CH 02

Strategic Planning for
Competitive Advantage
Chapter 2
Prepared by
Deborah Baker
Texas Christian University
Chapter 2 Marketing 7e Lamb Hair McDaniel
2004 South-Western/Thomson Learning
Learning Objectives
1. Understand the importance of strategic
marketing and know a basic outline for a
marketing plan.
2. Develop an appropriate business mission
statement.
3. Describe the criteria for stating good
marketing objectives.

Learning Objectives (continued)

4. Explain the components of a situation
analysis.
5. Identify sources of competitive advantage.
6. Identify strategic alternatives and describe
tools used to help select alternatives.
7. Discuss target market strategies.

Learning Objectives (continued)

8. Describe elements of the marketing mix.
9. Explain why implementation, evaluation, and
control of the marketing plan are
necessary.
10. Identify several techniques that help make
strategic planning possible.

On
OnLine
Line
http://www.coach.com
http://www.coach.com
http://www.vuitton.com
http://www.vuitton.com
http://www.katespade.com
http://www.katespade.com
Learning Objective
Understand the
importance of
strategic marketing
and know
a basic outline for a
marketing plan.

Strategic Planning
On
OnLine
Line
http://www.coke.com
http://www.coke.com
http://www.pepsi.com
http://www.pepsi.com

The managerial process of

creating and maintaining a
fit between the
organizations objectives
and resources and evolving
market opportunities.
Strategic Planning
EVOLVING
MARKET
OPPORTUNITIES
LONG RUN
PROFITABILITY
AND GROWTH
RESOURCES
&
OBJECTIVES

Strategic Marketing Planning
What
What is
is the
the organizations
organizations main
main activity?
activity?
How
How will
will itit reach
reach its
its goals?
goals?
The
The Marketing
Marketing Plan
Plan
Planning
The process of anticipating

future events and
determining strategies to
achieve organizational
objectives in the future.

The Marketing Plan
A written document that

acts as a guidebook of
marketing activities for the
marketing manager.

10
Why Write a Marketing Plan?
Provides a basis for comparison of actual

and expected performance
Provides clearly stated activities to work

toward common goals
Serves as a reference for the

success of future activities
Allows entry into the

marketplace with awareness

g
in
t
ke n
r
Ma Pla
11
Business Mission
Statement
On
OnLine
Line
http://www.dmusic.com
http://www.dmusic.com
Marketing Plan
Process
Objectives
Situation or SWOT
Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product
Distribution
Promotion
Price
Implementation
Evaluation
Control

12
Learning Objective
Develop an
appropriate
business mission
statement.

13
Defining the Business Mission
On
OnLine
Line
http://www.att.com
http://www.att.com
Answers the question,

What business are we in
and where are we going?
Focuses on the market(s)

rather than the good or service
Strategic Business Units may

also have a mission statement

14
AMAs Mission Statement

15
PepsiCos Mission Statement

PepsiCos overall mission is to increase the value of our
shareholders investment.
We do this through sales
growth, cost controls and wise investment of resources.
We believe our commercial success depends upon
offering quality and value to our consumers and
customers; providing products that are safe, wholesome,
economically efficient and environmentally sound; and
providing a fair return to our investors while adhering to
the highest standards of integrity.
http:\\www.pepsico.com

16
Strategic Business Units (SBUs)
Characteristics
Characteristics
1.
A distinct mission and specific target

market
2.
Control over their resources
3.
Their own competitors
4.
Plans independent of other SBUs

17
Learning Objective
Describe the criteria

for stating good
marketing objectives.

18
Marketing Objective
A statement of what is to be
accomplished through
marketing activities.

19
Marketing Objectives
Marketing
MarketingObjectives
ObjectivesMust
MustBe:
Be:
Realistic
Measurable
Time specific
Our objective is to
increase market share
by 40% and to obtain
customer satisfaction
ratings of at least 90%
in 2003.
Consistent with
Organizations
Priorities
20
Examples of Marketing Objectives

21
Marketing Plan Objectives
Communicate marketing
management philosophies
Provide direction
Serve as motivators
Clarify thinking
Provide basis for control

22
Learning Objective
Explain the
components
of a situation
analysis.

23
SWOT Analysis
Identifying
internal strengths (S)
and weaknesses (W)
and also examining
external opportunities (O)
and threats (T)

24
SWOT Analysis
S
W
O
T
Things
Things the
the company
company does
does well.
well.
Internal
External
Things
Things the
the company
company does
does not
not do
do well.
well.
Conditions
Conditions in
in the
the external
external environment
environment
that
that favor
favor strengths.
strengths.
Conditions
Conditions in
in the
the external
external environment
environment
that
that do
do not
not relate
relate to
to existing
existing strengths
strengths
South-Western
College
Publishing
or
areas
of
or favor
favor
areas
of current
current weakness.
weakness.

