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Discussion Questions

1 1. How is strategic planning carried

out at the corporate and divisional
02 levels?
Marketing Planning and 2. How is strategic planning carried
Development out at the business unit level?
3. What does a marketing plan
include?

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Strategic Planning Marketing‘s Role in Strategic Planning

• The process of developing & maintaining • Customer-centric MKT that responds

effectively to their changing needs
strategic fit between the org‘s goals &
– All depts. accept that ‗the customer is king‘
capabilities and its changing MKT
opportunities • Prioritizes in 3 key areas
̶ SP sets the stage for rest of the planning – Manage businesses as an investment portfolio
̶ SP involves adapting the firm to take advantage – Assess market‘s growth rate & firm‘s position
of opportunities in its constantly changing envt – Establish a strategy

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CORPORATE STRATEGIC
Three Organizational Levels
PLANNING
• MKT planning & MGT occur on 3 levels
– Corporate headquarters designs a corporate 1 Define the corporate mission
strategic plan to guide the whole enterprise
– Each business unit develops a plan to carry that Set company‘s goals &
2
business unit into a profitable future objectives
– Each market offering involves a MKT plan for
achieving its objectives 3 Design the business portfolio

4 Develop strategies and tactics

for growth

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Define the Corporate Mission Drucker‘s 5 classic questions for Mission

Setting a sound mission begins with Drucker‘s 5
classic questions:
• A mission is a clear, concise, & enduring
statement of the reasons for an org‘s What do customers
existence value?
– An org‘s core purpose What will our
Who is the
– A long-term goal that provides company employees customer?
business be?
& MGT with a shared sense of purpose, direction, &
opportunity

What is our What should our

business? business be?

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Definition of Mission Product vs. Market-Oriented Mission

Company Product-oriented Market-oriented

• Should be market-oriented
We sell coffee and We sell ―The Starbucks
• Must be defined in terms of satisfying Starbucks
snacks. Experience‖.
customer needs; not in terms of products &
We make copying We help improve office
techs Xerox
equipment. productivity.
– Products & techs are transient & become We sell lifestyle & self-
outdated (truck) We make
Revlon expression; success and
cosmetics.
– Needs or customer groups endure forever status.
(transportation)
Paramount
We make movies. We market entertainment.
Pictures

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Five Characteristics of Good Mission

Crafting a Mission Statement Statements

1. Focus on a limited number of goals

• A clear, thoughtful mission statement is
developed collaboratively with managers, 2. Stress major policies & values
employees, and often customers
3. Define the major markets that the
– May change over time to respond to new company aims to serve
opportunities
4. Take a long-term view
– Acts as an invisible hand to guide employees
5. Are as short, memorable, & meaningful as
possible

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Mission of Google Mission of eBay

Vague mission

―We help people trade anything on earth.

We will continue to enhance the online
trading experiences of all—collectors,
dealers, small businesses, unique item
seekers, bargain hunters, opportunity
sellers, and browsers.‖

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Set Company's Goals & Objectives Design the Business Portfolio

• Turn the broad mission into detailed • Design business portfolios & growth
supporting objectives for each level of MGT strategies
– Goals are the desired outcomes or achievable – Business portfolio is the collection of businesses
tangible results & products that make up the company

– Each manager should have objectives & be – The best business portfolio must fit the firm‘s S/Ws
responsible for reaching them to market opportunities

– The broad mission leads to a hierarchy of – Specialized vs. diversified portfolio

objectives – GE has 49 SBUs

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Analyze the Current Business Analyze the Current Business

Portfolio Portfolio
3 characteristics of an SBU
• First identify key SBUs
A single business or
• Assess each SBU‘s attractiveness & assign collection of related
businesses
corporate resources to each SBU
– Invest more in profitable SBUs
– Phase down or drop weaker SBUs Unique competitors

– Use various strategies: building, holding,

harvesting, & divesting strategies
A leader responsible for planning
& profit performance

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Analyze the Current Business

