strategic marketing plan copyright © houghton mifflin company

Strategic Marketing Plan

Copyright © Houghton Mifflin Company.All rights reserved. 3–2

Definitions of Strategy and Tactics

Strategy:

• An explicit statement of the firm’s vision of its future, objectives, and purpose

• Provides long-term direction for decisions

• Includes corporate policies, resource allocations, customer markets, and competitive environment


Definitions of Strategy and Tactics (cont’d)

Tactics:

• Serve as guidelines for implementing the intent of the strategic plan

• Are the basis for day-to-day operating decisions (including the marketing mix)

• Have a shorter-term planning horizon than strategic planning


Dimensions That Define Strategy

• The product market in which the business will compete

• The level of investment in a strategic business unit

• The functional area strategies required for competing in the chosen market

• The underlying strategic assets and skills (core competencies) that give the firm a sustainable competitive advantage


Marketing, Strategic Planning, and Organizational Levels

Insert table 3.1


Fee

db

ack

The Strategic Planning Process

Mission

Set Performance Objectives

Environmental and Self Analyses

Strategic Objectives & Strategy Definition

Implementation and Tactics

Execution

Evaluation and Control


Strategic Perspectives

• Strategic readiness

– Ability to take advantage of unexpected market opportunities by having a long-term strategic plan and vision in place

• Strategic vision

– Longer-term, futuristic perspective, requires patience and determination

• Strategic opportunism

– Focus on present, and seizing market opportunities in a dynamic, uncertain environment


External Environmental Analysis

• Customers

– Who are most desirable? Should the market be segmented?

– What are their characteristics, preferences, and behaviors?

• Competitor Assessment

– Who are our present and potential competitors?

– How well matched are their strategies and strengths to

– the market’s key success factors?

– What are their weaknesses?

– How much of a threat are they?


External Environmental Analysis (cont’d)

• Market

– What are the market segment characteristics?

– What market trends are occurring?

– What is the current and future size, growth rate, and direction of the market?

• Environmental scanning and forecasting

– What trends and events are apparent in both the micro- and macro-environments?

– What will be their impact on us?


Internal Organizational Analysis

• Financial resources

– Self-assessment of present financial assets

– Sources of funds (sales, interest, loans) and uses (inventories, interest) of assets

• Physical resources

– Assets presently available and those needed to implement strategy in the short - and long-run

– Property, plant, equipment, other assets


Internal Organizational Analysis (cont’d)

• Human resources

– Talents, skills, and abilities of managers and other personnel

– Outside specialists, suppliers, or others

• Technological resources

– In the form of products and processes

• Organizational resources

– Firm’s structure, systems, and procedures that support the strategy


Figure 3.3: Five-FactorModel of Profitability

Source: Model adapted from Michael Porter, “Industry Structure and Competitive Strategy: Keys to Profitability,” Financial Analysis Journal (July-August 1980) p. 33.


Strategic Inflection Point:A Six Forces Adaptation of the Five Forces Model

Suppliers

Existing Competitors

PotentialCompetitors

Complementors*

The Business Change The Business

Customers

Substitutes

Source: Adapted from Andrew Grove, “Navigating Strategic Inflection Points,” Business Strategy Review (Autumn, 1997), pp.12-13. Copyright London Business School. Reprinted by permission of Blackwell Publishers.

*Significance: Complementors counteract substitution.

Imbalance of Environmental Forces (Substitutes)


Strategic Inflection Point

Source: Adapted from Andrew Grove, “Navigating Strategic Inflection Points,” Business Strategy Review (Autumn, 1997), pp.12-13. Copyright London Business

School. Reprinted by permission of Blackwell Publishers.

“During a Strategic Inflection Point, the way a business operates, the very structure and concept of the business, undergoes a change. But the irony is that at this point itself nothing much happens.”


What Are the Basic Strategies for Sustainable Competitive Advantage?

Differentiation

Low Cost

PreemptiveMove

Synergy

Distinguishing one company’s products from competitors on the basis of greater perceived benefits and/or more value

Marketer achieves cost advantage by controlling costs of production, inputs, marketing programs, etc.

First-mover advantage from being first to enter market with a new product, innovation, etc.; creates barriers to entry for follow-on competitors

Combining the assets and skills of two or more units by sharing business functions, customers, marketing, personnel, etc.

Focus Concentration of the business on specific market segment(s) and/or product group(s)


Strategic Planning and the Challenge of Change

• Changes in approaches to strategy development

• Complexity and uncertainty

• Poverty of time

• Need for flexibility and adaptability

• Stakeholder involvement

• Integration of ethics and social responsibility


Complexity and Uncertainty in Strategic Market Planning

• Complexity

– The intricacies and relationships of the company and its industry partners make it difficult to analyze, understand, or solve complicated strategic problems.

• Uncertainty

– The vagueness and doubt about a company’s industry and general operating environment; not being sure of what is happening now or what to expect in the future.


Strategic Planning andCustomer Orientation

• Develop outstanding approaches to delivering customer satisfaction.

• Plan for value creation from the customer’s perspective.

• Pursue continuous quality improvement in products and processes.

• Develop the ability and willingness to re-engineer (or redesign) goods or services as indicated by the marketing environment or internal conditions.


Figure 3.5: Integration of Ethical and Socially Responsible Plans into Strategic Decision Making

Source: Adapted from Donald Robin and R. Eric Reidenbach, “Social Responsibility, Ethics, and Marketing Strategy: Closing the Gap Between Concept and Application,” Journal of Marketing 51(1) (January), pp.44-58.Reprinted by permission.


American Marketing AssociationCode of Ethics

• Responsibilities of the marketer to all relevant publics (consumers, organizations, and society)

• Honesty and fairness; uphold integrity, honor, and dignity of the marketing profession

• Rights and duties of participants in the marketing exchange process (including 4P’s and marketing research)

• Ethical behavior in organizational relationships


Figure 3.7: The Value Chain


Service

Cu

stom

er Valu

e N

eed A

ssessmen

t

Select T

arget(s)

Valu

e Po

sition

ing

Pro

du

ct/Service

Develo

pm

ent

So

urcin

g an

d

Makin

g

Distrib

utio

n

Pricin

g

Pro

mo

tion

and

P

ub

lic Relatio

ns

Ap

plicatio

n

En

gin

eering

Ad

vertising

Sellin

g

The Marketing Value Chain

Value = Benefit – Price

Source: Redrawn from Anterasian and Phillips in Webster, Market-Driven Management (1994).

Choosethe Value

Provide the ValueCommunicate

the Value

strategic marketing plan copyright © houghton mifflin company

Documents

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strategic marketing

strategic inflection

underlying strategic

longterm strategic plan

business strategy reviewautumn

competitive strategy

product market