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Marketing Concept, Customer Needs, American Marketing Marketing Concept, Customer Needs, American Marketing Association, Customers, Employees, Investors, Strategic Association, Customers, Employees, Investors, Strategic Planning, Mission Statement, Organizational Objectives, Planning, Mission Statement, Organizational Objectives,

Organizational Strategies, Competitive Advantage, Organizational Strategies, Competitive Advantage, Organizational Portfolio Plan, The Marketing Management Organizational Portfolio Plan, The Marketing Management

Process, Marketing Planning, Implementation and Control of the Process, Marketing Planning, Implementation and Control of the Marketing Plan, Marketing Information Systems and Marketing Marketing Plan, Marketing Information Systems and Marketing

Research, Cross-functional Strategic PlanResearch, Cross-functional Strategic Plan

Strategic Planning and the Marketing Strategic Planning and the Marketing Management ProcessManagement Process

Chapter 1Chapter 1

Key TermsKey Terms

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The Marketing ConceptThe Marketing Concept

An organization should seek to make a profit by An organization should seek to make a profit by serving needs of customersserving needs of customers

Purpose of marketing concept is to rivet attention Purpose of marketing concept is to rivet attention of marketing managers on serving broad classes of of marketing managers on serving broad classes of customer needscustomer needs

Principal task of marketing function operating Principal task of marketing function operating under marketing concept is to find effective and under marketing concept is to find effective and efficient means of making the business do what efficient means of making the business do what suits interests of customerssuits interests of customers

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What is Marketing?What is Marketing?

““The process of planning and executing The process of planning and executing conception, pricing, promotion and distribution of conception, pricing, promotion and distribution of ideas, goods and services to create exchanges ideas, goods and services to create exchanges that satisfy individual and organizational goals”that satisfy individual and organizational goals”

–– The American Marketing AssociationThe American Marketing Association

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What is Strategic Planning?What is Strategic Planning?

True mission of an organization is to provide value True mission of an organization is to provide value for three key constituencies for three key constituencies CustomersCustomers EmployeesEmployees InvestorsInvestors

Objectives and strategies established at the top Objectives and strategies established at the top level provide context for planning in each of the level provide context for planning in each of the divisions and departmentsdivisions and departments

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What is Marketing?What is Marketing?

Major Types of MarketingMajor Types of Marketing

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Strategic Planning and Marketing Strategic Planning and Marketing ManagementManagement

Includes all activities that lead to development of a Includes all activities that lead to development of a clear organizational mission, objectives, and clear organizational mission, objectives, and appropriate strategiesappropriate strategies

Plays a key role in achieving an equilibrium Plays a key role in achieving an equilibrium between short and long term, by balancing between short and long term, by balancing acceptable financial performanceacceptable financial performance

Prepares for inevitable changes in markets, Prepares for inevitable changes in markets, technology, and competition, as well as in technology, and competition, as well as in economic and political arenaseconomic and political arenas

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The Strategic Planning ProcessThe Strategic Planning Process

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The Strategic Planning ProcessThe Strategic Planning Process

Mission statement – In developing a mission Mission statement – In developing a mission statement, management must take into accountstatement, management must take into account Organization’s historyOrganization’s history Organization’s distinctive competitivenessOrganization’s distinctive competitiveness Organization’s environmentOrganization’s environment

Mission statement should beMission statement should be Focused on markets rather than productsFocused on markets rather than products AchievableAchievable MotivationalMotivational SpecificSpecific

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The Strategic Planning ProcessThe Strategic Planning Process

OOrganizational objectivesrganizational objectives End-points of an organization’s mission and are what it End-points of an organization’s mission and are what it

seeks through on-going, long-run operationsseeks through on-going, long-run operations Organizational strategiesOrganizational strategies

Involves choice of major directions organization will take Involves choice of major directions organization will take in pursuing its objectivesin pursuing its objectives

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The Strategic Planning ProcessThe Strategic Planning Process

Sample Organizational Objectives (Manufacturing Firm)Sample Organizational Objectives (Manufacturing Firm)

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The Strategic Planning ProcessThe Strategic Planning Process

Organizational growth based on products and marketsOrganizational growth based on products and markets Market penetration strategiesMarket penetration strategies Market development strategiesMarket development strategies Product development strategiesProduct development strategies DiversificationDiversification

Organizational strategies based on competitive Organizational strategies based on competitive advantageadvantage Ability to outperform competitors in providing something Ability to outperform competitors in providing something

that the market valuesthat the market values Porter suggests strategies based on cost leadership and Porter suggests strategies based on cost leadership and

differentiationdifferentiation

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The Strategic Planning ProcessThe Strategic Planning Process

Organizational Growth StrategiesOrganizational Growth Strategies

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The Strategic Planning ProcessThe Strategic Planning Process

Organizational strategies based on valueOrganizational strategies based on value ““Customer value” has become critical for marketers as Customer value” has become critical for marketers as

well as customerswell as customers Firms must seek to build long-term relationships with their Firms must seek to build long-term relationships with their

customers by offering unique valuecustomers by offering unique value

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The Strategic Planning ProcessThe Strategic Planning Process

