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1 Strategic Planning for Competitive Advantage
1
Strategic Planning for Competitive
Advantage
Enduring Understandings for
Market Planning Unit
• Marketing is customer focused.
• Marketing is much more than advertising and selling.
• A marketing plan is a roadmap for all companies' business efforts.
Essential Questions for Market Planning Unit
• What is marketing?
• How do marketers find their customers?
• What makes marketing dynamic?
• What causes a business to "close its doors"?
The Importance of Strategic Marketing
What
Why
How
Strategic Planning
Long-term profitability
and growth
Write a marketing plan
GE, Toys R Us, McDonalds
Strategic Marketing Management
THE ANSWER IS A MARKETING PLAN.
What is the organization’s main activity?
How will it reach its goals?
Marketing Planning
Marketing Plan- A written document that acts as a guidebook for the
marketing manager.
Building a marketing plan is more than just meeting and
knocking around ideas haphazardly…
And it’s DEFINITELY more than adopting a strategy
just because “all of a sudden” you decided it seemed like
a good idea…
A Marketing Plan is a Roadmap for All of
a Company’s Business Efforts
Marketing Plans are:
– Strategic and extensive
– Organized and analytical
– Either short or long range (depending on the company)
Marketing Plan Elements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Situation or SWOT Analysis
Objectives
Target Market Strategy
Implementation
Evaluation
Control
Promotion
Business Mission Statement
marketing myopia
no direction
focus on markets
served and benefits
customers seek
Q: What business are we in?
A: Business mission statement
Too narrow
Too broad
Just right
marketing myopia
no direction
focus on markets
served and benefits
customers seek
Star Trek Enterprise Why is a mission statement important?
Starbucks Mission
Statement
Our mission: to
inspire and nurture
the human spirit –
one person, one
cup and one
neighborhood at a
time.
DECA Mission Statement
DECA prepares emerging leaders and
entrepreneurs for careers in marketing, finance,
hospitality and management in high schools and
colleges around the globe.
Nike Mission Statement
Find a sample to share
Parkway Mission statement
Our mission for the Nike brand is:
To bring inspiration and innovation to every athlete* in
the world.
*"If you have a body, you are an athlete."
Samples
• Answers the question,
“What business are we in?”
• Focuses on the market(s)
rather than the good or service
• Strategic Business Units (SBUs) may
also have a mission statement
Defining the Business Mission
Strategic Business Unit (SBU)
• Company division or a
• Product line within a division or a
• Single product or company brand that has an
objective and mission different from other
company business
• Can be marketed independently from the rest
of the company.
Strategic Business Unit (SBU)
• GE Technology Infrastructure
(healthcare, aviation,
transportation)
• GE Energy
(energy, oil & gas,
water)
• GE Capital
(Commercial Finance, GE
Money)
• NBC Universal
(television, music, film)
Marketing Plan Elements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Situation or SWOT Analysis
Objectives
Target Market Strategy
Implementation
Evaluation
Control
Promotion
Conducting a Situation Analysis
LO3
SWOT Analysis- Identifying internal strengths and weaknesses and also
examining external opportunities and threats.
SWOT Analysis
©South-Western College Publishing
S
W
O
T
Things the company does well.
Things the company does not do well.
Conditions in the external environment that favor strengths.
Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness.
Internal
External
THE STRATEGIC MARKETING PROCESS THE PLANNING PHASE
Analyze Competitors
Identify Industry Trends
Research Present and
Prospective Customers
Assess the Organization
• SWOT Analysis Study
Step 1: Situation (SWOT) Analysis
Components of a Situation Analysis
production costs
marketing skills
financial resources
image
technology
INT
ER
NA
L
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VIR
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ME
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Environmental Scanning
Environmental Scanning- The collection and interpretation of information about forces, events, and relationships in the
external environment that may affect the future of the organization or the
implementation of the marketing plan.
Copyright 2010 by Cengage Learning Inc. All Rights Reserved
Marketing Objective
A statement of what is
to be accomplished
through marketing activities.
Marketing Objectives
Realistic
Measurable
Time specific
Compared to a benchmark
“Our objective is to
increase sales of Purina
brand cat food by 15
percent over 2009 sales of
$300 million.”
Criteria for Good Marketing Objectives
Realistic, measurable, and time-specific objectives
consistent with the firm’s objectives:
1. Communicate marketing management philosophy
2. Provide management direction
3. Motivate employees
4. Force executives to think clearly
5. Allow for better evaluation of results
1. Profitability Objectives
To achieve a 20% return on capital by August 2019.
2. Market Share Objectives
To gain 25% of the market for sports shoes by
September 2019.
3. Promotional Objectives
To increase trail of X washing powder from 2% to 5% of
our target group by January 2019.
