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1Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningStrategic Planning for Competitive AdvantagePrepared byDeborah BakerTexas Christian UniversityChapter 2

Chapter 2Strategic Planning for Competitive Advantage12Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objectives1.Understand the importance of strategic marketing and know a basic outline for a marketing plan.

2. Develop an appropriate business mission statement.

3. Describe the criteria for stating good marketing objectives.3Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objectives (continued)4. Explain the components of a situation analysis.

5. Identify sources of competitive advantage.

6. Identify strategic alternatives and describe tools used to help select alternatives.

7. Discuss target market strategies.4Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objectives (continued)8. Describe elements of the marketing mix.

9. Explain why implementation, evaluation, and control of the marketing plan are necessary.

10. Identify several techniques that help make strategic planning possible.5Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Understand the importance of strategic marketing and know a basic outline for a marketing plan.1

On Linehttp://www.coach.comhttp://www.vuitton.comhttp://www.katespade.com

Chapter 2Strategic Planning for Competitive Advantage5On LineCoachHow well do you think Coach uses its Web site to build competitive advantage? Compare Coach to its competitors, Louis Vuitton and even Kate Spade.

6Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningStrategic PlanningThe managerial process of creating and maintaining a fit between the organizations objectives and resources and evolving market opportunities.1On Linehttp://www.coke.comhttp://www.pepsi.com

Chapter 2Strategic Planning for Competitive Advantage6On LineCokePepsiHow are Coke and Pepsi using their Web sites to promote their new flavors? Do you see hints of any future strategies the companies might implement? Where?7Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningStrategic PlanningRESOURCES & OBJECTIVESEVOLVING MARKET OPPORTUNITIES

LONG RUN PROFITABILITY AND GROWTHPlus1Chapter 2Strategic Planning for Competitive Advantage7Notes:Strategic planning creates and maintains a fit between the organizations resources and objectives and the evolving market opportunities. The goal is to sustain and increase long-run profitability and growth.

Examples of strategic decisions:a. Sears purchase of Lands Endb. PepsiCos and Coca-Colas introductions of new productsc. S.C. Johnsons introduction of Shout Color Catchersd. Kmart Corporations filing for Chapter 11 bankruptcy

Strategic planning requires long-term commitment of resources.

Discussion/Team Activity:Name and discuss strategic planning decisions of other companies.

Discuss why strategic planning is important for these companies. 8Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningWhat is the organizations main activity?

How will it reach its goals?

Strategic Marketing PlanningThe Marketing Plan19Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningPlanningThe process of anticipating future events and determining strategies to achieve organizational objectives in the future.110Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningThe Marketing PlanA written document that acts as a guidebook of marketing activities for the marketing manager.111Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningWhy Write a Marketing Plan?Provides a basis for comparison of actual and expected performance

Provides clearly stated activities to work toward common goals

Serves as a reference for the success of future activities

Allows entry into the marketplace with awareness

MarketingPlan1Chapter 2Strategic Planning for Competitive Advantage1112Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningMarketing Plan Process1Marketing StrategyProductPromotionDistributionPriceMarketing MixBusiness Mission StatementObjectivesSituation or SWOT AnalysisImplementationEvaluationControlTarget Market StrategyOn Linehttp://www.dmusic.com

Chapter 2Strategic Planning for Competitive Advantage12On LineDmusicUse Exhibit 2.2 to create a sample summary marketing plan for Dmusic.com, an Internet start-up created by a teenage entrepreneur.

Notes:Some elements are common to all marketing plans. These include the business mission and objectives, performing a SWOT analysis, determining a target market, and establishing a marketing mix.

Other elements that may be included are budgets, implementation timetables, required marketing research efforts, or elements of advanced strategic planning.

Exhibit 2.2: Example of marketing plan sketchExhibit 2.7:Marketing Plan Outline 13Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Develop an appropriate business mission statement.

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14Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson Learning

Defining the Business MissionAnswers the question, What business are we in and where are we going?

