STRATEGIC MARKETING

PLANNING
CHAPTER 3
REAL ESTATE MARKETING

REM312
CONTENT

Strategic Marketing Planning

 Strategic Marketing Planning Process

 BCG growth share matrix

 Product/market expansion matrix
(Ansoff Matrix)
Developing strategic marketing
planning
 An organization develops its overall strategic
planning to develop and maintain a strategic
fit between the organization’s objectives,
available resources, and evolving market
opportunities (Kotler & Amstrong, 2010)

 Strategic planning is done at a corporate

level and will used as a framework that sets
the overall planning of various levels in
organization.
Developing Strategic Marketing
Planning
 Strategic planning is a process that charts out
the course that the company will take in relations to
marketing.

 This process includes defining a clear company

mission which is market oriented, setting out
companywide objectives based on the mission and
developing competitive approach within the market.

 The aim of strategic planning is to mold and

remold the company’s businesses and products so
that they yield target profits and growth.
Strategic Marketing Planning
Process
 The stages in the marketing planning process are:
1) Specifying Market-oriented
Business Mission
 First have to define a business mission
statement.
 A business mission statement is what is
stated to reflect the organization’s
purpose, that is, what it wants to
accomplish.
 The mission statement should be clear,
realistic and provide motivation for
the company to reach its objective.
Cont’d
 A well rounded MISSION statement answers the
following questions:
1. Who are our customers?
2.What is our business?
3.Where are we going?

 A market-oriented business MISSION

STATEMENT is defined in terms of SATISFYING
BASIC CUSTOMER NEEDS.
Cont’d
 It replaces the traditional mission statements which
are product or technologically focused which is they
are narrow, short sighted, and ignore market needs
(marketing myopia).

(Marketing Myopia)
“A short-sighted and inward-looking approach to marketing that
focuses on the needs of the company rather than defining the
company and its products in terms of the customers' needs and
wants. It results in the failure to see and adjust to the rapid
changes in their markets”

 Product may change, but basic needs and

customer group remain unchanged.
Cont’d
 MARKET-ORIENTED MISSION STATEMENT
EXAMPLE:

 Air Asia

 To be the best company to work for whereby

employees are treated as part of a big family
 To create a globally recognized ASEAN brand
 To attain the lowest costs so that everyone can
fly with Air Asia
 To maintain the highest quality products,
embracing technology to reduce cost and
enhance service levels
MARKET-ORIENTED MISSION STATEMENT
EXAMPLE:

 COCA-COLA COMPANY

To refresh the world

To inspire moments of

optimism and happiness

Tocreate value and

make a difference
MARKET-ORIENTED MISSION STATEMENT
EXAMPLE:

 FACEBOOK

Facebook’s mission is to
give people the power to
share and make the
world more open and
connected
 CHARACTERISTIC good mission statements:
 Focus
 Focused on a limited number of goals
 Scope
 Defines the major competitive scopes
within which the company will operate
 Motivates
• A good mission statement can trigger a sense
of motivation amongst employees. Thus it
is vital for employees to feel that their work is
significant and contributed to people’s live.
Characteristic good mission statement:
 Guided by vision
 Missions are at their best when they are
guided by a vision and direction for the
company for the next 10-20 years
 Policies
 The corporate mission should emphasize on
the company’s major policies and values to
honor such as how employees should deal
with customers, suppliers, distributors,
competitors and other important groups.
Characteristic good mission statement:
 At the beginning of an organizations
operations, the mission or purpose tends
to be clear.

 After sometime, when the market

condition changes or when there are new
products or markets being introduced, the
mission has to be revisited.
 Ex: Sime Darby
2) Developing measurable
companywide objectives
• After defining the business mission statement,
the next step is turning the business mission
into companywide objectives.

• A company must ensure that they meet certain

criteria when setting objectives.

• The company has to ensure that each objective

is realistic, measurable, time specific and
consistent with organizational mission.
 3) Establishing business
portfolio
 When company are large, they may have several
businesses or business portfolio.

