Marketing Management

Code - BBA 102

LTPC – 2-0-1-3
 Unit II
Corporate & Division Strategic Planning
 Strategic Planning

Strategic Planning is
the process of
developing and maintaining
a strategic fit between
the organization’s goals and capabilities
and
its changing marketing opportunities.
Continue…strategic planning

Strategic planning may be defined as

the process of
determining the objectives
of the organization and
the resources to be used to
attain these objectives,
as also the policies
to govern
the acquisition,
utilization and
disposition of these resources.
Continue…strategic planning

It helps in knowing
what we are
and
where we want to go
so that
environmental
threats and opportunities
can be exploited,
given
the strengths and weakness
of the organization.
Continue…strategic planning

Business Unit,
product and
Corporate Level market level

Setting Planning
Defining the Designing Marketing &
Company
Company Business other
Objectives &
Mission Portfolio Functional
Goals
Strategies
Continue…strategic planning

It involves crafting a
clear and concise statement
Defining that outlines the
the
Company purpose,
Mission values, and
core objectives
of an organization.
Continue…market-oriented mission

Mission statement
A statement of the organization’s purpose—what it wants
to accomplish in the larger environment.

➢ Organizations defines their missions myopically in

terms of product and technology.

➢ Mission statements should be market oriented and

defined in terms of satisfying basic customer needs.
E.g.: Pinterest, MS etc.
 Defining a Market-Oriented Mission
An organization exists to accomplish something, and this
purpose should be clearly stated. Forging a sound mission
begins with the following questions:

➢ What is our business?

➢ Who is the customer?

➢ What do consumers value?

➢ What should our business be?

Product vs Market-oriented Business
Definition
Product-oriented Market-oriented
Company
Definition Definition

We run a hypermarket “Isse acha aur sasta kahin nahi”. (It does
Big Bazar to sell household not get cheaper or better than this.)
merchandise.

We connect people around the world and

We are an online social help them share important moments in
Facebook
network their lives.

Life Insurance “Zindagi ke saath bhi, zindagi ke baad

Corporation of We sell life insurance. bhi”. (With life, after life) Link:
India https://www.youtube.com/watch?v=zWilI5n51n0&pp=yg
UYbGljIHppbmRhZ2kga2UgYmFhZCBiaGkg
Continue…strategic planning

Product-oriented Market-oriented
Company
Definition Definition

We make the internet buying experience

We sell books, videos,
fast, easy and enjoyable….we are the
Amazon toys, electronics and
place where you can find and discover
other products online.
anything you want to but online.

We provide the best We help you organize the world’s

Google information and make it universally
online search engine.
accessible and useful.

We deliver low prices everyday and give

Walmart We run discounts
ordinary folks the chance to buy the
stores.
same things as rich people.
Continue…strategic planning
Defining the Company Mission

Mission Statement: Example - Pantagonia

"Build the best product, cause no unnecessary harm, use business to inspire and
implement solutions to the environmental crisis."

➢ Purpose and ➢ Ethical ➢ Leveraging ➢ Clear and ➢ Aligned with

Value Consider Business for Concise Company
Orientation: ation: a Greater Language: Activities: eco-
"build the "cause no Cause: "use powerful friendly materials,
best product" unnecessa business to statement, support
ry harm" inspire and making it easy environmental
implement for all initiatives, and
solutions to stakeholders to actively work
the understand. towards reducing
environment their ecological
al crisis." footprint.
Continue…strategic planning
Setting Company Objectives & Goals

Objective1: Reduce Objective2: Objective3: Objective4: Increase Objective5:

Environmental Promote Circular Advocate for Transparency in Innovate in
Impact in Product Economy Environmental Supply Chain Sustainable Material
Manufacturing. Practices. Policy Changes. Practices. Development.

Goal1: Achieve a Goal2: Goal3: Engage in Goal4: Publish an Goal5: Introduce at

30% reduction in Implement a at least three high- annual sustainability least three new
water and energy product take- impact report, detailing key product lines
consumption in the back program environmental environmental and incorporating
production process and ensure that advocacy social metrics, and cutting-edge, eco-
for all products 50% of returned campaigns work towards friendly materials
within the next items are annually, achieving a 90% within the next 18
three years. recycled or supporting supplier compliance months.
repurposed by policies that rate with Patagonia's
the end of the address climate environmental
next fiscal year. change and standards within the
environmental next two years.
conservation.
Continue…strategic planning

➢ At the corporate level, the company starts the strategic

planning process by defining its overall purpose and mission.

