Marketing Chap 1 10 07 2012 Strategic Planning for Competitive Advantage The Nature of Strategic Planning Strategic Planning is the managerial process of creating and maintaining a fit between the organization s objectives and resources and the evolving market opportunities Strategic Marketing Management 2 q s o What is the organization s main activity at a particular time o How will it reach its goals What is a Marketing Plan Planning is the process of anticipating future events and determining strategies to achieve Marketing Planning involves designing activities relating to marketing objectives and the organizational objectives in the future changing marketing environment Marketing plan written document acting as a guidebook of marketing activities o Help employees and managers understand and work toward common goals o Define the business mission performing a situational analysis defining objectives delineating a target market and establishing components of the marketing mix o Market share and profitability are end goal Writing a Marketing Plan Mission Statement the foundation of any marketing plan o o o a statement of the firm s business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions Should focus on the market or markets the organization is attempting to serve Marketing Myopia benefits customers seek o Defining a business in terms of goods and services rather than in terms of the Suffer when mission statements are too narrow Strategic Business Unit SBU A subgroup of a single business or collection of related businesses within the larger Should have a distinct mission and specific target market control over its resources its own competitors and plans independent of the other SBUs in the o o o organization organization Conducting a Situational Analysis SWOT Analysis o Strengths weaknesses opportunities threats For S and W focus on organizational resources Ex Production costs marketing skills financial resources For O and T analyze aspects of the marketing environment Environmental Scanning the collection and interpretation of information about forces events and relationships in the external environment that may affect the future of the organization Setting Marketing Plan Objectives Marketing Objective o A statement of what is to be accomplished through marketing activities Realistic have a chance of being met Measureable quantitatively measure whether objective has been met Time Specific by what time should it be met Compared to Benchmark important to know baselines o Carefully selected objectives Communicate marketing management philosophies and provide direction for lower level marketing managers Serve as motivators by creating something for employees to strive for Competitive Advantage A set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition Cost Competitive Advantage Being the low cost competitor in an industry while maintaining satisfactory profit margins Delivers superior customer value o Experience Curve Costs decline as experience with a product increases Learning by doing technological advances economies of scale o Efficient Labor Costs decline o No frills or options o Gvt subsidies o Product Design Costs decline as options are limited for customers Interest free loans to target industries Ease of manufacture and assembly o o Reengineering Product innovations o New methods of service delivery Costs decline Rethinking and redesigning to improve in performance New technology and simplified production techniques Product Service Differentiation Competitive Advantage Occurs when a firm provides something that is unique and valuable to buyers beyond simply offering a lower price than that of the competitors o iPhone to other smart phones for 200 Niche Competitive Advantage Target and effectively serve a single segment of the market Small companies with limited resources Markets with good growth potential but not crucial to the success of major competitors Building Sustainable Competitive Advantage An advantage that cannot be copied by competition o Netflix online movie shipping rental Unique position in some manner from rivals Strategic Directions Present Product New Product Present Market Market Penetration increase Product Development new market share among existing products for present markets customers New Market Market Development attracting Diversification increasing sales new customers to existing by introducing new products into products new markets Selecting a Strategic Alternative Portfolio Matrix share Classifies each SBU strategic business unit by its present or forecast growth and market Star fast growing market leader high market share and high growth Cash Cow high market share but low market growth generates more cash than it needs to maintain its market share Problem Child rapid growth but low profit margins and market share Dog low growth and low market share Describing the Target Market Marketing Strategy o o Involves the activities of selecting and describing one or more target markets and developing and maintaining a marketing mix that will produce mutually satisfying exchanges with target markets Marketing Opportunity Analysis MOA The description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these Target markets can be selected by appealing to the entire market with one marketing mix concentrating on one segment or appealing to multiple market segments using multiple market segments marketing mixes o Market segment must be fully described Demographics Psychographics Buyer behavior o Product o Place o Promotion o Pricing The Marketing Mix A unique blend of product place promotion and pricing strategies designed to produce mutually satisfying exchanges with a target market Includes the physical unit Packaging warranty brand name company image value Making products available when and where customers want them Advertising public relations sales promotion personal selling Important competitive weapon and important in determining revenue for the firm Implementation the specified time period budget guidelines o The process that turns a marketing plan into action assignments and ensures that these assignments are executed in a way that accomplishes the plan s objectives Time lines
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