Steps and inputs to developing a strategic marketing plan - Marketing Management

The final part of this chapter provides an overview of the key steps and considerations in developing a strategic marketing plan. It is important to become familiar with this framework, as in the following chapters we look at these steps in more detail. It is easy to lose sight of how individual steps fit together, so from time to time you will need to return to this framework.

1 The corporate plan remit

The corporate mission statement needs detailed consideration by top management to establish the business the company is really in and to relate this consideration to future business intentions. It is a general statement that provides an integrating function for the business, from which a clear sense of business definition and direction can be achieved. This stage, which is the starting point for overall corporate planning (elements of which are: human resource, marketing, operations, financial and logistics) is often overlooked in marketing planning; yet without it, the plan will lack a sense of contribution to the development of the total business. By deriving a clear mission statement, boundaries for the ‘corporate entity’ can be conceived in the context of environmental trends that influence the business.

It is helpful to establish areas of distinctive competence and in so doing, focus upon what customers are buying rather than upon what the company is selling. This will assist in the development of a more marketing-oriented mission statement; it therefore takes into account trends in market consumption patterns. A clear mission statement should include customer groups to be served, customer needs to be served and the technologies to be utilized.

Corporate objectives of the organization are time dependent, designed to achieve shareholder expectations. These should be derived from the mission statement to ensure integration within a corporate and marketing planning system. The time horizon to achieve corporate objectives will vary between organizations, from market to market and from country to country, with time-scales stretching from one to five, or even to 20 or more years.

From a practical viewpoint, both quantitative and qualitative objectives are required to provide the foundation upon which measurable marketing activities can be planned. In particular, quantitative corporate objectives are concerned with rates of return on capital employed and invested, return on shareholder funds etc., and these are inextricably linked to the company’s financial year where these key ratios are used as indicators of annual financial performance. Qualitative corporate objectives may relate to image, stance, positioning, projection, appeal, identity and recognition and it is possible to apply quantitative criteria to each of these to make their analysis to make them more objective, techniques.

Objectives are statements of what is to be achieved and hence provide the stimulus for strategy, i.e. the means by which the objectives will be achieved. Because these objectives are corporate and have company-wide parameters, balance is needed for the attainment of integration in the organization as a whole. Areas to consider when setting up corporate level objectives include: market standing; innovation; productivity; physical and financial resources; staff performance, development and attitude; public responsibility and profitability/financial health.

Corporate constraints are an important consideration. It is the matching of ambition to the ability to maximize performance that is a perennial task which besets senior management. Corporate constraints are the limiting factors that govern corporate capability. As the process of planning is iterative, a clearer understanding of these constraints may arise at subsequent stages in the planning process. A full appreciation of corporate capability at this stage will affect more realistic resource deployment at later stages in the marketing plan and will assist cross-functional plans which collectively are designed to achieve corporate level objectives.

2 The marketing audit

In most business enterprises, periodic financial reviews are mandatory and systems are established to ensure that these occur within the deadlines set. This should be the case with marketing, but rarely is it so formalized. Essentially the marketing audit is a systematic internal and external environmental review of the company’s marketing performance for a given period of time. This review provides the basis for subsequent SWOT analysis (i.e. a review of company Strengths, Weaknesses, Opportunities and Threats). The purpose of auditing the external internal environment of the organization is to separate controllable from uncontrollable variables that have an impact on corporate performance. Companies should develop a customized checklist of factors for examination that can then be reviewed systematically and periodically.

The external audit will examine ‘PEST’ factors – Political, Economic, Socio-cultural and Technological – in the general business environment. Later consideration added the legal impact of these on company operations and the definition was broadened to ‘SLEPT’. Later thinking adds Environmental to this classification which makes the acronym ‘PESTLE’ and the word Ecological has now made the acronym ‘STEEPLE’. In addition, a comprehensive market profile is required with a detailed understanding of market movements so that forecasts can be developed for market performance and changes thereto. To support this market profile, the company must place itself in the context of a competitive market environment and a comprehensive profile of competition must be obtained, together with an examination of competitive product offerings.

Internally, a thorough examination of the company’s marketing performance is vital. Detailed sales analysis, market shares and profit contribution analysis must be undertaken, together with an assessment of the efficiency of the company’s marketing mix and marketing control plans and procedures.

The process of auditing raises a series of questions and produces a series of discoveries. These will need to be compiled into an acceptable format for presentation, a format from which later stages of the plan can be developed. This format is known as the ‘SWOT’ analysis. The PEST analysis is effectively the antecedent to the SWOT analysis.

3 SWOT analysis

This acronym classifies results of the audit into internal current strengths and weaknesses that largely concern controllable variables, and external future opportunities and threats that largely concern uncontrollable variables. The SWOT analysis used for presentation should be a succinct summary of the audit which concentrates upon main issues for resolution, and for which objectives, strategies and tactics could be set if required. In effect this is a series of bullet points under each of the SWOT elements rather than a dialogue.