BCG Growth-Share Matrix
Portfolio
Analyzing the Current Business Portfolio

BCG Growth-Share Matrix

Building Holding
– Classify SBUs based on market growth rate &
relative market share Building
Harvesting Divesting

GE/McKinsey Matrix
– Classify SBUs based on competitive advantage &
industry attractiveness indices Holding
Divesting

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GE/McKinsey Matrix Problems with Matrix Approaches

GE/McKinsey Matrix
• Difficulty in defining SBUs and measuring
HIGH

market share and growth

Competitive Advantage

• Time consuming
MED

• Expensive
• Focus on current businesses, not future
planning
LOW

• Ignores relationships between SBUs

LOW MED HIGH

Industry Attractiveness

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Develop Strategies and Tactics Develop Strategies and Tactics

for Growth for Growth

• MKT strategy involves

• MKT has the responsibility New
Businesses – Identifying & choosing a well-defined market
for achieving profitable
growth – designing an optimal offering

• MKT needs to formulate • MKT tactics (MKT mix)

Opportunities
strategies & tactics for – The specific actions, tools, or techniques to
achieving growth execute strategy & achieve short-term goals
Eliminate – Makes the company‘s MKT strategy come alive
Downsizing Businesses

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Identify the Target Market Develop an Optimal Value Proposition

The target market comprises 5 factors: Create superior value for the trios

Figure: The 5-C Framework Fig: The 3-V Market Value Principle

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Develop Marketing Tactics (Mix) Determine Strategic Planning Gap

• Add attractive
unrelated
businesses
• Build or acquire
related businesses
• Opportunity to grow
within current
Projected sales businesses

Fig: Marketing Tactics- The Seven Tactics (7 Ts)

Defining the Market Offering
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Ansoff‘s Product/Market Expansion Grid Integrative Growth

A firm can increase sales & profits through backward,

A tool for identifying company growth opportunities forward, or horizontal integration within its industry

Existing New
products products
Wholesaler
Existing Supplier Business
markets

New
markets
Competitor

FIGURE 2.3 The Product/Market Expansion Grid Horizontal Integration

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Diversification Growth Diversification Growth

Seeking new products having technological

• Diversification growth makes sense when Concentric or MKT synergies with existing product
good opportunities exist outside the Strategy lines, even though they appeal to a different
present businesses group of customers

Producing complementary products, even

Horizontal though they might require a different
Strategy manufacturing process (DVD Disc +
Plastic Disc)

Conglomerate Seeking new businesses with no

relationship to its current technology,
Strategy products, or markets

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Downsize and Divest Older Businesses Corporate Culture

• Carefully prune, harvest, or divest

the tired old businesses to release • SP happens within the context of the org
needed resources for other uses • A company‘s org consists of its
and reduce costs structures, policies, & corporate culture,
all of which can become dysfunctional in
a rapidly changing business environment

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Corporate Culture Marketing Innovation

… is the shared experiences, stories, beliefs, • To stimulate new ideas, MKT innovation is
& norms that characterize an org very crucial (BlackBerry)
• A customer-centric • Fostered by 3 unrepresented employee
culture can affect all groups
aspects of an org
– Employees with youthful or diverse perspectives
• Very difficult to change – Employees far removed from corporate
corporate culture
headquarters
• A viable corporate culture – Employees new to the industry
is the key to market
success

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SWOT Analysis The Organization of Marketing Plan

Favorable Unfavorable

A formal

SW
Internal

framework for Strength Weakness

identifying and
framing
organizational
growth

OT
External

opportunities Opportunity Threat

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Strategic vs. Tactical Issue Marketing Debate

1. What good is a mission statement?

 Peter Drucker: it is more
important to ―do the right 2. What implications do Porter‘s value chain
thing‖—to be effective— and the holistic MKT orientation model have
than ―to do things right‖— for MKT planning?
to be efficient 3. Take a position:
– The most successful (a) Mission statements are critical to a successful
companies, however, excel at
MKT org.
both Strong leadership
(b) Mission statements rarely provide useful
marketing value.

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