CHAPTER TWO

Marketing Strategy
Planning

For use only with

Perreault/Cannon/McCarthy
or Perreault/McCarthy texts.
© 2008 McGraw-Hill
Companies, Inc.
McGraw-Hill/Irwin [Link]/fourps
When we finish this lecture you should

• [Link] trade practice

Understand what a marketing manager
acts
does.
• [Link]
Know what marketing strategy planning is—
• Phony
and list
whyprices
it will be the focus of the book.
• [Link]-Lea
Understand target marketing.
[Link]
Be familiar with the four Ps in a marketing
• Price
[Link]
• [Link]-Patman
Know the differenceAct between a marketing
• Price
strategy, a marketing plan, and a marketing
discrimination
program.
6. Understand what customer equity is and
why marketing strategy planners seek to
increase it.
© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
When we finish this lecture you should

• [Link] trade practice

Be familiar with the text’s framework for
acts
marketing strategy planning—and why it
• Dumping
involves a process of narrowing down from
• Phony
broad listopportunities
prices to the most attractive
marketing strategy.
• Wheeler-Lea
[Link]
Know four broad types of marketing
opportunities
• Price fixing that help in identifying new
strategies.
• Robinson-Patman Act
• [Link]
Understand why strategies for opportunities
discrimination
in international markets should be
considered.

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

The Management Job in Marketing

Whole-Company
Marketing Strategic
Management
Planning Planning

Control Marketing Implement Marketing

Plan(s) and Program Plan(s) and Program
What is Marketing Strategy Planning? (Exhibit 2-2)

The
marketing mix

C
Selecting a Marketing-Oriented Strategy Is Target
Marketing (Exhibit 2-3)

Production-oriented manager sees Marketing-oriented manager sees

everyone as basically similar and everyone as different and
practices “mass marketing” practices “target marketing”
An Application of Target Marketing
Developing Marketing Mixes for Target Markets
(Exhibit 2-4)

Product Place

Price Promotion
The Product Element of the Marketing Mix
The Place Element of the Marketing Mix (Exhibit 2-6)

Examples of Channels of Distribution

Charles Sara
Toyota Nestle
Schwab Lee

Wholesaler Wholesaler

Wholesaler

Retailer Retailer Retailer

Consumer
The Promotion Element of the Marketing Mix

Personal
Personal Advertising
Advertising
Selling
Selling

Telling
Telling and
and
Selling
Selling
the
the Customer
Customer

Sales
Sales Publicity
Publicity
Promotion
Promotion
The Price Element of the Marketing Mix

Price
Price of
of Other
Other Pricing
Pricing
Objectives Price
Price
Products
Products In In Objectives
Flexibility
Flexibility
the
the Line
Line
Competition
Competition Price
Price Changes
Changes
and
and Over
Over the
the Life
Life
Substitutes
Substitutes Cycle
Cycle
Price
Price
Setting
Setting Discounts
Discounts
Price
Price and
and
Sensitivity
Sensitivity Allowances
Allowances
Geographic
Geographic
Cost
Cost and
and Legal
Legal Pricing
Pricing
Demand
Demand
Environment
Environment Terms
Terms
Interactive Exercise: Marketing Mix

Product Place

Price Promotion

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

All Four Ps Contribute to the Whole

Product
Product

Place
Place Selection
Selection
of
of Target
Target
Promotion Market
Market
Promotion

Price
Price

Understanding the Target Market Leads to Good Strategies!

Checking your knowledge

General Motors is considering increasing the length of its bumper-to-

bumper warranty on new vehicles from 3 years to 5 years. The
marketing mix variable being considered here is:
A. product.
B. personnel.
C. place.
D. promotion.
E. price.
Checking your knowledge

A television network is trying to generate interest in a new television

show in advance of its premiere. The network sends out press
releases and makes the star of the new show available for guest
appearances on TV and radio talk shows. The marketing mix variable
involved here is:

A. product.
B. personnel.
C. place.
D. promotion.
E. price.
The Marketing Plan Guides Implementation and
Control

Target
Target
Market
Market
+ Marketing
Marketing
= Strategy
Strategy
Marketing
Marketing
+ Marketing
Marketing
Mix
Mix = Plan
Plan
Time-
Time- AA Firm’s
Firm’s
Related
Related + Marketing
= Marketing
Details
Details Other
Other Program
Program
Marketing
Marketing
Plans
Plans
Checking your knowledge

An entrepreneurial teenager decides to start a new dog-walking

business aimed at dog owners who have to leave their pets at home
alone during regular working hours. The teenage develops a thorough
description of the people in her target market and their needs. She
then comes up with a general outline of the services she will offer,
some price ranges, the geographic area she will serve, and some low-
cost promotion ideas. What has she developed so far?

