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Chapter 2
Developing Marketing Strategies and a Marketing Plan
1.1.1.1.1.1.1.1 Tools For Instructors
Brief Chapter Outline
Learning Objectives
Chapter Overview (“Summing Up”)
Extended Chapter Outline with Teaching Tips
PowerPoint Slides with Teaching Notes
Answers to End of Chapter Learning Aids
Chapter Case Study
Additional Teaching Tips
1.1.1.1.1.1.1.2 Brief Chapter Outline
What is a Marketing Strategy?
The Marketing Plan
Growth Strategies
Summing Up
End of Chapter Learning Aids
Case Study: The Great Yogurt Battle
1.1.1.1.1.1.1.3 Learning Objectives
LO1 Define a marketing strategy.
LO2 Describe the elements of a marketing plan.
LO3 Analyze a marketing situation using SWOT analyses.
LO4 Describe how a firm chooses which consumer group(s) to pursue with its marketing
efforts.
LO5 Outline the implementation of the marketing mix as a means to increase customer value.
LO6 Summarize portfolio analysis and its use to evaluate marketing performance.
LO7 Describe how firms grow their business.
1.1.1.1.1.1.1.4 Chapter Overview (“Summing Up”)
LO1 Define a marketing strategy.
A marketing strategy identifies (1) a firm’s target markets(s), (2) a related marketing mix (four
Ps), and (3) the bases on which the firm plans to build a sustainable competitive advantage.
Firms use four macro strategies to build their sustainable competitive advantage. Customer
excellence focuses on retaining loyal customers and excellent customer service. Operational
excellence is achieved through efficient operations and excellent supply chain and human
resource management. Product excellence entails having products with high perceived value and
effective branding and positioning. Finally, locational excellence entails having a good physical
location and Internet presence.
LO2 Describe the elements of a marketing plan.
A marketing plan is composed of an analysis of the current marketing situation, its objectives,
the strategy for the four Ps, and appropriate financial statements. A marketing plan represents the
output of a three-phase process: planning, implementation, and control. The planning phase
requires that managers define the firm’s mission and vision and assess the firm’s current
situation. It helps answer the questions, “What business are we in now, and what do we intend to
be in the future?” In the second phase, implementation, the firm specifies, in more operational
terms, how it plans to implement its mission and vision. Specifically, to which customer groups
does it wish to direct its marketing efforts, and how does it use its marketing mix to provide good
value? Finally, in the control phase, the firm must evaluate its performance using appropriate
metrics to determine what worked, what didn’t, and how performance can be improved in the
future.
LO3 Analyze a marketing situation using SWOT analyses.
SWOT stands for strengths, weaknesses, opportunities, and threats. A SWOT analysis occurs
during the second step in the strategic planning process, the situation analysis. By analyzing what
the firm is good at (its strengths), where it could improve (its weaknesses), where in the
marketplace it might excel (its opportunities), and what is happening in the marketplace that
could harm the firm (its threats), managers can assess their firm’s situation accurately and plan
its strategy accordingly.
LO4 Describe how a firm chooses which consumer group(s) to pursue with its marketing
efforts.
Once a firm identifies different marketing opportunities, it must determine which are the best to
pursue. To accomplish this task, marketers go through a segmentation, targeting, and positioning
(STP) process. Firms segment various markets by dividing the total market into those groups of
customers with different needs, wants, or characteristics who therefore might appreciate products
or services geared especially toward them. After identifying the different segments, the firm goes
after, or targets, certain groups on the basis of the firm’s perceived ability to satisfy the needs of
those groups better than competitors and do so profitably. To complete the STP process, firms
position their products or services according to the marketing mix variables so that target
customers have a clear, distinctive, and desirable understanding of what the product or service
does or represents relative to competing products or services.
LO5 Outline the implementation of the marketing mix as a means to increase customer
value.
The marketing mix consists of the four Ps—product, price, promotion, and place—and each P
contributes to customer value. To provide value, the firm must offer a mix of products and
services at prices their target markets will view as indicating good value. Thus, firms make
trade-offs between the first two Ps, product and price, to give customers the best value. The third
P, promotion, informs customers and helps them form a positive image about the firm and its
products and services. The last P, place, adds value by getting the appropriate products and
services to customers when they want them and in the quantities they need.
