Marketing in the Organisation: Strategic Environment and Planning

MARKET DRIVEN STRATEGY

A STRATEGY IS A PLAN OF ACTION

1. a series of interconnected tactics
2. purposely organized to be executed in a particular order in time and space
3. for the purpose of achieving specific goals.

A MARKETING STRATEGY IS A PLAN OF ACTION

1. within a dynamic environment.
2. It begins with a market opportunity …
3. … and capitalizes on that opportunity through careful use of resources (assets and capabilities).

Reasons to plan

¡  Identifies and builds on the firm’s strengths

¡  Allows organisations to be
proactive instead of reactive.

¡  Marketing can be integrated and coordinated.

¡  Intent and purpose of top 
management is clearly  
communicated.

¡  Ensures activities are goal
oriented (i.e. Develops objectives before action is taken)

¡   Allows for activity monitoring and adjustment.

BP requires integrated activity

1. Strategic planning (SP): Managerial decision process that matches the firm’s resources capabilities and competencies (e.g. $$, workforce) to market opportunities for long-term growth and survival.

                Fundamentally concerned with the selection of markets that the company should compete in and with the development and co-ordination of that portfolio of businesses.

2. Functional planning (FP): detailed plans drawn by operating divisions (e.g. marketing) for strategies and tactics that support the SP.
3. Operational planning:  detailed plans for day-to-day activities to carry out FPs.

Steps in Strategic Planning

step 1: Define the Mission / Vision
step 2: Evaluate internal and external environments
step 3: Set organizational or SBU objectives
step 4: Establish the business portfolio
step 5: Develop growth strategies

Sp step 1: Define the Mission / vision   

Mission statement:

A formal document that describes the firm’s overall purpose and what it hopes to achieve in terms of its customers, products, and resources

Vision statement:

Specifies what the firm could achieve if it performed perfectly

Answers 3 key questions:

1. What business are we in?
2. What customers should we serve?
3. How to develop capabilities and focus our effort?

OFTEN CONSIDERED TOO BROAD

McDonalds – “To Be the best employer for our people in each community around the world and deliver operational excellence to our customers in each of our restaurants”

Disneyland  (HK) - “to inspire happiness and  deliver a world-class experience through creativity, great leadership and a passionate cast”.

Disneyland  (HK): “to be the Asia’s premier resort destination creating magical memories for the guests, cast and community”.

McDonalds – “To be the world’s best quick service restaurant”

Corporate vision / culture / image

Vision - Top management’s aspiration for the firm;

Culture - the company’s values, attitudes and behaviors

Image - the outside world’s impression of the firm.

Driven by different internal and external stakeholders, these elements are used for building a corporate brand.

CORPORATE BRANDING - The planned management of behavior and communication, in order to achieve positive reputation with all relevant company stakeholders.

SP step 2: Evaluate the internal
and external environments

1. COMPANY’s internal environment (objectives, capabilities and competencies)
2. External environmental general CONTEXT (e.g. PESTLE: Political, Economic, Social, Technological, Legal & Environmental).
3. Know thy CUSTOMERS (needs, wants and characteristics of current and potential customers)
4. Know thy COMPETITORS (objectives, capabilities and competencies)

    === NOTE THE 4 ‘C’s ===

In some instances marketers deal separately with:

• External industrial environment  (market, competitive, supply).
• Know thy suppliers  ( … supply/value chain)

Internal Environment

Controllable elements inside a firm that may affect its performance either positively or negatively:

• Includes people (human capital), physical facilities, financial stability, corporate reputation, quality products, strong brands, technologies
• Represent the firm’s key strengths and weaknesses

External Environment

Elements outside the firm that may affect its performance either positively or negatively:

• Economic, competitive, technological, legal/political/ethical, and socio-cultural trends
• Trends manifest as opportunities or threats
• Firm cannot directly control external factors but can respond to them via planning

SP step 3: Set organizational
or SBU objectives

Organizational/SBU Objectives:

• What the firm hopes to accomplish with long-range business plan
• Need to be specific, measurable, attainable and sustainable
• May relate to sales, profitability, product development, market share, productivity, ROI, customer satisfaction, or social responsibility

SP step 4: Establish the business portfolio

The group of different products or brands owned by a firm and having different income-generating and growth capabilities

Portfolio analysis:

Assessing potential of a firm’s SBUs. Helps make decisions about which SBUs should receive more or less of the firm’s resources

SP step 5: Develop growth strategies

Product-market growth matrix:

• Characterizes different growth strategies according to type of market (new vs. existing) and type of product (new vs. existing).

Matrix yields 4 potential strategies:

1. Market penetration
2. Product development
3. Market development
4. Diversification

Marketing Planning: Step 1

One of the most difficult parts of developing a marketing plan due to a common lack of reliable information.

It should provide a complete picture of the firm’s (or product line) current and future situation with respect to  the internal, the customers and other external environments.

Data and information about these environments should come from external sources (preferably multi-sources.

A comprehensive situation analysis  looks at all environments simultaneously (2)

Perform a Situation Analysis (1)

Describes a firm’s (or product line) competitive position, operating and financial condition and general state of internal and external affairs.

Situation Analysis and the SWOT

The SWOT is a synthesis of the findings of the situational analysis.

Generates information and perspective useful across a variety of functional areas.

•       What do customers (and non-customers) believe about us as a company?

•       What do customers (and non-customers) think of our product quality, customer service,  price and overall value, convenience and promotional messages in comparison with our competitors?

•       What is the relative importance of these issues; not as we seem  them, but as customers see them?

Every issue in a SWOT should be examined from the customers’ perspective

Marketing Planning: Step 2

Set marketing objectives

• Specific to the firm’s brands and other marketing mix-related elements
• States what the marketing function must accomplish if firm is to achieve its overall business objectives

Marketing Planning: Step 3

Develop marketing strategies to achieve marketing objectives

• Select target market(s) where the firm’s offerings are best suited
• Develop marketing mix strategy for each market
• Marketing mix strategies and positioning statements: how marketing will accomplish its objectives in the firm’s target market(s) by using product, price, promotion, place (distribution), processes (and other Ps).

Marketing Planning: Step 4

CONTROL:

• Measuring actual performance, comparing performance to the objectives, making adjustments
• Think about the planning cycle

MARKETING METRICS:

Return on marketing investment (ROMI)

ACTION PLANS:

Support plans that guide implementation and control of marketing strategies