Strategic Planning in Marketing
The process of creating and preserving a strategic alignment between the organisation’s skills and goals and its ever-changing marketing possibilities is known as strategic planning. Strategic planning offers a systematic means of coping with uncertainty and adapting to change. It enables managers to consider how to grasp opportunities and avoid problems, to establish and coordinate appropriate courses of action and to set targets for achievement.
1. Strategy in Marketing
Marketing strategy is the process by which businesses and organisations understand their markets and the ways in which they approach convincing profitable customer action.
An organisation’s comprehensive plan for drawing in new clients and turning them into buyers of its products or services is called a marketing strategy. High-level elements of a marketing plan include the target customer demographics, value proposition and key messaging for the business.
A business’s approach to reach potential customers and persuade them to purchase its products and services is known as its marketing strategy. Among the components of a marketing strategy are:
1. Research: Examining potential customers, rivals, price points, purchasing patterns and more aspects.
2. Positioning: Packaging design and feel, conversion message and value promises.
3. Promotion: In order to influence lucrative customer action, promotion refers to the actual marketing of goods and services through connections, experiences and content.
4. Measurement: To achieve marketing objectives, measurement involves demonstrating value, drawing lessons from both successes and failures and refining future efforts.
The following are some of the benefits of putting business’s marketing plan into action:
1. Learn what makes product development investments profitable, such as target market, demand and competitive differentiation.
2. Knowledge of the factors influencing buying decisions can provide your business a competitive advantage and improve the placement of your products.
3. Establish lead and lag indicators, marketing goals and a focus area for marketers to direct their efforts toward the things that have the greatest chance of influencing outcomes to help marketing departments succeed.
A strong and effective marketing strategy will:
1. Organize your group around a set of goals.
2. Help you link your efforts to the objectives of your firm
3. Use distinctive value propositions to set your products out from the competitors.
4. Permit you to ascertain and test what resonates with your audience.
5. Encourage your group to demonstrate its worth to the company.
2. Strategic Planning Levels
There are three aspects or levels of strategy formulation, each with a different focus, need which are to be dealt with in the formulation phase of strategic management. The three sets of recommendations must be internally consistent and fit together in a mutually supportive manner which form an integrated hierarchy of strategy, in the order mentioned.
1. Corporate Level Strategy
2. Competitive Strategy
3. Functional Strategy
1. Corporate Level Strategy
the business is concerned with specific decisions in that dimension of the strategy, regarding the nature and purpose of the overall organisation. In general, it is discussed as to what improvements can be made to our growth target and plan, the business lines we are in and how these business lines work together. It is useful to think of three components of corporate level strategy:
(b) Portfolio strategy - The term pertains to the appropriate range of business lines that a company should have, which implies reevaluating the required level of concentration or diversification.
(c) Parenting strategy - It refers to as how the business should allocate resources and manage capabilities and activities across the portfolio, where a firm must put special emphasis and how much do they integrate their various lines of business.
2. Competitive Strategy
This is often called as the business level strategy. This includes determining how each Line of Business (LOB) or Strategic Business Unit (SBU) should perform within the business. In this second dimension of a company’s strategy, the emphasis is on how to efficiently succeed in each of the business lines that the organisation has chosen to participate in. The main thrust is how to build and strengthen the competitive position of the company for each of its business lines. A business has competitive advantage if it can draw customers and defend itself better than its competitors against external powers.
Successful strategic approaches tend to require developing incredibly strong skills in one or more fields critical to success and their using them to retain a competitive advantage over rivals. Few examples include the superior technology or the product features, better manufacturing technology and skills, superior sales and distribution capabilities and better customer service.
3. Functional Strategy
These are more focused and shorter-term approaches tackle how to be efficient and optimize the resource efficiency, increasing functional area and unit must carry out its functional activities. Functional strategies are fairly short-term initiatives that would be carried out by each functional region of an organisation to execute larger organisational and business-level strategies at the longer term. Each functional area has a number of strategy choices that interact with and must be consistent with the overall company strategies.
Strategic Planning Steps
a. Defining the Company Mission
The mission statement is a declaration of the organisation’s goals and objectives for the wider world. The characteristics of the Mission statement are: The mission statement should be market oriented and defined in terms of the customer needs.
- Realism should be reflected in the mission statement.
- There should be specificity in the mission statement.
- The mission statement must to be appropriate for the marketplace.
- Distinctive competencies ought to form the foundation of the mission statement.
- The mission statement ought to inspire motivation.
b. Strategic Choice
- Objectives – The main question is Where do we want to be? - Objectives provide a more detailed articulation of purpose and a basis for monitoring performance.
- Options analysis - The main question is are there alternative routes? - Alternative strategic options may be identified and are require to be appraised in order that the best can be selected.
- Strategies- The main question is how are we going to get there? - Strategies are the means or the courses of action to achieve the organisational purpose.
c. Designing the Business Portfolio
The business portfolio is the collection of businesses and the products which form the business. A business must plan its portfolio after the guidance from the business’s mission statement and objectives. The business portfolio that best aligns the company’s strengths and weaknesses with external prospects is the most appropriate one. Planning a business portfolio requires two processes.
1. The company needs to evaluate the businesses in its portfolio to determine which ones need more, less, or no investment.
2. The company needs to create growth and downsizing strategies in order to shape the portfolio going forward.
Step 1 - Analysing the Current Business Portfolio
The method by which management assesses the goods and companies that comprise the company is called portfolio analysis. Finding the important businesses that comprise the company is the first stage for management. We may refer to these as Strategic Business Units (SBUs). A Strategic Business Unit (SBU) is a division of a company with its own goals and objectives that can be planned separately from the operations of other companies. A business division, a product line inside a division, or even a single product or brand can all be considered SBUs.
Step 2 –Assessing the SBU’s
The management team must now determine how desirable each SBU is and how much support it should receive in the next round of the business portfolio review. Determining how the company may leverage its advantages to seize favourable possibilities in the external environment is the goal of strategic planning. Boston Consulting Group, a top management consulting firm, created the most well-known strategy for portfolio planning
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