The document provides an overview of strategic marketing planning concepts. It discusses strategic planning processes including defining an organizational mission, setting objectives, and designing business portfolios. Methods for analyzing business portfolios such as the BCG matrix and GE planning grid are also outlined. The document then covers growth strategies like market penetration and product development as well as competitive strategies like market leadership. Finally, it describes key components of a marketing plan such as situation analysis, goals and objectives, marketing strategies, implementation, and evaluation.

1. CHAPTER 3
STRATEGIC MARKETING PLANNING

2. Strategic Planning
– The process of establishing an organizational
mission and formulating goals, corporate strategy,
marketing objectives, marketing strategy, and a
marketing plan

3. Strategic Planning Process
 involves:
 Defining a Mission
 Setting Company Objectives
 Designing a Business Portfolio
 Planning Strategies

4. Establishing an Organizational Mission
Mission Statement
 Statement of an organization’s purpose
 Reveal what an organization wants to be and whom
it wants to serve
 Mission statement answers two questions:
• Who are our customers?
• What is our core
competency?

5. Mission Statements…Cont’d
• Enduring statement of purpose
• Distinguishes one firm from another
• Declares the firm’s reason for being
• Essential for effectively establishing
objectives and formulating strategies

6. Mission & Customer Orientation
• An Effective Mission Statement --
– Anticipates customer needs
– Identifies customer needs
– Provides product/service to satisfy needs

7. Designing the Business Portfolio
 Collection of business to be shown to
potential customers
 The Best portfolio is the one that best fits the
company’s strengths and weaknesses to the
opportunities in the environment.
 The company must:
• Analyze its current business portfolio or
strategic business units (SBU’s)
• Decide which SBU’s should receive more, less,
or no investment
• Develop growth strategies for adding new
products or businesses to the portfolio

8. Portfolio Analysis
 It is evaluation of each strategic
business unit or product
 Portfolio Analysis techniques:
• BCG growth-share matrix
• GE nine-cell planning grid

9. The BCG Matrix (Boston Consultancy Group)
 It is also called growth share matrix
 Is a portfolio planning method that evaluates a company’s
products in terms of their market growth rate and relative share.
• Market share
– The percentage of a market that actually buys a specific product
from a particular company
– Products are classified as: stars, cash cows, question marks and dogs
– Marketing efforts, or investments, will change, depending on
the product’s classification

10. The BCG Matrix

11. Question Marks
 High growth, low share
 Build into Stars/ phase out
 Requires cash to hold
market share
 Represents a high-risk
Stars
 High growth & dominant
market share
 Profit potential
 May need heavy
investment to grow
Cash Cows
 Low growth, high share
 Established, successful SBU’s
 Produces cash
 Generates surplus resources
for allocation to other SBUs
Dogs
•Low growth & share
•Low profit potential
•Has diminished prospects and
represents a drain on the portfolio
Relative Market Share
High Low
Market
Growth
Rate
Low
High

12. The BCG Matrix
Problems with Matrix Approaches
– Difficulty in defining SBUs and measuring market
share and growth
– Time consuming
– Expensive
– Focus on current businesses, not future planning

13. GE Matrix
 A more advanced model developed by General Electric and
expansion of the BCG matrix
 It evaluate SBU by measuring market attractiveness and
business strength
– Market attractiveness is a composite measure of the
potential for sales and profits in a particular market
segment
– Business strength is the strength of companies’ offering
relative to other companies’ products

14. GE Matrix
It consider a number of factors in assessing the
industry attractiveness and business strength.
Market Attractiveness
• Growth
• Diversity
• Competitive
• Structure Change
• Technology Change
• Social Environment
Business Strength
• Size of Market & Share
• Company Growth Rate
• Profit
• Margins
• Technology Platform
• Image
• People

15. GE NINE-CELL PLANNING GRID
• GE grid considers three degrees of a dimensions- high, medium and low for
attractive and business strength
• It has nine cells w/c can be grouped in to three broad cells
 Green -Insert/ Expand
 Yellow -Select/ Earn
 Light Green-Harvest/ Divest
Attractiveness

16. Invest/ Expand-Green
 In the extreme left both high and this is an ideal situation in growth.
 In high attractiveness and average strength, an organization may grow
 At medium attractiveness and strong strength business can generate
competitive advantage
Attractiveness

17. Select/Earn- Yellow
 Cell with high attractiveness
and weak business strength
shows scope to earn in future,
 Cell with medium strength and
average attractiveness shows
earn profits with present level
capacity.
 While strong strength and low
attractiveness leaves no or
very low scope of earnings.

