Strategic Planning

8 August 2016

This write-up attempts to review what authors have written specifically on strategic marketing process; particularly their approach and personal philosophy vis-à-vis this concept. Within the various approaches, it looks at the respective purpose and structure. Then onwards provide an analytical perspective on the SWOT analysis which seemingly, marketing gurus and authors embrace in their strategic plan in today’s market environment. Review: Strategic Marketing Plan

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Doyle explains strategic marketing plan is concerned with adapting the organisation to a changing environment more effectively than their competitors. “Organisation succeeds when they meet the needs of customers more effectively than their competitors” (Doyle 2002, p. 92). The market’s drivers for change (Drummond, Ensor 2003), some of which are far beyond the organisation’s sphere of control. Adaptability becomes an inextricable phenomenon in mainstream marketing environment.

The organisation has to monitor key macroenvironmental variables (demographic, economic, technological, political, and socio-cultural) and microenvironment variables (customers, competitors, distributors, suppliers) that affect its ability to retain customers (Kotler, P. 2003). In order for it to achieve and enjoy a comparative advantage, the organisation executes a careful strategic planning, and using marketing strategies to achieve this aim (Dibb et al 2001). Hence, the notion of strategic marketing plan.

Doyle advanced that a well defined strategy would incorporate the following: Scope of business; Objectives; Strategic business unit (SBU) identification; Resource allocation; Deeping sustainable advantage; Effective functional strategies (positioning, product line, price, promotion and distribution; synergy. The elements of synergy and SBU identification underlined by Doyle prove relevant to large organisations with diverse business units, products and target segments. It would serve a right purpose for management to be clear and exact about their choice of product, what business are they in,nand what business do they want to be. He supports his approach with the following diagram.

According to Doyle, strategic focus looks at product profitability either by increasing productivity or increasing volume by market expansion and penetration as an objective for an organisation to pursue; a marketing strategy that have seen most UK supermarkets and departmental stores adopting in South East London, for instant the ASDA supermarket. Dibb et al posits the strategic marketing process is based on the establishment of organisational goals and must stay within the bounds of organisational opportunities and resources.

They highlight a complex set of externalities including; political, legal, regulatory, societal and green, economic and competitive, and technological forces that border around the all popular notion of PEST (political, economic, social & technological) analysis. The relationship between market opportunities and organisation’s goals and the availability of resources to match them in relation external forces is captured below in the diagram provided by Dibb et al (2001).

The aforementioned understanding relates with that of Drummond and Ensor who also agree that the external analysis is the “initial step in the process of establishing the key issues facing an organisation” (2003, p. 34). Given that businesses operate in hostile and increasingly complex environment, it makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services (Riley, J. G. 2005).

Another distinctive element of the Dibb et al model is the focus on organisational opportunities and resources, which Doyle (2003) also highlights in his approach. A proper strategic marketing planning process would seek to identify the organisation’s opportunities that would be matched by the necessary and available resources. For instant a company willing to enter into a large buying consumer market like the United States of America would to seek competitive advantage over its competitors by matching adequate technological, economic, management resources.

More so, Dibb et al further clarifying a major confusion over the misuse of terms–strategic marketing plan and marketing plan amongst students and marketing managers: “Strategic marketing plan is a plan of all aspects of an organisation’s strategy in the market place… marketing deals primarily with implementing marketing strategy as it relates to target markets and marketing mix” (2001, p. 656).

Brassington and Pettitt reiterate this distinction; strategic marketing plan deals with the total strategy in a market linking customers, competitors and organisational capability while the marketing plan is an operational element dealing with the marketing mix strategy that will be used to gained leverage in the market place (2003). Brassington and Pettitt model. The leverage in the market place is what Drummond and Ensor underline on their approach in the strategic marketing planning process as it: involves achieving a superior competitive position within a defined market. Essentially, it involves segmentation, targeting and positioning.

This must address customers, competitors and internal corporate factors (2003, p. 14). Drummond and Ensor stress a strategic marketing plan should be relevant and sustainable (2003); an argument also adhered to and phrased by Doyle (2002) as sustainable differential advantage. In order for that to happen, the organisation must be competitive now and in the future and be able to accept ‘change’ as an integral part of strategy (Drummond and Ensor 2003). Hiebaun (1997) underlines the fact that the strategy marketing plan demands a methodology to be followed and should begin with the company’s forecast and objectives .

According to him, forecast consists in answering the following question: If our market and environment tendency stays the same and continues, what will be our situation in the short, medium, and long term? We have to ask ourselves: Where is the company at right now? Where are we going? Where do we want to go? However, McDonalds (2003) cautions about the using of the forecasting system as they tend to project a current business into the future, which can work if the future is going to be the same as the present or the past; if not the business would result to lost opportunities for profit, unrealistic objectives, wasted promotional expenditure, management frustration, growing vulnerability to changes in the business environment, just to name this few.

