Strategic Market Planning

1. Strategic Market Planning Marketing 360 Brian Gillespie

2. Value • Value (from Customer’s Perspective) • Sum of benefits we receive from a product • Value (from Seller’s Perspective) • Profits…but also, prestige, pride, making community happy • Lifetime value of a customer • How much is this customer worth to us in the long-term? • Long-term thinking  develop relationships with customers • Value (to Shareholders) • Created when company has competitive advantage over rivals • Distinctive competency (company’s superior capability) • Differential benefit (unique benefit of product) • Value (to Society) • What is the impact of product/service on society?

3. Product Strategies (what will we produce and for whom?) Place Strategies (where will we deliver product/service?) Promotion Strategies (how will we inform and encourage customers to buy our product?) Price Strategies (what will we charge?) The Marketing Mix Marketing Mix

4. Why Study Marketing? • Plays an Important Role in Society • Promotes efficient transfer of desired products to meet needs • Can be used to promote worthwhile social causes • Fundamental to the Success of Businesses • Assessing needs, designing products, pricing product, promoting products, distribution strategies, servicing customer • Great Career Opportunities • Roughly 25-33% of people perform marketing related activities • Marketing Affects You Everyday • Become a wiser consumer

5. The Dark Side of Marketing • Illegal practices like “bait and switch” • Societal health problems • Diabetes, heart disease, cancer, alcoholism, domestic violence • Psychological Costs • Many ads encourage us to feel bad about ourselves • Financial Burdens • Consumer debt • Environmental degradation and resource depletion

6. Ethics in Strategic Market Planning • Unethical business decisions impact all stakeholders • Job loss • Environmental effects • Most times unethical decisions do not go unnoticed • Enron • Martha Stewart • Sub-prime mortgage meltdown

7. Preventing Unethical Activities • Business ethics • Underlying values and philosophies that dictate actions in an organization • The ethical culture of an organization • Code of ethics • Written standards of behavior to which everyone in the organization must subscribe

8. Three Levels of Business Planning • Strategic Planning • Managerial decision process matching an organization’s resources and capabilities to its market opportunities for long-term growth • Functional (Marketing) Planning • Decision process that develops detailed short-term strategies that support an organization’s strategic plans • Operational Planning • Decision process that develops detailed day-to-day strategies that carry out an organizations functional plans

9. Strategic Planning • Five steps to strategic planning • Step 1: define the mission • Step 2: situational analysis • Step 3: set organizational or strategic business unit objectives • Step 4: establish the business portfolio • Step 5: develop growth strategies

10. Step 1: Define the Mission • Mission Statement • Formal statement in an organization’s strategic plan that describes overall purpose of the organization and what it plans to achieve in terms of customers, products, resources • Too narrow = marketing myopia • Too broad = no direction • Could have one for each Strategic Business Unit (SBU) • Individual units in the firm that operate like separate businesses, each with its own mission, objectives, resources, managers, & competitors

11. Mission Statements • Washington State University • As a public, land-grant and research institution of distinction, Washington State University enhances the intellectual, creative, and practical abilities of the individuals, institutions, and communities that we serve by fostering learning, inquiry, and engagement. • Starbucks • Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.

12. Creating a Mission Statement • In groups, pretend you are opening a new chain of Mexican – Chinese fusion restaurants in the Pacific Northwest • Create a mission statement for your new concept restaurant

13. Step 2: Situational analysis • Internal Environment • Controllable elements in organization • People, corporate culture, facilities, processes • External Environment • Uncontrollable elements outside organization that may affect performance • Both positive and negative

14. SWOT Analysis • Internal analysis • Strengths • Weaknesses • External analysis • Opportunities • Threats • What would a SWOT analysis for The Coug look like?

15. Step 3: Set Organizational or SBU Objectives • Objectives flow from the mission statement • Organization size typically determines whether or not SBUs exist, and if they have their own objectives • Effective objectives are • Realistic, specific, measurable, and well-matched with mission statement • Example • Ok: Our objective is to better serve customers • Better: Our objective is to obtain customer satisfaction ratings of at least 90% in 2011, and retain at least 85% of our 2010 customers as repeat customers in 2011

16. Step 4: Establish the Business Portfolio • Portfolio • Collection of brands or units owned by organization that have different income generating potential • Portfolio Analysis • Evaluating an organization’s business mix and assessing the potential of an organization’s SBUs

17. BCG Growth-Market Share Matrix Product is dominant in category Product is a miss

18. Step 5: Develop Growth Strategies • BCG matrix does not address how to grow SBUs, but the Product-Market Growth Matrix does • Market penetration strategies • Designed to increase sales of existing products to current customers, nonusers, and users of competitors • Market development strategies • Strategies that introduce existing products into new markets • Product Development Strategies • Strategies that focus on selling new product to existing markets • Diversification Strategies • Strategies that emphasize both new products and new markets

19. Product-Market Growth Model New market (customers) =No New market (customers) =Yes New product =No New product =Yes

20. Which Quadrant of the Product-Market Growth Matrix is This?

21. Which Quadrant of the Product-Market Growth Matrix is This?

22. Which Quadrant of the Product-Market Growth Matrix is This?

23. Which Quadrant of the Product-Market Growth Matrix is This?

24. Functional (Marketing) Planning • Decision process that develops detailed short-term strategies that support an organization’s strategic plans • Step 1: perform a situational analysis • Step 2: set marketing objectives • Step 3: develop marketing strategies • Step 4: implement and control the marketing plan

25. Step 3: Develop Marketing Strategies • Select a Target Market • Market opportunity analysis – size and sales potential of target group, and assessment of key competitors • Develop Marketing Mix Strategies • Product, Price, Promotion, Place of Distribution

26. Step 4: Implement and Control the Marketing Plan • Action Plans • Implementation of marketing strategies • Responsibilities, Time Line, Budget, Measurement and Control • Control • Monitoring progress • Compare actual performance to marketing objectives and adjust strategy/objectives as needed • Must have good marketing metrics • Marketing audits • Evaluation of objectives, strategies, structure, performance of marketing organization • Should be comprehensive, systematic, independent, periodic