Strategic Marketing

Chapter Two Objectives
Strategic Marketing Planning

By the end of this chapter, you should be able to:
• Define strategic marketing planning
• Understand mission statements and vision statements
• Describe a corporate or business-unit strategy
• Describe the components of the marketing plan
• Explain crisis management
• Understand the importance of customer-focused strategic planning and balanced strategic

planning
O.C. Ferrell, Michael D. Hartline, Bryan W. Hochstein, Marketing Strategy, Eighth Edition.© 2022 Cengage. All Rights
Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Ice Breaker: Brands on Social Media
1. The class will be broken up into small groups.

2. Groups will discuss how brands can tell their brand story through social
media (e.g., Facebook, Instagram, Twitter, and TikTok).
3. Each group will share at least one real-world example of a company
engaging with its customers on social media.
4. Share any personal experience group members have engaging with brands
through social media.
INTRODUCTION: Escaping the Commodity Trap
• Without a competitive advantage, a firm may find itself in the

“commodity trap”
• Product is just one more in a sea of similar products
• Competitive advantage can be developed with product differentiation,
promotion, price, or distribution
• Mature industries face this problem
• Success stories:
• Southwest
• Dollar Shave Club
• Tesla
• Firms in this trap must spend a great deal on promotion
• Some firms avoid this trap through brand building
THE STRATEGIC PLANNING PROCESS
• Situation analysis refers to an in-depth analysis of the organization’s

internal and external environments
• A marketing plan is a written document that provides the blueprint or
outline of the organization’s marketing activities
• Including implementation, evaluation, and control
• Determines specific marketing goals, objectives, responsibilities, budgets, and timelines
• Requires contingency plans for unknown disruptors
• Decisions must be made within the organization’s overall mission, goals, and objectives
Organizational Mission Versus Organizational Vision

• A mission, or mission statement, seeks to answer the question “What
business are we in?”
• AT&T’s mission is to “inspire human progress through the power of communication
and entertainment”
• A vision or vision statement seeks to answer the question “What do we

want to become?”
• IKEA’s vision is to “create a better everyday life for the many people”
Elements of the Mission Statement
1. Who are we?
2. Who are our customers?
3. What is our operating philosophy (basic beliefs, values, ethics, etc.)?
4. What are our core competencies or competitive advantages?
5. What are our responsibilities with respect to being a good steward of our
human, financial, and environmental resources?
Mission Statement Examples
• Patagonia: Build the best product, cause no unnecessary harm, use
business to inspire and implement solutions to the environmental crisis.
• American Express: We work hard every day to make American
Express the world’s most respected service brand.
• Warby Parker: To offer designer eyewear at a revolutionary price, while
leading the way for socially conscious businesses.
• Honest Tea: To create and promote great-tasting, healthy, organic
beverages.
• Nordstrom: To give customers the most compelling shopping
experience possible.
• Prezi: To reinvent how people share
Mission Width and Stability
• If the mission is too broad, it will be meaningless
• Can lead companies to establish plans and strategies in areas where their strengths
are limited
• Narrow mission statements can be costly as well

• Can cause company to miss major opportunity
• Consider railroad industry overtaken by other modes of transportation and travel
• Mission stability refers to the frequency of modifications in an

organization’s mission statement
• Mission should not change frequently
Customer-Focused Mission Statements
• Mission statements have become much more customer oriented
• People’s lives and businesses should be enriched because they have dealt
with the organization
• Consider Southwest Airline’s mission statement:
• The mission of Southwest Airlines is dedication to the highest quality of customer service
delivered with a sense of warmth, friendliness, individual pride, and company spirit.
Johnson & Johnson Strengthens Its Credo
• J&J was a pioneer in developing Credo of values in 1943
• Regularly enhances Credo with feedback from employees
• Emphasizes putting consumer first
• Addresses needs of employees
• Addresses how J&J can improve its communities
• Emphasizes importance of innovation in generating fair return for

stockholders
Corporate or Business-Unit Strategy
• Strategic business units (SBUs) include subsidiaries, divisions, product
lines, and other profit centers
• Competitive advantages, allocation of resources and coordination across functional units
(marketing, production, finance, HR, etc.)
• Sony operates music, pictures, electronics, game services, etc.
• Must consider firm’s capabilities

