All companies must look ahead and develop long-term strategies to
meet the changing conditions in their industries. Each company must find
the game plan that makes the most sense given its specific situation,
opportunities, objectives, and resources. Keeping in view this fact the
last Lesson was dedicated for the discussion to explore several growth
alternatives within the context of strategic planning and portfolio
analysis. The product/market expansion grid shows four avenues for
growth: market penetration, market development, product development, and
A. MARKETING PROCESS
Analyzing the Current Business Portfolio We have discussed in last
Lesson that in order to analyze the current business portfolio, the
company must conduct portfolio analysis (a tool by
which management identifies and evaluates the various businesses that
make up the company). Two steps are important in this analysis:
1). The first step is to identify the key businesses (SBUs). The
strategic business unit (SBU) is a
unit of the company that has a separate mission and objectives and which
can be planned independently from other company businesses.
3). The second step is to assess the attractiveness of its various SBUs
and decide how much support each deserves. d. The best-known portfolio
planning method is the Boston Consulting Group (BCG) matrix: 1). Using
the BCG approach, where a company classifies all its SBUs according to
the growth-share matrix.
2). The SBU can be a company division, a product line within a division,
or even a single product or brand.
a). The vertical axis, market growth rate, provides a measure of market
b). The horizontal axis, relative market share, serves as a measure of
company strength in the market.
2). Using the matrix, four types of SBUs can be identified (Discussed in
detail in last Lesson)
b). Cash Cows
c). Question Marks
Once it has classified its SBUs, a company must determine what role
each will play in the future. The four strategies that can be pursued
for each SBU are:
1). The company can invest more in the business unit in order to build its share.
2). The company can invest enough just to hold at the
3). The company can harvest the SBU.
4). The company can divest the SBU. As time passes,
SBUs change their positions in the growth-share matrix. Each has its own
life cycle. The growth-share matrix has done much to help strategic
planning study; however, there are problems and limitations with the
1). They can be difficult, time-consuming, and costly to implement.
2). Management may find it difficult to define SBUs and measure market
share and growth.
3). They focus on classifying current businesses but provide little
advice for future planning.
44). They can lead the company to place too much emphasis on market-share
growth or growth through entry into attractive new markets. This can
cause unwise expansion into hot, new, risky ventures or giving up on
established units too quickly. In spite of the drawbacks, most firms are
still committed to strategic planning. Based upon this analysis company
designs the growth strategies:
Developing Growth Strategies
Companies should always be looking to the future. One useful device
for identifying growth opportunities for the future is the
product/market expansion grid. The product/market/strong
expansion gridis a portfolio-planning tool for
identifying company growth opportunities through:
1). Market Penetration—making more sales to present
customers without changing products in any way. Market penetration means
trying to increase sales of a firm’s present products in its present
markets probably through a more aggressive marketing mix. The firm may
try to strengthen its relationship with customers to increase their rate
of use or repeat purchases, or try to attract competitors’ customers or
current nonusers. New promotion appeals alone may not be effective. A
firm may need to add a home page on the Internet to make it easier and
faster for customers to place an order. Or, it may need to add more
stores in present areas for greater convenience.
2). Market Development—a strategy for company growth
by identifying and developing new markets for current company products
(example, demographic markets). Market development means trying to
increase sales by selling present products in new markets. Firms may try
advertising in different media to reach new target customers. Or they
may add channels of distribution or new stores in new areas, including
3). Product Development—a strategy for company
growth by offering modified or new products to current markets. Product
development means offering new or improved products for present markets.
By knowing the present market’s needs, a firm may see new ways to
satisfy customers. Computer software firms like Microsoft boost sales by
introducing new versions of popular programs.
4). Diversification&—a strategy for company growth by
starting up or acquiring businesses outside the company’s current
products and markets. Diversification means moving into totally
different lines of business perhaps entirely unfamiliar products,
markets, or even levels in the production-marketing system.
Planning Cross-Functional Strategies
The final step in the strategic planning process is planning
1). Once the strategic plan is in place, more detailed planning must
take place within each business unit.
2). Each department (such as marketing, finance, et cetera) provides
information for strategic planning. Marketing plays a key role in the
company’s strategic planning process by:
1). Providing a guiding philosophy.
2). Providing inputs to strategic planners by helping
to identify attractive market opportunities and by assessing the firm’s
potential to take advantage of them.
3). Within individual business units, marketing designs
strategies for reaching the unit’s objectives.
44). Marketers are challenged to find ways to get all departments to
Strategic Planning, Implementation, and Control Process
The process of developing and maintaining a strategic fit between the
organization’s goals and capabilities and its changing marketing
opportunities. It relies on developing a clear company mission,
supporting objectives, a sound business portfolio and coordinated
functional strategies. Business plans are more customers and
competitor-oriented and better reasoned and more realistic than they
were in the past. The plan is variously called a "business plan," a
"marketing plan," and sometimes an "operating plan." Most marketing
plans cover one year, but some cover a few years. The plans vary in
their length from under ten pages to over 50 pages. Some companies take
their plans very seriously, while others see them as only a rough guide
to action. The most frequently cited shortcomings of current marketing
plans, according to marketing executives, are lack of realism,
insufficient competitive analysis, and a short-run focus.
IMPLEMENTING THE MARKETING PLAN:
Planning good strategy is only the start - it counts very little if
the organization fails to implement it correctly. Main reasons for the
poor implementation are isolated planning, Some organizations employ
‘professional planners’ while others leave the task of developing
strategic plans to top management and leaving the details of
implementation to lower-level managers can spell poor or no
implementation at all. Marketing strategy and marketing performance are
linked by an implementation system consisting of five related elements.
Finally marketing control involves evaluating the results of marketing
strategies and plans and taking corrective action to ensure that
objectives are attained. It then measures its performance in the
marketplace and evaluates the causes of any differences between expected
and actual performance. Finally, management takes corrective action to
close the gaps between its goals and its performance.
Marketing Strategy Planning Process
Whenever performing the marketing function company needs courses of
the action known as the strategies. Marketing strategies and the
planning process are based on the It is based on the SWOT analysis. SWOT
analysis means to analyze the threats and opportunities that are part of
external environment and strengths and weaknesses of the organization,
which are part of the internal the environment. Based on this
environmental analysis company formulates the strategies to find out the
target customers designs objectives and mission statements to fulfill
the needs of the target customers and strategies to respond to the
competitive environment. After conducting SWOT analysis companies
decides strategies about the marketing mix i.e. 4Ps (Product, Price,
Place and Promotion) .
The marketing process /strong>is the process of analyzing
market opportunities, selecting target markets, developing the marketing
mix, and managing the marketing effort. This process has following main
1. Analyzing marketing opportunities
2. Selecting target markets
3. Developing the marketing Mix
4. Managing the marketing effort