Choosing an appropriate strategyChoosing an appropriate strategy Management should select those strategies consistent Management should select those strategies consistent

with its mission and capitalize on the organization’s with its mission and capitalize on the organization’s distinctive competenciesdistinctive competencies

Sustainable competitive advantage can be based on Sustainable competitive advantage can be based on either the assets or skills of the organizationeither the assets or skills of the organization

Key to sustaining a competitive advantage is to Key to sustaining a competitive advantage is to continually focus and build on the assets and skills that continually focus and build on the assets and skills that will lead to long-term performance gainswill lead to long-term performance gains

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The Strategic Planning ProcessThe Strategic Planning Process

Organizational portfolio planOrganizational portfolio plan Organizations at a particular time are a portfolio of Organizations at a particular time are a portfolio of

businesses – product lines, divisions, schoolsbusinesses – product lines, divisions, schools Management must decide which businesses to build, Management must decide which businesses to build,

maintain, or eliminate, or which new businesses to addmaintain, or eliminate, or which new businesses to add Organizations can create strategic business units Organizations can create strategic business units

(SBUs) which could be a single product, product line, or (SBUs) which could be a single product, product line, or divisiondivision

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The Marketing Management ProcessThe Marketing Management Process

Complete Strategic PlanComplete Strategic Plan Facilitates development of marketing plans for each Facilitates development of marketing plans for each

product, product line, or division of the organizationproduct, product line, or division of the organization Marketing plan serves as a subset of strategic planMarketing plan serves as a subset of strategic plan

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The Marketing Management ProcessThe Marketing Management Process

Defined as “the process of planning and executing the Defined as “the process of planning and executing the conception, pricing, promotion, and distribution of conception, pricing, promotion, and distribution of goods, services, and ideas to create exchanges with goods, services, and ideas to create exchanges with target groups that satisfy customer and organizational target groups that satisfy customer and organizational objectives”objectives”

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The Marketing Management ProcessThe Marketing Management Process

Strategic Planning and Marketing PlanningStrategic Planning and Marketing Planning

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The Marketing Management ProcessThe Marketing Management Process

Situation analysisSituation analysis Cooperative environmentCooperative environment Competitive environmentCompetitive environment Economic environmentEconomic environment Social environmentSocial environment Political environmentPolitical environment Legal environmentLegal environment

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The Marketing Management ProcessThe Marketing Management Process

Marketing planningMarketing planning Establishing marketing objectivesEstablishing marketing objectives Selecting the target marketSelecting the target market Developing the marketing mixDeveloping the marketing mix

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The Marketing Management ProcessThe Marketing Management Process

Implementation and control of marketing planImplementation and control of marketing plan Implementation involves putting the plan into action and Implementation involves putting the plan into action and

performing marketing tasks according to the predefined performing marketing tasks according to the predefined scheduleschedule

Controlling involves three basic stepsControlling involves three basic steps Measuring results of implemented marketing planMeasuring results of implemented marketing plan Comparing results with objectivesComparing results with objectives Making decisions on whether plan is achieving objectivesMaking decisions on whether plan is achieving objectives

Marketing information systems and marketing Marketing information systems and marketing researchresearch Need for current, reliable, and valid informationNeed for current, reliable, and valid information

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The Strategic Plan, The Marketing Plan, The Strategic Plan, The Marketing Plan, and Other Functional Area Plansand Other Functional Area Plans

Strategic planning is a top-management responsibilityStrategic planning is a top-management responsibility All strategic planning has marketing implicationsAll strategic planning has marketing implications Marketing objectives and strategies must be derived Marketing objectives and strategies must be derived

from the strategic planfrom the strategic plan Planning done in all functional areas of the Planning done in all functional areas of the

organization should be derived from strategic planorganization should be derived from strategic plan

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The Strategic Plan, The Marketing Plan, The Strategic Plan, The Marketing Plan, and Other Functional Area Plansand Other Functional Area Plans

The Cross-Functional Perspective in PlanningThe Cross-Functional Perspective in Planning

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The Strategic Plan, The Marketing Plan, The Strategic Plan, The Marketing Plan, and Other Functional Area Plansand Other Functional Area Plans

A Blueprint for Management Action: Relating the Marketing Plan to the Strategic Plan and the A Blueprint for Management Action: Relating the Marketing Plan to the Strategic Plan and the Production PlanProduction Plan

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Appendix – Portfolio ModelsAppendix – Portfolio Models

Portfolio Theory – Experience Curve and Resulting ProfitPortfolio Theory – Experience Curve and Resulting Profit

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Portfolio Models – BCG ModelPortfolio Models – BCG Model

The Boston Consulting Group Portfolio ModelThe Boston Consulting Group Portfolio Model

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Portfolio Models – The General Portfolio Models – The General Electric ModelElectric Model

The General Electric Portfolio ModelThe General Electric Portfolio Model

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Portfolio Models – The General Portfolio Models – The General Electric ModelElectric Model

Components of Industry Attractiveness and Business Strength at Components of Industry Attractiveness and Business Strength at GEGE