4 Assumptions

To move forward from analysis to planning, a conceptual transition is required because something has to be achieved by that which has been assessed, discovered and recorded. A potential drawback of planning is that if not careful it can become and end in itself. What this means is that in some organizations, particularly those where planning is done centrally using specialist planning staff, extensive and sophisticated analysis is carried out, but little of this feeds into and affects actual marketing plans and activities at divisional or individual brand level. There are various reasons for this, but a frequent one is simply a lack of communication between planners and implementers. Surprisingly, in many organizations brand managers are unaware of the organization’s mission and vision statements or have not been informed about market developments and forecasts which may have significant implications for their brands. Another reason is a possible clash of cultures when two previously independent organizations come together. Initially, when the UK supermarket group Morrisons first acquired their competitor, Safeway, in 2003 there were problems bringing together the marketing plans and strategies of each group into one coherent whole. However the senior management of both companies were eventually able to do this and the new combined company has made significant inroads into the market ever since.

Environmental scanning of the market and analysis of competitive and market situations leads to the statement of assumptions for a future planning time horizon. To avoid the need for assumptions, we would have to have perfect knowledge, which is rare. It is upon the statement of assumptions that progress can be made to the planning stage. Assumptions can be classified as internal and external, quantitative and qualitative, in the same format as prescribed for corporate constraints.

5 Time-scales

It is normal practice to design at least an annual marketing plan that co-ordinates with the fiscal year of the organization and hence integrates with the budgetary control and associated management information and control systems. Some companies then extend the planning horizon to a separate plan for around five years, or incrementally on a rolling planning basis. A rolling planning principle ensures plans are at least one year ahead and revised and updated quarterly.

6 Marketing objectives

Objectives are statements of what is to be achieved and strategies are means of achieving objectives. It is important to realize that marketing objectives should be derived directly from corporate level objectives and, in turn, reflect both quantitative and qualitative criteria. Concentration should be focused on setting objectives for products and markets, because corporate level objectives reflect product/market combinations. Marketing mix objectives, that relate to price, product, place and promotion (each dealt with as individual chapters) can be separated out at a later stage. This simplifies the process of setting marketing objectives, but they must be actionable, achievable and measurable, otherwise the accomplishment of marketing strategies cannot be accurately assessed in the timescale of the plan.

7 Marketing strategies

Strategy is the means by which objectives are achieved. If objectives specify what is to be done, strategy lays down how it is to be done. A predetermined strategy leads to a series of action statements which are a clear set of steps to be followed to achieve the determined strategy. These actions are known as tactics. Effective marketing strategy is critical to the success of the plan. It must exploit the strengths and opportunities, overcome weaknesses and avoid threats identified in the SWOT analysis.

A strategic marketing programme depends upon an incisive SWOT analysis arising from a clear definition of planned marketing activity as company success is governed by marketing strategy. A company’s marketing strategy is the basis upon which operational decisions are made and corporate and marketing objectives achieved within the time periods specified for the plan. The time period for the tactical plan is usually one year i.e. the current operating year. It is through the tactical plan that marketing strategy is achieved in practice.

The strategic element of the marketing plan concentrates on the selection of target markets, positioning strategies and the planning and implementation of the elements of the marketing mix, which includes product, price, place and promotion, and in the case of service products /markets, the extended marketing mix elements of people, process and physical evidence.

Marketing research at this stage should provide a vital strategic contribution to the plan. A key part of the strategic elements of the marketing plan that is often overlooked is the policy statement, which provides the guidelines by which the marketing strategy can be accomplished within determined time planning horizons.

As part of strategic determination, it is common practice to identify alternative means by which specified marketing objectives can be achieved. Criteria for evaluation are then set and applied to the stated alternatives, and the best course of action selected.

The intention of a marketing mix strategy is to achieve marketing positioning for product/market combinations specified in the corporate and marketing objectives sectors. Therefore, market definition, market segmentation and market targeting are prerequisites within which positioning must be achieved.

An idea first put forward by Weihrich18 in 1982 provides a useful means of applying SWOT analysis principles to form marketing strategies. This is termed the TOWS matrix which brings together company strengths and weaknesses and links them with external opportunities and threats to form specific strategies by using elements from the SWOT analysis.

For example, consider a small regional bakery where the following SWOT has been produced:

Marketing research

  • Strengths 1 and 2; Weakness 3; Opportunity 2 produces: ‘Use long established brand name and “word of mouth” promotion to develop and retail products other than bread’;
  • Strength 7; Weakness 2; Opportunity 1 produces: ‘Expand production to enter larger market in other regions using alliance with local transport company’;
  • Weakness 1; Strength 6; Threats 1 and 2 produces: ‘Use spare capital to update production facilities to counter expansion plans from national bakeries.’

8 Detailed marketing programmes

The level of marketing strategy will vary from plan to plan and company to company, but the final intention is to put the plan into action. It is now time to construct a set of detailed action programmes to achieve the previously stated marketing strategy. This part of the plan is concerned with who should do what, where, when, how and why. In this way responsibility, accountability and action over a specified time-scale can be planned, scheduled, implemented and reviewed.

