CHAPTER 2- Strategic Market Planning
- experience the power of effective business planning and lay the groundwork for
your own capability
-sets the stages for your ability to do great market planning its about the process
of planning and marketing planning template that shows you step by step how to
buold a plan.
-this chapters helps you know where you want the firm to go, how it will get there
or even if it is on the right or wrong track right now.
Business Planning: plan well and prosper
Careful planning enables firm to speak in a clear voice in the marketplace so that
customers understand what the firm is and what it has to offer that competitiors
don’t have , also how to create values for customers, clients, partners and society
For a new firm , planning for the future is key to prosperity. A lack of planning can
be fatal for both large and small business so better be prepared.
Business planning: an ongoing process of making decision that guide the firm both
in the short term and for the long term.
-planning identify and build on a firm’s strength , and help managers at all level
make informed decisions in a changing business environment.
Planning means that an organization develops objective before it takes actions.
Business plan : A plan that includes the decisions that guide the entire
organization Marketing plan: a document that describe the marketing environment outlines
the marketing objectives and strategy, and identifies who will be responsible for
carrying out each part of the marketing strategy
Ethics is up front in marketing planning:
When major companies defraud the public everyone suffers. People lose their
jobs , stockholders lose their investments and so on.
Levels of Planning
Business planning occurs on annual basis at three levels (see Figure 2.1 pg.48
IMPORTANT explanations of each is down)
1-strategic planning: A managerial decision process that matches and
organization’s resources and capabilities to its market opportunities for long-term
growth and survival.
Strategy: what a firm is going to do to achieve an objective
Tactics: how a strategy is going to be enacted.
In large firms strategic planning can occur at two different levels. First is overall
corporate strategic planning . second the individual business units do strategic
Strategic business unit (SBU): A semi- autonomous entity that operates as an
independent business with its own mission and objectives- andits own marketing
2-Functional planning ( in marketing department called 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.
What is sometimes confusing about strategies and tactics is that a tactic at the
organization (strategic plan) level become, or is reflected in, the strategy at the functional level, and functional-level tactic become, or are reflected, in
3-operational planning: planning that focuses on the day-to-day execution of the
functional plans and included detailed annual, semiannual, or quarterly plans.
All business planning is an integrated activity that must work together for the
benefit of the whole.
Strategic Planning: Guiding the Business: (see figure 2.2 pg. 51)
Step 1: Define the Mission
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.
A mission that is too broad will not provide adequate focus for the organizations.
a mission that is too narrow may inhibit managers’ ability to visualize possible
growth opportunities. It should inspire customers and other stakeholders to want
to do business with an organization.
Step 2: Evaluate the internal & external environment ( see figure 2.3 page 52)
This process is referred to as situational analysis, environmental analysis, or
sometimes a business review
External Environment: The uncontrollable elements outside of an
organization that may affect its performance either positively or negatively.
These include macro environment factors like regulatory or technology
factors, consumer behavior trends, industry factors such as industry
concentration, and competitive factors such as the number and
sophistication of competitors. 4 main categories for consideration. Looking for trends or issues in the macro or
general environments that might have positive or negative effect on your
1-PESTO: Political, economic, social or cultural, technological or other trends that
might impact a particular industry and business.
2- Detailed consumer analysis. This is where u would look for trends, issues or
considerations with respect to changing consumers segments, segments profile
3- Industry analysis. Include factors like industry size and competitiveness,
industry structure, dynamics and so on
4- Competitive analysis- identifying the key competitors, understanding their
strategies and strengths and weakness and anticipating likely future strategic
Internal Environment: the controllable elements inside an organization-
including its people (employees appropriate skills and abilities), its
facilities(it creates customer value as can its level of financial stability), and
how it does things- that influence the operations of the organization.
Marketers need to understand:
1-The current strategy of the organization and assess how well that strategy is
2- The recourses and competencies of the organization (its technology,
intellectual capital, and other assets).
3- The organizations of the firm- its structure, culture and systems.
4- The beliefs, values and preferences of senior management are an organization
need to consider organization – appropriate alternatives in making key marketing
decision. Step 3: Set Organizational or SBU Objectives:
Objective are a direct outgrowth of the mission statement and broadly identify
what the firm hopes to accomplish within the general time frame of the firm’s
long-range business plan.
To be effective, objectives need to be Specific, measurable (often stated in
numerical terms) and attainable. Objectives may relate to revenues and sales,
profitability, product development, customers relations and so on.
Step 4: Establish the Business Portfolio
See figure 2.4 illustrates each SBU has its own focus within the firm’s objective
overall strategic plan and each has its own target market and strategies for
reaching its objective. Also Used to evaluate product lines in order to make
important decisions about where to invest for future growth.
Stars: generate large revenue and require large amount of fund. Design
strategies to max. market share
Cash cow: less opportunity for new companies, competitors don’t enter the
market, but sustain with minimal funding.
Question marks: pump more money into marketing the product and hope
that markets share will improve.
Dogs: large firms may sell of their dogs to smaller firms that may be able to
nurture them or take the SBU’ products off the market.
Business portfolio: this group of different products or brands owned by an
organization and characterized by different income-generating and growth
Portfolio analysis: A tool management uses to assess the potential of a firm’s
business portfolio. Step 5: Develop Growth Strategies:
See figure 2.5 pg 56 , analyze different growth strategies
Marketing penetration strategies: Growth strategies designed to increase
sales of existing products to current customer, nonusers, and users of
competitive brands in served markets.* like advertise new uses for soup in
lunches and dinners
Marketing Development Strategies: Growth Strategies that introduce
existing product to new markets. * expanding into a new geographic area
or it may mean reaching customers segments within an existing geographic
Product development strategies: Growth strategies that introduce existing
products to new markets. *Extending the firm’s product line and
developing new variations of the item, or improving performance.
Diversification strategies: Growth strategies that emphasize both new
products and new markets.* through successful strategic planning.
The Marketing Planning Process:
Uses the output of the strategic planning process as an input
Focus much of their planning efforts on issues related to marketing mix.
Solid planning means the firm has viable