LO6 Summarize portfolio analysis and its use to evaluate marketing performance.
Portfolio analysis is a management tool used to evaluate the firm’s various products and
businesses—its “portfolio”—and allocate resources according to which products are expected to
be the most profitable for the firm in the future. A popular portfolio analysis tool developed by
the Boston Consulting Group classifies all products into four categories. The first, stars, are in
high growth markets and have high market shares. The second, cash cows, are in low-growth
markets, but have high market share. These products generate excess resources that can be spun
off to products that need them. The third category, question marks, are in high-growth markets,
but have relatively low market shares. These products often utilize the excess resources
generated by the cash cows. The final category, dogs, are in low-growth markets and have
relatively low market shares. These products are often phased out.
LO7 Describe how firms grow their business.
Firms use four basic growth strategies: market penetration, market development, product
development, and diversification. A market penetration strategy directs the firm’s efforts toward
existing customers and uses the present marketing mix. In other words, it attempts to get current
customers to buy more. In a market development strategy, the firm uses its current marketing
mix to appeal to new market segments, as might occur in international expansion. A product
development growth strategy involves offering a new product or service to the firm’s current
target market. Finally, a diversification strategy takes place when a firm introduces a new
product or service to a new customer segment. Sometimes a diversification strategy relates to the
firm’s current business, such as when a women’s clothing manufacturer starts making and selling
men’s clothes, but a more risky strategy is when a firm diversifies into a completely unrelated
business.
1.1.1.1.1.1.1.5 Extended Chapter Outline With Teaching Tips
What Is A Marketing Strategy?
2 Customer excellence (PPT slide 2-5)
3 Retaining Loyal Customers
4 Providing Outstanding Customer Service
5 Operational excellence (PPT slide 2-6)
6 Product Excellence (PPT slide 2-8)
7 Locational Excellence (PPT slide 2-9)
8 Multiple Sources of Advantage
Check Yourself: Several questions are offered for students to check their understanding of core
concepts. (PPT slide 2-11)
What are the various components of a marketing strategy?
List the four macro strategies that can help a firm develop a sustainable competitive
advantage.
Answer: The four microstrategies that can help a firm develop a sustainable competitive
The Marketing Plan (PPT Slide 2-12)
Step 1: Define the business mission. (PPT slide 2-14)
9 Step 2. Conduct a situation analysis. (PPT slide 2-16)
10 Step 3: Identify and evaluate opportunities using STP (segmentation,
targeting, and positioning). (PPT slide 2-17, 18)
Segmentation
11 Targeting
12 Positioning
13 Step 4: Implement the marketing mix and allocate resources. (PPT slide
2-20)
Product and Value Creation (PPT slide 2-21)
14 Price and Value Capture (PPT slide 2-22)
15 Place and Value Delivery ((PPT slide 2-23)
16 Promotion and Value Communication (PPT slide 2-24)
17 Step 5: Evaluate performance using marketing metrics. (PPT slide 2-25)
Who is Accountable for Performance?
18 Performance Objectives and Metrics
19 Financial Performance Metrics
20 Portfolio Analysis
20.1.1.1 Stars
20.1.1.2 Cash Cows
20.1.1.3 Questions Marks
20.1.1.4 Dogs
21 Strategic planning is not sequential.
Check Yourself: Several questions are offered for students to check their understanding of core
concepts. (PPT slide 2-27)
1. What are the five steps in creating a marketing plan?
Answer: The five steps in creating a marketing plan are defining a business mission and
2. What tool helps a marketer conduct a situation analysis?
3. What is STP?
4. What do the four quadrants of the portfolio analysis represent?
Growth Strategies (PPT Slide 2-28)
Market penetration (PPT slide 2-29)
22 Market development and the case for global expansion (PPT slide 2-30)
23 Product Development (PPT slide 2-31)
24 Diversification (PPT slide 2-33)
Check Yourself: Several questions are offered for students to check their understanding of core
concepts. (PPT slide 2-34)
1. What are the four growth strategies?
2. What type of strategy is growing the business from existing customers?
3. Which strategy is the riskiest?
