STRATEGIC MARKETING PROCESS
Overview
The topic implies that businesses need to plan for a wide amount of factors in the marketplace in order to be successful and achieve an advantage in the marketplace. In today’s dynamic environment, strategic planning certainly does provide better tools and resources to help survive, compete, and thrive in the marketplace.
In this topic, students learn that ethically sound strategic planning can take place at both the corporate and the strategic business unit (SBU) level in large firms and in a single stage in smaller businesses. Businesses conduct functional (including marketing) and operational planning. Successful businesses continually scan the organization’s internal environment and the external business environment. By carefully following these strategies in an ethical manner, undeniably businesses can create their own advantage.
|
Learning Outcomes (Duration: 7.32 minutes)
After studying this topic, students should be able to:
- Explain business planning and its three levels.
- Describe the steps in strategic planning.
- Describe the steps in market planning.
BUSINESS PLANNING
Planning is the key to prosperity. Business planning is an ongoing process of making decisions that guide the firm both in the short term and for the long term. Planning identifies and builds on a firm’s strengths, and it helps managers at all levels make informed decisions in a changing business environment.
- A business plan is a plan that includes the decisions that guide the entire organization.
- A marketing plan is a document that describes the marketing environment, outlines the marketing objectives and strategies, and identifies how the company will implement and control the strategies embedded in the plan.
|
The Three Levels of Business Planning
Business planning occurs at three levels: strategic, functional, and operational. The top-level is “big picture” stuff, while the bottom level specifies the “nuts-and-bolts” actions the firm will need to take to achieve these lofty goals.
- Strategic planning is the managerial decision process that matches the firm’s resources (such as its financial assets and workforce) and capabilities (the things it is able to do well because of its expertise and experience) to its market opportunities for long-term growth.
- Strategic business units (SBUs)—individual units representing different areas of business within a firm that are different enough to each have their own mission, business objectives, resources, managers, and competitors.
- The next level of planning is functional planning. This level gets its name because the various functional areas of the firm, such as marketing, finance, and human resources get involved. Vice presidents or functional directors usually do this. We refer to what the functional planning marketers do as marketing planning.
- Operational planning focuses on the day-to-day execution of the functional plans and includes detailed annual, semiannual, or quarterly plans.
All business planning is an integrated activity. This means that the organization’s strategic, functional, and operational plans must work together for the benefit of the whole, always within the context of the organization’s mission and objectives.
STRATEGIC PLANNING: FRAME THE PICTURE
The Central Role of Strategic Planning
Successful marketing requires capabilities such as understanding, creating, delivering, capturing, and sustaining customer value.
Companies must also have strong market leadership.
- Successful Chief Marketing Officers (CMOs) have strong quantitative and qualitative skills, work well with others but have an entrepreneurial attitude, understand the bottom line, and listen to the voice of the customers.
- Successful CMOs are risk-takers, problem solvers, change agents, and results-oriented with global experience, multichannel expertise, cross-industry experience, digital focus, and operational knowledge.
- Three driving forces are expected to change CMO role
- Predictable marketplace trends
- Change the role of the C-suite
- Uncertainty about the economy and organizational design
- Five priorities for a successful CMO
- Act as the visionary for the future of the company.
- Build adaptive marketing capabilities.
- Win the war for marketing talent.
- Tighten the alignment with sales.
- Take accountability for returns on marketing spending.
To ensure they select and execute the right activities, marketers must give priority to strategic planning in three areas:
- Managing a company’s businesses as an investment portfolio;
- Assessing each business’ strength by considering the market’s growth rate and the company’s position and fit in that market; and
- Establishing a strategy.
Strategic Planning Process
Listed below are typical steps followed in strategic planning.
Step 1: Define the Mission
|
Questions asked in this stage include: What business are we in? What customers should we serve? How should we develop the firm’s capabilities and focus its efforts? Answers to these questions become part of the mission statement, a formal document that describes the organization’s overall purpose and what it hopes to achieve in terms of its customers, products, and resources. The ideal mission statement is not too broad, too narrow, or too shortsighted.
People sometimes use the terms vision and mission interchangeably, but in the strategy process, they differ.
- A vision defines what an organization wants to accomplish ultimately, and thus the goal can be described by the infinitive form of the verb starting with "to".
- A mission statement is concerned with the reason the organisation exists. It tells the stakeholders what it is doing and why. It must be capable of determining the organisation's strategic intent. It defines how the vision is accomplished.
Companies with Customer-Oriented Vision Statements
- Alibaba: To make it easy to do business anywhere.
- Amazon: To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online.
- Facebook: To make the world more open and connected.
- GE: To move, cure, build, and power the world.
- Google: To organize the world’s information and make it universally accessible and useful.
- SpaceX: To make human life multi-planetary.
- Tesla: To accelerate the world’s transition to sustainable energy.
