Module 2
Creating and Implementing MarketOriented Strategic Planning
Kotler’s Chapter 3 and 22
Chapter 3: Winning Markets:
Market-Oriented Strategic Planning
• Learning Objectives
– 1. Describe what is strategic planning on the corporate
level and the eight major steps involved in business
strategic planning.
– 2. Discuss the business portfolio techniques utilized in
assigning resources to SBUs.
– 3. Describe the strategic options available in planning
new businesses and downsizing older businesses.
– 4. Describe the value delivery sequence.
– 5. Describe what is involved in creating a mkting plan.
Chapter 3/Objective 1: Describe what is
strategic planning on the corporate level.
• Market-Oriented Strategic Planning - the managerial
process of developing and maintaining a viable fit between
the organization’s objectives, skills, and resources and its’
changing market opportunities. The aim is to shape the
company’s businesses so they yield target profits/growths.
• Corporate and Division Strategic Planning
–
–
–
–
Defining the corporate mission
Establishing strategic business units (SBUs)
Assigning resources to each SBU (Obj 2)
Planning new businesses, downsizing older businesses (Obj 3)
Chp 3/Obj 1: Describe what is strategic
planning on the corporate level cont.
• Defining the corporate mission
– Ask some fundamental questions as to what is
the business, why does it exist, whose needs is
firm trying to serve, what does firm value?
– Need to convey a shared sense of purpose and
direction to all stakeholders.
– Need to define competitive scope: industry,
product/applications, competence, marketsegment, vertical, and/or geographical scope.
Chp 3/Obj 1: The Eight Major Steps
in Business Strategic Planning
• 1. Business Mission - define specific mission
• 2. SWOT Analysis (2 steps)
– a.External Environment Analysis - Opportunity/Threats
• Marketing opportunity is an area of buyer need in which a
company can perform profitably (look at in terms of
attractiveness and success probability).
• Environmental threat is a challenge posed by an unfavorable
trend or development that would lead in the absence of
defensive marketing action to deterioration in sales/profits
(look at in terms of seriousness and probability of occurrence).
– b.Internal Environment Analysis-Strengths/Weaknesses
Chp 3/Obj 1: The Eight Major Steps
in Business Strategic Planning Cont.
• 3. Goal Formulation
– Goals state qualitative direction (ex. Increase Profits)
while Objectives are needed to quantify this direction
by stating the performance dimension from the goal, a
measure for evaluating progress, a benchmark and
target level, and a time frame (ex. Increase profits from
$1 million this year to $1.5 million at the end of next
year). Need both goals + objectives.
– These need to be arranged hierarchically (most important first), be
realistic, and consistent/compatible with each other.
Chp 3/Obj 1: The Eight Major Steps
in Business Strategic Planning Cont.
• 4. Strategic Formulation - Game plan to meet
goals/objectives
– Porter’s 3 types: cost leadership, differentiation,
focus/customer intimacy.
• 5. Program Formulation - Create action plans that
detail tactics that must be done for strategy.
• 6. Implementation - carry out plan
• 7. Feedback and Control - measure if plan
worked/objectives met, consider/track environment, and if
any changes to plan is needed.
Chp 3/Obj 2: Discuss the business portfolio
techniques in assigning resources to SBUs.
• Boston Consulting Group
– Looks at market growth rate and relative market share
– Categorizes SBUs as Stars, ?, Cash Cows, and Dogs
– Determine whether to build, hold, harvest, or divest
• General Electric Model
– Looks at market attractiveness and business strength in
terms of both quantitative and qualitative measures.
– Uses weightings and ratings to evaluate factors of each
dimension.
Chp 3/Obj 3: Describe the strategic options in
planning new or downsizing older businesses.
• Intensive Growth
– Market Penetration, Marketing Development, and
Product Development
• Integrative Growth
– Backward, Forward, or Horizontal integration
• Diversification Growth
– Concentric, horizontal, and conglomerate
• Downsizing Older Businesses
– Prune, harvest, or divest tired old businesses to release
needed resources and reduce costs.
Chp 3/Obj 4: Describe the value
delivery sequence
• Traditional Physical Process Sequence
– Make the product and sell the product
• Value Creation and Delivery Sequence
– Choose the Value - strategic marketing with
segmentation, market selection, positioning.
– Provide the Value - tactical marketing of
product, price, and place.
– Communicate the Value - tactical marketing
with the promotional mix.
Chp 3/Obj 5: Describe what is involved
in creating a marketing plan.
•
•
•
•
•
•
•
•
•
Executive Summary and Table of Contents
Current Marketing Situation (Situation Analysis)
Opportunity and Issue Analysis (SWOT)
Objectives (Outcomes)
Marketing Strategy
Action Programs (Plans/Tactics)
Projected P/L Statement (Financials)
Controls
Also could include References and Exhibits. See tutorial.
Chapter 22: Managing the Total
Marketing Effort
• Learning Objectives
– 1. Describe the six stage evolution of the
marketing department.
– 2. Describe the trends in organizing the
marketing department in the firm.
– 3. Describe the options in evaluating and
controlling marketing efforts.
Chp 22/Obj 1: Six Stage Evolution
of Marketing Department
• Simple Sales Department - outsiders do marketing
• Sales Department with Ancillary Marketing Functions Marketing director reports to Sales
• Separate Marketing Department - Marketing Department
separate from Sales Department
• Modern Marketing Department - Marketing Department
responsible for all marketing and sales efforts
• Effective Marketing Company-All depts focus on customer
• Process and Outcome-Based Company-cross disciplinary
teams focus on key process such as new products
Chp 22/Obj 2: Describe the trends in
organizing the MKTG department in the firm
• Functional - functional specialists
• Geographic - regional managers
• Product or Brand Management - manager responsible for a
variety of tasks for a product
• Market-Management - manager responsible for a specific
market (customer group)
• Product-Management/Market-Management (Matrix
Organization) - managers responsible for each discrete
market and managers responsible for each product
• Corporate-Divisional - balancing corporate versus
divisional marketing responsibilities
Chp 22/Obj 2: Describe trends in organizing
the MKTG department in the firm cont.
• Need to address Marketing relations with other
departments; balance politics/views - perspective.
• Marketing needs to effectively work with R&D,
Engineering, Manufacturing, Operations, Finance,
Accounting, Credit, etc…
• Managers need to develop systems that make a
market orientation possible (i.e. carrying out the
marketing concept) and reinforce/reward those
who make those systems work.
Chp 22/Obj 3: Describe the options in
evaluating/controlling marketing efforts
• Marketers need to continuously monitor and
control marketing activities.
• 1. Annual/Plan Control - mgmt by objectives
– Sales Analysis - sales variance and microsales analysis
– Market-Share Analysis - take with a grain of salt
– Marketing Expense-to-Sales Analysis - how much bang
for the buck is one getting from marketing efforts
– Financial Analysis - ratios
– Market-Based Scorecard Analysis - track customer stats
Chp 22/Obj 3: Describe the options in
evaluating/controlling mktg efforts cont.
• Profitability Control
– Marketing-Profitability Analysis but need to address
how to assign indirect/common costs, correct problems.
• Efficiency Control
– Sales force, Advertising, Sales-Promotion, and
Distribution Efficiency (are these efforts working).
• Strategic Control
– Marketing-effectiveness review (measure if carrying
out marketing concept)
– Comprehensive marketing audit (done by an outsider).
Module 2
• Creating and
implementing marketoriented strategic
planning.
• Chapters 3 and 22
• Any questions?