CHAPTER 2:

ELEMENTS OF
MARKETING
STRATEGY AND
PLANNING
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McGraw-Hill
Education Part 1: Discover Marketing Management
 Learning Objectives
2

 Examine the concept of value and the elements and role of the
value chain.
 Understand the conditions required for successful marketing
planning, that marketing planning is focused on the value.
proposition, and that marketing planning is a dynamic
process.
 Identify various types of organizational strategies.
 Conduct a situation analysis.
 Use the framework provided for marketing planning, along
with the content in future chapters, to build a marketing plan.

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 Value Is At
The Core Of Marketing
3

 Value is a ratio of benefits to costs, as viewed from

the eyes of the beholder (the customer).

Form Time
utility utility

Place Ownershi
utility p utility

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 Value Is At
The Core Of Marketing
4

 Value proposition is the firm’s communication of

the unique value of its products to its customers.
 The value message may include the whole bundle
of benefits the company promises to deliver – not
just the benefits of the product itself.

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 Value Is At
The Core Of Marketing
5

 A firm’s value proposition must be strong enough

to move customers past satisfaction.

Customer
Satisfaction

Customer Loyalty Customer Retention Customer Switching

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 Value Is At
The Core Of Marketing
6

 The Value
Chain serves as
a means for
firms to identify
ways to create,
communicate,
and deliver
more customer
value within a
firm.

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EXHIBIT 2.1 Porter’s Value Chain

Support
Activities

Primary Activities

Source: Michael E. Porter, Competitive Advantage (New York: Simon & Schuster, 1985).

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 Value-Creating Activities
8

 Primary activities
Inbound Logistics

Operations

Outbound Logistics

Marketing and Sales

Service

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 Value-Creating Activities
9

 Support activities
Firm Infrastructure

Human Resource Management

Technology Development

Procurement

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 Marketing Planning
10

 Marketing planning is the ongoing

process of developing and implementing
market-driven strategies for an
organization.
The resulting document
that records the
marketing planning
process in a useful
framework is the
marketing plan.
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 Marketing Planning Is Both
Strategic And Tactical
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 Marketing (Big M) serves as a core

driver of business strategy.
 marketing (little m) represents the

specific programs and tactics aimed at

customers and other stakeholder groups.

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 For Effective
Marketing Planning
12

 Everyone in an
organization must
understand and support the
concept of customer
orientation.
 All internal organizational
processes and systems
must be aligned around the
customer.

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 Framework for
Marketing Planning
13

 Marketing plan is connected to the firm’s business

plan
 Conduct a situation analysis
 Perform any needed market research
 Establish marketing goals and objectives
 Develop marketing strategies
 Marketing mix strategies
 Develop implementation plans

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 Connecting the Marketing Plan to the
Firm’s Business Plan
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 Market-driven strategic planning is often

used to describe the process at the
corporate or strategic business unit
(SBU) level of marshaling the various
resource and functional areas of the firm
toward a central purpose around the
customer.

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 Elements Of
Marketing Planning
15

 Portfolio analysis views SBUs and

sometimes even product lines as a series
of investments from which it expects
maximization of returns.
 Boston Consulting Group (BCG) Growth-
Share Matrix
 GE Business Screen

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EXHIBIT 2.3 Boston Consulting Group Growth-Share Matrix

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EXHIBIT 2.4 GE Business Screen

Market Attractiveness
High Med Low
High

Invest/
Grow
Business Position
Med

Selective
Investment
Low

Harvest/
Divest

“GE Business Screen,” Business Resource Software Online, www.brs-inc.com/pwxcharts.asp?32, accessed May 16, 2008.

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 Elements Of
Marketing Planning
18

 Marketing planning does not occur in a

vacuum
 A mission statement articulates an organization’s
purpose, or reason for existence.
 Most mission statements also include a discussion
of what the company would like to become in the
future – its strategic vision.

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 Elements Of Marketing Planning
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 Goals eventually become refined into specific,

measurable, and (hopefully) attainable objectives
for the firm.

Jet Blue’s goal “to fly

new planes” may be
refined into an
objective “to purchase
15 new aircraft over
two years”.

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 Elements Of
Marketing Planning
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 Organizational Strategies
 A strategy is a comprehensive plan stating
how the organization will achieve its
mission and objectives.
 A firm’s generic strategy is its overall
directional strategy at the business level.

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 Elements Of
Marketing Planning
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 Three primary categories

of competitive strategy:
1. Cost Leadership—
Low Cost
2. Differentiation
3. Focus (or Niche)

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 Generic Business Strategies
22

Generic
Generic
Business
Business
Strategies

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EXHIBIT 2.7 Competitive Strategy Options

Competitive Advantage
Lower Cost Differentiation
Broad Target

Cost Leadership Differentiation

Competitive Scope

Narrow Target

Focus
Cost Focus
Differentiation

Source: Michael E. Porter, Competitive Advantage (New York: Simon & Schuster, 1985).

