Strategic Marketing Planning

What is Strategic Planning?

It is the managerial process that helps to
develop a strategic and viable fit
between the firm’s objectives, skills,
resources with the market opportunities
available. It helps the firm deliver its
targeted profits and growth through its
businesses and products.

Strategic-Planning,
Implementation, and Control
Process

Planning Implementation Control

Corporate
planning
Organizing
Measuring
results
Division
planning Diagnosing
Implementing results
Business
planning
Taking
corrective
action
Product
planning
Corporate and Division Planning
Defining the corporate mission
Establishing SBUs
Allocating resources for SBUs
Planning for new business
Corporate Mission
This seeks to embody the entire goals of
the organization and the objective of its
existence.
It seeks to provide a sense of purpose,
direction and opportunity
5 questions that the firm must
ask itself
What is our business?
Who is our customer?
What does our customer need?
What will our business be?
What should our business be?
Good mission statements
have three characteristics
They focus on a limited number of goals
It stresses the major values and policies
the firm desires
It defines the major competitive scope of
operation
Competitive Scopes

Industry scope – range of industries that

the company will consider

Products and applications scope –
rang of products and applications in
which the company will participate

Competencies scope – range of
technological and other core
competencies the company will master
and leverage
Competitive Scopes

Market-segment scope – the type of

market or customers the company will
serve

Vertical scope – the number of channel
levels from raw materials to final
product and distribution in which the
company will engage

Geographic scope – the range of
regions, countries or country groups
Strategic Business Units (SBU)

To make planning more effective, a large,

diverse organization may divide itself
into smaller planning units called
Strategic Business Units

The unit should:
Be a separately identifiable business
Have a distinct mission
Have separate competitors
Have a separate group of executives
charged with profit responsibility
Have its own strategic plan

Establish Strategic Business
Units And Assign Resources

A ssig n in g re so u rce s b y e va lu a tin g b y

u sin g a n a lytica lto o ls fo r cla ssifyin g its
b u sin e sse s b y p ro fit p o te n tia l.

1 . B o sto n C o n su ltin g G ro u p M o d e l
2. G e n e ra lE le ctric M o d e l
The Boston Consulting
Group Matrix

Using this model, a strategic business unit

(SBU) can be classified according to two
factors: its market share relative to
competitors, and the growth rate of the
industry in which the SBU operates.
The resulting 2 x 2 grid has 4 quadrants
that represent distinct categories of
major products.
Each category is assigned a name that
reflects its market share, industry growth
rate, cash needs, and appropriate
strategies.
 COMPANY ’ S MARKET SHARE

Hig Low
h

High
GROWTH RATE
INDUSTRY

Stars Question marks

Low

Cash cows Dogs

 Boston Consulting Group portfolio analysis for Kodak, as it
might appear in 2004

Kodak digital Kodak digital

camera photo printer

Kodak film sales: US, Kodak self-

Canada, & W. Europe service kiosk
BCG Matrix (cont.)
Cash Cows – SBU’s that have a high
market share in a low sales growth
market.

Stars – SBU’s that have a high market
share in a high sales growth market.

Question marks – SBU’s that have a low
market share in a high sales growth
market.

Dogs – SBU’s that have a low market
share in a low sales growth market.
General Electric Model
Each business is rated in terms of two major dimensions,
market attractiveness and business strength.

1 . MARKET ATTRACTIVENESS – Overall market size, market

growth rate, profit margin, competitive intensity,
inflationary vulnerability, technological requirements,
environmental impact..
2.
3 . STRENGTH OF SBU / FIRM= Market share ,share growth,
product quality, brand reputation, distribution network,
promotion effectiveness, production capacity, productive
efficiency, R&D performance, managerial personnel.
Each of these factors is assigned weights and business is
measured of 5 point scale.
 Market Attractiveness:
Competitive- Position Portfolio
Classification
BUSINESS STRENGTH 1
5 Strong 3 2
. Medium . Weak .
5 .
. 0 6 3 0
7 Joint 3 0
0 0
MARKET ATTRACTIVENESS

s
Hig

0
h

3 Hydraulic Aerospace
pumps fittings
.
6
Clutche
Medium

7 s
Fuel
2 pumps
. Flexible
3 diaphragms
3 Relief
Low

1 valve
.
0 Invest/gro Selectivity/earnin Harvest/dive
0 w gs st
 (B)
Strategies BUSINESS STRENGTH
INVEST TO BUILD BUILD SELECTIVELY
•Specialize around
PROTECT POSITION •Challenge for limited
leadership. strength.
•Build selectively
•Invest to grow at maximum on •Seek ways to overcome
weaknesses.
MARKET ATTRACTIVENESS

digestible rate. strengths.

