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Canada (161,660)
BUS 343 (122)
Jason Ho (70)
Chapter 2

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Department
Business Administration
Course
BUS 343
Professor
Jason Ho
Semester
Fall

Description
CHAPTER 2: Strategic Marketing Planning Explain how businesses develop plans at different levels within the organization. BUSINESS PLANNING -an ongoing process of making decisions that guide the firm both in the short term and for the long term -identifies and builds on strengths -develops objectives before taking action 3 levels: strategic, marketing, and operational BUSINESS PLAN -includes decisions that guide the entire organization or its business units MARKETING PLAN -document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy STRATEGIC PLANNING -planning done by top level corporate mgmt. -long term planning -managerial decision process that matches an org’s resources (manufacturing facilities, financial assets, and skilled workforce) and capabilities to its market opportunities for long-term growth and survival -can occur at two different levels 1) overall corporate strategic planning, which determines the organization’s different business and product pursuits 2)??? - includes developing the mission statement, assessing the internal and external environment, setting objectives, establishing the business portfolio, and developing growth strategies strategy -what a firm is going to do to reach an objective Ex. Objective is to increase revenues by 20% next year, strategy would be to try to enter new markets with either new or existing products tactics -reflect how a strategy will be enacted or realized Ex. Mega Bloks may decide to enter the Japanese market with a product line customized for the Japanese consumer Strategic business unit (SBU) -A semi-autonomous entity that operates as an independent business with its own mission and objectives—and its own marketing strategy - each SBU is a separate profit centre within the larger corporation; that is, each SBU within the firm is responsible for its own costs, revenues, and profits FUNCTIONAL PLANNING ex. Marketing planning -A decision process that concentrates on developing detailed plans for strategies and tactics for the short term, supporting an organization’s long-term strategic plan -top functional level mgmt. (vice presidents, functional directors, chief marketing manager) - contains details regarding the marketing mix elements (product strategy, pricing strategy, channel of distribution strategy, market- ing communication strategy), while the strategic plan does not contain this level of detail -cover shorter period of time (one or two months) -ensures proper implementation and control of the marketing plan OPERATIONAL PLANNING - Planning that focuses on the day-to-day execution of the functional plans and includes detailed annual, semiannual, or quarterly plans -supervisory managers - sales managers, marketing communications managers, brand managers, and marketing research managers Process steps in Strategic Planning Step 1 : Define the Mission Step 2: Evaluate the Internal & External Environment Step 3: Set Organizational or SBU Objectives Step 4: Establish the Business Portfolio Step 5: Develop Growth Strategies Mission statement - A formal statement in an organization’s strategic plan that describes the overall purpose of the organization and what it intends to achieve in terms of its customers, products, and resources - The ideal mission statement is not too broad, too narrow, or too shortsighted - should also inspire customers and other stakeholders to want to do business with an organization Situational analysis -analyzing the organization’s external and internal environment External environment - T he uncontrollable elements outside of an organization that may affect its performance either positively or negatively -PESTO political (legal or regulatory), economic, social, technological, other -perform consumer analysis, industry analysis, competitive analysis Internal environment -The controllable elements inside an organization—including its people, its facilities, and how it does things—that influence the operations of the organization. Business portfolio -T he group of different products or brands owned by an organization and characterized by different income-generating and growth capabilities. - Having a diversified business portfolio reduces the firm’s dependence on one product line or one group of customers Portfolio analysis - A tool management uses to assess the potential of a firm’s business portfolio -helps decide which SBUs should receive more or less of the firm’s resources and which are most consistent with overall mission -ex. BCG growth–market share matrix (Refer pg. 54) BCG growth–market share matrix *helpful tool to trade off category growth and competitive position for market segments. Vertical axis: attractiveness of the market, market growth rate horizontal axis: SBU’s current strength in market through its relative market share Stars -dominant market share in high-growth markets -generate large revenues, but cost a lot to keep up with production and promotion demands -largest growth potential - aims at getting the largest share of loyal customers so that the SBU will make profits that can reallocate to other parts of the company Cash cows -dominant market share in a low-growth potential market -not much opportunity for new companies, new competitors rarely enter the market - SBU is well established and enjoys a high market share that the firm can sustain with minimal funding -firms often milk cash cows’ profits to fund other SBUs -BUT, cash cows can become a liability if firm’s goal is to increase revenue Question marks aka problem children -SBUs with low market share in fast-growth markets -suggests firm has failed to compete successfully Dogs -SBU’s no one wants -small share of a slow-growth market - businesses that offer specialized products in limited markets that are not likely to grow quickly -try to sell off dogs to companies that are able to nurture them Marketers use the product-market growth to analyze different growth strategies. vertical axis- represents opportunities for growth, either in existing markets or in new markets horizontal axis- considers whether the firm would be better off putting its resources into existing products or if it should acquire new products Market penetration strategy -growth strategy designed to increase sales of existing products to existing markets such as current customers, non-users, and users of competing brands Market development strategy -introduce existing products to new markets -ex. Expanding into new geographic area, or reaching new customer segments within existing geographic market Product development strategy -creating new products within an existing market -ex. Extend product line by creating variations of an existing product, or altering the product to provide enhanced performance ex. New beds in the Hampton Inns Diversification strategy -emphasizes new markets and new products to achieve growth -ex. McDonalds trying to attract a different market of customers by focusing on a different portfolio of food offerings, not just hamburgers Marketing Planning -uses output from strategic planning, provides context in which marketing planning is conducted -difference b/c strat. Planning and marketing planning is marketing planning uses marketing mix (4Ps) Step 1: Perform a Situational Analysis to Under -analyze marketing environment the Decision Context -identify internal or external factors that could have any implications or bearings on marketing planning -perform a SWOT analysis: identifies (S)trengths and (W)eaknesses in the org.’s internal environment and the (O)pportunities and (T)hreats in the external environment Fatal Business Flaws: Factors to look for in SWOT analysis, 6 reasons why businesses fail Failure to innovate -no differentiation -don’t create offers that are superior to those already available -unable to create and sustain a competitive advantage -
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