Focuses on the market(s) rather than the good or service

Strategic Business Units may also have a mission statement2On Linehttp://www.att.com

Chapter 2Strategic Planning for Competitive Advantage14On LineAT&THow does AT&T use its Web site to market its communication technology? Are its long distance products a large part of its strategy? How can you tell?15Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningAMAs Mission Statement2

16Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningPepsiCos Mission StatementPepsiCos overall mission is to increase the value of our shareholders investment. We do this through sales growth, cost controls and wise investment of resources. We believe our commercial success depends upon offering quality and value to our consumers and customers; providing products that are safe, wholesome, economically efficient and environmentally sound; and providing a fair return to our investors while adhering to the highest standards of integrity.

http:\\www.pepsico.com

2Chapter 2Strategic Planning for Competitive Advantage16Discussion/Team Activity:Have the class write mission statements for different organizations, such as the university, business school, or fraternity/sorority, utilizing the characteristics of appropriate mission statements.

Search the Web for the mission statements of various companies, such as Walt Disney, Johnson & Johnson, etc. Discuss.

17Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningStrategic Business Units (SBUs)A distinct mission and specific target marketControl over their resourcesTheir own competitorsPlans independent of other SBUsCharacteristics218Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Describe the criteria for stating good marketing objectives.

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19Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningMarketing ObjectiveA statement of what is to be accomplished through marketing activities.320Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningOur objective is to increase market share by 40% and to obtain customer satisfaction ratings of at least 90% in 2003.Marketing Objectives

Marketing Objectives Must Be:

Realistic

Measurable

Time specific

Consistent with Organizations Priorities

321Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningExamples of Marketing Objectives3

22Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningMarketing Plan ObjectivesCommunicate marketing management philosophies

Provide direction

Serve as motivators

Clarify thinking

Provide basis for control

323Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Explain the components of a situation analysis.4

24Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSWOT AnalysisIdentifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T)425Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSWOT AnalysisSouth-Western College PublishingSWOTThings the company does well.Things the company does not do well.Conditions in the external environment that favor strengths.Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.InternalExternal4Chapter 2Strategic Planning for Competitive Advantage25Notes:Performance of a SWOT analysis helps firms identify their competitive advantage.

Strengths and Weaknesses are an internal assessment. Opportunities and Threats are an external environment assessment.26Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSWOT AnalysisProduction CostsMarketing SkillsEmployee CapabilitiesFinancial ResourcesAvailable TechnologyCompany/Brand Image

Strengths and WeaknessesINTERNAL

4Chapter 2Strategic Planning for Competitive Advantage26Notes:Additional strengths include superiority in manufacturing, service, quality and value perception.

27Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSWOT Analysis

OpportunitiesAndThreatsEXTERNAL

SocialDemographicEconomicTechnologicalPolitical/LegalCompetitive4Chapter 2Strategic Planning for Competitive Advantage27Notes:The external environmental forces listed are discussed in detail in Chapter 3.

Discussion/Team Activity:1. Identify different companies and organizations (such as the university), and perform a SWOT analysis for each. 28Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningEnvironmental ScanningCollection and interpretation of information about forces, events and relationships in the external environment that may affect the future of the organization or the marketing plan implementation.429Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningEnvironmental ScanningExamination of macroenvironmental forcesSocialDemographicEconomicTechnologicalPolitical / LegalCompetitive

Helps identify market opportunities

Provides guidelines for design of marketing strategy

430Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Identify sources of competitive advantage5

31Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningCompetitive AdvantageThe set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition.532Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningCompetitive AdvantageNiche StrategiesCostProduct/Service DifferentiationTypes of Competitive Advantage5On Linehttp://www.travelocity.com

Chapter 2Strategic Planning for Competitive Advantage32On LineTravelocityHow would you characterize Travelocitys competitive advantage based on the companys Web site? Does it have a sustainable competitive advantage? Why or why not?33Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningCost Competitive AdvantageBeing the low-cost competitor in an industry while maintaining satisfactory profit margins.5Chapter 2Strategic Planning for Competitive Advantage3334Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningObtain inexpensive raw materialsCreate efficient operationsDesign products for manufactureControl overhead costsAvoid marginal customersCost Competitive Advantage5Chapter 2Strategic Planning for Competitive Advantage34Notes:Having a cost competitive advantage means being the low-cost competitor in an industry while maintaining satisfactory profit margins. This enables a firm to deliver superior customer value.

Cost competitive advantages are subject to continual erosion.

