ch02_prep - 2 Strategic Planning for Competitive Advantage...

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KEY CONCEPTS Understand the importance of strategic marketing and know a basic outline for a marketing plan. Strategic marketing planning is the basis for all marketing strategies and decisions. By specifying objectives and defining the actions required to attain them, a marketing plan provides the basis on which actual and expected performance can be compared. Although there is no set formula or a single correct outline, a marketing plan should include elements such as stating the business mission, setting objectives, performing a situation analysis of internal and external environmental forces, selecting target market(s), delineating a marketing mix (product, place, promotion, and price), and establishing ways to implement, evaluate, and control the plan. Develop an appropriate business mission statement. The firm’s mission statement establishes boundaries for all subsequent decisions, objectives, and strategies. A mission statement should focus on the market or markets the organization is attempting to serve rather than on the good or service offered. Describe the components of a situation analysis. In the situation (or SWOT) analysis, the firm should identify its internal strengths (S) and weaknesses (W) and also examine external opportunities (O) and threats (T). When examining external opportunities and threats, marketing managers must analyze aspects of the marketing environment in a process called environmental scanning. The six most-often-studied macroenvironmental forces are social, demographic, economic, technological, political and legal, and competitive. Explain the criteria for stating good marketing objectives. Objectives should be realistic, measurable, time specific, consistent, and indicate the priorities of the organization. Good marketing objectives: (1) communicate marketing management philosophy; (2) provide management direction; (3) motivate employees; (4) force executives to think clearly; (5) allow for better evaluation of results. Identify sources of competitive advantage. There are three types of competitive advantages: cost, product/service differentiation, and niche strategies. Sources of cost competitive advantages include experience curves, efficient labor, no-frills goods and services, government subsidies, product design, reengineering, product innovations, and new methods of service delivery. A product/service differentiation competitive advantage exists when a firm provides something unique that is valuable to buyers beyond just low price. Niche competitive advantages come from targeting
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ch02_prep - 2 Strategic Planning for Competitive Advantage...

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