18. Harvest/ Divest-Light Green
 Cells with average strength
and low attractiveness &
weak strength and low
attractiveness are fit for
harvesting/reduction or
termination of investment
 while cell with medium
attractiveness and weak
strength suggests slow
divesting/sell off or
withdraw

19. Planning Strategies
a) Planning growth strategies
b) Planning competitive strategies

20. Planning growth strategies

21. Planning the Growth of Business
• Commonly used growth strategies include
 Intensive Growth Strategies
 Integrative Growth Strategies and
 Diversification Strategies

22. A) Intensive Growth Strategies
• A business that wants to
increase sales to its target
customers might use
intensive growth strategies
• strategies that take
advantage of an opportunity
within a current market using:
•Market penetration
•Market development
•Product development

23. Intensive strategies … Cont’d
.
1. Market
Penetration
Existing
Markets
New
Markets 2. Market
Development
3. Product
Development
4. Diversification
Existing
Products
New
Products

24. Market Penetration
• Market penetration
Involves getting
customers to use
products more
frequently, attracting
competitors’ customers,
and finding people in
present market not
using your products.
• Market penetration
 An attempt to increase
sales in a business’s
current market
 Market share
expansion

25. Market Development
• Franchising is one way
to grow a business
through market
development.
• Market development
 An attempt by a
business to reach new
locations for its
products

26. Product Development
Product development is the introduction of new
or improved products to the marketplace.
In most industries, companies must continually
develop new products to keep customers
interested.

27. New product development process
1. Idea generation
2. Screening of ideas
3. Initial concept testing
4. Business analysis
5. Prototype design
6. Market testing
7. Commercialization
8. Monitoring reaction

28. B) Integrative Growth Strategies
• When a product
manufacturer opens
retail stores it is
employing integrative
growth strategies.
• Integrative growth
strategies
 Growth strategies that
allow a company to
expand within the
industry by growing
• Vertically or
• Horizontally

29. Vertical Integration
• A business can use
vertical integration
suppliers or distributors
of its products.
• Merging of companies
that are in the same
distribution chain of a
product, either by
 Acquiring suppliers
upstream in the
distribution channel or
 Acquiring distribution
outlets downstream in
the channel

30. Horizontal Integration
• Horizontal integration
is buying competitors.
• Horizontal integration
 Increasing a business’s
market share and
expanding by buying
up competitors

31. C) Diversification Growth Strategies
• Businesses often use
diversification growth
strategies when they
have exhausted
opportunities within
their present industry.
 A growth strategy that
involves investing in
products/businesses
that are different from a
company’s own
products using
• Concentric
• Horizontal or
• Conglomerate
diversification

32. Concentric Diversification
• A bakery owner who
purchases a restaurant
to showcase his or her
baked goods is using a
concentric
diversification growth
strategy
• Concentric
diversification a
diversification growth
strategy that involves
finding new products or
businesses that are
technologically
compatible with a
company’s products or
business

33. Horizontal Diversification
• If a business chooses
horizontal
diversification, it looks
for a product or service
that it can sell to its
present customers.
• Horizontal
diversification a
diversification growth
strategy that involves
seeking products that
are technologically
unrelated to a
company’s own
products or business

34. Conglomerate Diversification
• A company may use
conglomerate
diversification to try to
cut costs or provide
convenience for its
customers.
• conglomerate
diversification a
diversification growth
strategy in which a
business seeks products
or businesses that are
totally unrelated to its
own products or
business

35. Planning Competitive Strategy

36. Competitive Strategy
• Marketing Strategies for Competitive Advantage
• Market-Leader
• Market Challenger
• Market-Follower
• Market-Nicher

37. Competitive Strategy
• Market Leader
 Expanding the total
demand
• Finding new users
• Discovering and
promoting new
product uses
• Encouraging greater
product usage
 Protecting market share
• Continuous innovation
 Expanding market share
 Profitability rises with
market share

38. Competitive Strategy….con.d
• Market Challenger
 Option 1: challenge the
market leader
 High-risk but high-gain
 Option 2: challenge firms
of the same size, smaller
size or challenge regional
or local firms
 Full frontal vs. indirect
attacks

