Strategic marketing planning is a five-step process that assesses current performance; establishes specific marketing objectives; determines positioning and differential advantage; selects target markets and measures market demand, and designs a strategic marketing mix.
With the plans in place, the marketing programmes are implemented, while the results are monitored. If the Plans work well, the feedback provides the good news. However, if the marketing programme does not meet expectations, the feedback mechanism helps marketers adjust the processes. You should realize that strategic marketing planning is a controlling process, not a one-time event. Therefore, continuous monitoring and feedback is the surest way to stay in touch with dynamic marketing conditions
Let us briefly examine what the term “strategy” means before proceeding to explore the various steps in the strategic planning process. Of course, there are various definitions of strategy. With this definition therefore, having a strategy means that you have analysed your environment, set some goals, and then made decisions about deploying the various resources at your disposal. Apart from the elements of the marketing mix, a business strategy also encompasses product research and development, manufacturing methods, financial investments, and personnel management. You will need to keep these factors in mind as we explore the marketing planning process.
We have already noted that strategic marketing planning is a five-step process as listed below:
(i) Conduct a situation analysis.
(ii) Develop marketing objectives.
(iii) Determine positioning and differential advantage.
(iv) Select target markets and measure market demand.
(v) Design a strategic marketing mix
Let us carefully discuss each as their steps:
SITUATION ANALYSIS
Situation analysis is the first step in a strategic marketing planning. It usually involves analysis
where the company’s marketing programme has been, how it has been performing and what is likely to face in the years ahead. This step allows management to determine the necessity of revising the old plans or devise new ones to realize the company’s objectives.
Situation analysis normally covers external environmental forces and internal marketing resources (e.g. R & D. capabilities, finances, and skil s together with the experience levels of personnel) surrounding the marketing programme. In addition, situation analysis considers the groups of consumers served by the company, the strategy adopted to satisfy them, and key measures of marketing performance.
From the foregoing, you would see that as a basis for planning decisions, situation analysis is quite critical. You would also agree that is can be very
costly, time-consuming, and at times, frustrating. For example, it is usually difficult to extract timely, accurate information from the huge pile of data accumulated during a situation analysis. Furthermore, some valuable information, such as sales or market share figures for competition, is often not available.
In continuation of a situation analysis, many marketers often combine several stages of examination in a technique called SWOT analysis, from an acronym of strengths, weaknesses, opportunities, and threats. Once they have analysed both themselves and their competitors using SWOT analysis, they have a good idea of what their strategic objectives should be, as well as what their competitors’ objectives might be. The application of SWOT analysis to competitors is part of a lager effort known as competitor intelligence, which is a systematic process of understanding competitions and their influence on your markets.
MARKETING OBJECTIVES
This is the second step in strategic marketing planning. Very often, marketing goals should be closely related to company — wide goals and strategies. Actual y, a company strategy usual y translates into a marketing goal. For example, in order to reach an organizational objective of a 25 percent return on investment next year, one company strategy might be to reduce marketing costs by 20 percent. Thus, this company strategy could become a marketing goal.
Earlier on, you were made to understand that strategic management involves matching an organisation’s resources with its market opportunities. In this regard therefore, each objective should be assigned a priority based on its urgency and potential impact on the marketing area, and, in turn, the organization. These priorities should be the basis for allocating the company’s resources. General y, it is recommended that each objective should be SMART, an acronym for Specific, Measurable, Attainable, Realistic, and Time-bound.
POSITIONING AND DIFFERENTIAL ADVANTAGE
Two complementary decisions are involved in the third step of strategic marketing planning: how to position a product in the marketplace, and how to distinguish it from competitors. These will be discussed in detail under product-mix strategies. The process of achieving a desired position in the mind of the market is cal ed positioning. For instance, you can position your company, your products, your technologies, or any other entity that commands customer attention.
After the product is positioned, a viable differential advantage has to be identified. Here, differential advantage refers to any features of an organization or brand perceived by customers to be desirable and different from those of the competition.
TARGET MARKET AND MARKET DEMAND
The fourth step in strategic marketing planning is the selection of target markets. We have already defined a market as consisting of people or organizations with needs to satisfy, money to spend, and the willingness to spend it. This market may be large, and usually consist of a number of
segments (i.e parts of markets) with differential needs. Ordinarily, it might be impossible for a firm to satisfy all segments with different needs. It is therefore bet er for a company to target its efforts on one or more of these segments. Hence, a target market refers to a group of people or organizations at which a firm directs a marketing programme. Details of target markets are described under market segmentation and target-market strategies.
In a new firm, it is necessary for management to analyse markets in detail to identify potential
target markets. With regard to an existing firm, management should routinely examine any changes in the characteristic of its target markets and alternative markets. Consequently, management should decide to what extent and in what manner to divide up total markets and then pursue only those segments that are more promising for successful marketing.
It has been suggested that target markets must be selected on the basis of opportunities. In order to analyse these opportunities, a firm needs to forecast demand or sales in its target markets. The results of such demand forecasting will indicate whether the firm’s targets are worth pursuing, or whether alternatives need to be identified.
MARKETING MIX
The last step in the strategic marketing planning process is the design of an appropriate marketing mix, i.e. the combination of product, price, promotion and distribution (place). These four elements should collectively satisfy the needs of the organisation’s target markets and, at the same time achieve marketing objectives.
We shall briefly examine the four elements together with some of the concepts as well as relevant strategies applicable to each
(i) Product: Strategies are needed for managing existing product over time, adding new ones, and dropping failed products. Strategic decisions must also be made regarding branding, packaging, quality levels, design, and other product features such as warranty, after-sales service etc.
(ii) Price: Here, the necessary strategies relate to the locations of customers, price flexibility, related items within a product line, and terms of sales. In addition, pricing strategies for entering a market, especial y with a new product, must be designed
(iii) Distribution: The relevant consideration with respect to distribution involve the management of the channel(s) by which ownership of products is transferred from producer to customer and, in many cases, the system(s) by which goods are moved from where they are produced to where they are purchased by the final customer. Consequently, the necessary strategies applicable to middlemen (wholesalers and retailers) must be designed.
(iv) Promotion: Coordinated campaign strategies are needed to blend individual promotion methods such as advertising, personal selling, sales promotion and publicity. Furthermore, it is necessary to adjust promotional strategies as a product moves from the early stages to the later stages of its summary, if the analysis of a potential market is promising enough to make it a good target, management should develop a marketing mix that will appeal to this market.
For example, it should assemble a combination of product characteristics that closely match what the customers in the target market are looking for. Next, it should create a structure of prices that will make product purchase feasible for market members. Furthermore, management should put together a distribution system that assures goods are made available where and when they are wanted. Finally, it is necessary for management to assemble a promotional mix of advertising and other tools that will communicate the benefits of the offer to the target market.
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