Discussion/Team Activity:Identify firms that have a cost competitive advantage and how they deliver superior value. Examples:Chaparral SteelDell ComputersWal-Mart CorporationDuPont35Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSources of Cost ReductionExperience CurvesEfficient LaborNo-frills ProductsGovernment SubsidiesProduct DesignReengineeringProduction InnovationsNew Delivery Methods5Chapter 2Strategic Planning for Competitive Advantage35Notes: Sources of Cost ReductionExperience Curves: Costs decline as experience with a product increases, and encompasses marketing, manufacturing, and administration costs.Efficient Labor: Labor costs in low-skill, labor-intensive industries can be reduced by going offshore or by outsourcing. No-frills Products: Removing frills and options can reduce costs. Government subsidies: Governments may provide grants and interest-free loans for target industries.Product design: Cutting-edge design and reverse engineering can offset costs.Reengineering: Reengineering can make firms more efficient by pruning product lines, closing obsolete factories, and renegotiating supplier contracts. Product innovations: New technology and simplified production techniques can reduce production costs.New methods of service delivery:Examples include:* Outpatient surgery and walk-in clinics in the medical industry* Internet ticket booking and ticketless travel in the airline industry36Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningProduct/Service DifferentiationAdvantage achieved when a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than the competition.537Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningExamples of Product/Service DifferentiationBrand namesStrong dealer networkProduct reliabilityImageService

5Chapter 2Strategic Planning for Competitive Advantage37Notes:Product/Service Differentiation tends to provide a longer lasting competitive advantage than does cost competitive advantage.

Discussion/Team Activity:Discuss companies that have a product/service differentiation for:Brand name:LexusMercedes BenzDell ComputerRolexStrong dealer network:Caterpillar TractorOreck Product reliability:MaytagAcuraLexusImage:Ritz Carlton HotelsRolexBMWNeiman MarcusJohnson & JohnsonService:Federal ExpressNordstrom

38Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningNicheCompetitive AdvantageAdvantage achieved when a firm seeks to target and effectively serve a small segment of the market.539Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningNiche Competitive AdvantageUsed by small companies with limited resourcesMay be used in a limited geographic market

Product line may be focused on a specific product line

5Chapter 2Strategic Planning for Competitive Advantage39Notes:An example of a niche marketer is The Orvis Company, a specialist in fly fishing manufacturing and sales.

Discussion/Team Activity:Discuss how a small firm serving a particular niche market can successfully compete against larger, global firms with greater resources. (For example, how might a small bookstore owner compete with Barnes & Noble and Amazon.com?)

40Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSustainableCompetitive AdvantageAn advantage that cannot be copied by the competition.541Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSources of Sustainable Competitive AdvantagePatentsCopyrightsLocationsEquipmentTechnologyCustomer ServicePromotionOrganizations Skills and Assets 5Chapter 2Strategic Planning for Competitive Advantage41Notes:Companies need to build their own competitive advantage instead of copying the competition.A sustainable competitive advantage lasts only as long as the time it takes a competitor to imitate the strategy and plans. Marketing managers should continually look for skills and assets that create and sustain competitive advantage.

Discussion/Team Activity:Discuss examples of firms that have sustainable competitive advantage in each skill and asset source listed.

42Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Identify strategic alternatives and describe tools used to help select alternatives.6

43Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningStrategic AlternativesMarketPenetrationMarketDevelopmentProduct DevelopmentDiversificationIncrease market share among existing customersAttract new customers to existing productsIntroduce new products into new marketsCreate new products for present markets6Chapter 2Strategic Planning for Competitive Advantage43Notes:Examples of Strategic AlternativesMarket Penetration:Grocery Triple CouponsMcDonalds Happy Meals with Tys Teeny Beanie Babies

Market Development:Expansion into global markets by companies such as McDonalds, Coca-Cola, and Pepsi

Product DevelopmentNike WatchesBeer Microbreweries

Diversification:Sonys acquisition of Columbia PicturesSara Lees ownership of Leggs Hanes Bali

44Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningStrategic Opportunity MatrixPresent ProductNew ProductNew MarketMarketPenetrationMarketDevelopmentProductDevelopmentDiversificationPresent Market6On Linehttp://www.pg.com

Chapter 2Strategic Planning for Competitive Advantage44On LineProcter & GambleExplore Procter & Gambles Web site and identify how it uses each of the four strategic alternatives. Create a portfolio matrix for P&G based on the information available on its Web site.