- Walmart: To be the best retailer in the hearts and minds of consumers and employees.
In your opinion, what type of product or brand/company has these mission statements?
|
SELF-CHECK: ACTIVITY
Step 2: Evaluate the Internal and External Environment
|
This is referred to as a situation analysis, environmental analysis, or sometimes a business review. The analysis includes a discussion of the firm’s internal environment, which can identify a firm’s strengths and weaknesses, as well as the external environment in which the firm does business so the firm can identify opportunities and threats.
- The internal environment is all controllable elements inside a firm that influence how well the firm operates. Examples include the firm’s people, its technologies, physical facilities, financial stability, and relationships with suppliers.
- The external environment consists of elements outside the firm that may affect it either positively or negatively. The external environment for today’s businesses is global, so managers /marketers must consider elements such as the economy, competition, technology, law, ethics, and sociocultural trends. Unlike elements of the internal environment that management can control to a large degree, the firm cannot directly control these external factors, so management must respond to them through its planning process.
A SWOT analysis, a summary of the ideas developed in the situation analysis, allows managers to focus clearly on the meaningful strengths (S) and weaknesses (W) in the firm’s internal environment and opportunities (O) and threats (T) coming from outside the firm (the external environment).
Step 3: Set Organizational or SBU Objectives
|
Organizational or SBU objectives are a direct outgrowth of the mission statement and broadly identify what the firm hopes to accomplish within the general time frame of the firm’s long-range business plan. Objectives need to be specific, measurable, attainable, and sustainable. Objectives may relate to a number of elements such as revenue and sales, profitability, the firm’s standing in the market, return on investment, productivity, product development, customer satisfaction, social responsibility, and many other attributes.
Step 4: Establish the Business Portfolio
|
For companies with several different SBUs, strategic planning includes making decisions about how to best allocate resources across these businesses to ensure growth for the total organization. Each SBU has its own focus within the firm’s overall strategic plan, and each has its own target market and strategies for reaching its objectives.
Just as we call the collection of different stocks an investor owns a portfolio, the range of different businesses that a large firm operates is its business portfolio.
- Portfolio analysis is a tool management uses to assess the potential of a firm’s business portfolio. It helps management decide which of its current SBUs should receive more—or less—of the firm’s resources, and which of its SBUs are most consistent with the firm’s overall mission.
- The BCG growth-market share matrix is one model managers use to assist in the portfolio management process. The BCG model focuses on determining the potential of a firm’s existing successful SBUs to generate cash that the firm can then use to invest in other businesses.
- SBUs are categorized as:
- Stars are SBUs with products that have a dominant market share in high-growth markets.
- Cash cows have a dominant market share in a low-growth potential market.
- Question marks—sometimes called “problem children”—are SBUs with low market shares in fast-growth markets.
- Dogs have a small share of a slow-growth market.
Step 5: Develop Growth Strategies
|
Part of the strategic planning at the SBU level entails evaluating growth strategies. The product-market growth matrix is used to analyze different growth strategies. The matrix provides four different fundamental marketing strategies.
- Market penetration: increasing sales of existing products to existing markets.
- Market development: introducing existing products to new markets.
- Product development: selling new products in existing markets.
- Diversification: emphasizing both new products and new markets to achieve growth.
The Nature and Contents of Marketing Plans
Working within the plans set by the levels above them, product managers come up with a marketing plan for individual products, lines, brands, channels, or customer groups.
Each product level (product line, brand) must develop a marketing plan for achieving its goals. A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives.
- Marketing plans are becoming more customer and competitor orientated. The plan draws more input from all the business functions and is team-developed.
|
Operational Planning: Day-To-Day Execution Of Marketing Plans
The best plan ever is written is useless if not properly carried out. That is what operational plans are for. They put the pedal to the metal by focusing on the day-to-day execution of the marketing plan.
The task falls to the first-line supervisors we discussed earlier, such as sales managers, marketing communications managers, and marketing research managers. Operational plans generally cover a shorter period of time than either strategic plans or marketing plans—perhaps only one or two months—and they include detailed directions for the specific activities to be carried out, who will be responsible for them, and timelines for accomplishing the tasks.
Agile Marketing and the Planning Process
|
Agile marketing uses data and analytics to source promising opportunities or solutions to problems in real-time, deploying tests quickly, evaluating the results, and rapidly doing it over and over. A high-functioning agile marketing organization can run hundreds of marketing campaigns simultaneously and generate multiple new ideas every week. Agility is based on a methodology called Scrum. Scrum provides a framework that aims to create a culture of transparency, inspection, and adaptation while making it easier for team members to produce consistently great products.
----------------------------------------------------------------- Back to Top
Defining the mission is identified as the first major step in the strategic planning process. Many companies display their mission statement on their website, making them readily accessible to the public. TASK:
|
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.