• Walmart’s long-running strategic investments in logistics allow the retailer to operate with
lower inventory costs than its competitors
Functional Goals and Objectives
• Represent functional areas of the organization
• marketing, production, financial, or human resources
• Should be expressed in clear/simple terms
• Should be measurable (accurately)
• Sales ($ or units)
• Profitability
• Gain in market share
• Sales/square foot
• Average check (sale)
• Share of customer (function of cross-selling)
Functional Strategy
• Select one or more target markets
• Develop a distinctive marketing program that addresses/understands the
wants/needs of the market(s)
• AutoZone targets the do-it-yourself car owner on demand delivery model,
stock low turnover items (warehouses)
• Low prices and signature/private products
• Superior logistics and staff are trained to be “experts”
• Commercial parts (autobody and mechanics)
Implementation
• Execution of the functional strategy
• Two focal point audiences
• Internal (employees, managers, and executives)
• External (customers, suppliers, investors, society at large)
• How can emerging technologies be used to support implementation

• AI, robotics, and blockchain
Evaluation and Control (1 of 2)
• Establish and monitor key performance indicators (KPIs)
• Sales
• Productivity
• Perfect orders
• Customer satisfaction
• If you’re not measuring “it”…is “it” perceived relevant

• Provides feedback for the next round of strategic planning
THE MARKETING PLAN
Evaluation and Control (2 of 2)

• Marketing control
• Establishing performance standards
• Assessing actual performance against performance standards
• Tied to plan objectives
• Taking corrective action as needed
• To reduce discrepancies between desired/actual data
• Financial assessment of the plan
• Costs, sales, and revenue
• Affects alternative courses of action going forward
• Marketing audit can help determine why marketing plan is not living up
to expectations
• Marketing plans are forward looking and set goals/objectives
Knowledge Check Activity 1
Which of the following is a written document that provides the blueprint or
outline of the organization’s marketing activities?
a. Vision statement
b. Strategic business unit (SBU)
c. Mission statement
d. Marketing plan
Knowledge Check Activity 1: Answer
Which of the following is a written document that provides the blueprint or
outline of the organization’s marketing activities?
Answer: D. Marketing plan

A marketing plan is a written document that provides the blueprint or outline of
the organization’s marketing activities including implementation, evaluation,
and control.
The marketing plan determines specific marketing goals, objectives,
responsibilities, budgets, and timelines. It requires contingency plans for
unknown disruptors. Decisions must be made within the organization’s overall
mission, goals, and objectives.
THE MARKETING PLAN
Structure
• Executive summary
• Situation analysis
• SWOT analysis (strengths, weaknesses, opportunities, threats)
• Marketing goals and objectives
• Marketing strategy
• Marketing implementation
• Evaluation and control
THE MARKETING PLAN
Considerations
• Comprehensive
• Ensures that there are no omissions of important information.
• Flexible
• Must be flexible enough to be modified to fit the unique needs of a situation
• An overly rigid outline is detrimental to the planning process
• Consistent
• Consistency between the marketing plan outline and the outline of other functional
area plans
• Logical
• Illogical outline could force top managers to reject or underfund the marketing plan
THE MARKETING PLAN
Executive Summary
• Outlines the key points of the plan/execution
• Concise overview of the plan
• Not a “drill deep” detailed analysis

• Major aspects of plan, objectives, sales goals/projections, costs, and
measurement/assessment
• Breadth of the plan (what areas are you covering)
• If an executive or employee reads the plan, can they quickly determine what is expected
to happen and how it will happen
• Share with key constituents to help them understand their roles
• First part of the marketing plan…you’re selling your plan
THE MARKETING PLAN
Situation Analysis
• Internal environment
• Workforce availability, competitive demand, age/capacity of technology, financial
resources, and internal political strife
• Firms current marketing objectives and performance
• Customer environment
• Needs of target market(s), changing needs, how current/new products meet those
needs
• External environment
• Competitive, economic, social, political/legal, and technological
• Challenges
• Too much data, push toward integrated data analytics
THE MARKETING PLAN
SWOT Analysis
Helpful Harmful
to achieving the objective to achieving the objective
Internal origin
(attributes of the Strengths Weaknesses
organization)
External origin
(attributes of the Opportunities Threats
environment)
THE MARKETING PLAN
Role Play Activity
1. Break into small groups of 3–5 people.
2. Congratulations! You’ve been hired by your school to develop a marketing
plan. Specifically, you are working on a SWOT analysis that outlines the
school’s strengths, weaknesses, opportunities, and threats as they relate to
the objective of recruiting new students. You’ve been asked to pull on your
personal experience and knowledge of the school to create this analysis.
3. Identify strengths and weaknesses.
4. Identify opportunities and threats.
5. Present to the class your group’s SWOT analysis.
THE MARKETING PLAN
Marketing Goals and Objectives
• Goals
• Broad, simple statements of what will be accomplished
• Guide the creation of objectives and resource allocations
• Marketing objectives
• Quantitative expectations to permit measurement and evaluation
• Performance targets to determine “success”