•Concentrate effort on •Withdraw if
Hig

•Reinforce
h

maintaining strength. indications of

vulnerable sustainable growth are
areas
SELECTIVITY /
lacking.
MANAGE FOR EARNING
•Protect existing LIMITED EXPANSION
BUILD SELECTIVELY
Medium

program. OR HARVEST
•Invest heavily in most •Look for ways to
attractive segments. •Concentrate
expand
•Build up ability to counterinvestments without high risk;
competition. in segments where
profitability is otherwise,
•Emphasize productivity minimize investment and
by raising productivity. good and
risks are relatively rationalize operations.
low. FOR EARNINGS
MANAGE
DIVEST
PROTECT AND REFOCUS •Protect position in
•Manage for current most •Sell at time that
Low

profitable segments. will

earnings. maximize cash value.
•Concentrate on attractive •Upgrade product
segments. line. •Cut fixed costs and
•Minimize avoid
•Defend strength. investment meanwhile.
investment.
Strong Medium Weak
18
Corporate New Business Plan
When gap between future desired sales
and projected sales, then three options.
1 . INTENSIVE GROWTH – current business
2.
3 . INTEGRATIVE GROWTH – build or acquire
businesses related to the company’s
current businesses.
4.
5 . DIVERSIFICATION GROWTH – opportunities
in unrelated business. Concentric (Same
technology / Marketing synergy), Horizontal
(Appeals to current customers),
Conglomerate (No relationship to the
company’s current technology, products, or
markets).
 The Strategic-Planning Gap

Desired
Desired
sales
sales
Diversification growth Strategi
c-
plannin
Integrative growth g
gap
Sal
es

Intensive growth

Current
Current
portfolio
portfolio

1
0 5
0
Time (years)
 Product-Market Growth
Matrix

Growth requires examination of both

products and markets; what needs
changing?
Should you stay and fight? Or should you
forge an alliance to meet the challenge?

 Product Market Growth Matrix
PRESENT PRODUCTS NEW PRODUCTS

PRESENT Market Product

MARKETS penetration development

NEW Market
MARKETS development Diversification

The product-market growth matrix depicts the options available in

considering markets and products.
Product-Market Growth
Matrix


market penetration: sell more of
present products/services to present
markets

market development: sell present
products to new markets or segments

product development: new
products/services for existing markets

diversification: new products to new
markets
The Business Strategic Planning Process

1. B u sin e ss m issio n
2. S W O T a n a lysis
3. G o a lfo rm u la tio n
4. S tra te g y fo rm u la tio n
5. Pro g ra m fo rm u la tio n
6. Im p le m e n ta tio n
7. Fe e d b a ck a n d co n tro l
SWOT - Opportunity And Threat

•A MARKETING OPPORTUNITY - is an area of buyer

need in which a company can perform profitably.
OPPORTUNITIES - can be classified
according to their attractiveness and their
success probability.

•AN ENVIRONMENTAL THREAT - is a challenge

posed by an unfavorable trend or development
that would lead, in the absence of defensive
marketing action, to deterioration in sales or
profit.
Threats should be classified according to
their seriousness and probability of
occurrence.
 Checklist For Strengths / Weaknesses
Analysis
Importance of factor(High ,Medium , Low) and
performance rating (Major/minor strength, Neutral,
Major/Minor weakness)on dimensions in
Marketing –Company reputation, marketshare,
product/service quality,
pricing/distribution/advtg/salesforce/innovation
effectiveness, geog coverage
Finance-cost/availability of capital, cash
flow/,financial stability
Manufacturing-facilities, economies of scale,
capacity, mfg skill ,dedicated workforce
Organization-visionary leadership, dedicated
employees, entrepreneurial orientation,
flexible/responsive
26

Goal Formulation

• O b je ctive s m u st b e
h ie ra rch ica l
• Q u a n tita tive
• R e a listic
• C o n siste n t
Strategy Formulation
MICHAEL PORTER ’ S THREE GENERIC STRATEGIES

