Chapter 2 – Strategy development and marketing
planning
Marketing planning
The four basic tasks of marketing management:
o Analysis
o Planning
o Implementation
o Control
Differences between strategic and tactical planning
Company’s policy = strategy + tactics
The long-term plan sets out the strategy (strategic marketing plan)
o Defines the marketing goals for a period of two to five years
o Indicates how (in which markets and with what products) those goals can be realized
o Based on certain assumptions, estimates, and scenarios
o Must be carefully aligned with the previous formulated corporate strategy
o Focus on overall objectives
o Top management responsibility
A short-term plan (‘annual plan’) describes the tactics the company will implement to
achieve its short-term objectives (operational marketing plan)
o A period of one year
o Can relate to an individual product or brand, a product line or the company as a
whole
o If for the entire company – will set out all of the marketing objectives and the
company’s full marketing strategy, including the budgets and action plans per
product-market combination
A company sets out its main objectives and the methods (strategies) it will use to achieve
them in its strategic marketing plan when the company’s tactics explain in detail how it
intends to implement the strategy
Three levels of strategy development
Corporate strategy – developed at the uppermost levels of the organization
o SBUs – Strategic Business Units – a division of the organization that operates more
or less independently, sells a range of products to a certain group of customers and is
responsible for the development and implementation of the strategy
o Strategic profile – the ‘big picture’ drawn by the head office to assure a profitable
future for the corporation
Business strategy
o The second level of planning: the divisions, subsidiaries or SBUs of the corporation
o The chief executive officer (CEO) of an operational unit develops a business strategy
distributes the resources
o Strategic profile - brief description of the company, its products and the markets in
which it operates
Marketing strategy
o The third level at which strategy occurs – the level of a product, brand or product line
(marketing planning)
, o The marketing managers’ or product managers’ responsibility
o Developing a product-, price-, promotion- and distribution strategy in order to
achieve the objectives of their product-market combination
o Analyzing information about the size of the market, target markets and the profit
contribution per product
A marketing planning and management model
Analysis
o Focusing on a certain target market – B2C and B2B
o SWOT analysis
o Company’s strengths and weaknesses -> internal analysis
o The opportunities and threats -> external analysis
Planning and implementation
o Formulation of marketing objectives in light of the results of the analysis
o Defining and evaluating strategic options
o For the year ahead
Control
o The chosen marketing strategy results in a marketing action plan for the year ahead
o Monitoring results to determine if any adjustments in the strategy need to be made
Integrated marketing
Departmental management/suboptimization – lack of cooperation between departments
that results in less than the best possible outcome
Business definition and mission statement
Strategic planning:
Outlines in broad terms the direction for the company
Specifies the company’s intended market and new product development
The essence: the development of a long-term plan to use the resources of an organization in
an optimal way, with the constraints of the business definition and the mission of the
organization
We should always first describe the markets in which we are currently competing, as well as
the results we have achieved, before developing a new plan for the future
Formulating the business definition
Focusing on the needs of the customers (because they are constant, unlike products and
technologies)
The Abell model
The business definition – specifies the company’s (potential) activities, indicates the sphere or limits
of the organization’s field of activity, leaving enough room to develop new, additional products and
services
Business domain (scope) – the extent of the firm’s current activities
Three dimensions (to describe a company’s business definition):
Customers: which groups of customers or market segments do we distinguish and what
target market do we single out (what type of customer)?
, Needs: what product features or benefits are customers looking for in order to satisfy their
needs (what ‘customer functions’ should we fulfil)?
Technologies: how can we satisfy the identified needs (with which products and services)?
The market: 1st factor, the product: 2nd and 3rd factor
o Business units defined like this – product-market combinations
Defining the company’s mission
Mission statement (a formal description of an organization’s mission) – spells out the company’s
strategic vision, including its corporate philosophy, the overall goals, top management’s values, and
priorities, and the strategies it pursues
What are our core activities or, in other words, what business are we in?
What kind of company are we and would we like to become?
Who are our customers and what are their needs and wants?
