Slide 1Strategic PlanningSteps in Strategic PlanningSteps in Strategic PlanningThe Mission StatementMission Statements:Steps in Strategic PlanningSetting Firm Objectives and GoalsSteps in Strategic PlanningDesigning the Business PortfolioStrategic Business UnitPortfolio AnalysisAnalyzing Current SBU’s: The BCG Growth-Share MatrixSlide 14Product/Market Expansion Grid Example: StarbucksProduct/Market Expansion Grid Example: StarbucksSo this has all been about “corporate strategy.”Managing Marketing Strategy and the Marketing MixThe Marketing MixThe Four P’s of the Marketing MixChapter 2Company and Marketing Strategy: Partnering to Build Customer RelationshipsStrategic PlanningStrategic Planning is the Process of Developing and Maintaining a Strategic Fit Between the Organizations Goals and capabilities and Its Changing marketing Opportunities.2Steps in Strategic Planning3Steps in Strategic Planning4The Mission StatementQuestions the mission statement should answer include:What is our business? Who is our customer?What do our customers value? What should our business be? 5Mission Statements: Amazon.com: We seek to be Earth’s most customer-centric company for four primary customer sets: consumers, sellers, enterprises, and content creators. IBM At IBM, we strive to lead in the invention, development and manufacture of the industry's most advanced information technologies, including computer systems, software, storage systems and microelectronics.  Procter & Gamble We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. 6Steps in Strategic Planning7Setting Firm Objectives and GoalsThe mission should be translated into supporting objectives for each level of management.Creates a hierarchy of objectives that are consistent with one anotherFor example:Overall corporate objective might be: increase profits Marketing objective might be: increase market are of more profitable product lines8Steps in Strategic Planning9Designing the Business PortfolioThe business portfolio is the collection of businesses and products that make up a company.The company must:Analyze its current business portfolio or strategic business units (SBU’s)Decide which SBUs get more, less, or no investment Develop strategies for growth or downsizing10Strategic Business Unit A unit of a company that has a separate mission and objectives and that can be planned independently from other company businesses.Can be a company division, a product line within a division, or sometimes a single product or brand.11Portfolio AnalysisAn evaluation of the products and businesses making up the company.Resources are directed to business units that help the company as a whole to be more successful.Business units that don’t contribute to the portfolio might be phased down or dropped.12Analyzing Current SBU’s: The BCG Growth-Share Matrix13Stars• High growth & share• May need heavy investment to grow• Eventually, growth will slow Relative Market Share High LowMarket Growth Rate Low High Question Marks• Low share SBUs in high growth markets• Require cash to hold market share• Build into Stars or phase out Question Marks• Low share SBUs in high growth markets• Require cash to hold market share• Build into Stars or phase out Cash Cows• Low growth, high share• Established, successful SBU’s• Produce cash Cash Cows• Low growth, high share• Established, successful SBU’s• Produce cashDogs• Low growth, low share• Generate cash to sustain self• Do not promise to be cash sourceDogs• Low growth, low share• Generate cash to sustain self• Do not promise to be cash sourceIn addition to analyzing current businesses, a company must think about growth strategiesProduct/Market Expansion Grid14Market PenetrationProductDevelopmentMarket DevelopmentExistingNewP R O D U C TNewM A R K E TDiversificationExistingProduct/Market Expansion Grid Example: StarbucksMarket Penetration: make more sales to current customers without changing products.How? Add new stores in current market areas; improve advertising, price, service Market Development: identify and develop new markets for current products.How? Pursue different demographic customer group (ethnicities) expand to different geographic regions(global expansion) 15Product/Market Expansion Grid Example: StarbucksProduct Development: offer modified or new products to current markets.How? Add food offerings sell coffee in supermarkets Diversification: start up or buy businesses outside current products and marketsHow? Making and selling music cd’s testing restaurant concepts, coffee makers 16So this has all been about “corporate strategy.”What role does marketing play?Provides a guiding philosophyRepresenting the customer and the demand side of the businessProvides inputs to strategic plannersEstimates of market size, customer trends, etc.Designs strategies to achieve corporate objectives17Managing Marketing Strategy and the Marketing Mix18The Marketing Mix The set of controllable, tactical tools that marketers blend to produce the response it wants from the target market.Consists of the Four P’s of Marketing1. Product 2. Price 3. Place4. Promotion19The Four P’s of the Marketing