Lecture 2: Strategic Marketing Planning

2.1. What is strategic planning?

Know your enemy, know yourself, and your victory will not be
threatened. Know the terrain, know the weather, and your victory
will be complete.- Sun Tze on strategy
Marketing Strategy is a series of integrated actions leading to a
sustainable competitive advantage.

John Scully

Changing environment
Organizational objectives

Organization Resources

Strategic fit

Strategic planning is the managerial process of developing and

maintaining a strategic fit between the organization's objectives
and resources and its changing market opportunities.

2.2. Why Strategic Planning?

Strategic planning offers at least five compelling reasons for its
use:
1. Provides an opportunity to influence the future
2. Provides better awareness of needs and of the facilities
related issues and environment.
3. Helps define the overall mission of the organization and
focuses on the objectives.
4. Provides a sense of direction, continuity, and effective
staffing and leadership.
5. Plugs everyone into the system and provides standards of
accountability for people, programs, and allocated resources.
In summary, strategic planning is the key to helping us
collectively and cooperatively gain control of the future and the
destiny of our organ
2.3. The Strategic Planning Process
This process is most applicable to strategic management at the
business unit level of the organization. For large corporations,
strategy at the corporate level is more concerned with managing
a portfolio of businesses.

A. Mission
The mission often is expressed in the form of a mission statement,
in the strategy formulation process; the mission statement sets
the mood of where the company should go.
B. Objectives
Objectives are concrete goals that the organization seeks to
reach, for example, an earnings growth target. The objectives
should be challenging but achievable. They also should be
measurable so that the company can monitor its progress and
make corrections as needed.
C. Situation Analysis
An environmental (both Macro & Micro) scan is performed to
identify the available opportunities. The internal analysis
considers the situation within the firm itself, such as:
Access to natural resources
Company culture
Company image
Exclusive contracts
Financial resources
Key staff
Organizational structure
Operational efficiency

 Operational capacity
Brand awareness
Market share
Patents and trade secrets
D.Strategy Formulation
Once a clear picture of the firm and its environment is in hand,
specific strategic alternatives can be developed. While different
firms have different alternatives depending on their situation,
there also exist generic strategies that can be applied across a
wide range of firms.
E. Implementation & control
The strategy should be translated into specific policies for
functional areas such as:
Marketing
Research and development
Procurement
Production
Human resources
Information systems
Once implemented, control systems should be developed and
implemented to facilitate this monitoring. Standards of
performance are set, the actual performance measured, and
appropriate action taken to ensure success.
2.4. SWOT Analysis

A situation analysis can generate a large amount of information,

much of which is not particularly relevant to strategy formulation.
To make the information more manageable, it sometimes is useful
to categorize the internal factors of the firm as strengths and
weaknesses, and the external environmental factors as
opportunities and threats. Such an analysis often is referred to as
a SWOT analysis.
A widely used framework for organizing and using data and
information gained from situation analysis
Encompasses both internal and external environments
One of the most effective tools
environmental data and information

in

the

analysis

of

A SWOT analysis generates information that is helpful in

matching an organizations or a groups goals, programs,
and capacities to the social environment in which they
operate
It is an instrument within strategic planning
When combined with a dialogue, it is a participatory process

Strengths Those things that you do well, the high value or

performance points

Strengths can be tangible: Loyal customers, efficient

distribution channels, very high quality products, excellent
financial condition

Strengths can be intangible: Good leadership, strategic

insights, customer intelligence, solid reputation, high skilled
workforce

Weaknesses Those things that prevent you from doing what you
really need to do

Since weaknesses are internal, they are within your control

Weaknesses include: Bad leadership, unskilled workforce,

insufficient resources, poor product quality, slow distribution
and delivery channels, outdated technologies, lack of
planning etc.

