2011-2012
© AP IMAGES/JENNIFER GRAYLOCK
Strategic Planning for
Competitive Advantage
The Nature of Strategic
Planning
Understand the
importance of strategic
marketing and know a
basic outline for a
marketing plan
LO1
Strategic Planning
Strategic Planning is…
the managerial process of creating
and maintaining a fit between the
organization’s objectives and
resources and the evolving
market opportunities.
The GOAL of strategic planning is long-term
profitability and growth.
Strategic Marketing
Management
How do companies go about strategic marketing planning?
How do employees know how to implement the long-term goals of the firm?
How will it reach its goals?
THE ANSWER IS A MARKETING PLAN.
LO1
What Is a Marketing Plan?
A Marketing planning delineates a company’s long term goals and
the strategies that will be used to achieve those goals. The strategies
used will impact product lines, distribution channels, communications
and pricing.
Planning /Market Planning
 the process of anticipating future events and
determining strategies needed to achieve the over all
marketing objectives within a changing market
environment in the future.
Marketing Plan

– a written document that acts as a guidebook
of marketing activities for the marketing
manager.
Writing a marketing plan allows
the examination of the marketing
environment in conjunction with
the inner workings of the
businesses. Once written it
serves as a reference point for
future activities, and allows the
marketing manager to enter the
marketplace with an awareness of
problems and opportunities.
Why Write a Marketing
Plan?
 Provides a basis for comparison of actual and expected
performance
 Provides clearly stated activities to work toward common
goals
 Provides an examination of the marketing environment
 Serves as a reference for the success of future activities
 Allows entry into the marketplace with awareness
Elements of a
Marketing
Plan
Business Mission
Statement
Situation or SWOT
Analysis
Objectives
Marketing Strategy
Are school districts a
Business? Do they use
A marketing plan? What
would a school’s
Marketing plan include?
Target Market
Strategy
Marketing Mix
Product
Distribution
Promotion
Price
Implementation
Evaluation
Control
Marketing Plan
Go to Dmusic.com
Create a sample summary
marketing plan as graphic
shown
Dmusic.com, an Internet start-up created
by a teenage entrepreneur which offers
various professional services for
independent musicians
divisionHS division
Writing the Marketing
Plan
A complete marketing plan can allow an
organization to achieve marketing
objectives…
HOWEVER
the marketing plan is only as good as the
information, effort, creativity and thought
put into it.
LO1
Defining the Business Mission
Develop an
appropriate business
mission statement
LO2
Defining the Business
Mission
 Answers the question,
“What business are we in?”
 Focuses on the market(s)
rather than the good or service
LO2
 Individual department within a major
company, called Strategic Business
Units (SBUs) may also have their
own mission statement
Mission Statement:
Ben & Jerry’s
1.
Product
1.
2.
To make, distribute and sell the finest quality all
natural ice cream and related products in a wide
variety of innovative flavors made from Vermont
Dairy products.
Economic
1.
3.
To operate the company on a sound financial basis
of profitable growth, increasing value for our
shareholders, and creating career opportunities
and financial rewards for our employees.
Social
1.
To operate the company in a way that actively
recognizes the central role that business plays in the
structure of society by initiating innovative ways to
improve the quality of life of a broad community—
local, national, and international.
Conducting a Situation Analysis
Describe the
components of a
situation analysis
LO3
SWOT Analysis
Internal
External
LO3
S
W
O
T
Strengths - things the company does
well.
Weaknesses - things the company
does not do well.
Opportunities - conditions in the
external environment that favor
strengths.
Threats - conditions in the external
environment that do not relate to
existing
strengths or favor areas of
©South-Western College Publishing
current weakness.
Components of a SWOT
Analysis
Examining internal strengths and weaknesses.
Focus on organizational resources:
• Production costs
• Marketing skills
• Financial resources
• Company or brand image
• Employee capabilities
• Technology
LO3
SWOT
• Internal strengths and weaknesses focus
on production costs, financial resources
brand image, technology, employee
capabilities.
