Strategic Planning: For Competitive Advantage

Insert Chapter Picture Here
Strategic Planning for Competitive Advantage

CHAPTER
2
Marketing
Designed by
Eric Brengle
B-books, Ltd
Lamb, Hair, McDaniel
Prepared by
Deborah Baker
Texas Christian University
Chapter 2
Copyright 2008 by South-Western, a division of Thomson Learning. All rights reserved
Learning Outcomes
LOI
Understand the importance of strategic marketing

and know a basic outline for a marketing plan
LO
Develop an appropriate business

mission statement
LO3
Describe the criteria for stating good marketing

objectives
Chapter 2
Learning Outcomes
LO4
Explain the components of a situation analysis
LO5
Identify sources of competitive advantage
LO6
Identify strategic alternatives
LO7
Discuss target market strategies
Chapter 2
Learning Outcomes
LO8
Describe the elements of the marketing mix
LO9
Explain why implementation, evaluation, and

control of the marketing plan are necessary
LOIO
Identify several techniques that help make

strategic planning effective
Chapter 2
LOI
The Nature of Strategic Planning
Understand the importance

of strategic marketing
and know a basic outline
for a marketing plan
Chapter 2
LOI
Strategic Planning
Strategic
Strategic
Planning
Planning
The managerial process of creating

and maintaining a fit between the
organizations objectives and
resources and evolving market
opportunities.
The goal is long-term profitability and
growth.
Chapter 2
Examples
Chevy Volt
Blamed on Human Error, These pictures were posted on

the GM website for three hours giving us a better look
at the new Chevy Volt (2010)
Chapter 2
LOI
Strategic Marketing Management

What is the organizations main activity?
How will it reach its goals?
THE ANSWER IS A MARKETING PLAN.
Chapter 2
LOI
Strategic Planning
Marketing
MarketingPlan
Plan
A written document that acts

as a guidebook of marketing
activities for the marketing
manager.
Chapter 2
Why Write a Marketing Plan?

Provides a basis for comparison of actual
and expected performance
Provides clearly stated activities to work
toward common goals
Serves as a reference for the success of
future activities
Provides an examination of the
marketing environment
Allows entry into the marketplace with awareness
LOI
Chapter 2
10
Business Mission
Statement
Objectives
Marketing Plan
Elements
Situation or SWOT
Analysis
Marketing Strategy
Target Market
Strategy
Marketing Mix
Product
Distribution
Promotion
Price
Implementation
Evaluation
Control
Chapter 2
11
LOI
LEARNING OUTCOME
LOI REVIEW
The Importance of Strategic Marketing
What
What
Strategic
StrategicPlanning
Planning
Why
Why
Long-term
Long-term profitability
profitability
and
and growth
growth
How
How
Write
Writeaa marketing
marketing plan
plan
http://www.dmusic.com
Online
Chapter 2
12
Bus Mission
Statement
Objectives
Situation or SWOT
Analysis
Target Market
Strategy
Product
Distribution
Promotion Price
Marketing Strategy
Marketing Mix
Implementation
Environmental
control
Chapter 2
13
LO2
Defining the Business Mission
Develop an appropriate
business mission statement
Chapter 2
14
LO2 Defining the Business Mission
Answers the question,

What business are we in?
Focuses on the market(s)

rather than the good or service
Strategic Business Units (SBUs) may

also have a mission statement
Chapter 2
15
LO2
AMAs Mission Statement
Chapter 2
16
FedEx Mission Statement

FedEx will produce superior financial returns for
shareowners by providing high value-added
supply chain, transportation, business and
related information services through focused
operating companies. Customer requirements
will be met in the highest quality manner
appropriate to each market segment served.
FedEx will strive to develop mutually rewarding
relationships with its employees, partners and
suppliers. Safety will be the first consideration in
all operations. Corporate activities will be
conducted to the highest ethical and professional
standards.
Chapter 2
17
Starbucks Mission Statement
Establish Starbucks as the premier purveyor of the finest coffee in the

world while maintaining our uncompromising principles as we grow.
The following six guiding principles will help us measure the
appropriateness of our decisions:
Provide a great work environment and treat each other with respect and
dignity.
Embrace diversity as an essential component in the way we do business.
Apply the highest standards of excellence to the purchasing, roasting and
fresh delivery of our coffee.
Develop enthusiastically satisfied customers all of the time.
Contribute positively to our communities and our environment.
Recognize that profitability is essential to our future success.
Chapter 2
18
Mission Statement Generator

http://www.unitedmedia.com/comics/dilbert/game
s/career/bin/ms.cgi
Chapter 2
19
Strategic Business Units (SBUs)

