Chapter 2 Planning Marketing Strategies PrideFerrell Marketing Foundations

Chapter 2: Planning Marketing Strategies Pride/Ferrell Marketing Foundations Fourth Edition Prepared by Milton Pressley University of New Orleans © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Objectives 1. Describe the strategic planning process. 2. Explain how organizational resources and opportunities affect the planning process. 3. Understand the role of the mission statement in strategic planning. 4. Examine corporate, business-unit, and marketing strategies. 5. Understand the process of creating the marketing plan. 6. Describe the marketing implementation process and the major approaches to marketing implementation. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Strategic Planning Process • The process of establishing an organizational mission and formulating goals, corporate strategy, marketing objectives, marketing strategy, and a marketing plan © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Understanding the Strategic Planning Process © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Strategy • A plan of action for identifying and analyzing a target market and developing a marketing mix to meet the needs of that market. The Marketing Strategy Wendy’s targets the “late night” market by keeping some of its locations open until midnight and beyond © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Effective Marketing Strategy ü Reflects overall direction of organization ü Coordinated with firm’s functional areas ü Contributes to achievement of: • Marketing objectives • Organizational goals © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Question • Using a local firm or organization, discuss what you perceive to be its “marketing strategy” and its “marketing plan. ” • What, if any, changes would you recommend to the firm or organization regarding its marketing strategy or plan? © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Assessing Organizational Resources and Opportunities Core Competencies Competitive Advantage Strategic Windows Market Opportunities The place where opportunities, core competencies, and strategic windows meet. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Core Competencies • Things a firm does extremely well, which sometimes give it an advantage over its competition – Mc. Donald’s consistent delivery of fast food – Starbuck’s gourmet coffee drinks – BMW’s production of sporty, luxury automobiles © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Plan A written document that specifies the activities to be performed to implement and control an organization’s marketing activities – Strengths – Weaknesses – Opportunities – Threats © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Market Opportunity • A combination of circumstances and timing that permits an organization to take action to reach a particular target market. – Real estate is all about Market Opportunity – Explore www. realtor. com © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Strategic Window • Temporary periods of optimal fit between the key requirements of a market and the particular capabilities of a firm competing in the market. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Competitive Advantage • The result of a company’s matching a core competency (superior skill or resources) to opportunities in the marketplace – cheaper, more widely available, stronger service support, higher quality © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Four-Cell SWOT Matrix © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Establishing an Organizational Mission and Goals © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Mission Statement • Mission Statement Answers: – Who are our customers? – What is our core competency? • Corporate Identity – Unique Symbols – Personalities – Philosophies – Celestial Seasonings complete mission statement © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Establishing an Organizational Mission and Goals • Mission Statement © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Question • After reviewing the mission statements for Fed. Ex on the previous slide and the USPS (below), which do you think is the better statement? Why? Source: http: //www. usps. com/postalhistory/_pdf/Missionand. Motto. pdf#search='postal service. Accessed Sept. 13, 2009) © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Objective • A statement of what is to be accomplished through marketing activities to match strengths to opportunities, or to provide for the conversion of weaknesses to strengths – Should be stated in clear, simple terms – Should be accurately measurable – Should specify a time frame for accomplishment – Should be consistent with business-unit and corporate strategy © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Developing Corporate, Business Unit, and Marketing Strategies Corporate and Business Unit Strategies © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Fig. 2. 4 Levels of Strategic Planning © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Corporate Strategy • A strategy that determines the means for utilizing resources in the various functional areas to reach the organization’s goals. Corporate Strategy Boeing continues to excel in producing innovative new jetliners such as the Dream Liner © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Business-Unit Strategy • Strategic Business Units (SBU) – A division, product line, or other profit center within a parent company • Market – a group of individuals and/or organizations that have needs for products and the ability, willingness and authority to buy • Market Share – the percentage of a market that actually buys a specific product from a specific company © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Market-growth/market-share matrix © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

BCG Product Classifications • Stars – dominant market share & good growth prospect • Cash Cows – dominant market share & low growth prospect • Dogs – low market share & low growth prospect • Question Marks – small market share of a growing market & require significant cash to build market © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Strategy Target Market Selection Creating a Marketing Mix © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Target Market Selection Selecting an appropriate target market may be the most important decision a company has to make. Target Market Selection L. L. Bean targets the outdoor enthusiast with many of its products © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Question • Click on the Television below, watch the commercial, and discuss your perception of REI’s target market. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Strategy • Components of marketing strategy – Target Market Selection – Creating the Marketing Mix – Sustainable Competitive Advantage • an advantage not readily copied by competitors • Wal-Mart’s buying power as the world’s largest retailer © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Creating the Marketing Mix • All marketing mix decisions should be consistent with the business unit and corporate strategies. Creating the Marketing Mix Tropicana’s marketing mix is designed to satisfy the needs of health-conscious customers © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Creating the Marketing Plan • Marketing Planning – The process of assessing opportunities and resources, determining objectives, defining strategies, and establishing guidelines for implementation and control of the marketing program © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Table 2. 1 Components of the Marketing Plan © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Implementation Intended Strategy Realized Strategy © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Implementing Marketing Strategies • The process of putting marketing strategies into action – Intended Strategy – Realized Strategy Intended Strategy Implementation Realized Strategy © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Approaches to Marketing Implementation • Customers – External customers – Internal customers • Internal Marketing – External Customers – Internal Customers • Total Quality Management – Benchmarking – Empowerment © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Approaches to Marketing Implementation Implementing Marketing Strategy Internal Marketing Customer Relationship Management Total Quality Management © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Discussion Question What, if any, relationship do you see between the “marketing concept” and “total quality management”? © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Marketing Activities Organizing by Functions Organizing by Regions Organizing by Products Organizing by Types of Customers © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

The Control Marketing Process © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

After Reviewing This Chapter You Should: 1. Be able to describe the strategic planning process. 2. Know how organizational resources and opportunities affect the planning process. 3. Understand the role of the mission statement in strategic planning. 4. Be able to examine corporate, business-unit, and marketing strategies. 5. Understand the process of creating the marketing plan. 6. Be able to describe the marketing implementation process and the major approaches to marketing implementation. © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Key Concepts • Strategic planning • Sustainable competitive advantage • Marketing strategy • Marketing planning • Marketing plan • Marketing implementation • Core competencies • Intended strategy • Market opportunity • Realized strategy • Strategic windows • External customers • Competitive advantage • Internal customers • SWOT analysis • Internal marketing • Mission statement • Total quality management (TQM) • Marketing objective • Benchmarking • Corporate strategy • Empowerment • Strategic business unit (SBU) • Centralized organization • Market • Decentralized organization • Market share • Marketing control process • Market growth/market share matrix • Performance standard © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.