Strategic Planning and the Marketing Process

Muhammad Imran Wazir

Strategic Planning
The process of developing and maintaining a strategic fit between the organizations goals and capabilities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies. If you fail to plan, you are planning to fail.

The annual and long-range plans deal with the companys current businesses and how to keep them going.

Steps in Strategic Planning

Defining the Company mission

Setting company objectives and goals

Designing the business portfolio

Planning marketing and other functional strategies

Corporate level

Business unit, product and market levels

What is a Mission?
Mission statement are enduring statements of purpose that distinguish one business from other similar firms. A clear mission statement acts as an invisible hand that guides people in the organization. It identifies the scope of a firms operation in product and market terms. It promotes a sense of shared expectations in employees and communicates a public image to important stakeholder groups in the companys task environment.

Factors for Mission Statement

Product and technologies eventually become outdated, but basic market needs may last forever. Management should avoid making its mission too narrow or too broad. e.g. pencil manufacturer communication equipment business. Missions should be realistic, specific and motivating. Base on organization distinctive competencies and should fit the market environment.

Objectives Vs Goals
Objectives are the end results of planned activity. They states what is to be accomplished by when and should be quantified if possible.

The achievement of corporate objectives should result in the fulfillment of the corporations mission.
In contrast to objectives, a goal is an open-ended statement of what one wishes to accomplish with no quantification of what is to be achieved and no time frame for completion.

Designing the Business Portfolio

Business portfolio the collection of businesses and products that make up the company. Portfolio analysis a tool by which management identifies and evaluates the various businesses making up the company. SBU a unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. The company must 1) Analyze its current business portfolio and decide which businesses should receive more, less, or no investment. 2) Develop growth strategies for adding new products or businesses to the portfolio.

The Boston Consulting Group Approach

A portfolio-planning method that evaluate a companys SBUs in term of their market growth rate and relative market share. SBUs are classified as stars, cash cows, question marks, or dogs. One of the four strategies can be pursued for each SBUs. Invest more in the SBU in order to build its share. Invest just enough to hold the SBUs share at its current level. It can harvest the SBU, milking its short-term cash flow regardless of the long-term effect. The company can divest the SBU by selling it or phasing it out and using the resources elsewhere.

Developing Growth Strategies

Existing products Existing markets New markets

Market Penetration

New products
Product Development

Market Development

Diversification

Planning Cross-Functional Strategies

The companys strategic plan establishes what kinds of businesses the company will be in and its objectives for each. Then, within each business unit more detailed planning must take place. There is much overlap between overall company strategy and marketing strategy. Marketing looks at consumer needs and the companys ability to satisfy them; these same factors guide the companys overall mission and objectives.

Marketing and the Other Business Functions

Value chain the series of departments which carry out value creating activities to design, produce, market, deliver, and support a firms products.
Each company department can be thought of as a link in the companys value chain.e.g. Wal-Mart. A companys different functions should work in harmony to produce value for consumers.

Marketing department actions can increase purchasing costs, disrupt production schedules, increase inventories, and create budget headaches.
Jack Welch, former CEO of GE, Companies cant give job security. Only customers can!

Factors Influencing Company Marketing Strategy

Marketing

Demographiceconomic environment

Intermediaries

Technologicalnatural environment

Product

Suppliers

Place

TARGET CONSUMERS

Price

Publics

Promotion

Politicallegal environment

Competitors

Socialcultural environment

The Marketing Process

The process of 1. Analyzing marketing opportunities; 2. Selecting target markets; 3. Developing a marketing mix; 4. Managing the marketing effort. The company first identifies the total market, then divides it into small segments, selects the most promising segments, and focuses on serving and satisfying these segments. To find the best marketing mix and put into action, the company engages in marketing analysis, planning, implementation and control.

Connecting with Consumers

Companies know that they cannot connect profitably with all consumers in a given market at least not all consumers in the same way. Thus, each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments better than its competitors do. This process involves three steps: market segmentation, market targeting, and market positioning.

Market Segmentation
The market consists of many types of consumers, products, and needs, and the marketer has to determine which segments offer the best opportunity for achieving company objectives. Consumers can be grouped and served in various ways based on geographic, demographic, psychographic, and behavioral factors. A market segment consists of consumers who respond in a similar way to a given set of marketing efforts.

Market segmentation dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

Market Targeting
The process of evaluating each market segments attractiveness and selecting one or more segments to enter. A company should target segments in which it can profitably generate the greatest customer value and sustain it over time. Most companies enter a new market by serving a single segment, and if this proves successful, they add segments. GM says that it makes a car for every person, purse, and personality.

Market Positioning
A products position is the place the product occupies relative to competitors in consumers minds. Market positioning arrangement for a product to occupy a clear, distinctive, and desirable place relative to competing products from competing brands and give them the greatest strategic advantage in their target markets. Thus, marketers plan positions that distinguish their products from competing brands and give them the greatest strategic advantage in their target markets. The company first identifies possible competitive advantages on which to build the position.

The four Ps of Marketing Mix

Product
Variety Quality Design Features Brand name Packaging Services

Price
List price Discounts Allowances Payment period Credit terms Target customers Intended positioning

Place
Channels Coverage Assortments Locations Inventory Transportation Logistics

Promotion
Advertising Personal selling Sales promotion Public relations

Buyers Viewpoint

4Ps Product Price Place Promotion

4Cs Customer solution Customer cost Convenience Communication

Managing the Marketing Effort

Analysis Control Implementation
Carry out the plans Measure results Evaluate results Take corrective action

Planning
Develop strategic plan Develop marketing plan

Marketing Analysis & Planning

The company must analyze its markets and marketing environment to find attractive opportunities and to avoid environmental threats. It must analyze company strengths and weaknesses as well as current and possible marketing actions to determine which opportunities it can best pursue. Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives. A marketing strategy is the marketing logic whereby the company hopes to achieve its marketing objectives. It consists of specific strategies for target markets, positioning, the marketing mix, and marketing expenditure levels.

Marketing Implementation
A brilliant marketing strategy counts for little if the company fails to implement it properly. Marketing planning addresses the what and why of marketing activities, implementation addresses the who, where, when, and how. Many managers think that doing things right (implementation) is as important as, or even more important than, doing the right things (strategy).

Successful implementation depends on how well the company blends its people, organizational structure, decision and reward systems, and company culture into a cohesive action program that supports its strategies.

The Control Process

Set goals

Measure performance

Evaluate performance

Take corrective action

What do we want to achieve?

What is happening?

Why is it happening?

What should we do about it?

Marketing Control
The process of measuring and evaluating the results of marketing strategies and plans, and taking corrective action to ensure that objectives are achieved. Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary. Strategic control involves looking at whether the companys basic strategies are well matched to its opportunities.

The marketing audit is a major tool for strategic control. It is a comprehensive, systematic, independent, and periodic examination of a companys environment, objectives, strategies, and activities to determine problem areas and opportunities.