Strategic Market Planning

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Strategic Market Planning

• Marketing 360
• Brian Gillespie

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Value

• Value (from Customers Perspective)
• Sum of benefits we receive from a product
• Value (from Sellers Perspective)
• Profitsbut also, prestige, pride, making
  community happy
• Lifetime value of a customer
• How much is this customer worth to us in the
  long-term?
• Long-term thinking ? develop relationships with
  customers
• Value (to Shareholders)
• Created when company has competitive advantage
  over rivals
• Distinctive competency (companys superior
  capability)
• Differential benefit (unique benefit of product)
• Value (to Society)
• What is the impact of product/service on society?

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The Marketing Mix
Marketing Mix
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Why Study Marketing?

• Plays an Important Role in Society
• Promotes efficient transfer of desired products
  to meet needs
• Can be used to promote worthwhile social causes
• Fundamental to the Success of Businesses
• Assessing needs, designing products, pricing
  product, promoting products, distribution
  strategies, servicing customer
• Great Career Opportunities
• Roughly 25-33 of people perform marketing
  related activities
• Marketing Affects You Everyday
• Become a wiser consumer

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The Dark Side of Marketing

• Illegal practices like bait and switch
• Societal health problems
• Diabetes, heart disease, cancer, alcoholism,
  domestic violence
• Psychological Costs
• Many ads encourage us to feel bad about ourselves
• Financial Burdens
• Consumer debt
• Environmental degradation and resource depletion

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Ethics in Strategic Market Planning

• Unethical business decisions impact all
  stakeholders
• Job loss
• Environmental effects
• Most times unethical decisions
• do not go unnoticed
• Enron
• Martha Stewart
• Sub-prime mortgage meltdown

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Preventing Unethical Activities

• Business ethics
• Underlying values and philosophies that dictate
  actions in an organization
• The ethical culture of an organization
• Code of ethics
• Written standards of behavior to which everyone
  in the organization must subscribe

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Three Levels of Business Planning

• Strategic Planning
• Managerial decision process matching an
  organizations resources and capabilities to its
  market opportunities for long-term growth
• Functional (Marketing) Planning
• Decision process that develops detailed
  short-term strategies that support an
  organizations strategic plans
• Operational Planning
• Decision process that develops detailed
  day-to-day strategies that carry out an
  organizations functional plans

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Strategic Planning

• Five steps to strategic planning
• Step 1 define the mission
• Step 2 situational analysis
• Step 3 set organizational or strategic business
  unit objectives
• Step 4 establish the business portfolio
• Step 5 develop growth strategies

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Step 1 Define the Mission

• Mission Statement
• Formal statement in an organizations strategic
  plan that describes overall purpose of the
  organization and what it plans to achieve in
  terms of customers, products, resources
• Too narrow marketing myopia
• Too broad no direction
• Could have one for each Strategic Business Unit
  (SBU)
• Individual units in the firm that operate like
  separate businesses, each with its own mission,
  objectives, resources, managers, competitors

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Mission Statements

• Washington State University
• As a public, land-grant and research institution
  of distinction, Washington State University
  enhances the intellectual, creative, and
  practical abilities of the individuals,
  institutions, and communities that we serve by
  fostering learning, inquiry, and engagement.
• Starbucks
• Establish Starbucks as the premier purveyor of
  the finest coffee in the world while maintaining
  our uncompromising principles while we grow.

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Creating a Mission Statement

• In groups, pretend you are opening a new chain of
  Mexican Chinese fusion restaurants in the
  Pacific Northwest
• Create a mission statement for your new concept
  restaurant

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Step 2 Situational analysis

• Internal Environment
• Controllable elements in organization
• People, corporate culture, facilities, processes
• External Environment
• Uncontrollable elements outside organization that
  may affect performance
• Both positive and negative

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SWOT Analysis

• Internal analysis
• Strengths
• Weaknesses
• External analysis
• Opportunities
• Threats
• What would a SWOT analysis for The Coug look like?

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Step 3 Set Organizational or SBU Objectives

• Objectives flow from the mission statement
• Organization size typically determines whether or
  not SBUs exist, and if they have their own
  objectives
• Effective objectives are
• Realistic, specific, measurable, and well-matched
  with mission statement
• Example
• Ok Our objective is to better serve customers
• Better Our objective is to obtain customer
  satisfaction ratings of at least 90 in 2011, and
  retain at least 85 of our 2010 customers as
  repeat customers in 2011

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Step 4 Establish the Business Portfolio

• Portfolio
• Collection of brands or units owned by
  organization that have different income
  generating potential
• Portfolio Analysis
• Evaluating an organizations business mix and
  assessing the potential of an organizations SBUs

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BCG Growth-Market Share Matrix
Product is dominant in category
Product is a miss
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Step 5 Develop Growth Strategies

• BCG matrix does not address how to grow SBUs, but
  the Product-Market Growth Matrix does
• Market penetration strategies
• Designed to increase sales of existing products
  to current customers, nonusers, and users of
  competitors
• Market development strategies
• Strategies that introduce existing products into
  new markets
• Product Development Strategies
• Strategies that focus on selling new product to
  existing markets
• Diversification Strategies
• Strategies that emphasize both new products and
  new markets

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Product-Market Growth Model
Market penetration Seek to increase sales of existing products to existing markets Examples ??? Product development Create growth by selling new product in existing markets Examples ???
Market development Introduce existing products to new markets Examples ??? Diversification strategies Emphasize both new products and new markets to achieve growth Examples ???
New market (customers) No
New market (customers) Yes
New product No
New product Yes
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Which Quadrant of the Product-Market Growth
Matrix is This?
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Which Quadrant of the Product-Market Growth
Matrix is This?
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Which Quadrant of the Product-Market Growth
Matrix is This?
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Which Quadrant of the Product-Market Growth
Matrix is This?
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Functional (Marketing) Planning

• Decision process that develops detailed
  short-term strategies that support an
  organizations strategic plans
• Step 1 perform a situational analysis
• Step 2 set marketing objectives
• Step 3 develop marketing strategies
• Step 4 implement and control the marketing plan

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Step 3 Develop Marketing Strategies

• Select a Target Market
• Market opportunity analysis size and sales
  potential of target group, and assessment of key
  competitors
• Develop Marketing Mix Strategies
• Product, Price, Promotion, Place of Distribution

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Step 4 Implement and Control the Marketing Plan

• Action Plans
• Implementation of marketing strategies
• Responsibilities, Time Line, Budget, Measurement
  and Control
• Control
• Monitoring progress
• Compare actual performance to marketing
  objectives and adjust strategy/objectives as
  needed
• Must have good marketing metrics
• Marketing audits
• Evaluation of objectives, strategies, structure,
  performance of marketing organization
• Should be comprehensive, systematic, independent,
  periodic