2 Strategic Planning for Competitive Advantage Prepared by

Learning Objectives 1. Understand the importance of strategic marketing and know a basic outline for a marketing plan 2. Develop an appropriate business mission statement 3. Describe the criteria for stating good marketing objectives Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 2

Learning Objectives (continued) 4. Explain the components of a situation analysis 5. Identify sources of competitive advantage 6. Identify strategic alternatives 7. Discuss target market strategies Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 3

Learning Objectives (continued) 8. Describe the elements of the marketing mix 9. Explain why implementation, evaluation, and control of the marketing plan are necessary 10. Identify several techniques that help make strategic planning effective Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 4

Strategic Planning EVOLVING MARKET OPPORTUNITIES LONG RUN PROFITABILITY AND GROWTH RESOURCES & OBJECTIVES 1 Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 5

Business Mission Statement Objectives Marketing Plan Elements Situation or SWOT Analysis Marketing Strategy Target Market Strategy Marketing Mix Product Distribution Promotion Price Implementation Evaluation Control 1 On Line http: //www. dmusic. com Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 6

Defining the Business Mission Q: What business are we in? A: Business mission statement Too narrow Too broad Just right 2 marketing myopia no direction focus on markets served and benefits customers seek Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 7

Marketing Objectives Must Be: § 3 Realistic § Measurable § Time specific § Consistent with and indicate the organization’s priorities “Our objective is to achieve 10 percent dollar market share in the specialty pet food market within 12 months of product introduction. ” Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 8

Review Learning Objective 3 Clear and specific objectives: 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to think clearly 5. Allow for better evaluation of results 3 Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 9

SWOT Analysis S W O T Things the company does well. Internal External 4 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 areas. College of current weakness. ©South-Western Publishing Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 10

Competitive Advantage Cost Types of Competitive Advantage Product/Service Differentiation Niche Strategies On Line http: //www. travelocity. com http: //www. expedia. com 5 Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 11

Ansoff’s Strategic Opportunity Matrix Present Product New Product Present Market Penetration Product Development New Market Development Diversification On Line http: //www. pg. com 6 Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 12

Review Learning Objective 6 Identify strategic alternatives Market development = customers Market penetration = share Product development = products = new products new markets Diversification 6 Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 13

Target Market Strategy 7 u Segment the market based on groups with similar characteristics u Analyze the market based on attractiveness of market segments u Select one or more target markets Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 14

Targeting Strategies Entire Market Single Market Multiple Markets 7 Chapter 2 Copyright © 2006

Marketing Mix: The “Four Ps” Price Promotion Place Product 8 Chapter 2 Copyright ©

Following Up the Marketing Plan Implementation Evaluation Product Place Promotion Price Met objectives? Audits • • 9 comprehensive systematic independent periodic Chapter 2 Copyright © 2006 by South-Western, a division of Thomson Learning. All rights reserved 17