Strategic Planning and Marketing Plans

Lesson 2
Str ate gic Planning

and Mar keting
Plans
Lesson Objectives
1. Explain strategic planning and how it relates to the

organisation’s mission, objectives and goals
2. Identify and define methods for designing the
business portfolio, developing growth strategies and
planning functional strategies
3. Outline the marketing process
4. Introduce the components of the marketing plan
5. Explain the ways in which marketing organisations
control and evaluate their marketing performance
Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Strategic Planning
 Visions demand a strategy, strategy requires a plan

 Organizations that fail to plan, plan to fail
 Plans help you anticipate and respond quickly to
changes
 The main purpose of strategic planning is to help
firms understand how to compete for the future
The process of developing and maintaining a
strategic fit between the organization's goals and
capabilities in the light of changing marketing
opportunities
Figure 3.2: Strategy
Hierarchy
Corporate Strategy
Corporate • Mission and vision
Level • Objectives
• Business portfolio strategy
• Resource development
• Corporate values
Strategic SBU Strategy

Business SBU • Business definition SBU
Unit Level Strategy • Objectives Strategy
• Product market portfolio
• Competitive strategy
• Resource allocation and management
Functiona
l Level of
SBU Marketing Strategy
R&D Strategy Production Finance and Human
•Marketing
Technology and operation administration resources
objectives
Product strategy strategy strategy
•Product/markets
development
strategies
Corporate, Business, and
Marketing Strategy
• Business portfolio Corporate Strat

• Capital investments and
resource allocation • Building cor
• Corporate culture competencies
• Corporate structure
• Product/ market portfolio Business Strateg

Hierarchy of Objectives
Company 3M
Objectives
Business Unit
Adhesives
Objectives
Functional
Objectives Production Finance Marketing HR R&D
Marketing Product Place Promotion Price

Objectives
Promotion Personal Selling Sales

Advertising Promotion PR
Objectives
Figure 3.4: Steps in
Strategic Planning
Step 1:
The Mission Statement
 A statement of the organisation’s purpose – what it wants
to accomplish in the larger environment.
 market oriented (not short term like product and
technological definitions).
 based on organisational core competencies
Yahoo!’s mission is to connect people to their passion, their

communities and the world’s knowledge.
Our mission is to organize the world’s information and

make it universal accessible and useful.
Marketing
Myopia
Sustained growth depends on how broadly

companies define their businesses and how
carefully they gauge their customers’ needs. . .
Thus, companies should stop defining
themselves by what they produced (product-
oriented) and instead reorient themselves
toward customer needs (customer-oriented)
- Theodore Levitt, Marketing Myopia
Table 3.1: Product and
Market Oriented Business
Definitions
DO NOT O
Do not off
me a
Do not offe
The 5Ws of the Mission
Statement
Five basic questions to be answered:

• Why we are here?
• What we do?
• Who we serve?
• What we believe?
• What are our core competencies or competitive
advantages?
Setting Company
Objectives and Goals
Company objectives must be/have:

 Compatible with company resources
 Measurable
 Time frame
 Ownership & accountability
Marketing objectives must be compatible
with company objectives.
Step 2:
Corporate Objectives & Goals
Source: Kotler et al. (2007)
Step 3: The Business
Portfolio
 A business portfolio is the collection of

businesses and products that make up the
company
 Four basic questions to be answered:
• Which SBUs need to be built?
• Which SBU to be maintained?
• Which SBU to be harvested?
• Which SBU to be divested?
a) Analyze the Current
Business Portfolio
 Most portfolio analyses evaluate the SBUs of a firm

on two important dimensions: the attractiveness of
the SBU’s market and the strength of the SBU’s
position in the market.
 The best known portfolio-planning analysis methods
and tools were developed by the Boston Consulting
Group and by General Electric.
Figure 3.6: Boston
Consulting Group Approach
Figure 3.7: GE’s Strategic
Business-Planning Grid
Business Strength
Strong Average Weak
C
Attractiveness
High
A
Medium
Industry
B D
Low
b) Shape the Future
Business Portfolio
 Determine the future role of each SBU and choose

the appropriate resource allocation strategy:
 Build
 Maintain
 Harvest
 Divest
 Developing strategies for growth (product/market
expansion grid) or downsizing business portfolio
Figure 3.9: Product/Market
Expansion Grid
Developing Growth
Strategies
1. Market Penetration: promoting the company

growth by increasing sales of current products to
current markets.
2. Market Development: promoting growth by
identifying and developing new segments.
3. Product Development: promoting growth by
offering modified or new products.
4. Diversification: starting up or acquiring
businesses outside the current products and
markets.
Step 4:
The Marketing Strategy
Demographic - Marketing Technological -
Economic Channels Natural
Environment Environment
ys ng
M lan
ar n
al eti
P
is
ke in
An ark Product
tin g
M
g
Target
Suppliers Place Price Publics
Consumers
n
en ting
M Con
ti o
ar tr
Promotion
ta
em e
ke ol
pl ark
tin
Im M
g
Political - Social -
Legal Competitors Cultural
Environment Environment
The Marketing Process
(1) Analyzing marketing opportunities

