STRATEGIC MARKETING PLANNING
Chapter 2
Chapter 2 Outline
The Strategic Planning Process
Organizational Mission Versus Organizational Vision
Corporate or Business-Unit Strategy
Functional Strategy
Implementation
Evaluation and Control
The Marketing Plan
Marketing Plan Structure
Purposes and Significance of the Marketing Plan
The Strategic Planning Process
Whether at the corporate, business unit, or functional level,
the planning process begins with an in-depth analysis of the
organization’s internal and external environments—
sometimes referred to as a situation analysis.
This analysis focuses on the firm’s resources, strengths, and
capabilities with regards to competitive, customer, and
environmental issues.
Based on an extensive review of these relevant environmental
issues, the firm establishes its mission, goals, and/or
objectives; its strategy; and several functional plans.
The Strategic Planning Process
The Strategic Planning Process
As shown in the diagram in the previous slide,
planning efforts within each functional area will
result in the creation of a strategic plan for that area.
Although the focus of this chapter is on the issues and
processes concerned with developing a customer-
oriented marketing strategy and marketing plan, it
must be emphasized that organizations develop
effective marketing strategies and plans jointly with
the organization’s mission and goals, as well as the
plans from other functional areas.
Organizational Mission Versus Organizational
Vision
A mission, or mission statement, seeks to answer the question
‘‘What business are we in?’’
It is a clear and concise statement (a paragraph or two at most) that
explains the organization’s reason for existence.
A vision or vision statement seeks to answer the question ‘‘What do
we want to become?’’
Example 1: Texas Instruments—one of the world’s largest technology
companies—defines its mission this way: ‘‘Texas Instruments
Incorporated provides innovative semiconductor technologies to help
our customers create the world’s most advanced electronics.’’
Compare this to the company’s vision: ‘‘... to fundamentally change
markets and create entirely new ones.’’
Organizational Mission Versus Organizational
Vision
Example 2: Google’s mission is ‘‘to organize the
world’s information and make it universally
accessible and useful.’’
Google’s vision is ‘‘Never settle for the best.’’
Note that an organization’s vision is usually future
oriented, in that it represents where the
organization is headed and where it wants to go.
Class Exercise
Think of a company and explain how it has
changed since its launch.
Corporate or Business-Unit
Strategy
All organizations need a corporate strategy, the
central scheme or means for utilizing and integrating
resources in the areas of production, finance, research
and development, human resources, and marketing, to
carry out the organization’s mission and achieve the
desired goals and objectives.
In the strategic planning process, issues such as
competition, differentiation, diversification,
coordination of business units, and environmental
issues are all corporate strategy concerns.
Corporate or Business-Unit
Strategy
Business-unit strategy determines the nature and
future direction of each business unit, including its
competitive advantages, the allocation of its
resources, and the coordination of the functional
business areas (marketing, production, finance,
human resources, etc.).
Functional Strategy
Organizations develop functional strategies to provide a total
integration of efforts that focus on achieving the area’s stated
objectives.
Examples: In production, this might involve strategies for
procurement, just-in-time inventory control, or warehousing.
In human resources, strategies dealing with employee
recruitment, selection, retention, training, evaluation, and
compensation are often at the forefront of the decision-making
process.
In marketing strategy, the process focuses on selecting one or
more target markets and developing a marketing program that
satisfies the needs and wants of members of that target market.
Implementation
Evaluation and Control
Implementation: involves activities that actually
execute the functional area strategy.
Evaluation and Control: Organizations design the
evaluation and control phase of strategic planning
to keep planned activities on target with goals and
objectives.
Class Exercise
In many organizations, marketing does not have a
place of importance in the organizational hierarchy.
Why do you think this happens? What are the
consequences for a firm that gives little importance
to marketing relative to other business functions?
Class Exercise
Defend or contradict this statement: Developing
marketing strategy is more important than
implementing marketing strategy, because if the
strategy is flawed, its implementation doesn’t
matter.
The Marketing Plan
The result of the strategic planning process
described is a series of plans for each functional
area of the organization.
For the marketing department, the marketing plan
provides a detailed formulation of the actions
necessary to carry out the marketing program.
Think of the marketing plan as an action
document—it is the handbook for marketing
implementation, evaluation, and control.
The Marketing Plan
Marketing plans can be developed for specific
products, brands, target markets, or industries.
Likewise, a marketing plan can focus on a specific
element of the marketing program, such as a
product development plan, a promotional plan, a
distribution plan, or a pricing plan.
The Marketing Plan
All marketing plans should be well organized to make certain that
all relevant information is considered and included.
A good outline of the marketing plan should be:
1) Comprehensive: Having a comprehensive outline is critical to
make sure that there are no omissions of important information.
2) Flexible: Although having a comprehensive outline is vital,
flexibility should not be sacrificed.
