2. Strategic Market Planning:

Take the Big Picture

Chapter Objectives

Explain business planning and its three levels

Describe the steps in strategic planning

Describe the steps in marketing planning

Business Planning

Ongoing process of making decisions that guides

the firm both in the short term and for the long term

Business Planning: Compose the Big Picture

Identifies/builds on firm’s strengths

Helps managers make informed decisions

Develops objectives before action is taken

Business ethics

Basic values that guide a firm’s behavior

Ethics Is Up Front in Marketing Planning

Code of ethics

Written standards of behavior to which everyone

in the organization must subscribe

How to Write a Code of Ethics

Figure 2.1

Three Levels of Business Planning

Managerial decision process that matches firm’s

resources and capabilities to its market

opportunities for long-term growth and survival

Top management defines firm’s purpose and

objectives

Strategic Planning

Strategic business units (SBUs) are common in

large firms

Accomplished by various functional areas of firm,

such as marketing

A broad three-to-five-year plan to support the

strategic plan

Functional Planning

A detailed annual plan

Typically includes

First-line managers focus on day-to-day execution of

functional plans

Detailed annual plans

Operational Planning

Typically includes one or more of the following

Semiannual plans

Quarterly plans

Strategic, functional, and operational plans must

work together to benefit the whole firm

Plans are guided by firm’s mission

All Business Planning Is an Integrated Activity

Planners at all levels must keep the “big picture” in

mind when planning

Very large multiproduct firms may have divisions

called strategic business units (SBUs)

SBUs operate like separate businesses

Strategic Planning: Frame the Picture

Strategic planning is done at both the corporate and

SBU levels

Figure 2.2

Steps in Strategic Planning

Key questions in determining the mission

What business are we in?

Strategic Planning Step 1: Define the Mission

Mission statement

What customers should we serve?

How do we develop firm’s capabilities and focus

its efforts?

A formal document that describes the firm’s

overall purpose and what it hopes to achieve in

terms of its customers, products, and resources

Examples of mission statements

Step 1: Define the Mission

MADD: “to stop drunk driving, support the

victims of this violent crime, and prevent

underage drinking.”

National Book Swap: “to become the nation’s

largest book club and in the process bring a

lifetime of reading material to every American.”

Guess which company’s mission?

Step 1: Define the Mission

At ( ), we work to help people and

businesses throughout the world realize their full

potential. This is our mission. Everything we do

reflects this mission and the values that make it

possible.

To inspire and nurture the human spirit— one

person, one cup, and one neighborhood at a time.

Guess which company’s mission?

Step 1: Define the Mission

We are a global family with a proud heritage

passionately committed to providing personal

mobility for people around the world.

Our vision is to be earth's most customer centric

company; to build a place where people can

come to find and discover anything they might

want to buy online.

Situational analysis

Step 2: Evaluate the Internal and External

Environments

An assessment of a firm’s internal and external environments

Internal environmental assessment: identifies the firm’s

strengths and weaknesses

External environmental assessment: identifies

opportunities and threats

Controllable

elements inside a

firm that

influence how

well the firm

operates

Internal Environment

Name some

examples

Southwest Airlines’ employees

reflect the “Southwest Spirit” and

are considered a key strength of

the firm.

Elements outside the firm that may affect it either

positively or negatively.

Economic trends

External Environment

The external environment is global and requires

consideration of:

Competitive trends

Legal/political/ethical trends

Technological trends

Sociocultural trends

An analysis of an organization’s strengths (S) and

weaknesses (W) and the opportunities (O) and

threats (T) in the external environment

SWOT Analysis

SWOT enables the firm to develop strategies that

maximize strengths and capitalize upon

opportunities

Table 2.2 Part A

Example of a Partial SWOT Analysis for

McDonald’s

Organizational/SBU Objectives:

Step 3: Set Organizational or SBU Objectives

Need to be specific, measurable, attainable and

sustainable

What the firm hopes to accomplish with long-

range business plan

May be financially focused, or focused on other

factors such as satisfaction

Business portfolio:

Step 4: Establish the Business Portfolio

Portfolio analysis

The group of different products or brands owned

by a firm and having different income-generating

and growth capabilities

Assesses the potential of a firm’s SBUs

BCG growth-market share matrix

Figure 2-3

Boston Consulting Group (BCG) Matrix

Product-market growth matrix:

Step 5: Develop Growth Strategies

Characterizes different growth strategies

according to type of market and type of product

Step 1: Perform a situation analysis

Marketing Planning: Step 1 and Step 2

Step 2: Set marketing objectives

Builds on SWOT; identifies how environmental

trends affect the marketing plan

Specific to the firm’s brands and other marketing

mix-related elements

States what the marketing function must

accomplish if firm is to achieve its overall

business objectives

Develop marketing strategies to achieve

marketing objectives

Select target market(s) where the firm’s offerings are best suited

Marketing Planning: Step 3

Develop marketing mix strategies

Product strategies

Promotion strategies

Pricing strategies

Distribution(place) strategies

Control:

Step 4: Implement and Control the Marketing Plan

Action plans:

Measuring actual performance, comparing

performance to the objectives, making adjustments

Support plans that guide the execution and

control of marketing strategies at the operational

level

Marketing metrics:

Return on marketing investment (ROMI)

Table 2.4

Template for an Action Plan

At the operational level, plans focus on the day-to-

day execution of the marketing plan

Operational Planning: Day-to-Day Execution of Plans

Created by first-line managers

Cover short time frames

Marketing metrics gauge success

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