Characteristics:
[SBU HAS]
A distinct mission and specific target market
Control over its resources
Its own competitors
Plans independent of other SBUs
Chapter 2
20
LO2
LEARNING OUTCOME
LO2 REVIEW
Business Mission Statement
Q: What business are we in?

A: Business mission statement
Too narrow
Too broad
Just right
marketing myopia
no direction
focus on markets
served and benefits
customers seek
Chapter 2
21
LO3 Setting Marketing Plan Objectives
Describe the criteria for stating

good marketing objectives
Chapter 2
22
LO3
Marketing Objective
Marketing
Objective
A statement of what is to be
accomplished through
marketing activities.
Chapter 2
23
Marketing Objectives
Realistic
Measurable
Time specific
Consistent with
and indicate the
organizations
priorities
Our objective is to
achieve 10 percent dollar
market share in the cat
food market within 12
months of product
introduction.
Chapter 2
24
LO3
Poorly Stated Objectives

Our objective is to be a leader in the industry
in terms of new-product development
Our objective is to maximize profits
Our objective is to better serve customers
Our objective is to be the best we can
Our objective is to pick our nose better and
deeper than anyone else before us
Our objective is to
Chapter 2
25
Well Written Objectives

Our objective is to spend 12% of sales revenue
between 2007 and 2008 on research and
development in an effort to introduce at least
five new products in 2008
Our objective is to achieve a 10% return on
investment during 2007 with a payback on new
investments of no longer than four years
Our objective is to obtain customer
satisfaction ratings of at least 90% on the 2007
annual customer satisfaction survey, and to
retain at least 85% of our 2007 customers as
repeat purchasers in 2008
Chapter 2
26
LEARNING OUTCOME
LO3 REVIEW
Criteria for Good Marketing Objectives
Realistic, measurable, and time-specific objectives
consistent with the firms objectives:
1. Communicate marketing management philosophy

2. Provide management direction
3. Motivate employees
4. Force executives to think clearly
5. Allow for better evaluation of results
Chapter 2
27
LO4
Conducting a Situation Analysis
Explain the components

of a situation analysis
Chapter 2
28
LO4
SWOT Analysis
SWOT
SWOTAnalysis
Analysis
Identifying
internal strengths (S)
and weaknesses (W)
and also examining
external opportunities (O)
and threats (T)
Chapter 2
29
SWOT Analysis
S
W
O
T
Things
Thingsthe
thecompany
companydoes
doeswell.
well.
Internal
External
Things
Thingsthe
thecompany
companydoes
doesnot
not do
do well.
well.
Conditions
Conditionsin
inthe
theexternal
externalenvironment
environmentthat
that
favor
favorstrengths.
strengths.
Conditions
Conditionsin
inthe
theexternal
externalenvironment
environmentthat
that
do
donot
notrelate
relateto
toexisting
existingstrengths
strengthsor
orfavor
favor
areas
of
weakness.
Publishing
areasSouth-Western
of current
currentCollege
weakness.
Chapter 2
30
LO4
LO4
U-571
Biz
Flix
Chapter 2
31
LO4
Environmental Scanning
Environmental
Environmental
Scanning
Scanning
The collection and interpretation of

information about forces, events,
and relationships in the external
environment that may affect the
future of the organization or the
implementation
of the marketing plan.
Chapter 2
32
LEARNING OUTCOME
LO4 REVIEW
Components of a Situation Analysis
production costs
marketing skills
financial resources
image
technology
ENVIRONMENT
INTERNAL
Strengths
Weaknesses
Chapter 2
33
LEARNING OUTCOME
LO4 REVIEW
Components of a Situation Analysis
social
demographic
economic
technological
political / legal
competitive
ENVIRONMENT
EXTERNAL
Opportunities
Threats
Chapter 2
34
LO5
Competitive Advantage
Identify sources of
competitive advantage
Chapter 2
35
LO5
Competitive
Competitive
Advantage
Advantage
The set of unique features of a

company and its products that
are perceived by the target
market as significant and
superior to the competition.
Chapter 2
36
LO5
Cost
Cost
Types
Typesof
of
Competitive
Competitive
Advantage
Advantage
Product/Service
Product/Service
Differentiation
Differentiation
Niche
Niche Strategies
Strategies
Chapter 2
37
LO5
Cost Competitive Advantage

