Chapter 2

Planning, Implementing,
and Evaluating Marketing
Strategies
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LO 2-1 Explain the strategic planning process

LO 2-2 Identify what is necessary to effectively
manage the implementation of marketing
strategies
LO 2-3 Describe the four major elements of
strategic performance evaluation
LO 2-4Describe the development of a marketing
plan
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O The process of planning,

implementing, and evaluating the
performance of marketing activities
and strategies, both effectively and
efficiently
O Effectiveness is the degree to which long-term
customer relationships help achieve an
organizations objectives
O Efficiency refers to minimizing the resources an
organization uses to achieve a specific level of
desired customer relationships
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Goal
To facilitate highly desirable customer
relationships and to minimize the costs
of doing so.
© zayats-and-zayats O Strategic planning is the process of
establishing an organizational mission
and formulating goals, corporate
strategy, marketing objectives, and
marketing strategy
O Should be guided by a market orientation to
ensure that a concern for customer satisfaction
is an integral part of the process and permeates
the entire company
O A market orientation is also important for the
successful implementation of marketing
strategies
 Market Orientation vs Market Oriented
O Market Orientation
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- a company operates with a market-first approach
or customer-first approach.
- a business philosophy where the focus is on
identifying customer needs or wants and meeting
them.
- Marketing term

O Market Oriented
- used in marketing, but it is more typically describes
a free enterprise economy (businesses and consumers
are able to buy and sell freely).
- Economics term
© zayats-and-zayats O Examples of Market Oriented Companies
Facebook, Coca-Cola, Kleenex, Apple,
Levi's, Build-a-Bear, Hershey's, Twitter, Southwest
Airlines, and Pizza Hut

- Few examples of companies who

understand the importance of marketing in
creating a well-known brand.
- They inquire about customer needs
 1. Traditional Approaches
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a. Production Concept
b. Product Concept
c. Sales Concept

2. Contemporary Approaches
a. Marketing Concept
b. Societal Marketing Concept
c. Relationship Marketing Concept
d. Social Marketing Concept
1. Begins with the establishment or
revision of an organization’s mission and
goals

2. Then the corporation and individual

business units develop strategies to
achieve these goals

3. The company performs a detailed

analysis

4. Each functional area of

the organization establish
its own objectives and
develops strategies to
achieve them, which must
support the organization’s
overall goals and mission
and should be focused on
market orientation.
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O Mission statement is a long-term

view, or vision, of what the
organization wants to become
O The goals of any organization should
derive from its mission statement
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O An organization’s mission statement

should answer two questions:
O Who are our customers?
O What is our core competency?

- Simple questions
- Two of the most important questions for any
company to address
- Defining customer’s needs and wants gives
direction to what the company must do to satisfy
them.
This mission statement reflects what the company does to keep its business
running. It is clear that target consumers are given emphasis in this
corporate mission.

Speaks to the company’s desire to be a gathering place in neighbourhoods

1. Begins with the establishment or
revision of an organization’s mission and
goals

2. Then the corporation and individual

business units develop strategies to
achieve these goals

3. The company performs a detailed

analysis

4. Each functional area of

the organization establish
its own objectives and
develops strategies to
achieve them, which must
support the organization’s
overall goals and mission
and should be focused on
market orientation.
Figure 2.2
Shows the relationships
among three planning
levels

1. Corporate
2. Business – unit
3. Marketing

When conducting strategic

planning, a firm is likely to
seek out experts from
many levels of the
organization to take
advantage of in-house
expertise and a variety of
opinions
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O Companies develop and manage their
corporate identity
- their unique symbols, personalities, and
philosophies
- to support all the firm’s activities, including
marketing
O Managing identity requires:
O Broadcasting a company’s mission, goals, and
values
O Sending a consistent image
O Implementing a visual identity with
stakeholders
O Corporate strategy determines the means
for utilizing resources in the functional areas
of marketing, production, finance, research
and development, and human resources to
reach the organization’s goals