9 Sales forecast

In many companies, the sales plan will be separated from the marketing plan or even replace the marketing plan in a sales-oriented situation. However, if we adopt marketing as a business philosophy then sales must be included within the marketing plan – it is the means by which many of the plan’s objectives will be achieved. Sales forecasts and budgets will provide the means for quantitative achievement and control.

Selling and sales management strategy and tactics should be designed to complement, support and integrate with the marketing mix, components of marketing strategy – in particular promotion and distribution.

10 Staffing the plan

Objectives and strategy can only be achieved through people, structures, systems and methods. In the tactical section of the plan, responsibility and authority for operations should be designated to appropriate individuals. This requires company-wide consideration for organizational and staff development, to bring about any changes required to meet the objectives of the plan. Training and career development programmes, remuneration systems, numbers of staff required, etc., are important considerations, and this will require liaison with the human resource function.

11 Contingency measures

Despite planning ahead for change, environmental factors sometimes force us to change a course of action – often these factors are unforeseeable and frustrating. The time taken to adjust may be less than we would like because of a desire by management to avoid higher costs and incurring losses. Under such conditions, response to contingency situations becomes reactive. To minimize the impact of changed environmental circumstances, companies can be proactive by using contingency thinking to anticipate likely events that may occur, and then make plans to reconcile the changed position in which the company might then be placed.

For each element of marketing mix and sales strategy, the marketing planner should ask the question: ‘What if?’ In so doing, a change scenario will be formulated; a scenario to which the company can choose to respond. By planning ahead, the impact of changes will be reduced. Such thinking, when used in marketing planning, encourages control and may avoid expensive mistakes. Ironically, if the international banking sector had applied such thinking before the late 2008 ‘financial meltdown’ then costly blunders might have been anticipated and appropriate contingency planning applied in good time.

The marketing planner should refer back to the assumptions set previously and consider the impact on the plan if these are not fulfilled.

12 Budgets, reviews and controls

A marketing plan cannot be operated without some element of control to monitor and measure progress.

A system of controls should be laid down whereby the plan is reviewed on a systematic basis, and updated to extend the horizon to the prescribed time-scale. Controls are needed to assess tactics and strategy in the progress towards the achievement of quantitative and qualitative objectives. These controls should be both quantitative and qualitative in design.

The marketing information system, and in turn the management information system, provide essential inputs to the control system, but the organization depends on people to work the system through regular appraisal. Comparison of performance against target and the coincident variance analysis will enable corrective action to be taken to further exploit marketing and market opportunities and threats. Contingency planning is a form of control that can and should be used, particularly where markets are volatile.

For companies using a formal system of marketing planning, the budget is the means by which the entire plan is co-ordinated financially. Each area of marketing activity should be costed and allocated to centres of responsibility. As a key functional area the marketing budget is one of the key budgets to contribute towards the total budgetary control system. Budgeting is the transitional step between planning and implementation, because the budget, and allocated centres within it, will project the cost of each activity over the specified period of time, and also act as a guide for implementation and control.

This overview of the strategic marketing planning framework is brief. In practice developing strategic marketing plans is complex and multifaceted. This complexity is heightened by the fact that the process is essentially an iterative one, with the planner constantly having to return to earlier stages in the analysis and planning as final plans begin to emerge. In addition, the various elements of the marketing plan need to be consistent, one with another. Marketing mix elements of product, price, place and promotion need to blend into one coherent package. The mix elements must be consistent with overall corporate and marketing objectives, in particular with segmentation, targeting and positioning strategies. The whole process is one of constant checking and re-checking, not only in the preparation of the plan, but throughout its operation.

The steps in marketing planning in this wider framework, together with the key elements of analysis that feed into the decision-making steps. In addition, the interrelationships and iterative steps in the process are also shown. It looks complex, but represents a logical and ordered approach to the strategic marketing planning process.

The key steps shown in this framework are universal inasmuch as they remain essentially the same, irrespective of the nature of a company, e.g. its size, nature of product markets, geographical dispersion etc, and may be followed by the marketing manager preparing a strategic marketing plan for an individual Strategic Business Unit. Although strategic planning frameworks tend to differ, the essentials, together with the sequencing of these, are now generally agreed. However, where marketing extends beyond domestic boundaries to include international markets a number of additional complexities, considerations and steps that international marketing gives rise to. As we shall see, markets and marketing are dynamic.

Marketing and marketers operate in a dynamic environment. As a result, marketing concepts and applications are constantly evolving and changing, so the strategic marketing planner must consider these when formulating plans. Because of this, although the basic elements shown in the framework for strategic planning remain essentially the same, it is useful to conclude this chapter by briefly outlining some of the more recent developments and trends in marketing thinking and application, together with some of the more important potential implications of these for marketing management.

Strategic Marketing Planning Process Steps

The strategic marketing planning process

strategic marketing planning process


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