Planning

Question 1

3 types of planning?

Answer 1

1. Strategic - top level management
2. Functional - top functional management e.g. CMO
3. Operational - by supervisory managers

Question 2

Steps in strategic planning?

Answer 2

1. Define the mission statement
   - the organization’s purpose; what it wants to accomplish in the larger environment.
   - Effective mission statements are typically benefit driven rather than product specific. Don’t make mission statements to narrow, can limit you.
2. Evaluate the environment
   - internal and external
   - SWOT analysis
3. Set objectives & Goals
   Have to be specific and measurable so you can look back and see if you have achieved goal e.g. increase market share from the current 20% to 22% within the next year.
4. Establish portfolio
   - Business portfolio is the collection of businesses that a firm operates.
   - Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company.
   - e.g. the Boston Matrix compares relative market share (high-low) to market growth rate (low-high).
5. Develop growth strategies
   - Marketing needs to identify, evaluate, and select market opportunities and establish strategies for capturing them. - - One useful device for identifying growth opportunities is the product/market expansion grid e.g. existing products top left, new products top right and and new markets bottom and existing markets top.

Question 3

Sections of BCG matrix

Answer 3

1. Stars are high-growth, high-share businesses or products requiring heavy investment to finance rapid growth. They will eventually turn into cash cows.
2. Cash cows are low-growth, high-share businesses or products that are established and successful SBUs requiring less investment to maintain market share. Won’t be investing new money but will keep it going to fund other products. Usually eventually die e.g. blockbuster.
3. Question marks are low-share business units in high-growth markets requiring a lot of cash to hold their share.
4. Dogs are low-growth, low-share businesses and products that may generate enough cash to maintain themselves but do not promise to be large sources of cash. No investment.

Question 4

Sections of the product/market expansion grid

Answer 4

1. Market penetration involves making more sales to current customers without changing its original product such as by adding new stores in current market areas to make it easier for customers to visit.
2. Market development involves identifying and developing new markets for its current products. Managers could consider new geographic markets in U.S. markets and in non-U.S. markets, especially Asia.
3. Product development involves offering modified or new products to current markets such as by moving into new product categories.
4. Diversification involves starting up or buying businesses beyond its current products and markets. For example, the company could acquire a company that operates in different market segments with a different product mix.

Question 5

Steps in functional planning?

Answer 5

1. Perform situation analysis
2. Set marketing objectives
3. Develop marketing strategies
4. Implement and control marketing plan e.g. RIO

Question 6

What is ROI?

Answer 6

Net return from a marketing investment divided by the costs of the marketing investment. Measurement of the profits generated by investments in marketing activities.

e.g. 80/20 rule - 80% of revenue from 20% of customers.

Question 7

Steps in operational planning?

Answer 7

1. Develop action plan to implement marketing plan
2. Use marketing metrics to monitor how the plan is working

e.g. an objective may be set in terms of units of a product a particular salesperson needs to sell per month (sales quota).

Question 8

What is a marketing audit?

Answer 8

Comprehensive examination of a company’s environment, objectives, strategies and activities.