Outline the chapter.

As you read the chapter, make notes about each of the following:

	Strategic Posture
	Strategic Planning
	Strategic Planning Tools
	Market-Oriented Planning
	Marketing Strategies
	Process for Developing a Marketing Strategy
	Marketing Plan
	Marketing Implementation and Control

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	Strategic planning
	Marketing plan
	Tactical planning
	Strategic business units
	Cash cows
	Stars
	Problem children
	Dogs
	Marketing strategy

2. Describe the levels of organizational planning.

	strategic planning (This is the organization’s overall game plan and is long term for usually 5 years.) Strategic planning is for the whole company. Strategic company planning is the process of matching an organization’s resources with its marketing opportunities over the long run.
	marketing planning (This is the game plan for a particular product or product line.) Marketing planning should be done within the context of strategic planning for the entire company and for each strategic business unit (SBU) in the firm.
	tactical planning (This involves specifying details that pertain to the organization’s activities for a certain time period which is short term for usually one year or less.) In an annual marketing plan, more attention can be devoted to tactical details than is feasible in other levels of planning.

4. Describe Boston Consulting Group’s (BCG) Product Portfolio-Analysis Model.

An organization’s SBUs can be classified as a portfolio with each having a different growth rate and market share. This yields four categories: star, cash cow, question marks, dog. Stars are high-growth, high-share SBUs. They are typically cash-using SBUs because cash is necessary to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows and become major cash generators supporting other SBUs. Cash cows are low-growth, high-share SBUs. They produce a lot of cash that the company uses to pay its bills and support other SBUs that are cash using. Question marks are low share SBUs in high-growth markets. They require a lot of cash to maintain their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased down or out. Dogs are low-growth, low-share SBUs. They may generate enough cash to maintain themselves but do not promise to be a large source of cash.

5. Describe General Electric’s (GE) Attractiveness-Business Position Model.

The GE business screen classifies SBUs according to two other factors: market attractiveness and business differential advantage. This yields four categories: invest, protect, harvest, and divest.

6. Discuss the characteristics of a marketing plan.

A marketing plan includes specific objectives, necessary resources, planned activities, and expected results.

7. Understand the components of a marketing plan.

	The executive summary is a recapitulation of the entire marketing plan.
	The analysis of the marketing situation acts as the "state of the union" for the brand. Also, this is called the situation analysis. The external environment (social/cultural, technological, economy, political/legal, competition) is scanned.
	Assessment of opportunities and threats by determining positioning and differential advantages. This is called a SWOT analysis (strength, weaknesses, opportunities, threats).
	The marketing objectives section must be clear, concise, and realistic with a time frame assigned for each achievement.
	The formulation of the marketing strategies details how the marketing objectives will be accomplished. Target markets are selected and matched to the marketing mix elements to satisfy those markets and achieve those goals.
	The action programs and budgets section details any programs that are designed to result in some specific action as well as the budget required to support the planned marketing activities and to achieve the marketing objectives.
	The development of control procedures section details how results of the plan will be measured on an ongoing basis.

8. Describe the forecasting process.

Planning and forecasting influence one another and occur simultaneously with an overall goal to generate profits for the organization. The forecasting process begins with forecasts of more general economic, industry-wide, and company conditions. Before deciding on a target market, the company should forecast the demand in the total market and in each segment they have targeted. Demand forecasting involves measuring the industry’s market potential, then determining the company’s sales potential or market share, and finally preparing a sales forecast. The sales forecast is one of the most important documents developed in business. It is the foundation for all budgeting and operational planning in all major departments of a company. There are two basic methods available for forecasting market demand: "top-down" and "bottom-up." Specific methods used to forecast sales are market-factor analysis, survey of buyer intentions, test marketing, past sales and trend analysis, sales-force composite, and executive judgment.

9. State five popular forecasting methods.

	Survey of executive opinion (Survey executive experts for estimates and assumptions.)
	Sales force estimates (Survey sales force for estimates.)
	Buyer intention surveys (Surveys buyers regarding buying intentions.)
	Exponential smoothing (Statistical estimation using a weighting factor, or smoothing procedure, constant.)
	Multiple-factor index method (Statistical estimation used by Sales and Marketing Management for an index. A market factor is an element which exists in a market, which can be measured quantitatively, and which is related to the demand for a product or service. A market index is a market factor expressed as a percentage or some other mathematical term.)

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