Chapter 2
Strategic Planning
and the Marketing
Process
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Objectives
1. Distinguish between strategic planning and
tactical planning.
2. Explain how marketing plans differ at various
levels in an organization.
3. Identify the steps in the marketing planning
process.
4. Describe the concept of a SWOT analysis and
its major elements.
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Objectives
5. Discuss how a strategy can be implemented
through marketing plans.
6. Identify the basic elements of a marketing
strategy.
7. Describe the environmental characteristics
that influence strategy decisions.
8. Explain how the strategic business unit
concept, the market share/market growth
matrix, the market attractiveness/business
strength matrix, and spreadsheet analysis can
be used in marketing planning.
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Planning
 The process of anticipating future events and
conditions and determining the best way to
achieve organizational objectives.
 A continuous process that includes identifying
objectives and includes checkpoints.
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Plans Formulated Within the
Marketing Organization
 Product lines.
 Pricing decision.
 Selection of appropriate
distribution channels.
 Promotional campaigns.
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Planning helps us hit
what we aim for.
A portfolio of products
has helped Kraft
obtain the position of
market leader.
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Strategic Planning
• The process of determining an organization’s
primary objectives.
• Adopting courses of action that include
allocation of necessary resources.
• Typically longer term.
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Tactical Planning
• Guides the implementation of activities
specified in the strategic plan .
• Typically address shorter-term actions.
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Planning at Different Management Levels
Management Level
Types of Planning
Emphasized
at This Level
Examples
Top Management
Board of directors
Chief executive officer (CEO)
Chief operating officer (COO)
Divisional vice presidents
Strategic planning
Organization-wide objectives;
fundamental strategies; longterm plans; total budget
Tactical planning
Quarterly and semi-annual
plans; divisional budgets;
divisional policies and
procedures
Operational planning
Daily and weekly plans; unit
budgets; departmental rules and
procedures
Middle Management
General sales manager
Marketing research manager
Advertising director
Supervisory Management
District sales manager
Supervisors in staff
Marketing departments
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The Strategic Planning Process
• Define the mission
• Determine the objectives
• Assess Resources
– (SW)
• Evaluate environmental risks and opportunities
– (OT)
• Formulate a marketing strategy (target mkt/4P)
• Implement thru marketing plans
• Gather feedback and adapt
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Marketing Strategy and Consumer
Behavior
1-1
Outcomes
Individual
Firm
Society
Consumer decision process
Problem Recognition
Information Search
Alternative Evaluation
Purchase
Use
Evaluation
Marketing strategy
Product, Price, Distribution,
Promotion, Service
Marketing segmentation
Identify product-related need sets
Group Customers with similar need sets
Describe each group
Select attractive segment(s) to target
Marketing analysis
Company
Competitors
Conditions
Consumers
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Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights
reserved.
Mission
• The essential purpose that differentiates the
company from others.
• Specifies the organization’s overall goals and
operational scope.
• Provides general guidelines for future
management actions.
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SWOT Analysis
• An important strategic planning tool.
• Helps planners to compare internal
organizational strengths and weaknesses.
• Acronym for
– Strengths
– Weaknesses
– Opportunities
– Threats
• Provides managers with a critical view of the
organization’s internal and external
environments.
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SWOT
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Elements of a Marketing Strategy
Basic elements of a marketing strategy consist of:
1. The target market
2. The marketing mix variables of:
 product
 distribution
 promotion
 price
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Marketing Mix
Product Strategy
• Deciding what goods or services the firm should
offer to a group of consumers.
• Includes making decisions about
– Customer service
– Package design
– Brand names
– Trademarks
– Patents
– Warranties
– Life cycle of a product
– Positioning the product in the marketplace
– New product development
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Marketing Mix
Distribution Strategy
• Ensures that consumers find their products in
the proper quantities at the right times and
places.
• Involves:
– modes of transportation
– warehousing
– inventory control
– order processing
– selection of marketing channels
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Marketing Mix
Promotion Strategy
• The Communication link between sellers and
buyers
– Communicate messages directly through
salespeople or indirectly through
advertisements and promotions.
– Companies use an approach called
integrated marketing communications (IMC)
so the consumer receives a unified and
consistent message.
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Marketing Mix
Pricing Strategy
– Methods of setting profitable and justifiable
prices.
– Closely regulated and subject to
considerable public scrutiny.
– A major influence is competition.
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Strategic Business Units (SBUs)
SBUs are key business units within diversified
firms.
• Each SBU
– has its own managers, resources,
objectives, and competitors.
– pursues its own distinct mission.
– develops its own plans independently.
– focuses the attention of company
managers so that they can respond
effectively to changing consumer
demand.
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The Sponsor of this Advertisement is 7UP
7UP is a SBU of the Dr Pepper/Seven-Up Companies, Inc.
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Source:http://www.tsha.utexas.edu/handbook/online/articles/view/DD/did1.html
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Market Share / Market Growth Matrix
A four-quadrant chart that plots market share—the percentage of
a market that a firm controls—against market growth potential.
Relative Market Share
High
Low
Industry Growth Rate
High
Low
Stars
Question Marks
Generate considerable income
Have potential to become stars or cash
cows
Strategy: Invest more funds for future
growth
Strategy: Either invest more funds for
growth or consider disinvesting
Cash Cows
Dogs
Generate strong cash flow
Generate little profits
Strategy: Milk profits to finance growth
of stars and question marks
Strategy: Consider withdrawing
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Market Attractiveness/
Business Strength Matrix
• Rates SBUs according to the attractiveness of their
markets and their organizational strengths.
• Marketing attractiveness criteria include:
– Market share
– Growth
– Size
– Stability
– Potential profitability
– Extent of government regulations
– Potential environmental and social impact
– Competitive conditions
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Summary
• Discussion has centered around:
– Strategic and tactical planning
– Planning at different organizational
levels
– The planning process
– SWOT
– Planning tools available
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