(2) Segmenting the market
(3) Targeting markets
(4) Positioning products
(5) Crafting the marketing mix (4Ps)
(6) Implementing and managing the
marketing effort
Analysing Marketing Opportunities
Marketing opportunity is an area of buyer need

and interest in which there is a high
probability that a company can perform
profitably by satisfying that need.
Think of some companies who have

identified marketing opportunities.
Sources of Marketing
Opportunities
1. supplying something in short supply

2. supplying an existing product/service
in a new/superior way
3. supplying a new product or service
Targeted Marketing
 To succeed in today’s competitive marketplace,

companies must be consumer centred
 As there are too many consumers with too many
needs, a company must divide up the total market,
choose the best segments and design strategies for
profitably serving chosen segments better than its
competitors do
 This process involves four steps: demand
measurement and forecasting, market
segmentation, targeting and positioning (Lesson
4)
Target Consumers (2)
 Demand Measurement and Forecasting

A company needs to analyse, estimate and identify the
current and future size of the market before entering the
market. Demand can be forecasted by a variety of
methods and scenario planning is an important part of this
process.
 Market Segmentation
Dividing a market into direct groups of buyers who might
require separate products or marketing mixes; the
process of classifying customers into groups with different
needs, characteristics or behaviour.
Marketing Strategies for
Competitive Advantage
Market Market
Leader Challenger
STRATEGY A COMPANY ADOPTS
DEPENDS ON ITS
INDUSTRY POSITION
Market Market
Nicher Follower
Developing the Marketing
Mix
 The marketing mix is the set of

controllable variables; product, price,
place and promotion (4 Ps) that the
company uses to meet the target
markets needs and wants.
 Organisations that include service
components use the extended
marketing mix (7Ps).
Marketing Mix
at
Product  Advertising solutions
based ads)
 Business Solutions
models )
 Google Store (Sellin
Price  List price with AdWor
$50 per day (advert
times individuals click
 Discounts and allowa
at Google.
 Payment period at
relationship with cu
A Marketing Plan or a
Business Plan?
 The business plan incorporates the plans of all

functions —production, R&D, finance, human resources,
IT and marketing.
 The marketing plan has its focus on customer
acquisition, retention and the resources required.
 It is the central document for directing and coordinating
the marketing effort.
Figure 4.1: The Relationship Between
Analysis, Planning, Implementation and
Control
Table 4.1: Contents of a
Marketing Plan
Section Description
I. Executive Summary and Brief overview of the proposed plan
Table of Contents
II. Current Marketing Situation Background data on the market, product, competition,
distribution and macro environment
III. SWOT and Issue Analysis Identify main: strengths, weaknesses, opportunities,
threats facing the product line
IV. Objectives Define financial objectives and marketing goals such
as sales volume, market share and profit
V. Marketing Strategy Present broad marketing approach that will be used to
achieve the plan’s objectives
VI. Action Programs Present special marketing programs designed to
achieve the business objectives
VII. Projected Profit and Loss Forecast the plan’s expected financial outcomes
Statement
VIII. Controls Indicates how Kotler,
theBrown,
plan will
Adam, be
Burton, monitored
Armstrong: Marketing 7e © 2007 Pearson Education Australia
The Marketing Plan in Detail
Executive Summary
 Aimed at senior management to enable them to grasp quickly the
plan’s major thrust, its goals and recommendations
 The summary should be no more than one page long
Current Marketing Situation
 Relevant background data on the target market, product,
competition, distribution and the macro-environment
SWOT and Issues Analysis
 Opportunities and Threats
 Strengths, Weaknesses and
 Issues facing the product line
Objectives
 Two types of objectives must be set:
• Financial
• Marketing
Marketing Strategy
 The marketing strategy is often presented in list form after
the inclusion of a positioning strategy statement which
typically includes:
• Target Market
• Product positioning
• Product line
• Price
• Communication
• Sales
• Promotion Kotler, Brown, Adam, Burton, Armstrong: Marketing 7e © 2007 Pearson Education Australia
Action Programs
 Each marketing strategy element must now be
elaborated to answer:
• What will be done?
• When will it be done?
• Who will do it?
• How much will be spent?
Projected Profit-and-Loss Statement
 Action plans allow the product manager to

build a supporting budget.
 Shows the forecast sales volume in units and the
average price.
 Costs include production, physical distribution and
marketing broken down into finer categories.
 The difference between revenues and sales is the
projected profit.
Controls
 The goals and budget are spelled out for each month or quarter.
 Senior management can review the results of each period and
identify businesses that are not attaining their goals.
 Managers of lagging businesses must explain what is happening
and the actions they will take to improve plan fulfillment.
 A contingency plan outlines the steps that management would
take in response to specific adverse developments.
Evaluating the
Marketing Plan (1)
 How does your marketing plan measure up? Before
implementing the marketing plan it can be useful to
evaluate it by answering the following questions:
1. Do your marketing objectives relate directly to the
company’s strategic initiatives?
2. Do your marketing objectives relate directly to what you
learned in your situational analysis?
3. Do your marketing objectives relate directly to the
capacity of your current marketing mix to handle them?
4. Do your marketing objectives relate directly to your
business’s strengths and to the opportunities available?
5. Do your marketing objectives relate directly to your
business’s weaknesses and to the threats that
endanger it?
Evaluating the
Marketing Plan (2)
6. Are your marketing objectives clear, measurable statements of what is
to be achieved?
7. Do your marketing objectives, strategies and tactics relate to each
other?
8. Does each strategy in your marketing plan contain a cost/benefit
evaluation?
9. Is every person involved in implementation included in the marketing
planning process in some way?
10. Is the plan clearly visible on your desk every day?
11. Is your business’s vision truly a ‘shared vision’?
If you can answer all these questions positively you have a powerful
marketing plan ready for implementation.
Implementing the Marketing
Plan
 To turn marketing strategies and plans into

