Transcript Chapter 1 - Oakton Community College

Lamb, Hair, McDaniel
2012-2013
CHAPTER 2
Chapter 1
Copyright ©2012 by Cengage Learning Inc. All rights reserved
© 2013 by Cengage Learning Inc. All Rights Reserved.
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© AP IMAGES/JENNIFER GRAYLOCK
Strategic Planning for
Competitive Advantage
Learning Outcomes
1
Understand the importance of strategic planning
2
Define strategic business units (SBUs)
3
Identify strategic alternatives and know a basic
outline for a marketing plan
4
Develop an appropriate business mission statement
5
Describe the components of a situation analysis
6
Identify sources of competitive advantage
2
Learning Outcomes
7
Explain the criteria for stating good marketing
objectives
8
Discuss target market strategies
9
Describe the elements of the marketing mix
10
Explain why implementation, evaluation, and control
of the marketing plan are necessary
11
Identify several techniques that help make strategic
planning effective
3
The Nature of Strategic Planning
Understand strategic
marketing and explore
a basic outline for a
marketing plan
1
4
Strategic Marketing Management
What is the organization’s main activity?
How will it reach its goals?
The answer is by examining:
• SBUs (Strategic Business Units)
• Strategic Alternatives
• The Marketing Plan
5
1
Strategic Planning is…
the managerial process of
creating and maintaining a fit
between the organization’s
objectives and resources and the
evolving market opportunities.
The GOAL of strategic planning is long-term
profitability and growth.
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1
Strategic Business Units
Define Strategic
Business Units
(SBUs)
2
7
Characteristics of
Strategic Business Units (SBUs)
An SBU …
g
 has a distinct mission and specific
target market
 has control over its resources
 has its own competitors
 has plans independent of other SBUs
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2
Strategic Alternatives
Identify strategic
alternatives and
know a basic
outline for a
marketing plan
3
9
Ansoff’s Opportunity Matrix
Market
Penetration
10
Increase market share among
existing customers
Market
Development
Attract new customers to
existing products
Product
Development
Create new products for
present markets
Diversification
Introduce new products
into new markets
3
Exhibit 2.1
Ansoff’s Strategic Opportunity Matrix
Present Product
New Product
Present
Market
Market Penetration
Product Development
Starbucks sells more coffee to
customers who register their
reloadable Starbucks cards.
Starbucks develops
powdered instant coffee Via
or Blond Roast.
New
Market
Market Development
Diversification
Starbucks opens stores in
Brazil and Chile.
Starbucks launches Hear
Music and buys Ethos Water.
3
11
Boston Consulting Group
Portfolio Matrix
Star
Cash Cow
Portfolio
Matrix
Question Mark
Dog
12
3
Exhibit 2.2
Portfolio Matrix for a Large Computer Manufacturer
3
13
Portfolio Matrix Strategies
Build
Hold
Harvest
Divest
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3
Exhibit 2.3
High
Cautiously Invest
Invest/Grow
Invest/Grow
Medium
Harvest/Divest
Cautiously Invest
Invest/Grow
Low
Market attractiveness
Portfolio Matrix for a Large Computer Manufacturer
Harvest/Divest
Harvest/Divest
Cautiously Invest
Low
Medium
High
Business Position
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3
What Is a Marketing Plan?
 Planning – the process of anticipating future events
and determining strategies to achieve organizational
objectives in the future.
 Marketing Planning – designing activities relating to
marketing objectives and the changing marketing
environment.
 Marketing Plan – a written document that acts as a
guidebook of marketing activities for the marketing
manager.
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3
Why Write a Marketing Plan?
 Provides a basis for comparison of actual versus
expected performance
 Provides clearly stated activities to work toward
common goals
 Provides an examination of the marketing
environment
 Serves as a reference for the success of future
activities
 Allows entry into the marketplace with awareness
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3
Business Mission
Statement
Exhibit 2.4
Elements of a
Marketing Plan
Situation or SWOT
Analysis
Objectives
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product
Distribution
Promotion
Price
Implementation
Evaluation
Control
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Marketing Plan Elements
Selecting how to proceed depends on:
1.
2.
Philosophy and culture
Decision making tools
The most common decision
making tool is the SWOT analysis.
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3
Writing the Marketing Plan
A complete marketing plan can allow an
organization to achieve marketing
objectives…
HOWEVER…
the marketing plan is only as good as the
information, effort, creativity and thought
put into it.
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3
Defining the Business Mission
Develop an
appropriate business
mission statement
4
21
Defining the Business Mission
 Answers the question,
“What business are we in?”
 Focuses on the market(s)
rather than the good or service
 SBUs may also have a mission statement
22
4
Conducting a Situation Analysis
Describe the
components of a
situation analysis
5 3
LO
23
SWOT Analysis
Internal
External
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S
W
O
T
Strengths - things the company does
well.
Weaknesses - things the company does
not do well.
Opportunities - conditions in the
external environment that favor
strengths.
Threats - conditions in the external
environment that do not relate to
existing
strengths or favor areas of
©South-Western College Publishing
current weakness.
5
Components of a SWOT Analysis
Examining Internal Strengths and Weaknesses
Focus on organizational resources:
• Production costs
• Marketing skills
• Financial resources
• Company or brand image
• Employee capabilities
• Technology
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5
Environmental Scanning
Helps identify Opportunities and Threats
Designing a marketing strategy is based
on six major environmental forces:
 Economic
 Technological
 Social
 Competitive
 Demographic
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5
© AP IMAGES/PRNEWSFOTO/PEPSICO
 Political/Legal
Competitive Advantage
Identify sources
of competitive
advantage
6
27
Types of Competitive Advantage
Cost
Types of
Competitive
Advantage
Product/Service
Differentiation
Niche
28
6
1. Competitive Advantage-Cost
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
Obtain inexpensive raw materials

