Lamb, Hair, McDaniel

2012-2013

CHAPTER 2

Copyright 2012 by Cengage Learning Inc. All rights reserved

11

iStockphoto.com/Dem10

Chapter 1

AP IMAGES/JENNIFER GRAYLOCK

Strategic Planning for

Competitive Advantage

Learning Outcomes
1

Understand the importance of strategic planning

Define strategic business units (SBUs)

Identify strategic alternatives and know a basic

outline for a marketing plan

Develop an appropriate business mission statement

Describe the components of a situation analysis

Identify sources of competitive advantage

Learning Outcomes
7

Explain the criteria for stating good marketing

objectives

Discuss target market strategies

Describe the elements of the marketing mix

10

Explain why implementation, evaluation, and control of

the marketing plan are necessary

11

Identify several techniques that help make strategic

planning effective

The Nature of Strategic Planning

Understand the
importance of strategic
marketing and know
a basic outline for
a marketing plan

1
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Strategic Marketing Management

What is the organizations main activity?
How will it reach its goals?
The answer is by examining:
SBUs
Marketing Plan
Strategic Alternatives
5

2013 by Cengage Learning Inc. All Rights Reserved.

Strategic Planning is
the managerial process of
creating and maintaining a fit
between the organizations
objectives and resources and the
evolving market opportunities.
The GOAL of strategic planning is long-term
profitability and growth.
6

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Strategic Business Units

Define Strategic
Business Units
(SBUs)

2
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Characteristics of
Strategic Business Units (SBUs)
An SBU HAS
A distinct mission and specific target market
Control over its resources
Its own competitors
Plans independent of other SBUs

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Strategic Alternatives
Identify strategic
alternatives and
know a basic
outline for a
marketing plan

3
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Ansoffs Opportunity Matrix

Market
Penetration
Market
Development

Attract new customers to

existing products

Product
Development

Create new products for

present markets

Diversification

10

Increase market share among

existing customers

Introduce new
products
into new markets

2013 by Cengage Learning Inc. All Rights Reserved.

Ansoffs Product-Market Expansion Grid

2-11

Copyright 2009 Pearson Education, Inc. Publishing as Prentice Hall

Exhibit 2.1

Ansoffs Strategic Opportunity Matrix

Present Product
Present
Market

Market Penetration

New
Market

Market Development

Starbucks sells more coffee to

customers who register their
reloadable Starbucks cards.

Starbucks opens stores in

Brazil and Chile

New Product
Product Development

Starbucks develops
powdered instant coffee Via.

Diversification

Starbucks launches Hear

Music and buys Ethos Water.

3
12

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What Is a Marketing Plan?

Planning the process of anticipating future events
and determining strategies to achieve organizational
objectives in the future.
Marketing Planning designing activities relating to
marketing objectives and the changing marketing
environment.
Marketing Plan a written document that acts as a
guidebook of marketing activities for the marketing
manager.

13

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Why Write a Marketing Plan?

Provides a basis for comparison of actual and
expected performance
Provides clearly stated activities to work toward
common goals
Provides an examination of the marketing environment
Serves as a reference for the success of future
activities
Allows entry into the marketplace with awareness

14

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Business Mission
Statement

Exhibit 2.4
Elements of a
Marketing Mix

Situation or SWOT
Analysis
Objectives

Marketing Strategy
Target Market
Strategy

Marketing Mix
Product

Distribution

Promotion

Price

Implementation
Evaluation
Control
15

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Marketing Plan Elements

Selecting which alternative to
pursue depends on:
1. Philosophy and culture
2. Decision making tools

The most common

decision making tool is
the matrix form.
16

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Writing the Marketing Plan

A complete marketing plan can allow an
organization to achieve marketing
objectives

HOWEVER
the marketing plan is only as good as the
information, effort, creativity and thought
put into it.
17

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Defining the Business Mission

Develop an
appropriate business
mission statement

4
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18

Defining the Business

Mission
Answers the question,
What business are we in?
Focuses on the market(s)
rather than the good or service
SBUs may also have a mission
statement
19

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Conducting a Situation Analysis

Describe the
components of a
situation analysis

5 3
LO
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20

SWOT Analysis
Internal

External

21

S
W
O
T

Strengths
Strengths--things
thingsthe
thecompany
companydoes
does
well.
well.
Weaknesses
Weaknesses--things
thingsthe
thecompany
company
does
doesnot
not do
dowell.
well.
Opportunities
Opportunities--conditions
conditionsin
inthe
the
external
externalenvironment
environmentthat
thatfavor
favor
strengths.
strengths.
Threats
Threats--conditions
conditionsin
inthe
theexternal
external
environment
environmentthat
thatdo
donot
notrelate
relateto
toexisting
existing
strengths
or
areas
of
strengths
orfavor
favor
areas
ofcurrent
current
South-Western
College
Publishing
weakness.
weakness.

2013 by Cengage Learning Inc. All Rights Reserved.

Components of a SWOT Analysis

Examining internal strengths and weaknesses.