A. A marketing program
B. A marketing plan
C. A SWOT analysis
D. A marketing strategy
E. Differentiation and segmentation
Checking your knowledge

A large consumer products company markets several different lines of

products, with many individual products in each line. Each product has
its own marketing plan. The company president wants to bring together
all of the different marketing plans into a single integrated document
that can become part of the company’s strategic plan. It appears that
the company president needs a:

A. marketing super-plan.
B. marketing program.
C. marketing strategy.
D. operational plan.
E. mass-marketing approach.
Customer Equity (Exhibit 2-9)

Business time
enters market

C
C
C
C

Current
Current
Customers
Customers
firm C
C
New
New
Customers
Customers C
C
As Customer Equity Grows, so do Earnings!
The Importance of Marketing Strategy Planning

Strategy
Strategy Decisions
Decisions Usually
Usually Determine
Determine
Success
Success and
and Failure
Failure

• Timex had captured a large

market share
• Low price, dependability, good
ads, unconventional channels
• Stiff competition arose
• New product refinements
Creative Strategy Planning Needed for Survival

Death-wish Best-practices
marketing marketing

(Below (Above
average) average)
68%
(Well below (Average (Well above
average) Marketing average)
Program)
2% 14% 14% 2%
Failure Poor Fair Good Exceptional
What Are Attractive Opportunities?

Breakthrough
Opportunities

Competitive
Avoid Hit-or-Miss
Advantage
Marketing
The Importance of Good Research

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Marketing Strategy Planning Process Highlights
Opportunities (Exhibit 2-11)
Interactive Exercise: Marketing Strategy

Present products New products

Present Market Product

markets penetration development

New Market Diversification

markets development

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Checking your knowledge

A large metropolitan university has an established summer-school

program that offers a wide variety of classes to its current students. To
expand enrollment, the school started promoting its summer school to
students who live in the area and are home for the summer, even
though they attend other universities during the regular school year.
This effort is an example of:

A. market penetration.
B. market development.
C. product development.
D. diversification.
E. a breakthrough opportunity.
Market Penetration

Coffee so good
You just can’t wait.
Checking your knowledge

An electronics superstore sends a special coupon to its current

customers offering them a special discount for purchases made during
an upcoming week that occurs during a traditionally slow sales period.
This is an example of:

A. market penetration.
B. market development.
C. product development.
D. diversification.
E. a breakthrough opportunity
Product Development
Product Development

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

International Opportunities Should Be Considered

Smaller
Smaller
World
World

Competitive
Competitive
Early
Early Start
Start Advantage
Advantage

Better
Better
Trends?
Trends?
Global Competitive Advantage
You now

• [Link] trade practice

Understand what a marketing manager
acts
does.
• [Link]
Know what marketing strategy planning is—
• Phony
and list
whyprices
it will be the focus of the book.
• [Link]-Lea
Understand target marketing.
[Link]
Are familiar with the four Ps in a marketing
• Price
[Link]
• [Link]-Patman
Know the differenceAct between a marketing
• Price
strategy, a marketing plan, and a marketing
discrimination
program.
6. Understand what customer equity is and
why marketing strategy planners seek to
increase it.
© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin
You now

• [Link] trade practice

Be familiar with the text’s framework for
acts
marketing strategy planning—and why it
• Dumping
involves a process of narrowing down from
• Phony
broad listopportunities
prices to the most attractive
marketing strategy.
• Wheeler-Lea
[Link]
Know four broad types of marketing
opportunities
• Price fixing that help in identifying new
strategies.
• Robinson-Patman Act
• [Link]
Understand why strategies for opportunities
discrimination
in international markets should be
considered.

© 2005 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Key Terms

• Marketing • Customer service

management • Mass selling
process • Advertising
• Strategic • Publicity
(management) • Sales promotion
planning • Marketing plan
• Marketing strategy • Implementation
• Target market • Operational
• Marketing mix decisions
• Target marketing • Marketing program
• Mass marketing • Customer equity
• Channel of • Breakthrough
distribution opportunities
• Personal selling
Key Terms

• Competitive
advantage
• Differentiation
• S.W.O.T. analysis
• Market penetration
• Market
development
• Product
development
• Diversification