Chapter 2

Strategic Planning and the

Strategic Marketing Process
I. What is Strategic Planning?
The process of developing and
maintaining a viable fit between the
organizations objectives and
resources and its changing
environment.
It involves developing a:
clear mission
supporting objectives
supporting strategies
II. Three Organizational Levels
Corporate Level

Business Unit Level

Strategic Business Units

Functional Level
III. Components of the Strategic Plan
Organizational Mission defines the core purpose of
the organization why it exists.

Organizational Objectives statements of what the

organization wishes to accomplish in the on-going, long-
run operation of the firm.
Profits sales market share customer satisfaction

Organizational Strategies major directions the

organization will take in pursuing its objectives.
Business Portfolio Analysis
WHERE AN A IN A CORRESPONDENCE COURSE IN ICE CREAM MAKING
CAN LEAD!

2-5
Business Portfolio Analysis
A technique which uses market growth rate
and relative market share to identify what
combination of SBUs will best achieve
organizational objectives.
Market growth rate annual sales growth
rate of the SBUs industry.
Relative market share the sales of the
SBU divided by the sales of the largest firm
in the industry.
LO4 SETTING STRATEGIC DIRECTIONS
WHERE DO WE WANT TO GO?

Business Portfolio Analysis

(BCG) High
Stars Question Marks
Market Growth Rate

Cash Cows Dogs

Low
High Low
Relative Market Share

2-7
Business Portfolio Analysis (cont.)
Cash Cows SBUs that have a high relative
market share in a low sales growth market.
Stars SBUs that have a high relative market
share in a high sales growth market.
Question marks SBUs that have a low
relative market share in a high sales growth
market.
Dogs SBUs that have a low relative market
share in a low sales growth market.
 Kodak Consumer-Related Products
LO4
What SBU type in the BCG growth-share matrix?

Kodak digital camera Kodak digital photo printer

Kodak film Kodak digital picture frame

2-9
IV. Strategic Marketing Process
Process whereby an organization
allocates it marketing mix resources
to reach its target markets.

Planning
Implementation
Evaluation
 Planning Phase Situation Analysis
This is a complete analysis of the firms
situation which assesses internal strengths
and weaknesses and external threats and
opportunities (SWOT)
Internal analysis (controllable factors)
assess the firm itself to identify strengths and
weaknesses
External analysis (uncontrollabe factors)
assess the firms external environment to
identify opportunities and threats
Identify ways to build on a strength, correct a
weakness, exploit an opportunity, or avoid a
threat.
FIGURE 2-6 Ben & Jerrys: a SWOT analysis to get it
growing again

Slide 2-34
Planning Phase Marketing
Objectives
Specific levels of performance desired
for a product or product line to be
achieved by a given date.
Stated in terms of market share,
sales, profit
Should be measureable, attainable,
specific, and consistent with
organizational objectives
Planning Phase Target Market
One or more specific groups of
potential consumers toward which an
organization directs its marketing
program.
Why focus on the needs of a
subgroup of a market rather than the
entire market?
Planning Phase: Product
Positioning
The process where marketers try to
create a product image or identity in
the minds of their target market
relative to competitive products.
Planning Phase: Marketing Mix
Program
Product good, service, or idea to satisfy
the consumers needs.
Price what is exchanged for the product.
Promotion means of communication
between the seller and buyer.
Place means of getting the product to the
consumer
Marketing mix decisions are based on the
needs of the target market and the
positioning strategy.
Elements of the marketing mix that comprise a cohesive
marketing program

Slide 2-40
Implementation Phase
Process of putting the marketing plan
into action.
Involves great attention to detail
Evaluation
Involves measuring the results of the
actions from the implementation
phase and comparing them with goals
set in the planning phase.

sales analysis
marketshare analysis
expense to sales analysis