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Chapter 2

Chapter 2. Strategic Planning: Making Choices in a Wired World. Chapter Objectives. Explain the strategic planning process Tell how firms gain a competitive advantage and describe the factors that influence marketing objectives. Chapter Objectives_2.

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Chapter 2

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  1. Chapter 2 Strategic Planning: Making Choices in a Wired World Marketing: Real People, Real Choices 3rd edition

  2. Chapter Objectives • Explain the strategic planning process • Tell how firms gain a competitive advantage and describe the factors that influence marketing objectives Marketing: Real People, Real Choices 3rd edition

  3. Chapter Objectives_2 • Describe the steps in the marketing planning process • Explain how marketers implement and control the marketing plan Marketing: Real People, Real Choices 3rd edition

  4. Strategic Planning: Guiding the Business • Strategic planning is the managerial decision process that matches the organization’s resources and capabilities to its market opportunities for long-term growth • Firms may become multi-product companies with self-contained divisions • Strategic Business Units (SBUs) • Example: The Walt Disney Company Marketing: Real People, Real Choices 3rd edition

  5. Strategic Planning at the Corporate Level • Defining the Organization’s Mission • Establish Corporate Objectives • Allocate Resources to the SBUs Marketing: Real People, Real Choices 3rd edition

  6. Defining the Organization’s Mission • A mission may begin with these questions: • What business are we in? • What customers should we serve? • How should we develop the firm’s capabilities and focus its efforts? Marketing: Real People, Real Choices 3rd edition

  7. Avoiding Marketing Myopia • Describes firms with shortsighted visions and missions • Example: What business is Amtrak in? Marketing: Real People, Real Choices 3rd edition

  8. Establishing Corporate Objectives • Grow directly from a mission statement • Specify outcomes that an organization seeks to achieve in a certain time period • Example: Altria (Philip Morris) • To profitably grow our worldwide tobacco, food, and beer business • To enhance shareholder value through a balanced program of dividends and share repurchases Marketing: Real People, Real Choices 3rd edition

  9. Planning for Growth: The Business Portfolio • For firms with different SBUs, planning also includes allocating resources among the businesses • Each SBU is a separate profit center within the larger corporation • Each SBU is responsible for its own costs, revenues, and profits Marketing: Real People, Real Choices 3rd edition

  10. Portfolio Management • The range of products owned by a large firm is called a business portfolio • Portfolio analysis allows a firm to assess the potential of its products and businesses • BCG Growth-Market Share Matrix Marketing: Real People, Real Choices 3rd edition

  11. BCG Matrix • Method focuses on potential for existing products to generate cash that the firm can then use to invest in new products • New products are chosen for their potential to become future cash generators • Two dimensions: • Market growth rate • Relative market share Marketing: Real People, Real Choices 3rd edition

  12. Strategic Planning at the SBU Level • Evaluating the Environment: SWOT Analysis • Setting Business Objectives • Creating a Competitive Advantage • Developing Growth Strategies Marketing: Real People, Real Choices 3rd edition

  13. SWOT Analysis • Internal Environment • Strengths • Weaknesses • External Environment • Opportunities • Threats • See Table 2.1 for an example Marketing: Real People, Real Choices 3rd edition

  14. Setting Business Objectives • SBU objectives must support the overall objectives of the firm • Customer Satisfaction • Profitability • Market Standing • Return on Investment • Revenue and Sales Marketing: Real People, Real Choices 3rd edition

  15. Creating Competitive Advantage • Identify what a firm does really well • Distinctive competency - a firm’s capability that is superior to that of its competitors • Turn a distinctive competency into a differential benefit • Differential benefits set products apart from competitors’ products by providing something unique that customers want Marketing: Real People, Real Choices 3rd edition

  16. Developing Growth Strategies • Product-Market Growth Matrix illustrates different growth strategies • Two dimensions • opportunities for growth in existing or new markets • allocating resources into existing products or new products • Four strategies result Marketing: Real People, Real Choices 3rd edition

  17. Tactical Planning: The Marketing Management Process • Analyzing the Marketing Environment • Setting Marketing Objectives • Developing Marketing Strategies • Preparing the Marketing Plan Marketing: Real People, Real Choices 3rd edition

  18. Developing Marketing Strategies • Selecting a Target Market • Developing Marketing Mix Programs • Product Strategies • Pricing Strategies • Promotion Strategies • Distribution Strategies Marketing: Real People, Real Choices 3rd edition

  19. Operational Planning: Executing the Marketing Plan • Implementing the Marketing Plan • The Marketing Budget • Organizing the Marketing Function • Controlling the Marketing Plan • Trend Analysis • Marketing Research Marketing: Real People, Real Choices 3rd edition

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