The Role of Marketing in Strategic Planning
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The document discusses strategic planning for businesses in the hospitality and tourism industries. It covers defining a company's mission and objectives, analyzing internal strengths and weaknesses as well as external opportunities and threats, developing business strategies, and implementing and controlling the strategic plan. Key aspects of strategic planning discussed include assessing profit potential of business units, defining competitive scopes, establishing strategic business units, and considering growth strategies like diversification, integration and strategic alliances.
The Role of Marketing in Strategic Planning
- 1. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Chapter 3 The Role of Marketing in Strategic Planning
- 2. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens âWould you tell me, please, which way I ought to go from here?â -Alice (from Lewis Carrollâs Alice in Wonderland) Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 3. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Chapter Objectives ⢠Explain company-wide strategic planning ⢠Understand the concepts of stakeholders, processes, resources, and organization as they relate to a high-performing business ⢠Explain the four planning activities of corporate strategic planning Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 4. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Chapter Objectives ⢠Understand the processes involved in defining a companyâs mission and setting goals and objectives ⢠Discuss how to design business portfolios and growth strategies ⢠Explain the steps involved in the business strategy planning process Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 5. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Market-Oriented Strategic Planning Market-oriented strategic planning is the managerial process of developing and maintaining a feasible fit between the organizationâs objectives, skills and resources and its changing market opportunities Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 6. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Ideas Defining Strategic Planning 1. Manage companies businesses as an investment portfolio 2. Assess future profit potential 3. Develop the strategy itself Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 7. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Nature of High-Performance Business ⢠Stakeholders ⢠Processes ⢠Resources ⢠Organization Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 8. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens The Relationship Between Analysis, Planning, Implementation, and Control Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 9. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens The High Performance Business (Excerpted from the first quarter 1992 issue of Prism, the quarterly journal for senior managers, published by Arthur D. Little, Inc.) Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 10. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Dynamic Relationships Among Stakeholder Groups in High Performance Businesses (Excerpted from the fourth quarter 1992 issue of Prism, the quarterly journal for senior managers, published by Arthur D. Little, Inc.) Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 11. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Corporate Strategic Planning ⢠Corporate headquarters sets planning process into motion ⢠Greater need for empowerment of employees ⢠Hospitality and tourism industries are international and multi-cultural Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 12. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Defining the Corporate Mission ⢠Mission is shaped by History ⢠Resources determine possibilities ⢠Mission should be based on distinctive competencies Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 13. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Competitive Scopes ⢠Industry scope â range of industries that the company will consider ⢠Products and applications scope â rang of products and applications in which the company will participate ⢠Competencies scope â range of technological and other core competencies the company will master and leverage Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 14. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Competitive Scopes ⢠Market-segment scope â the type of market or customers the company will serve ⢠Vertical scope â the number of channel levels from raw materials to final product and distribution in which the company will engage ⢠Geographic scope â the range of regions, countries or country groups where the corporation will operate Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 15. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Establishing Strategic Business Units ⢠A single business or a collection of related businesses that can be planned for separately from the rest of the company ⢠It has its own set of competencies ⢠It has a manager who is responsible for strategic planning and profit performance Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 16. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Assigning Resources to Each SBU Analytical tools, such as the Boston Consulting Group (BCG) model, are used to classify businesses by profit potential Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 17. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens BCG Growth-Share Matrix Relative market share Marketgrowthrate LowHigh LowHigh Star Question mark Cash cow Dog Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 18. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Developing Growth Strategies Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 19. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Diversification Growth ⢠Concentric diversification strategy ⢠Horizontal diversification strategy ⢠Conglomerate diversification strategy Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 20. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Integrative Growth ⢠Backward integration (acquiring a supplier) ⢠Forward integration (acquiring distributor of your product) ⢠Horizontal integration (acquiring a competitor) Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 21. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Business Strategy Planning ⢠Business Mission ⢠SWOT Analysis â Strengths, Weaknesses, Opportunities, Threats Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 22. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Business Strategy Planning ⢠Internal Environment Analysis â (Strengths and Weaknesses Analysis) ⢠External Environmental Analysis â (Opportunities and Threats Analysis) Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 23. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Business Strategy Planning ⢠Goal Formulation â Arrange from most to least important â State quantitatively â Measurable and realistic â Consistent Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 24. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Business Strategy Planning ⢠Strategy Formulation ⢠Strategies are the paths to goals ⢠3 generic types ⢠Overall cost leadership ⢠Differentiation ⢠Focus Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 25. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Business Strategy Planning ⢠Strategic Alliances â cooperative agreements between organizations that allow them to benefit from each otherâs strengths ⢠What are some strategic alliances in the hospitality and tourism industry? Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 26. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Business Strategy Planning ⢠Program formulation â Formulate programs that support the strategy ⢠Implementation â To implement strategy, required resources and employee buy-in are necessary ⢠Feedback and Control â Track results and monitor new developments Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 27. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Business Strategy Planning ⢠Unique Challenges of the hotel industry complicate the process of strategic planning â Major chains commonly do not own all properties that they manage â Owners of hotel-resorts often show little interest or knowledge of their property (ego- capital concept) â Professional managers often are not trained in strategic planning â Global strategic alliances may further complicate the planning process Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 28. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Best Practices ⢠Howard Schultz brings the European coffee experience to America via Starbucks ⢠Focus on growth, new products, new retail channels to stave off competition Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 29. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Best Practices in Strategic Planning ⢠What did they do? â The Inn on Biltmore Estates â Tricon Global Restaurants (Yum Brands) â Jack in the Box â The Las Vegas Hilton â Hyatt Hotels â Boston Greater Convention and Visitors Bureau Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 30. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms ⢠Ansoff productâmarket expansion grid ⢠Backward integration ⢠Competencies scope ⢠Concentric diversification strategy Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 31. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms ⢠Conglomerate diversification strategy ⢠Corporate mission statement ⢠Forward integration ⢠Geographic scope Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 32. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms ⢠Growthâshare matrix ⢠Horizontal diversification strategy ⢠Horizontal integration ⢠Industry scope Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 33. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms ⢠Macroenvironmental forces ⢠Microenvironmental forces ⢠Marketing opportunity ⢠Market-oriented strategic planning Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens
- 34. Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens Key Terms ⢠Market-segment scope ⢠Products and applications ⢠Strategic alliances ⢠Strategic business units (SBUs) ⢠Vertical scope Š2006 Pearson Education, Inc. Marketing for Hospitality and Tourism, 4th edition Upper Saddle River, NJ 07458 Kotler, Bowen, and Makens