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Strategic Planning in Contemporary Marketing1Chapter 2 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. ObjectivesDistinguish between strategic planning and tactical planning.Explain how marketing plans differ at various levels in an organization.Identify the six steps in the marketing planning process.2Chapter 2 Strategic Planning in Contemporary Marketing 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.ObjectivesDescribe successful planning tools and techniques, including Porters Five Forces model, first and second mover strategies, SWOT analysis, and the strategic window.Identify the two basic elements of a marketing strategy.Describe the environmental characteristics that influence strategic decisions.3Chapter 2 Strategic Planning in Contemporary Marketing 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.ObjectivesDescribe the methods for marketing planning, including business portfolio analysis and the BCG matrix.4Chapter 2 Strategic Planning in Contemporary Marketing 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Marketing Planning: The Basis for Strategy and TacticsPlanning - Anticipating future events and conditions and determining the best way to achieve organizational objectivesContinuous process that includes:Identifying objectives Determining the actions through which a firm can attain those objectivesCreates a blueprint for everyone in the organization

5 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingMarketing Planning: The Basis for Strategy and TacticsMarketing planning - Implementing planning activities devoted to achieving marketing objectivesMany planning activities take place over the Internet with virtual conferences6 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingMarketing Planning: The Basis for Strategy and TacticsAn important trend in marketing planning centers on relationship marketingA firms effort to develop long-term, cost-effective links with individual customers and suppliers for mutual benefit

7 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingStrategic Planning Versus Tactical Planning8Strategic PlanningDetermining an organizations primary objectives Adopting courses of action that will achieve these objectivesProvides long-term direction for its decision makers

Tactical PlanningGuides the implementation of activities specified in the strategic planAddresses shorter-term actions

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingTable 2.1 - Planning at Different Managerial Levels9

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingSteps in the Marketing Planning ProcessDefining the organizations mission and objectivesMission - Essential purpose that differentiates one company from anotherWalmart: Save money. Live better.Infiniti: Inspired performance.10 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingSteps in the Marketing Planning ProcessObjectives - Guide the development of marketing objectives and plansFor example:Generate a 15 percent profit over the next 24 monthsAdd 25 new outlets within the next year

11 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingAssessing Organizational Resources and Evaluating Environmental Risks and Opportunities12Resources include:ProductionMarketingFinanceTechnologyEmployeesStrengths help planners:Set objectivesDevelop plansTake advantage of marketing opportunities

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingFormulating, Implementing, and Monitoring a Marketing StrategyMarketing strategy - Selecting and satisfying target consumers through the marketing mix elementsThe final steps of the planning process:Marketers put the marketing strategy into action Marketers monitor performance to ensure that objectives are achieved

13 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingSuccessful Strategies: Tools and TechniquesPorters Five Forces modelThe potential of new entrantsThe bargaining power of buyersThe bargaining power of suppliersThe threat of substitute productsRivalry among competitors

14 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingFigure 2.2 - Porters Five Forces Model15

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingFirst Mover and Second Mover StrategiesFirst mover strategy - The company first to offer a product in a marketplace will be the long-term market winnerSecond mover strategy - Observing the innovations of first movers and then improving on them to gain advantage in the marketplace

16 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingSWOT AnalysisHelps planners compare internal organizational strengths and weaknesses with external opportunities and threatsProvides managers with a critical view of the organizations internal and external environments Helps them evaluate the firms fulfillment of its basic mission

17 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingFigure 2.3 - SWOT Analysis18

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingThe Strategic WindowLimited periods when key requirements of a market and a firms particular competencies best fit togetherRequires a thorough analysis of:Current and projected external environmental conditionsCurrent and projected internal company capabilitiesHow, whether, and when the firm can reconcile environmental conditions and company capabilities

19 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingElements of a Marketing StrategyThe target marketMarketing mix variables

20 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingThe Target MarketThe group of people toward whom the firm directs its marketing efforts and merchandiseExample: Boeing markets most of their products to business buyers such as Delta AirlinesDiversity plays a critical roleExample: Growing Hispanic population in United States

21 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingThe Target MarketTargeting consumers in specific global markets represents a challenge and an opportunity

22 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingMarketing Mix VariablesMarketing mix - Blending four strategy elements to fit the needs and preferences of a specific target marketProductDistributionPromotionPricing

23 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingFigure 2.4 - Element of a Marketing Strategy and Its Environmental Framework24

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingProduct StrategyDeciding what goods or services the firm should offer to a group of consumersCustomer servicePackage designBrand names, trademarks, patents, and warrantiesLifecycle of a productProduct positioningNew-product development25 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingDistribution StrategyConsumers find their products in the proper quantities at the right times and placesInvolves modes of transportation, warehousing, inventory control, order processing, and selection of marketing channelsTechnology has opened new channels of distribution in many industries

26 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingPromotion StrategyCommunication link between sellers and buyersFirms may communicate messages:Directly through salespeople Indirectly through advertisements and promotionsMany companies use integrated marketing communications (IMC)

27 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingPricing Strategy Deals with methods of setting profitable and justifiable pricesSubject to regulation and public scrutinyA good pricing strategy:Creates value for customersBuilds and strengthens customer relationships with a firm and its products

28 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingThe Marketing EnvironmentFive external dimensions that affect the marketing mix variables:CompetitivePolitical-legalEconomicTechnologicalSocial-cultural29 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingThe Marketing EnvironmentBusinesses increasingly looking to foreign shores for new growth marketsTechnology continues changing the marketing environmentRule of three - In any industry, the three strongest, most efficient companies dominate 70 and 90 percent of a marketExample: Cereal manufacturers - General Mills, Kelloggs, and Post30 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingMethods for Marketing PlanningBusiness portfolio analysisAn evaluation of a companys products and divisions to determine the strongest and weakest

31 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingStrategic Business UnitsKey business units within diversified firmsEach strategic business unit (SBU):Has its own managers, resources, objectives, and competitorsPursues its own distinct mission and develops its own plans independentlyHelp focus the attention of company managersCompanies may have to redefine their SBUs as market conditions dictate32 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingThe BCG MatrixDeveloped by the Boston Consulting GroupA market share/market growth matrix that plots market share against market growth potential

33 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingFigure 2.5 - BCG Market Share/Market Growth Matrix34

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingStrategic Implications of Marketing in the 21st CenturyPlanning becoming vital as technology advancesMarketers must consider:A changing, diverse population The boundaryless business environment created by the InternetPlanning reduces risk and worry of bringing new goods and services to the market35 2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary MarketingNederlander Video36http://www.cengage.com/marketing/book_content/boone_9781133628460/videos/ch02.html

2016 Cengage Learning.All Rights Reserved.May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.Chapter 2 Strategic Planning in Contemporary Marketing