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Chapter 2 - Developing Marketing Strategies and a Marketing Plan Marketing 6th
Chapter 2
Developing Marketing Strategies and a Marketing Plan
Tools for Instructors
Brief Chapter Outline
Learning Objectives
Extended Chapter Outline with Teaching Tips
Answers to End of Chapter Learning Aids
Chapter Case Study
Additional Teaching Tips
Connect Activities
Brief Chapter Outline
What Is a Marketing Strategy?
The Marketing Plan
Growth Strategies
End of Chapter Learning Aids
Chapter Case Study: The Coffee Wars
Learning Objectives
LO2-1 Define a marketing strategy.
A marketing strategy identifies (1) a firm’s target markets(s), (2) a related marketing mix (its 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, 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.
LO2-2 Describe the elements of a marketing plan.
A marketing plan is composed of an analysis of the current marketing situation, opportunities and threats
for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, 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.
LO2-3 Analyze a marketing situation using SWOT analyses.
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Chapter 2 - Developing Marketing Strategies and a Marketing Plan Marketing 6th
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.
LO2-4 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 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.
LO2-5 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.
LO2-6 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.
LO2-7 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 riskier strategy is when a firm diversifies into a completely
unrelated business.
Extended Chapter Outline with Teaching Tips
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Chapter 2 - Developing Marketing Strategies and a Marketing Plan Marketing 6th
I. What Is a Marketing Strategy?
A. Customer Excellence
1. Retaining Loyal Customers
2. Providing Outstanding Customer Service
B. Operational Excellence
C. Product Excellence
D. Locational Excellence
E. Multiple Sources of Advantage
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the various components of a marketing strategy?
Answer: A marketing strategy includes a firm’s target market(s), a related marketing mix, and the
bases upon which the firm plans to build a sustainable competitive advantage.
2. List the four macro strategies that can help a firm develop a sustainable competitive advantage.
Answer: The four macro strategies that can help a firm develop a sustainable competitive
advantage include customer excellence, operational excellence, product excellence, and
locational excellence.
II. The Marketing Plan
A Step 1: Define the Business Mission
F. Step 2. Conduct a Situation Analysis
G. Step 3: Identify and Evaluate Opportunities Using STP (Segmentation, Targeting, and Positioning)
1 Segmentation
3. Targeting
4. Positioning
H. Step 4: Implement Marketing Mix and Allocate Resources
1 Product and Value Creation Products
5. Price and Value Capture
6. Place and Value Delivery
7. Promotion and Value Communication
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Chapter 2 - Developing Marketing Strategies and a Marketing Plan Marketing 6th
I. Step 5: Evaluate Performance Using Marketing Metrics.
1 Who Is Accountable for Performance?
8. Performance Objectives, Marketing Analytics, and Metrics
9. Financial Performance Metrics
10. Portfolio Analysis
a. Stars
b. Cash Cows
c. Questions Marks
d. Dogs
J. Strategic Planning Is Not Sequential.
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
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
objectives, evaluating a situation analysis, identifying opportunities, implementing a marketing
mix, and evaluating performance using marketing matrics.
2. What tool helps a marketer conduct a situation analysis?
Answer: A SWOT analysis helps a marketer conduct a situation analysis.
3. What is STP?
Answer: STP is Segmentation, Targeting, and Positioning.
4. What do the four quadrants of the portfolio analysis represent?
Answer: Stars, Cash Cows, Question Marks, Dogs.
III. Growth Strategies
A Market Penetration
K. Market Development
L. Product Development
M. Diversification
Progress Check: Several questions are offered for students to check their understanding of core
concepts.
1. What are the four growth strategies?
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Chapter 2 - Developing Marketing Strategies and a Marketing Plan Marketing 6th
Answer: Market penetration strategy, market development strategy, product development
strategy, and diversification strategy.
2. What type of strategy is growing the business from existing customers?
Answer: The type of strategy that grows a business from existing customers is market penetration
strategy.
3. Which strategy is the riskiest?
Answer: The diversification strategy is the riskiest, because unrelated diversifications do not
capitalize on either core strengths associated with markets or with products.
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McGraw-Hill Education. 5