• Ex. Dell ‘s stock has fallen 42% SINCE
2007, so what should management look
at? What are Dell’s strengths? It’s
weakness?
• Look at their strength and weakness in the
company and its competition
• Dell has a $6 billion server business
STRENGHT
• But the shrinking PC part of their business
accounts for 24% of their sales revenue
• this is a WEAKNESS part of the company
• Were will Dell find growth opportunities for
the compay?
Environmental forces that
Help identify opportunities and threats before starting
Designing a marketing strategy is based
on six major environmental forces:
• Social
• Economic
• Technological
• Political/Legal
LO3
• Competitive
© AP IMAGES/PRNEWSFOTO/PEPSICO
• Demographic
• How many of you drink vitamin water, owned
by Coca-cola?
• Pepsi trying to break into the water market with
Sobe lifewater had to hire Tom Silk a web savvy
• Marketer who make Guitar Hero famous,
refocused Lifewater marketing to target the
youth who love viral marketing, Sobe water tests
• Television ads on Youtube before airing them.
• The strategy worked and doubled Sobe lifewater
market share
Setting Marketing
Plan Objectives
Explain the criteria
for stating good
marketing objectives
LO4
Marketing Objectives
should be:
 Realistic
 Measurable
 Time specific
 Compared to a benchmark
“Our objective is to achieve 10
percent dollar market share in
the cat food market within 12
months of product introduction.”
LO4
Criteria used when developing
Good Marketing Objectives
Ask your self if the following statements are true about your
company objectives:
1. Marketing management philosophy is communicated
2. Management direction is outlined
3. Provision for Employee Motivation is included
4. Force executives to clarify their thinking
5. Form a basis for control
LO4
Competitive Advantage
Identify sources
of competitive
advantage
LO5
Competitive Advantage or
edge
Competitive
Advantage
LO5
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.
Areas of Competitive
Advantage
What makes your
Product better
Or different
So customers
Keep buying
Cost
Types of
Competitive
Advantage
Product/Service
Differentiation
Niche
LO5
Cost Competitive
Advantage is achieved by:
 Inexpensive raw materials
 Creating efficient scale of plant
operations
 Design products for ease of
manufacturing
 Control overhead costs
 Avoid marginal customers
LO5
Areas where Cost
Reduction can be made
Experience with a product
Brings cost down, in mkt, manuft.
Experience
Curves
And administration
OutsourcingLabor
to???
Efficient
No-frills Products
Government Subsidies
Product Design
Reengineering
Reducing product line
Production Innovations
New Service
Delivery Methodsmedical field, on-line magazines
LO5
Do on line vocabulary
Product/Service Differentiation
Competitive Advantage
A Product/Service Differentiation
Competitive Advantage is…
the provision of something that is
unique and valuable to buyers beyond
simply offering a lower price than that
of the competition.
LO5
How do you create product
differentiation through?
Lexus
 Brand names
Caterpillar-construction
 Strong dealer network
Maytag
 Product reliability
 Image
 Service
LO5
BMW
Fed-ex
Product/service
Differentiation provides
Longer lasting
Competitive advantage
long term
Than cost competitive
advantage
Niche Competitive
Advantage
 Used by small companies with limited resources
 May be used in a limited geographic market
 Identify a product or products that you feel have
a “niche” market
 How can a small bookstore compete with
Barnes & Noble or Amazon.com?
LO5
Building Sustainable
Competitive Advantage
 Sustainable competitive advantage is an
advantage that cannot be copied by the
competition.
 A firm that has successfully achieved a
competitive advantage will stake out a position
unique in some manner from its rivals.
 Netflix over blockbuster, Tylenol over detail
LO5
Sources of Sustainable
Competitive Advantage
How long can a
Company maintain
A competitive
Advantage?
