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Chapter 2
Strategic Market Planning:
Take the Big Picture
Business Planning:
Compose the Big Picture
 Business Planning:
Ongoing process of making decisions
that guide the firm both in the short
term and for the long haul
– Identifies/builds on firm’s strengths
– Helps managers make informed decisions
– Develops objectives before action is taken
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Figure 2.1
Three Levels of Business Planning
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Strategic Planning
 Managerial decision process that
matches firm’s resources and
capabilities to its market opportunities
for long-term growth and survival
– Top management defines firm’s purpose and
objectives
• Example: increase firm’s total revenues by
20% over next five years
– Strategic Business Units (SBUs)
• Self-contained divisions
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SWOT - Starbucks
 Growth Strategy for the US
– Strength – profitable and cash-rich
– Threat – New potentially damaging competition (Walmart & Kicks)
– Strategy indicated
• Reinforce positioning
• Introduce flanker brand to compete with Wal-mart on the
lower end (Seattle Coffee Company)
SWOT - Starbucks
 Growth Strategy for France
– Strength – high quality, global management expertise
– Strength – cash-rich and profitable
– Opportunity – No concept like Starbucks exists in France
– Threat – “sock juice” – damaging pre-existing attitudes
– US-France political tensions
 Strategy
– Target a more receptive segment – the young French
– Sell the American Starbucks experience (coffee, ambience,
music, healthful (no-smoking), internet, a cool place to hang out)
 Objective
– Attitudes in the target segment
Functional (Tactical) Planning
 Accomplished by various functional
areas of firm, such as marketing
 Typically includes:
– A broad 5-year plan to support strategic plan
– A detailed annual plan
• Example: marketing plan objective: to gain a
40% share of a particular market with three
new products during coming year
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Operational Planning
 First-line managers focus on day-today execution of functional plans
 Such planning includes detailed
annual, semiannual, or quarterly plans
– Example: an objective may be set in terms of
units of a product a particular salesperson
needs to sell per month (sales quota)
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All Business Planning
Is an Integrated Activity
 Strategic, functional, and operational
plans must work together to benefit the
whole firm
 Marketers must fully understand how
they fit with the organization’s
direction and resources
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Strategic Planning:
Frame the Picture
 Very large multiproduct firms may have
divisions called strategic business
units (SBUs)
– SBUs operate like separate businesses with
their own mission, business objectives,
resources, managers, and competitors
 Strategic planning is done at both the
corporate and SBU levels
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Strategic Business Units (SBUs)
Large firms like
the Walt Disney
Company
usually operate
several SBUs.
Disney SBUs
include theme
parks, movie
studios, TV
networks, and
cruise line
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Strategic Planning Step 1:
Define the Mission
 Answer three key questions:
– What business are we in?
– What customers should we serve?
– How do we develop firm’s capabilities and
focus its efforts?
 Mission statement:
– A formal document that describes the firm’s
overall purpose and what it hopes to achieve
in terms of its customers,
products, and resources
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Step 1: Define the Mission
 Examples of mission statements
– MADD: “to stop drunk driving, support the
victims of this violent crime, and prevent
underage drinking”
– National Book Swap: “to become the nation’s
largest book club and in the process bring a
lifetime of reading material to every
American”
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Coca Cola’s Mission Statement
 “Everything we do is inspired by our enduring
mission:
– To Refresh the World… in body, mind, and spirit.
– To Inspire Moments of Optimism… through our
brands and our actions.
– To Create Value and Make a Difference…
everywhere we engage.”
http://www.missionstatements.com/fortu
ne_500_mission_statements.html
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Step 2: Evaluate the Internal
and External Environments
 Situational analysis (business review)
– An assessment of a firm’s internal and
external environments
– Internal environment: Controllable elements
inside of an organization
– External environment:Uncontrollable
elements outside of an organization that may
affect its performance either
positively or negatively
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Internal Environment
 Controllable elements inside a firm that
influence how well the firm operates
include:
– People (human capital), physical facilities,
financial stability, corporate reputation, quality
products, strong brands, technologies, etc.
