Gilbert A. Churchill, Jr. J. Paul PeterGilbert A. Churchill, Jr. J. Paul Peter

Chapter 4

Marketing Planning and Organization Strategy

Marketing

Strategic Planning ResponsibilitiesStrategic Planning ResponsibilitiesSlide4-1a

Activities that lead to the development of a clear organizational mission, organizational objectives and the strategies that enable the organization to achieve its objectives.

Strategic Planning

TopManagement

LongTerm

Tactical Planning ResponsibilitiesTactical Planning ResponsibilitiesSlide4-1b

Involves the creation of objectives and strategies aimed at attaining goals for specific divisions or departments over a medium time frame (1-5 years).

Strategic Planning

TopManagement

Tactical Planning

MiddleManagement

MediumTerm

Operational Planning ResponsibilitiesOperational Planning ResponsibilitiesSlide4-1c

Involves the creation of objectives and strategies for individual operating units over a short time span (less than 1 year).

OperationalPlanning

Tactical Planning

Strategic Planning

TopManagement

MiddleManagement

LowerManagement

ShortTerm

The Strategic Planning Process IThe Strategic Planning Process ISlide4-2a

Figure4.1

OrganizationalMission

OrganizationalObjectives

OrganizationalStrategies

OrganizationalPortfolio Plan

The Organizations Strategic Plan

The EnvironmentInformation Implementation

Source: J. Paul Peter and James H. Donnelly, Jr., A Preface to Marketing Management, 7th ed. (Burr Ridge, Ill.: Irwin, 1997), p. 10.

Activities by which people in an organization get the marketing job done.

Business Mission

Statement

BusinessObjectives

Situation Analysis

Target Market Strategy

Implementation Evaluation Control

Business Strategy

Product

Promotion

Distribution

Price

Marketing Mix

The Strategic Planning Process IIThe Strategic Planning Process IISlide4-2b

Source: Lamb, Hair, and McDaniel, Marketing, 5th ed. (ITP p. 20.)

Mission Mission StatementStatement

A statement of the organization’s distinct purpose (i.e., what business are we in). A good mission statement must:

Define and satisfy the key stakeholders (i.e., customers, shareholders, employees)

Not suffer from marketing myopia (i.e., defining it in terms of the offering rather than benefits; e.g., “railway business”, “slide-rule business”)

Not depart too radically from history

Fit the market environment (e.g., GSA - “To prepare young girls for motherhood and wifely duties”)

Specific and Realistic (e.g., SIA - “to become the worlds largest airline”)

Slide4-3

Criteria for Organizational Criteria for Organizational ObjectivesObjectives

Realistic

Measurable - 15% ROI, Increase sales by 10%

Clear - for a Defined Period of Time

Consistent with Organizational Objectives

A statement of what is to be accomplished through marketing activities.

Slide4-4

Growth Strategies: Product Market MatrixGrowth Strategies: Product Market MatrixSlide4-7

Figure4.3

Market Penetration

(Arm & Hammer)

Product Development

(McDonald’s Pizza)

Diversification

(Mrs. Tea)

Market Development

(Taco Bell)

PresentCustomers

NewCustomers

PresentProducts

NewProducts

Markets

Products

Strategic Opportunity MatrixStrategic Opportunity Matrix

Situation AnalysisSituation AnalysisTo Identify Marketing To Identify Marketing

OpportunitiesOpportunities

SS

WW

OO

TT

Internal Strengths - Things the company does well (e.g., production, marketing, brand image, employees, brand loyalty).

Internal Strengths - Things the company does well (e.g., production, marketing, brand image, employees, brand loyalty).

Internal Weaknesses - Things the companydoes not do well (e.g., high production costs).Internal Weaknesses - Things the companydoes not do well (e.g., high production costs).

External Opportunities - Conditions in the environment that favor strengths (e.g., unmet demand, technology).

External Opportunities - Conditions in the environment that favor strengths (e.g., unmet demand, technology).