Opportunities
performance

Potential

areas

for

growth

and

higher

External in nature marketplace, unhappy customers with

competitors, better economic conditions, more open trading
policies etc.
Internal opportunities should be classified as Strengths

Threats Challenges confronting the organization, external in

nature
Threats can take a wide range bad press coverage, shifts in
consumer behavior, substitute products, new regulations etc.
The more accurate you are in identifying threats, the better
position you are for dealing with the sudden ripples of
change
Preconditions of productive SWOT analysis
Stay focused. Be specific and keep your swot short and simple.
Avoid complexity and over analysis

2.5. Case study

The Sweet Dreams Motel Far North Queensland

The Sweet Dreams Motel is a 40-unit, no-frills operation in the less
scenic part of a major Queensland resort town. The owner, Mr.
Smith, firmly believes that there is a need for his style of low-cost
family accommodation amid the luxury and beauty of the area.
His rooms are large, family-style rooms (there is no television, for
example). Although there is plenty of room for future expansion,
the grounds are fairly bare with a bit of landscaping, but mostly
grass.
Mr. Smith can serve breakfast to the rooms and provides teamaking facilities. There are now a lot of good restaurants and
take-aways in the area. Mr. Smiths prices are less than half of
what similar motels charge and only a fraction of what the big
five-star properties are charging. And, really, he isnt all that far
away from the beach, shops and other attractions.
The problem is occupancy. He has some regulars who come
every holiday period (and have been doing so for the four years
he has owned the property). Overall, occupancy is about 50%
year round and he knows from the local tourist office that the
other properties average around 68% occupancy year round.
New developments could mean trouble. This lack of occupancy
can be quite frustrating for Mr. Smith. Cars pull in, drive around
the parking areas, and then drive away.
Currently Mr. Smith does very little advertising in local district
guides and the holiday papers, mainly because he really thinks
word-of-mouth is the best form of advertising. He is a member of
the local tourist committee, but too busy to go to meetings.
However, he does receive the local statistics and knows the
average stay in the area is 3.8 nights, and that local families and
couples and increasingly overseas visitors are his potential
customers.

Hes not desperate yet, but hes getting worried and disillusioned.
He thought he would be overrun with guests, but that hasnt
happened.

SWOT analysis of the Sweet Dreams Motel (Compare your analysis with the
following points)
Strengths:

Located in a popular tourist

region
Big rooms
Large grounds and open areas
Breakfast service to rooms
Good restaurants and takeaway nearby
Low prices (but this is also a
problem!)
Regular customers (but not
very many)
Membership in the local tourist
group
Property large enough for
coach groups
Property is clean
Access to information about
the industry
Mr. Smith acknowledges he has
a problem the first step
towards solving it!
Opportunities:
Install televisions immediately
Landscape the grounds and
make them more attractive
Add more outdoor facilities
playground, BBQ facilities,
perhaps a pool or tennis courts
depending on finances
Increase the level of
advertising

Weaknesses:

No television (crucial for the

family market)
Bare and unappealing grounds
Initial interest by people who
drive in and look but then
leave (probably because of the
bare grounds)
Location poor in relation to
other services, attractions, etc.
No separate restaurant
services
Low occupancy compared to
other motels
Very little advertising
Only local advertising
Uninspiring motel name
Low rates being charged could
be perceived as unappealing

Threats:
Potential failure if occupancy
doesnt improve
Potential failure if other
properties begin cutting rates
Potential problems if other
properties begin big
promotional campaigns
Potential problems if more
budget motels are built

Increase the rates being

charged
Work in with other attractions,
restaurants, etc (charge-back
facilities with nearby
restaurants, for example)
Attend tourist group meetings
do more networking
Add own restaurant or do-ityourself catering facilities for
guests
Investigate other markets
(backpackers, etc.)

Mr. Smiths most important action is to raise rates immediately. At less than half
the price of other motels his price is too low which conveys a poor image. This
combined with the bare grounds, may be driving potential customers away. His
rates can still be low, but should be comparable to the rates of competitive
properties.