysis
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Threat of new
entrants
Rivalry among
existing firms
Threat of
substitute
products
Bargaining
power of buyers
Bargaining
power of
suppliers
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EXHIBIT
2.9
Forces Driving Industry Competition
Potential entrants
(Threat of
mobility)
Supplier
(Supplier
power)
Industry
competitors
(Segment rivalry)
Buyers
(Buyer
power)
Substitutes
(Threat of
substitutes)
Source: Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (Boston: The Free Press, 1980).
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Situation Analysis
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Firm structure and
systems
Firm culture
Firm leadership
Firm resources
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Elements Of
Marketing Planning
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
Summarize the situation analysis into a SWOT
analysis:
A
convenient way to summarize key findings into a
matrix of strengths, weaknesses, opportunities, and
threats.
 Internal analysis reveals strengths and weaknesses,
while external analysis points to potential
opportunities and threats.
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EXHIBIT
2.10
SWOT Analysis Template
INTERNAL
FACTORS
(IFAS)
Strengths (S)
Weaknesses (W)
List 5–10 internal
strengths here
List 5–10 internal
weaknesses here
Opportunities (O)
S/O Based Strategies
W/O Based Strategies
List 5–10 external
opportunities here
Generate strategies here
that use strengths to take
advantage of opportunities
Generate strategies here
that take advantage of
opportunities by
overcoming weaknesses
Threats (T)
S/T Based Strategies
W/T Based Strategies
List 5–10 external
threats here
Generate strategies here
that use strengths to
avoid threats
Generate strategies here
that minimize weaknesses
and avoid threats
EXTERNAL
FACTORS
(EFAS)
Source: J. David Hunger and Thomas H. Wheelen, Essentials of Strategic Management, 4th ed. (Upper Saddle River, NJ: Prentice Hall, 2007).
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Elements Of
Marketing Planning
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
Additional Aspects of Marketing
Planning
Perform Any
Needed Market Research
Establish Marketing Goals and
Objectives
Goals
are qualitative
Objectives are quantitative
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Elements Of
Marketing Planning
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
Additional Aspects of Marketing
Planning
Develop
Marketing Strategies
Market
penetration strategies
Product development strategies
Market development strategies
Diversification strategies
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EXHIBIT
2.11
Product – Market Combinations
Product Emphasis
Existing
Markets
Market
Emphasis
New
Markets
Existing Products
New Products
Strategy =
Market
Penetration
Strategy =
Product
Development
Seek to increase
sales of existing
products to
existing markets
Strategy =
Market
Development
Introduce existing
products to new
markets
Create growth
by selling new
products in
existing markets
Strategy =
Diversification
Emphasize both
new products and
new markets to
achieve growth
Source: H. Igor Ansoff, The New Corporate Strategy (New York: John Wiley & Sons, 1988).
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Elements Of
Marketing Planning
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
Implementation Plan
Forecast
Budget
Appropriate Marketing Metrics
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ELEMENTS OF
MARKETING PLANNING
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
Marketing Control
 Process
of measuring marketing results and adjusting
the marketing plan as needed.

Action Plans
 Implementation
strategy that describes specific tasks
and the resources needed, who is responsible, and
metrics to track success.

Contingency Plans
 Plans
that can be implemented should something
happen that negates the viability of the marketing plan.
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TIPS FOR SUCCESSFUL
MARKETING PLANNING
1.
2.
3.
4.
5.
Stay flexible
Utilize input, but don’t become paralyzed by
information and analysis
Don’t underestimate the implementation part of
the plan
Stay strategic, but also stay on top of the tactical
Give yourself and your people room to fail and
try again
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Photo Credits
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 Slide
2-6: Sean Hunter/Getty Images; Steve
Hix/Corbis
 Slide 2-10: Image Source/Getty Images
 Slide 2-12: John Lund/Drew Kelly/Blend Images
 Slide 2-19: Getty Images
 Slide 2-21: McGraw Hill Companies (all)
 FedEx
Image Jill Braaten, photographer
 A&F image Andrew Resek, photographer
 Walmart image John Flournoy, photographer
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