StrategicStrategicMarketingMarketing
ManagementManagementProcessProcess
Chapter 15Chapter 15Also includesAlso includesAppendix AAppendix A
Accounting forAccounting formarketersmarketers
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© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-2
Strategic PlanningStrategic Planning
nn The managerial process of matching anThe managerial process of matching anorganisationorganisation’’s resources with itss resources with itsmarketing opportunities over the longmarketing opportunities over the longrun.run.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-3
Strategic PlanningStrategic Planning
nn The process:The process:–– Define organisationDefine organisation’’s mission.s mission.–– Set organisational objectives.Set organisational objectives.–– Evaluate organisationEvaluate organisation’’s strategic businesss strategic business
units (units (SBUSBU’’ss).).–– Select strategy to achieve organisationSelect strategy to achieve organisation’’ss
objectives.objectives.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-4
The marketing managementThe marketing managementprocessprocess
PLANNINGAnalyse situationSet goalsSelect strategies
and tactics
IMPLEMENTATIONOrganiseStaffDirect
EVALUATIONCompareperformancewith goals
Feedback, so management can adapt future plans and theirimplementation to the changing environment
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-5
The Mission StatementThe Mission Statement
nn A mission statement is a short clearA mission statement is a short clearstatement defining the central reasonstatement defining the central reasonfor an organisationfor an organisation’’s existence.s existence.
nn It answers the questions:It answers the questions:–– What business are we in?What business are we in?–– What business should we be in?What business should we be in?
nn It is expressed in terms of benefits.It is expressed in terms of benefits.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-6
EvaluatingEvaluating SStrategictrategicBBusinessusiness UUnitsnits
nn An analysis of current products and theAn analysis of current products and themarkets in which they are operating.markets in which they are operating.
nn An SBU may be:An SBU may be:–– A major division in an organisationA major division in an organisation–– A group of related productsA group of related products–– A single product or brandA single product or brand
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-7
B.C.G. Product Portfolio AnalysisB.C.G. Product Portfolio Analysis
Stars
Cash cows Dogs
Question marks
High Low
High
Low
COMPANY’S MARKET SHAREIN
DU
STR
YG
RO
WTH
RA
TE
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-8
THE BOSTON CONSULTING GROUP MATRIX
• A strategic business unit (SBU) model canbe classified according to two factors:– its market share relative to competitors– the growth rate of the industry in which
the SBU operates• These models, known as portfolio
analysis, assess the needs of particularSBUs.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-9
THETHE BBOSTONOSTON CCONSULTINGONSULTINGGGROUPROUP MATRIXMATRIX
nn They are divided into high and lowThey are divided into high and lowcategories.categories.
nn They seek to reduce risk and optimiseThey seek to reduce risk and optimiseoutcomes and determine resourceoutcomes and determine resourceallocation.allocation.
nn A company should seek a balancedA company should seek a balancedportfolio of SBUs with a mix of stars,portfolio of SBUs with a mix of stars,cash cows, and questions marks, butcash cows, and questions marks, buthopefully no dogs.hopefully no dogs.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-10
High Low
High
Low
BUSINESS POSITION
MA
RK
ET A
TTR
AC
TIVE
NES
SMedium
Medium
INVEST INVEST PROTECT
INVEST PROTECT HARVEST
PROTECT HARVEST DIVEST
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GENERAL ELECTRIC BUSINESS SCREEN
• Management can classify SBUs or major productsbased on two factors, market attractiveness andbusiness position.
• Each of these factors is rated according to severalcriteria.
• Each SBU is rated with respect to all criteria.• Overall ratings (usually numerical scores) for both
factors are calculated for each SBU.• Based on these ratings, each SBU is labelled as
high, medium, or low with respect to: (a) marketattractiveness, and (b) business position.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-12
PRESENT PRODUCTS
PRESENTMARKETS
NEW PRODUCTS
NEWMARKETS
Marketpenetration
Marketdevelopment
Productdevelopment
Diversification
The Growth MatrixThe Growth Matrix
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-13
The Growth MatrixThe Growth Matrix
nn Market penetrationMarket penetration——Marketing ofMarketing ofpresent products to present markets.present products to present markets.
nn Market developmentMarket development——MarketMarketpresent products to new markets.present products to new markets.
nn Product developmentProduct development——MarketingMarketingnew products to present markets.new products to present markets.
nn DiversificationDiversification——Market new productsMarket new productsto new markets.to new markets.