Focus on organizational resources:

Production costs
Marketing skills
Financial resources
Company or brand image
Employee capabilities
Technology
22

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Environmental Scanning
Helps identify opportunities and threats.

Designing a marketing strategy is based

on six major environmental forces:
Social
Economic
Technological
Political/Legal
Competitive
23

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AP IMAGES/PRNEWSFOTO/PEPSICO

Demographic

Exhibit 3.6

324

Examples of SWOT Factors

2010 South-Western, Cengage Learning, Inc. All rights

reserved.

Competitive Advantage

Identify sources
of competitive
advantage

6
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25

Competitive Advantage
Cost
Cost
Types
Typesof
of
Competitive
Competitive
Advantage
Advantage

Product/Service
Product/Service
Differentiation
Differentiation
Niche
Niche

26

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Cost Competitive
Advantage
Obtain inexpensive raw materials
Create efficient scale of plant operations
Design products for ease of manufacture
Control overhead costs
Avoid marginal customers

27

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Sources of Cost Reduction

28

Experience
Experience Curves
Curves

Product
Product Design
Design

Efficient
Efficient Labor
Labor

Reengineering
Reengineering

No-frills
No-frills Products
Products

Production
Production Innovations
Innovations

Government
Government Subsidies
Subsidies

New
New Service
Service
Delivery
Delivery Methods
Methods

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Examples of Product/Service
Differentiators
Brand names
Strong dealer network
Product reliability
Image
Service

29

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Niche Competitive
Advantage
Used by small companies with limited
resources
May be used in a limited geographic market

30

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Building Sustainable
Competitive Advantage
Sustainable competitive advantage is an
advantage that cannot be copied by the
competition.
A firm that has successfully achieved a
competitive advantage will stake out a
position unique in some manner from its
rivals.

31

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Sources of Sustainable
Competitive Advantage
Patents
Patents
Copyrights
Copyrights
Locations
Locations
Equipment
Equipment
Technology
Technology
Skills
Skills and
and Assets
Assets
of
of an
an
Organization
Organization
32

Customer
Customer Service
Service
Promotion
Promotion

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Setting Marketing Plan Objectives

Explain the criteria

for stating good
marketing objectives

7
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33

Marketing Objectives
Realistic
Measurable
Time specific
Compared to a benchmark

Our objective is to achieve 10

percent dollar market share in
the cat food market within 12
months of product introduction.

34

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Criteria for Good Marketing

Objectives
Carefully specified objectives serve several functions:

1. Communicate marketing management philosophy

2. Provide management direction
3. Motivate employees
4. Force executives to clarify their thinking
5. Form a basis for control
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Describing the Target Market

Discuss target
market strategies

8
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36

Describing the Target Market

Marketing Strategy

involves

the activities of selecting and describing one or more

target markets and developing and maintaining a
marketing mix that will produce mutually satisfying
exchanges with target markets.

Marketing Opportunity Analysis

(MOA) involves
the description and estimation of the size and sales
potential of market segments that are of interest to
the firm and the assessment of key competitors in
these market segments.
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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

38

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Target Market Strategy

Appeal
Appeal to
to the
the entire
entire market
market
with
with one
one marketing
marketing mix
mix
Concentrate
Concentrate on
on one
one
marketing
marketing segment
segment
Appeal
Appeal to
to multiple
multiple markets
markets
with
with multiple
multiple marketing
marketing mixes
mixes

39

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The Marketing Mix

Describe the
elements of the
marketing mix

9
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40

The Marketing Mix is

a unique blend of product, place (distribution),
promotion, and pricing strategies designed to
produce mutually satisfying exchanges with a
target market.
The elements of the marketing mix
are often referred to as the

Four Ps

41

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Marketing Mix:
The Four Ps
The starting point of the 4
Ps Includes:
Physical unit
Package
Warranty
Service
Brand
Image
Value

42

Product
Products can
be
Tangible goods
Ideas
Services

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Marketing Mix:
The Four Ps

Place

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
43

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Marketing Mix:
The Four Ps
Includes integration
Promotion
of:
Advertising
Role is to bring about
Public relations
exchanges with target
Sales promotion
markets by:
Informing
Personal selling
Educating
Persuading
Reminding

44

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Marketing Mix:
The Four Ps

Price

Price is what a buyer must give up to

obtain a product.
The most flexible of the
4 Psquickest to change
Competitive weapon
Price x Units Sold = Total Revenue

45

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Following Up on
the Marketing Plan
Explain why
implementation,
evaluation, and control
of the marketing plan
are necessary

10
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46

Following Up on
the Marketing Plan
Implementation
Evaluation and Control
Marketing audit is

47

Comprehensive
Systematic
Independent
Periodic

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10

Effective Strategic Planning

Identify several
techniques that help
make strategic
planning effective

11
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48

Techniques for Effective Strategic

Planning

Continual
Continual
attention
attention

Creativity
Creativity

Management
Management
commitment
commitment

Effective
Effective
Strategic
Strategic
Planning
Planning
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