The Role Of Marketing In Strategic Planning

The Role of Marketing inStrategic PlanningMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 074581

Strategic tainingmaintainingaafeasiblefeasiblefitfit �sobjectives,objectives, portunities.Marketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 074582

Reasons for Planning If we do not know where we are goingany road will take us there. The essence of strategic planning is theconsideration of current decisionalternatives in the light of their probableconsequence over time. The future is unpredictable but it is not arandom walk.Marketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 074583

Four Organizational Levelsof Large CorporationsCorporateSBUMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James MakensUnitFunctional 2003 Pearson Education, Inc.Upper Saddle River, NJ 074584

The rcesOrganizationMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 074585

Corporate Strategic Planning–Four Planning Activities1.2.3.4.Defining the corporate mission.Establishing strategic business units.Assigning resources to each SBU.Developing growth strategiesMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 074586

Corporate Strategic Planning (cont.)Defining the corporate mission The mission should define the competitive scopes withinwhich the company will operate. Industry scope,products and applications scope, competencies scope,market-segment scope, and vertical scope. Mission– What business are we in? What businesses shouldwe be in? What do we do best? What are thevalues/ethics of the firm?– Define business by need rather than product.- Lodging vs hotel- Quick service restaurants vs fast food hamburgers– Marketing myopia - Transportation vs railroadMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 074587

Corporate Strategic Planning(cont.)Assigning resources to each SBU. Analytical tools such as the BostonConsulting Group growth-share matrix areused to guide. Anticipate changesMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 074588

Analyzing Current SBU’s:Boston Consulting Group ApproachRelative Market ShareHighStars High growth & share Profit potential May need heavyinvestment to growCashCashCowsCowsLowMarket Growth RateHigh LowLowgrowth,growth,highhighshareshare sSBU’s Produce ProducecashcashMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James MakensLowQuestionQuestionMarksMarks? HighHighgrowth,growth,lowlowshareshare BuildintoStarsorBuild into Stars orphasephaseoutout RequirecashtoholdRequire cash to holdmarketmarketshareshareDogsDogs LowLowgrowthgrowth&&shareshare LowprofitpotentialLow profit potential 2003 Pearson Education, Inc.Upper Saddle River, NJ 074589

Corporate Strategic Planning(cont.)4. Developing Growth Strategies–Intensive growth opportunities: Identifyfurther opportunities to achieve growth within thecompany’s current business. Market penetration strategy seeks toincrease current products in current markets. Market development strategy looks for newmarkets in which current products canexpand. Product development strategy considersnew product possibilitiesMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745810

Corporate Strategic Planning(cont.)- Diversification growth opportunities:Identify opportunities to add attractivebusinesses that are unrelated to thecompany’s current businesses. Concentric diversification strategy:Company seeks new products that havetechnological and/or marketing synergywith existing product lines, even thoughthe product may appeal to a new classof customersMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745811

Corporate Strategic Planning(cont.)- Horizontal diversification strategy:Company searches for new productsthat could appeal to its currentcustomers though technologicallyunrelated to its current product line. Conglomerate diversificationstrategy.Marketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745812

Corporate Strategic Planning(cont.)- Integrative growth opportunities. Backward integration: A hotel companyacquiring one of its suppliers. Forward integration: A hotel companyacquiring tour wholesaler or travel agents. Horizontal integration: A hotel companyacquiring one or more competitors, providedthe government does not bar the move.Marketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745813

Developing Growth Strategiesin the Age of ConnectednessProduct/ Market Expansion GridExistingProductsExistingMarkets1. MarketPenetrationNewMarkets2. MarketDevelopmentMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James MakensNewProducts3. ProductDevelopment4. Diversification 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745814

Business Strategy Planning –Planning at the SBU Level1. Business mission2. External environment analysis–opportunities and threats3. Internal environment analysis– strengthsand weaknesses4.Goal Formulation (What do we want?)–ThevisionMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745815

Business Strategy Planning(cont.)5. Strategy Formulation (How do we getthere?)- Michael Porter’s three generic types of strategy: Overall cost leadership Differentiation Focus– Strategic Alliances: companies need to form strategicalliances with domestic or multinational companies thatcomplement or leverage their capabilities andresources to achieve leadership nationally or globally.Marketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745816

Business Strategy Planning(cont.)6. Program formulation. A company mustdevelop hiring, training, advertising, and otherprograms to support its strategy.7. Implementation. A firm must communicateits strategy to its employees and it must havethe resources to carry out its strategy.Marketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745817

Business Strategy Planning(cont.)8. Feedback and control are absolutelynecessary to track results and monitornew developments in the environment.Marketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745818

STRATEGIC MARKETINGMARKETING ESTRATÉGICOMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745819

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Service Characteristics ofHospitality and Tourism MarketingMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745822

CharacteristicsCharacteristics ofof ilityPerishabilityMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James MakensCan’t be seen, tasted, felt, heard,or smelled before purchase.Can’t be separated from serviceproviders.Quality depends on who providesthem and when, where and how.Can’t be stored for later sale or use. 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745823

Intangibility High risk associated with services. It is difficultto evaluate service before the experience.Furthermore, lack of tangibility after theexperience Tangibilizing the intangible– Create strong organization image– Engage in post-purchase communication– Stimulate “Word of Mouth” & PublicityMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745824

PerishabilityLack of ability to inventoryCapacity and demand management– Managing demand Understanding demand patterns Price, Shift demand Reservation, Overbooking Create promotional events– Managing capacity Cross-train employees Schedule downtime during periods of low capacityMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745825

InseparabilityThe customer becomes part ofthe service– Service encounter, Moment of truth– Managing employees Communication training Empowerment– Managing customers What do you expect customers to do? Interaction with other customersMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745826

VariabilityLack of consistency Managing consistency Standardized procedure: industrialize serviceand cutting interaction Customized: taking care of individual Educate customers Train contact and non-contact employees Manage suppliers’ qualityMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745827

Management Strategies forService Business Positioning strongly in the chosen targetmarkets Effective interaction between customersand employees Managing differentiation Managing service quality Tangibilizing the productMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745828

Management Strategies forService Business Tangibilizing the productManaging the physical surroundingsManaging employeesManaging perceived riskManaging capacity and demandManaging consistencyMarketing for Hospitality and Tourism, 3ePhilip Kotler, John Bowen, James Makens 2003 Pearson Education, Inc.Upper Saddle River, NJ 0745829

Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ 07458 2 Strategic Planning Strategic planning is the process of developing and maintaining a feasible fit between the organization’s objectives, skills, and resources and its changing marketing opportunities. Strategic planning is