Chapter 2 Class Notes
Chapter 2 Notes Contents
It is necessary to discuss strategic market planning and marketing early in the course. A strategic market plan gives direction to a firm's efforts and better enables it to understand the dimensions of marketing research, consumer analysis, and product, distribution, promotion, and price planning, which will be discussed in later classes.
We will look at an overview of the strategic marketing process including the development of:
The process of strategic market planning yeilds a marketing strategy(s) that is the framework and the development of the marketing plan.
Developing a marketing plan is your group project assignment. A marketing plan deals primarily with implementing the market strategy as it relates to target market(s) and the marketing mix .
Strategic Market Planning
A Strategic marketing plan is an outline of the methods and resources required to achieve organizational goals within a specific target market(s).
"Describes the direction [an organization] will pursue within its chosen environment and guides the allocation of resources and effort" - Peter Bennett, Dictionary of Marketing Terms, AMA 1988
Strategic planning requires a general marketing orientation rather than a narrow functional orientation.
All functional areas must include marketing and must be coordinated to reach organizational goals. It is a heirarchal process, from company wide to marketing specific. (Marketing concept, implemented from top down.)
Company wide, SBU specific
A firm can be broken down into several strategic business units. Each SBU is a division, product line, or other profit center within the parent company.
An SBU has its own strategic plan and can be considered a seperate business entity competing with other SBU's for corporate resources.For example Pepsico Companies SBUs include:
- Taco Bell
- Pizza Hut
- Mountain Dew
- Lipton Tea Brands
- Frito Lay
- Direction and better enables the company to understand mkt. function dimensions
- Makes sure that each division has clear integrated goals
- Different functional areas are encouraged to coordinate
- Assesses SW & OT
- Assesses alternative actions
- It is a basis for allocating company resources
- A procedure to assess company performance
although this differs from one organization to another:
- Develop a SWOT analysis
- Develop Mission Statement that evolves from the SWOT analysis
- Develop Corporate Objectives that are consistent with the organization's mission statement.
- Develop corporate strategy to achieve the organization's objectives. [if the organization is made up of more than one SBU, then follow loop again for each SBU, then proceed]
- Marketing (and other functional objectives) must be designed to achieve the corporate objectives
- Marketing Strategy, designed to achieve the marketing objectives.
A firm can then assess its opportunities and develop a corporate strategy. Marketing objectives must be designed so that they can be accomplished through efficient use of the firms resources.
Corporate strategy is concerned with issues such as diversification, competition, differentiation, interrelationships between business units and environmental issues. It attempts to match the resources of the organization with the opportunities and risks of the environment (SWOT). Corporate strategy is also concerned with defining the scope and roles of the SBU's of the firm so that they are coordinated to reach the ends desired.
SWOT AnalysisA SWOT Analysis examines the companies:
- S trengths. Internal
- W eaknesses. Internal
- O pportunites. External
- T hreats. External
Handout Visioning Missions becomes.
Reason to be? Invisible hand etc.
Product Terms. outdated
Technology Terms. outdated
Market Terms. keep in touch with consumer's needs
i.e. AT&T is in the communications business not the telephone business.
Visa. allows customers to exchange values. not credit cards
3M solves problems by putting innovation to work.
Should not be too narrow. or. too broad
Should be based on distinctive competancies of the corporation, determined from the SWOT analysis
Goals must specify the end results that are desired, that are measurable and within a particular time frame.Source: www.udel.edu