PRINCIPLES OF MARKETING

Chapter 2

Strategic Planning and the

Marketing Process
Strategic Planning Process
• Strategic Planning involves developing an overall company
strategy for long-run survival and growth.

• This process involves:

• Defining a Mission: Statement of an organization’s purpose; should be
market oriented.
• Setting Company Objectives: Supporting goals and objectives to guide
the entire company.
• Designing a Business Portfolio: Collection of businesses and products
that make up the company.
• Planning Functional Strategies: Detailed planning for each department
designed to accomplish strategic objectives.
 2-3
Mission
Mission Statements
Statements
2-3

Market
Market
Oriented
Oriented

Motivating
Motivating Realistic
Realistic
Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements
Distinctive
Distinctive Specific
Specific
Competencies
Competencies
Fit
Fit Market
Market
Environment
Environment

 Copyright 1998 Prentice Hall

Cebu Pacific
Vision: Cebu Pacific is internationally renowned as the most
successful low-cost carrier in the Asia-Pacific region

Mission: Cebu Pacific brings people together through an

affordable, reliable mode of travel—a fun-filled experience
that's delivered with a true heart and soul for service.
We enhance the quality of life of the communities we serve and
are an active partner in the nation's progress.
St. Lukes Medical Center
• VISION
• St. Luke's Medical Center will be internationally recognized
academic medical center by the year 2020.

MISSION
• We are committed to deliver state of the art healthcare because
at St. Luke's Medical Center, the needs of our patients comes first.
Unilab
Vision
We shall be the best provider of healthcare in Asia by:
• Converting opportunities into sustainable business growth
• Nurturing a culture of innovation
• Delivering better value to our partners and consumers

Mission
We provide quality and affordable healthcare products and services that
promote and enrich life for all communities that we serve by working
together as one united family.
PUREGOLD
Vision: To be the Most Customer-Oriented Hypermart offering a One-Stop
Shopping convenience and Best Value to our Customers.
Sa PUREGOLD, Always Panalo!
Mission: Our Mission is to Provide Products, Services and Business
Opportunities to Every Filipino Family.
We Establish Lasting Relationship with Our Suppliers and Business
Partners. We Strive to Promote the Personal and Professional Development
of our Employees. We Commit Profitable Results to the Stockholders.
Sa bawat araw, PUREGOLD kasama mo!
Designing the Business Portfolio

• The best portfolio is the one that best fits the company’s
strengths and weaknesses to the opportunities in the
environment.

• The company must:

• analyze its current business portfolio or Strategic Business Units
(SBU’s)
• decide which SBU’s should receive more, less, or no investment
• develop growth strategies for adding new products or businesses to
the portfolio
 Analyzing Current SBU’s:
Boston Consulting Group Approach

Relative Market Share

High Low
Stars Question Marks
Market Growth Rate
High

• High growth & share • High growth, low share

• Profit potential • Build into Stars/ phase out
• May need heavy • Requires cash to hold
investment to grow market share

Cash Cows Dogs

• Low growth, high share • Low growth & share
Low

• Established, successful
SBU’s
• Low profit potential
•Produces cash
Developing Growth Strategies
Product/ Market Expansion Grid

Existing New
Products Products
Existing 1. Market 3. Product
Markets Penetration Development

New 2. Market
4. Diversification
Markets Development
Product/ Market Expansion Grid
• Market Penetration: increase sales to present customers with
current products. How? Cut prices, increase advertising, get
products into more stores.

• Market Development: develop new markets with current

products. How? Identify new demographic or geographic
markets.

• Product Development: offering modified or new products to

current customers. How? New styles, flavors, colors, or modified
products.

• Diversification: new products for new markets. How? Start up or

buy new businesses.
Marketing’s Role in Strategic Planning

1. Marketing provides a guiding philosophy - company

strategy should revolve around serving the needs of
important consumer groups.
2. Marketing provides inputs to strategic planners by helping
to identify attractive market opportunities and by assessing
the firm's potential to take advantage of them.
3. Marketing designs strategies for reaching the objectives for
each strategic business units.
The Marketing Process

Demographic- Marketing Technological-

Economic Intermediaries Natural
Environment Environment

Product

Target
Suppliers Place Consumers Price Publics

Promotion

Political- Social-
Legal Competitors Cultural
Environment Environment
Marketing’s Role in Strategic Planning
Target Consumer – consumers the company wants to serve
Process of Selecting Target Consumers
• Market Segmentation: determining distinct groups of buyers
(segments) with different needs.
• Market Targeting: evaluating and selecting which target
segments to enter.
• Market Positioning: products distinctive and desirable place
in the minds of target segments compared to competing
products.
Marketing Strategies for Competitive Advantage

1. Market-Leader-The firm in an industry 'with the largest marker

share; it usually leads other firms in price changes, new product
introductions, distribution coverage and promotion spending.
2. Market Challenger- are runner-up companies that aggressively
attack competitors to get more market share.
3. Market-Follower- are firms will choose to follow rather than
challenge the market leader.
4. Market-Niche - refers to a firm in an industry that serves small
segments that the other firms overlook or ignore
Marketing Mix- The Four P’s
Price
Product
“Goods-and-service” Amount of money
combination that a that consumers
company offers a have to pay to obtain
target market the product

Target
Customers

Intended
Promotion Positioning Place
Activities that
persuade target Company activities
customers to buy that make the
the product product available
Extended Marketing Mix
• People - members of the team
who contribute to the delivery of
service
• Physical environment – place a
service is performed
• Process- procedures, flows of
activities
Managing the Marketing Effort

Marketing Analysis of Company’s Situation

Marketing Control
Marketing Planning
Implementation Measure
Develop Marketing Results
Strategies to Turn Marketing Plans
Achieve Marketing into
Evaluate
Objectives Action Plans Results
to Achieve
Develop Marketing
Marketing Objectives Take
Plans & Budget Corrective
Action
Contents of an annual marketing plan
I. Executive summary -Presents a quick overview of the plan for
quick management review.
II. Situational analysis (SWOT)- The marketing audit that presents
background data on the market, product, competition and
distribution.
III. Program objectives - Defines the company's objectives in the
areas of sales, market share and profits, and the issues that will
affect these objectives.
IV. Marketing strategies Presents the broad marketing approach
that will be used to achieve the plan's objectives
Contents of an annual marketing plan
V. Program tactics- Specifies what will be done, ro/io will
do it, 'when it will be done and what it will cost
VI. Financial schedule (budgets) A projected profit and
loss statement that forecasts the expected financial
outcomes from the plan
VII. Program timetable – schedule
VIII. Evaluation procedure - indicates how the progress of
the plan will be monitored
Marketing Implementation

Marketing
implementation is the
process that turns
marketing strategies
and plants into
marketing actions to
accomplish strategic
marketing objectives.
Marketing Control
Marketing control is the process of measuring and
evaluating the results of marketing strategies and plans
and taking corrective action to ensure the achievement of
marketing objectives
Marketing Control Process
Set Marketing Goals

Measure
Performance

Evaluate
Performance

Take Corrective
Action
Marketing Audits

Environment

Function Types Strategy

of Marketing
Audits
Productivity Organization

Systems