Another drawback is that Hiebaun’s strategic marketing model assumes a fairly accurate forecasting, and does not take in to account unexpected events. In an uncertain world, long-term forecasts cannot relied upon with a high level of confidence; many firms would have to rely on scenario planning as a tool for dealing with multiple contingencies . Whereas the marketing planning process embodies a series of managerial steps, is not simply a series of action steps; it also embodies a set of values and assumptions which, while not being explicit, are nevertheless an integral part of the whole process (McDonald 1996, p. 11).

He observes that an organisation would not change its value system or culture unless something very significant take place to make such a change worthwhile. Lancaster and Waddelow (1998) explore this lagging phenomenon of organisations to embrace the tenets of the all acclaimed strategic marketing plan in their study of small-to-medium-size-enterprises.

They observe that the strategic scope of a marketing plan is a daunting task which creates two major barriers of perceptions in the minds of managing directors in small-to-medium-size-enterprises. It would take too much time to complete (providing poor return for the effort expended); it will be out of date by the time it is completed (wasting precious resources) (1998, p. 2). They advanced a new methodology for small-to-medium-size-enterprises that must motivate managing directors towards planning and provide for any lapses in their will and knowledge.

Such a process should be simple and appropriate; a content that has meaning and resonance; a basis of continuous development and learning (Lancaster and Waddelow 1998). Whereas the representation of strategic marketing planning process proves useful in the world of academics, it is not necessarily the straightforward, linear sequential operation (McDonald 1996). SWOT ANALYSIS Definition SWOT is the acronym of Strengths, Weaknesses, Opportunities and Threats; simply is an effective way of identifying your Strengths and Weaknesses, and of examining the Opportunities and Threats you face .

It is a summary of the audit under the headings, internal strengths and weaknesses as they relate to external opportunities and threats” (McDonald 2003, p. 48). Basically, a straightforward model that provides direction and serves as a basis for the development of marketing plans. This is accomplished by assessing an organizations strengths (what an organization can do) and weaknesses (what an organization cannot do) in addition to opportunities (potential favourable conditions for an organization) and threats (potential unfavourable conditions for an organization) .

David Jobber sees it as a “structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threat of the marketing audit” (2004, p. 44). Strengths and weaknesses are essentially associated with the audit of the internal company whereas opportunities and threats stem primarily from the external environment (Lancaster, Massingham, Ashford 2002, p. 374). Purpose of the SWOT Analysis The purpose of strategy is to be really clear before you take the direction.

The point of a SWOT analysis is to have the best shot at a grounded plan,” says Rashi Glazer, co-director of the Centre for Marketing and Technology at the University of California at Berkeley . SWOT analysis provides the basis upon which later stages in the strategic marketing plan depend and be used to generate thoughts for clear problem definition (Lancaster, Massingham, Ashford 2002). It provides strong evidence about what the company should and should not try to set as marketing objectives (McDonald 2003). A scan of the internal and external environment is an important part of the strategic planning process.

It provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates . That information would provide indicators that will assist the firm in accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that must be overcome or minimized to achieve desired results (weakness or threat) (Danca). The information that is used in a SWOT analysis exercise must be current and relevant to the firm; it should ensure that the following is completed : For strengths – All strengths should be recognized and validated on a regular basis.

The information can originate from internal evaluations by top management. A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage including; patents, strong brand names, good reputation amongst customers, cost advantage from proprietary know-how, exclusive access to high grade natural resources, favourable access to distribution networks (quickmba, online). For weaknesses – A weakness could be lack of marketing expertise, undifferentiated products or services (i. e. in relation to your competitors), location of your business, poor quality goods or services, or damaged reputation. For opportunities – Track what is being published in press releases, magazines, and market research reports for the industry. Any mention of growth or continuous trends should be noted. An opportunity could be developing market such as the Internet, mergers, joint ventures or strategic alliances, moving into new market segments that offer improved profits, a new international market, a market vacated by an ineffective competitor. For threats – Closely monitor press releases of competitors.

The press releases can reveal what competitors are currently doing to be competitive in the industry. A threat could be: a new competitor in your home market, price wars with competitors, a competitor has a new, innovative product or service, competitors have superior access to channels of distribution or taxation is introduced on your product or service Davis (2004) suggests that information needed to conduct a proper analysis should be verified and updated before being sent to executives. Data that will be used for the analysis must reflect the current status of the industry.

If the method of collecting information is flawed, the results of the analysis will be incorrect and hence provide an assessment that can be poor and lack the proper insight to make the right decisions. Cautioning Overtime, market experts have warned about the seemingly over simplistic approached usually incorporated into the strategic marketing planning. Jobber noted strengths such as ‘I have an old established firm’, ‘We are a larger supplier’, ‘We are technologically advanced’ should be questioned for their impact on customer satisfaction (2004, p. 44).

A considerable improvement is needed in the way SWOT framework is understood, and used, by many organizations . Koch (2000) further suggests that in appraising effects of opportunities, threats, strengths and weaknesses, emphasis should be put on their combined effects, rather than on the effects of individual factors in isolation from one another. Appropriate rules must be developed and observed in every SWOT analysis if it is to produce reliable inputs into strategy generation. Koch developed what he referred as the SECURE model (shown below) aimed at circumventing what he described as “various SWOT malpractices”.