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 Elements Of
Marketing Planning
24

 Core competencies
 Distinctive competencies

 Sustainable competitive advantage

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 Miles and Snow’s
Strategy Types
25

Defenders Reactors

Strategic
Analyzers
Types

Prospector
s

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 Situation Analysis
26

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 Situation Analysis
27

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EXHIBIT 2.9 Forces Driving Industry Competition

Potential
Potentialentrants
entrants
(Threat
(Threatofof
mobility)
mobility)

Industry
Industry
Supplier
Supplier Buyers
Buyers
competitors
competitors
(Supplier
(Supplier (Buyer
(Buyer
(Segment
(Segmentrivalry)
rivalry)
power)
power) power)
power)

Substitutes
Substitutes
(Threat
(Threatofof
substitutes)
substitutes)

Source: Michael E. Porter, Competitive Strategy: Techniques for Analyzing Industries and Competitors (Boston: The Free Press, 1980).

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 Situation Analysis
29

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 Elements Of
Marketing Planning
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 Summarize the situation analysis into a SWOT

analysis:
 A convenient way to summarize key findings into a
matrix of strengths, weaknesses, opportunities, and
threats.
 Internal analysis reveals strengths and weaknesses,
while external analysis points to potential opportunities
and threats.

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 EXHIBIT
SWOT Analysis Template
2.10

INTERNAL Strengths (S) Weaknesses

Weaknesses(W)
(W)
FACTORS
(IFAS) List 5–10 internal List
List5–10
5–10internal
internal
EXTERNAL strengths here weaknesses
weaknesseshere
here
FACTORS
(EFAS)

Opportunities (O) S/O Based Strategies W/OBased

W/O BasedStrategies
Strategies
List 5–10 external Generate strategies here Generate
Generatestrategies
strategieshere
here
opportunities here that use strengths to take that take advantage of
that take advantage of
advantage of opportunities opportunities
opportunitiesby by
overcoming weaknesses
overcoming weaknesses

Threats
Threats(T)
(T) S/TBased
S/T BasedStrategies
Strategies W/TBased
W/T BasedStrategies
Strategies
List
List5–10
5–10external
external Generate
Generatestrategies
strategieshere
here Generate
Generatestrategies
strategieshere
here
threats here
threats here that use strengths to
that use strengths to that minimize weaknesses
that minimize weaknesses
avoid
avoidthreats
threats and
andavoid
avoidthreats
threats

Source: J. David Hunger and Thomas H. Wheelen, Essentials of Strategic Management, 4th ed. (Upper Saddle River, NJ: Prentice Hall, 2007).

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 Elements Of
Marketing Planning
32

 Additional Aspects of Marketing

Planning
 Perform Any Needed Market Research
 Establish Marketing Goals and
Objectives
Goals are qualitative
Objectives are quantitative

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 Elements Of
Marketing Planning
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 Additional Aspects of Marketing

Planning
 Develop Marketing Strategies
Market penetration strategies
Product development strategies
Market development strategies
Diversification strategies

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EXHIBIT 2.11 Product – Market Combinations

Product Emphasis

Existing Products New Products

Strategy = Strategy =
Strategy =
Market Product
Product
Penetration Development
Development
Existing
Seek to increase Create growth
Markets sales of existing
Create growth
by selling new
by selling new
products to products in
products in
existing markets existing markets
existing markets
Market
Emphasis Strategy = Strategy =
Strategy = Strategy =
Market Diversification
Market Diversification
Development
Development
New Emphasize both
Emphasize both
Introduce existing new products and
Markets Introduce existing
products to new
new products and
new markets to
products to new new markets to
markets achieve growth
markets achieve growth

Source: H. Igor Ansoff, The New Corporate Strategy (New York: John Wiley & Sons, 1988).

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 Elements Of
35
Marketing Planning
 Implementation Plan
Budget
Forecast
Budget
Forecast

A
pp
ro
pri
at
e
M
ar
ke
tin
g
M
etr
ics

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 ELEMENTS OF
36
MARKETING PLANNING
 Marketing Control
 Process of measuring marketing results and adjusting
the marketing plan as needed.
 Action Plans
 Implementation strategy that describes specific tasks
and the resources needed, who is responsible, and
metrics to track success.
 Contingency Plans
 Plans that can be implemented should something
happen that negates the viability of the marketing plan.
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 TIPS FOR SUCCESSFUL MARKETING
PLANNING
37

1. Stay flexible
2. Utilize input, but don’t become paralyzed by
information and analysis
3. Don’t underestimate the implementation part of the
plan
4. Stay strategic, but also stay on top of the tactical
5. Give yourself and your people room to fail and try
again

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 Photo Credits
38

 Slide 2-6: Sean Hunter/Getty Images; Steve

Hix/Corbis
 Slide 2-10: Image Source/Getty Images
 Slide 2-12: John Lund/Drew Kelly/Blend Images
 Slide 2-19: Getty Images
 Slide 2-21: McGraw Hill Companies (all)
 FedExImage Jill Braaten, photographer
 A&F image Andrew Resek, photographer
 Walmart image John Flournoy, photographer

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