• Defines measurement targets for the evaluation and control phases
• Must be consistent with the firm’s mission
THE MARKETING PLAN
Marketing Strategy
• Selection/identification of target market(s)
• Creating and maintaining the marketing program
• Price, product, promotion, and distribution
• Enhance competitive advantage(s) and make it sustainable

• Managing relationships with customers through maintaining a competitive advantage(s)
THE MARKETING PLAN
Marketing Implementation
• What are the specific marketing activities that will be undertaken?
• How will the activities be performed?
• When will these activities be performed?
• Who is responsible for these activities?
• How will the completion of planned activities be monitored?
• How much will these activities cost?
THE MARKETING PLAN
Percent of Revenue Spent on Marketing by Industry
Source: Ben Hallman,

“What Percent of
Revenue Do Publicly
Traded Companies
Spend on Marketing and
Sales?” Vital Design,
2020,
https://vtldesign.com/digit
al-marketing/content-mar
keting-strategy/percent-of
-revenue-spent-on-market
ing-sales/
THE MARKETING PLAN
Using the Plan Structure
• Plan ahead
• Revise, then revise again
• Be creative
• Use common sense and judgment
• Think ahead to implementation
• Update regularly
• Communicate to others
THE MARKETING PLAN
Crisis Management
• Crisis management is the process of handling a high-impact event
characterized by uncertainty and ambiguity
• Requires quick response to mitigate damage
• Impossible to be perfect because of all the chaos involved
• Learning events because of successes and failures
• Assist in the development of future crisis management plans
• Likely to disrupt marketing plans/implementation
• Require the development of a recovery plan
• Crises examples:
• COVID-19 pandemic
• The Great Recession
• Natural disasters
THE MARKETING PLAN
Continuity Planning
• Continuity planning refers to strategies, systems, and procedures
that help ensure that a firm’s policies are in place and operating (in any
environment)
• Anticipation, prevention, mitigation, and survival mechanisms
• Goes beyond normal planning to:

• address disasters
• provide continuity through decision making
THE MARKETING PLAN
Purpose and Significance

• Explains both the present and future
• Situation analysis and SWOT
• Specifies expected outcomes (goals and objectives)

• Describes specific actions/responsibilities
• Identifies resources needed for implementation
• Permits monitoring of actions/results so that controls can be implemented
• Informs next year’s planning cycle
MORE ON MARKETING
Organizational Aspects
• Marketing manager, brand manager, and/or product manager write the plan
• Others use consultants or committees
• Responsibility for performance lies with V.P. Marketing or Marketing Director

• Final approval comes from the President or CEO
• Will the proposed plan achieve the desired objectives?
• Are there alternative uses of resources that would better meet corporate or business unit
objectives, other than this plan?
MORE ON MARKETING
Major Barriers Marketers Face Around Innovation
Source: Gartner,
“Gartner Reveals the
Top Three Barriers to
Innovation in
Marketing,” November
11, 2019,
https://www.gartner.co
m/en/newsroom/press-r
eleases/2019-11-11-gar
tner-reveals-the-top-thr
ee-barriers-to-innovatio
n-
Knowledge Check Activity 2
_______ is a simple framework for organizing and evaluating a company’s
strategic position when developing a marketing plan.
a. Contingency planning
b. SWOT analysis
c. Situation analysis
d. Executive summary
Knowledge Check Activity 2: Answer
_______ is a simple framework for organizing and evaluating a company’s
strategic position when developing a marketing plan
Answer: B. SWOT analysis

