MKTG 2 CHAPTER Chapter 2 Copyright 2010 Cengage

………………. . The managerial process of creating and maintaining a fit between the organization’s

Strategic Planning ………………… A written document that acts as a guidebook of marketing activities

Why Write a Marketing Plan? u Provides a basis for comparison of actual and

Marketing Plan Elements Business Mission Statement Objectives Situation or SWOT Analysis Marketing Strategy Target

Levels of Strategy § § Corporate Level Business Unit Level – § Functional Level

Defining the Business Mission u Answers the question, “What business are we in? ”

Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 8

Strategic Business Units (SBUs) Characteristics: [SBU HAS…] u A distinct mission and specific target

LO 2 Business Mission Statement Q: What business are we in? A: Business mission

What Businesses are we in? Businesses must be viewed as CONSUMER-SATISFYING process and not

What Businesses are we in? Remember products are transient and basic NEEDS are not

LO 3 Marketing Objective ………………… A statement of what is to be accomplished through

LO 3 Marketing Objectives u Realistic u Measurable u Time specific u Consistent with

………………… Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O)

SWOT Analysis Internal External LO 4 Chapter 2 S W O T Things the

Environmental Scanning The collection and interpretation of information about forces, events, and relationships in

LO 5 Competitive Advantage …………………. Chapter 2 The set of unique features of a

LO 5 Competitive Advantage Cost Types of Competitive Advantage Product/Service Differentiation Niche Strategies Chapter

LO 5 ………………. . Chapter 2 Being the low-cost competitor in an industry while

LO 5 Product/Service Differentiation …………. Chapter 2 The provision of something that is unique

LO 5 ………………… Chapter 2 The advantage achieved when a firm seeks to target

LO 5 Niche Competitive Advantage u Used by small companies with limited resources u

Marketing Strategy …………………. LO 7 Chapter 2 The activities of selecting and describing one

LO 7 Target Market Strategies Target Market Options Entire Market Chapter 2 Multiple Markets

The Marketing Mix A unique blend of product, distribution, promotion, and pricing strategies designed

Following Up on the Marketing Plan u Implementation u Evaluation u Control u Marketing

Market Share § a company's sales expressed as a percentage of the sales for

Market Share § There are three firms in the market –P. Diddy, Puff Daddy,

Market Shares: Light Beer Brands Chapter 2 Copyright © 2010 Cengage Learning Inc. All

Relative Market Share § In 1995, Makita enjoyed a 50% market share in the

Boston Consulting Group’s Growth-Share Matrix Industry Growth (%) High STARS Low Chapter 2 CASH

LO 6 Strategic Alternatives Market ………………. Chapter 2 Increase market share among existing customers

Competitive Growth Strategies MARKET PRODUCT Present Market Present Penetration Chapter 2 New Product Development

LO 6 Portfolio Matrix Strategies Build Hold Harvest Divest Chapter 2 Copyright © 2010

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………………. . The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities. The goal is long-term profitability and growth. LO 1 Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 2

Why Write a Marketing Plan? u Provides a basis for comparison of actual and expected performance u Provides clearly stated activities to work toward common goals u Serves as a reference for the success of future activities u Provides an examination of the marketing environment u Allows entry into the marketplace with awareness LO 1 Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 4

Marketing Plan Elements Business Mission Statement Objectives Situation or SWOT Analysis Marketing Strategy Target Market Strategy Marketing Mix LO 1 Chapter 2 Product Distribution Promotion Price Implementation Evaluation Control Copyright © 2009 Cengage Learning Inc. All rights reserved. 5

Defining the Business Mission u Answers the question, “What business are we in? ” u Focuses on the market(s) rather than the good or service u Strategic Business Units (SBUs) may also have a mission statement LO 2 Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 7

Strategic Business Units (SBUs) Characteristics: [SBU HAS…] u A distinct mission and specific target market u Control over its resources u Its own competitors u Plans independent of other SBUs LO 2 Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 9

LO 2 Business Mission Statement Q: What business are we in? A: Business mission statement Too narrow Too broad Just right Chapter 2 marketing myopia no direction focus on markets served and benefits customers seek Copyright © 2010 Cengage Learning Inc. All rights reserved 10

What Businesses are we in? Businesses must be viewed as CONSUMER-SATISFYING process and not goods-producing process. MARKETING MYOPIA. Chapter 2 Copyright © 2010 Cengage Learning Inc. All rights reserved 11

What Businesses are we in? Remember products are transient and basic NEEDS are not …. so, the key is to have a “market definition” of your business and not a product-based definition For example, is Xerox in the photocopying business? Chapter 2 Copyright © 2010 Cengage Learning Inc. All rights reserved 12

LO 3 Marketing Objectives u Realistic u Measurable u Time specific u Consistent with and indicating the priorities of the organization “Our objective is to achieve 10 percent dollar market share in the cat food market within 12 months of product introduction. ” Chapter 2 Copyright © 2010 Cengage Learning Inc. All rights reserved 14

………………… Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) LO 4 Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 15

SWOT Analysis Internal External LO 4 Chapter 2 S W O T Things the company does well. 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 of current weakness. ©South-Western College Publishing Copyright © 2009 Cengage Learning Inc. All rights reserved. 16

Environmental Scanning The collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. LO 4 Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 17

LO 5 Competitive Advantage …………………. Chapter 2 The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. Copyright © 2009 Cengage Learning Inc. All rights reserved. 18

LO 5 Product/Service Differentiation …………. Chapter 2 The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s. Copyright © 2009 Cengage Learning Inc. All rights reserved. 21

LO 5 Niche Competitive Advantage u Used by small companies with limited resources u May be used in a limited geographic market u Product line may be focused on a specific product category Chapter 2 Copyright © 2009 Cengage Learning Inc. All rights reserved. 23

Marketing Strategy …………………. LO 7 Chapter 2 The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets. Copyright © 2010 Cengage Learning Inc. All rights reserved 24

The Marketing Mix A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market. LO 8 Chapter 2 Copyright © 2010 Cengage Learning Inc. All rights reserved 26

Following Up on the Marketing Plan u Implementation u Evaluation u Control u Marketing audit is… u Comprehensive u Systematic u Independent 9 u Periodic LO Chapter 2 http: //www. youngbiz. com Online Copyright © 2010 Cengage Learning Inc. All rights reserved

Market Share § There are three firms in the market –P. Diddy, Puff Daddy, and Diddy (very confusing, I know!). P. Diddy sells 40 units, Puff sells 50 units, and Diddy sells 10 units. Compute the market shares of all three firms. Chapter 2 Copyright © 2010 Cengage Learning Inc. All rights reserved

Relative Market Share § In 1995, Makita enjoyed a 50% market share in the tradesmen segment. Milwaukee was second with 10% and Black & Decker was third in the market with 5%. Compute the relative market shares of the three brands. Chapter 2 Copyright © 2010 Cengage Learning Inc. All rights reserved

Boston Consulting Group’s Growth-Share Matrix Industry Growth (%) High STARS Low Chapter 2 CASH COWS PROBLEM CHILD DOGS High Relative Low Market Share Copyright © 2010 Cengage Learning Inc. All rights reserved

LO 6 Strategic Alternatives Market ………………. Chapter 2 Increase market share among existing customers Market ……………. . Attract new customers to existing products …………. . Development Create new products for present markets …………………. . Introduce new products into new markets Copyright © 2010 Cengage Learning Inc. All rights reserved

Competitive Growth Strategies MARKET PRODUCT Present Market Present Penetration Chapter 2 New Product Development Market Diversification Development Copyright © 2010 Cengage Learning Inc. All rights reserved