Chapter 3- Strategic Market Planning

Thursday, September 6, 2018 2:56 PM

What to study
• Be sure to
LO1 Business Planning the differe
planning an
Planning: The big (and small) picture outline for
Business planning is an ongoing process that strategic p
guides short-and-long-term decisions. Some process.
terms: • Good to con
• Strategy: A general term (not just link the en
business) for a long term plan to achieve, scans discu
and therefore, measure progress towards a chapter two
goal. those scans
• Business Strategy: A system of activities planning ph
that provides sustainable competitive • Review the
advantage. focus on BC
• Marketing Strategy: how a company creates Ansoff matr
value for costumers. • Spend less
• Tactics: methods of implementing the marketing p
strategy (e.g. the 4Ps) section as,
• Operations: Daily execution of tactics. exceptions,
similar pro
A brief aside strategy pl
Many executives will talk about "sustainable
competitive advantage" but not really embrace
it. Vocab:
• Advantage: You must be really good at it.
• Competitive: You must be better at it than
all your competitors.
• Sustainable: It is not easily copied by
competitors.

Business Planning levels

Strategic planning
Planning done by top-level corporate
management
1. Define the mission
2. Evaluate the internal and external
environment
3. Set organizational or SBU objectives
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Strategic planning
Planning done by top-level corporate
management
1. Define the mission
2. Evaluate the internal and external
environment
3. Set organizational or SBU objectives
4. Establish the business portfolio (if
applicable)
Functional (Market) Planning
Planning done by top functional-level
management such as the firms chief
marketing officer (CMO)
1. Preform a situation analysis
2. Set marketing objectives
3. Develop marketing strategies
4. Implement and control the marketing plan
Operational Planning
Planning done by supervisory managers
1. Develop action plans to implement the
marketing plan
2. Use marketing metrics to monitor how the
plan is working.

Strategic Planning
• Strategic planning is the managerial
process that matches firms resources and
capabilities to market opportunities
○ Top management defines firms purpose
and sets objectives
○ Many large firms have separate
strategic business units (SBUs)
○ Disney has four SBUs for theme parks,
TV networks, film studios, and cruise
lines, each with their own president.

Functional planning
• Planning done by top functional management
• Marketing is a functional area in company
so there is marketing functional plan
includes:
○ Situational analysis
○ Broad 3-5 year plan to support the
strategic plan
○ Annual plan

Operational planning
You will see this when you start working
 ○ Broad 3-5 year plan to support the
strategic plan
○ Annual plan

Operational planning
You will see this when you start working
• First-line managers, who focus on day-to-
day execution of functional plan, often
creates operational plans to guide them
and staff
○ Covers a shorter period of time than
strategic and functional plans
○ Includes detailed instructions for
activities, specifies
responsibilities, and provides time
lines.
• For marketers, this typically includes:
○ Annual, semi-annual, or even quarterly
actions plans to guide marketing plan
implementation.
○ Identification of marketing metrics to
monitor performance.

Plans are integrated

Strategic planning
Planning done by top-level corporate
management
1. Define the mission
2. Evaluate the internal and external
environment
3. Set organizational or SBU objectives
4. Establish the business portfolio (if
applicable)
Functional (Market) Planning
Planning done by top functional-level
management such as the firms chief
marketing officer (CMO)
1. Preform a situation analysis
2. Set marketing objectives
3. Develop marketing strategies
4. Implement and control the marketing plan
Operational Planning
Planning done by supervisory managers
1. Develop action plans to implement the
marketing plan
2. Use marketing metrics to monitor how the
plan is working.
The best companies link their plans in what is
 Planning done by supervisory managers
1. Develop action plans to implement the
marketing plan
2. Use marketing metrics to monitor how the
plan is working.
The best companies link their plans in what is
sometimes called "Line of Sight"

LO2 Strategic Planning

Strategic Planning Process
• Strategic planning plays an important role
in modern business
○ Optimize revenues across multiple
lines of business
○ Minimize risk in a complex and
changing global environment
• Includes steps that result in development
of growth strategies.

Step 1: Define the mission

• A mission statement is a formal statement
of the firms overall purpose and what it
hopes to achieve in terms of its
customers, products, and resources.
• Key questions in determining mission:
○ What business are we in?
○ What customers should we serve?
○ How should we develop the firms
capabilities?
• Good mission statements are not too broad
or narrow, and are not shortsighted. A
mission statement is the ruler by which
the firm measures if it is working on the
right things.

