Strategic Planning and the Strategic Marketing Process

I. What is Strategic Planning?

• The process of developing and maintaining a viable fit between the organization’s objectives and resources and its changing environment.

• It involves developing a: clear mission supporting objectives supporting strategies

II. Different Levels of Planning

Corporate Level

Business Unit Level Strategic Business Units (division within the organization that markets a set of related products to a clearly defined group of customers)

Functional Level

III. Components of the Strategic Plan Organizational Mission defines the core purpose of the organization – why it

exists.

Organizational Objectives statements of what the organization wishes to accomplish in the on-going, long-run operation of the firm.Profits sales market share customer satisfaction

Organizational Strategies major directions the organization will take in pursuing its objectives.Business Portfolio Analysis Market-Product Analysis

Slide 2-5

WHERE CAN AN “A” IN A COURSE IN ICE CREAM MAKING LEAD?

Business Portfolio Analysis A technique which uses market growth rate

and relative market share to identify what combination of SBUs will best achieve organization objectives.

Market growth rate – annual rate of sales growth of the SBU’s industry.

Relative market share – the sales of the SBU divided by the sales of the largest firm in the industry.

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FIGURE 2-3FIGURE 2-3 Boston Consulting Group portfolio analysis for Kodak, as it might appear in 2004

Kodak self-service kiosk

Kodak film sales: US,Canada, & W. Europe

Kodak digitalphoto printer

Kodak digitalcamera

Business Portfolio Analysis (cont.)

Cash Cows – SBU’s that have a high market share of a low sales growth market.

Stars – SBU’s that have a high market share of a high sales growth market.

Question marks – SBU’s that have a low market share of a high sales growth market.

Dogs – SBU’s that have a low market share of a low sales growth market.

Market-Product Analysis

Indicates that a firm can grow in a number of ways either by concentrating on current or new products; or on current or new customers.

Four strategies: market penetration, market development, product development, product diversification

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FIGURE 2-4FIGURE 2-4 Four market-product strategies: alternative ways to expand sales revenues for Ben & Jerry’s

IV. Strategic Marketing Process

Process whereby an organization allocates it marketing mix resources to reach its target markets.

PlanningImplementation

Evaluation

Planning Phase – Situation Analysis

This is a complete analysis of the firm’s situation which assesses internal strengths and weaknesses and external threats and opportunities (SWOT)

Internal analysis (controllable factors) – assess the firm itself to identify strengths and weaknesses

External analysis (uncontrollable factors) – assess the firm’s external environment to identify opportunities and threats

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FIGURE 2-6FIGURE 2-6 Ben & Jerry’s: a SWOT analysis to get it growing again

Planning Phase – Marketing Objectives

Specific levels of performance desired for a product or product line to be achieved by a given date.

Stated in terms of market share, sales, profit

Should be measureable, attainable, specific, and consistent with organizational objectives

Planning Phase – Target Market One or more specific groups of

potential consumers toward which an organization directs its marketing program.

Market segmentation is used to identify target markets.

Why focus on the needs of a subgroup of a market rather than the entire market?

Planning Phase: Product Positioning

The process where marketers try to create a product image or identity in the minds of their target market relative to competitive products.

Planning Phase: Marketing Mix Program

Product – good, service, or idea to satisfy the consumer’s needs.

Price – what is exchanged for the product. Promotion – means of communication

between the seller and buyer. Place – means of getting the product to the

consumer Marketing mix decisions are based on the

needs of the target market and the positioning strategy.

Slide 2-40

FIGURE 2-7FIGURE 2-7 Elements of the marketing mix that comprise a cohesive marketing program

Implementation Phase

Process of putting the marketing plan into action.

Involves great attention to detail

Evaluation

Involves measuring the results of the actions from the implementation phase and comparing them with goals set in the planning phase.

sales analysismarket share analysisexpense to sales analysis