Chapter 2

Strategic Planning
for Competitive
Advantage

MKTG9
Lamb, Hair, and McDaniel

1 © 2016 Cengage Learning. All Rights Reserved.

LEARNING OUTCOMES
2-1 Understand the importance of strategic
planning

2-2 Define strategic business units (SBUs)

2-3 Identify strategic alternatives and know a

basic outline for a marketing plan

2-4 Develop an appropriate business mission

statement

© 2016 Cengage Learning. All Rights Reserved. 2

LEARNING OUTCOMES
2-5 Describe the components of a situation
analysis

2-6 Identify sources of competitive advantage

2-7 Explain the criteria for stating good

marketing objectives

2-8 Discuss target market strategies

© 2016 Cengage Learning. All Rights Reserved. 3

LEARNING OUTCOMES
2-9 Describe the elements of the marketing mix

2-10 Explain why implementation, evaluation,

and control of the marketing plan are
necessary

2-11 Identify several techniques that help make

strategic planning effective

© 2016 Cengage Learning. All Rights Reserved. 4

 The Nature of
2-1 Strategic Planning

Understand the
importance of strategic
marketing and know
a basic outline for
a marketing plan

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Strategic Planning is…
the managerial process of creating
and maintaining a fit between the
organization’s objectives and
resources and the evolving market
opportunities.
Strategic marketing management
addresses two questions:
•What is the organization’s main activity at a particular
time?
•How will it reach its goals?

© 2016 Cengage Learning. All Rights Reserved. 6

 Characteristics of
Strategic Business Units
(SBUs)
An SBU has…
 A distinct mission and specific target market
 Control over its resources
 Its own competitors
 A single business or a collection of related
businesses
 Plans independent of other SBUs

© 2016 Cengage Learning. All Rights Reserved. 7

Systems and servers
IBM Systems overview
Software
Servers and Storage overview Personal Computers
Product finder
Power Systems Used from IBM
Systems software PC recycling and buyback programs
z Systems
Popular software product for businesses
PureFlex System
lines Printing Products
Flex System Printing systems and supplies from
CICS
System x InfoPrint Solutions Company*
Collaboration (Lotus)
Blade Servers Printing paper and toner from IBM
Cognos
Express Systems
DB2
Security
FileNet
Cloud
IMS
Big Data
Informix
Software defined environment
InfoSphere
Storage
Platform Computing
Disk
Rational
Flash SPSS
Network attached storage z System
Storage area networks Tivoli
Storage software WebSphere
Tape
Storage “A-Z”
Certified used storage
Networking
Switches
Transceivers and cables
Networking software

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 http://
www.pepsicobeveragefacts.co
m/

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2-3 Strategic Alternatives

Identify strategic
alternatives

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Ansoff’s Opportunity Matrix
Market Increase market share among
Penetration existing customers

Market Attract new customers to

Development existing products

Product Create new products for

Development present markets

Introduce new products

Diversification into new markets

© 2016 Cengage Learning. All Rights Reserved. 11

2.1
Ansoff’s
Opportunity Matrix

Present Product New Product

Present Market Penetration Product Development

Market Starbucks sells more coffee to Starbucks develops
customers who register their powdered instant coffee
reloadable Starbucks cards. called Via.

New Market Development Diversification

Market Starbucks opens stores in Starbucks launches Hear
Brazil and Chile Music and buys Ethos Water.

© 2016 Cengage Learning. All Rights Reserved. 12

Boston Consulting Group
Portfolio Matrix
Star

Cash Cow
Portfolio
Matrix
Question Mark

Dog

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2.3 Portfolio Matrix for a Large
Computer Manufacturer

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 What Is a Marketing Plan?

 Planning – the process of anticipating future

events and determining strategies to achieve
organizational objectives in the future.

 Marketing Planning – designing activities relating

to marketing objectives and the changing
marketing environment.

 Marketing Plan – a written document that acts as

a guidebook of marketing activities for the
marketing manager.

© 2016 Cengage Learning. All Rights Reserved. 15

Why Write a Marketing Plan?
The creation and implementation of a
complete marketing plan will allow the
organization to achieve marketing
objectives and succeed.

However, the marketing plan is only as

good as the information it contains and
the effort, creativity, and thought that
went into its creation.

© 2016 Cengage Learning. All Rights Reserved. 16

2.5 Elements of a
Marketing Plan
Business Mission
Statement

Situation or SWOT
Analysis

Objectives

Marketing Strategy
Target Market
Strategy

Marketing Mix
Product Distribution

Promotion Price

Implementation
Evaluation
Control
 Defining the
2-4 Business Mission

Develop an
appropriate business
mission statement

© 2016 Cengage Learning. All Rights Reserved.

 Defining the Business
Mission
 Answers the question,
“What business are we in?”

 The business mission profoundly

affects the firm’s long-run resource
allocation, profitability, and survival

 Business mission statements that

are stated too narrowly suffer from
marketing myopia
© 2016 Cengage Learning. All Rights Reserved. 19
Pepsi’s Mission Statement

© 2014 Cengage Learning Inc. All Rights Reserved. 20

 Conducting a
2-5 Situation Analysis

Describe the
components of a
situation analysis

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 SWOT Analysis

S Strengths - things the company does

well.

Internal

W Weaknesses - things the company

does not do well.