Patents
Copyrights
Locations
Equipment
Technology
Skills and Assets
of an
Organization
LO5
Customer Service
Promotion
Strategic Directions
Identify strategic
alternatives
LO6
LO6 Strategic Alternatives to gain
competitive advantage
Ex. Manufacturers
use coupons
Market
Penetration
Increase market share among
existing customers
Expansion into global mk
McDonalds, Coco-cola,
Pepsi
Market
Development
Product
Development
Diversification
Attract new customers to
existing products
Create new
products for
present markets
McDonald’s introduces yogurt
parfaits,
salads, and fruit to offer customers m
healthy options.
Introduce new products
into new markets CVS, launched Beauty 36
Stores premium cosmeti
Ansoff’s Strategic Opportunity
Matrix
Market Penetration Increase market share among existing customers
Market Development Attract new customers to existing products
Product Development Create new products for present markets
Diversification Introduce new products into new markets
LO6
Selecting a Strategic
Alternative by product
Star
Cash Cow
Product
classifications
Problem child
LO6
Dog
1.A star is a fast-growing market leader. Stars
usually have large profits but need cash to
finance growth.
2.A cash cow generates more cash than it needs
to maintain market share. It is in a low-growth
market, but the product has dominant market
share
3.A problem child shows rapid growth but poor
profit margins. It has a low market share in a
high-growth industry. It needs a great deal of
cash to prevent conversion to dog status.
4.A dog has low growth potential and a small
market share. Most dogs leave the market. The
strategy options are to divest or harvest.
Strategies
Build
If a product has the potential to be a star,
building would be an appropriate goal
Hold
Harvest
Divest
LO6
If a product is a cash cow goal is to
Preserve market share
Take the money and run not
Used for stars
Get rid of your problem children
And dogs
Describing
the Target Market
Discuss target
market strategies
LO7
Describing the Target
Market
Marketing Strategy
involves…
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.
Marketing Opportunity Analysis
(MOA) involves…
LO7
the description and estimation of the size and sales
potential of market segments that are of interest
to the firm and the assessment of key competitors
in these market segments.
Target Market Strategy
• Segment the market based on
groups with similar characteristics
• Analyze the market based on
attractiveness of market segments
• Select one or more target markets
LO7
Target Market Strategy
Appeal to the entire market
with one marketing mix
Concentrate on one
marketing segment
Appeal to multiple markets
with multiple marketing mixes
LO7
The Marketing Mix
Describe the
elements of the
marketing mix
LO8
The Marketing Mix
The Marketing Mix is…
a unique blend of product, place (distribution),
promotion, and pricing strategies designed to
produce mutually satisfying exchanges with a
target market.
The elements of the marketing mix
are often referred to as the
“Four Ps”
LO8
Marketing Mix:
The “Four Ps”
The starting point of
the “4 Ps” Includes:
LO8
Physical unit
Package
Warranty
Service
Brand
Image
Value
Product
Products can be…
 Tangible goods
 Ideas
 Services
Marketing Mix:
The “Four Ps”
Place
Product availability where and
when customers want them
All activities from raw materials to
finished products
LO8
Ensure products arrive in usable
condition at designated places
when needed
Marketing Mix:
The “Four Ps”
Includes integration of:
Promotion
Advertising
Public relations
 Role is to bring about
Sales promotion
exchanges with target
Personal selling
markets by:
 Informing
 Educating
 Persuading
 Reminding
LO8
Marketing Mix:
The “Four Ps”
Price
Price is what a buyer must give up to
obtain a product.
The most flexible of the
“4 Ps”—quickest to change
Competitive weapon
Price x Units Sold = Total Revenue
LO8
Following Up on
the Marketing Plan
Explain why
implementation,
evaluation, and control
of the marketing plan
are necessary
LO9
Following Up on
the Marketing Plan
 Implementation
 Evaluation and Control
 Marketing audit is…




LO9
Comprehensive
Systematic
Independent
Periodic
Effective Strategic Planning
Identify several
techniques that help
make strategic
planning effective
LO10
Techniques for Effective
Strategic Planning
Continual
attention
LO10
Creativity
Effective
Strategic
Planning
Management
commitment