Reflective Paper

Outlines learning objectives from this chapter.

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LO 1: Explain company-wide strategic planning and its four steps.

Strategic planning sets the stage for the rest of the planning in the firm. Companies usually prepare annual plans, long-range plans, and strategic plans. The annual and long-range plans deal with the company’s current businesses and how to keep them going. In contrast, the strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment.

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LO1: Explain company-wide strategic planning and its four steps

At the corporate level, the company starts the strategic planning process by defining its overall purpose and mission (see <LINK>Figure 2.1</LINK>). This mission is then turned into detailed supporting objectives that guide the whole company. Next, senior managers at the corporate level decide what portfolio of businesses and products is best for the company and how much support to give each one. In turn, each business and product develops detailed marketing and other departmental plans that support the company-wide plan. Thus, marketing planning occurs at the business-unit, product, and market levels. It supports company strategic planning with more detailed plans for specific marketing opportunities.

Explain company-wide strategic planning and its four steps.

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LO1: Explain company-wide strategic planning and its four steps

Strategic planning sets the stage for the rest of the planning in the firm. Companies usually prepare annual plans, long-range plans, and strategic plans. The annual and long-range plans deal with the company’s current businesses and how to keep them going. In contrast, the strategic plan involves adapting the firm to take advantage of opportunities in its constantly changing environment.

1: Explain company-wide strategic planning and its four steps.

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LO 1: Explain company-wide strategic planning and its four steps.

Mission statements should be meaningful and specific, and yet motivating at the same time. They should emphasize the company’s strengths in the marketplace. Too often, mission statements are written for public relations purposes and lack specific, workable guidelines. Instead, they should emphasize the company’s strengths and forcefully declare how it intends to win in the marketplace. For example, Google’s mission isn’t to be the world’s best search engine; it’s to organize the world’s information and make it universally accessible and useful.

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LO 1: Explain company-wide strategic planning and its four steps.

- Different functions of the organization have varying objectives – however, they all support over-arching business objective.

- Creates a hierarchy of objectives that are consistent with one another.

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LO 2: Discuss how to design business portfolios and develop growth strategies.

• Business portfolios list and categorize the firm’s different businesses and products.

- Shape the future portfolio by developing strategies for growth and downsizing.

LO 2: Discuss how to design business portfolios and develop growth strategies.

- The BCG Growth-Share Matrix helps evaluate a company’s key strategic business units (SBUs) to determine their strength in the market or industry.

- It uses market growth rate and relative market share to classify SBUs into four groups:

Stars: High-share of high-growth market

- Strategy: Build into cash cow via investment

Cash cows: High-share of low-growth market

- Strategies: Maintain or harvest for cash to build Stars

Question marks: Low-share of high-growth market

- Strategies: Build into Stars via investment OR reallocate funding and let slip into Dog status

Dogs: Low-share of low-growth market

- Strategies: Maintain or divest

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LO 2: Discuss how to design business portfolios and develop growth strategies.

• When assessing a portfolio like that of Apple, first make the hypothetical assumption that Apple has stars, dogs, cash cows, and question marks.
• For the sake of this exercise, assume that each of the four categories listed has an exclusive category in the BCG.

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LO 2: Discuss how to design business portfolios and develop growth strategies.

• Portfolio analysis isn’t flawless
• Many companies favour more customized strategic planning approaches

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LO 2: Discuss how to design business portfolios and develop growth strategies.

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LO 2: Discuss how to design business portfolios and develop growth strategies.

• Self explanatory, but can’t be under-stated: these are the key options available from which to grow.

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LO 2: Discuss how to design business portfolios and develop growth strategies.

- Note: At least two of these strategies have been initiated by Tim Hortons over the last few years.

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LO 3: Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.

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LO 3: Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.

Customer value is the key ingredient in the marketer’s formula for success. However, <CORE>as we noted in <OLINK>Chapter 1</OLINK>, </CORE>marketers alone cannot produce superior value for customers. Although marketing plays a leading role, it can be only a partner in attracting, keeping, and growing customers. In addition to customer relationship management, marketers must practise partner relationship management. They must work closely with partners in other company departments to form an effective internal value chain that serves the customer. Moreover, they must partner effectively with other companies in the marketing system to form a competitively superior external value delivery network. One company that epitomizes the concept of providing value for its customers by developing relationships with them is Nike. (See Marketing@Work 2.1.)

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LO 3: Explain marketing’s role in strategic planning and how marketing works with its partners to create and deliver customer value.

- Value chain is the series of internal departments that carry out value-creating activities to design, produce, market, deliver, and support a firm’s products.

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LO 4: Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

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LO 4: Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

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LO 4: Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

- A market segment consists of a group of consumers who respond in a similar way to a given set of marketing efforts.

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LO 4: Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

Marketers develop positioning strategies for their brands and products for the purpose of distinguishing them from competing brands. A positioning strategy is designed to make the consumer “think” a certain way about a brand, and, when done well, to create an emotional bond between the consumer and the brand.