Cost
Cost
Competitive
Competitive
Advantage
Advantage
Being the low-cost competitor

in an industry while maintaining
satisfactory profit margins.
Chapter 2
38
Cost Competitive Advantage
LO5
Obtain inexpensive raw materials
Create efficient plant operations
Design products for ease of

manufacture
Control overhead costs
Avoid marginal customers
Chapter 2
39
LO5 Sources of Cost Reduction
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
Chapter 2
40
LO5
Product/Service Differentiation
Product
Product //Service
Service
Differentiation
Differentiation
Competitive
Competitive
Advantage
Advantage
The provision of something that is unique

and valuable
to buyers beyond simply
offering a lower price than
the competitions.
Chapter 2
41
Examples of
Product/Service Differentiation
LO
Brand names
Strong dealer network
Product reliability
Image
Service
Chapter 2
42
LO5
Niche Competitive Advantage
Niche
Niche
Competitive
Competitive
Advantage
Advantage
The advantage achieved when a

firm seeks to target and
effectively serve a small
segment of the market.
Chapter 2
43
LO5
Niche Competitive Advantage
Used by small companies with

limited resources
May be used in a limited geographic market
Product line may be focused on a
specific product category
Chapter 2
44
LO
Sources of Sustainable
Patents
Patents
Copyrights
Copyrights
Locations
Locations
Equipment
Equipment
Technology
Technology
Skills
Skills and
and Assets
Assets
of
of an
an
Organization
Organization
Customer
Customer Service
Service
Chapter 2
Promotion
Promotion
45
LEARNING OUTCOME
LO5 REVIEW
Sources of Competitive Advantage
Sources
Sourcesof
of
Competitive
CompetitiveAdvantage
Advantage
Cost
Cost
$$
Product/Service
Product/Service
Differentiation
Differentiation
AAvs.
vs.BBvs.
vs.CC
Chapter 2
Niche
Niche
Strategies
Strategies
46
LO6
Strategic Directions
Chapter 2
47
Strategic Alternatives
LO6
Market
Penetration
Increase market share among

existing customers
Market
Development
Attract new customers to

existing products
Product
Development
Create new products for

present markets
Diversification
Introduce new products

into new markets
Chapter 2
48
Ansoffs Strategic Opportunity Matrix

Present Product
New Product
Present
Market
Market
Penetration
Product
Development
New
Market
Market
Development
Diversification
http://www.pg.com
Online
Chapter 2
49
LO6
LO6
Portfolio Matrix
Stars
Cash Cows
Problem
Children
Dogs
Chapter 2
50
LO6
Portfolio Matrix Strategies

Build
Hold
Harvest
Divest
Chapter 2
51
LEARNING OUTCOME
LO6 REVIEW
Strategic Alternatives
Market development
customers
Market penetration
share
Product development
products
new products +
new markets
Diversification
Chapter 2
52
LO7
Describing the Target Market
Discuss target
market strategies
Chapter 2
53
LO7
Marketing Strategy
Marketing
Marketing
Strategy
Strategy
The activities of selecting and describing

one or more target markets and
developing and maintaining a market mix
that will produce mutually satisfying
exchanges with target markets.
Chapter 2
54
LO7
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
Chapter 2
55
LO7
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
Chapter 2
56
LEARNING OUTCOME
LO7 REVIEW
Target Market Strategies
Target Market Options
Entire Market
Multiple Markets
Single Market
Chapter 2
57
LO8
The Marketing Mix
Describe the elements

of the marketing mix
Chapter 2
58
LO8
The Marketing Mix
Marketing
MarketingMix
Mix
A unique blend of product,

distribution, promotion, and pricing
strategies designed to produce
mutually satisfying exchanges with a
target market.
Chapter 2
59
LO8
Marketing Mix: The Four Ps

