Chapter 3: The Role of Marketing in Strategic Planning
Chapter Objectives
1. Explain company-wide strategic planning.
3. Explain the four planning activities of corporate strategic planning.
5. Discuss how to design business portfolios and growth strategies.
6. Explain the steps involved in the business strategy planning process.
Teaching Suggestions
The following explanations and suggestions are outlined based on the Chapter Objectives.
1. Explain company-wide strategic planning.
The aim of strategic planning is to help a company select and organize its business in a
way that keeps the company healthy despite unexpected upsets occurring in any of its
specific businesses or product lines. One of the main ideas students should learn from this
chapter is that the strategy of the business unit must be consistent with that of the
The three ideas for strategic planning are:
Managing business as an investment portfolio
2. Understand the concepts of stakeholders, processes, resources, and organization as
they relate to a high-performing business.
Stakeholders can include stockholders, customers, employees, suppliers, and
distributors. There is a dynamic relationship connecting the stakeholder groups
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3. Explain the four planning activities of corporate strategic planning.
The four steps for corporate strategic planning are: defining the corporate mission,
establishing strategic business units, assigning resources to each SBU, and developing
growth strategies.
4.
goals and objectives.
A mission should define competitive scopes within which the company will operate. A
nning and should be motivating. Good
mission statements embody a number of characteristics. They should focus on a limited
5. Discuss how to design business portfolios and growth strategies.
However, market definitions of a business
are superior to product definitions. A business must be viewed as a customer-
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The Ansoff product market expansion grid (see Figure 3 2) offers a useful
framework for examining growth. By examining the following three intensive
growth strategies, management ideally will discover several ways to grow.
o Market concentration strategy: Management first considers whether it
6. Explain the steps involved in the business strategy planning process.
Managing the marketing process requires the four marketing management functions (see
Figure 3 4): analysis, planning, implementation, and control. The company should first
develop companywide strategic plans and then translate them into marketing and other
plans for each division, product, and brand. The company then turns the plans into
actions and asserts control by measuring and evaluating the results of marketing activities
and taking corrective action where needed. Finally, marketing analysis provides
information and evaluations needed for all of the other marketing activities.
Managing the market
situation. The marketer should conduct a SWOT analysis, by which it evaluates the
Figure 3 5).
Strengths include internal capabilities, resources, and positive situational factors
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Chapter Outline
I. Nature of High-Performance Business [Slide 3-3]
A. Stakeholder. The principle that a business must at least strive to satisfy the
minimum expectations of each stakeholder group.
B. Processes. Companies build cross-functional teams that manage core business
II. Corporate Strategic Planning: Def
A. Defining the Corporate Mission. A mission statement is a statement of the
what it wants to accomplish in the larger environment.
[Slide 3-4]
B. Setting Company Objectives and Goals. The company needs to turn its mission
C. Designing the Business Portfolio. Market definitions of a business are superior to
product definitions. A business must be viewed as a customer-satisfying process,
not a product-producing process. Companies should define their business in terms
of customer needs, not products.
1.Developing Strategies for Growth. Companies need growth if they are to
compete and attract top talent. [Slide 3-5]
2.Diversification Growth. Makes sense when good opportunities can be
found outside the present businesses. [Slide 3-6]
a. Concentric Diversification Strategy. The company could seek new
products that have technological or marketing synergies with
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3.Integrative Growth. Opportunities in diversification, market development,
and product development can be seized through integrating backward,
Downsizing can
also occur. [Slide 3-7]
a. Backward Integration. Acquiring a supplier.
4.Downsizing. When a firm finds brands or businesses that are unprofitable
III. Partnering to Build Customer Relationships
A. Partnership with other company departments. The major functional departments
in each unit marketing, finance, accounting, purchasing, operations, information
IV. Marketing Strategy and the Marketing Mix
A. Customer Value-Driven Marketing Strategy. Before it can satisfy consumers, a
company must first understand their needs and wants. Thus sound marketing
requires a careful customer analysis. Each company must divide up the total
market, choose the best segments, and design strategies for profitably serving
chosen segments. [Slide 3-8]
1.Market Segmentation. The market consists of many types of customers,
products, and needs. The marketer must determine which segments offer
2.Market Targeting. Market targeting involves evaluating each market
3.Market Differentiation and Positioning. After a company has decided
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B. Developing an Integrated Marketing Mix. The marketing mix is the set of
controllable, tactical marketing tools that the firm blends to produce the response
it wants in the target market. The marketing mix consists of everything the firm
can do to influence the demand for its product. [Slide 3-9]
2.Price. The amount of money customers must pay to obtain the product.
V. Managing the Marketing Effort [Slide 3-10]
A. Marketing Analysis. Managing the marketing function begins with a complete
(W), opportunities (0), and threats (T). [Slide 3-11]
1.Internal Environmental Analysis (Strengths and Weaknesses Analysis)
a. Strengths. Internal capabilities, resources, and positive situational
2.External Environmental Analysis (Opportunity and Threat Analysis)
a. Opportunities. Favorable factors or trends in the external
B. Goal Formulation. After the business unit has defined its mission and conducted a
SWOT analysis, it can proceed to develop specific objectives and goals. [Slide 3-
12]
1.Overall cost leadership. The real key is for the firm to achieve the lowest
2.Differentiation. The business concentrates on achieving superior
3.Focus. The business focuses on one or more narrow market segments
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C. Marketing Planning. Marketing planning involves deciding on marketing
strategies that will help the company attain its overall strategic objectives. A
VI. Measuring and managing return on marketing investment. Marketing managers must
ensure that their marketing dollars are being well spent.
Answers to Discussion Questions
1. Conduct a SWOT analysis for a hospitality company near your college.
This is a good group project or individual assignment for your students. Ensure they fully
2. From your analysis above, suggest a strategy from the product market expansion
grid and an appropriate marketing mix to implement the strategy
3. What is a marketing dashboard and how is it useful to hospitality marketers?
A company can assess marketing ROI in terms of standard marketing performance
measures, such as brand awareness, sales, or market share. Many companies are
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4. Think about the shopping area near your campus. Assume that you wish to start a
business here and are looking for a promising opportunity for a restaurant. Is there
an opportunity to open a distinctive and promising business? Describe your target
market and how you would serve it differently than current businesses do.
Break students into small groups and have them come up with different restaurant