Any outline that you choose must be flexible enough to be
modified to fit the unique needs of specific business situation.
Because all situations and organizations are different, using strict
outline is harmful to the planning process.
The Marketing Plan
3) Consistent: Consistency between the marketing
plan outline and the outline of other functional area
plans is a very important consideration.
Consistency may also include the connection of the
marketing plan outline to the planning process used
at the corporate- or business-unit levels.
Maintaining consistency ensures that executives
and employees outside of marketing will
understand the marketing plan and the planning
process.
The Marketing Plan
4) Logical: Because the marketing plan must
ultimately sell itself to top managers, the plan’s
outline must flow in a logical manner.
An illogical outline could force top managers to
reject or underfund the marketing plan.
Marketing Plan Structure
1) Executive Summary
2) Situation Analysis
3) SWOT (Strengths, Weaknesses,
Opportunities, and Threats) Analysis
4) Marketing Goals and Objectives
5) Marketing Strategy
6) Marketing Implementation
7) Evaluation and Control
Marketing Plan Structure
1) Executive Summary: is a summary of the
overall marketing plan, with an outline that
communicates the main direction of the marketing
strategy and its execution.
The purpose of the executive summary is to
provide an overview of the plan so the reader can
quickly identify key issues or concerns related to
his or her role in implementing the marketing
strategy.
Marketing Plan Structure
The executive summary does not provide detailed
information found in the following sections, or any
other detailed information that supports the final plan.
Individuals both within and outside of the
organization may read the executive summary for
reasons other than marketing planning or
implementation.
Many users of a marketing plan ignore some of the
details because of the role they play.
Marketing Plan Structure
For example: The CEO may be more concerned
with the overall cost and expected return of the plan,
and less interested in the plan’s implementation.
Financial institutions or investment bankers may
want to read the marketing plan before approving
any necessary financing.
Suppliers, investors, or others who have a stake in
the success of the organization sometimes receive
access to the marketing plan.
Marketing Plan Structure
Even though the executive summary is the first part
of a marketing plan, it should always be the last part
to be written because it is easier (and more
meaningful) to write after the entire marketing plan
has been developed.
There is another good reason to write the executive
summary last: It may be the only part of the marketing
plan read by a large number of people.
Therefore, the executive summary must accurately
represent the entire marketing plan.
Marketing Plan Structure
2) Situation Analysis: The second part of the
marketing plan is the situation analysis, which
summarizes all relevant information obtained about
three key environments:
A) The internal environment
B) The customer environment
C) The firm’s external environment
Marketing Plan Structure
A) The internal environment: The analysis of the
company’s internal environment considers issues
such as:
The availability and deployment of human
resources
The age and capacity of equipment or technology
The availability of financial resources
This section also summarizes the firm’s current
marketing objectives and performance.
Marketing Plan Structure
B) The customer environment: The analysis of the
customer environment studies the current situation with
respect to the needs of the target market (consumer or
business), anticipated changes in these needs, and how
well the firm’s products presently meet these needs.
C) The firm’s external environment: The analysis of
the external environment includes relevant external
factors—competitive, economic, social, political/legal,
and technological—that can put considerable direct and
indirect pressures on the company’s marketing activities.
Marketing Plan Structure
A clear and detailed situation analysis is one of the most
difficult parts of developing a marketing plan.
This difficulty arises because the analysis must be both
comprehensive and focused on critical issues in order to
prevent information overload—a task actually made
more complicated by advances in information technology.
The information for a situation analysis may be acquired
internally through the firm’s marketing information
system, or it may have to be obtained externally through
primary or secondary marketing research.
Marketing Plan Structure
3) SWOT (Strengths, Weaknesses,
Opportunities, and Threats) Analysis: SWOT
analysis focuses on the internal factors (strengths
and weaknesses) and external factors (opportunities
and threats)—obtained from the situation analysis
in the previous section—that give the firm certain
advantages and disadvantages in satisfying the
needs of its target market(s).
SWOT-Driven Strategic Planning
Marketing Plan Structure
These strengths, weaknesses, opportunities, and
threats should be analyzed relative to market needs
and competition.
This analysis helps the company determine what it
does well and where it needs to make
improvements.
At the conclusion of the SWOT analysis, the focus
of the marketing plan shifts to address the strategic
focus and competitive advantages to be leveraged
in the strategy.
Marketing Plan Structure
The key to developing strategic focus is to match
the firm’s strengths with its opportunities to create
capabilities in delivering value to customers.
The challenge for any company at this stage is to
create a compelling reason for customers to buy its
products over those offered by competitors.
Marketing Plan Structure
4) Marketing Goals and Objectives: Marketing
goals and objectives are formal statements of the
desired and expected outcomes resulting from the
marketing plan.
Goals are broad, simple statements of what will be
accomplished through the marketing strategy.