Price
Promotion
Place
Product
Chapter 2
60
LO8

The starting point of the
4 Ps
Includes
Physical unit
Package
Warranty
Service
Brand
Image
Value
Product
Products can be
Tangible goods
Ideas
Services
Chapter 2
61
LO8

Product availability where and
when customers want them
Place
All activities from raw

materials to finished products
Ensure products arrive in
usable condition at designated
places when needed
Chapter 2
62
LO8
Role is to bring about

exchanges with target
markets by:
Informing
Educating
Persuading
Reminding
Promotion
Includes integration of:
Personal selling
Advertising
Sales promotion
http://www.paramount.com
http://www.warnerbros.com
http://www.universalstudios.com
Public relations
Chapter 2
Online
63
LO8

Price is what a buyer must
give up to obtain a product.
Price
The most flexible of the

4 Ps-- quickest to change
Competitive weapon
Price x Units Sold = Total Revenue

Chapter 2
64
LEARNING OUTCOME
LO8 REVIEW
Elements of the Marketing Mix
Chapter 2
65
LO9
Following Up on the Marketing Plan
Explain why implementation,

evaluation, and control
of the marketing plan
are necessary
Chapter 2
66
Following Up the Marketing Plan
LO9
Implementation
Evaluation
Control
Marketing audit is
Comprehensive
Systematic
Independent
Periodic
http://www.youngbiz.com
Online
Chapter 2
67
LO9 REVIEW LEARNING OUTCOME

Implementation, Evaluation, and Control
Implementation
Evaluation
Product
Product
Place
Place
Promotion
Promotion
Price
Price
Met
Met
objectives?
objectives?
Audits
Audits
comprehensive
comprehensive
systematic
systematic
independent
independent
periodic
periodic
Chapter 2
68
LOIO
Effective Strategic Planning
Identify several techniques

that help make strategic
planning effective
Chapter 2
69
LOI REVIEW LEARNING OUTCOME

O
Techniques for Effective Strategic Planning
Continual
Continual
attention
attention
Creativity
Creativity
Management
Management
commitment
commitment
Effective
Effective
Strategic
Strategic
Planning
Planning
Chapter 2
70

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Strategic Planning for Competitive Advantage

Lamb, Hair, McDaniel

Understand the importance of strategic marketing

Develop an appropriate business

Describe the criteria for stating good marketing

Explain the components of a situation analysis

Identify sources of competitive advantage

Identify strategic alternatives

Discuss target market strategies

Describe the elements of the marketing mix

Explain why implementation, evaluation, and

Identify several techniques that help make

The Nature of Strategic Planning

Understand the importance

The managerial process of creating

Blamed on Human Error, These pictures were posted on

Strategic Marketing Management

THE ANSWER IS A MARKETING PLAN.

A written document that acts

Why Write a Marketing Plan?

Defining the Business Mission

LO2 Defining the Business Mission

Answers the question,

Focuses on the market(s)

Strategic Business Units (SBUs) may

AMAs Mission Statement

FedEx Mission Statement

Starbucks Mission Statement

Establish Starbucks as the premier purveyor of the finest coffee in the

Mission Statement Generator

Strategic Business Units (SBUs)

Q: What business are we in?

LO3 Setting Marketing Plan Objectives

Describe the criteria for stating

Poorly Stated Objectives

Well Written Objectives

1. Communicate marketing management philosophy

Conducting a Situation Analysis

Explain the components

The collection and interpretation of

The set of unique features of a

Cost Competitive Advantage

Being the low-cost competitor

Cost Competitive Advantage

Obtain inexpensive raw materials

Create efficient plant operations

Design products for ease of

Control overhead costs

Avoid marginal customers

LO5 Sources of Cost Reduction

The provision of something that is unique

Strong dealer network

Niche Competitive Advantage

The advantage achieved when a

Niche Competitive Advantage

Used by small companies with

Identify strategic alternatives

Increase market share among

Attract new customers to

Create new products for

Introduce new products

Ansoffs Strategic Opportunity Matrix