Chapter 3: The Role of Marketing in Strategic Planning

Marketing Mix 4 Ps

product, price, place, promotion

strategic planning

the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities -set the stage for the rest of the planning in the firm -corporate headquarters has responsibility for setting the process in motion

Marketing Strategy and the Marketing Mix

*marketing strategy* is the marketing logic by which the company hopes to create customer value and achieve profitable relationships 1) *market segmentation*- the process of dividing a market into distinct groups of buyers who have different needs, characteristics, or behavior and might require separate products or marketing programs 2) market targeting- evaluating each market segment's attractiveness and selecting one or more segments to enter 3) market differentiation and positioning- position is the place the product occupies relative to competitors' products, in peoples minds

Marketing Analysis

-*SWOT analysis*: marketer evaluates the companies overall *Strengths* (internal capabilities that may help a company reach its objectives), *Weaknesses* (internal limitations that may interfere with a company's ability to achieve its objectives), *Opportunities* (external factors that the company may be able to exploit to its advantage), and *Threats* (current and emerging external factors that may challenge the company's performance)

developing growth strategies

-companies need growth if they are to compete and attract top talent -*ansoff product-market expansion grid*: a matrix developed by cell, plotting new products and existing products with new markets and existing markets; the grid provides strategic insights into growth opportunities -*market development strategy*: finding and developing new markets for your current products -*product development*: offering modified or new products to current markets

integrative growth

1) *backward integration*- a growth strategy by which companies acquire businesses supplying them with products or services 2) *forward integration*- a growth strategy by which companies acquire businesses that are closer to the ultimate consumer, such as a hotel acquiring a chain of travel agents 3) *horizontal integration*- a growth strategy by which companies acquire competitors

diversification growth

1) *cocentric diversification strategy*- a growth strategy whereby a company seeks new products that have technological or marketing synergies with existing product lines 2) *conglomerate diversification strategy*- a product growth strategy in which a company seeks new businesses that have no relationship to the company's current product line of markets 3) *horizontal diversification strategy*-a product growth strategy whereby a company looks for new products that could appeal to current customers, which are technologically unrelated to its current line

4 Factors of the Nature of High-Performance Business

1. *Stakeholders*- the starting point for any business is to define the stakeholders and their needs 2. *Processes*- study how tasks pass from department to department as well as the impediments to creative output 3. *Resources*- to carry out processes, a company needs such resources as personnel, materials, machines, and information; outsource less critical resources 4. *Organization* The organizational side of a company consists of its structure, policies, and culture, all of which tend to become dysfunctional in a rapidly changing company

Threats

1. An *ideal* business is high in major opportunities and low in major threats 2. A *speculative* business is high in both major opportunities and threats 3. A *major* business is low in major opportunities and high in threats 4. A *troubled* business is low in opportunities and high in threats

3 Examples of performance measures used in the hotel industry

1. a hotel's return- return based performance tests measure income before fixed costs; owners and management companies can usually find agreement using these measures 2. operating margins 3. revenue per available room (RevPAR)

Managing the marketing process requires the 4 marketing management functions

1. analysis 2. planning (develop strategic & marketing plans) 3. implementation (carry out the plans) 4. control (measure and evaluate results, take corrective action)

The Strategic Planning Process

1. defining the company mission 2. setting company objectives and goals 3. designing the business portfolio 4. planning marketing and other functional strategies

3 Generic types of strategy

1. overall cost leadership- business works hard to achieve the lowest costs 2. differentiation- business concentrates on achieving superior performance in an important customer benefit area valued by a large part of the market 3. focus- business focuses on one or more narrow market segments rather than going after a large market

Goal Formulation

Obectives are sometimes in a trade-off relationship; examples of important tradeoffs include -high profit margins vs high market share -deep penetration of existing markets vs developing new markets -profit goals vs nonprofit goals -high growth vs low risk

strategic business unit

a business that a company decides that they must manage strategically; has 3 characteristics: -it is 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 competitors -it has a manager who is responsible for strategic planning and profit performance and who controls most of the factors affecting profits purpose of identifying these SBUs is to assign to these units strategic-planning goals and appropriate funding

corporate mission statement

a guide to provide all the public of a company with a shared sense of purpose, direction, and opportunity, allowing all to work independently, yet collectively, toward the organization's goals

marketing opportunity

an area of need that a company can perform profitably

Customer Perspective- 4 Cs

customer solution, customer cost, convenience, communication

micro-environmental forces

customers, competitors, distribution channels, and supplies

macro-environmental forces

demographic-economic, technological, political-legal, social-cultural

return on marketing investment or marketing ROI

net return from a marketing investment divided by the costs of the marketing investment