1. StrategicStrategic
MarketingMarketing
ManagementManagement
ProcessProcess
Chapter 15Chapter 15
Also includesAlso includes
Appendix AAppendix A
Accounting forAccounting for
marketersmarketers
© 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-1

2. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-2
Strategic PlanningStrategic Planning
nn The managerial process of matching anThe managerial process of matching an
organisationorganisation’’s resources with itss resources with its
marketing opportunities over the longmarketing opportunities over the long
run.run.

3. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-3
Strategic PlanningStrategic Planning
nn The process:The process:
–– Define organisationDefine organisation’’s mission.s mission.
–– Set organisational objectives.Set organisational objectives.
–– Evaluate organisationEvaluate organisation’’s strategic businesss strategic business
units (units (SBUSBU’’ss).).
–– Select strategy to achieve organisationSelect strategy to achieve organisation’’ss
objectives.objectives.

4. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-4
The marketing managementThe marketing management
processprocess
PLANNING
Analyse situation
Set goals
Select strategies
and tactics
IMPLEMENTATION
Organise
Staff
Direct
EVALUATION
Compare
performance
with goals
Feedback, so management can adapt future plans and their
implementation to the changing environment

5. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-5
The Mission StatementThe Mission Statement
nn A mission statement is a short clearA mission statement is a short clear
statement defining the central reasonstatement defining the central reason
for an organisationfor an organisation’’s existence.s existence.
nn It answers the questions:It answers the questions:
–– What business are we in?What business are we in?
–– What business should we be in?What business should we be in?
nn It is expressed in terms of benefits.It is expressed in terms of benefits.

6. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-6
EvaluatingEvaluating SStrategictrategic
BBusinessusiness UUnitsnits
nn An analysis of current products and theAn analysis of current products and the
markets in which they are operating.markets in which they are operating.
nn An SBU may be:An SBU may be:
–– A major division in an organisationA major division in an organisation
–– A group of related productsA group of related products
–– A single product or brandA single product or brand

7. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-7
B.C.G. Product Portfolio AnalysisB.C.G. Product Portfolio Analysis
Stars
Cash cows Dogs
Question marks
High Low
High
Low
COMPANY’S MARKET SHARE
INDUSTRY
GROWTHRATE

8. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-8
THE BOSTON CONSULTING GROUP MATRIX
• A strategic business unit (SBU) model can
be classified according to two factors:
– its market share relative to competitors
– the growth rate of the industry in which
the SBU operates
• These models, known as portfolio
analysis, assess the needs of particular
SBUs.

9. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-9
THETHE BBOSTONOSTON CCONSULTINGONSULTING
GGROUPROUP MATRIXMATRIX
nn They are divided into high and lowThey are divided into high and low
categories.categories.
nn They seek to reduce risk and optimiseThey seek to reduce risk and optimise
outcomes and determine resourceoutcomes and determine resource
allocation.allocation.
nn A company should seek a balancedA company should seek a balanced
portfolio of SBUs with a mix of stars,portfolio of SBUs with a mix of stars,
cash cows, and questions marks, butcash cows, and questions marks, but
hopefully no dogs.hopefully no dogs.

10. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-10
High Low
High
Low
BUSINESS POSITION
MARKETATTRACTIVENESS
Medium
Medium
INVEST INVEST PROTECT
INVEST PROTECT HARVEST
PROTECT HARVEST DIVEST

11. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-11
GENERAL ELECTRIC BUSINESS SCREEN
• Management can classify SBUs or major products
based on two factors, market attractiveness and
business position.
• Each of these factors is rated according to several
criteria.
• Each SBU is rated with respect to all criteria.
• Overall ratings (usually numerical scores) for both
factors are calculated for each SBU.
• Based on these ratings, each SBU is labelled as
high, medium, or low with respect to: (a) market
attractiveness, and (b) business position.

12. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-12
PRESENT PRODUCTS
PRESENT
MARKETS
NEW PRODUCTS
NEW
MARKETS
Market
penetration
Market
development
Product
development
Diversification
The Growth MatrixThe Growth Matrix

13. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-13
The Growth MatrixThe Growth Matrix
nn Market penetrationMarket penetration——Marketing ofMarketing of
present products to present markets.present products to present markets.
nn Market developmentMarket development——MarketMarket
present products to new markets.present products to new markets.
nn Product developmentProduct development——MarketingMarketing
new products to present markets.new products to present markets.
nn DiversificationDiversification——Market new productsMarket new products
to new markets.to new markets.

14. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-14
PorterPorter’’s Generic Strategics Generic Strategic
ModelModel
nn Overall cost leadershipOverall cost leadership
–– Producing standardised product at a lowProducing standardised product at a low
costcost
nn DifferentiationDifferentiation
–– Market a USP (Unique Selling Proposition)Market a USP (Unique Selling Proposition)
nn FocusFocus
–– Concentration on a small specialty marketConcentration on a small specialty market

15. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-15
Marketing AuditMarketing Audit
nn A marketing audit is a comprehensiveA marketing audit is a comprehensive
review and evaluation of the marketingreview and evaluation of the marketing
function in an organisation.function in an organisation.
–– An audit examines:An audit examines:
nn Marketing strategyMarketing strategy
nn Structure of the marketing divisionStructure of the marketing division
nn Marketing systemsMarketing systems
nn Marketing productivityMarketing productivity
nn Marketing functionsMarketing functions

16. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-16
.
Strategic company planning
1. Define org. mission
2. Conduct situation analysis
3. Set org. objectives
4. Select appropriate strategies
Strategic marketing planning
1. Conduct situation anal.
2. Develop marketing obj.
3. Determine positioning and
differential advantage
4. Select target markets,
measure market demand
5. Design strategic
marketing mix
Annual marketing planning
Prepare annual marketing plan
for each major product and
company division
PLANNING SEQUENCE
IMPLEMENTATION AND EVALUATION

17. Accounting for MarketersAccounting for Marketers
Appendix A, Chapter 15Appendix A, Chapter 15

18. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-18
Accounting reportsAccounting reports
nn Two typesTwo types
–– Balance SheetBalance Sheet
–– Profit and Loss StatementProfit and Loss Statement
nn Balance SheetBalance Sheet——a snapa snap--shot of theshot of the
financial position of a business at afinancial position of a business at a
given point in time.given point in time.

19. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-19
Balance sheetBalance sheet
nn Three main elements:Three main elements:
–– AssetsAssets——What the company owns or isWhat the company owns or is
owed.owed.
–– LiabilitiesLiabilities——What the company owes toWhat the company owes to
others.others.
–– OwnerOwner’’s equitys equity——The net worth of a firm.The net worth of a firm.

20. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-20
Profit and loss statementProfit and loss statement
nn Usually structured as follows:Usually structured as follows:
–– SalesSales $$
–– Less Cost of goods soldLess Cost of goods sold $____$____
–– EqualsEquals Gross profitGross profit $$
–– Less ExpensesLess Expenses $____$____
–– Equals Net profitEquals Net profit $____$____
(See Table 15A(See Table 15A –– 1 in the text)1 in the text)

21. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-21
MarkMark--up and gross marginup and gross margin
nn Dollar markDollar mark--upup
nn MarkMark--up %up % --------------------
nn CostCost
nn Dollar markDollar mark--upup
nn Gross margin (markGross margin (mark--up %)up %)----------------------
nn (based on selling price) Selling price(based on selling price) Selling price

22. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-22
Analytical ratiosAnalytical ratios
–– Net profit percentage, Net profitNet profit percentage, Net profit
------------------------------------
Net salesNet sales
–– Expense ratio, ExpensesExpense ratio, Expenses
------------------------------
Net salesNet sales

23. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-23
Analytical ratiosAnalytical ratios
nn Stock turn rate,Stock turn rate, cost of goods soldcost of goods sold
nn Rate of stock turnRate of stock turn ------------------------------------------
average inventory at cost ofaverage inventory at cost of
goods soldgoods sold
nn Total dollar markTotal dollar mark
downdown
nn Mark down %Mark down % ------------------------------------------------------------
Total net salesTotal net sales (given(given
period)period)

24. © 2001 McGraw-Hill Australia PPT slides t/a Rix, Marketing: A Practical Approach 4th ed 15-24
Analytical ratiosAnalytical ratios
nn Average collection periodAverage collection period
Net salesNet sales
--------------------------------------------------------------------------------------
average accounts receivable (oraverage accounts receivable (or
debtors)debtors)
nn Return on investment (ROI)Return on investment (ROI)
Net profitNet profit SalesSales
ROI=ROI= ---------------- XX --------------------
sales investmentsales investment