Marketing Management, 8e

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Strategic Planning and the Marketing Management
Process
Chapter One
Marketing concept, Customer needs, The American
Marketing Association,
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The Marketing Concept

• An organization should seek to make a profit by
  serving the needs of customers
• The purpose of the marketing concept is to rivet
  (Fix) the attention of marketing managers on
  serving broad classes of customer needs
• The principal task of the marketing function
  operating under the marketing concept is to find
  effective and efficient means of making the
  business do what suits the interests of customers

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What is Marketing?

• The process of planning and executing
  conception, pricing, promotion and distribution
  of ideas, goods and services to create exchanges
  that satisfy individual and organizational
  goals.
• - The American Marketing Association

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What is Strategic Planning?

• The objectives and strategies established at the
  top level provide the context for planning in
  each of the divisions and departments by
  divisional and departmental managers

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Major Types of Marketing
Type Description
Product Marketing designed to create exchange for tangible products
Service Marketing designed to create exchanges for intangible products
Person Marketing designed to create favorable actions toward persons
Place Marketing designed to attract people to places
Cause Marketing designed to create support for ideas, causes, or issues or to get people to change undesirable behaviors
Organization Marketing designed to attract donors, members, participants, or volunteers
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Strategic Planning and Marketing Management

• Includes all activities that lead to the
  development of a clear organizational mission,
  objectives, and appropriate strategies
• Plays a key role in achieving an equilibrium by
  balancing acceptable financial performance
• Prepares for inevitable changes in markets,
  technology, and competition, as well as in
  economic and political arenas

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The Strategic Planning Process

• Mission statement
• In developing a mission statement, management
  must take into account three key elements
• The organizations history
• The organizations distinctive competitiveness
• The organizations environment
• Mission statement should be
• Achievable
• Motivational
• Specific

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Missions vs. Strategic Visions

• A strategic vision concerns a firms future
  business path -- where we are going
• Markets to be pursued
• Future technology-product-customer focus
• Kind of company that management is trying to
  create

• A mission statement focuses on current business
  activities -- who we are and what we do
• Current product and service offerings
• Customer needs being served
• Technological and business capabilities

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Vision Statement
We want to sell a variety of products on a
daily basis to every living person on the earth.
PepsiCo.
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Vision Statement
To be the world leader in transportation
products and services.
General Motors Corp.
Source 1993 Annual Report
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Vision Statement
Absolutely, positively overnight!
Federal Express
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Vision Statement
A computer on every desk and in every home.
Microsoft
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Whirlpool Mission Statement
To shape and lead the major home appliance
industry globally, becoming one of the worlds
great companies while creating value for
shareholders, employees, customers, suppliers,
government leaders and communities.
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The Strategic Planning Process
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The Strategic Planning Process

• Create discrete (Distinct) objectives
• The end-points of an organizations mission are
  what it seeks through on-going, long-run
  operations
• Organizational strategy
• Involves the choice of major directions the
  organization will take in pursuing its
  objectives.

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The Strategic Planning Process

• Create marketing strategy
• Organizational growth strategies

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The Strategic Planning Process

• Organizational growth based on products and
  markets
• Four paths organizations take in order to grow
• Market penetration strategies
• Market development strategies
• Product development strategies
• Diversification
• Organizational strategies based on competitive
  advantage
• Competitive advantage is an ability to outperform
  competitors in providing something that the
  market values
• Porter suggests strategies based on cost
  leadership or a strategy based on differentiation
  Focus

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The Strategic Planning Process

• Organizational strategies based on value
• Customer value has become critical for
  marketers as well as customers
• To succeed firms must seek to build long-term
  relationships with their customers by offering
  unique value

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The Strategic Planning Process

• Choosing an appropriate strategy
• Management should select those strategies
  consistent with its mission and capitalize on the
  organizations distinctive competencies
• A sustainable competitive advantage can be based
  on either the assets or skills of the
  organization
• The key to sustaining a competitive advantage is
  to continually focus and build on the assets and
  skills that will lead to long-term performance
  gains

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The Strategic Planning Process

• Organizational portfolio plan
• Organizations at a particular time are a
  portfolio of businesses that is, product lines,
  divisions, schools
• Management must decide which businesses to build,
  maintain, or eliminate, or which new businesses
  to add
• Organizations can create strategic business units
  (SBU) which could be a single product, product
  line, or division

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The Marketing Management Process

• The Marketing Management Process can be defined
  as the process of planning and executing the
  conception, pricing, promotion, and distribution
  of goods, services, and ideas to create exchanges
  with target groups that satisfy customer and
  organizational objectives.

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The Marketing Management Process

• Strategic planning and marketing planning

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The Marketing Management Process

• Situation analysis
• The cooperative environment
• The competitive environment
• The economic environment
• The social environment
• The political environment
• The legal environment

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The Marketing Management Process

• Marketing planning
• Establishing marketing objectives
• Selecting target market
• Developing marketing mix

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The Marketing Management Process

• Implementation and control of marketing plan
• Implementing the marketing plan involves putting
  the plan into action and performing marketing
  tasks according to the predefined schedule.
• Controlling the marketing plan involves three
  basic steps
• The results of the implemented marketing plan are
  measured
• These results are compared with objectives
• Decisions are made on whether the plan is
  achieving objectives.

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The Marketing Management Process

• Marketing information systems and marketing
  research
• Throughout the marketing management process,
  current, reliable, and valid information is
  needed to make effective marketing decisions

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The Marketing Management Process

• Strategic planning is a top-management
  responsibility
• All strategic planning has marketing implications
• Marketing objectives and strategies must be
  derived from the strategic plan
• Planning done in all functional areas of the
  organization should be derived from strategic plan

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The Marketing Management Process

• Marketings role in cross functional strategic
  plan

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Corporate Strategy

• Portfolio Analysis
• BCG (Boston Consulting Group) Matrix
• Product life cycle and funding decisions
• Question marks
• Stars
• Cash cows
• Dogs

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BCG Matrix
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GE Business Screen

• Long-term industry attractiveness
• Business strength/competitive position

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The Market Attractiveness-Business Position Matrix
Invest/ Grow
Selective Investment
Harvest/ Divest
Figure 7.5
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Industry attractiveness at

• Industry attractiveness
• Market size
• Market growth
• Profitability
• Cyclicality
• Ability to recover from inflation
• World scope

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Business strength at

• Business strength
• Market position
• Domestic market share
• World market share
• Share growth
• Share compared with leading competitor
• Competitive strengths
• Quality leadership
• Technology
• Marketing
• Relative profitability