O The broadest of the three levels of

strategy
O should be developed with the
organization’s overall mission in mind
O Who are our customers? What is our core
competency?
© zayats-and-zayats O Corporate strategy planners are
concerned with broad issues such as:
O Corporate culture
O Competition
O Differentiation
O Diversification
O Interrelationships among business units
O Environmental and social issues

O Match the resources of the

organization with the opportunities
and threats in the environment
Corporate Culture - defined as the values, standards, attitudes and
beliefs shared by the members of an organization
 Team-oriented Culture - prioritizes the happiness of the
employee’s, believing that their happiness will affect their
productivity
 Elite Culture - revolves around hiring the best qualified
individuals
 Horizontal Culture - common among younger companies
where everyone voices their ideas and titles are not important.
 Conventional Culture - more traditional manner to which
hierarchies are defined and dress codes are followed. Such
examples are schools and banks

Competition - contest or rivalry between firms to win revenue

Differentiation Strategy - approach that a business takes to
develop a unique product or service that customers will find better
than or in another way distinctive from products or services offered
by competitors
- a way for a business to distinguish itself from the
competition

Examples of Differentiation Strategies

1. Based on Price - least expensive or the most expensive
2. Based on Specialties - putting a specific focus in the mind of
your target audience
3. Product or Service - better materials, are made by hand or are
guaranteed.
4. Customer Service Quality
Diversification Strategy - a corporate strategy to enter into a new
market or industry in which the business doesn't currently
operate, while also creating a new product for that new market.
Example:
an auto company may diversify by adding a new car model
or by expanding into a related market like trucks.

Interrelationship Among Business Units

the relationship and interactions between the parts of your
business, and identifies how the chain of command runs through
the different levels.

Environmental and Social Issues

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O Business-unit strategy should be

consistent with corporate strategy
O Strategic business unit (SBU) is a division,
product line, or other profit center within the
parent company
Example:
Different Strategic Business Units of Nestle
1. Maggi - deals in Food products
2. Milkmaid - deals in Dairy products
3. Kitkat - deals in Chocolate products
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O Each of these units sells a distinct set of

products to an identifiable group of customers,
and each competes with a well-defined set of
competitors
O The revenues, costs, investments, and strategic
plans of each SBU can be separated from those
of the parent company and evaluated
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O Strategic planners should recognize
the strategic performance capacities
of each SBU and allocate scarce
resources among those divisions
O A market is a group of individuals and/or
organizations that have needs for products in a
product class and have the ability, willingness,
and authority to purchase those products
O The percentage of a market that actually buys a
specific product from a particular company is
referred to as that product’s (or business unit’s)
market share
  General Electric launched Ecomagination
to “imagine and build innovative
solutions to today’s environmental
challenges while driving economic
growth.” GE uses knowledge and the
resources of different functional areas to
create and market dozens of green
products for customers.
 What type of strategy is Ecomagination:
corporate, strategic business unit, or
marketing?
 GE uses its knowledge of design and
manufacturing from different
departments to develop green products.
Is this a strength, weakness, threat, or
opportunity?

DISCLAIMER: This document is a draft and the information contained herein is subject to change as this document is currently undergoing
review. The final version of this teacher’s resource manual will be published as soon as the review has been completed.
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O The market growth/market share matrix
- is a helpful business tool
- based on the philosophy that a
“product’s market growth rate and its
market share are important
considerations in determining its
market strategy”
Managers use this model to determine and classify each
product’s expected future cash contributions and future cash
requirements
O Stars are products with a
dominant share of the
market and good prospects
for growth.
Example:
Samsung’s Tablet Computers –
gaining market share quickly
but remain well behind Apple,
the leader.

*** Use more cash than they

generate to finance growth,
add capacity and increase
market share
O Cash cows have a dominant
share of the market but low
prospects for growth

Example:
Bounty Paper Towel – P&G’s
product that consistently sells
well.

