Strategic Marketing and Planning

Strategic Marketing Management

w The mark of an excellent company is how it responds to a continuously changing environment w Benefits of planning
n n n n n

management becomes proactive facilitates integration communicates management intent ensures activities are goal-oriented monitor progress towards goals

Strategic Planning
w Strategic planning is the managerial process of developing and maintaining a viable fit between the organisations objectives and resources, and its changing market opportunities w The aim of strategic planning is to shape and reshape the companys businesses and products to produce satisfactory profits and growth

Planning hierarchy
Three levels: w Corporate strategic plan w Strategic Business Unit plan w Marketing plan

Corporate Level

Corporate Strategy Mission and vision Objectives Business portfolio strategy Resource development Corporate values

The Strategy Hierarchy

Corporate Strategic Plans

Strategic Business Unit Level

SBU Strategy

Functional Level of Marketing Strategy SBU Marketing objectives Product markets strategies

SBU Strategy Business definition Objectives Product market portfolio Competitive strategy Resource allocation and management

SBU Strategy

Corporate strategic planning concerns the organisation as a whole and ultimately deals with the allocation of funds across SBUs and returns generated on those funds

R&D Strategy Technology Product development

Production and operation strategy

Finance and administration Strategy

Human resources Strategy

Steps in Strategic Planning

Corporate Level Defining the Company Mission

w 4 planning activities
Defining Company Objectives and Goals Designing the Business Portfolio
n n n

define mission identify SBUs analyse and evaluate the current portfolio of businesses identify new business arenas to enter

Business Level

Planning, Marketing and Other Functional Strategies

Strategic Business Units

w The mission statement provides direction for the company
n n n

What business are we in? Who do we serve? What benefits do we provide?

w Elaborating on the mission w The mission statement acts as an invisible hand to guide geographically remote operations

w Companies too often describe their business in terms of a product they make w Levitt argues that a business must be viewed as a customer-satisfying process, not a goods-producing process w SBU business domain (Abell) w Purpose is to assign strategic planning responsibilities to these units

SBUs
w The General Electric (GE) approach w Definition of SBUs can be at any level of the company w At the corporate level, decisions are made concerning which SBUs to build, maintain, harvest, and divest

Planning tools
GE Business Screen w If either market attractiveness or business strength is weak, the company will not produce outstanding results w SBUs have a life cycle w May be used to forecast SBU position w Corporate decisions (Build;Hold;Harvest;Divest)

The GE Planning Grid

Business Strength
Average

Strategic Planning Gap

The output of portfolio analysis of SBUs is the identification of any gaps between future desired sales and projected sales. If a gap exists, corporate management must plan to either develop or acquire new businesses to fill the gap

Industry Attractiveness

Strong High

Weak

C A B D

Medium

Low

Closing the strategic gap

w Major classes of growth opportunities
n n n

Corporate, Business and Marketing Strategy Model

Business portfolio Capital investments and resource allocation Corporate culture Corporate structure Corporate Strategy Building core competencies Focus Economic value added Shareholde r Value

Intensive growth Integrative growth Diversification growth

Product/market portfolio Business Strategy Resource allocation Distinctive competencies Product- markets Developing competitive Business culture position Strategic cost Competitive advantage management Markets Products and services Profit- yielding strategies Brand management Profit improvement Marketing Strategy Developing market position Customer satisfaction

Focus Economic value added

Business Value

Focus
Customer value creation, maintenance and defence

Customer Value

Strategic Planning Process

w Linear and iterative w SWOT analysis
n

Marketing Strategy & the Marketing Plan

w Planning is conducted at two levels
n n

Performance-Importance matrix

annual plan long term plan

w Goals should be SMART w Strategy w Programs and action plans w Implementation

w It contains much greater detail than the corporate plan w It takes direction from the strategic plan

Planning tool
Market Growth Rate
High

Business Portfolios
Stars Question Marks

BCG Product Portfolio Matrix w Used at the product market level w Components w Is the portfolio balanced?

?? ?? ?
Cash Cows Dogs

Low

High

Low

Relative Market Share

Closing the marketing plan gap

w Market opportunity identification
n

Sales

Ansoffs Gap Analysis Chart

Objectives

Ansoffs Product/Market expansion grid

Diversification
Projected Gap to be closed

w Market opportunity evaluation

n

Projected Gap to be closed

Is the opportunity compatible with company objectives? Is the opportunity compatible with company resources?
Past

Competitive Gap
Forecast Future (No change strategy)

w Target market strategy

Now

Source: D.T. Brownlie & C.K. Bart, Products and Strategies, MCB University Press, Vol.11, No.1, 1985, p.29

Ansoffs Growth Vector Matrix

PRODUCTS / SERVICES Present MARKET Present New Product / Service development

Using the Ansoff Matrix in the Objective -setting Process

PRODUCTS / SERVICES Established Established Market penetration (1) New Product / Service development (2)

Market penetration

New

Market development

New

Diversification

MARKET

High Risk Market development (3) Diversification (4)

Source: D.T. Brownlie & C.K. Bart, Products and Strategies, MCB University Press, Vol.11, No.1, 1985, p.29

Profit improvement options

Profit Improvement Sales Growth Productivity Improvement Market Penetration Market Development Product Change Development Asset base Existing Assets

Marketing Plan contents

w Sales objectives w Target market w Marketing objectives and strategies w Positioning w Product & Branding w Price w Distribution w Operations plan w Promotion
n n n n

Take Increase New Convert Existing competitors usage Segments non-users Markets customers

New Markets

Cost Reduction

Improve asset Increase utilisation Price (experience and efficiency Cash and margin focus

Improve product sales mix ( margin)

Advertising message Media Merchandising PR

Growth focus

Investment innovation diversification

Divestment redeployment of capital resources

w Budget/payback analysis/calendar w Evaluation measures

Capital utilisation focus

Extended Marketing Mix

3. PEOPLE 1. PRODUCT & SERVICE Variety Quality Design Features Brand name Packaging Sizes Add-ons Warranties Returns 2. PRICE List price Discounts Allowances Settlement and credit terms People interacting with people is how many service situations might be described. Relationships are important in marketing 4. PROCESS
TARGET CUSTOMERS INTENDED POSITIONING

Guest Speaker
David Burke Australian Institute for Enneagram Studies Ph: 32191071 aies@enneagram.com.au enneagram.com.au

7. PROMOTION Advertising Personal selling Direct marketing Synchronous marketing

6. PLACEMENT for customer service Demand chain management Logistics management Channel management

In the case of high-contact services, customers are involved in the process. Technology is also important in conversion operations and service delivery 5. PHYSICAL EVIDENCE Services are mostly intangible. T hus the meaning of other tools and techniques used in measures of satisfaction are important

Planning the Migration

Planning dimensions: Management Process Technology Key milestones: Culture Space strategy People Information Marketing Strategy Desired Future Position

DemographicEconomic Environment

The Marketing Process TechnologicalMarketing

Channels
ng eti g rk nin Ma lan P
M An arke aly tin sis g

Natural Environment

Product

Suppliers
Key milestones: Place strategy

Place
ng eti rk trol Ma on C

Target Price Consumers Promotion

Im M ple ark m eti en ng tat ion

Publics

Present Position

th Pa on ati r g Mi

PoliticalLegal Environment

Competitors

SocialCultural Environment