Lecture-6Lecture-6

MGT301MGT301Principles of MarketingPrinciples of Marketing

SummarySummaryof of

Lecture-5Lecture-5

Marketing Marketing ChallengesChallenges

in the in the 21st century21st century

Threat of New

Entrants

Threat of Substitute Products

Threat of New

Entrants

Bargaining Power of Buyers

Bargaining Power of Suppliers

Rivalry Among Competing Firms in Industry

*

The Information Technology BoomThe Information Technology Boom

Rapid GlobalizationRapid Globalization

The Changing World EconomyThe Changing World Economy

The Call for more ethical and social ResponsibilityThe Call for more ethical and social Responsibility

The New Marketing LandscapeThe New Marketing Landscape

Today’s Today’s TopicsTopics

Strategic Planning and Marketing Strategic Planning and Marketing ProcessProcess

Strategic Strategic planningplanning

The process of developing and maintaining a The process of developing and maintaining a strategic fit between the organization’s goals and strategic fit between the organization’s goals and capabilities and its changing marketing capabilities and its changing marketing opportunities. opportunities.

Planning--what are we going Planning--what are we going do and how are we going to do and how are we going to do it?do it?

Why Why Plan?Plan?

Address changing environment and Address changing environment and consumersconsumers

Develop shared goals within Develop shared goals within organizationorganization

Address competitive threatAddress competitive threat

Planning is no Planning is no fun!fun!

Who likes to think about Who likes to think about the future?the future?

It is just an unnatural act!It is just an unnatural act!

If you fail to If you fail to plan,plan,

you plan to you plan to fail.fail.

Planning requires that Planning requires that you:you:

Anticipate the futureAnticipate the future

Determine actions that are Determine actions that are needed to achieve objectivesneeded to achieve objectives

What doyou see?

The Planning The Planning ProcessProcess

Environmental AnalysisEnvironmental Analysis Mission & Objective SettingMission & Objective Setting Marketing Strategy DevelopmentMarketing Strategy Development Action PlansAction Plans

Characteristics of a Strategic Characteristics of a Strategic PlanPlan

Broad in ScopeBroad in Scope Long Range: 3 - 5 + YearsLong Range: 3 - 5 + Years Focus on Organizational ObjectivesFocus on Organizational Objectives Initiated and Managed by Top ManagementInitiated and Managed by Top Management Becomes Basis for Tactical Planning & OperationsBecomes Basis for Tactical Planning & Operations

Strategic Strategic PlanningPlanning

Conducted by Board, Conducted by Board, CEO, Division VPsCEO, Division VPs

Sets ObjectivesSets Objectives

Fundamental StrategiesFundamental Strategies

Tactical Tactical Planning Planning

Middle Management - Sales Middle Management - Sales Mgr., Mkt. Research Director, Mgr., Mkt. Research Director, Advertising DirectorAdvertising Director

Quarterly & Semi-Annual Quarterly & Semi-Annual PlansPlans

Departmental Policies and Departmental Policies and ProceduresProcedures

Budget AllocationsBudget Allocations

Operational Operational PlanningPlanning

District Sales Managers, District Sales Managers, Staff Marketing SupervisorsStaff Marketing Supervisors

Daily and Weekly PlansDaily and Weekly Plans

Departmental Rules & Departmental Rules & ProceduresProcedures

It is more important to do what is strategically It is more important to do what is strategically right than what is immediately profitable.right than what is immediately profitable.

--Phillip Kotler--Phillip Kotler

SWOT SWOT AnalysisAnalysis

StrengthsStrengths

WeaknessesWeaknesses

OpportunitiesOpportunities

ThreatsThreats

Steps in Strategic Steps in Strategic PlanningPlanning

Defining the

CompanyMission

Setting CompanyObjectivesand Goals

Designingthe Business

Portfolio

Planning, marketing,and other functionalStrategies

Corporate LevelCorporate LevelBusiness unit, product,and marketlevel

Strategic Planning Strategic Planning involves developing an overall involves developing an overall company strategy for long-run survival and growth.company strategy for long-run survival and growth.

This process involves:This process involves:– Defining a MissionDefining a Mission:: Statement of an organization’s Statement of an organization’s

purpose; should be market oriented.purpose; should be market oriented.