*** Typically generate more

cash than is required to market
share
O Dogs have a subordinate
share of the market and low
prospects for growth.
- often found in established
markets

Example:
Panasonic Cathode Ray Tube
Television

***customers prefer flat

screens
O Question marks have a small
share of a growing market
and generally require a large
amount of cash to build
market share
- sometimes called “Problem
Children”
Example:
BMW i3 Electric Car is a
question mark relative to
BMW’s more established
gasoline powered automobile
models
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O Long-term health of an organization

depends on having some products
that generate cash and others that
use cash to support growth
  Look at the following Coca-Cola
products. Determine whether they
qualify as dogs, cash cows, stars, or
question marks.
Coca-Cola soft drink
Energy drink Full Throttle
Hi-C juice drink
Dasani Bottled Water

DISCLAIMER: This document is a draft and the information contained herein is subject to change as this document is currently undergoing
review. The final version of this teacher’s resource manual will be published as soon as the review has been completed.
© zayats-and-zayats

O The strategic planning process begins

with an analysis of the marketing
environment, including a thorough
analysis of the industry in which the
company is operating or intends to
sell its products
O Any strategic planning effort must assess
(measure, evaluate, weigh, calculate) the
organization’s available financial and human
resources and capabilities as well as how the
level of these factors is likely to change in the
future
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Core
Competencies

Competitive
Advantage
Strategic Market
Windows Opportunities

The place where opportunities, core competencies,

and strategic windows meet
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O Core competencies are things a company does

extremely well, which sometimes gives it an
advantage over its competition
- a defining capability or advantage that
distinguishes an enterprise from its competitors

Example:
O Walmart’s core competency, which is efficiency in
supply chain management, has enabled the chain
to build a strong reputation for low prices at high
quality levels on a wide variety of goods
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O Market opportunity is a combination of

circumstances and timing that permits an
organization to take action to reach a particular
target market

- a situation in which a product, service, etc.

that is potentially wanted or needed by
consumers is identified by a business as not
being supplied by rival companies.
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O Strategic windows are temporary periods of

optimal fit between the key requirements of a
market and the particular capabilities of a
company competing in that market

- period of time during which some action or

strategy can be taken that will achieve a desired
outcome.
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O Competitive advantage is the result

of a company matching a core
competency to opportunities it has
discovered in the marketplace
O Tesco, a large-scale grocery chain from the U.K.,
entered the western U.S. market with its Fresh
& Easy Neighborhood Markets
O The company seeks competitive advantage by offering
cheap, healthy food options such as 98-cent produce
packages and cheap cuts of meat
O The store seeks to source produce and meats locally as
much as possible, offer organic and hormone-free
foods, and use less energy than typical grocery stores
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O SWOT analysis is a tool marketers use

to assess an organization’s strengths,
weaknesses, opportunities, and
threats
O Strengths and weaknesses are internal factors
that can influence an organization’s ability to
satisfy its target market
O Opportunities and threats exist independently
of the company and therefore represent issues
to be considered by all organizations, even
those that do not compete with the company
Figure 2.4 – shows how marketers must seek to convert
weaknesses into strengths, threats into opportunities, and match
internal strengths with external opportunities to develop
competitive advantages.
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O Strengths refer to competitive

advantages or core competencies
that give the company an advantage
in meeting the needs of its target
market

O Weaknesses refer to any limitations a

company faces in developing or
implementing a marketing strategy
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O Opportunities refer to favorable
conditions in the environment that
could produce rewards for the
organization if acted on properly.
***must be exploited for the company to
benefit from them
O Threats refer to conditions or barriers
that may prevent the company from
reaching its objectives
***must be acted upon to prevent them from
limiting the organization’s capabilities
  Gluten allergies seem to be rising in the U.S.
 You have hired a talented cook who
specializes in gluten-free recipes.
 You are opening a gluten-  A popular restaurant in your town has
free restaurant. You recently begun offering several gluten-free
decide to perform a menu options.
SWOT analysis. Classify
the following statements
 You do not have the money to purchase new
kitchen equipment, so you have to make do
as strengths, weaknesses,
with used equipment.
opportunities, or threats.
 More and more people are viewing gluten as
unhealthy.
 You do not have any money for marketing.
 There is a recession and more people are
opting not to eat out.
 Your recipes are unique and are hard to copy.
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O First-mover advantage
O Late-mover advantage
 O First-mover advantage is the ability of an
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innovative company to achieve long-term