The following explanation about the SECURE model as advanced by Koch (2000): The first rule is that boundaries and structure of the market, and their anticipated changes, should be well defined. The second rule demands that all changes in the company’s environment capable of influencing this company future performance be included in its SWOT analysis. One should stress here that a multiple-scenario approach to strategic planning would require a multiple SWOT inventory development at each, or at least some, organizational levels.

The third rule, trends in the company’s external and internal environments should be presented clearly. If, for instance, the long-term survival of the automotive industry depends on its adoption of a new propelling system for a future car, a system that would be more environmentally friendly, and increasingly based on renewable, or more abounding, sources of energy, a superior ability of car-making companies to make progress in this direction would be of critical strategic importance today.

The fourth rule, company’s competitive environments, their structure, forms, scope and intensity of competition should be properly examined and presented. Again, one should aim for precision of reference in all these respects. For instance, referring broadly to a company as one ‘involved in telecommunication’ may be quite inadequate, while referring to it as ‘involved in facilitating transmission of certain kind of data to certain categories of customers in certain geographic regions will make it possible to ascertain, and name, all possible opportunities, threats, strengths and weaknesses.

Aiming for a high level of precision in making one’s reference sufficiently specific should not come, however, at the cost of blurring the big picture of the market. One should always try and make sure that strategic analysts overlook neither trees nor woods. The fifth rule, a clear reference to an anticipated state of the future company internal and external environment should be made. If SWOT analysis is done in absence of such a background, the verification of claims concerning individual strengths, weaknesses, opportunities and threats can be either difficult or virtually impossible.

Thus, organizations need to formulate their possible future scenarios clearly and completely. Analysis of the potential significance of the various organization strengths and weaknesses in various possible future situations is obviously capable of enhancing SWOT analysis quite considerably. The sixth rule, a clear reference to future strategic objectives and strategies is required in every SWOT analysis. Failure to do so will make the evaluation of scenario-specific relative importance of individual strengths, weaknesses, opportunities and threats quite perplexing and much harder, if at all feasible.

One should acknowledge that their significance depends, among other things, on what strategies are going to be implemented by the company. SWOT-TOWS PARADIGM IN ACTION Once a SWOT analysis has been completed, thought can be driven to how to turn weaknesses into strengths and threats into opportunities. For example, a perceived weakness in customer care might call for staff training to create a new strength. Also, a threat posed by a new entrant might call for a strategic alliance to combine the strengths of both parties to exploit a new opportunity.

By dint of the fact that these activities are designed to convert weaknesses into strengths and threats into opportunities, they are called conversion strategies (Jobber 2004, p. 44). Jobber also suggests that another way to use a SWOT analysis is to match strength with opportunities; a strategy which he termed matching strategies (2004). The diagram below illustrates both strategic phenomena. A similar illustration is that presented by in an online article as shown below. The S-O Strategies pursue opportunities that are good to fit to the company’s strengths. W-O Strategies overcome weaknesses to pursue opportunities.

Strategies identify ways the firm can use its strengths to reduce its vulnerability to external threats. W-T Strategies establish a defensive plan to prevent firm’s weaknesses from making its highly susceptible to external threats. An example of how the strengths can be used to exploit new opportunities is the move by Dixons into internet service provision (Jobber 2004). Two of Dixons strengths were its credibility as a supplier of PCs and its larger customer base. Dixons leveraged these strengths to exploit the growth in internet usage by creating a free internet portal, Freeserve.

There was no need to advertise its service at a huge expense because a large traffic of PC users already passed through its stores. All Dixons had to do was stick up posters in its stores and handout a free CD-ROM to anyone who was interested. The SWOT analysis would vary from company to another, nonetheless in formulating marketing strategies, it should provide answers to such questions as what do customers need, how do they buy, what our competitors are doing, and how well we are performing against customer needs.

McDonald provides some pertinent guidelines for completing the SWOT analysis of major products or market that would serve to generate good marketing objectives and strategies: Critical Success Factors Critical success factors as referred to by McDonald are such factors as product performance, breadth of services, speed of service, low cost just to name this few, are often the most important factors that should be looked at. Besides, identify other suppliers to the same segment, and provide answers as to why the company can succeed.

It would result to some key issues to be included in the marketing objectives. Summary of Opportunities and Threats A statement how environmental influencers such as the PEST (Political, Economic, Social & Technological) have affected the targeting segment. Key Issues to Address Having done the foregoing, some key issues to be addressed would emerge. Assumptions, Marketing Objectives, Marketing Strategies Assumptions relating to each particular product or market segment under consideration can now be made and objectives set. Competitor Analysis

The findings from the audit become relevant at this stage. Each competitor sales and share for the market or product under consideration should be indicated. The company should be able to measure the business strategies and directions of its competitors. Whatever the company’s strategic marketing and objectives are, Hiebaun (1997) postulates, they should be measurable qualitatively and quantitatively; reachable; perfectly described and accepted by the people involved.

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