Market-Oriented Strategic Planning

Objectives Resources

Skills

Opportunities

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Market-Oriented Strategic Planning

Objectives Resources

Profit and Growth

Skills Opportunities

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Levels of Planning
Planning

Strategic Planning

Marketing Planning

Tactical Planning

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Strategic Planning
Strategic Planning- The process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing market opportunities Philip Kotler.

The strategic plan establishes goals and strategies , delineates activities and assigns responsibilities for every face of the organization.
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Strategic Planning.contd
In other or rather simple words

Strategic planning sets the stage for the rest of the planning in the company.

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Marketing Planning
Marketing Planning is the operational plan for a particular product or product line.

This is the detailed scheme of the marketing strategies and activities associated with each products marketing mix.
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Tactical Planning (Annual Marketing Planning)

Tactical planning involves specifying details which pertain to organizations activities for a specific period of time, usually one year.

A tactic is a means by which a strategy is implemented. It is more specific , detailed course of action than a strategy

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CEAT
Strategy
Direct the Companys promotion towards teenagers.

Tactics
Sponsor most of the events attended in person or watched on TV by this group. MTV Roadies, IPL( Change Ads), ICC World Cup( Idiots Ads)

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Basic Elements of Strategic Planning

1.Mission 2.Strategic Business Units 3.Objectives 4.Strategic Planning Tools 5.Marketing Plans
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1. Good Mission Statements:

Limited number of goals Stress major policies & values Define competitive scopes
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Some Mission Statements

Cadbury India To attain leadership position in the confectionary market and achieve a strong national presence in the food drinks sector. Amazon.com We make buying the fastest. Easiest, and most enjoyable shopping experience possible. Unilever- To make cleaniliness commonplace , to lessen work for women, to foster health and to contribute to personal attractiveness, so that life becomes more enjoyable for the people who use our products.
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2. Strategic Business Units.

Most Companies with Multi products lines or different country operations create SBUs or smaller divisions to facilitate the general operations. An SBU can be a product, one product line or a specific business. The SBU operates as a separate entity, establish its own mission statement objectives. The SBUs have their own management teams and operational goals.
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SBU of HMT Ltd. (Indian)

1.
2. 3. 4. 5.

Machine Tools Consumer Products Tractors Engineering components Technology and Information Systems.

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General Electric (GE) Portfolio of SBUs( Global)

1. GE Appliances 2. GE Aircraft engines
3. GE Capital 4. GE Global Services 5. 6. 7. 8. 2000 Prentice Hall GE Lighting GE Plastics GE Transportation Systems GE Medical

3. Objectives
Sales can be increased by improving the market share of the company in the home country by entering into new markets or by entering new Global Markets.
Such Goals can be the Current Objectives of any Organization.

An Objective is simply a desired Outcome

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Objectives
Objectives must always be - Clear - Concise - Realistic Above all All the objectives come to life when they are time framed.
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4. Strategic Planning Tools

To help the organization to take decisions on various strategies there are many tools which most of the organizations use. Some of them are as follows:-

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Three Intensive Growth Strategies: Product/Market Expansion Grid

(Growth Vector Model)( Igor Ansoffs Model)

Existing products
Existing markets

New products

1. Market penetration

3. Product development

New markets
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2. Market development

4. Diversification

Ansoff's Product-Market Expansion Grid

Ian Ansoff has proposed a useful framework called the product/market expansion grid for detecting new intensive growth opportunities.
There are four strategies, one for each of the quadrants: Market Penetration Strategy

When the product is in the current market, it can still grow. There are three major approaches to increasing current product's market share: 1. Encourage current customers to buy more. 2. Attract competitors customers. 3. Convince non-users to use the product. 2000 Prentice Hall

Market-Development Strategy When the current product is launched in a new market, there are three approaches to develop the market: 1. Expand distribution channels. 2. Sell in new locations. 3. Identify the potential users. Product-Development Strategy When a new product is launched in the current market, the intensive growth strategies could be to: 1. Develop new features. 2. Develop different quality levels. 3. Improve the technology.
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Diversification When a new product is launched in a new market, diversification makes good sense as better opportunities are found outside the present business. The diversification strategies are of three types: 1. Concentric Diversification Strategy: Develop new products with the earlier technology for new segments 2. Conglomerate Diversification Strategy: Develop new products for new markets. 3. Horizontal Diversification Strategy: Develop new products with new technology for old customers.
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Diversification Growth

Concentric diversification Strategy-For example, a company that

manufactures industrial adhesives might decide to diversify into adhesives to be sold via retailers. The technology would be the same but the marketing effort would need to change. It also seems to increase its market share to launch a new product that helps the particular company to earn profit. For instance, the addition of tomato ketchup and sauce to the existing "Maggi" brand processed items of Food Specialties Ltd. is an example of technological-related concentric diversification.

Horizontal Diversification Strategy-The

company adds new products or services that are often technologically or commercially unrelated to current products but that may appeal to current customers. In a competitive environment, this form of diversification is desirable if the present customers are loyal to the current products and if the new products have a good quality and are well promoted and priced. For example, a company that was making notebooks earlier may also enter the pen market with its new product.

