Explain companywide strategic planning and Explain marketing’s role in strategic planning Describe the elements of a customer-driven List the marketing management functions, Defining the company mission. Setting company objectives and Designing the busine

Copyright 2007, Prentice Hall, Inc. 2-2 Roadmap: Previewing the Concepts

1. Explain companywide strategic planning and

its four steps. 2. Discuss how to design business portfolios and growth strategies.

3. Explain marketing’s role in strategic planning

and how marketing works with its partners to create and deliver customer value.

4. Describe the elements of a customer-driven

marketing strategy and mix, and the forces that influence it.

5. List the marketing management functions,

including the elements of a marketing plan. Copyright 2007, Prentice Ha ll, Inc. 2-3 Early Days  Characterized by “seat of the pants” management.  Innovative sneaker tread drove early success.  Technological product superiority, big-name endorsements and “Just Do It” ads revolutionized sport marketing.  1980s – 1990s: Nike leverages brand strength into new product areas. NIKE – Strategy: Then Now NIKE – Strategy: Then Now Case Study Case Study Late 1990s - Present  Changes in consumer shoe preference, declining product innovation, and negative PR plague Nike.  Anti-establishment image no longer works: brand backlash occurs.  Strategic planning is embraced and Nike focuses on innovation and exploring new market opportunities.  Nike has global success. Copyright 2007, Prentice Ha ll, Inc. 2-4 Strategic Planning  The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. Copyright 2007, Prentice Ha ll, Inc. 2-5 Steps in Strategic Planning

1. Defining the company mission.

2. Setting company objectives and

goals.

3. Designing the business portfolio.

4. Planning marketing and other

functional strategies. Copyright 2007, Prentice Ha ll, Inc. 2-6 The Mission Statement  A statement of the organization’s purpose. – What it wants to accomplish in the larger environment.  Should be market oriented and defined in terms of customer needs. Copyright 2007, Prentice Ha ll, Inc. 2-7 The Mission Statement  Questions the mission statement should answer include: – What is our business? – Who is our customer? – What do consumers value? – What should our business be? Copyright 2007, Prentice Ha ll, Inc. 2-8 The Mission Statement:  Should be realistic.  Should be specific.  Should fit the market environment.  Should be based on distinctive competencies.  Should be motivating. Copyright 2007, Prentice Ha ll, Inc. 2-9 Designing the Business Portfolio  The business portfolio is the collection of businesses and products that make up the company.  The company must: – analyze its current business portfolio or Strategic Business Units SBUs, – decide which SBUs should receive more, less, or no investment, – develop growth strategies for growth or downsizing. Copyright 2007, Prentice Ha ll, Inc. 2-10 Portfolio Analysis  An evaluation of the products and business making up the company.  Resources are directed to more profitable businesses and weaker ones are phased down or dropped. Copyright 2007, Prentice Ha ll, Inc. 2-11 Strategic Business Unit SBU  A unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses.  Can be a company division, a product line within a division, or sometimes a single product or brand. Copyright 2007, Prentice Ha ll, Inc. 2-12 BCG Growth-Share Matrix  Stars – High share of low growth market. – Build into cash cow via investment.  Cash Cows – High share of low growth market. – Maintain or harvest for cash to build STARS.  Question Marks – Low share of high growth market. – Build into STAR via investment if warranted, or reallocate financing and let slip into DOG status.  Dogs – Low share of low growth market. Maintain or divest. Copyright 2007, Prentice Ha ll, Inc. 2-13 Problems with Matrix Approaches  Can be difficult, time consuming, and costly to implement.  Difficult to define SBUs and measure market share and growth rate.  Focus is on current businesses; gives little help with future planning.  Can place too much emphasis on growth.  Can lead to poorly planned diversification. Copyright 2007, Prentice Ha ll, Inc. 2-14 ProductMarket Expansion Grid  Market Penetration – Existing markets, existing products  Market Development – New markets, existing products  Product Development – Existing markets, new products  Diversification – New products, new markets Copyright 2007, Prentice Ha ll, Inc. 2-15 Planning Marketing  Marketing plays a key role in strategic planning: – Provides a guiding philosophy. • The Marketing Concept – Provides inputs to strategic planners. – Designs strategies to reach objectives. Copyright 2007, Prentice Ha ll, Inc. 2-16 Value Delivery Network  Components include: – Company’s value chain • Each department is a link – Distributors – Suppliers – Customers  Improved performance in delivery value to customers is the goal. Copyright 2007, Prentice Ha ll, Inc. 2-17 Market Segmentation  The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs.  A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. Copyright 2007, Prentice Ha ll, Inc. 2-18 Target Marketing  Involves evaluating each market segment’s attractiveness and selecting one or more segments to enter.  Target segments that can sustain profitability. Copyright 2007, Prentice Ha ll, Inc. 2-19 Market Positioning  Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.  Begins with differentiating the company’s marketing offer so it gives consumers more value. Copyright 2007, Prentice Ha ll, Inc. 2-20 The Marketing Mix  The set of controllable, tactical marketing tools that the firm blends to produce the response it wants in the target market. – Product – Price – Place distribution – Promotion Copyright 2007, Prentice Ha ll, Inc. 2-21 The Marketing Mix  Product: – Variety, quality, design, features, brand name, packaging and services.  Promotion: – Advertising, sales promotion, public relations and personal selling.  Place: – Channels, coverage, logistics, locations, transportation, assortments and inventory.  Price: – List price, discounts, allowances, payment period and credit terms. Copyright 2007, Prentice Ha ll, Inc. 2-22  4 Ps – Seller’s View – Product – Price – Place – Promotion  4 Cs – Buyer’s View – Customer Solution – Customer Cost – Convenience – Communication Copyright 2007, Prentice Ha ll, Inc. 2-23 Managing the Marketing Effort  Four marketing management functions: – Marketing Analysis • SWOT analysis is key. – Marketing Planning • Create brand marketing plan. – Marketing Implementation • Determine who, where, when, and how. – Marketing Control • Evaluate results, take corrective action. Copyright 2007, Prentice Ha ll, Inc. 2-24 SWOT Analysis  Strengths: Internal capabilities that may help a company reach its objectives.  Weaknesses: Internal limitations that may interfere with a company’s ability to achieve its objectives. Copyright 2007, Prentice Ha ll, Inc. 2-25 SWOT Analysis  Opportunities: External factors that the company may be able to exploit to its advantage.  Threats: Current and emerging external factors that may challenge the company’s performance. Copyright 2007, Prentice Ha ll, Inc. 2-26 Brand Product Marketing Plan

1. Executive summary