GRAHAM HOOLEY NIGEL F.

PIERCY BRIGETTE
NICOULAUD

Strategic marketing
planning

Strategy is the matching of the

activities of an organisation to the
environment in which it operates and
to its own resource capabilities
Johnson and scholes (1988)

6-2

Introduction
Companys capabilities are matched
to the market environment in which
it operates not for today but in
foreseeable future
Strategic planning attempts to
answer three basic questions
What is the business doing now?
What is happening in the environment?
What should the business be doing?
6-3

Figure 2.1

Strategic fit
Market needs &
conditions

Strategy adapted to
the needs and
requirements of the
market

Marketing
strategy

Organizational
resources suited to
the markets in which
it operates

Organizational
resources

Organizational resources
needed for implementation of
the strategy
6-4

Defining the business

purpose or mission
Requires asking fundamental
questions:
What business are we in?
What businesses do we want to be in?
Who is our major competitor?
What markets are we in?

6-5

Mission formulation and

statement
The strategic intent or vision of where
organization want to be in foreseeable
future
The values of the organization should
be spelled out to guide operations
Articulate distinctive competencies
Market definition, in terms of customer
targets
Finally, it should spell out where
organization intends to be positioned in
marketplace
6-6

Figure 2.2

Components of mission

Strategic intent
Strategic intent
Vision of what you want
Vision of what you want
to be
to be

Market
Market
definition
definition
Customer
Customer
targets
targets

Company values
Company values
Guiding
Guiding
principles
principles

Mission
Mission
Objectives and
Objectives and
strategy
strategy

Competitive
Competitive
positioning
positioning
Differential
Differential
advantage
advantage

Distinctive
Distinctive
competencies
competencies
Core skills
Core skills

6-7

The marketing strategy

process
Three main levels:
Establishment of a core strategy
Assessment of companies capabilities
(strengths and weaknesses relative to
competition opportunities and threats
posed by the environment)
The creation of the companys competitive
positioning
competitive edge in serving customers
better than competition is defines
The implementation of the strategy
Department putting strategy into action is
6-8
created

Figure 2.3

The marketing strategy process

Business
Business
purpose
purpose

Environment
Environment
analysis
analysis

Core
Core
strategy
strategy

Company
Company
analysis
analysis

Market
Markettarget
target

Competitive
Competitive
positioning
positioning

Competitive
Competitive
advantage
advantage

Control
Control

Implementation
Implementation

Organization
Organization

Marketing
Marketing
mix
mix

6-9

ESTABLISHING THE CORE

STRATEGY

6-10

Analysis of organizational
resources
Creation of long list of resources and
many weaknesses that an
organization has at its disposal
They may stem from;
Skills of the workforce in assembling
products
Skills of management in planning
R&D department in new product ideas
Distinctive competencies may lie in
image, market presence or its 6-11
after

Product portfolio
DRUKERS SEVEN TYPES
OF BUSINESSES

6-12

Drukers seven types of

businesses
Todays breadwinners
products earning healthy profits now
Tomorrows breadwinners
Expected to take breadwinning role in the
future
Yesterdays breadwinners
Supported the company in the past
Developments
Recently developed that may have some
future
6-13

Drukers seven types of

businesses
Sleepers
Have been around for sometime but failed
to establish themselves in their markets
Investments in managerial ego
Have strong product champions among
influential managers
Failures
Failed to play a significant role in the
companys portfolio
6-14

Figure 2.4

Market
attractiveness

High

Product types in the portfolio

Tomorrow's
breadwinners

Developments
Sleepers
Ego trips

Life
Cycle

Death
Cycle

Low

Failures
Yesterdays
breadwinners

Todays
breadwinners
High

Business strength

Low
6-15

Portfolio planning
Diversified organizations need to find
methods for assessing the balance of
business in its portfolio
Development of business strategies and
allocation of resources (both managerial
and financial)
Analyzing portfolio balance

6-16

Figure 2.5

Balancing the business portfolio

Long-run corporate health requires a balance of:

Products
Products that
that
generates
generates
cash
cash NOW
NOW

Other
Other that
that
use
use cash
cash now
now
but
but promise
promise
to
to generate
generate
cash
cash in
in the
the
FUTURE
FUTURE

6-17

Figure 2.6

Unbalanced, present-focused
business portfolio

A great present
but what about
the future?

Other
Other that
that
use
use cash
cash now
now
but
but promise
promise
to
to generate
generate
cash
cash in
in the
the
FUTURE
FUTURE

Products
Products that
that
generates
generates
cash
cash NOW
NOW

6-18

Figure 2.7

Unbalanced, future-focused business

portfolio

Products
Products that
that
generates
generates
cash
cash NOW
NOW

Future prospects good

but who pays todays
bills?

Other
Other that
that
use
use cash
cash now
now
but
but promise
promise
to
to generate
generate
cash
cash in
in the
the
FUTURE
FUTURE

6-19

Analysis of the markets

served
Opportunities and threats facing the
company
Stem from two main areas;
The customers (both current and
potential) and competitors ( again both
current and potential)
Most markets consist of heterogeneous
customers (varying needs and demands)

6-20

Figure 2.8

S W O T An a l y s i s
Internal

Strengths
Strengths
Good
points

What
Whatare
arewe
wegood
goodat
at
relative
relativeto
tocompetitors?
competitors?