External Threats - Conditions in the environment that do not relate to existing strengths or favor areas of current weakness (e.g., stronger competitors).

External Threats - Conditions in the environment that do not relate to existing strengths or favor areas of current weakness (e.g., stronger competitors).

Slide4-5

Examples of SWOT IssuesExamples of SWOT IssuesSlide4-6

Table4.1

Internal EnvironmentInternal Environment

Financial Resources

Well-known brands

Technological Skills

StrengthsStrengths WeaknessesWeaknesses

Lack of Strategic Direction

High Costs

Obsolete Facilities

External EnvironmentExternal Environment

OpportunitiesOpportunities ThreatsThreats

Potential New Markets

Potential New Products

Falling International Trade Barriers

New Competition

Slow Market Growth

New Regulations

BCG Portfolio MatrixBCG Portfolio MatrixM

ark

et

Gro

wth

Ra

te

Relative Market Share

High

High

Low

Low

10%

10x 0.1x1x

Star

Cash Cow Dog

Problem Child(question mark)

Slide4-8b

The Boston Consulting Group MatrixThe Boston Consulting Group MatrixSlide4-8a

IndustryGrowthRate

High

Low

High LowMarket Share

GE Portfolio MatrixGE Portfolio MatrixM

ark

et/

Ind

ust

ry A

ttra

cti

ven

ess

Business Strength/Position

High

Low

Medium

MediumStrong Weak

Slide4-9

• Are the objectives clear? Specific? Measurable? Challenging, but achievable? Written?

• Have the industries that are growing been identified? Those that are stagnant? Those that are declining?

• Who are the principal competitors?• What are the organization’s strengths? Weaknesses?• Does the plan take advantage of the organization’s special competencies

and vulnerabilities?• What are the target markets?• Do our products and services appeal to the needs and wants of the target

markets?• What are the best ways to promote the products to customers?• Where do customers like to purchase?• How do our prices compare with the competition?• What are the costs and benefits of the plan?

Some Questions for Evaluating Some Questions for Evaluating a Marketing Plana Marketing Plan

Slide4-10

Table4.2

Forecasting TechniquesForecasting TechniquesSlide4-11aTable4.3

TechniqueTechnique

Jury of Executive Opinion

Quick; simple; opinions come from executives with expertise in different departments; useful for new or innovative products

Data typically must be broken down by product. region, etc.; consumes time of executives; may not give greatest weight to those with most expertise.

Sales ForceComposite

Survey of Buyer Intentions

Qualitative MethodsBenefitsBenefits LimitationsLimitations

Salespeople have a vested interest, so they may give biased estimates.

Providing number can motivate salespeople; salespeople know customers, product and competitors.

Based on estimates obtained directly from buyers; can provide detailed information; often provides insight into buyer’s thinking; can be used for new products.

Intention to buy may not result in actual purchase; expensive; time consuming; useful only when there are a few, well-defined potential customers.

Delphi Technique

Estimators less likely to succumb to group pressure.

Time consuming; expensive.

Slide4-11bTable4.3

TechniqueTechnique

Trend Analysis

Quick; inexpensive; effective when demand and environmental factors are stable.

Assumes future is continuation of past; does not consider marketing plans or changes in environment; not useful for new or innovative products.

Exponential Smoothing

Market Tests

Quantitative MethodsBenefitsBenefits LimitationsLimitations

Same limitations as trend analysis but not as severe because of emphasis on more recent data.

Same benefits as trend analysis but emphasizes more recent data.

Provide more realistic information because based on actual purchases rather than intent to buy; permits assessment of effects of marketing plan; useful for new or innovative products.

Time consuming; expensive; alerts competition to organization’s plans.

Forecasting TechniquesForecasting Techniques

Source: J. Paul Peter and James H. Donnelly, Jr., A Preface to Marketing Management, 7th ed. (Burr Ridge, Ill.: Irwin, 1997), p. 10.