The Marketing Environment

Strategic Marketing Planning

What is strategic marketing planning?

Definitions

Mission statement

objectives/goals

strategy

tactics

Copyright © 1998 by The McGraw-Hill Companies, Inc.

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 demand5. Design strategic marketing mix

Annual marketing planningPrepare annual marketing planfor each major product andcompany division

PLANNING SEQUENCE

IMPLEMENTATION AND EVALUATION

Strategic Marketing Planning

5 step process:

1) Situation analysis

2) Develop marketing objectives

3) Determine positioning and differential advantages

4) Select target markets and market demand

5) Design the marketing mix

Situational analysis

Examine: – external environment

– non-marketing resources (internal)

– the present marketing mix

The Marketing Environment

Environmental scanning is:

Gathering information regarding a company’s external environment

Analyzing it Forecasting the trends

The Marketing Environment

There are two levels of external forces:

Macro influences

Micro influences

The External Microenvironment

Six forces affect the organization’s marketing system:

Demography Economic conditions Competition Social and cultural Technology Political and legal factors

COMPANY’SMARKETINGPROGRAM

Demo-graphics

Economicconditions

Politicaland legal

forces

Social and cultural

forces

Competition

Technology

The Marketing Program

Demographic factors

Refers to the changing nature of the population

What are some current demographic trends?

What are the implications of these changes?

Changing Demographics

Different age groups buy different products or services. – Under age 25: Grow by 4.8%.– 25-34 years old: Decline by 5%.– 35-44 years old: Increase by 4.5%.– 45-64 years old: Grow by 2.5 million, or

39.5%.– Over age 65: Grow by 20%.

What are the implications?

Changing Ethnic Mix

Chinese growing to be second largest language group in Canada

Have unique buying habits and needs

Make an “ethnic” market segment

Economic Change

1) The stage of the Business Cycle:– Prosperity, recession and recovery

2) Inflation rate

3) Interest rates

4) Unemployment rate

Competitive Change

Competition takes place at three levels:

1) Direct at the brand or store level

2) Substitute products/services

3) All products and services competing for the same consumer dollar

Social and Cultural Change

Our lifestyles and values are changing!What are some changes you think are

occurring?

Attitudes toward physical activity, exercise, and diet

Emphasis on service quality and value Environmental awareness Demand for convenience

Technological Change

Can create new forms of competition and communications: ATM’s, CD-ROM, cellular, Internet

creates new industries to be supplied impacts how people spend their time technology is accepted by consumers,

expected by them, transparent to them, and often “disposable”

Political and Legal Change

Six categories:1) General fiscal/monetary policies2) Policies set by government agencies3) Social legislation4) Government relationships with industry5) Legislation related to marketing6) Provision of information

The external macro-environment

External to the firm, but important because of its close relationship

Your firm

Market

Suppliers

Intermediaries

COMPANY’SMARKETINGPROGRAM

SuppliersMarketinginter-mediaries

Marketinginter-mediaries

Themarket

The Company’s Marketing Program

COMPANY’SNONMARKETING

RESOURCES

Financialresources

Researchand

development

Com

pany

imag

eLocation

Pro

duct

ion

faci

litie

s

Hum

an

resources

The Internal Market

Internal marketing ensures:– employees are ‘on side’ with the goals of the

organization – they have direct impact on product and service

quality, dependability, and overall productivity– they are “internal market” which impact every

department within the firm– a satisfied internal market will be better able to

satisfy the external (customer) market

A firm’s complete marketing environment

SWOT

After an environmental scan, a SWOT will help analyze your results

Objectives are based on information from the SWOT

Planning Stages

1) Planning

2) Implementation

3)Performance-Evaluation stage

PLANNINGAnalyze situationSet goalsSelect strategies and tactics

IMPLEMENTATIONOrganizeStaffDirect

EVALUATIONCompare performance with goals

Feedback, so management can adapt future plans and theirimplementation to the changing environment

The Planning Management Process

Models to assist in Planning

1) The Boston Consulting Group Matrix: Using this model, a business unit can

be classified according to two factors—market share relative to competitors and industry growth

A company should have a balance of SBUs with a mix of stars, cash cows, and ???

Stars

Cash cows Dogs

Question marks

High Low

High

Low

COMPANY’S MARKET SHAREIN

DU

ST

RY

GR

OW

TH

RA

TE

Models to assist in Planning

2) Product Market Growth Matrix Growth requires examination of products and

markets to determine what needs changing Options:

– Market penetration: – Market development: – Product development: – Diversification:

PRESENT PRODUCTS

PRESENTMARKETS

NEW PRODUCTS

NEWMARKETS

Marketpenetration

Marketdevelopment

Productdevelopment

Diversification

The product-market growth matrix depicts the options available in considering markets and

products.

Product Market Growth Matrix

For next class

Read Chapter 3

First group presentation