Weaknesses
Weaknesses
Danger
points

What
Whatare
arewe
webad
badat
at
relative
relativeto
tocompetitors?
competitors?

External
Opportunities
Opportunities
What
Whatchanges
changesare
are
creating
creatingnew
newoptions
optionsfor
for
us?
us?

Threats
Threats
What
Whatemerging
emergingdangers
dangers
must
mustwe
weavoid
avoidor
or
counter?
counter?
6-21

Figure 2.9

SWOT strategic implications

Opportunities

Strengths

Exploit
Exploitexisting
existing
strengths
strengthsin
inareas
areasof
of
opportunity
opportunity

Build
Buildnew
newstrengths
strengthsfirst
first
to
weaknesses
totake
takeadvantage
advantageof
of
opportunities
opportunities

Threats

Use
Useexisting
existingstrengths
strengthsto
to
counter
counterthreats
threats

Build
Buildnew
newstrengths
strengthsto
to
counter
counterthreats
threats

6-22

Core strategy
Define the key factors of success
Company sets its marketing objectives
Objectives should be both long and short
term
Core strategy varies at different stages of
product life cycle
Expand the market (achieved in early
growth stages of lifecycle) or to increase
share of existing market (pursued during
late growth/maturity stages
6-23

Expand the market

Market expansion can be achieved
through attraction of new users to
the product or service
Through geographic expansion of the
companys operations (both
domestically and internationally)

6-24

Figure 2.10

Strategic focus
Improve
Improve
performance
performance

Improve
Improve
productivity
productivity

Increase
Increasesales
sales

Expand
Expand
market
market

Increase
Increase
share.
share.

Expand
Expand
market
market

Increase
Increase
share.
share.

New uses

Win share

Increase price

Capital costs

New users

Acquire share

Add value

Fixed costs

Increasing use
frequently

Create
alliances

Change product
mix

Variable costs

New products
6-25

Increase share
Main routes to increasing share include;
Winning competitors, customers
Merging with (or acquiring) the
competitors
Entering into strategic alliances with
competitors, suppliers and/or
distributors
Increasing usage rate may be viable
approach to expanding the market for
some products
6-26

Improving profitability
Through improving margins
Increasing price, reducing cost or both
Removing poorly performing products
and concentrating on more financially
viable

6-27

Creating the competitive

positioning
Statement of companys market
targets
Where the company will compete and
differential advantage
How the company will compete

Market targets
Select those targets most suited to
utilizing companys strengths and
minimizing vulnerability due to
weaknesses
6-28

Market targets
Market will generally be more
attractive if the following hold;
It is large
It is growing
Contribution margins are high
Competitive intensity and rivalry are low
There are high entry and low exit
barriers
The market is not vulnerable to
uncontrollable events
6-29

DIFFERENTIAL
ADVANTAGE

6-30

Cost leadership
Company seek to obtain a cost
structure significantly below than
that of competitor
Through construction of efficient scale
economies, cost minimization in R&D,
service, sales force, advertising etc

6-31

Figure 2.11

Routes to competitive advantage

High

Competitive
advantage

Valued
uniqueness

St

Low

uc

in

th

id

dl

Competitive
disadvantage

High

Low

Relative delivered cost

6-32

Differentiation
Something that is seen as a unique in
the market
Companys strengths and skills are
used to differentiate the companys
offerings than competitors
Differentiation can be achieved
through design, style, product or
service features, price, image etc
6-33

Differentiation and cost

leadership
Both could be pursued simultaneously
(Fulmer and Goodwin, 1988)
Cost leadership may be impossible to
sustain due to competitor imitation
Cost leadership requires minimal
spending on R&D, product improvement
and image creation

6-34

Implementation
Task of marketing management is to
implement those decisions through
marketing effort
Three basic elements of
implementation;
Marketing mix, organization and control

6-35

Marketing mix
Each of the element of the mix
should be designed to add up to the
positioning required
Where elements of the mix do not
pull in the same direction but
contradict each other, the positioning
achieved will be confused and
confusing to customers
6-36

Organization
How the marketing effort and the
marketing department are organized
will have effect on how well the
strategy can be can be carried
through
Required manpower and financial
resources to be made available

6-37

Control
Monitor and control the effort
Performance can be monitored in two
ways;
Market performance (sales, market
share, customer attitude and loyalty and
changes in them over time)
Financial performance ( monitoring of
product contribution relative to the
resources employed to achieve it)
6-38

AMBER REPORTS THE

MOST IMPORTANT
MARKETING METRICS
USED BY COMPANIES

6-39

Marketing metrics

Relative perceived quality

Loyalty/retention
Total no of customers
Customer satisfaction
Relative price (market share/volume)
Perceived quality/esteem
Complaints (level of dissatisfaction)
Awareness and distribution/availability
6-40