➢ This mission is then turned into detailed supporting

objectives that guide the entire company.

➢ Next, headquarters decides what portfolio of businesses and

products is best for the company and how much support to
give each one.
Continue…strategic planning

➢ In turn, each business and product develops detailed

marketing and other departmental plans that support the
company-wide plan.

➢ Thus, marketing planning occurs at the business-unit,

product, and market levels.
Steps of an Effective Strategic Plan

1. Understanding the need for a strategic plan

2. Setting Goals
3. Developing Assumptions or Premises
4. Researching Different ways to achieve Objectives
5. Choosing the Plan of Action
6. Developing a Supporting Plan
Continue…steps in SP

1. Understanding the need for a strategic plan

➢ To be aware of the industry environment in which the
business operates.
➢ To identify opportunities for development.
➢ To be aware of the business’s internal operation.
➢ To know when there is a problem that needs to be
solved.
➢ To begin looking at actions that would help to take
advantage of those opportunities.
Continue…steps in SP

2. Setting Goals
➢ Can be set for both individual departments and for the
business as a whole.
➢ Can be general for an organization.
➢ Detailed and specific for a department, so that team
members understand what they need to do.
➢ Vital to the strategic planning process.
➢ Allow managers to more effectively direct their teams.
➢ Give employees a common purpose to work toward .
➢ To ensure that their daily activities are more focused.
Continue…steps in SP

3. Developing Assumptions or Premises

Forecast: Type of premise that involves making predictions
about the future.
➢ Internal premises: Based on inner workings of the
company and factors.
▪ The resources you expect to have available.
▪ Company policies that you need or will have to
implement.
▪ How the levels of management will interact with the
plan.
Continue…steps in SP

➢ External premises: Anything outside the company that

may affect the plan and the ability to achieve set
objectives.
▪ The political and social environment
▪ Technological advancements
▪ Competition from other businesses
Continue…steps in SP

4. Researching Different ways to achieve Objectives

➢ Important to have some flexibility for managers when they are
directing their teams.
➢ May involve innovative solutions/traditional methods for
completing goals.
➢ Goal to narrow options down to a few choices.
➢ To carefully consider the strengths and weaknesses of each
solution.
➢ Important as they relate to the business’s set goals.
➢ Also need to analyze each option to ensure if it would help
efficiently achieve the final objectives.
Continue…steps in SP

5. Choosing the Plan of Action

➢ Avoid a plan that could potentially cost the business money.
▪ Whether it’s in the short term or the long term.
➢ Be sure to select the plan having least amount of potentially
negative consequences.
▪ Compare the different options for completing the goal
▪ Choose the one having highest chance of success.
➢ Choose a plan of action that is adaptable.
▪ May encounter obstacles that you did not anticipate.
▪ Flexible plans: Helps to overcome these obstacles more
easily than with a fixed plan.
Continue…steps in SP
6. Developing a Supporting Plan
➢ Varies depending on the objectives.
E.g.: Primary Plan: To launch a new product
➢ Steps involved: Product research, developing a marketing plan
and arranging for manufacturing.
➢ Secondary plan: Steps that you need to take to support the
implementation of the main plan.
▪ Need to expand your product research team
▪ May include hiring new employees
▪ Hire a product research team if required
➢ Training personnel: A common component of a secondary plan
regardless of the goal.
 Marketing Strategies
A comprehensive plan formulated particularly for achieving
the marketing objectives of the organization.
A marketing strategy is a
comprehensive plan
that outlines
how an organization will
promote,
distribute, and
sell
its products or services.
Continue…

➢ Helps to increase sales, improve brand equity, bring new

customers, increase customer loyalty, increase market share
etc.
➢ Helps companies grow in the market through effective
research, marketing, promotion & advertising.
▪ It involves,
i. identification of target market segment,
ii. setting of short-term and long-term goals,
iii. pre-requisite consumer research, and
iv. implementation of ideas to get the attention of people.
 Steps of an Effective Marketing
Strategy
1. Analyze market
▪ To analyze & evaluate the market for the product or service being
considered.
▪ The market potential, target market, product need and the
feasibility.

