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Strategic Planning and the Marketing Process • Unless we change our direction we are likely to end up where we are headed. • -ANCIENT CHINESE WISDOM Planning Benefits • Encourages thinking ahead systematically • Sharpens objectives • Results in better coordination • Suggests clear performance standards STRATEGIC PLANNING: • The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. (p. 38) • Strategic planning involves… – Defining a clear company mission – Setting company objectives – Design (evaluate) business portfolio – Developing/Coordinating functional strategies Mission Statements • Addresses the questions – What is the purpose of our business? – Why do we (or should we) exist? – Who is the customer? Characteristics of Good Mission Statements • Market oriented – Think NEEDS/WANTS, not products – Marketing myopia • Realistic • Clear and focused (specific) • Based on sustainable distinctive competencies which bestow differential advantages to organization Characteristics of Good Mission Statements (cont’d) • Should fit the marketing environment • Motivating • Future oriented • Above ALL else, useful and memorable A Short Mission Statement Checklist • Mission statements should identify… 1. Customer groups to be served (general target markets) 2. Needs/wants to meet 3. General technologies to be employed to meet customer needs How Should Mission Statements be Constructed? • Examine ORGANIZATION (culture, desires, history, current mission statement, programs, characteristics) • Examine EXTERNAL ENVIRONMENT (current and potential customers, publics, competition, environmental factors) • MATCH the 2 to identify SWOT OBJECTIVES • Objectives for Organization and Organizational Units should be – Consistent with mission of organization – Based on clear understanding of characteristics and environment – Stated in QUANTITATIVE terms only if appropriate PORTFOLIO PLANNING MODELS • STRATEGIC BUSINESS UNITS (SBUs)- A unit of an organization that has its own mission and objectives that can be planned independently of other units. • EXAMPLE: Litton Industries – publishing unit – shipbuilding unit – microwave unit PORTFOLIO MODELS • Boston Consulting Group – Market share (x axis) VS Market growth rate (y axis) – Dogs, Stars, Cash Cows, and Question Marks PORTFOLIO PLANNING MODELS - PLUSES • Introduced/reinforced SBU concept • Helpful in understanding organization • Helpful question prompter PORTFOLIO PLANNING MODELS - MINUSES • 1. Built on questionable assumptions (e.g., need for cash flow balance) • 2 Too simplistic/transparent • 3. Sensitive to definitions • 4. Deflected attention away from customers and their needs/wants PORTFOLIO PLANNING MODELS - MINUSES (Continued) • 5. Deflected attention away from the search for long-run, sustainable competitive advantage. • OBSERVATION: Firms entered inappropriate businesses and abandoned good ones. PRODUCT/MARKET EXPANSION GRID (Fig. 2.3) Existing New Products Products Existing Market Product Markets penetration development New Market Diversification Markets development Partnering to Build Customer Relationships • Partnering with other co. departments • Partnering with others in the marketing system – Up and down the supply chain + collaborators Marketing Strategy & Marketing Mix • Segment Markets; • Select Target Markets – Seek those where you can develop sustainable competitive advantages • Select Market Position – Position versus positioning • Develop the Marketing Mix – Productcustomer solution; Pricecustomer cost; Placeconvenience; Promotioncommunication Managing the Marketing Effort • Marketing Analysis • Marketing Planning • Marketing Implementation • Organization – Functional – Geographic – Product – Market – Combination (matrix) Marketing Control • Operating Control: Are results consistent with the annual plan? How are the current operations measuring up to expectations? • Strategic Control: Are our strategies, and is our organization, tackling appropriate opportunities? – Marketing audit.
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