 A business can be defined in three terms such as

customer groups, customer needs and
technology.
 A small company that designs incandescent
lighting systems for television studios
 Customer Group : Television Studios
 Customer Need : Lighting
 Technology : Incandescent Lighting
 A company can expand into additional business
such as make lighting for other groups of
customers : homes, offices and factories

 A strategic business unit (SBU) is a unit of the

company that has a separate mission and
objectives and that can be planned
independently from other company businesses.

 An SBU may develop for a company’s

division level, for a product line, for a
product and for a brand.
QSR Brands (M) Berhad may have separate
marketing plans for each of its SBUs.

The SBUs of QSR Brand are the restaurant SBUs

which include the chain of KFC restaurant, Rasamas
restaurant and Pizza Hut restaurants.

It also includes the Ayamas retail SBUs, the poultry

integration SBUs and the ancillary operations SBUs to
support it core operations like sauce
manufacturing, bakery and commissary
operations.
Cont’d
 Companies that have many businesses must be
managed strategically. A strategic business
unit has three characteristics:
a.It is a single business or a group of
related businesses that can be planned
differently from the rest of the company.
b.It has its own group competitors.
c.It has a manager who is accountable from
strategic planning and profit performance and
who monitors most of the conditions
influencing profit.
• In planning a business portfolio, an
organization needs to conduct an
analysis on the current available
portfolio and develop a future portfolio.

Steps Tools

Analyze current BCG Growth Share

business portfolio Matrix

Strategic opportunity
matrix
Develop future “4) Developing
portfolio strategic future
portfolio”
Analyzing current business
portfolio
 The objective of analyzing a current business portfolio
is to ensure that a firm uses its strength to match
available business opportunities.

 Many companies use portfolio techniques to evaluate

alternative strategies and allocate resources
across number of businesses. Its allows a firm to
maximize the firm’s business and to ensure satisfactory
profits.

 The most common method used to select a strategic

alternatives the Boston Consulting Group
Portfolio (BCG) Growth Matrix approach
BCG growth share matrix
 BCG growth share matrix
A tool used in corporate strategy to analyse
business units or product lines based on two
variables: relative market share and the
market growth rate.
By combining these two variables into a matrix,
a corporation can plot their business units
accordingly and determine where to allocate extra
(financial) resources, where to cash out and
where to divest. 
The main purpose of the BCG Matrix is
therefore to make investment decisions on
a corporate level. 
Depending on how well the unit and the
industry is doing, four different category labels
can be attributed to each unit: Dogs, Question
Marks, Cash Cows and Stars.
 Example: Samsung’s Product Portfolio

Samsung is a conglomerate consisting of
multiple strategic business units (SBUs) with a
diverse set of products. Samsung sells phones,
cameras, TVs, microwaves, refrigerators,
laundry machines, and even chemicals and
insurances. 
This is a smart corporate strategy
to have because it spreads risk
among a large variety of business
units. In case something might happen
to the camera industry for instance,
Samsung is still likely to have positive
cash flows from other business units in
other product categories. 
Example: Samsung’s Product Portfolio

This helps Samsung to cope with the

financial setback elsewhere. However
even in a well balanced product
portfolio, corporate strategists will
have to make decisions on allocating
money to and distributing money
across all of those business units.
Where do you put most of the money
and where should you perhaps divest? 
BCG growth share matrix
Question marks or problem child are low-
share business units in high-growth markets
but with poor profit margin requiring a lot of
cash to hold their share

Dogs are low-growth, low-share businesses

and products that may generate enough cash to
maintain themselves but do not promise to be
large sources of cash
• An organization that has classified its SBUs
according to the matrix will be able to plan their
next strategic move

• Successful SBUs have a life cycle that begin as

Question Marks, become Stars, then Cash
Cows and finally Dogs. Therefore companies
should inspect not only current position in the
growth share matrix but also its future position

• The BCG growth matrix should become a planning

framework for strategic planners at the
organizations headquarters to assess each business
and assign the most reasonable objective.
•Ventures or start-ups usually start off as Question Marks.
Question Marks (or Problem Children) are businesses
operating with a low market share in a high growth market.

•Have the potential to gain market share and become Stars

(market leaders) eventually. If managed well, Question
Marks will grow rapidly and thus consume a large amount
of cash investments. 

