MARKETING STRATEGIC AND PLANS

Introduction

Businesses that succeed do so by creating and keeping customers. They do this by

providing better value for the customer than the competition.

Marketing management constantly have to assess which customers they are trying
to reach and how they can design products and services that provide better value
(“competitive advantage”).

The main problem with this process is that the “environment” in which businesses
operate is constantly changing. So a business must adapt to reflect changes in the
environment and make decisions about how to change the marketing mix in order
to succeed. This process of adapting and decision-making is known as marketing
planning.

What is marketing strategy?

A marketing strategy is a process that can allow an organization to concentrate

its limited resources on the greatest opportunities to increase sales and achieve a
sustainable competitive advantage. A marketing strategy should be centered on the
key concept that customer satisfaction is the main goal.

A marketing strategy is most effective when it is an integral component of corporate

strategy, defining how the organization will successfully engage customers,
prospects, and competitors in the market arena. It is partially derived from broader
corporate strategies, corporate missions, and corporate goals. As the customer
constitutes the source of a company's revenue, marketing strategy is closely linked
with sales. A key component of marketing strategy is often to keep marketing in line
with a company's overarching mission statement

A marketing strategy can serve as the foundation of a marketing plan. A

marketing plan contains a set of specific actions required to successfully implement
a marketing strategy. For example: "Use a low cost product to attract consumers.
Once our organization, via our low cost product, has established a relationship with
consumers, our organization will sell additional, higher-margin products and
services that enhance the consumer's interaction with the low-cost product or
service."

A strategy consists of a well thought out series of tactics to make a marketing plan
more effective. Marketing strategies serve as the fundamental underpinning of
marketing plans designed to fill market needs and reach marketing objectives.
Plans and objectives are generally tested for measurable results.
A marketing strategy often integrates an organization's marketing goals, policies,
and action sequences (tactics) into a cohesive whole. Similarly, the various strands
of the strategy , which might include advertising, channel marketing, internet
marketing, promotion and public relations can be orchestrated. Many companies
cascade a strategy throughout an organization, by creating strategy tactics that
then become strategy goals for the next level or group. Each one group is expected
to take that strategy goal and develop a set of tactics to achieve that goal. This is
why it is important to make each strategy goal measurable.

Marketing strategies are dynamic and interactive. They are partially planned and
partially unplanned.

The broad scope of strategic planing encompasses:

• All the products/services your company offers

• All the markets you serve
• Both environmental and internal variables
• Production, research, finance, and other organizational elements needed for
success

There are two major components to your marketing strategy:

• How your enterprise will address the competitive marketplace

• How you will implement and support your day to day operations.

In today's very competitive marketplace a strategy that insures a consistent

approach to offering your product or service in a way that will outsell the
competition is critical. However, in concert with defining the marketing strategy you
must also have a well defined methodology for the day to day process of
implementing it. It is of little value to have a strategy if you lack either the
resources or the expertise to implement it.

In the process of creating a marketing strategy you must consider many factors. Of
those many factors, some are more important than others. Because each strategy
must address some unique considerations, it is not reasonable to identify 'every'
important factor at a generic level. However, many are common to all marketing
strategies. Some of the more critical are described below.

You begin the creation of your strategy by deciding what the overall objective of
your enterprise should be. In general this falls into one of four categories:

• If the market is very attractive and your enterprise is one of the strongest in
the industry you will want to invest your best resources in support of your
offering.
 • If the market is very attractive but your enterprise is one of the weaker ones
in the industry you must concentrate on strengthening the enterprise, using
your offering as a stepping stone toward this objective.
• If the market is not especially attractive, but your enterprise is one of the
strongest in the industry then an effective marketing and sales effort for your
offering will be good for generating near term profits.
• If the market is not especially attractive and your enterprise is one of the
weaker ones in the industry you should promote this offering only if it
supports a more profitable part of your business (for instance, if this segment
completes a product line range) or if it absorbs some of the overhead costs of
a more profitable segment. Otherwise, you should determine the most cost
effective way to divest your enterprise of this offering.

Having selected the direction most beneficial for the overall interests of the
enterprise, the next step is to choose a strategy for the offering that will be most
effective in the market. This means choosing one of the following 'generic'
strategies (first described by Michael Porter in his work, Competitive Advantage).

• A COST LEADERSHIP STRATEGY is based on the concept that you can produce
and market a good quality product or service at a lower cost than your
competitors. These low costs should translate to profit margins that are
higher than the industry average. Some of the conditions that should exist to
support a cost leadership strategy include an on-going availability of
operating capital, good process engineering skills, close management of
labor, products designed for ease of manufacturing and low cost distribution.
• A DIFFERENTIATION STRATEGY is one of creating a product or service that is
perceived as being unique "throughout the industry". The emphasis can be
on brand image, proprietary technology, special features, superior service, a
strong distributor network or other aspects that might be specific to your
industry. This uniqueness should also translate to profit margins that are
higher than the industry average. In addition, some of the conditions that
should exist to support a differentiation strategy include strong marketing
abilities, effective product engineering, creative personnel, the ability to
perform basic research and a good reputation.
• A FOCUS STRATEGY may be the most sophisticated of the generic strategies,
in that it is a more 'intense' form of either the cost leadership or
differentiation strategy. It is designed to address a "focused" segment of the
marketplace, product form or cost management process and is usually
employed when it isn't appropriate to attempt an 'across the board'
application of cost leadership or differentiation. It is based on the concept of
serving a particular target in such an exceptional manner, those others
cannot compete. Usually this means addressing a substantially smaller
market segment than others in the industry, but because of minimal
competition, profit margins can be very high.
The strategic marketing planning process

The Marketing Process Company has developed a wide range of marketing

consultancy offers and strategic planning tools to aid practitioners in the strategic
planning field to develop marketing plans & strategies. The EXMAR strategic
marketing planning process supported by EXMAR software is outlined below.