2. Analyze competition
▪ To analyze the existing competitors as well as potential
competitors.
▪ Understanding competition provides insights into the product and
pricing strategies.
Continue…

3. Marketing Research
▪ To have a comprehensive marketing research to understand the
demand, customer needs etc.
▪ May include speaking with the end customers and surveys
▪ Analyzing the results to derive the customers needs and behavior.
4. Define marketing mix
▪ Defining strategies about product, price, place, promotion etc.
5. Financial analysis
▪ To evaluate and forecast the financials based on sales forecasting
to the target market.
▪ Helps in understanding the revenue potential, profitability and
viability of company and the market.
Continue…

6. Review and revise

▪ Continuous process.
▪ Strategy once devised to be constantly revisited and improved
or even changed to cater to changing customer behavior and
market dynamics.

7. Understand customers
▪ To constantly understand customer needs & requirements and
adapt business accordingly.
 Strategic Business Units
➢ Fully-functional unit of a business with its own vision and direction.
➢ Operates as a separate unit and independently
➢ Reports to the headquarters about its operational status.
e.g., LG in consumer durables.
❑ Makes refrigerators, washing machines, air-conditioners as well as
televisions.
❑ Divided into small units as separate SBUs so that revenues, costs as
well as profits can be tracked independently.
❑ Can make its own decisions, investments, budgets etc.
❑ Quick to react when the product market takes a shift, or changes
start happening before the shift happens
Product Life Cycle (PLC)
Product Life Cycle (PLC)
Continue…PLC

The product life cycle refers to the length of time a product

is introduced to the consumers into the market until it is
removed from the shelves.
➢ Every product passes through almost similar type of
phases, which are known as PLC.
➢ Though all products have a different life cycle and
several products do not pass through all phases.
➢ Every stage poses opportunities and challenges. Each of
these stages demands the unique or distinguished set of
marketing strategy.
Continue…PLC
Continue…PLC
Continue…PLC
Introduction
Marketing strategies used in the introduction stages include:
1. Rapid skimming - launching the product at a high price and high
promotional level
2. Slow skimming - launching the product at a high price and low
promotional level
3. Rapid penetration - launching the product at a low price with
significant promotion
4. Slow penetration - launching the product at a low price and minimal
promotion
Continue…PLC

Organization should aim to:

1. establish a clear brand identity
2. connect with the right partners to promote your product
3. set up consumer tests, or provide samples or trials to key target
markets
4. price the product or service as high as you believe you can sell it, and
to reflect the quality level you are providing
5. limit the product or service to a specific type of consumer - being
selective can boost demand.
Continue…PLC

Growth
➢ Mainly aim to increase profits. improving product quality
➢ Rapidly rising sales, profits and market share.
➢ Strategies include:
1. Adding new product features or support services to grow your market
share
2. Entering new markets segments
3. Keeping pricing as high as is reasonable to keep demand and profits
high
Continue…PLC

4. Increasing distribution channels to cope with growing demand

5. Shifting marketing messages from product awareness to product p
reference
6. Skimming product prices if your profits are too low
Continue…PLC
Maturity
➢ When sales peak, your product will enter the maturity stage.
➢ Market will be saturated,
➢ Need to change your marketing tactics to prolong the life cycle of
your product.
➢ Common strategies that can help during this stage:
1. Market modification –
▪ Includes entering new market segments,
▪ redefining target markets,
▪ winning over competitor's customers,
▪ converting non-users
2. Product modification –
▪ Adjusting or improving your product’s features, quality, pricing
▪ Differentiating it from other products
Continue…PLC

Decline
➢ Declining sales and profits.
➢ Can be caused by changes in consumer preferences,
technological advances and alternatives on the market
➢ Strategies include:
1. reduce your promotional expenditure on the products
2. reduce the number of distribution outlets that sell them
3. implement price cuts to get the customers to buy the product
4. find another use for the product
5. maintain the product and wait for competitors to withdraw
from the market first
6. harvest the product or service before discontinuing it
Continue…PLC

➢ Another option: To discontinue the product from your

offering.
➢ May choose to:
1. sell the brand to another business
2. significantly reduce the price to get rid of all the inventory
Continue…PLC
Continue…PLC
Thank You