Transcript presentation source

Chapter 2 Strategic Planning for
Competitive Advantage
Marketing Plan Elements
Business Mission
Statement
Objectives
Situation or
SWOT Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product
Distribution
Promotion
Price
Implementation
Evaluation
Control
Defining the Business Mission
•
Answers the question:
What business are we in and
where are we going?
•
Focuses on the market(s) rather than
the good or service
•
Strategic Business Units may also
have a mission statement
Marketing Objectives
Marketing Objectives Must Be:

Realistic

Measurable

Time specific

Consistent with
Organization’s Priorities
“Our objective is to
increase market
share by 40% and to
obtain customer
satisfaction ratings of
at least 90% in 2001.”
SWOT Analysis
S
W
O
T
Things the company does well.
Internal
External
Things the company does not do well.
Conditions in the external environment
that favor strengths.
Conditions in the external environment
that do not relate to existing strengths
or favor
areasCollege
of current
weakness.
©South-Western
Publishing
Environmental Scanning

Examination of macroenvironmental forces
 Social
 Demographic
 Economic
 Technological
 Political / Legal
 Competitive

Helps identify market
opportunities

Provides guidelines for
design of marketing strategy
Environmental Scan:
The E - Organization*
• The Internet is building a new market order.
• Today’s focal business model is driven by the fear of
being irrelevant.
• The REAL E- Organization isn't just using the Internet to
alter its approach to markets and customers; it’s
combining computers, the Web, and the massively
complex programs known as enterprise software to
change everything about how it operates. The question
is Will your organization be ‘Net-centric’?
• The Web will fundamentally change customers'
expectations about convenience, speed, comparability,
price, and service.
The New Environment:
The E - Organization (B)
• The Internet will empower consumers like nothing else
ever has. Already 50% of car buyers shop online before
showing up at a dealership.
• Many mass marketers spend as much as 80% of their
ad budgets on television, but the Net threatens to shatter
the mass market into millions of individual consumers
doing their own thing online.
• For the online advertiser, the challenge is to educate,
entertain, and entice, for no one can be compelled to pay
attention online.
• Key to Web page success is Content, Chat and
Community.
The New Environment:
The E - Organization (C)
• Why should an advertiser send money to AOL or
Yahoo--or to CBS, for that matter--when the money could
be sent straight to me? When I click on an ad, I should
get paid. This idea is not as farfetched as it sounds. A
company called Yoyodyne calls it permission-based
marketing, which stands in contrast to interruption-based
marketing - helping advertisers build relationships with
consumers and learn more about them.
• The Net threatens to invert the traditional logic of
advertising. Suddenly, the hunted have become the
hunters.
The New Environment:
The E - Organization (D)
• Online, mediocrity will have no place to hide. Online
brokers compare products feature for feature and dollar
for dollar. Whether it's lawnmowers, camcorders, or
treadmills.
• Junglee and C2B Technologies are developing
powerful search engines that allow consumers to search
for products and bargains all across the Net. Inktomi-gives Web shoppers information on nearly a million
products and connects them with hundreds of
merchants.
The New Environment:
The E - Organization (E)
• In the off-line world, products and services were
designed and built far in advance of customer needs, and
there was little customers could do to configure those
products and services to their own requirements. No
more. The Net currently allows a vendor to build to
demand, thus keeping inventory to a minimum.
Increasingly the Net will enable building to spec.
• Solution selling and online advice are ways in which
online merchants can find some relief from the Web's
tendency to drive prices to zero. Think about the
economics of teaching thousands of Home Depot
employees to give helpful advice to weekend do-ityourself enthusiasts. Now think about the economics of
making that advice available on the Web. No contest.
The New Environment:
The E - Organization (F)
• How many of The purchases you made last year did
you put out to bid? Maybe you got a couple of quotes on
that new deck you had installed, but that was probably it.
In the future you might put just about everything you buy
out to bid. The Web will make it possible to hold real-time
auctions for just about everything.
• Priceline.com allows would-be fliers to name their price
for travel between any pair of cities. If an airline is willing
to issue a ticket at the requested price, the passenger is
obligated to buy.
The New Environment:
The E - Organization (G)
• E-commerce breaks every business free of its
geographic moorings. No longer will geography bind a
company's aspirations or the scope of its market.
Amazon.com spans the globe, selling 20% of its books to
foreign destinations. A physical bookstore serves an area
of a few square miles, and you can't peruse its inventory
without getting in your car and making a little
contribution to global warming. But whether you're in
Albania or Zambia, Amazon.com is a click away.
The New Environment:
The E - Organization (H)
• People are flocking to the Net because it's simply the
most efficient place to shop for a whole range of goods
and services. Say you're looking for a digital camera.
You can drive to your electronics superstore, try to nab a
salesperson who knows digital cameras and wait while
product literature is dug out from behind a counter, and
then make your purchase.
• Word of mouse. Every time someone sent an E-mail to
a friend, the message carried an offer to sign up for free
E-mail. At Hotmail they call it viral marketing: Harnessing
word of mouse, Hotmail's message spread like a
contagion.
The New Environment:
The E - Organization (I)
•The Web lends itself to immediate customer feedback
and rapid adjustment. Learning cycles are much shorter
online than off-line. Companies that are quick to try,
quick to learn, and quick to adapt will win. Those that
learn fastest, and keep learning, will stay ahead.
• Ralph Lauren and a host of other companies
are caught in a quandary: Should they go direct to
consumers via the Web or protect their traditional
channels? Surprising as it may seem, when some
companies talk about customers, they don't mean the
people who use their products; they mean the retailers
that stock their products. Many of these companies have
held back from E-tailing for fear that they'll offend their
customers.
Competitive Advantage
Cost
Types of
Competitive
Advantage
Product/Service
Differentiation
Niche Strategies
Niche Competitive Advantage
• Used by small companies with limited
resources
• May be used in a limited geographic market
• Product line may be focused on a specific
product line
Strategic Opportunity Matrix
Present Product
New Product
Present
Market
Market
Penetration
Product
Development
New
Market
Market
Development
Diversification
BCG Portfolio Matrix
HIGH
HIGH
LOW
MARKET GROWTH RATE
MARKET SHARE DOMINANCE
High growth
Market leaders
Require cash
LOW
High growth
Low market share
Need cash
Poor profit margins
$
Low growth
High market share
High cash flow
Low growth
Low market share
Minimal cash flow
Market Attractiveness Matrix
(GE)
BUSINESS POSITON
HIGH
MEDIUM
MEDIUM
WEAK
High Attractiveness
Medium Attractiveness
Low Attractiveness
LOW
MARKET ATTRACTIVENESS
STRONG
Target Market Strategy

Segment the market based on
groups with similar characteristics

Analyze the market based on
attractiveness of market segments

Select one or more target markets