Chapter 3: Strategic Market Planning – Flashcards
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Business Planning
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An ongoing process of marketing decisions that guides the firm both in the short term and long term. Also helps identify and build firms strengths, improves managerial decision making, and develops objectives
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Business Plan
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A plan that includes the decisions that guide the entire organization
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Marketing Plan
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A 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
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Strategic Planning
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A managerial decision process that matches an organization's resources and capabilities to its market opportunities for long term growth and survival. (First level of Business Planning)
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Strategic Planning Steps
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-Planning done by top-level corporation management 1. Define the mission 2. Evaluate the internal and external environment 3. Set organizational or SBU objectives 4. Establish Business portfolio 5. Develop growth strategies
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Mission Planning (step 1)
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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. (What business are we in? , What customers should we serve? , How should we develop firm capabilities and focus its efforts?)
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Evaluate the Internal and External Environment (step 2)
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Situation Analysis: an assessment of a firm's internal and external environments. It can identify a firm's strengths and weaknesses ( internal), as well as opportunities and threats (external) Internal: The controllable elements inside an organization, including its people, its facilities, and how it does things that influence the operations of the organization. External: The Uncontrollable elements outside an organization that may affect its performance either positively or negatively
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Set Organizational or SBU Objectives (step 3)
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To be effective, objectives need to Specific, Measurable, Attainable, and Sustainable.
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Establish the Business Portfolio (step 4)
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Business Portfolio: The group of different products or brands owned by an organization and characterized by different income-generating and growth capabilities Portfolio Analysis: A management tool for evaluating a firm's business mix and assessing the potential of an organization's strategic business units
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BCG growth-market share matrix (Included in step 4)
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A portfolio analysis model developed by the Boston Consulting Group that assess the potential of successful products to generate cash that a firm can then use to invest in new products. ( Stars, Cash Cows, Question Marks, Dogs)
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BCG Matrix
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Stars: SBU's whose products have a DOMINANT market share in a HIGH-growth-potential market (iPhone) Cash Cows: SBU's with a DOMINANT market share in a LOW-growth-potenial market (apple desktop) Question Marks: SBU's with LOW market shares in a FAST-growth market (phone cases) Dogs:SBU's with a SMALL share of a SLOW-growth market. They are businesses that offer specialized products in limited markets that are not likely to grow quickly. SBU's nobody wants.(iPod)
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Product-Market Growth Matrix
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existing products, existing markets, new products, new markets
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Market Penetration Strategies (step 5)
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Growth strategies designed to increase sales of existing products to current customers, nonusers and users of competitive brands in served markets
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Market Development Strategies (step 5)
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Growth strategies that introduce existing products to new markets
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Product Development Strategies (step 5)
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Growth strategies that focus on selling new products in existing markets
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Diversification Strategies (step 5)
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Growth strategies that emphasize both new product and new markets
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Strategic Business Units (SBU)
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Individual Units within the firm that operate like separate businesses, with each having its own mission, business objectives, resources, managers and competitors
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Functional Planning ( also known as market planning)
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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. (Second level of Business Planning)
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Functional Planning Steps
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-Planning done by top functional-level management such as the firm's chief marketing officer (CMO) 1. Perform a situation analysis 2. Set marketing objectives 3. Develop marketing strategies 4. Implement marketing strategies 5. Monitor and control marketing strategies
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Develop Market Strategy
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identify target markets and adjust marketing mix for each target market (price, product, place, promotion)
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Product Strategy (Market Planning Step 3)
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Include decisions such as product design, packaging, branding, support services, variations of product, and product features
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Pricing Strategy (Stage 3)
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Determines how much a firm charges for a product. Cost, demand, competition, prestige pricing
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Promotional Strategy (Stage 3)
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How marketers communicate a product's value proposition to the target market
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Distribution Strategy (stage 3)
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Outline how, when, where the firm will make the product available to targeted customers
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Control (Implement and Control Marketing Plan step 4)
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A process that entails measuring actual performance, comparing this performance to the established marketing objectives, and then making adjustments to the strategies or objectives on the basis of this analysis
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Return on Marketing Investment (ROMI) ( step 4)
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revenue granted by investment in a given marketing program divided by the cost of the program at a given level of risk
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Action Plans (step 4)
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Individual support plans included in a marketing plan that provide the guidance for implementation and control of the various marketing strategies within the plan. Action plans are sometimes referred to as "marketing programs"
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Operational Plans
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Plans that focus on the day-to-day execution of the marketing plan. These plans include detailed directions for the specific activities to be carried out, who will be responsible for them, and time lines to accomplish tasks
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Operational Planning
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A decision process that focuses on developing detailed plans for day-to-day activities that carry out an organization's functional plans. (Third level Business Planning)
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Operational Planning Steps
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-Planning done by supervisory managers 1. Develop action plans to implement the marketing plan 2. Use marketing metrics to monitor how the plan is working
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Creating a Budget
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each cost element of the action plan should link to a budget item -accuracy in estimating individual action plan expenditure helps overall marketing budget forecasting -percentage of sales- most common method of budgeting