Step 2: Evaluate the environment

• Examination of internal and external
environments.
• Managers often synthesize environmental
analysis of into format known as SWOT
(Strengths, Weaknesses, Opportunities, and
Threats)
• A SWOT analysis catalogs the firms:
○ Internal strengths and weaknesses
 • Managers often synthesize environmental
analysis of into format known as SWOT
(Strengths, Weaknesses, Opportunities, and
Threats)
• A SWOT analysis catalogs the firms:
○ Internal strengths and weaknesses
(e.g. human capital, key processes)
○ External opportunities and threats
(i.e. Trends)

SWOT Analysis

Step 3: Set Objectives

• Organizational goals (e.g. "increase
sales") and objectives (a specific
outcome) should reflect the mission and be
based on environmental assessment
• Objectives should be SMART (Specific,
Measurable, Achievable, Relevant, Time-
bound)
○ If you are in marketing, the goals
should be externally-facing. For
example, increased sales,
satisfaction, not "spend more on ads."

Step 4: Establish Portfolio

• A portfolio represents the different
business lines a large firm operates
○ Apples for example, manages its
business by product (iPhone, iPad,
Mac, services, other) and geography
(Americas, Europe, China, Japan,
other)
• Portfolio analysis assesses the growth
potential for a firm's SBU and product
lines. Two examples:
○ BCG Growth-Share Matrix
○ GE Model

Step 5: Growth Strategies

• Product-market growth matrix characterizes
different types of growth strategies based
on market and product types
○ Market penetration
○ Market development
Step 5: Growth Strategies
• Product-market growth matrix characterizes
different types of growth strategies based
on market and product types
○ Market penetration
○ Market development
○ Product development
○ Diversification

LO3 Market Planning

Market Planning Process
• Effective implementation of the four Ps
requires a great deal of planning
• Steps are similar to those in strategic
planning
○ Key difference relates to focus on
issues relating to marketing mix.

Step 1: Situation analysis

• Perform a marketing environmental analysis
• Conduct SWOT analysis

Marketing Environment
• Decisions for Domestic and Global Markets
○ Economic
○ Competitive (Do this last and worry
about it least.
○ Technology
○ Sociocultural
○ Political/Legal

SWOT Analysis

Step 2: Marketing objective

• Specific to the firm's marketing mix
elements (4Ps)
• Marketing objectives help achive the
overall business objectives
• Relate directly to strategic goals
 • Specific to the firm's marketing mix
elements (4Ps)
• Marketing objectives help achive the
overall business objectives
• Relate directly to strategic goals

Step 3: Marketing strategy

• Identify target market(s)
• Adjust marketing mix for each target
market:
○ Product
○ Price
○ Promotion
○ Place (distribution)

Step 4: Implementing and Control

During implementation process, firms follow
formal process to determine progress toward
marketing objectives
1. Measure actual performance
2. Compare performance to establish
objectives
3. Adjustments to objectives or strategies
based on analysis.

Assign responsibility
• Who is responsible for carrying out each
part of the marketing plan?
• Not everyone involved will be marketers:
○ Sales, production, quality control,
shipping, customer service, finance,
IT
• But real responsibility is assigned to
named individual, not to "sales"
• Apple uses a concept they call "directly
responsible individual" or "DRI"
○ From strategic plan to squashing an
individual software bug, someone is
responsible (and has authority to
decide).

Timelines
• Plan timelines are often shown in
flowchart form to help managers and
employees visualize sequence of tasks
○ Grant charts
Timelines
• Plan timelines are often shown in
flowchart form to help managers and
employees visualize sequence of tasks
○ Grant charts
○ PERT charts
• There are newer iterative project methods
that are not "waterfall" (a long series of
tasks) that are designed to be used in
dynamic environments

Budget
• Objectives, timeline and, yes money.
• Things to know:
○ There is never enough money in the
budget
○ As far as possible, estimates for each
activity should be tied to a budget
○ Increase accountability (gives another
measure) for all parties involved with
implementing the marketing plan
○ Accuracy (which is sometimes hard to
achieve) in estimating individual
action plan expenditures helps overall
marketing budget.