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•Strategic Marketing Planning – Tools/Models.

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Goals of the topicTo gain an understanding of:• The nature and scope of planning and

how it fits within the management process

• Similarities and differences among mission, objectives, strategies and tactics

• The essential difference between strategic company planning and strategic marketing planning

• The steps involved in strategic marketing planning

• The purpose and contents of an annual marketing plan

• How planning models can be useful aids in developing a marketing program

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PLANNINGAnalyze situationSet goalsSelect strategies and tactics

IMPLEMENTATIONOrganizeStaffDirect

EVALUATIONCompare performance with goals

Feedback, so management can adapt future plans and theirimplementation to the changing environment

The Management Process

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Strategic Business Units (SBU)• To make planning more effective, a

large, diverse organization may divide itself into smaller planning units called Strategic Business UnitsStrategic Business Units

• The unit should:•Be a separately identifiable business•Have a distinct mission•Have separate competitors•Have a separate group of executives

charged with profit responsibility•Have its own strategic plan

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The BCG The BCG ( Boston Consulting Group) MatrixMatrix

• Market Share/ Market Growth Market Share/ Market Growth MatrixMatrix:

• a marketing planning tool that classifies a firm’s SBU’s or products according to industry growth rates and market shares relative to competing products•Stars•Cash Cows•Dogs•Question Marks

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(BCG Matrix)

• Using this model, a strategic business unit (SBU) can be classified according to two factors: its market share relative to competitors, and the growth rate of the industry in which the SBU operates.

• The resulting 2 x 2 grid has 4 quadrants that represent distinct categories of SBUs or major products.

• Each category is assigned a name that reflects its market share, industry growth rate, cash needs, and appropriate strategies.

• A company should seek a balanced portfolio of SBUs with a mix of stars, cash cows, and questions marks, but hopefully no dogs.

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Stars

Cash cows Dogs

Question marks

High Low

High

Low

COMPANY’S MARKET SHAREIN

DU

ST

RY

GR

OW

TH

RA

TE

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• “Stars “ and “Qs Marks” are both company business that operate in high growth industries. The difference b/w them is the firm's market share relative to other main operators in the industry.

• Where as a ‘Star’ is a ‘Market Leader’, a ‘Question Mark’ is a ‘follower’.

• “Cash Cows” and “Dogs” are both company business that operates in low-growth industries. It is the market share position that distinguishes a Cash Cow from a Dog, though both operate in low-growth industries.

• A “Cash Cow" is a “market Leader” while “Dog” is a “Poor follower”.

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• Stars: are net users of resources. A Star needs a good deal of investment support as it operates in a high –growth market. It may not bring in immediate profits, but holds out great potential for the future. Strategy: invest more funds for future growth.

• Qs .Marks: : they also are net users of resources. But, their future is uncertain. and they are in the high –risk category. Strategy: Either invest more funds for future or disinvest.

• Cash Cows: are net generator of resources. A cash cow brings a lot of cash and profit to your company, investment needs of a cash cow is minimal being it in a low-growth market. Strategy: milk profits to finance growth of stars & QMs.

• Dogs: dogs are business with weak market share in weak (low-growth) market. they are cash-traps and draggers of your company resources. Stg: Withdraw

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Product-Market Growth Matrix (Ansoff Model)

• This was developed by Igor Ansoff for strategic Planning.

• growth requires examination of both products and markets; what needs changing?

• Should you stay and fight? Or should you forge an alliance to meet the challenge?• market penetrationmarket penetration:: sell more of

present products/services to present markets

• market developmentmarket development:: sell present products to new markets or segments

• product developmentproduct development:: new products/services for existing markets

• diversificationdiversification: new products to new markets

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PRESENT PRODUCTS

PRESENTMARKETS

NEW PRODUCTS

NEWMARKETS

Marketpenetration

Marketdevelopment

Productdevelopment

Diversification

The product-market growth matrix depicts the options available in

considering markets and products.

Product Market Growth Matrix

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• Market penetration strategy tries to achieve growth through Existing products in Existing Markets

• Market development Strategy tries to achieve growth through Existing products in New Markets.

• Product development Strategy tries to achieve growth through Improved Products in Existing Markets.

• Summary : Ansoff model helps strategic Planning in respect of the existing business of a company through the intensification route.