Examples of Smart Objectives
. Examples of Smart Objectives
4. Objectives for Survival
To survive the current double-dip recession.
5. Objectives for Growth
To increase the size of our Brazilian operation from
$200,000 in 2017 to $400,000 in 2018.
6. Objectives for Branding
To make Y brand of bottled beer the preferred brand of
21-28 year old females in North America by February
2017.
Marketing Plan Elements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Situation or SWOT Analysis
Objectives
Target Market Strategy
Implementation
Evaluation
Control
Promotion
Describing the Target Market
Discuss target market strategies.
Vals Study
Marketing Strategy
Marketing Strategy- The activities of selecting and describing one or
more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.
Target Market Strategy
• Segment the market based on
groups with similar characteristics
• Analyze the market based on attractiveness
of market segments
• Select one or more target markets
Target Market Strategy
Appeal to the entire market
with one marketing mix
Concentrate on one
marketing segment
Appeal to multiple markets
with multiple marketing mixes
Bases for Segmenting Consumer Markets
Geography Demographics Psychographics Benefits Usage Rate
• Region
• Market size
• Market
density
• Climate
• Age
• Gender
• Income
• Race/ethnicity
• Family life
cycle
• Personality
• Motives
• Lifestyle
• Geodemo-
graphics
• Benefits
sought
• Former
• Potential
• 1st time
• Light or
irregular
• Medium
• Heavy
Family Life Cycle
New Terminology in the Family Life Cycle
DINKS (Double Income No Kids)
SINKS (Single Income No Kids)
Boomerang Kids (adult children who have moved back in
with their parents)
Extended parents (grandparents raising their grandchildren)
Blended Families (stepchildren)
Cougar and Silver Fox
Same-sex singles/couples
Family Life Cycle Assignment
• Each student will be given one stage of the
life cycle
• List 3 to 5 demographic and psychographic
characteristics of your life cycle stage
• List 3 types of products your life cycle stage
would purchase
• Find an advertisement that is targeted to your
stage of the family life cycle.
Silver Fox
• Older 50-70 year old male
• Income at highest level expenses low
• Home ownership at its peak may own a
second vacation home
• Interested in travel, and recreation,
prestigious products
• Satisfied with financial position and money
• Buy: luxuries, home improvements,
recreational event tickets
Sample: Lexus Ad
The Concept of Market Segmentation
Segmentation Example Macy’s Department store: classified into five
groups based upon demographics, values, and
attitudes.
For Example:
1. Fashion Statement-most affluent and
educated, use credit cards, expect to be
treated well by retail personnel.
2. Wanna-Buys –similar to a fashion statement but with less income. Enjoy buying on
impulse.
Segmentation Example
3. Family Values – represent large families, often are professionals, buying focuses on children or the home 4. Down to Basics – Most likely to have children, not college educated, careful spenders, prefer not to use credit, like coupons. 5. Matriarchs- older often retired, they like
department stores but are risk adverse and have few purchase plans.
Who’s Who?
1.Fashion Statement
2.Family Values
3. Wanna Buy’s
4. Matriarch
5.Down-to-Basics
Who’s Who?
Wanna
Buy’s
Down-to-
Basics Matriarch
Fashion
Statement
Family
Values
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Segmentation study
tells us how pet
owners feel about
their pets and the role
food plays in that
relationship.
Their attitudes
influence the
brands they purchase
and their sensitivity
to price, promotion,
and assortment.
How do we Understand the Pet Owner’s Attitudes?
There are distinct segments of pet owners and they all shop in your stores: 7 Practical Providers
They like pets, but are not
goo-goo about them.
Look for convenient, practical,
affordable food
High price sensitivity
- Will switch for a good deal
Uninvolved Owners
Food must be:
- Affordable
- Quick
- Easy to feed
Very high price sensitivity
Expert Driven Providers
Expert advice – from veterinarian,
breeder or other perceived expert –
is very important.
Information seekers
Nutrition focused
Primarily feed dry food
Very low price sensitivity
Basic Food Feeders
Pet most likely belongs to the children,
but needs to be fed.
Food that looks like human food is
more appealing
High price sensitivity-look for sales
Healthy Habitualists
Look for something easy
and nutritious.
Very brand loyal
Not as worried about taste
Indulgent Nutritionists
Still searching for right balance of
taste and nutrition.
Try new products
Mix wet and dry
Like variety
Below average price sensitivity
Pampering Preparers
Homemade food is used to show love.
Store-bought food alone does not suffice
Nutrition is important, but taste is paramount
Food = Love
Average price sensitivity
Market Segmentation Strategy Project
Neiman Marcus Christmas Catalog
AB Customer Profile Example
Marketing Plan Elements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Situation or SWOT Analysis
Objectives
Target Market Strategy
Implementation
Evaluation
Control
Promotion
Strategic Directions
Identify strategic alternatives.
