Chapter 1

Strategic
Planning and
the Marketing
Management
Process
McGraw-Hill/Irwin

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Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
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The Marketing Concept

An organization should seek to make a
profit by serving the needs of customer
groups
The purpose is to rivet the attention of
marketing managers on customer orientation,
rather than on product orientation or selling
orientation

The principal task of the marketing

function - Find effective and efficient
means of making the business do what
suits the interests of customers
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Figure 1.1 - Major Types of

Marketing

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Strategic Planning and

Marketing Management
Strategic planning:
All the activities that lead to the
development of a clear organizational
mission
Organizational objectives
Appropriate strategies to achieve the
objectives for the entire organization

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Figure 1.2 - The Strategic

Planning Process

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Organizational Mission
In developing a statement of mission,
management must take into account
three key elements:
The organizations history
The organizations distinctive
competitiveness
The organizations environment

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Organizational Mission
An effective mission statement
should be:
Focused on markets rather than
products
Achievable
Motivating
Specific

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Organizational Objectives
Objectives must be:
Specific
Measurable
Action commitments

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Organizational Objectives
If formulated properly, organizational
objectives:
Can be converted into specific action
Will provide direction
Can establish long-run priorities for the
organization
Can facilitate management control

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Figure 1.3 - Sample

Organizational Objectives

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Organizational Strategies
Organizations can pursue various
strategies based on:
Products and markets
Competitive advantage
Value

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Figure 1.4 - Organizational

Growth Strategies

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Organizational Strategies
Based on Competitive
Advantage
Cost leadership strategy - A firm
would focus on being the low-cost
company in its industry
Strategy based on differentiation - A
firm seeks to be unique in its
industry or market segment along
particular dimensions that the
customers value
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Strategies Based on Value

Three value strategies:
Best price
Best product
Best service

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Choosing an Appropriate
Strategy
Management should:

Select those strategies consistent with

its mission
Capitalize on the organizations
distinctive competencies

Sustainable competitive advantage

can be based on either the assets or
skills of the organization

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Organizational Portfolio Plan

The first step in this approach is to
identify the various divisions, product
lines, and so on that can be considered
a business
Also called strategic business units (SBUs)

The next step is to establish methods

to determine how resources should be
allocated among the various SBUs
Known as portfolio models
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The Marketing Management Process

Process of planning and executing the conception,
pricing, promotion, and distribution of goods, services,
and ideas to create exchanges with target groups that
satisfy customer and organizational objectives

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Figure 1.5 - Strategic Planning

and Marketing Planning

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Situation Analysis
Involves analysis of the past, present,
and likely future in six major areas of
concern:
Cooperative environment - Includes all firms
and individuals who have a vested interest
in the firms accomplishing its objectives
Competitive environment - Includes
primarily other firms in the industry that
rival the organization for both resources and
sales
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Situation Analysis
Economic environment - State of the
macroeconomy and changes in it also bring
about marketing opportunities and
constraints
Social environment - Includes general
cultural and social traditions, norms, and
attitudes
Political environment - Includes the attitudes
and reactions of the general public, social
and business critics, and other organizations

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Situation Analysis
Legal environment - Includes a host of
federal, state, and local legislation
directed at protecting both business
competition and consumer rights

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Marketing Planning
Produces three outputs:
Establishing marketing objectives
Selecting the target market
Developing the marketing mix
Marketing mix: A set of controllable
variables that must be managed to satisfy
the target market and achieve
organizational objectives

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Implementation of the
Marketing Plan
Involves putting the plan into action
and performing marketing tasks
according to the predefined schedule

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Control of the Marketing

Plan
Involves three basic steps:

Measuring results of implemented

marketing plan
Comparing results with objectives
Making decisions on whether plan is
achieving objectives

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Marketing Information Systems

and Marketing Research
Throughout the marketing
management process, current,
reliable, and valid information is
needed to make effective marketing
decisions
Providing this information is the task
of the marketing information system
and marketing research
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The Strategic Plan, The

Marketing Plan, and Other
Functional
Area
Strategic planning
is aPlans
top-management
responsibility
Ways in which marketing executives are
involved in the strategic planning process:
They influence the process by providing
important inputs in the form of information and
suggestions relating to customers, products, and
middlemen
They must always be aware of what the process
of strategic planning involves as well as the
results
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Marketings Role in CrossFunctional Strategic Planning

More organizations are bringing
managers and employees together to
participate in cross-functional teams
All personnel working in a crossfunctional team participate in creating a
strategic plan to serve customers
The greatest advantage of cross-functional
team is the ability of team members to
consider a situation from a number of
viewpoints
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Marketings Role in CrossFunctional Strategic Planning

Strategic planning results in a clearly
defined blueprint for management
action in all functional areas of the
organization

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Figure 1.6 - The CrossFunctional Perspective in

Planning

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Figure 1.7 - A Blueprint for

Management Action

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