– Setting Company Objectives:Setting Company Objectives: Supporting goals and Supporting goals and objectives to guide the entire company.objectives to guide the entire company.

– Designing a Business PortfolioDesigning a Business Portfolio: : Collection of Collection of businesses and products that make up the company.businesses and products that make up the company.

– Planning Functional StrategiesPlanning Functional Strategies: : Detailed planning for Detailed planning for each department designed to accomplish strategic each department designed to accomplish strategic objectives.objectives.

Defining the Company’s Business Defining the Company’s Business and Missionand Mission

Market OrientedMarket Oriented

RealisticRealistic

Fit Market EnvironmentFit Market Environment

Distinctive CompetenciesDistinctive Competencies

MotivatingMotivating

Specific

Characteristics

of a Good Mission

Statement:

A Mission Statement is a A Mission Statement is a Statement of the Organization’s Statement of the Organization’s

Purpose.Purpose.

Setting Company Objectives and Setting Company Objectives and Goals Goals

M arke tin gS tra teg y

M arke tin gS tra teg y

M arke tin gO b jec tive # 1

M arke tin gS tra teg y

M arke tin gO b jec tive # 2

M arke tin gS tra teg y

M arke tin gS tra teg y

M arke tin gO b jec tive # 3

M iss ionS ta tem en t

Designing the Business PortfolioDesigning the Business Portfolio

Business PortfolioBusiness Portfolio:: The collection of business and The collection of business and products that make up the companyproducts that make up the company

Portfolio AnalysisPortfolio Analysis:: A tool by which management A tool by which management evaluates the various business making up the companyevaluates the various business making up the company

Strategic Business Unit (SBU):Strategic Business Unit (SBU): A unit of the A unit of the company that has a separate mission and objectives company that has a separate mission and objectives and that can be planned independently from other and that can be planned independently from other company businesscompany business

The best portfolio is the one that best fits the company’s strengths The best portfolio is the one that best fits the company’s strengths and weaknesses to the opportunities in the environment.and weaknesses to the opportunities in the environment.

The company must:The company must: analyze its analyze its currentcurrent business portfolio or Strategic Business Units business portfolio or Strategic Business Units

(SBU’s)(SBU’s) decide which SBU’s should receive more, less, or no investmentdecide which SBU’s should receive more, less, or no investment develop growth strategies for adding develop growth strategies for adding newnew products or products or

businesses to the portfoliobusinesses to the portfolio

The Boston Consulting Group’s The Boston Consulting Group’s Growth-Share MatrixGrowth-Share Matrix

3 ?

10x 4x 2x 1.5x 1x 10x 4x 2x 1.5x 1x

20%-20%-18%-18%-16%-16%-14%-14%-12%-12%-10%-10%- 8%-8%- 6%-6%- 4%-4%- 2%-2%- 00

Mar

ket

gro

wth

rat

e

Relative market share

Stars

Cash cow

Question marks

Dogs

? ??5

4

2

1

68

7.5x .4x .3x .2x .1x .5x .4x .3x .2x .1x

Enough for today. . .Enough for today. . .

SummarySummary

Strategic Planning and Marketing ProcessStrategic Planning and Marketing Process

Defining the

CompanyMission

Setting CompanyObjectivesand Goals

Designingthe Business

Portfolio

Planning, marketing,and other functionalStrategies

Corporate Corporate LevelLevel

Business unit, product,

and marketlevel

3 ?

10x 4x 2x 1.5x 1x 10x 4x 2x 1.5x 1x

20%-20%-18%-18%-16%-16%-14%-14%-12%-12%-10%-10%- 8%-8%- 6%-6%- 4%-4%- 2%-2%- 00

Mar

ket

gro

wth

rat

e

Relative market share

Stars

Cash cow

Question marks

Dogs

? ??5

4

2

1

68

7.5x .4x .3x .2x .1x .5x .4x .3x .2x .1x

Next….Next….

BCGBCG Marketing ProcessMarketing Process Analyzing marketing opportunitiesAnalyzing marketing opportunities Selecting target marketsSelecting target markets

Lecture-6Lecture-6

MGT301MGT301Principles of MarketingPrinciples of Marketing