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Co ri ht 2004 Pearson Education Canada Inc.
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Kotler on
Marketing
It is more important
to do what isstrategically right
than what is
immediately
profitable.
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Chapter Objectives
In this chapter, we examine thefollowing questions:
How is strategic planning carried out at thecorporate and division levels?
How is planning carried out at the businessunit level?
What are the major steps in the marketingprocess?
How is planning carried out at the productlevel?
What does a marketing plan include?
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Strategic Planning: Three Key Areas and FourOrganization Levels
Strategic marketing plan
Tactical marketing plan
Marketing plan
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Corporate and Division Strategic
Planning All corporate headquarters undertake four
planning activities
Defining the Corporate Mission
Establishing Strategic Business Units (SBUs)
Assigning resources to each SBU
Planning new businesses, downsizing, orterminating older businesses
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Corporate and Division Strategic
Planning Defining the Corporate Mission
Mission statements define which competitive
scopes the company will operate in Industry scope
Products and applications scope
Competence scope
Market-segment scope Vertical scope
Geographical scope
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Can you name a company that has
recently changed its product scope
or market segment scope in a very
public way? Was this an expansion
or contraction of scope?
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Corporate and Division Strategic
Planning Establishing Strategic Business Units
(SBUs)
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Table 4.1: Product-Oriented versus Market-Oriented Definitions of aBusiness
Company Product Definition Market DefinitionCanadian NationalRailway
We run a railroad We are a people-and-goods mover
Xerox We make copyingequipment
We help improve officeproductivity
Imperial Oil We sell gasoline We supply energy
Columbia Pictures We make movies We market entertainment
Encyclopaedia
Britannica
We sell encyclopedias We distribute Information
Carrier We make air conditionersand furnaces
We provide climate controlin the home
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Corporate and Division Strategic
Planning
Three characteristics of SBUs
Single business or collection of related
businesses that can be planned for separately
Has its own set of competitors
Has a manager who is responsible for strategic
planning and profit
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The Growth-Share Matrix
Relative market share
Four Cells
Question Marks
Stars
Cash Cows
Dogs
SBU Strategies
SBU Lifecycle
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Can you give an example of a Star
that skipped Cash Cow, and wentstraight to Dog status?
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Corporate and Division Strategic Planning
The General Electric Model
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Table 4.2: Factors underlying Market Attractiveness and Competitive Position in GE MultifactorPortfolio Model: Hydraulic-Pumps Market
MarketAttractiveness
Overall market sizeAnnual market growth rate
Historical profit margin
Competitive intensity
Technological requirements
Inflationary vulnerability
Energy requirementsEnvironmental impact
Social-political-legal
Weight
0.200.20
0.15
0.15
0.15
0.05
0.050.05
Must beacceptable
1.0
Rating =
(1-5)
45
4
2
4
3
23
Value
0.801.
0.60
0.30
0.60
0.15
0.100.15
3.70
BusinessStrength
Market shareShare growth
Product quality
Brand reputation
Distribution network
0.100.15
0.10
0.10
0.05
42
4
5
4
0.400.30
0.40
0.50
0.20
See text for complete table
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Corporate and Division Strategic
Planning
Critique of Portfolio Models
Planning New Businesses,Downsizing Older Businesses
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Corporate and Division Strategic
Planning
Intensive Growth
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Starbucks home page: Customers can request a
catalog of Starbucks products, subscribe to anewsletter, and shop online
http://www.starbucks.com/8/4/2019 Kotler Mktman 11ce Ch04
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Corporate and Division Strategic
Planning
Integrative Growth
Diversification Growth Downsizing Older Businesses
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Give an example of a market
segment where integrative growth
would be preferable to growth
through diversification. Explain
why one approach is better
than the other.
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Business Unit Strategic
Planning Business Mission
SWOT Analysis
External Environment Analysis(Opportunity and Threat Analysis)
Marketing Opportunity
Buying opportunity more convenient or efficient
Meet the need for more information and advice
Customize an offering that was previously only
available in standard form
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Give some examples of companies
that have grown to dominate their
market segment by using technology
to make buying opportunities more
convenient and efficient.
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Business Unit Strategic
PlanningMarketing Opportunity Analysis (MOA)
Can the benefits be articulated to a target market?
Can the target market be reached with cost-effective media and trade channels?
Does the company have the critical capabilities to
deliver the customer benefits?
Can the company deliver these benefits betterthan any actual or potential competitors?
Will the rate of return meet the required threshold
of investment?
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Figure 4.7: Opportunity and Threat Matrices
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Business Unit Strategic
Planning
Internal Environmental Analysis
(Strength/Weakness Analysis)
Goal Formation
Strategic
FormulationStrategy
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Business Unit Strategic
Planning
Porters Generic Strategies
Overall cost leadershipDifferentiation
Focus
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Travelocitys Web site helps the consumer plan the
whole vacation flights, lodging, and car rental.com
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Operational Effectiveness and Strategy
Strategic groupStrategic alliances
Business Unit Strategic
Planning
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Business Unit Strategic
Planning Marketing Alliances
Product or service alliances
Promotional alliancesLogistical alliances
Pricing collaborations
Partner RelationshipManagement, PRM
Program Formulation and Implementation
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Business Unit Strategic
Planning
Feedback and Control
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The Marketing Process
Steps in the Planning ProcessThe marketing process
Analyzing Market Opportunities
Developing Marketing Strategies Planning Marketing Programs
Managing the Marketing Effort
Annual-plan controlProfitability control
Strategic control
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Figure 4.10: FactorsInfluencing CompanyMarketing Strategy
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Product Planning: The Nature and Contents ofa Marketing Plan
Contents of the Marketing Plan
Executive Summary
Current Marketing Situation
Opportunity and issue analysis
Objectives
Marketing strategy
Action programs
Financial projections
Implementation controls
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Sample Marketing Plan: Sonic PersonalDigital Assistant
Current Marketing Situation
Opportunity and Issue Analysis
Objectives
Action ProgramsFinancial Projections
Product Planning: The Nature and Contents of
a Marketing Plan
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Implementation Controls
Marketing Strategy
Positioning
Product Management
Pricing
Distribution
Marketing Communications
Marketing Research
Product Planning: The Nature and Contents of
a Marketing Plan