Strategic planning is critical

§ Describes the overall direction an organization will pursue within its environment

§ Guides the allocation of resources

§ Provides the logic that integrates the perspectives of functional departments and operating units

§ Points them all in the same direction

§ Outlines the actions necessary, who is responsible, when and where they will be completed, and how they will be coordinated

§ Carried out within the context of a firm’s broader strategic business plan

Total quality approach

Ø This is a process- and out-put related philosophy, striving to satisfy customers effectively

Ø It always: seeks to satisfy customers

Ø has a top management commitment

Ø emphasizes continuous improvement

Ø requires support from employees, suppliers, and distribution intermediaries

Strategic marketing process

1. Organization mission determination

2. Setting marketing objectives

3. Situation analysis

4. Marketing strategy development

5. Tactical implementation planning

6. Monitoring results

#1. Organization mission determination

Defining the organizational mission refers to a long term commitment to a type of business and a place in the market. It “describes the scope of the firm and its dominant emphasis and values,” based on a firm’s history, current management preferences, resources, and distinctive competence, and on environmental factors.

#2. Setting marketing objectives

Marketing objectives establish the firm’s goals for each SBU. Objectives are described in both quantitative terms (dollar sales, percentage profit growth, and market share), and qualitative terms (image, level of innovativeness, and industry leadership role). Without clearly identified objectives, firms often fail.

#3. Situation analysis

Analysis methods used for uncontrollable factors: PEST, PEESTLE, PESTEL etc.

Both uncontrollable and controllable factors: SWOT, BCG, GE/Mckinsey, Ansoff Matrix, 5 Porter market forces, Value chain, GAP

#3.1. PESTEL analysis

A PESTEL analysis is a framework or tool used by marketers to analyze and monitor the macroenvironmental (external marketing environment) factors that have an impact on an organization. The result of which is used to identify threats and weaknesses which is used in a SWOT analysis.

#3.2. SWOT analysis

The theory seems simple enough, you use it to evaluate the Strengths, Weaknesses, Opportunities and Threats that is involved in a marketing or business project. You will specify the objective for the project and then identify the internal and external factors that will have a positive as well as negative impact on the objective. Users of the SWOT analysis can therefore use the first two sections (Strengths and Weaknesses) to help them identify all of the internal factors. The last two sections (Opportunities and Threats) will be used to identify all the external factors.

 

#4. Market strategy development

A marketing strategy outlines the way in which the marketing mix is used to attract and satisfy the target market.

Strategic planning approaches are (examples): BCG, GE/Mckinsey, Ansoff Matrix, 5 Porter market forces, Value chain, GAP.

#4.1. Boston consulting group (BCG) analysis

The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help with long-term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue or develop products. It is also known as the Growth/Share Matrix.

The Matrix is divided into 4 quadrants derived on market growth and relative market share, as shown in the diagram below

1. Dogs: These are products with low growth or market share

2. Question marks or Problem Child: Products in high growth markets with low market share.

3. Stars: Products in high growth markets with high market share.

4. Cash cows: Products in low growth markets with high market share

 

#4.2. GE/McKinsey analysis

GE-McKinsey nine-box matrix is a strategy tool that offers a systematic approach for the multi business corporation to prioritize its investments among its business units.

GE-McKinsey is a framework that evaluates business portfolio, provides further strategic implications and helps to prioritize the investment needed for each business unit (BU)

 

#4.3. Ansoff matrix analysis

Ansoff’s Matrix shows four strategies used to grow. It also helps to analyze the risks associated with each one. The idea is that, each time you move into a new quadrant (horizontally or vertically), risk increases.

Market penetration, in the lower left quadrant, is the safest of the four options. Here, you focus on expanding sales of your existing product in your existing market: you know the product works, and the market holds few surprises for you.

Product development, in the lower right quadrant, is slightly more risky, because you're introducing a new product into your existing market.

With market development, in the upper left quadrant, you're putting an existing product into an entirely new market. You can do this by finding a new use for the product, or by adding new features or benefits to it.

Diversification, in the upper right quadrant, is the riskiest of the four options, because you're introducing a new, unproven product into an entirely new market that you may not fully understand

#4.4. 5 Porter’s market forces

This model helps marketers and business managers to look at the ‘balance of power’ in a market between different types of organizations, and to analyze the attractiveness and potential profitability of an industry sector.

It is a strategic tool designed to give a global overview, rather than a detailed business analysis technique. It helps review

 

#4.5. Value chain

Value chain analysis (VCA) is a process where a firm identifies its primary and support activities that add value to its final product and then analyze these activities to reduce costs or increase differentiation.

Value chain represents the internal activities a firm engages in when transforming inputs into outputs.

#4.6. GAP analysis

Gap analysis involves the comparison of actual performance with potential or desired performance. If an organization does not make the best use of current resources, or forgoes investment in capital or technology, it may produce or perform below its potential. This concept is similar to an economy's production being below the production possibilities frontier.

 Gap analysis identifies gaps between the optimized allocation and integration of the inputs (resources), and the current allocation-level. This may reveal areas that can be improved. Gap analysis involves determining, documenting, and approving the difference between business requirements and current capabilities. Gap analysis naturally flows from benchmarking and from other assessments. Once the general expectation of performance in an industry is understood, it is possible to compare that expectation with the company's current level of performance. This comparison becomes the gap analysis. Such analysis can be performed at the strategic or at the operational level of an organization.

Gap analysis is a formal study of what a business is doing currently and where it wants to go in the future. It can be conducted, in different perspectives, as follows:

1. Organization (e.g., Human Resources)

2. Business direction

3. Business processes

4. Information technology

#5. tactical implementation planning

A tactical plan specifies the short-run actions (tactics) that a firm undertakes in implementing a given marketing strategy.

It has three basic elements:

• specific tasks

• time frame

• resource allocation

#6. monitoring results

Monitoring results compares the actual performance of a firm, SBU, or product against the planned performance for a specified period.

Successful companies often employ the following strategies to assure success:

• continuous monitoring of performance

• regular use of proper strategy adjustments

• maintenance of a customer-oriented focus

• stressing positive written and oral communication among employees and channel members

#4. Marketing research

Market research objects

§ demand analysis - consumer studies

§ competition - rivals analysis

§ performance analysis

Market research data types

1. Secondary data: internal and external

Internal: business plans, P&L statements, invoices, +other relevant internal paperwork

External: open sources publications, WEB

2. Primary data: big data, survey, experiment, simulation, panel

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                           in person, telephone   mechanical online