Strategic Market Planning: Take the Big Picture

1. Strategic Market Planning: Take the Big Picture

2. Business Planning:Compose the Big Picture • Business Planning:Ongoing process of making decisions that guide the firm both in the short term and for the long haul • Identifies/builds on firm’s strengths • Helps managers make informed decisions

3. Figure 2.1Three Levels of Business Planning

4. Strategic Planning • Managerial decision process that matches firm’s resources and capabilities to its market opportunities for long-term growth and survival • Top management defines firm’s purpose and objectives • Example: increase firm’s total revenues by 20% over next five years • Strategic Business Units (SBUs) • Self-contained divisions

5. Functional (Tactical) Planning • Accomplished by various functional areas of firm, such as marketing • Typically includes: • A broad 5-year plan to support strategic plan • A detailed annual plan • Example: marketing plan objective: to gain a 40% share of a particular market with three new products during coming year

6. Operational Planning • First-line managers focus on day-to-day execution of functional plans • Such planning includes detailed annual, semiannual, or quarterly plans • Example: an objective may be set in terms of units of a product a particular salesperson needs to sell per month (sales quota)

7. All Business Planning Is an Integrated Activity • Strategic, functional, and operational plans must work together to benefit the whole firm • Marketers must fully understand how they fit with the organization’s direction and resources

8. Strategic Planning: Frame the Picture • Very large multiproduct firms may have divisions called strategic business units (SBUs) • SBUs operate like separate businesses with their own mission, business objectives, resources, managers, and competitors • Strategic planning is done at both the corporate and SBU levels

9. Strategic Planning Step 1: Define the Mission • Answer three key questions: • What business are we in? • What customers should we serve? • How do we develop firm’s capabilities and focus its efforts? • Mission statement: • A formal document that describes the firm’s overall purpose and what it hopes to achieve in terms of its customers, products, and resources

10. Step 1: Define the Mission • Examples of mission statements • MADD: “to stop drunk driving, support the victims of this violent crime, and prevent underage drinking” • National Book Swap: “to become the nation’s largest book club and in the process bring a lifetime of reading material to every American”

11. Step 2: Evaluate the Internal and External Environments • Situational analysis (business review) • An assessment of a firm’s internal and external environments • Internal environment: Controllable elements inside of an organization • External environment:Uncontrollable elements outside of an organization that may affect its performance either positively or negatively

12. Internal Environment • Controllable elements inside a firm that influence how well the firm operates include: • People (human capital), physical facilities, financial stability, corporate reputation, quality products, strong brands, technologies, etc. • These elements represent key strengths and weaknesses of the firm

13. External Environment • Elements outside the firm that may affect it either positively or negatively: • Economic, competitive, technological, legal/political/ethical, and sociocultural trends • Trends manifest as opportunities or threats • Firm cannot directly control external factors but can respond to them via planning

14. Recent sociocultural trends influencing food marketing stem from consumer desires for low fat, low carb, and organic foods Trends Present Opportunities

15. SWOT Analysis • An analysis of an organization’s strengths (S) and weaknesses (W) and the opportunities (O) and threats (T) in the external environment • SWOT enables the firm to develop strategies that maximize strengths and capitalize upon opportunities

16. Step 3: Set Organizationalor SBU Objectives • Organizational/SBU Objectives: • What the firm hopes to accomplish with long-range business plan • Need to be specific, measurable, attainable, and sustainable • May relate to sales, profitability, product development, market share, productivity, ROI, customer satisfaction, or social responsibility

17. Step 4: Establish the Business Portfolio • Business portfolio: • The group of different products or brands owned by a firm and having different income-generating and growth capabilities • Portfolio analysis: • Assessing the potential of a firm’s SBUs • Helps make decisions regarding which SBUs should receive more or less of the firm’s resources

18. Figure 2-3Boston Consulting Group (BCG) Matrix

19. Step 5: Develop Growth Strategies • Product-market growth matrix: • Characterizes different growth strategies according to type of market (new vs. existing) and type of product (new vs. existing). • Matrix yields four potential strategies: • Market penetration • Product development • Market development • Diversification

20. Figure 2-4Product-Market Growth Matrix

21. Marketing Mix Strategies • Product strategies: • Include product design, packaging, branding, support services, and product variations and features • Pricing strategies: • Include setting prices for final consumers, wholesalers, and retailers based on costs, demand, or competitors’ prices

22. Marketing Mix Strategies • Promotion strategies: • Advertising, sales promotion, public relations, direct marketing, personal selling • Distribution (place) strategies: • How, when, and where the product is available to targeted customers

23. “Plans are nothing,planning is everything.”- Dwight D. Eisenhower

24. “All markets are dynamic.”

32. Strategic Analysis • Info about customers, competitors, and trends

33. Innovation - Apple

34. Innovation - Apple

35. Innovation - Apple

36. Innovation – P&G

37. Innovation – Clorox

38. Innovation – Clorox

39. Sometimes the innovator is beaten by followers • The VCR industry is a great example • What company INVENTED the VCR?

40. Sometimes the innovator is beaten by followers

41. Sometimes the innovator is beaten by followers

42. Most companies have MULTIPLE businesses • They usually have synergy

43. Company with multiple unrelated businesses? Conglomerate

44. Company with multiple unrelated businesses? Conglomerate

50. “All markets are dynamic.”