978-0130387752 Chapter 14 Market-Based Strategic Thinking

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CHAPTER 14

Building a Marketing Plan

The following questions lie at the heart of any marketing

and strategic planning process:

Where are we now?

How did we get there?

Where are we heading?

Where would we like to be?

How do we get there?

Are we on course?

— Source: www.tutor2u.net

The questions posed above are a good way to start a class discussion on building a marketing plan. You could

talk about how a small local business would answer these questions and how a large business, such as Apple

or Lexus, might answer them. The point you want to make is that a marketing plan will help a business

understand where it is now and how it can get to where it wants to go.

Introduction

Starbucks’ marketing plan includes a mission statement to position Starbucks as “the most respected and

recognized brand of coffee in the world.” The company’s objective is to achieve sales of $12 billion by 2010. To

achieve this goal, Starbucks’ marketing plan calls for growing its U.S. distribution from 7,102 U.S. stores (in

2007) to over 10,000 stores (by 2010) and expanding aggressively in international markets.

Discuss the factors Starbucks would need to consider in a situation analysis of its market and its position in

that market. Build the discussion around market size, market growth, Starbucks’ position, the competition,

and distribution channels.

What factors should a business include in developing an index of market attractiveness and what factors

should it include in an index of competitive position? Create a subjective strategic marketing planning

portfolio using market attractiveness and competitive position, and place Starbucks in it. Then add to the

discussion the kind of strategic marketing objective Starbucks might pursue.

Discuss the main roadblocks to Starbucks’ sales objective. Explain how the roadblocks become the key issues in

developing a marketing mix strategy.

Teaching Objectives

Discuss the various benefits of a marketing plan, as well as the dangers of highly formalized marketing plans.

Present a process for developing a marketing plan that enables openness and creativity while retaining the

degree of structure needed to reconcile marketing strategies with performance objectives.

Review and illustrate each of the key steps in developing a marketing plan

Harvard Business School Case Studies

Twitter (2009). HBS Case 710455-PDF-ENG.Twitter is a micro-blogging company that enables people to

send short text messages to others. The site is used by celebrities, government officials, business people,

and the general public. A widely used communications platform, Twitter has become a venue for raising

money for nonprofits, providing first-responders with information during natural disasters, and other

purposes. Even though almost 10 million people had visited the site by early 2009, the company had no

strategy for monetizing the traffic. The case presents an opportunity for students to examine possible

monetizing strategies for Twitter.

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Saturn Corp. HBS Case 90797-052. This case describes Saturn’s 1996 competitive position in the

automobile market and a marketing plan to introduce a mid-sized model under the Saturn brand name. The

marketing mix strategy for the new marketing plan is discussed along with Saturn’s small-car position.

Hurricane Island Outwater Bound School. HBS Case 9-588-019. Hurricane Island Outwater Bound, a

small nonprofit school that helped pioneer experiential education in the U.S., has recently recovered from a

financial crisis. Students assume the role of the school’s new marketing manager who is preparing his first

marketing programs by evaluating the school’s past performance and future potential. Alternately, students

may shift pricing or the course mix to generate additional marketing funds. The case explores the

appropriateness of marketing tactics relative to pricing, service mix, and managing demand in an extremely

seasonal business. Teaching Note: 5-589-049.

Mary Kay Cosmetics: Asian Market Entry. HBS Case No. 9-594-023. Executives at Mary Kay Cosmetics

are reviewing opportunities to enter the Japanese and Chinese markets. The comparative opportunities must

be assessed and guidelines for entry strategies must be determined.

Millipore Corporate Strategy. HBS Case No. 9-594-009. Millipore, with $750 million in combined sales from

its three divisions in the 1980s, grew 20 percent annually during the 1970s, but its growth rate has slowed

considerably. The company is looking for ways to reenergize the organization and redirect its strategy to

achieve a 15 percent annual growth rate for the next 10 years. Teaching Purpose: to highlight the challenges

in strategy formulation and corporate reorganization–both structure and process.

Market-Based Strategic Thinking

1. How would the process of developing a marketing plan help Stericycle achieve a higher level of

sales growth and profitability?

Like many businesses, Stericycle has limited resources and desires to invest them wisely in achieving the

highest possible return on shareholder value. In the Situation Analysis section of the Stericycle Sample

Marketing Plan (Figure 14-5, page 1.2 of the sample plan), we can see that Stericycle faces a growing

2. Why would a business like Coca-Cola with a strong market orientation do a better job of preparing

a situation analysis than a business with a poor market orientation?

With a strong market orientation at its core, Coca-Cola has an good knowledge of its customers,

competitors, and changing market conditions. This, coupled with a cross-functional team approach to

3. How could a business that does no strategic market planning and one that engages in highly

formalized strategic market planning both miss meaningful market insights?

With no marketing plan, a business is without a roadmap for the future. Marketing decisions are reactive

and unplanned, versus proactive and planned. In addition, there are no measures for success. Businesses

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4. How would a company like Apple with a sound marketing planning process differ from a business

with no marketing plan in the following?

Discovering opportunities

Discovering opportunities – A business with no marketing planning process would most likely develop

Leveraging existing systems, assets, and core capabilities – A business like Apple with a sound, systematic

the process focused on their products and manufacturing capacity. Instead, they start with market conditions,

and opportunities. For Apple, specific problems identified with the iPhone were addressed with extra

specific internal (financial) and external (marketing) performance metrics are applied. Without a timeline and

periodic measurements of performance, it would not be possible to track performance and take corrective

5. Why does the first step in the strategic market planning process involve a situation analysis?

Referring to Figure 14-4, we can appreciate those aspects of a business’s current situation that must be

6. What is the role of a SWOT analysis in the strategic market planning process? What is the role of

key issues in the SWOT analysis?

A SWOT analysis is a summary of issues uncovered in the situation analysis and categorized as strengths,

7. For each product-market opportunity, how is a strategic market plan determined?

On the basis of the level of market attractiveness and competitive advantage, an appropriate portfolio

position is established for each product or market being considered in the planning process, as illustrated

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8. How does the strategic market plan for a given product-market influence the marketing mix

strategies for that product-market?

Defensive strategic market plans are going to require corresponding defensive marketing tactics to either

9. How are key performance issues identified in the SWOT analysis used in selecting a strategic

market plan and building marketing mix strategies?

The key issues represent areas that need actionable strategies. The nature of the key issues influences

10. Why is the development of a marketing budget so important to the success of the marketing plan?

Inadequately resourcing the marketing effort is a leading cause of marketing plan failure. Businesses do a

11. What are the various ways that one could develop a marketing budget for a given strategic market

plan and the supporting marketing mix strategies?

The three approaches to building a marketing budget for a market plan and its supporting marketing mix

strategy, as presented in Chapter 14 of Market-Based Management, are briefly summarized here.

defensive market strategies. Especially when products are in a mature market, the marketing budget is

customers, then all marketing and sales expenses need to be assigned to one or the other. Knowing the

per-customer cost of each allows for the development of a meaningful marketing budget that is based

cost, an overall marketing budget can be determined. For example, when McDonald’s enters a new

12. How should the resources needed to support a marketing plan be logically linked to the key issues,

the market strategy, the marketing mix strategies, and expected performance?

For each key issue, a marketing tactic needs to be developed and appropriate resources allocated to

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13. What is the purpose of the performance plan? What role should it play in the successful

implementation of a marketing plan?

It is critical in a market-based management system to establish performance benchmarks against which

progress can be measured. Financial performance metrics establish internal benchmarks, while marketing

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