 These elements represent key
strengths and weaknesses
of the firm
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External Environment
 Elements outside the firm that may
affect it either positively or negatively:
– Economic, competitive, technological,
legal/political/ethical, and sociocultural trends
– Trends manifest as opportunities or threats
– Firm cannot directly control external factors
but can respond to them via planning
Visit Trendwatching.com
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Trends Present Opportunities
Recent sociocultural trends influencing food marketing
stem from consumer desires for low fat,
low carb, and organic foods
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SWOT Analysis
 An analysis of an organization’s
strengths (S) and weaknesses (W) and
the opportunities (O) and threats (T) in
the external environment
 SWOT enables the firm to develop
strategies that maximize strengths and
capitalize upon opportunities
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Step 3: Set Organizational
or SBU Objectives
 Organizational/SBU Objectives:
– What the firm hopes to accomplish with longrange business plan
 Need to be specific, time-bound and
measurable
– May relate to sales, profitability, product
development, market share, productivity,
ROI, customer satisfaction, or
social responsibility
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Are these good objectives?
 Increase sales by 15%
 Achieve recall by December 2010
 20% of my consumers should know about
my brand
 Within 6 months of the launch of the
product, consumers should be brand loyal
 60% of the consumers should like my brand
within six months of launch
Figure 2-2
SBUs and the Strategic Plan
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Step 4: Establish the Business
Portfolio
 Business portfolio:
– The group of different products or brands
owned by a firm and having different incomegenerating and growth capabilities
 Portfolio analysis:
– Assessing the potential of a firm’s SBUs
– Helps make decisions regarding which SBUs
should receive more or less of
the firm’s resources
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Figure 2-3
Boston Consulting Group (BCG) Matrix
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Step 5: Develop Growth Strategies
 Product-market growth matrix:
– Characterizes different growth strategies
according to type of market (new vs. existing)
and type of product (new vs. existing).
– Matrix yields four potential strategies:
•
•
•
•
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Market penetration
Product development
Market development
Diversification
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Figure 2-4
Product-Market Growth Matrix
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Marketing Planning: Step 1
 Perform a
situation
analysis
– Builds on SWOT;
identifies how
environmental
trends affect the
marketing plan
What trends impact the marketing
plan for Netflix?
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Marketing Planning: Step 2
 Set marketing objectives
– Specific to the firm’s brands
and other marketing mixrelated elements
– States what the marketing
function must accomplish if
firm is to achieve its overall
business objectives
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Marketing Planning: Step 3
 Develop marketing strategies to
achieve marketing objectives
– Select target market(s) where the firm’s
offerings are best suited
– Develop marketing mix strategies:
• Marketing mix strategies: how marketing will
accomplish its objectives in the firm’s target
market by using product, price, promotion,
and place (distribution)
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Marketing Mix Strategies
 Product strategies:
– Include product design, packaging, branding,
support services, and product variations and
features
 Pricing strategies:
– Include setting prices for final consumers,
wholesalers, and retailers based on costs,
demand, or competitors’ prices
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Marketing Mix Strategies
 Promotion strategies:
– Advertising, sales promotion, public relations,
direct marketing, personal selling
 Distribution (place) strategies:
– How, when, and where the product is
available to targeted customers
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Step 4: Implement and Control
the Marketing Plan
 Control:
– Measuring actual performance, comparing
performance to the objectives, making
adjustments
 Marketing metrics:
– Return on marketing investment (ROMI)
 Action plans:
– Support plans that guide implementation and
control of marketing strategies
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Metrics Moment
 ROMI is the revenue or
profit margin generated by
investment in a specific
marketing program
divided by the cost of that
program (expenditure) at a
given risk level, as
determined by
management
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Creating and Working with
a Marketing Plan
 Written marketing plans encourage
concrete objectives and strategies
 Operational plans focus on the day-today execution of the marketing plan
 A firm’s corporate culture determines
much of its internal environment—the
values, norms, and beliefs that
influence everyone in the firm
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Corporate Culture
The way employees dress
reflects their organization’s
corporate culture.
Think about the way people
dress at a firm that is
familiar to you. What does
the typical attire at that firm
“say” about the culture of
the organization?
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