Conglomerate diversification strategy -The

company markets new products or services that have no technological or commercial synergies with current products but that may appeal to new groups of customers. Eg. Reliance Industries.

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Integrative Growth

Backward integration (acquiring a supplier) Forward integration (acquiring distributor of your product) Horizontal integration (acquiring a competitor)

2006 Pearson Education, Inc. Upper Saddle River, NJ 07458 2000 Prentice Hall

Marketing for Hospitality and Tourism, 4th edition Kotler, Bowen, and Makens

The Boston Consulting Groups Growth-Share Matrix

Market Growth Rate
H I G H L O W

Stars

Question marks

5
Cash cow

?2
7

Dogs

8 6
HIGH
LOW

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Relative Market Share

5. Marketing Plans The Marketing plan is a detailed scheme of the marketing strategies and activities associated with each products marketing mix.
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Strategic-Planning, Implementation, and Control Process

Planning
Corporate planning Division planning Business planning Product planning
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Implementation
Organizing

Control
Measuring results

Diagnosing results Implementing

Taking corrective action

The Strategic-Planning Gap

Desired sales

Diversification growth Integrative growth Intensive growth Current portfolio

Sales

Strategicplanning gap

0
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5 Time (years)

10

Ways to beat Competition

1. 2. 3.

4.
5. 6. 7. 8.

Reducing Competition- Acquisition & Merger Joining Competition- Joint venture Pre-empting Competition. Creating Barriers- Sony Vs. Kodak Differentiate the product. To improve the speed of response-Dominos Divest from regular activities. To improve efficiency.

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Nature of Marketing Strategies

1.
2. 3. 4. 5.

6.
7.

They are dynamic They are futuristic They are complex They provide direction They are all covering They are interpretive They are the Top Management Blue-print.

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Essentials of Marketing Strategies

1. 2.

3.
4. 5. 6.

It should be consistent It should be workable It should be suitable It should not be risky It should be resource based It has a time horizon

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The McKinsey 7-S Framework

Structure

Strategy Shared values

Systems

Skills
Staff
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Style

The McKinsey 7-S Framework

The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help you: - Improve the performance of a company. - Examine the likely effects of future changes within a company. - Align departments and processes during a merger or acquisition. - Determine how best to implement a proposed strategy.
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The McKinsey 7-S Framework

The Seven Elements The McKinsey 7S model involves seven interdependent factors which are categorized as either "hard" or "soft" elements:

Hard Elements

Soft Elements Shared Values Skills Styles Staff

Strategy Structure System

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The McKinsey 7-S Framework

Structure

Strategy Shared values

Systems

Skills
Staff
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Style

The McKinsey 7-S Framework

Hard elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems.
Soft" elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful.
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The McKinsey 7-S Framework

Let's look at each of the elements specifically
Strategy: the plan devised to maintain and build competitive advantage over the competition. Structure: the way the organization is structured and who reports to whom. Systems: the daily activities and procedures that staff members engage in to get the job done. Shared Values: called "super ordinate goals" when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic. Style: the style of leadership adopted. Staff: the employees and their general capabilities. Skills: the actual skills and competencies of the employees working for the company.
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The Value-Delivery Process

(a) Traditional physical process sequence Make the product
Design Procure Make product

Sell the product

Price Sell Advertise/ Distribute Service promote

(b) Value creation & delivery sequence

Choose the Value Provide the Value Communicate the Value

Strategic marketing
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Tactical marketing

The Marketing Plan

Objectives of a Marketing Plan:1. To define the Current situation facing the Product. 2. To define the problems and opportunities facing the business. 3. To establish Objectives. 4. To define strategies and programs. 5. To pinpoint responsibility for achieving product objectives. 6. To encourage careful and disciplined thinking. 7. To establish a customer- competitor orientation.
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Steps in Marketing Planning

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Steps in Marketing Planning

Step 1. Analysis of the Marketing Situation

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Components of The Marketing Plan

Executive Summary & Table of Contents Current Marketing Situation Opportunity & Issue Analysis Objectives

Marketing Strategy Action Programs

Projected Profit-and-loss Controls
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Factors Influencing Company Marketing Marketing Strategy

intermediaries

Demographic/ economic environment

Product

Technical/ physical environment

Suppliers

Place

Target Price customers

Publics

Promotion

Political/ legal environment

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Social/ cultural environment

Competitors

Modern Marketing Organization

1. Simple Sales Department
2. Sales Department with some Marketing Function

3. Separate Marketing Department

4. Integrated Marketing Department 5. Modern Marketing Oriented Organization

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Types of Marketing Organizations

General Manager

Manufacturing

Marketing

Finance

Public Relations

Product Marketing

Advertising

Sales Promotion

Marketing Research

Functional Organizational Structure

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Product Oriented Organizational Structure

General Manager

Manufacturing

Marketing

Finance

Public Relations

Marketing Research

Product Management

Support

ManagerProduct A
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ManagerProduct B

ManagerProduct C