SWOT analysis focuses on the internal factors (strengths and weaknesses)
and external factors (opportunities and threats), derived from the situation
analysis in the preceding section that give the firm certain advantages and
disadvantages in satisfying the needs of its target market(s).
SWOT analysis has gained widespread acceptance because it is a simple
framework for organizing and evaluating a company’s strategic position when
developing a marketing plan.
MAINTAINING CUSTOMER FOCUS AND BALANCE IN
STRATEGIC PLANNING
Customer-Focused Planning
• Focus on customer satisfaction and firm success
• Putting customers’ needs first
• Long-term, value-added relationships with key stakeholders
• Generate sustainable competitive advantage
• Home Depot under Carol Tome (CFO)
• Marketers can see their products from the virtual eyes of the customer by
analyzing multiple data sources to create a holistic view of customer
perceptions and use of products (synthetic customer vision)
STRATEGIC PLANNING
Home Depot’s Inverted Pyramid
Source: Home Depot, “About Us,”

https://corporate.homedepot.com/about
STRATEGIC PLANNING
Spotify Eyes the Next Generation
• Spotify is the world’s most popular audio streaming service
• 270 million users
• 35% of the global music-streaming market
• Looking to next generation of audio consumers to expand customer base

• Spotify Kids offers stripped-down design with fewer features
• Similarly, Amazon offers family-friendly features for its Echo devices
• Must take care to protect children’s online privacy
STRATEGIC PLANNING
Balanced Strategic Planning
• System to monitor environmental, social, and governance (ESG)
• Environmental
• Land, air, water protection
• Social (how you treat key stakeholders)

• Product liability, shareholder activists, etc.
• Governance
• Legal, regulatory, business ethics
STRATEGIC PLANNING ESG Framework Example
Source: FTSE Russel, “ESG

Ratings,”
https://www.ftserussell.com/data/sust
ainability-and-esg-data/esg-ratings
Summary
Now that the lesson has ended, you should have learned to:
• Define strategic marketing planning
• Understand mission statements and vision statements
• Describe a corporate or business-unit strategy
• Describe the components of the marketing plan
• Explain crisis management
• Understand the importance of customer-focused strategic planning and balanced
strategic planning

Strategic Marketing

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Chapter Two Objectives

Strategic Marketing Planning

• Understand mission statements and vision statements

• Describe a corporate or business-unit strategy

• Describe the components of the marketing plan

• Explain crisis management

• Understand the importance of customer-focused strategic planning and balanced strategic

1. The class will be broken up into small groups.

• Without a competitive advantage, a firm may find itself in the

• Situation analysis refers to an in-depth analysis of the organization’s

• Determines specific marketing goals, objectives, responsibilities, budgets, and timelines

• Requires contingency plans for unknown disruptors

Organizational Mission Versus Organizational Vision

• A vision or vision statement seeks to answer the question “What do we

• Narrow mission statements can be costly as well

• Consider railroad industry overtaken by other modes of transportation and travel

• Mission stability refers to the frequency of modifications in an

• J&J was a pioneer in developing Credo of values in 1943

• Regularly enhances Credo with feedback from employees

• Emphasizes putting consumer first

• Addresses needs of employees

• Addresses how J&J can improve its communities

• Emphasizes importance of innovation in generating fair return for

• Must consider firm’s capabilities

• How can emerging technologies be used to support implementation

• If you’re not measuring “it”…is “it” perceived relevant

Evaluation and Control (2 of 2)

b. Strategic business unit (SBU)

Answer: D. Marketing plan

• SWOT analysis (strengths, weaknesses, opportunities, threats)

• Marketing goals and objectives

• Evaluation and control

• Not a “drill deep” detailed analysis

• Performance targets to determine “success”

• Enhance competitive advantage(s) and make it sustainable

• How will the activities be performed?

• When will these activities be performed?

• Who is responsible for these activities?

• How will the completion of planned activities be monitored?

• How much will these activities cost?

Source: Ben Hallman,

• Goes beyond normal planning to:

Purpose and Significance

• Specifies expected outcomes (goals and objectives)

• Responsibility for performance lies with V.P. Marketing or Marketing Director

Answer: B. SWOT analysis

• Putting customers’ needs first

• Long-term, value-added relationships with key stakeholders

• Generate sustainable competitive advantage

• Home Depot under Carol Tome (CFO)

Source: Home Depot, “About Us,”

• Looking to next generation of audio consumers to expand customer base

• Social (how you treat key stakeholders)

Source: FTSE Russel, “ESG

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