25
SWOT Analysis
Strengths
Strengths
and
and
Weaknesses
Weaknesses
INTERNAL
INTERNAL
Production
Costs
Marketing
Skills
Employee
Capabilities
Financial
Resources
Available
Technology
Company/Brand
Image
26
SWOT Analysis
Opportunities
Opportunities
And
And
Threats
Threats
EXTERNAL
EXTERNAL
Social
Demographic
Economic
Technological
Political/Legal
Competitive

27
Environmental Scanning
Collection and interpretation of

information about forces,
events and relationships in the
external environment that may
affect the future of the
organization or the marketing
plan implementation.
28
Environmental Scanning
Examination of macroenvironmental forces

Social
Demographic
Economic
Technological
Political / Legal
Competitive
Helps identify market

opportunities
Provides guidelines for

design of marketing strategy

29
Learning Objective
Identify sources of
competitive
advantage

30
The set of unique features of

a company and its products
that are perceived by the target
market as significant and
superior to the competition.

31
On
OnLine
Line
http://www.travelocity.com
http://www.travelocity.com
Cost
Cost
Types
Types of
of
Competitive
Competitive
Advantage
Advantage
Product/Service
Product/Service
Differentiation
Differentiation
Niche
Niche Strategies
Strategies
32
Cost Competitive Advantage
Being the low-cost competitor

in an industry while
maintaining satisfactory
profit margins.

33
Cost Competitive Advantage
Obtain
Obtain inexpensive
inexpensive raw
raw materials
materials
Create
Create efficient
efficient operations
operations
Design
Design products
products for
for manufacture
manufacture
Control
Control overhead
overhead costs
costs
Avoid
Avoid marginal
marginal customers
customers
34
Sources of Cost Reduction
Experience
Experience Curves
Curves
Product
Product Design
Design
Efficient
Efficient Labor
Labor
Reengineering
Reengineering
No-frills
No-frills Products
Products
Production
Production Innovations
Innovations
Government
Government Subsidies
Subsidies
New
New Delivery
Delivery Methods
Methods

35
Product/Service Differentiation
Advantage achieved when a

firm provides something that
is unique and valuable to
buyers beyond simply
offering a lower price
than the competition.

36
Examples of
Product/Service Differentiation
Brand names
Strong dealer network
Product reliability
Image
Service
37
Niche
Advantage achieved when a

firm seeks to target and
effectively serve a small
segment of the market.

38
Niche Competitive Advantage
Used by small companies with

limited resources
May be used in a limited geographic
market
Product line may be focused on a
specific product line
39
Sustainable
An advantage
that cannot be copied
by the competition.

40
Sources of Sustainable
5
Patents
Patents
Copyrights
Copyrights
Locations
Locations
Equipment
Equipment
Organizations
Organizations
Skills
Skills and
and Assets
Assets
Technology
Technology
Customer
Customer Service
Service
Promotion
Promotion

41
Learning Objective
Identify strategic
alternatives and
describe tools used
to help select
alternatives.

42
Strategic Alternatives
6
Market
Market
Penetration
Penetration
Increase market share among

existing customers
Market
Market
Development
Development
Attract new customers to

existing products
Product
Product
Development
Development
Create new products for

present markets
Diversification
Diversification
Introduce new products

into new markets

43
Strategic Opportunity Matrix
On
OnLine
Line
http://www.pg.com
http://www.pg.com
Present Product
New Product
Present
Market
Market
Penetration
Product
Development
New
Market
Market
Development
Diversification

44
Selecting a Strategic Alternative
Common Tools
Philosophy
Profitability
Portfolio Matrix
$
Market Share
45
Portfolio Matrix
Tools for allocating resources
among products or strategic
business units on the basis of
relative market share and
market growth rate.

46
BCG Portfolio Matrix
HIGH
HIGH
LOW
MARKET GROWTH RATE
MARKET SHARE DOMINANCE

LOW
$
47
BCG Portfolio Matrix

High growth
Market leaders
Require cash
Large profits
HIGH
LOW
MARKET GROWTH RATE
HIGH
Low growth
High market share
High cash flow

LOW
High growth
Low market share
Need cash
Poor profit margins
Low growth
Low market share
Minimal cash flow
48
BCG Portfolio Matrix Example

HIGH
SubNotebooks
and Hand-Held
Computer
STAR
LOW
MARKET GROWTH RATE
HIGH
Laptop and
Personal
Computers
CASH
COW

LOW
Integrated
phone/Palm
devices
PROBLEM
CHILD
Mainframe
Computer
DOG
49
Strategies for Resource Allocation
Build
Build
Provide financial resources if SBU (Problem

Child) has potential to be a Star.
Hold
Hold
Preserve market share if SBU is a successful

Cash Cow. Use cash flow for other SBUs.
Harvest
Harvest
Divest
Divest
Increase short-term cash return.