O
Opportunities - conditions in the
external environment that favor
strengths.
External Threats - conditions in the external

T environment that do not relate to

existing strengths or favor areas of
©South-Western College Publishing
current weakness.
© 2016 Cengage Learning. All Rights Reserved. 22
 Components of a SWOT
Analysis
Examining internal strengths
and weaknesses.
Focus on organizational resources:
• Production costs
• Marketing skills
• Financial resources
• Company or brand image
• Employee capabilities
• Technology

© 2016 Cengage Learning. All Rights Reserved. 23

Environmental Scanning
Helps identify
opportunities and threats.
Designing a marketing strategy is based on
six major environmental forces:
• Social
• Demographic
• Economic
• Technological
• Political/Legal
• Competitive
© 2016 Cengage Learning. All Rights Reserved. 24
2-6 Competitive Advantage

Identify sources
of competitive
advantage

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 Competitive Advantage

Cost

Types of
Product/Service
Competitive Differentiation
Advantage

Niche

© 2016 Cengage Learning. All Rights Reserved. 26

Cost Competitive Advantage
A competitive advantage is a set of unique
features of a company and its products that
are perceived by the target market as
significant and superior to those of the
competition.
Having a cost competitive advantage means
being the low-cost competitor in an industry
while maintaining satisfactory profit margins.

© 2016 Cengage Learning. All Rights Reserved. 27

 Examples of Product/Service
Differentiators
A product/service differentiation competitive advantage
exists when a firm provides something that is unique
and valuable to buyers beyond simply offering a lower
price than that of the competition. Examples include:
Brand names
Strong dealer network
Product reliability
Image
Service

© 2016 Cengage Learning. All Rights Reserved. 28

 Niche Competitive Advantage
A niche competitive advantage seeks to
target and effectively serve a single
segment of the market. A nice competitive
advantage:

Is used by small companies with limited

resources

May be used in a limited geographic market

© 2016 Cengage Learning. All Rights Reserved. 29

 Building Sustainable
Competitive Advantage

 Sustainable competitive advantage is

an advantage that cannot be copied by
the competition.

 A firm that has successfully achieved a

competitive advantage will stake out a
position unique in some manner from
its rivals.

© 2016 Cengage Learning. All Rights Reserved. 30

 Setting Marketing
2-7 Plan Objectives

Explain the criteria

for stating good
marketing objectives

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 Marketing Objectives
A marketing objective is a statement of
what is to be accomplished through
marketing activities. To be useful, stated
objectives should be:

Realistic
Measurable
Time specific
Compared to a benchmark

© 2016 Cengage Learning. All Rights Reserved. 32

Criteria for Good Marketing Objectives

Carefully specified objectives serve several functions:

1. Communicate marketing management philosophy

2. Provide management direction

3. Motivate employees

4. Force executives to clarify their thinking

5. Form a basis for control

© 2016 Cengage Learning. All Rights Reserved. 33

 Describing the
2-8 Target Market

Discuss target
market strategies

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 Describing the Target Market
Marketing Strategy involves…
the activities of selecting and describing one
or more target markets and developing and
maintaining a marketing mix that will
produce mutually satisfying exchanges with
target markets.
Marketing Opportunity Analysis
(MOA) involves…
the description and estimation of the size
and sales potential of market segments
that are of interest to the firm and the
assessment of key competitors in these
market segments.
© 2016 Cengage Learning. All Rights Reserved. 35
 Target Market Strategy
 Segment the market based on groups
with similar characteristics

 Analyze the market based on

attractiveness of market segments

 Select one or more target markets

© 2016 Cengage Learning. All Rights Reserved. 36

Target Market Strategy

Appeal to the entire market

with one marketing mix

Concentrate on one
marketing segment

Appeal to multiple markets

with multiple marketing mixes

© 2016 Cengage Learning. All Rights Reserved. 37

2-9 The Marketing Mix

Describe the
elements of the
marketing mix

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The Marketing Mix is…
a unique blend of product, place (distribution),
promotion, and pricing strategies designed to
produce mutually satisfying exchanges with a
target market.

The elements of the marketing mix

are often referred to as the

“Four Ps”

© 2016 Cengage Learning. All Rights Reserved. 39

 Marketing Mix:
The “Four Ps”
The starting point of the “4
Ps” Includes:
Physical unit
Package Product
Warranty
Service Products can be…
 Tangible goods
Brand
 Ideas
Image  Services
Value
© 2016 Cengage Learning. All Rights Reserved. 40
Marketing Mix:
The “Four Ps”
Place
Product availability where and when
customers want them

All activities from raw materials to

finished products

Ensure products arrive in usable

condition at designated places when
needed
© 2016 Cengage Learning. All Rights Reserved. 41
 Marketing Mix:
The “Four Ps”

Promotion

Role is to bring about Includes integration of:

exchanges with target  Advertising
markets by:  Public relations
 Informing
 Sales promotion
 Educating  Personal selling
 Persuading
 Reminding

© 2016 Cengage Learning. All Rights Reserved. 42

Marketing Mix:
Price
The “Four Ps”
Price is what a buyer must give up
to obtain a product.
The most flexible of the
“4 Ps”—quickest to change
Competitive weapon
Price x Units Sold = Total
Revenue

© 2016 Cengage Learning. All Rights Reserved. 43

 Following Up on
2-10 the Marketing Plan

Explain why
implementation,
evaluation, and control
of the marketing plan
are necessary

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Following Up on the
Marketing Plan
 Implementation

 Evaluation and Control

 A marketing audit is…

 Comprehensive
 Systematic
 Independent
 Periodic

© 2016 Cengage Learning. All Rights Reserved. 45