Strategic planning
Strategic planning is the process of developing and
maintaining a strategic fit between the organization’s
goals and capabilities and its changing marketing
opportunities.
Steps in strategic planning
Corporate level Business unit,
product
Setting and market
Planning,
Defining the
level Designing
company marketing and
company the business
objectives and other
mission portfolio
goals functional
strategies
Like the marketing
Company-wide
strategy, the
strategic planning
broader company
guides marketing
strategy must be
strategy and
customer focused.
planning.
Steps in strategic Planning
1. Defining a market oriented mission: a sound mission
begins with the following questions: What is our
business? Who is the customer? What do consumers
value? What should our business be?
2. Setting company objectives and goals: The company
needs to turn its mission into detailed supporting
objectives for each level of management. Each manager
should have objectives and be responsible for reaching
them.
3. Designing the business portfolio: Guided by the
company’s mission statement and objectives,
management now must plan its business portfolio- the
collection of businesses and products that make up the
company.
Business portfolio: The collection of businesses and
products that make up the company.
Portfolio analysis: The process by which management
evaluates the products and businesses that make up
the company.
The Boston Consulting Group Approach:
Using this classic Boston consulting Group (BCG)
approach a company classifies all its Strategic Business
Units (SBUs) according to growth-share-matrix. Growth-
share matrix is a portfolio planning method that
evaluates a company’s SBUs in terms of market growth
rate and relative market share.
High Star Question
Market growth
Mark
rate
Low Cash Dog
Cow
High Low
The BCG Growth share Matrix
Relative market share
Stars : Stars are high growth high share businesses or
products, they often need heavy investments to
finance their rapid growth. Eventually their growth
will slow down and they will turn into cash cows.
Cash cows : Cash cows are low-growth high-share
businesses or products. These established & successful
SBUs need less investment to hold their market share.
They produce a lot of cash that the company uses to
pay its bills and support other SBUs that need
investment.
Question marks : Question marks are low-share
business units in high-growth markets. They require a
lot of cash to hold their market share. Management
has to think hard about which question marks it
should try to build into stars & which should be
phased out.
Dogs : Dogs are low-share businesses and products.
They may generate enough cash to maintain
themselves but do not promise to be large sources of
cash.
Developing strategies for growth and downsizing
Beyond evaluating current businesses, designing the
business portfolio involves finding businesses and
products the company should consider in the future.
Marketing has the main responsibility for achieving
profitable growth for the company. Marketing needs to
identify, evaluates and select market opportunities and
establish strategies for capturing them. One useful
device for identifying growth opportunities is the
Product/Market expansion grid.
Product/market expansion grid
Product/market expansion grid is a portfolio-planning
tool for identifying company growth opportunities
through market penetration, market development,
product development or diversification
Existing products New products
Existing Market penetration Product
markets Development
New markets Market development Diversification
The Product/market expansion grid
Market penetration: Company growth by increasing
sales of current products to current market segments
without changing the products.
Market development: Company growth by
identifying and developing new market segments for
current company products.
Product development: Company growth by offering
modified or new products to current market segments.
Diversification: Company growth through starting
up or acquiring businesses outside the company’s
current products and markets.
Partnering to build customer relationships
1. Partnering with company’s other departments: Each
company department can be thought of as a link in
the company’s internal value chain. That is each
department carries out value-creating activities to
design, produce, market, deliver and support the
firm’s product.
2. Partnering with others in the marketing system: In
the quest to create customer value, the firms need to
look beyond its own internal value chain and into the
value chains of its suppliers.
Marketing Strategy and Marketing
Mix
Marketing strategy: The marketing logic by which the
company hopes to create customer value and achieve
profitable customer relationships.
Marketing mix: The set of tactical marketing tools-
product, price, place and promotion that the firm
blends to produce the response it wants in the
market.
Major activities involved in managing customer-
driven marketing strategy and the marketing mix
Customer
value and
relationship
----Segmentation------Targeting------Differentiation—
Positioning---
Product/Price/Promotion/Place
---Marketing Planning---Marketing implementation---
Marketing control----Marketing Analysis-----
Market segmentation: Dividing a market into
distinct groups of buyers who have different needs
,characterstics, or behaviour and who might
require separate products.
Market targeting: The process of evaluating each
market segments attractiveness and selecting one
or more segments to enter.
Differentiation: Differentiating the market
offering to create superior customer value.
Positioning: Arranging for a product to occupy a
clear, distinctive and desirable place relative to
competing products in the minds of target
consumers.
The 4 Ps of Marketing Mix
Product Price
Variety List price
Quality Discounts
Design Allowances
Features Payment
Brand name period
Packaging Target Credit terms
Services customer
intended
positioning Place
Promotion
Advertising Channels
personal Coverage
selling sales Locations
promotion Inventory
public Transportation
relations Logistics
Managing the Marketing effort
1. Marketing analysis
2. Marketing planning
3. Marketing implementation
4. Marketing department organization
5. Marketing control