Appropriate for all SBUs except Stars.
Get rid of SBUs with low shares in
low-growth markets.

50
Learning Objective
Discuss target
market strategies.

51
Marketing Strategy
The activities of selecting and

describing one or more target
markets and developing and
maintaining a market mix that
will produce mutually
satisfying exchanges with
target markets.
52
Target Market Strategy
Segment the market based on

groups with similar
characteristics
Analyze the market based on

attractiveness of market
segments
Select one or more target

markets

53
Target Market Selections

Appeal
Appeal to
to the
the entire
entire market
market
with
with one
one marketing
marketing mix
mix
Concentrate
Concentrate on
on one
one
marketing
marketing segment
segment
Appeal
Appeal to
to multiple
multiple markets
markets
with
with multiple
multiple marketing
marketing mixes
mixes
54
Target Market Strategy
Develop a marketing mix that will

produce satisfying exchanges with
target markets
Product
Product
Place
Place
Promotion
Promotion
Price
Price
55
Learning Objective
Describe elements of
the marketing mix.

56
The Marketing Mix
A unique blend of product,

distribution, promotion, and
pricing strategies designed to
produce mutually satisfying
exchanges with a target
market.
57
Marketing Mix: The Four Ps
Price
Price
Promotion
Promotion
Place
Place
Product
Product
58
Product Strategies
The starting point of

the 4 Ps
Product
Product

Includes physical unit,

package, warranty,
service, brand, image,
and value
59
Distribution (Place) Strategies
Place
Place
Product availability
where and when
customers want them.
Involves all activities
from raw materials to
finished products

60
Promotion Strategies
On
OnLine
Line
http://www.paramount.com
http://www.paramount.com
http://www.warnerbros.com
http://www.warnerbros.com
http://www.universalstudios.com
http://www.universalstudios.com
Promotion
Promotion
Role is to bring about

exchanges with target
markets
Includes integration of
personal selling,
advertising, sales
promotion, and public
relations

61
Pricing Strategies
Price
Price
The most flexible of

the 4 Ps
Price X Units Sold =
Total Revenue

62
Learning Objective
On
OnLine
Line
http://www.youngbiz.com
http://www.youngbiz.com
Explain why
implementation,
evaluation, and
control of the
marketing plan
are necessary.

63
Following Up the Marketing Plan
Implementation
Evaluation
Control
Marketing Audit
Comprehensive
Systematic
Independent
Periodic

64
The Marketing Audit
A thorough, systematic,
periodic evaluation of the
goals, strategies, structure,
and performance of the
marketing organization.

65
10
Learning Objective
Identify several
techniques that help
make strategic
planning effective.

66
10
Effective Strategic Planning

Continual
Continual
Attention
Attention
Requirements
Requirements
for
for Effective
Effective
Strategic
Strategic
Planning
Planning
Creativity
Creativity
Management
Management
Commitment
Commitment

67

CH 02

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

CH 02

Încărcat de

Drepturi de autor:

Formate disponibile

Strategic Planning for

Chapter 2 Marketing 7e Lamb Hair McDaniel

Learning Objectives (continued)

Chapter 2 Marketing 7e Lamb Hair McDaniel

Learning Objectives (continued)

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

The managerial process of

Chapter 2 Marketing 7e Lamb Hair McDaniel

Strategic Marketing Planning

The process of anticipating

Chapter 2 Marketing 7e Lamb Hair McDaniel

The Marketing Plan

A written document that

Chapter 2 Marketing 7e Lamb Hair McDaniel

Why Write a Marketing Plan?

Provides a basis for comparison of actual

Provides clearly stated activities to work

Serves as a reference for the

Allows entry into the

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Defining the Business Mission

Answers the question,

Focuses on the market(s)

Strategic Business Units may

Chapter 2 Marketing 7e Lamb Hair McDaniel

AMAs Mission Statement

Chapter 2 Marketing 7e Lamb Hair McDaniel

PepsiCos Mission Statement

Chapter 2 Marketing 7e Lamb Hair McDaniel

Strategic Business Units (SBUs)

A distinct mission and specific target

Control over their resources

Their own competitors

Plans independent of other SBUs

Chapter 2 Marketing 7e Lamb Hair McDaniel

Describe the criteria

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Examples of Marketing Objectives

Chapter 2 Marketing 7e Lamb Hair McDaniel

Marketing Plan Objectives

Provide basis for control

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

Collection and interpretation of

Examination of macroenvironmental forces

Helps identify market

Provides guidelines for

Chapter 2 Marketing 7e Lamb Hair McDaniel

Chapter 2 Marketing 7e Lamb Hair McDaniel

The set of unique features of

Chapter 2 Marketing 7e Lamb Hair McDaniel

Cost Competitive Advantage

Being the low-cost competitor

Chapter 2 Marketing 7e Lamb Hair McDaniel

Cost Competitive Advantage