39. Competitive Strategy…cont’d
• Market Follower
 Follow the market leader
• Focus is on improving
profit instead of
market share
 Many advantages:
• Learn from the market
leader’s experience
• Copy or improve on
the leader’s offerings
• Strong profitability

40. Competitive Strategy…cont’d
• Market Nicher
 Serving market niches
means targeting
subsegments
 Good strategy for small
firms with limited
resources
 Specialization is key
 By market, customer,
product, or
marketing mix lines

41. Porter competitive Strategies
 Overall cost leadership
 Lowest production and distribution costs
 Differentiation
Creating a highly differentiated product
line and marketing program
 Focus
 Effort is focused on serving
a few market segments

42. Marketing Plan
• A written document that specifies the
activities to be performed to implement and
control the organization’s marketing activities.

43. Key components of marketing plan
1. Mission Statement
2. Executive Summary
3. Situation or S.W.O.T. Analysis
4. Marketing Goals / Objectives
5. Market Research / Marketing
Strategies
6. Implementation
7. Evaluation and Control

44. The Mission Statement
.

45. The Executive Summary
.
Executive Summary:
Provides an overview of
the complete plan
The executive summary
highlights key information
within the document

46. The Situation Analysis
• The situation analysis(referred to
as SWOT)
 Provides information that is helpful
in matching the organization’s
resources and capabilities to the
competitive environment

47. SWOT analysis
.
Strengths
Internal capabilities that
can help the organization
achieve its objectives
Weaknesses
Internal factors that can
prevent the organization
from achieving its
objectives
Opportunities
External circumstances
that may be exploited for
higher performance
Threats
External circumstances
that might hinder
performance

48. The Internal factors
 Mission
 Resources
 Offerings
 Previous results
 Keys to success, warning signs
 Business relationships

49. The External factors
 Demographic trends
 Economic trends
 Ecological trends
 Technological trends
 Political-legal trends
 Social-cultural trends
 Competitors

50. Four-Cell SWOT Matrix
.

51. Marketing Goals & Objectives
• Goals and objectives identify what the
company hopes to achieve with the
marketing plan and a timeline for which the
plan is to be carried out
• Effective objectives follow the S.M.A.R.T
criteria
 Specific
 Measurable
 Action-oriented
 Realistic
 Time bound

52. Types of marketing plan objectives
 Marketing objectives
• To manage key relationships/activities
 Financial objectives
• To attain certain financial results
 Societal objectives
• To achieve social responsibility results

53. Marketing strategies
 A plan of action for identifying and analyzing
a target market and developing a marketing
mix to meet the needs of that market.
 It involves analyzing
• Market segmentation
• Market targeting and
• Positioning

54. Applying market segmentation
Market segmentation
 This is the process of dividing the total market
for a good or service into several smaller,
internally similar (or homogeneous) groups.
 All members in a group have similar
factors that influence their demand for
the particular product.

55. Variables for consumer market segmentation
.
Demographic
Age, gender, household size,
family status, income, race,
occupation, religion, class,
nationality
Geographic
Location (country, region, state,
city, neighborhood, postal code),
distance, climate
Psychographic
Lifestyle, activities, interests,
personality characteristics
Behavioral/Attitudinal
Benefits perceived/expected,
loyalty, usage occasion/rate, user
status, price sensitivity, product
or brand attitude

56. No Market Segmentation
.

57. Segmented by Gender
.

58. Segmented by Age
.

59. Market Segmentation
Why Segment?:
• Meet consumer needs more precisely
• Increase profits
• Segment leadership
• Retain customers
• Focus marketing
communications

60. Segment Coverage strategies
 Concentrated marketing-Target only one
segment
 Undifferentiated marketing-Target all
segments with same strategy
 Differentiated marketing-Use a separate
strategy to target each segment

62. Positioning
 Customers’ image or perception of a particular
brand or company, relative to others in the
same category
 How a business wants its products or services
to be perceived by the consumer
 Positioning is assessed:
• In relation to a competitor.
• According to a product class or attribute.
• By price and quality.

63. Implementation
• Implementation refers to the
process of putting the marketing
plan into action

64. Evaluation and Control
• The evaluation phase determines
whether the plan achieved the
desired results
• The controlling process refers to the
adjustments required to achieve
desired results where initial efforts
did not already succeed

65. Thank for your Attention!