Strategic Marketing Planning

What is Strategic Planning?

It is the managerial process that helps to develop a strategic and viable fit between the firms objectives, skills, resources with the market opportunities available. It helps the firm deliver its targeted profits and growth through its businesses and products.

How to go about it?

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?

Marketing Myopia

Industry is a customer satisfying process not a goods producing process. It is important therefore how you redefine your business.

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

SBU

It is a company within a company The business is differentiated from the rest of the company It has its own set of competitors It is a separate profit centre

SWOT Analysis

Strengths Weaknesses Opportunities Threats

Scanning the internal environment

SWOT Analysis
Threat

Weakness

Strength
Organization

Opportunity

Identifying Resource Strengths and Competitive Capabilities

A strength is something a firm does well or an attribute that enhances its competitiveness

Valuable competencies or know-how Valuable physical assets Valuable human assets Valuable organizational assets Valuable intangible assets Important competitive capabilities An attribute that places a company in a position of market advantage Alliances or cooperative ventures with partners

Resource strengths and competitive capabilities are competitive assets!

Identifying Resource Weaknesses and Competitive Deficiencies

A weakness is something a firm lacks, does poorly, or a condition placing it at a disadvantage Resource weaknesses relate to

Inferior or unproven skills, expertise, or intellectual capital Lack of important physical, organizational, or intangible assets Missing capabilities in key areas

Resource weaknesses and deficiencies are competitive liabilities!

Identifying a Companys Market Opportunities

Opportunities

most relevant to a company are those offering

Good match with its financial and organizational resource capabilities

Best prospects for profitable long-term growth Potential for competitive advantage

Identifying External Threats Emergence of cheaper/better technologies

Introduction of better products by rivals Entry of lower-cost foreign competitors Onerous regulations Rise in interest rates Potential of a hostile takeover

Unfavorable demographic shifts

Adverse shifts in foreign exchange rates Political upheaval in a country

BCG Growth Share Matrix.

Star.

Stars are market leaders & are usually able to generate enough cash to maintain their high market share.When their growth rate slows ,star become cash cows.

Cash Cows.

As leaders in mature market, cash cows exhibit a return on assets that is greater than the market growth rate & thus generate more cash than they consume. Cash cows bring in a far more money than is needed to maintain their market.Organistion often tap their cash cows in order to draw out resources required elsewhere in the organization.

Question Marks.

QM are also called wildcats/problem child are new products with potential for success but they need lot of cash for development. If such a product is to gain enough market share to become a market leader & thus a star money must be taken from more mature products & spend on question mark.

Dogs.

The dogs have low market share & do not have potential to bring in much cash. Dogs should be sold off or managed carefully for the small amount of cash they can generate.
Dogs are cash trap.

Remarks on BCG Matrix.

High market share is not the only success factor.

The BCG Matrix

??? Stars

Build

Hold

Dogs Divest

Cash Cows
Harvest
Mkt Share

The GE Model
Weak Medium Strong Strong

Medium

Weak Business Strength

Ansoffs Product-Market Grid

Current products New products Current Mkts Mkt penetration Product development strategy strategy

New Mkts

Mkt development strategy

Diversification strategy

The Planning Process

Analysing Market opportunities Developing Marketing strategies Planning Marketing Programs Managing the Marketing Effort

Porters Generic Strategies

Overall cost leadership Product Differentiator Focus

Low-Cost Leadership

Make achievement of low-cost relative to rivals the theme of firms business strategy

Find ways to drive costs out of business yearafter-year

Low-cost leadership low Low-cost leadership means means low OVERALL costs, not just low low overall costs, not just manufacturing or production costs!costs! manufacturing or production

Differentiation Strategies

Incorporate differentiating features that cause buyers to prefer firms product or service over brands of rivals Keys to success

Find ways to differentiate that create value for buyers and that are not easily matched or cheaply copied by rivals Not spending more to achieve differentiation than the price premium that can be charged

Focus / Niche Strategies

Involve concentrated attention on a narrow piece of the total market Objective

Serve niche buyers better than rivals Choose a market niche where buyers have distinctive preferences, special requirements, or unique needs Develop unique capabilities to serve needs of target buyer segment

Keys to success

Marketing Control

Annual Plan control Profitability control Strategic Control