Competitive Advantage
Niche Strategies
Cost
Product/Service Differentiation
Types of Competitive Advantage
Cost Competitive Advantage
Cost Competitive Advantage- Being the low-cost competitor in an industry
while maintaining satisfactory profit margins.
Examples:
Obtain inexpensive raw materials
Design products for ease of manufacture
Control overhead costs
Product differentiation
• Brand Names –Lexus
• Product Reliability -Maytag
• Strong Dealer Network -Harley Davidson
• Service -Fed Ex
• Image –Neiman Marcus
• Product Innovation - -Nike
Niche
Competitive
Advantage
Niche Competitive Advantage
The advantage achieved when
a firm seeks to target and
effectively serve a small
segment of the market.
Example:
Party Pastry’s Cupcakes
Fleet Feet
Fro Yo
SETTING STRATEGIC DIRECTIONS WHERE DO WE WANT TO GO?
Business Portfolio Analysis (BCG) Boston Consulting Group
Mark
et
Gro
wth
Rate
Stars
Cash Cows Dogs
Question Marks
Relative Market Share
High
High Low
Low
BCG business portfolio analysis for
Kodak’s consumer SBUs for 2003
(solid circle) and 2011 (hollow circle)
Kodak digital
photo printer
Kodak digital
picture frame
① ④
③
Kodak film sales: US,
Canada, & W. Europe
Kodak digital
camera
②
BCG Portfolio Matrix
Boston Consulting Group
Stars Notebooks
Cash Cows Laptops/ Personal computer
Problem Children/Question
Marks Palm Pilots
Dogs Mainframe computer
Computer Example
Assignment
• Select a partner
• Select a business of interest to research
• Design a BCG (Boston Consulting Group)
Model Matrix for the business using one
PowerPoint slide
• Include the company Stars, Cash Cows,
Problem Children/Question Marks and Dogs
Strategic Alternatives
Market Penetration
Market Development
Product Development
Diversification
Increase market share among
existing customers
McDonalds: Beanie Babies
Attract new customers to
existing products
Coke in India 850/350
Introduce new products
into new markets
Sony-Columbia pictures
Create new products for
present markets
Taco Bell Fresco Style
Ansoff’s Strategic Opportunity
Matrix
Present Product New Product
New Market
Market Penetration McDonalds sells
More happy meals With Disney promo
Market Development McDonalds opens
Restaurants in China
Product Development
McDonalds introduces Salads and McWater
Diversification
McDonalds introduces Line of children’s
clothing
Present Market
Online
Strategic Alternatives
Identify strategic alternatives
Diversification =
Product development = products
Market development = customers
Market penetration = share
new products +
new markets
Portfolio Matrix Strategies
Build
Hold
Harvest
Divest
Pringles
Bisquick/General
Mills
Lever
Brothers/Lifebuoy
Marketing Plan Elements
Marketing Strategy
Product Distribution
Price
Marketing Mix
Business Mission Statement
Situation or SWOT Analysis
Objectives
Target Market Strategy
Implementation
Evaluation
Control
Promotion
Marketing Mix: The “Four Ps”
Price
Promotion
Place
Product
Marketing Mix: The “Four Ps”
The starting point of the
“4 Ps”
Includes
Physical unit
Package
Warranty
Service
Brand
Image
Value
Product
Products can be…
Tangible goods
Ideas
Services
Marketing Mix: The “Four Ps”
Product availability where
and when customers want
them
All activities from raw
materials to finished
products
Ensure products arrive in
usable condition at
designated places when
needed
Place
Marketing Mix: The “Four Ps”
Promotion Role is to bring about
exchanges with target
markets by:
Informing
Educating
Persuading
Reminding
Includes integration of:
Personal selling
Advertising
Sales promotion
Public relations
Marketing Mix: The “Four Ps”
Price
Price is what a buyer must
give up to obtain a product.
The most flexible of the
“4 Ps”-- quickest to change
Competitive weapon
Price x Units Sold = Total Revenue
The elements of the marketing mix
must be blended to produce a cohesive
marketing program
Following Up the Marketing Plan
• Implementation
• Evaluation
• Control
• Marketing audit is… • Comprehensive
• Systematic
• Independent
• Periodic
Product
Place
Promotion
Price
Met
objectives?
Implementation Evaluation
Audits • comprehensive
• systematic
• independent
• periodic
Implementation, Evaluation, and Control
Techniques for Effective Strategic Planning
Effective Strategic Planning
Continual
attention Creativity
Management
commitment