Notes:1. Exhibit 2.5 is an example of Ansoffs Strategic Opportunity Matrix for McDonalds. 45Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningSelecting a Strategic AlternativeCommon ToolsPhilosophy

Market ShareProfitabilityGoalsPortfolio Matrix

$6Chapter 2Strategic Planning for Competitive Advantage45Notes:Selecting the strategic alternative depends on the company philosophy and culture, and the tool used to make the decision. Philosophies may be either to increase market share or to pursue profits, both being compatible goals.

One of the tools used to select a strategic alternative is the Portfolio Matrix, from the Boston Consulting Group.46Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningPortfolio MatrixTools for allocating resources among products or strategic business units on the basis of relative market share and market growth rate.

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6Chapter 2Strategic Planning for Competitive Advantage46Notes:

47Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningBCG Portfolio MatrixMARKET GROWTH RATEMARKET SHARE DOMINANCEHIGH LOW LOW HIGH

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6Chapter 2Strategic Planning for Competitive Advantage47Notes:The Boston Consulting Group Portfolio Matrix classifies each SBU by its growth rate and market share, both strongly linked.

Relative market share is a measure of the ratio between the companys share and the share of the largest competitor.

The categories used for the matrix are:StarsCash CowsProblem Children (question mark)Dogs

After classifying each SBU in the matrix, the next step is the allocation of future resources, with possible strategies shown on Slide 50.

48Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson Learning

MARKET SHARE DOMINANCEHIGH LOWMARKET GROWTH RATE LOW HIGH High growthMarket leaders Require cashLarge profits Low growthHigh market shareHigh cash flow

Low growthLow market shareMinimal cash flow High growthLow market shareNeed cashPoor profit margins$

BCG Portfolio Matrix6Chapter 2Strategic Planning for Competitive Advantage48Notes:Stars: High growth market leaders with large profits, but need a lot of cash to finance growth. The best marketing tactic is to protect existing market share by reinvesting earnings in product improvement, better distribution, more promotion, and production efficiency.Cash Cow: Generates more cash than it needs to maintain market share. Maintains a dominant market share in a low growth market. The strategy for a cash cow is to maintain its market dominance through price leadership and technological improvements in the product. Allocate excess cash to product categories where growth prospects are greatest. Problem Children: Rapid growth, but poor profit margins. Low market share in a high growth industry. Needs a lot of cash, or may become dogs. Strategy options are to invest heavily to gain market share, acquire competitors, or drop the SBU. Product repositioning may be helpful to move them to star category status.Dogs: Low growth potential, small market share, and eventually leave marketplace. Strategy options for dogs are to harvest or divest.

Discussion/Team Activity:Identify products that fit each of the BCG Portfolio Matrix classifications. Determine a resource allocation strategy for each after discussing the four resource allocation options described on Slide 50.

49Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningBCG Portfolio Matrix ExampleSub-Notebooks and Hand-Held Computer

Integrated phone/Palm devicesLaptop and Personal ComputersMainframeComputer

MARKET GROWTH RATE LOW HIGHMARKET SHARE DOMINANCEHIGH LOWSTAR PROBLEMCHILDCASH COWDOG650Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningStrategies for Resource AllocationBuildHoldHarvestDivestProvide financial resources if SBU (Problem Child) has potential to be a Star.Preserve market share if SBU is a successful Cash Cow. Use cash flow for other SBUs.Increase short-term cash return. Appropriate for all SBUs except Stars. Get rid of SBUs with low shares in low-growth markets.651Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Discuss target market strategies.7

52Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningThe activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.Marketing Strategy753Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningTarget Market StrategySegment the market based on groups with similar characteristics

Analyze the market based on attractiveness of market segments

Select one or more target markets

754Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningAppeal to the entire market with one marketing mixTarget Market SelectionsConcentrate on one marketing segment

Appeal to multiple marketswith multiple marketing mixes7Chapter 2Strategic Planning for Competitive Advantage54Notes:Three strategies for selecting target markets are shown here. These strategies are discussed in detail in Chapter 7.

Discussion/Team Activity:1. Discuss the differences in McDonalds and Wendys target markets. 55Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningTarget Market StrategyDevelop a marketing mix that will produce satisfying exchanges with target markets

ProductPlacePromotionPrice7Chapter 2Strategic Planning for Competitive Advantage55Notes:Once a target market is selected, a marketing mix is developed that will produce mutually satisfying exchanges.

