Strategic and Marketing Planning

Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 2 Objectives
1. Recognize the nature and scope of planning including the five key elements that are crucial to planning activities 2. Understand each of the fundamental steps involved in developing a strategic plan
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 2 Objectives
3. Appreciate the fundamentals of marketing planning.

Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Chapter 2Strategy Defined

Finding a fit between an organization and its environment Pertains directly to an organizations ability to adapt to changing environmental forces and matching organizational capabilities to the opportunities that exist within the current marketing environment.
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

The Nature and Scope of Planning

Planning is the basis for sound decision making in any situation in life. Key elements to any planning:
1) 2) 3) 4) 5) Timing Tasks Responsibility Follow-up Budgeting
Objective 1
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The Nature and Scope of Planning

The scope of planning Strategic planning or the overall game plan has a 3-5 year time horizon
Corporate strategy takes place at the highest levels of the organization Business strategy attempts to achieve and maintain competitive advantages in specific product-market domains
Objective 1
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

The Nature and Scope of Planning

The scope of planning Marketing planning has a shorter time horizon, 1 year, than strategic planning
Performed at the marketing level of what otherwise could be termed the product or product-line level of the organization.
Objective 1
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

The Nature and Scope of Planning

The scope of planning Tactical planning
Involves specifying details that pertain to the organizations activities for a certain period of time. Detailed account of the short-term activities of a firm
Objective 1
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

The six fundamental steps:
1. Establishing the Organizational Mission

2. Defining Strategic Business Units

3. Specifying Organizational Objectives

Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

The six fundamental steps:
4. Analyzing Strategic Business Unit Performance 5. Assessing Organizational Growth Opportunities 6. Developing Marketing Plans
Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

1. Establishing the Organizations Mission
Mission statement is a guideline for the organizations decision making for both the short and long run.

Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

2. Defining Strategic Business Units
Strategic Business Units (SBUs) or smaller divisions, to facilitate planning and general operations

Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

3. Specifying Organizational Objectives
Well developed organizational objectives should be SMART
Specific Measurable Achievable Relevant Time-bound
Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

4. Analyzing SBU performance:
Allocating Resources in the Product-Portfolio
Five resource allocation strategies
1) 2) 3) 4) 5) Build Maintain Niche Harvest Divest

Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

Five resource allocation strategies

1) Buildimprove the SBUs position in the marketplace by investing additional resources. 2) Maintainhold steady the SBUs current position in the market place.
Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

Five resource allocation strategies

3) Nichenarrow the focus of the SBUs intended market. 4) Harvestutilize the SBU to generate resources for other SBUs. 5) Divestdiscontinue all investment in an SBU so that resources can be redirected to other SBUs.
Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

5. Assessing Organizational Growth Opportunities
Three avenues for growth
1) Developing growth within current operationsintensive growth 2) Achieving growth by acquiring other businesses that are directly related to existing operationsintegrative growth 3) Developing growth by acquiring other businesses not directly related to existing operationsdiversification growth
Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

5. Assessing Organizational Growth Opportunities
1) Intensive Growth Strategies
a) Market penetrationsell more of existing products to existing markets b) Market developmentfind new markets for existing products c) Product developmentdevelop new products for existing markets d) Product diversificationdevelop new products for new markets
Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

5. Assessing Organizational Growth Opportunities
2) Integrative Growth Strategies
a) Backward integration b) Horizontal integration c) Forward integration

Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Strategic Planning

5. Assessing Organizational Growth Opportunities
3) Diversification Growth Strategies
Growth through the acquisition of other businesses that are not directly related to existing operations. Can be accomplished through concentric diversification, horizontal diversification and conglomerate diversification
Objective 2
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Marketing Planning

Variations in Marketing Planning
Marketing plans vary in Scope

Marketing plans vary in Length

Marketing plans vary in Formality

Objective 3
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Marketing Planning

The Traditional Marketing Plan
1. Executive Summary

2. Market Situation Analysis

3. SWOT Analysis 4. Specification of Marketing Objectives
Objective 3
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.

Fundamentals of Marketing Planning

The Traditional Marketing Plan
5. Formulation of Marketing Strategies

6. Preparation of Action Programs and Budgets 7. Development of Control Procedures

Objective 3
Copyright 2005 by South-Western, a division of Thomson Learning. All rights reserved.