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Chapter 2

Chapter 2 Textbook Notes.docx

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McMaster University
Stephen Charko

Chapter 2: Strategic Planning in Contemporary Marketing Marketing Planning… •Planning: process of anticipating future events and conditions and of determining the best way to achieve organizational goals. --> continuous process; creates a blueprint and checkpoint for everyone in the organization. •Marketing Planning: implementing planning activities devoted to achieving marketing objectives --> many planning activities take place over the internet; important trend centres on "relationship marketing" •Strategic Planning: process of determining an organization's primary objectives and adopting courses of action that will achieve these objectives o Includes the allocation of resources o Provides long-term direction for its decision makers •Tactical Planning: planning that guides the implementation of activities specified in the strategic plan o Address shorter-term actions that focus on current and near-future activities •Planning is a major responsibility for managers at every level o Top Management focuses on long range strategic planning; total budget, fundamental strategies, organization-wide objectives o Middle Management focus on tactical planning; quarterly and semi-annual plans, divisional budgets, policies and procedures. o Lower Management (supervisors) develop specific programs to meet goals in their areas of responsibility in the form of operational planning; daily & weekly plans, unit budgets, departmental rules and procedures Steps in the Marketing Planning Process… •Steps in the Marketing Planning Process: o Corporate level 1. Define the Mission of the Organization  Mission: essential purpose that differentiates one company from others • Mission Statement specifies the organization's overall goals and operational scope and provides general guidelines for future management actions • Tim Hortons: "Always Fresh. Always." 1. Determine Organizational Objectives A company lays out its basic objectives or goals in its complete  mission statement 1. Assess Organizational Resources and Evaluate Environmental Risks and Opportunities  Involves a SWOT analysis  Resources (Production, marketing, finance, technology, employees)  Strengths help planners: set objectives, develop plans, take advantage of marketing opportunities o Business Unit Level 1. Formulate Strategy  Marketing Strategy: overall company-wide program for selecting a particular target market and then satisfying consumers in that market through the marketing mix • Marketing Mix is: i. Product i. Distribution i. Promotion i. Price 1. Implement Strategy through Operating Plans  Put plan into action to meet goals and objectives 1. Monitor and Adapt Strategies When Necessary Based on Feedback  Sometimes strategies need to be modified if the product's or company's actual performance is not in line with expected results Successful Strategies: Tools and Techniques… • Porter's Five Forces Model: model developed by strategy expert Michael Porter, which identifies five competitive forces that influence planning strategies: 1. Threat of new entrants 1. Threat of substitute products 1. Rivalry among competitors 1. Bargaining power of buyers 1. Bargaining power of suppliers o Potential new entrants are sometimes blocked by these forces o The internet has reduced these barriers to market entry in many industries • First Mover and Second Mover Strategies o First Mover Strategy: theory advocating that the company that is first to offer a product in a marketplace will be the long-term market winner o Second Mover Strategy: theory that advocates observing closely the innovations of first movers and then introducing new products that improve on the original offering to gain advantage in the marketplace • SWOT Analysis: analysis that helps planners compare internal organizational strengths and weaknesses with external opportunities and threats • • Strategic Windows: limited periods which the key requirements for a market and the particular competencies of a firm best fit together o
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