The marketing mix is also called The Four PsProduct, Place (distribution), Promotion, and Price. 56Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Describe elements of the marketing mix.8

57Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningA unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.The Marketing Mix858Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningPriceMarketing Mix: The Four PsPromotionPlaceProduct859Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningProduct StrategiesThe starting point of the 4 Ps

Includes physical unit, package, warranty, service, brand, image, and valueProduct8Chapter 2Strategic Planning for Competitive Advantage59Notes:The product is the starting point of the marketing mix. It is difficult to decide on a promotion campaign, determine a price, or design a distribution strategy until the product offering and product strategy are defined.

The product is not only the physical unit but also the packaging, warranty, after-sale service, brand name, company image, value, and other factors.

Products may be tangible goods, services, and ideas.

Product decisions are discussed in Chapter 9 and 10, services marketing in Chapter 11. 60Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningDistribution (Place) StrategiesPlaceProduct availability where and when customers want them.

Involves all activities from raw materials to finished products8Chapter 2Strategic Planning for Competitive Advantage60Notes:The goal of distribution is to ensure products arrive in usable condition at the right place when customers need them.

Distribution is covered in Chapters 12 and 13. 61Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningPromotion StrategiesPromotionRole is to bring about exchanges with target markets

Includes integration of personal selling, advertising, sales promotion, and public relations8On Linehttp://www.paramount.comhttp://www.warnerbros.comhttp://www.universalstudios.com

Chapter 2Strategic Planning for Competitive Advantage61On LineParamountWarner BrothersUniversal StudiosHow do movie companies use their Web sites as part of their promotion strategies? Visit the sites for the movie studios listed to see what films they are promoting heavily. Also look at movie-specific sites. Are there differences how the movie-specific site (like the Scooby Doo site at www.scoobydoo.com) promotes the film and how the umbrella site (in this case, Warner Brothers) promotes the film? Explain what you find.

Notes:Promotion includes personal selling, advertising, sales promotion, and public relations.

Each element of the promotion mix is coordinated with the others to create a promotional blend. Integrated Marketing Communications is discussed in Chapters 14, 15, and 16. 62Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningPricing StrategiesThe most flexible of the 4 Ps

Price X Units Sold = Total RevenuePrice8Chapter 2Strategic Planning for Competitive Advantage62Notes:Price is an important competitive weapon and is often the most flexible of the marketing mix. It is the quickest of the Four Ps to change.

Pricing decisions are discussed in Chapters 17 and 18. 63Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Explain why implementation, evaluation, and control of the marketing plan are necessary.9

On Linehttp://www.youngbiz.com

Chapter 2Strategic Planning for Competitive Advantage63On LineYoungbiz.comVisit the YoungBiz Web sites list of Top 100 entrepreneurs. Select one of the entrepreneurial ventures listed and create a marketing plan for it using the concepts and strategies discussed in this chapter. Refer to Exhibit 2.7. How would you implement, evaluate, and control the plan?64Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningFollowing Up the Marketing PlanImplementationEvaluation

ControlMarketing AuditComprehensiveSystematicIndependentPeriodic

9Chapter 2Strategic Planning for Competitive Advantage64Notes:Implementation is the process that turns marketing plans into action assignments. These activities may involve job assignments, activity descriptions, timelines, budgets, and lots of communication.

Implementation is essentially doing what you said you were going to do.

The marketing audit provides the mechanisms for evaluating marketing results compared to the plans goals. 65Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningThe Marketing AuditA thorough, systematic, periodic evaluation of the goals, strategies, structure, and performance of the marketing organization.966Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningLearning Objective Identify several techniques that help make strategic planning effective.10

67Chapter 2 Marketing 7e Lamb Hair McDaniel2004 South-Western/Thomson LearningEffective Strategic PlanningManagement CommitmentContinualAttentionCreativityRequirementsfor Effective Strategic Planning10Chapter 2Strategic Planning for Competitive Advantage67Notes:Strategic planning is not an annual event, but an ongoing process. The environment is continually changing, and the firms internal resources and capabilities are continually evolving.

Strategic planning is based on creativity. Assumptions about the firm and the environment should be challenged and new strategies established to sustain competitive advantage.

Management support is critical.