•If Question Marks do not succeed in becoming a

market leader, they might degenerate into
Dogs when market growth declines after years of cash
consumption.

• Question marks must therefore be analyzed carefully in

order to determine whether they are worth the investment
required to grow market share.
 COMPANY NEXT MOVES?

To BUILD means to invest in whatever

the firm thinks has the potential to be a
Star, often a Question Mark
Stars are business units with a high market share
(potentially market leaders) in a fast-growing
industry. 

Stars generate large amounts of cash due to their high

relative market share but also require large
investments to fight competitors and maintain their
growth rate. 

Successfully diversified companies should

always have some Stars in their portfolio in
order to ensure future cash flows in the long term.

Apart from the assurance that Stars give for the

future, they are also very good to have for your
corporate’s image.
Eventually after years of operating in the industry,
market growth might decline and revenues stagnate.
At this stage, your Stars are likely to transform
into Cash Cows.
Because they still have a large relative market share
in a stagnating (mature) market, profits and cash
flows are expected to be high.
Because of the lower growth rate, investments needed
should also be low. Cash cows therefore typically
generate cash in excess of the amount of cash
needed to maintain the business. 
This ‘excess cash’ is supposed to be ‘milked’ from the
Cash Cow for investments in other business units
(Stars and Question Marks). Cash Cows ultimately
bring balance and stability to a portfolio.
 COMPANY NEXT MOVES?

•To HOLD means to support the

product so that it continues to perform
at current levels. Cash Cows are the
most appropriate targets of this strategy
 COMPANY NEXT MOVES?

•To HARVEST means to increase short term cash returns

without necessarily thinking about long term effects. This
option is appropriate for all SBUs except Stars. It is often
used with Cash Cows in declining industries.
 COMPANY NEXT MOVES?

•To DIVEST could be an option for Question

Marks that the company cannot afford to
support adequately.
Cash Flows and Desired Movement in
BCG Matrix
 WEAKNESSESS / LIMITATION OF MATRIX

•It is not easy to implement as decision are not simply

based on 2 factors in the real business setting
•It requires a lot of time to implement as markets are not
easily defined in the real world
•A company may place too much emphasis in the market
share growth whereas a high market share growth does
not necessarily higher profits
•A company may enter high growth businesses in which
the company has no expertise
•A company may terminate a losing business unit that
actually provides an essential core competence needed by
several other business units.
4) Developing strategic future
portfolio
 After evaluating the current business
portfolio, a company might want to
decide on which business that should
go in the future.

 A company may decide to expand or

downsize the future business
portfolio.
Expansion strategies
 The management can use the
product/market expansion matrix
which has four alternatives:

i. Market penetration
ii.Market development
iii.Product development
iv.Diversification
Product/market expansion
matrix (Ansoff Matrix)
Expansion strategies
1. Market penetration
• Firm would try to increase their market
share among existing customers.

Example: Increase its baby shampoo sales,

Johnson & Johnson might cut prices,
increase advertising or obtain
better store display.
2. Market development
• This strategy attracts new customers to existing
product by expanding target market or
expanding geographically.
• The ideal solution is finding new uses for existing
products to stimulate additional sales while also
bringing new buyers.

Example: Johnson & Johnson reviews the demographic

markets, which include infants, pre schoolers,
teenagers, young adults and senior citizen, to see if
any of these groups can be encouraged to buy more of
Johnson & Johnson products.

.
3) Product development
• This strategy entails the creation of new
products for present markets.
EX: Johnson & Johnson could launch new
products like Johnson & Johnson
conditioner to appeal to existing customers
4) Diversification
• This is the riskiest strategy as the firm is attempting
to increase sales by introducing new products
into new markets.
• It is most typically adopted within the nature
product industry where growth cannot be achieved
in any other way.

Example: Johnson & Johnson has diversified into

producing disposable contact lenses
Downsizing strategies
 A company might want to reduce the
number of businesses for several
reasons:
i. Irrelevant products due to changes in
consumers’ preferences
ii.Lack of experience in certain
businesses
iii.Product obsolescence due to changes
in technology