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-14
PorterPorter’’s Generic Strategics Generic StrategicModelModel
nn Overall cost leadershipOverall cost leadership–– Producing standardised product at a lowProducing standardised product at a low
costcost
nn DifferentiationDifferentiation–– Market a USP (Unique Selling Proposition)Market a USP (Unique Selling Proposition)
nn FocusFocus–– Concentration on a small specialty marketConcentration on a small specialty market
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-15
Marketing AuditMarketing Auditnn A marketing audit is a comprehensiveA marketing audit is a comprehensive
review and evaluation of the marketingreview and evaluation of the marketingfunction in an organisation.function in an organisation.–– An audit examines:An audit examines:
nn Marketing strategyMarketing strategynn Structure of the marketing divisionStructure of the marketing divisionnn Marketing systemsMarketing systemsnn Marketing productivityMarketing productivitynn Marketing functionsMarketing functions
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.
Strategic company planning1. Define org. mission2. Conduct situation analysis
3. Set org. objectives4. Select appropriate strategies
Strategic marketing planning1. Conduct situation anal.2. Develop marketing obj.3. Determine positioning and
differential advantage
4. Select target markets,measure market demand
5. Design strategicmarketing mix
Annual marketing planningPrepare annual marketing planfor each major product andcompany division
PLANNING SEQUENCE
IMPLEMENTATION AND EVALUATION
Accounting for MarketersAccounting for Marketers
Appendix A, Chapter 15Appendix A, Chapter 15
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Accounting reportsAccounting reports
nn Two typesTwo types–– Balance SheetBalance Sheet–– Profit and Loss StatementProfit and Loss Statement
nn Balance SheetBalance Sheet——a snapa snap--shot of theshot of thefinancial position of a business at afinancial position of a business at agiven point in time.given point in time.
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Balance sheetBalance sheet
nn Three main elements:Three main elements:
–– AssetsAssets——What the company owns or isWhat the company owns or isowed.owed.
–– LiabilitiesLiabilities——What the company owes toWhat the company owes toothers.others.
–– OwnerOwner’’s equitys equity——The net worth of a firm.The net worth of a firm.
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Profit and loss statementProfit and loss statement
nn Usually structured as follows:Usually structured as follows:–– SalesSales $$–– Less Cost of goods soldLess Cost of goods sold $____$____–– EqualsEquals Gross profitGross profit $$–– Less ExpensesLess Expenses $____$____–– Equals Net profitEquals Net profit $____$____
(See Table 15A(See Table 15A –– 1 in the text)1 in the text)
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MarkMark--up and gross marginup and gross marginnn Dollar markDollar mark--upup
nn MarkMark--up %up % --------------------nn CostCostnn Dollar markDollar mark--upup
nn Gross margin (markGross margin (mark--up %)up %)----------------------nn (based on selling price) Selling price(based on selling price) Selling price
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Analytical ratiosAnalytical ratios
–– Net profit percentage, Net profitNet profit percentage, Net profit------------------------------------
Net salesNet sales
–– Expense ratio, ExpensesExpense ratio, Expenses------------------------------
Net salesNet sales
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Analytical ratiosAnalytical ratiosnn Stock turn rate,Stock turn rate, cost of goods soldcost of goods sold
nn Rate of stock turnRate of stock turn ------------------------------------------average inventory at cost ofaverage inventory at cost of
goods soldgoods sold
nn Total dollar markTotal dollar markdowndown
nn Mark down %Mark down % ------------------------------------------------------------Total net salesTotal net sales (given(given
period)period)
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Analytical ratiosAnalytical ratios
nn Average collection periodAverage collection periodNet salesNet sales
--------------------------------------------------------------------------------------
average accounts receivable (oraverage accounts receivable (ordebtors)debtors)
nn Return on investment (ROI)Return on investment (ROI)Net profitNet profit SalesSales
ROI=ROI= ---------------- XX --------------------sales investmentsales investment