The ten steps of the strategic marketing

planning process
Phase one 1 Mission
Goal setting
2 Corporate objectives

Phase two 3 Marketing audit

Situation review
4 SWOT analyses

5 Assumptions

Phase three 6 Marketing objectives &

Strategy strategies
formulation
7 Estimate expected results

8 Identify alternative plans &

mixes

Phase four 9 Budget

Resource
allocation & 1 1st year detailed
monitoring 0 implementation program

The Strategic Plan (output of the planning

process)
Mission Statement
Financial summary
Market overview
SWOT analyses
Portfolio summary
Assumptions
Marketing objectives and strategies
Three-year forecasts & budgets

A marketing plan is a written document that details the necessary actions to

achieve one or more marketing objectives. It can be for a product or service, a
brand, or a product line. Marketing plans cover between one and five years.

A marketing plan may be part of an overall business plan. Solid marketing strategy
is the foundation of a well-written marketing plan. While a marketing plan contains
a list of actions, a marketing plan without a sound strategic foundation is of little
use.

Mission

A strategic plan starts with a clearly defined business mission.

Mintzberg defines a mission as follows:

“A mission describes the organisation’s basic function in society, in terms

of the products and services it produces for its customers”.

A clear business mission should have each of the following elements:

Taking each element of the above diagram in turn, what should a good mission
contain?

(1) A Purpose

Why does the business exist? Is it to create wealth for shareholders? Does it exist to
satisfy the needs of all stakeholders (including employees, and society at large?)

(2) A Strategy and Strategic Scope

A mission statement provides the commercial logic for the business and so defines
two things:

- The products or services it offers (and therefore its competitive position)

- The competences through which it tries to succeed and its method of competing

A business’ strategic scope defines the boundaries of its operations. These are set
by management.

For example, these boundaries may be set in terms of geography, market, business
method, product etc. The decisions management make about strategic scope define
the nature of the business.

(3) Policies and Standards of Behaviour

A mission needs to be translated into everyday actions. For example, if the business
mission includes delivering “outstanding customer service”, then policies and
standards should be created and monitored that test delivery.

These might include monitoring the speed with which telephone calls are answered
in the sales call centre, the number of complaints received from customers, or the
extent of positive customer feedback via questionnaires.

(4) Values and Culture

The values of a business are the basic, often un-stated, beliefs of the people who
work in the business. These would include:

• Business principles (e.g. social policy, commitments to customers)

• Loyalty and commitment (e.g. are employees inspired to sacrifice their personal
goals for the good of the business as a whole? And does the business demonstrate a
high level of commitment and loyalty to its staff?)

• Guidance on expected behaviour – a strong sense of mission helps create a work

environment where there is a common purpose

What role does the mission statement play in marketing planning?

In practice, a strong mission statement can help in three main ways:
• It provides an outline of how the marketing plan should seek to fulfill the mission
• It provides a means of evaluating and screening the marketing plan; are
marketing decisions consistent with the mission?
• It provides an incentive to implement the marketing plan

This next stage in marketing planning is indeed the key to the whole marketing
process. The marketing objectives state just where the company intends to be; at
some specific time in the future. James Quinn succinctly defined objectives in
general as: "Goals (or objectives) state 'what' is to be achieved and 'when' results
are to be accomplished, but they do not state 'how' the results are to be achieved".
[3]

They typically relate to what products (or services) will be where in what markets
(and must be realistically based on customer behaviour in those markets). They are
essentially about the match between those 'products' and 'markets'. Objectives for
pricing, distribution, advertising and so on are at a lower level, and should not be
confused with marketing objectives. They are part of the marketing strategy needed
to achieve marketing objectives.

To be most effective, objectives should be capable of measurement and therefore

'quantifiable'. This measurement may be in terms of sales volume, money value,
market share, percentage penetration of distribution outlets and so on. An example
of such a measurable marketing objective might be `to enter the market with
product Y and capture 10 per cent of the market by value within one year'. As it is
quantified it can, within limits, be unequivocally monitored; and corrective action
taken as necessary.

The marketing objectives must usually be based, above all, on the organization's
financial objectives; converting these financial measurements into the related
marketing measurements.

He went on to explain his view of the role of `policies', with which strategy is most
often confused: "Policies are rules or guidelines that express the 'limits' within
which action should occur.