• OVERALL COST LEADERSHIP – firms should be good at

engineering, purchasing, manufacturing and distribution.
•
• DIFFERENTIATION – on key customer benefit area e.g.
services, quality, style, technology.
•
• FOCUS – on narrow market segment and pursue either cost
leadership or differentiation.
•
• “CLEAR STRATEGY IMPORTANT ” - “Don’t be middle of the
roaders”
•
•
Program Formulation And
Implementation, Feedback & Control
PROGRAM FORMULATION - Develop programs in line
with strategy e.g. Technology leadership – strengths
– R&D, gather technological intelligence, develop
leading edge products, train technical sales force,
develops ads to communicate technology leadership.

IMPLEMENTATION – The McKinsey 7-S

Framework(Hardware-strategy, structure, systems and
Software-Style, Staff, Skills, Shared Values)

FEEDBACK & CONTROL - Need to review and revise

implementation, programs, strategies, or even
objectives.
The McKinsey 7-S Framework

Structure
Structure

Strategy
Strategy Systems
Systems

Shared
Shared
values
values
Skills
Skills Style
Style

Staff
Staff
 Marketing Process
The Value-Delivery Process
(a) Traditional physical process sequence

Make the product Sell the product

Design Procure Make Price Sell Advertise/ Distribute Service

product promote

(b) Value creation & delivery sequence

Choose the Value Provide the Value Communicate the Value

Strategic marketing Tactical marketing

Marketing Process
Involves
1.Analysing Marketing Opportunities
2.Developing marketing strategies (Differentiating
and positioning)
3.Developing marketing programs (Marketing mix)
4.Managing marketing effort through
- Annual plan control (Achievement of
sales, profits and other goods).
- Profitability control (Analysis of
profitability of products, customers, trade
channels and order sizes, Marketing
profitability analysis and marketing
efficiency studies).
- Strategic control (Appropriateness of
companies marketing strategy to market
conclusions through marketers audit).
 Factors Influencing Company’s Marketing
Strategy
Marketing
intermediarie
s
Demographic/ M Technical/
economic pl ark physical
sy ann etin

st at ing
environment environment

n
em io
st in g

sy rm et
em g
fo rk
in Ma Produ
ct

Supplier Place Target Price

s custo Publics
mers

or Ma

em nd at g
n ent on
pl a iz tin

io
g r Promotio

i
syan ket

at
im ganrke
st i z a i n n
or Ma
em tio g
Political/ n Social/
legal cultural
environment environment
Competitors
A Good Marketing Strategy

• Co-ordinates functional areas of

organisation
• Allocates resources efficiently
• Helps product attain market
position
• Competitive
Objectives Of Marketing Plan

1.Define current situation facing the product

(and how we got there)
2.Define problems and Opportunities
3.Establish objectives
4.Define strategies and programs necessary to
achieve objectives
5.Pinpoint responsibility to achieve
6.Encourage careful and disciplined thinking
7.Establish customer-competitor orientation
The Marketing Plan

Executive Summary & Table of Contents

Current Marketing Situation
Opportunity & Issue Analysis
Objectives
Marketing Strategy
Action Programs
Projected Profit-and-loss
Controls
Contents Of A Marketing Plan
I. Executive summary and table of Presents a brief over of the proposed plan
contents
II. Current marketing situation Presents relevant background data on the market,
product, competition, distribution, and macro-
III. Opportunity and issue analysis environment.
Identifies the main opportunities/threats,
strengths/weaknesses, and issues facing the
IV. Objectives product
Defines line.
the plan’s financial and marketing goals
in terms of sales volume, market share, and profit
V. Marketing strategy Presents the broad marketing approach that will
be used to achieve the plan’s objectives.
VI. Action programs Presents the special marketing programs designed
to achieve the business objectives.
VII. Projected profit-and-loss statement Forecasts the plan’s expected financial outcomes.

VIII. Controls Indicates how the plan will be monitored

Frequent Mistakes In Planning Process
1.Speed of planning
2.Amount of data collections
3.Who does the planning
4.Structure
5.Length of plan
6.Frequency of planning
7.Number of courses of action considered
8.Who sees the plan
9.Insufficient senior management leadership
10.Tying compensation to efforts
Thank You