competitive advantages by being the first
to offer a certain product in the
marketplace
O Build a firm’s reputation as a market pioneer
and a leader – Amazon and eBay
O Market is free of competition (for a short
period of time)
O Establish brand loyalty for the firm due to its
customer’s costs to switch later on
O Firm can protect its trade secrets or technology
through patents
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O Risks of being the first to enter a

market:
O High cost associated with creating a new
product from scratch
O Market research, product development, production,
and marketing or buyer education costs
O Early sales growth may not be as high as the
company predicted if it makes mistakes with
regard to the product or its marketing
O Risk that the product will fail due to market
uncertainty, or that the product might not meet
consumers’ expectations or needs
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O Late-mover advantage is the ability of

later market entrants to achieve long-
term competitive advantages by not
being the first to offer a certain
product in a marketplace
O Learn from first mover’s mistakes and thus
create an updated/improved product design
and marketing strategy
O Lower initial costs since first mover has
developed an educated buyers
O More certainty about the success of the market
for the product
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O Disadvantages of being a late mover:

O First mover may have patents on its technology
and trade secrets that prevent the late mover
from reverse engineering its product or
producing a product that is too similar
O Customers who have already purchased the
first mover’s product may believe that
switching to the late mover’s product is too
expensive or time-consuming for them
O Timing of entry to the market is crucial and can
determine the amount of late-mover advantage
that is actually possible (competition is high)
 O A statement of what is to be
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accomplished through marketing

activities
O Should:
O Be based on a study of the SWOT analysis
O Match strengths to opportunities and/or eliminate
weaknesses or threats
O Be stated in clear, simple terms (so all marketing and non-
marketing personnel in the company understand exactly what they
are trying to achieve)
O Be accurately measurable (allows the organization to tract
progress and compare outcomes against beginning benchmarks)
O Specify a time frame for accomplishment
O Be consistent with business-unit and corporate
strategy
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O A plan of action for identifying and

analyzing a target market and
developing a marketing mix to meet
the needs of that market
Marketing
Strategy

Target Creating a
Market Marketing
Selection Mix
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O Selecting an appropriate target

market may be the most important
decision a company makes in the
strategic planning process
O Identification and analysis of a target market
provide a foundation on which a company can
develop a marketing mix
O Marketers should also assess whether the
company has the resources to develop the right
marketing mix to meet the needs of a particular
target market
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O Decisions made in creating a

marketing mix are only as good as the
organization’s understanding of its
target market
O Requires:
O In-depth research into the characteristics of the
target market
O Analysis of customer needs, preferences, and
behaviors with respect to product design,
pricing, distribution, and promotion
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O All marketing mix decisions should be:

O Consistent with the business-unit and corporate
strategies
O Flexible to permit the organization to alter the
marketing mix in response to changes in market
conditions, competition, and customer needs
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O At the marketing mix level, a company can

detail how it will achieve a competitive
advantage

O A sustainable competitive advantage is one

that the competition cannot copy in the
foreseeable future

O How can an organization make its

competitive advantage sustainable over
time?
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O The process of putting marketing

strategies into action
O Depends on:
O Organization of the marketing department
O Motivating marketing personnel
O Effectively communicating within the marketing
unit
O Coordinating all marketing activities
O Establishing a timetable for the completion of
each marketing activity
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O Companies that truly adopt the

marketing concept develop a distinct
organizational culture:
O A culture based on a shared set of beliefs that
makes the customer’s needs the pivotal point
of the company’s decisions about strategy and
operations
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O Centralized organizations
O Authority is concentrated at the top level
O Very little delegation to lower levels