Create efficient scale of plant operations

Design products for ease of manufacture

Control overhead costs

Avoid marginal customers
6
Sources of Cost Reduction
30
Experience Curves
Product Design
Efficient Labor
Reengineering
No-frills Products
Production Innovations
Government Subsidies
New Service
Delivery Methods
6
2. Competitive AdvantageProducts/Service
31

Brand names

Strong dealer network

Product reliability

Image

Service
6
3. Competitive Advantage-Niche
32

Used by small companies with limited
resources

May be used in a limited geographic
market
6
Building Sustainable Competitive
Advantage
33

Sustainable competitive advantage is an
advantage that cannot be copied by the
competition.

A firm that has successfully achieved a
competitive advantage will stake out a
position unique in some manner from rivals.
6
Sources of Sustainable
Competitive Advantage
Patents
Copyrights
Locations
Equipment
Technology
Skills and Assets
of an
Organization
34
Customer Service
Promotion
6
Setting Marketing Plan Objectives
Explain the criteria for
stating good marketing
objectives:
“What is to be
accomplished through
marketing activities”
7
35
Marketing Objectives
 Setting realistic goals
 Measurable targets
 Time specific aims
 Compared to a benchmark
For example: “Our objective is to
achieve 10 percent dollar market
share in the cat food market within
12 months of product introduction.”
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7
Criteria for Good Marketing
Objectives
Carefully specified objectives serve several functions:
1. Communicate marketing management philosophy
2. Provide management direction
3. Motivate employees
4. Force executives to clarify their thinking
5. Form a basis for control
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7
Describing the Target Market
Discuss target
market strategies
8
38
Describing the Target Market
Marketing Strategy:
Activities of selecting and describing one or more
target markets and developing and maintaining a
marketing mix that will produce mutually satisfying
exchanges with target markets.
Marketing Opportunity Analysis (MOA):
Description and estimation of the size and sales
potential of market segments that are of interest to
the firm and the assessment of key competitors in
these market segments.
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8
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
40
8
Target Market Strategy
Appeal to the entire market
with one marketing mix
Concentrate on one
marketing segment
Appeal to multiple markets
with multiple marketing mixes
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8
The Marketing Mix
Describe the
elements of the
marketing mix
9
42
The Marketing Mix
A unique blend of PRODUCT, PRICE,
PROMOTION AND PLACE (distribution)
strategies designed to produce mutually
satisfying exchanges with a target market.
The elements of the marketing
mix are often referred to as the
“Four Ps”
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9
Marketing Mix: Product
 The starting point of the
Product
“4 Ps” is the product:
 Physical unit
 Products can be…
 Package
 Tangible goods
 Warranty
 Ideas
 Service
 Services
 Brand
 Image
 Value
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9
Marketing Mix: Price
Price
 Price is what a buyer must give
up to obtain a product.
 The most flexible of the
“4 Ps”- quickest to change
 Competitive weapon
 Price x Units Sold = Total
Revenue
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9
Marketing Mix: Promotion
 Includes :
Promotion
 Advertising
 Public relations
 Brings about exchanges  Sales promotion
with target markets by:  Personal selling




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Informing
Educating
Persuading
Reminding
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Marketing Mix: Place
 Product availability where and
when customers want them
Place
 All activities from raw materials
to finished products
 Ensure products arrive in usable
condition at designated places
when needed
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Whole Foods Changes Its Pricing
Strategy
• As customers face financial struggles,
Whole Foods is changing its pricing
strategy by:
– highlighting deals and sales
– pricing items individually instead of per pound
– bundle items in bulk discounts
Source: Katy McLaughlin and Timothy Martin, "As Sales Slip, Whole Foods Tries Health Push," Wall Street Journal, August 5, 2009, B1
9
© 2013 by Cengage Learning Inc. All Rights Reserved.
48
Following Up on the Marketing Plan
Explain why
implementation,
evaluation, and control
of the marketing plan
are necessary
10
49
Following Up on the Marketing Plan
 Implementation
 Evaluation & Control
 Marketing audit is…
1. Comprehensive
2. Systematic
3. Independent
4. Periodic
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… and involves:
 Planning
 Organizing
 Controlling
 Leading
10
Effective Strategic Planning
Identify several
techniques that help
make strategic
planning effective
11
51
Techniques for Effective Strategic
Planning
Continual
attention
Creativity
Management
commitment
Effective
Strategic
Planning
52
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