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PRINCIPLES OF MARKETING
Eighth Edition
Philip Kotler and Gary Armstrong

Chapter
Chapter 22
Strategic Planning
and the
Marketing Process

Copyright 1999 Prentice Hall

Strategic
Strategic Planning
Planning Process
Process

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Strategic Planning involves developing an

overall company strategy for long-run
survival and growth.
This process involves:
Defining a Mission: Statement of an organizations
purpose; should be market oriented.
Setting Company Objectives: Supporting goals and
objectives to guide the entire company.
Designing a Business Portfolio: Collection of businesses
and products that make up the company.
Planning Functional Strategies: Detailed planning for each
department designed to accomplish strategic objectives.

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Designing
Designing the
the Business
Business Portfolio
Portfolio

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The best portfolio is the one that best fits the

companys strengths and weaknesses to the
opportunities in the environment.
The company must:
analyze its current business portfolio or Strategic
Business Units (SBUs)
decide which SBUs should receive more, less, or no
investment
develop growth strategies for adding new products or
businesses to the portfolio

Copyright 1999 Prentice Hall

Analyzing
Analyzing Current
Current SBUs:
SBUs:
Boston
Boston Consulting
Consulting Group
Group Approach
Approach

Low

High

Market Growth Rate

Relative Market Share

High
Stars

Low
Question
Question Marks
Marks

High growth & share

Profit potential
May need heavy
investment to grow

Dogs
Dogs

Cash
CashCows
Cows
Low
Lowgrowth,
growth,high
highshare
share
Established,
Established,successful
successful
SBUs
SBUs
Produces
Producescash
cash

High
Highgrowth,
growth,low
lowshare
share
Build
Buildinto
intoStars/
Stars/phase
phaseout
out
Requires
Requirescash
cashto
tohold
hold
market
marketshare
share

Low
Lowgrowth
growth&&share
share
Low
Lowprofit
profitpotential
potential

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Industry Attractiveness

Analyzing
Analyzing Current
Current SBUs:
SBUs:
GE
GE Strategic
Strategic Business-Planning
Business-Planning
Grid
Grid

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Business Strength
Strong

Average

High

Weak

A
Medium

Low

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Developing
Developing Growth
Growth Strategies
Strategies
Product/ Market Expansion Grid
Existing
Products
Existing
Markets

1. Market
Penetration

New
Markets

2. Market
Development

New
Products
3. Product
Development
4. Diversification

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Product/
Product/ Market
Market Expansion
Expansion Grid
Grid

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Market Penetration:
Penetration increase sales to present customers
with current products. How? Cut prices, increase
advertising, get products into more stores.
Market Development:
Development develop new markets with current
products. How? Identify new demographic or
geographic markets.
Product Development:
Development offering modified or new products
to current customers. How? New styles, flavors, colors,
or modified products.
Diversification:
Diversification new products for new markets. How?
Start up or buy new businesses.

Copyright 1999 Prentice Hall

Marketings
Marketings Role
Role in
in Strategic
Strategic
Planning
Planning

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Process of Selecting Target Consumers

Market Segmentation:
Segmentation determining distinct groups of
buyers (segments) with different needs.
Market Targeting:
Targeting evaluating and selecting which target
segments to enter.
Market Positioning:
Positioning products distinctive and desirable
place in the minds of target segments compared to
competing products.
Marketing Strategies for Competitive Advantage
Market-Leader
Market Challenger
Market-Follower
Market-Nicher

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10

The
The Marketing
Marketing Process
Process
DemographicEconomic
Environment
M
An ark
al eti
ys n g
is

Product

g
tin g
ke in
ar n
M lan
P

Target
Place Consumers Price
g
tin
ke o l
ar tr
M Con

Promotion

PoliticalLegal
Environment

Competitors

Copyright 1999 Prentice Hall

Publics

Im Ma
p l rk
em et
en ing
ta
ti o
n

Suppliers

TechnologicalNatural
Environment

Marketing
Intermediaries

SocialCultural
Environment

Marketing
Marketing MixMix- The
The Four
Four Ps
Ps

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Price

Product
Goods-and-service
combination that a
company offers a
target market

Amount of money
that consumers
have to pay to obtain
the product

Target
Customers
Intended
Positioning

Activities that
persuade target
customers to buy
the product

Promotion

Company activities
that make the
product available

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Place

Managing
Managing the
the Marketing
Marketing Effort
Effort

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12

Marketing
Marketing Analysis
Analysis of
of Companys
Companys Situation
Situation

Marketing
Marketing
Implementation
Implementation

Marketing
MarketingPlanning
Planning
Develop
Develop Marketing
Marketing
Strategies
Strategiesto
to
Achieve
AchieveMarketing
Marketing
Objectives
Objectives

Turn
Turn Marketing
MarketingPlans
Plans
into
into
Action
Action Plans
Plans
to
toAchieve
Achieve
Marketing
Marketing
Objectives
Objectives

Develop
Develop
Marketing
Marketing
Plans
Plans&&Budget
Budget

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Control
Measure
Results
Evaluate
Results
Take
Corrective
Action

Elements
Elements of
of aa Marketing
Marketing Plan
Plan
Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

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22-14
14

Marketing
Marketing Implementation
Implementation
Marketing
Marketing Strategy
Strategy
Decision
and
Organizational Reward
Structure
Action
Programs

Human
Resources

Climate and
Culture

Implementation

Marketing
Marketing Performance
Performance

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Marketing
Marketing Control
Control
Set
Set Marketing
Marketing Goals
Goals

Measure
Measure
Performance
Performance
Evaluate
Evaluate
Performance
Performance
Take
Take Corrective
Corrective
Action
Action

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Marketing
Marketing Audits
Audits

Environment

Function

Types
Types
of
of Marketing
Marketing
Audits
Audits

Productivity

Systems

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Strategy

Organization