Strategic Market Planning

Chapter Chapter ElevenEleven

MMarket-Basedarket-Based Management, 4Management, 4thth editionedition

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Strategic Market PlanningStrategic Market Planning

Chapter Eleven

– Strategic Market Planning Process(for each product-market)

• Business Performance• Market Attractiveness• Competitive Advantage• Portfolio Analysis• Performance Impact

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Product-Market DiversificationProduct-Market Diversification

Why do firms

diversify across product-markets?

ProductDiversification

MarketDiversification

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Strategic Market Planning Strategic Market Planning ProcessProcess

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Business Performance and Business Performance and Market AttractivenessMarket Attractiveness

• Three critical areas of business performance1. Share Position2. Sales Growth3. Profit Performance

• Three dimensions of Market Attractiveness1. Market Forces2. Market Access3. Competitive Intensity

• Market Attractiveness Index

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Competitive AdvantageCompetitive Advantage

• Three dimensions of Competitive Advantage1. Differentiation Advantage2. Cost Advantage3. Marketing Advantage

• Competitive Advantage Index

• Defensive Vs. Offensive Strategic Market Plans and Portfolio Analysis

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Product-Market PortfolioProduct-Market Portfolio

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Strategic Market Plans and Strategic Market Plans and Performance ImpactPerformance Impact

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Tactical Marketing Strategy Tactical Marketing Strategy and Performance Planand Performance Plan

• Strategic Market Plan Vs. Market Mix Strategy

• Developing a Detailed Marketing Mix Strategy

• Performance Objectives

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TakeawaysTakeaways//ReviewReview

• Strategic Market Planning– Competitive Advantage– Market Attractiveness– Business Performance

• Product-Market Portfolio and Strategic Plan• Performance Impact• Performance Metrics

– Competitive Advantage Index– Market Attractiveness Index

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Marketing Performance ToolsMarketing Performance Tools

Market Attractiveness Index

Very Som ew hat Som ew hat Very

Unattractive Unattractive Unattractive Attractive Attractive Attractive

0 20 40 60 80 100

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Marketing Performance ToolsMarketing Performance Tools

Market Attractiveness IndexMarket Market

Market Attractiveness Attractiveness Relative Attractiveness

Factors Rating Importance Score

Market Forces Sum to 100%

Market Size 80 40% 32

Market Grow th 60 30% 18

Buyer Pow er 40 30% 12

Market Forces Total 62

x Relative Importance of Market Forces 30% 18.6

Competitive Intensity Sum to 100%

Price Rivalry 40 40% 16

Ease of Entry 80 30% 24

Substitutes 60 30% 18

Competitive Intensity Total 58 x Relative Importance of Competitive Intensity 40% 23.2

Market Access Sum to 100%

Customer Familiarity 80 40% 32

Channel Access 100 30% 30

Sales Force Capabilities 60 30% 18

Market Access Total 80

x Relative Importance of Market Access 30% 24.0

Market Attractiveness Index 65.8

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Marketing Performance ToolsMarketing Performance Tools

Competitive Advantage Index

Major Definite Slight Slight Definite Major

Disadvantage Disadvantage Disadvantage Advantage Advantage Advantage

0 20 40 60 80 100

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Marketing Performance ToolsMarketing Performance Tools

Competitive Advantage IndexCom petitive Com petitive

Com petitive Advantage Advantage Relative Advantage

Factors Rating Im portance Score

Differentiation Advantage Sum to 100%

Product Benef its 80 40% 32

Service Benef its 60 30% 18

Brand Image/Reputation 80 30% 24

Dif ferentiation Advantage Total 74

x Rel. Importance of Dif ferentiation Advantage 40% 29.6

Cost Advantage Sum to 100%

Cost per Unit 40 70% 28

Transactions Cost 60 20% 12

Marketing Productivity 60 10% 6

Cost Advantage Total 46

x Rel. Importance of Cost Advantage 40% 18.4

M arketing Advantage Sum to 100%

Market Share 40 40% 16

Brand Aw areness 40 30% 12

Channel Control 20 30% 6

Marketing Advantage Total 34

x Rel. Importance of Marketing Advantage 20% 6.8

Com petitive Advantage Index 54.8