Strategic marketing planning is a systematic process where an organization formulates marketing strategies and outlines the steps to achieve its marketing objectives. It aligns marketing activities with the overall business goals, ensuring resources are optimally utilized to deliver value to customers and maintain a competitive edge.
Michael Porter's Value Chain Analysis
Michael Porter's Value Chain Analysis identifies critical activities in an organization that create value and competitive advantage. It divides these activities into Primary Activities and Support Activities.
Primary Activities
| Primary Activity | Description | Example |
|---|---|---|
| Inbound Logistics | Managing incoming materials from suppliers to production facilities. | Toyota’s Just-In-Time (JIT) system ensures efficient inventory management. |
| Operations | Transforming inputs into finished goods or services. | Apple’s high-quality assembly line for iPhones. |
| Outbound Logistics | Delivering finished products to customers or retailers. | Amazon’s streamlined delivery system ensures fast shipping. |
| Marketing & Sales | Creating awareness and driving demand for products. | Nike’s campaigns featuring global athletes. |
| Services | Enhancing customer satisfaction through post-sale services. | Samsung’s product repair and customer support services. |
Support Activities
| Support Activity | Description | Example |
|---|---|---|
| Firm Infrastructure | Company-wide operations like finance and strategic planning. | Tesla’s infrastructure for renewable energy development. |
| Human Resource Management | Recruiting and retaining talent for operational excellence. | Google’s employee-focused work environment. |
| Technology Development | Innovating products or processes. | Amazon’s AI-driven product recommendations. |
| Procurement | Sourcing materials and components needed for production. | Starbucks sourcing fair-trade coffee beans. |
BCG Matrix
The BCG Matrix classifies a company's products or business units based on Market Growth Rate and Market Share. It includes four categories:
| Category | Characteristics | Example |
|---|---|---|
| Stars | High growth, high market share. | Tesla’s electric vehicles in the EV market. |
| Cash Cows | Low growth, high market share. | Microsoft’s Windows OS. |
| Question Marks | High growth, low market share. | Google’s smart home products. |
| Dogs | Low growth, low market share. | Older models of feature phones. |
GE 9-Cell Matrix
The GE 9-Cell Matrix is a strategic tool used for portfolio analysis. It evaluates business units based on two dimensions:
- Industry Attractiveness: Measures factors like market growth rate, profitability, and competitive intensity.
- Business Strength: Assesses factors like market share, product quality, and brand reputation.
The matrix is divided into three zones, each providing actionable insights:
- Grow: High-priority investments in attractive industries with strong businesses.
- Hold: Moderate investments to maintain current market positions.
- Harvest: Divest or minimize investments in weak or declining businesses.
GE 9-Cell Matrix Grid
| High Industry Attractiveness | Medium Industry Attractiveness | Low Industry Attractiveness |
|---|---|---|
| Invest/Grow | Selective Growth | Harvest/Divest |
| Invest/Grow | Hold/Selective Growth | Harvest/Divest |
| Hold/Selective Growth | Hold | Divest |
Example: A tech company can classify its cloud computing business as "Invest/Grow" due to high industry attractiveness and business strength, while its older desktop hardware may fall under "Harvest/Divest."
Ansoff Grid
The Ansoff Grid helps companies identify growth strategies by analyzing markets and products. It consists of four quadrants:
Ansoff Grid Representation
| Existing Products | New Products | |
|---|---|---|
| Existing Markets |
Market Penetration Increase sales in current markets using promotions or pricing strategies. |
Product Development Launch new products in existing markets. |
| New Markets |
Market Development Expand into new geographical or demographic markets. |
Diversification Develop new products for entirely new markets. |
Explanation of Quadrants
- Market Penetration: Focuses on selling more to existing markets. For example, Coca-Cola runs promotions to increase sales in established markets.
- Market Development: Targets new markets with existing products. For instance, Starbucks entering rural areas or new countries.
- Product Development: Involves introducing new products to existing markets. For example, Apple launching updated versions of the iPhone.
- Diversification: The riskiest strategy, involving new products in new markets. For example, Google venturing into self-driving cars.
Criticism: While the Ansoff Grid offers clear growth directions, it does not address external risks like market competition or economic downturns.