1. CHAPTER 2 Strategic Planning for Competitive Advantage Designed by Eric Brengle B-books, Ltd Prepared by Deborah Baker Texas Christian University Introduction to Marketing McDaniel, Lamb, Hair 9

2. Learning Outcomes Understand the importance of strategic marketing and know a basic outline for a marketing plan Develop an appropriate business mission statement Describe the criteria for stating good marketing objectives LO I LO 2 LO 3

3. Learning Outcomes Explain the components of a situation analysis Identify sources of competitive advantage Identify strategic alternatives Discuss target market strategies LO 5 LO 6 LO 7 LO 4

4. Learning Outcomes Describe the elements of the marketing mix Explain why implementation, evaluation, and control of the marketing plan are necessary Identify several techniques that help make strategic planning effective LO 9 LO IO LO 8

5. The Nature of Strategic Planning Understand the importance of strategic marketing and know a basic outline for a marketing plan LO I

6. Strategic Planning LO I The managerial process of creating and maintaining a fit between the organization’s objectives and resources and evolving market opportunities. The goal is long-term profitability and growth. Strategic Planning

7. Strategic Marketing Management LO I What is the organization’s main activity? How will it reach its goals? THE ANSWER IS A MARKETING PLAN.

8. Strategic Planning LO I Marketing Plan A written document that acts as a guidebook of marketing activities for the marketing manager.

10. Marketing Plan Elements LO I Implementation Evaluation Control Promotion Marketing Strategy Product Distribution Price Marketing Mix Business Mission Statement Objectives Situation or SWOT Analysis Target Market Strategy

11. REVIEW LEARNING OUTCOME The Importance of Strategic Marketing LO I What Why How Strategic Planning Long-term profitability and growth Write a marketing plan Online http://www.dmusic.com

12. Defining the Business Mission Develop an appropriate business mission statement LO 2

14. AMA’s Mission Statement LO 2

16. REVIEW LEARNING OUTCOME Business Mission Statement LO 2 marketing myopia no direction focus on markets served and benefits customers seek Q: What business are we in? A: Business mission statement Too narrow Too broad Just right marketing myopia no direction focus on markets served and benefits customers seek

17. Setting Marketing Plan Objectives Describe the criteria for stating good marketing objectives LO 3

18. Marketing Objective LO 3 A statement of what is to be accomplished through marketing activities. Marketing Objective

20. REVIEW LEARNING OUTCOME Criteria for Good Marketing Objectives LO 3 Realistic, measurable, and time-specific objectives consistent with the firm’s objectives: 1. Communicate marketing management philosophy 2. Provide management direction 3. Motivate employees 4. Force executives to think clearly 5. Allow for better evaluation of results

21. Conducting a Situation Analysis Explain the components of a situation analysis LO 4

22. SWOT Analysis LO 4 Identifying internal strengths (S) and weaknesses (W) and also examining external opportunities (O) and threats (T) SWOT Analysis

23. SWOT Analysis LO 4 ©South-Western College Publishing S W O T Things the company does well. Things the company does not do well. Conditions in the external environment that favor strengths. Conditions in the external environment that do not relate to existing strengths or favor areas of current weakness. Internal External

24. Biz Flix U-571 LO 4

25. Environmental Scanning LO 4 The collection and interpretation of information about forces, events, and relationships in the external environment that may affect the future of the organization or the implementation of the marketing plan. Environmental Scanning

28. Competitive Advantage Identify sources of competitive advantage LO 5

29. Competitive Advantage LO 5 The set of unique features of a company and its products that are perceived by the target market as significant and superior to the competition. Competitive Advantage

30. Competitive Advantage LO 5 Niche Strategies Cost Product/Service Differentiation Types of Competitive Advantage

31. Cost Competitive Advantage LO 5 Cost Competitive Advantage Being the low-cost competitor in an industry while maintaining satisfactory profit margins.

33. Sources of Cost Reduction LO 5 Experience Curves Efficient Labor No-frills Products Government Subsidies Product Design Reengineering Production Innovations New Service Delivery Methods

34. Product/Service Differentiation LO 5 Product / Service Differentiation Competitive Advantage The provision of something that is unique and valuable to buyers beyond simply offering a lower price than the competition’s.

36. Niche Competitive Advantage LO 5 Niche Competitive Advantage The advantage achieved when a firm seeks to target and effectively serve a small segment of the market.

38. Sources of Sustainable Competitive Advantage LO 5 Patents Copyrights Locations Equipment Technology Customer Service Promotion Skills and Assets of an Organization

39. REVIEW LEARNING OUTCOME Sources of Competitive Advantage LO 5 Sources of Competitive Advantage Cost $ Product/Service Differentiation A vs. B vs. C Niche Strategies

40. Strategic Directions Identify strategic alternatives LO 6

41. Strategic Alternatives LO 6 Market Penetration Market Development Product Development Diversification Increase market share among existing customers Attract new customers to existing products Introduce new products into new markets Create new products for present markets

42. Ansoff’s Strategic Opportunity Matrix LO 6 Present Product New Product New Market Market Penetration Market Development Product Development Diversification Present Market http://www.pg.com Online

43. Portfolio Matrix LO 6 Stars Cash Cows Problem Children Dogs

44. Portfolio Matrix Strategies LO 6 Build Hold Harvest Divest

45. REVIEW LEARNING OUTCOME Strategic Alternatives LO 6 Identify strategic alternatives Diversification = Product development = products Market development = customers Market penetration = share new products + new markets

46. Describing the Target Market Discuss target market strategies LO 7

47. Marketing Strategy LO 7 Marketing Strategy The activities of selecting and describing one or more target markets and developing and maintaining a market mix that will produce mutually satisfying exchanges with target markets.

49. Target Market Strategy LO 7 Appeal to the entire market with one marketing mix Concentrate on one marketing segment Appeal to multiple markets with multiple marketing mixes

50. REVIEW LEARNING OUTCOME Target Market Strategies LO 7 Entire Market Multiple Markets Single Market Target Market Options

51. The Marketing Mix Describe the elements of the marketing mix LO 8

52. The Marketing Mix LO 8 Marketing Mix A unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market.

53. Marketing Mix: The “Four Ps” LO 8 Price Promotion Place Product

58. REVIEW LEARNING OUTCOME Elements of the Marketing Mix LO 8

59. Following Up on the Marketing Plan Explain why implementation, evaluation, and control of the marketing plan are necessary LO 9

62. Effective Strategic Planning Identify several techniques that help make strategic planning effective LO IO

63. REVIEW LEARNING OUTCOME LO IO Techniques for Effective Strategic Planning Effective Strategic Planning Continual attention Creativity Management commitment