marketing actions in order to accomplish strategic
marketing objectives.
 Implementation involves day-to-day, month-to-month
activities that effectively put the marketing plan to
work.
 Whereas marketing planning addresses the what
and why of marketing activities, implementation
addresses the who, where, when and how.
Reasons for Poor
Implementation
 Isolated planning
 Trade-offs between long and short-term
objectives
 Natural resistance to change
 Lack of financial and marketing integration
 Overemphasis on the document
Factors for Successful
Implementation
 Action program that pulls all the people and activities
together.
 Formal organisation structure.
 A company’s decision and reward systems (operating
procedures that guide planning, budgeting, remuneration
and other activities).
 Careful human resources planning.
 Marketing strategies must fit with its company culture.
 Company culture is a system of values and beliefs shared by people
in an organisation—the company’s collective identity and meaning.
Marketing Department
Organisation
 Implementation is affected by the

structure of the organisation.
 The most common form of marketing
organisation is by job function.
 Product management organisation or
geographical organisation could be
other approaches.
Figure 4.2: Functional
Organisation
Marketing
Director/Manager
Marketing Customer
Sales Advertising New-Product
Research Service
Manager Manager Manager
Manager Manager
Figure 4.4: Product
Management Organisation
Controlling and Evaluating
Performance
 Marketing Control: The process of measuring and

evaluating the results of marketing strategies and plans
and taking corrective action to ensure that marketing
objectives are attained.
 Marketing Audit: A comprehensive, systematic and

periodic examination of a company’s environment,
objectives, strategies and activities to determine problem
areas and opportunities and to recommend a plan of
action to improve the company’s marketing performance.
Figure 4.5: The
Control Process
Step 1. Ask “Where Are We
Now?”
 SWOT Analysis
 Strengths
• Competencies? Sustainable Competitive
Internal Advantages? Unique Selling Points?
 Weakness
 Opportunities
External
 Threats
 SWOT should result in information
about:
 Firm itself
 Trends in industry
 Competitors
 Customers
 Need to translate into action plan

Step 2: Ask “Where Do We
Want To Go?”
 Objectives:
 Make a profit
 Develop the organization
 Be socially useful
 Company objectives affect marketing
objectives
 Objectives must be compatible
 Coy resources may limit opportunities
• Financial strength, marketing strength, production
capability and flexibility
Step 3: Segment, Target,
Position
 Market Segmentation
 Identify buyers 1) with common needs, and 2) will
respond similarly
 Targeting
 Select a segment and focus efforts and resources
on it
 Positioning
 How consumers see your product
 Points of difference, company philosophy etc
Step 4: Develop Marketing
Program
 Strategies for the 4Ps

 What product to offer?
 At what price?
 How to promote to consumers?
 Where to place them for sale?
 Estimate budgets
Step 5: Implement & Control
 Implementation
 Obtain resources
 Organize the team
 Develop schedules
 Working with other departments
 Executing plan
 Control
 Steer to stay to plan
 Steps 4 & 5: Iterative process
 May need update of 4P strategies

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Lesson 2

Str ate gic Planning

1. Explain strategic planning and how it relates to the

 Visions demand a strategy, strategy requires a plan

Strategic SBU Strategy

• Business portfolio Corporate Strat

• Product/ market portfolio Business Strateg

Marketing Product Place Promotion Price

Promotion Personal Selling Sales

Yahoo!’s mission is to connect people to their passion, their

Our mission is to organize the world’s information and

Sustained growth depends on how broadly

Five basic questions to be answered:

Company objectives must be/have:

 A business portfolio is the collection of

 Most portfolio analyses evaluate the SBUs of a firm

 Determine the future role of each SBU and choose

1. Market Penetration: promoting the company

(1) Analyzing marketing opportunities

Marketing opportunity is an area of buyer need

Think of some companies who have

1. supplying something in short supply

 To succeed in today’s competitive marketplace,

 Demand Measurement and Forecasting

 The marketing mix is the set of

 The business plan incorporates the plans of all

Projected Profit-and-Loss Statement

 Action plans allow the product manager to

 To turn marketing strategies and plans into

 Implementation is affected by the

 Marketing Control: The process of measuring and

 Marketing Audit: A comprehensive, systematic and

 Need to translate into action plan

 Strategies for the 4Ps

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