The main function of goals is to guide the
development of objectives and to provide direction
for resource allocation decisions.
Marketing Plan Structure
Marketing objectives are more specific and are critical
to planning.
Marketing objectives should be stated in quantitative
terms to permit reasonably precise measurement.
This part of the marketing plan has two important
purposes:
First, it sets the performance targets that the firm seeks
to achieve by giving life to its strategic focus through
its marketing strategy (i.e., what the firm hopes to
achieve).
Marketing Plan Structure
Second, it defines the guidelines by which the company
will measure actual performance in the evaluation and
control phase of the marketing plan (i.e., how performance
will actually be measured).
5) Marketing Strategy: This part of the marketing
plan outlines how the firm will achieve its
marketing objectives.
It is at this level where the firm will specify how it
will gain a competitive advantage by doing
something better than the competition:
Marketing Plan Structure
Its products must be of higher quality than competitive
offerings; its prices must be consistent with the level of
quality (value); its distribution methods must be as
efficient as possible; and its promotions must be more
effective in communicating with target customers.
It is also important that the company try to make these
advantages sustainable.
Therefore, in its broadest sense, marketing strategy deals
with how the company will manage its relationships with
customers in a way that gives it an advantage over the
competition.
Marketing Plan Structure
6) Marketing Implementation: The implementation part of the
marketing plan describes how the marketing program will be
executed.
This part of the marketing plan answers several questions with respect
to the marketing strategies outlined in the previous section such as:
1. What specific marketing activities will be undertaken?
2. How will these activities be performed?
3. When will these activities be performed?
4. Who is responsible for the completion of these activities?
5. How will the completion of planned activities be monitored?
6. How much will these activities cost?
Marketing Plan Structure
Without a good plan for implementation, the success
of the marketing strategy will be in jeopardy.
The implementation of a marketing plan depends on
acquiring the support of employees:
Employees implement marketing strategies, not
organizations.
As a result, issues such as leadership, employee
motivation, communication, and employee training
are vital to implementation success.
Marketing Plan Structure
7) Evaluation and Control: The final part of the
marketing plan details how the results of the
marketing program will be evaluated and controlled.
Marketing control involves:
Establishing performance standards
Evaluating actual performance by comparing it with
these standards
Taking corrective action if necessary to decrease the
gap between desired and actual performance.
Marketing Plan Structure
Performance standards should be tied back to the
objectives stated earlier in the plan.
These standards can be based on increases in sales
volume, market share, or profitability; or
advertising standards such as brand name
recognition or recall.
All performance standards must be agreed upon
before the results of the plan can be evaluated.
Marketing Plan Structure
The financial assessment of the marketing plan is
also an important component of evaluation and
control.
Estimates of costs, sales, and revenues determine
financial projections.
Finally, if the marketing plan has not lived up to
expectations, the company can use a number of
tools to pinpoint potential causes for the
discrepancies.
Marketing Plan Structure
One such tool is the marketing audit—a systematic
examination of the firm’s marketing objectives,
strategy, and performance.
The marketing audit can help isolate weaknesses in
the marketing plan and recommend actions to help
improve performance.
The control phase of the planning process also
outlines the actions that can be taken to decrease the
differences between planned and actual performance.
Marketing Audit
Purposes and Significance of the Marketing Plan
A good marketing plan will accomplishes these
five purposes in detail:
1. It explains both the present and future situations
of the organization.
This includes the situation and SWOT analyses and
the firm’s past performance.
2. It spells out the expected outcomes (goals and
objectives) so that the organization can anticipate
its situation at the end of the planning period.
Purposes and Significance of the Marketing Plan
3. It details the specific actions that are to take place so
that the responsibility for each action can be assigned
and implemented.
4. It identifies the resources that will be needed to
carry out the planned actions.
5. It allows the monitoring of each action and its
results so that controls may be implemented.
Feedback from monitoring and control provides
information to start the planning cycle again in the
next time period.
Purposes and Significance of the Marketing Plan
These five purposes are very important to various people in
the firm.
Line managers have a special interest in the third purpose
(description of specific actions) because they are responsible
for ensuring the implementation of marketing actions.
Middle level managers have a special interest in the fifth
purpose (monitoring and control), as they want to make sure
that tactical changes can be made if needed.
These managers must also be able to evaluate why the
marketing strategy does or does not succeed.
Purposes and Significance of the Marketing Plan
The most pressing concern for success may lie in the
fourth purpose: identifying needed resources.
The marketing plan is the way of communicating the
strategy to top executives who make the vital
decisions regarding the productive and efficient
allocation of resources.
Very sound marketing plans can prove unsuccessful
if implementation of the plan is not properly funded
Reference
Ferrell, O. C., & Hartline, M. D. (2016) Marketing
Strategy: Text and Cases, 7th Edition, International
Edition, South-Western Cengage Learning.