O Decentralized organizations
O Decision making authority is delegated as far
down the chain of command as possible
 Look at the following examples.
Determine whether each example is
likely to have more of a centralized or
decentralized organizational
structure.
 A Chrysler factory
 Zappos
 Pizza Hut
 Google
 U.S. military
 A trucking company
 Berkshire-Hathaway
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O To motivate marketing personnel,

managers must discover their
employees’ needs and then develop
motivational methods that will help
employees satisfy those needs
O Rewards to employees should be tied to
organizational goals and be fair, ethical, and
well understood by employees
O Selecting effective motivational tools has
become more complex because of greater
differences among workers in terms of race,
ethnicity, gender, and age
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O One of the most important types of

communication in marketing is
communication that flows upward
from the frontline of the marketing
unit to higher-level marketing
managers
O Communication is facilitated by an:
O Effective training program where employees can learn,
ask questions, and become accountable for marketing
performance
O Information system within the marketing unit and with
other departments in the organization
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O Marketing managers must work with

other departments to ensure
marketing activities mesh with other
functions of the firm
O Must coordinate the activities of marketing
staff within the firm and integrate those
activities with the marketing efforts of external
organizations
O Managers can improve coordination by making
each employee aware of how his or her job
relates to others and how his or her actions
contribute to achieving marketing objectives
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O Establishing an implementation
timetable involves several steps:
O Identifying the activities to be performed
O Determining the time required to complete
each activity
O Separating the activities to be performed in
sequence from those to be performed
simultaneously
O Organizing the activities in the proper order
O Assigning responsibility for completing each
activity to one or more employees, teams, or
managers
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O Strategic performance evaluation

consists of:
O Establishing performance standards
O Measuring actual performance
O Comparing actual performance with established
standards
O Modifying the marketing strategy, if needed
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O Performance standard is an expected

level of performance against which
actual performance can be compared
O For example, a 20% reduction in customer
complaints, a monthly sales quota of $150,000,
or a 10% increase per month in new-customer
accounts
O Performance standards are derived from
marketing objectives that are set while
developing marketing strategies
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O Sales analysis uses sales figures to

evaluate a firm’s current performance
O Most common method of evaluation because
sales data partially reflect the target market’s
reactions to a marketing mix and often are
readily available
O Current sales data must be compared with
forecasted sales, industry sales, specific
competitor’s sales, or the costs incurred to
achieve the sales volume
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O Marketing cost analysis breaks down

and classifies costs to determine
which are associated with specific
marketing efforts
O One way to analyze costs is by comparing a
company’s costs with industry averages
O When looking at industry averages, a company should
take into account its own unique situation
O Company’s costs can differ from the industry average
for several reasons, including its own marketing
objectives, cost structure, geographic location, types
of customers, and scale of operations
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O If actual performance exceeds

performance standards:
O Marketing strategy is viewed as being effective
O Try to gain an understanding of why the
strategy is effective
O If actual performance does not meet
performance standards:
O Determine why a marketing strategy was less
effective
O Determine whether the marketing objective,
against which performance is measured, is
realistic or not
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O Written document that specifies the

activities to be performed to
implement and control the firm’s
marketing strategies
O The systematic process of:
O Assessing marketing opportunities and resources
O Determining objectives
O Defining Strategies
O Establishing guidelines for implementation and control
of the marketing program
O Aligned with corporate/business-unit strategies
and is accessible/shared with employees
 Sample marketing objectives
• Increase sales
• Build brand awareness
• Grow market share
• Launch new products or services
• Target new customers
• Enter new markets internationally or locally
• Improve stakeholder relations
• Enhance customer relationships
• Improve internal communications
• Increase profit
 SMART Marketing Objective
• To increase the number of enquires from our
marketing communications activities by 15%
by the end of the year
• To increase sales by 20% within 18 months