Chapter 2 Strategic Planning for Competitive Advantage 11 20 12 1 51 PM The Nature of Strategic Planning Is the managerial process of creating and maintaining a fit between the organizations objectives and resources and the evolving market opportunities The goal is long run profitability and growth Strategic decisions require long term commitments of resources Example March of Dimes survived by making the strategic decision to switch to fighting birth defects and not just fighting polio a disease that no longer existed What is a Marketing Plan Planning is the process of anticipating future events and determining strategies to achieve organizational objectives in the future Marketing planning involves designing activities relating to marketing objectives and the changing marketing environment o Is the basis for all marketing strategies and decisions o Entails issues such as product liens distribution channels marketing communications and pricing Marketing plan is a written document that acts as a guidebook of marketing activities for the marketing manager Why Write a Marketing Plan By specificying objectives and defining the actions required to attain them you can provide in a marketing plan the basis by which actual and expected performance can be compared Written marketing plan provides clearly stated activities that help employees and managers understand and work toward common goals Writing a marketing plan allows you to examine the marketing environment in conjunction with the inner workings of the business Marketing plan allows the marketing manager to enter the marketplace with an awareness of possibilities and problems Marketing Plan Elements Most businesses need a written marketing plan because a marketing plan is large and can be complex Elements include defining the business mission performing a situation analysis defining objectives delineating a target market and establishing components of the marketing mix o Other elements that may be included are budgets implementation timetables required marketing research efforts or elements of advanced strategic planning Companies have one or two philosophies about when they expect profits o 1 They either pursue profits right away o 2 First seek to increase market share and then pursue profits In the long run market share and profitability are compatible goals Matrix form helps managers to select a strategic alternative Writing the Marketing Plan Marketing plan is only as good as the information it contains and the effort creativity and thought that went into its creation Overall structure of the marketing plan should not be viewed as a series of sequential planning steps o Many are decided on simultaneously and in conjunction with one another There is no single correct format for a marketing plan Defining the Business Mission Foundation of any marketing plan is the firms mission statement which answers what business are we in Mission statement is based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions strategies o It establishes boundaries for all subsequent decisions objectives and Mission statement should focus on the market or markets the organization is attempting to serve rather than on the good or service offered Business mission statements that are stated too narrowly suffer from marketing myopia defining a business in terms of goods and services rather than in terms of benefits customers seek o Myopia means narrow short term thinking o Example Frito Lay s business mission is being in the snack food business rather than in the corn chip business Business statements can be too broad Strategic Business Unit SBU is a subgroup of a single business or collection of related businesses within the larger organization o Example Kraft foods has SBU for breakfast food dessert pet food Conducting a Situation Analysis Marketers must understand the current and potential environment in which the product or service will be marketed Situation analysis is known as SWOT analysis o Firm should identify its internal strengths S and weaknesses W and also examine external opportunities O and threats T When examining internal strengths and weaknesses the marketing manager should focus on organizational resources such as production costs marketing skills financial resources company or brand image employee capabilities and available technology o Also consider historical background of the firm its sales and profit history When examining external opportunities and threats marketing managers must analyze aspects of the marketing environment This process is called 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 or the implementation of the marketing plan o Environmental scanning helps identify market opportunities and threats and provides guidelines for the design of marketing strategy o 6 most studied forces are social demographic economic technological political and legal and competitive o Example Vitamin water vs Sobe and their rise taking advantage of costs Setting Marketing Plan Objectives Before the details of a marketing plan can be developed objectives for the plan must Marketing Objective is a statement of what is to be accomplished through marketing Stated objectives should be realistic measurable time specific compared to a Carefully specific objectives serve several functions o They communicate marketing management philosophies and provide direction for lower level marketing managers so that marketing efforts are integrated and pointed in a consistent direction o They also serve as motivators by creating something for employees to strive be stated activities benchmark for o Writing specific objectives forces executives to clarify their thinking o Objectives form a basis for control the effectiveness of a plan can be gauged in light for the stated objectives Competitive Advantage Performing a SWAT analysis allows firm to identify competitive advantage Competitive Advantage is 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 Cost leadership can result from obtaining inexpensive raw materials creating an efficient scale of plant operations designing products for ease of manufacture controlling
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