Simplifying somewhat, marketing strategies can be seen as the means, or `game

plan', by which marketing objectives will be achieved and, in the framework that we
have chosen to use, are generally concerned with the 7 Ps. Examples are:

Price- The amount of money needed to buy products

Product- The actual product

Promotion (advertising)- Getting the product known

Placement- Where the product is located

People- Represent the business

Physical environment- The ambience, mood, or tone of the environment

Process- How do people obtain your product

In principle, these strategies describe how the objectives will be achieved. The 7 Ps
are a useful framework for deciding how the company's resources will be
manipulated (strategically) to achieve the objectives. It should be noted, however,
that they are not the only framework, and may divert attention from the real issues.
The focus of the strategies must be the objectives to be achieved - not the process
of planning itself. Only if it fits the needs of these objectives should you choose, as
we have done, to use the framework of the 7 Ps.

The strategy statement can take the form of a purely verbal description of the
strategic options which have been chosen. Alternatively, and perhaps more
positively, it might include a structured list of the major options chosen.

One aspect of strategy which is often overlooked is that of 'timing'. Exactly when it
is the best time for each element of the strategy to be implemented is often critical.
Taking the right action at the wrong time can sometimes be almost as bad as taking
the wrong action at the right time. Timing is, therefore, an essential part of any
plan; and should normally appear as a schedule of planned activities.

Having completed this crucial stage of the planning process, you will need to re-
check the feasibility of your objectives and strategies in terms of the market share,
sales, costs, profits and so on which these demand in practice. As in the rest of the
marketing discipline, you will need to employ judgment, experience, market
research or anything else which helps you to look at your conclusions from all
possible angles.

In detail, a complete marketing plan typically includes:

1. Title page
2. Executive Summary
3. Current Situation - Macro environment
o economy
o legal
o government
o technology
o ecological
o sociocultural
o supply chain
4. Current Situation - Market Analysis
o market definition
o market size
o market segmentation
o industry structure and strategic groupings
o Porter 5 forces analysis
o competition and market share
o competitors' strengths and weaknesses
 o market trends
5. Current Situation - Consumer Analysis [4]
o nature of the buying decision
o participants
o demographics
o psychographics
o buyer motivation and expectations
o loyalty segments
6. Current Situation - Internal
o company resources
 financial
 people
 time
 skills
o objectives
 mission statement and vision statement
 corporate objectives
 financial objective
 marketing objectives
 long term objectives
 description of the basic business philosophy
o corporate culture
7. Summary of Situation Analysis
o external threats
o external opportunities
o internal strengths
o internal weaknesses
o Critical success factors in the industry
o our sustainable competitive advantage
8. Marketing research
o information requirements
o research methodology
o research results
9. Marketing Strategy - Product
o product mix
o product strengths and weaknesses
 perceptual mapping
o product life cycle management and new product development
o Brand name, brand image, and brand equity
o the augmented product
o product portfolio analysis
 B.C.G. Analysis
 contribution margin analysis
 G.E. Multi Factoral analysis
 Quality Function Deployment
10.Marketing Strategy [5] - segmented marketing actions and market share
objectives
o by product,
o by customer segment,
 o by geographical market,
o by distribution channel.
11.Marketing Strategy - Price
o pricing objectives
o pricing method (eg.: cost plus, demand based, or competitor indexing)
o pricing strategy (eg.: skimming, or penetration)
o discounts and allowances
o price elasticity and customer sensitivity
o price zoning
o break even analysis at various prices
12.Marketing Strategy - promotion
o promotional goals
o promotional mix
o advertising reach, frequency, flights, theme, and media
o sales force requirements, techniques, and management
o sales promotion
o publicity and public relations
o electronic promotion (eg.: Web, or telephone)
o word of mouth marketing (buzz)
o viral marketing
13.Marketing Strategy - Distribution
o geographical coverage
o distribution channels
o physical distribution and logistics
o electronic distribution
14.Implementation
o personnel requirements
 assign responsibilities
 give incentives
 training on selling methods
o financial requirements
o management information systems requirements
o month-by-month agenda
 PERT or critical path analysis
o monitoring results and benchmarks
o adjustment mechanism
o contingencies (What if's)
15.Financial Summary
o assumptions
o pro-forma monthly income statement
o contribution margin analysis
o breakeven analysis
o Monte Carlo method
o ISI: Internet Strategic Intelligence
16.Scenarios
o Prediction of Future Scenarios
o Plan of Action for each Scenario
17.Appendix
o pictures and specifications of the new product
 o results from research already completed
Strategic Planning Worksheet
Marketing Objectives
What are your (SMART) marketing objectives?
Marketing Mix Analysis
For each product/service, what is your planned marketing mix?
20.
Product/Service Target Populations Planned Price Place to Deliver Changes in Product Needed to Meet Demand Features and Benefits to Promote

Product/Service A

Product/Service B

Product/Service C

Marketing Activity Analysis

Activities Responsible Party Timeframe Budget

Activity 1

Activity 2

Activity 3

Promotional Activity Analysis

Promotional Activity Promotional Technique Message Desired Actions by Targets

Activity 1

Activity 2

Activity 3

25. (This article was originally published in the Philippine Marketing Association
newsletter.)