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PRINCIPLES OF MARKETING
Philip Kotler and Gary Armstrong

Chapter
Chapter 22
Strategic Planning
and the
Marketing Process

Copyright 1999 Prentice Hall

Strategic
Strategic Planning
Planning Process
Process

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Strategic Planning involves developing an

overall company strategy for long-run
survival and growth.
This process involves:
Defining a Mission: Statement of an organizations
purpose; should be market oriented.
Setting Company Objectives: Supporting goals and
objectives to guide the entire company.
Designing a Business Portfolio: Collection of businesses
and products that make up the company.
Planning Functional Strategies: Detailed planning for each
department designed to accomplish strategic objectives.

Copyright 1999 Prentice Hall

Mission
Mission Statements
Statements

232-3
2-2-3
3

Market
Market
Oriented
Oriented
Motivating
Motivating

Characteristics
Characteristics
of
of Good
Good Mission
Mission
Statements
Statements

Distinctive
Distinctive
Competencies
Competencies

Fit
Fit Market
Market
Environment
Environment

Copyright 1999 Prentice Hall

Copyri ght 1998 Prentice Hall

Realistic
Realistic

Specific
Specific

Designing
Designing the
the Business
Business Portfolio
Portfolio

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The best portfolio is the one that best fits the

companys strengths and weaknesses to the
opportunities in the environment.
The company must:
analyze its current business portfolio or Strategic
Business Units (SBUs)
decide which SBUs should receive more, less, or no
investment
develop growth strategies for adding new products or
businesses to the portfolio

Copyright 1999 Prentice Hall

Analyzing
Analyzing Current
Current SBUs:
SBUs:
Boston
Boston Consulting
Consulting Group
Group Approach
Approach

Low

High

Market Growth Rate

Relative Market Share

High
Stars

Low
Question
Question Marks
Marks

High growth & share

Profit potential
May need heavy
investment to grow

Dogs
Dogs

Cash
CashCows
Cows
Low
Lowgrowth,
growth,high
highshare
share
Established,
Established,successful
successful
SBUs
SBUs
Produces
Producescash
cash

High
Highgrowth,
growth,low
lowshare
share
Build
Buildinto
intoStars/
Stars/phase
phaseout
out
Requires
Requirescash
cashto
tohold
hold
market
marketshare
share

Low
Lowgrowth
growth&&share
share
Low
Lowprofit
profitpotential
potential

Copyright 1999 Prentice Hall

22-55

Developing
Developing Growth
Growth Strategies
Strategies
Product/ Market Expansion Grid
Existing
Products
Existing
Markets

1. Market
Penetration

New
Markets

2. Market
Development

New
Products
3. Product
Development
4. Diversification

Copyright 1999 Prentice Hall

22-66

Product/
Product/ Market
Market Expansion
Expansion Grid
Grid

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Market Penetration:
Penetration increase sales to present customers
with current products. How? Cut prices, increase
advertising, get products into more stores.
Market Development:
Development develop new markets with current
products. How? Identify new demographic or
geographic markets.
Product Development:
Development offering modified or new products
to current customers. How? New styles, flavors, colors,
or modified products.
Diversification:
Diversification new products for new markets. How?
Start up or buy new businesses.

Copyright 1999 Prentice Hall

Marketings
Marketings Role
Role in
in Strategic
Strategic
Planning
Planning

22-88

Process of Selecting Target Consumers

Market Segmentation:
Segmentation determining distinct groups
of buyers (segments) with different needs.
Market Targeting:
Targeting evaluating and selecting which
target segments to enter.
Market Positioning:
Positioning products distinctive and
desirable place in the minds of target segments
compared to competing products.

Copyright 1999 Prentice Hall

22-99

The
The Marketing
Marketing Process
Process
DemographicEconomic
Environment
M
An ark
al eti
ys n g
is

Product

g
tin g
ke in
ar n
M lan
P

Target
Place Consumers Price
g
tin
ke ol
ar tr
M Con

Promotion

PoliticalLegal
Environment

Competitors

Copyright 1999 Prentice Hall

Publics

Im Ma
p l rk
em et
en i n g
ta
tio
n

Suppliers

TechnologicalNatural
Environment

Marketing
Intermediaries

SocialCultural
Environment

Marketing
Marketing MixMix- The
The Four
Four Ps
Ps

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10

Price

Product
Goods-and-service
combination that a
company offers a
target market

Amount of money
that consumers
have to pay to obtain
the product

Target
Customers
Intended
Positioning

Activities that
persuade target
customers to buy
the product

Promotion

Company activities
that make the
product available

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Place

Elements
Elements of
of aa Marketing
Marketing Plan
Plan
Executive Summary
Current Marketing Situation
Threats and Opportunities
Objectives and Issues
Marketing Strategy
Action Programs
Budgets
Controls

Copyright 1999 Prentice Hall

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