In positioning a product or brand, the company first identifies possible customer value differences that provide competitive advantages upon which to build the position. In other words, the company must identify what it is about its product that offers greater value, and that would motivate a customer to choose it over the competition’s offering. Of course, if the company promises greater value, it must then deliver that greater value. Effective positioning begins with differentiation actually differentiating the company’s market offering so that it gives consumers more value. Once the company has chosen a desired position, it must take strong steps to deliver and communicate that position to target consumers. The company’s entire marketing program should support the chosen positioning strategy.

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LO 4: Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

After deciding on its overall marketing strategy, the company is ready to begin planning the details of the marketing mix, one of the major concepts in modern marketing. The marketing mix is the set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything the firm can do to influence the demand for its product. The many possibilities can be collected into four groups of variables known as “the four Ps”: product, price, place, and promotion. Figure 2.5 shows the marketing tools under each P.

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LO 4: Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.

- There is some concern that the four Ps concept takes the seller’s view of the market, not the buyer’s view. From the buyer’s viewpoint, the four Ps might be better described as the four Cs.

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LO 5: List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

In addition to being good at the marketing in marketing management, companies need to pay attention to the management. Managing the marketing process requires the four marketing management functions shown in Figure 2.7—analysis, planning, implementation, and control.

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LO 5: List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

• SWOT analysis is the quintessential business planning tool comparing internal forces (strengths and weaknesses) and external forces (opportunities and threats).
• Strengths and Opportunities are good for business, while weaknesses and threats can be detrimental. The difference is that strengths and weaknesses are created and controlled from within, while opportunities and threats abound outside irrespective of what the firm does.
• As a planning tool, SWOT reveals competencies to leverage, shortcomings upon which to improve, opportunities to seize, and threats requiring some form of reaction.

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LO 5: List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

- The marketing plan is a separate document detailing a firm’s entire product line up or single products.

- The marketing plan must be consistent and supportive of the larger organizational strategic plan.

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LO 5: List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

- Implementation is actually a key component of the marketing plan (see “Action Plan”). However, it is considered a key and separate management function due to the magnitude of the task. Converting words into actions is a challenge but essential.

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LO 5: List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

- Larger companies usually have a CMO (Chief Marketing Officer) and/or other senior executive marketing roles

- Functional Organization:

Different marketing activities are headed by a specialist (e.g., sales manager)

- Geographic Organization:

Sales and marketing people are assigned to specific countries, regions, and/or districts

- Product Management Organization:

One person is responsible for the strategy and marketing program for a single product

- Market or Customer Organization:

Manager responsible for specific market or type of customer (e.g., government buyers)

- Combination Organization:

Uses some combination of the previous four approaches

LO 5: List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

Because many surprises occur during the implementation of marketing plans, marketers must practise constant marketing control the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are attained. Marketing control involves four steps. Management first sets specific marketing goals. It then measures its performance in the marketplace and evaluates the causes of any differences between expected and actual performance. Finally, management takes corrective action to close the gaps between its goals and its performance. This may require changing the action programs or even changing the goals.

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LO 5: List the marketing management functions, including the elements of a marketing plan, and discuss the importance of measuring and managing return on marketing investment.

Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. Its purpose is to ensure that the company achieves the sales, profits, and other goals set out in its annual plan. It also involves determining the profitability of different products, territories, markets, and channels. Strategic control involves looking at whether the company’s basic strategies are well matched to its opportunities. Marketing strategies and programs can quickly become outdated, and each company should periodically reassess its overall approach to the marketplace.

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Copyright © 2015 Pearson Canada Inc.

The elements of SWOT are easy to remember but difficult to apply. “S” and “O” are good. “W” and “T” are bad. The differences between the two positive forces and the two negative forces lies in where they originate. Strengths and weaknesses come from within and are totally controlled by the firm. Opportunities and threats come from outside and are uncontrollable by the firm. Assign an S, W, O, or T to the statements on the right.

1. A slow economy will decrease consumer demand. ____

• The firm has a high customer satisfaction rating. _____
• The firm will postpone expansion due to shortage of capital. _____
• There is a growing demand for the firm’s type of goods. _____

SWOT Breakdown

Check Your Understanding

T

S

O

W

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Copyright © 2015 Pearson Canada Inc.

Reviewing the Concepts

• Explain the four steps of company-wide strategic planning.
• Discuss how to design business portfolios and growth strategies.
• Explain marketing’s role in strategic planning and how marketing creates and delivers customer value.
• Describe the elements of a customer-driven marketing strategy and mix, and the forces that influence it.
• List the marketing management functions and discuss the importance of measuring and managing return on marketing investment.

Segmentation, Targeting, Positioning

and Differentiation

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Copyright © 2015 Pearson Canada Inc.

Questions?