Core competencies – capabilities that customers value and competitors find hard to duplicate
Functions:
External – to emphasize the distinctive features of the company
Internal – to motivate the employees and to get them – particularly managers – to reflect on
the strategy
SWOT Analysis
Internal analysis
Factors that the company itself can influence – at least in the long term (controllable factors)
The resources needed to achieve the company’s objectives, the production technology, the
employees’ know-how, the nature of the product mix and the company’s reputation among
its customers
The company’s Strengths and Weaknesses
All departments of the company need to be included
External analysis
The marketing environment – external variables that the company is unable to influence
(non-controllable factors)
Determining the extent to which the trends represent Opportunities or Threats, and
identifying those which are irrelevant for the company
Confrontation matrix
A helpful tool to identify possible strategies, based on the SWOT analysis
Combines strengths and weaknesses with opportunities and threats and suggests several
preferred strategies for each quadrant
planning
Marketing planning
The four basic tasks of marketing management:
o Analysis
o Planning
o Implementation
o Control
Differences between strategic and tactical planning
Company’s policy = strategy + tactics
The long-term plan sets out the strategy (strategic marketing plan)
o Defines the marketing goals for a period of two to five years
o Indicates how (in which markets and with what products) those goals can be realized
o Based on certain assumptions, estimates, and scenarios
o Must be carefully aligned with the previous formulated corporate strategy
o Focus on overall objectives
o Top management responsibility
A short-term plan (‘annual plan’) describes the tactics the company will implement to
achieve its short-term objectives (operational marketing plan)
o A period of one year
o Can relate to an individual product or brand, a product line or the company as a
whole
o If for the entire company – will set out all of the marketing objectives and the
company’s full marketing strategy, including the budgets and action plans per
product-market combination
A company sets out its main objectives and the methods (strategies) it will use to achieve
them in its strategic marketing plan when the company’s tactics explain in detail how it
intends to implement the strategy
Three levels of strategy development
Corporate strategy – developed at the uppermost levels of the organization
o SBUs – Strategic Business Units – a division of the organization that operates more
or less independently, sells a range of products to a certain group of customers and is
responsible for the development and implementation of the strategy
o Strategic profile – the ‘big picture’ drawn by the head office to assure a profitable
future for the corporation
Business strategy
o The second level of planning: the divisions, subsidiaries or SBUs of the corporation
o The chief executive officer (CEO) of an operational unit develops a business strategy
distributes the resources
o Strategic profile - brief description of the company, its products and the markets in
which it operates
Marketing strategy
o The third level at which strategy occurs – the level of a product, brand or product line
(marketing planning)
, o The marketing managers’ or product managers’ responsibility
o Developing a product-, price-, promotion- and distribution strategy in order to
achieve the objectives of their product-market combination
o Analyzing information about the size of the market, target markets and the profit
contribution per product
A marketing planning and management model
Analysis
o Focusing on a certain target market – B2C and B2B
o SWOT analysis
o Company’s strengths and weaknesses -> internal analysis
o The opportunities and threats -> external analysis
Planning and implementation
o Formulation of marketing objectives in light of the results of the analysis
o Defining and evaluating strategic options
o For the year ahead
Control
o The chosen marketing strategy results in a marketing action plan for the year ahead
o Monitoring results to determine if any adjustments in the strategy need to be made
Integrated marketing
Departmental management/suboptimization – lack of cooperation between departments
that results in less than the best possible outcome
Business definition and mission statement
Strategic planning:
Outlines in broad terms the direction for the company
Specifies the company’s intended market and new product development
The essence: the development of a long-term plan to use the resources of an organization in
an optimal way, with the constraints of the business definition and the mission of the
organization
We should always first describe the markets in which we are currently competing, as well as
the results we have achieved, before developing a new plan for the future
Formulating the business definition
Focusing on the needs of the customers (because they are constant, unlike products and
technologies)
The Abell model
The business definition – specifies the company’s (potential) activities, indicates the sphere or limits
of the organization’s field of activity, leaving enough room to develop new, additional products and
services
Business domain (scope) – the extent of the firm’s current activities
Three dimensions (to describe a company’s business definition):
Customers: which groups of customers or market segments do we distinguish and what
target market do we single out (what type of customer)?
, Needs: what product features or benefits are customers looking for in order to satisfy their
needs (what ‘customer functions’ should we fulfil)?
Technologies: how can we satisfy the identified needs (with which products and services)?
The market: 1st factor, the product: 2nd and 3rd factor
o Business units defined like this – product-market combinations
Defining the company’s mission
Mission statement (a formal description of an organization’s mission) – spells out the company’s
strategic vision, including its corporate philosophy, the overall goals, top management’s values, and
priorities, and the strategies it pursues
What are our core activities or, in other words, what business are we in?
What kind of company are we and would we like to become?
Who are our customers and what are their needs and wants?
Core competencies – capabilities that customers value and competitors find hard to duplicate
Functions:
External – to emphasize the distinctive features of the company
Internal – to motivate the employees and to get them – particularly managers – to reflect on
the strategy
SWOT Analysis
Internal analysis
Factors that the company itself can influence – at least in the long term (controllable factors)
The resources needed to achieve the company’s objectives, the production technology, the
employees’ know-how, the nature of the product mix and the company’s reputation among
its customers
The company’s Strengths and Weaknesses
All departments of the company need to be included
External analysis
The marketing environment – external variables that the company is unable to influence
(non-controllable factors)
Determining the extent to which the trends represent Opportunities or Threats, and
identifying those which are irrelevant for the company
Confrontation matrix
A helpful tool to identify possible strategies, based on the SWOT analysis
Combines strengths and weaknesses with opportunities and threats and suggests several
preferred strategies for each quadrant
