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Strategic Planning
Overview: Strategic planning is the process through which a company develops and
maintains a strategic alignment between its goals, capabilities, and the evolving
marketing opportunities. This strategic fit is crucial for the company to adapt and thrive in
a dynamic business environment.
Nike Example: Nike exemplifies a successful strategic planning process. The company
has built its customer value not only through quality sports gear but also through
fostering deep engagement and a sense of community among its customers. This
approach helps Nike to resonate more effectively with its market, extending beyond
mere transactions to create brand loyalty.
Steps in Strategic Planning
1. Defining a Market-Oriented Mission
Purpose: This step involves clarifying what the business aims to accomplish and its
purpose in the larger market context. It sets the foundational direction for the company.
Key Questions:
What is our business?
Who is the customer?
What do consumers value?
What should our business be?
Mission Statement Characteristics: A good mission statement should be clear,
inspiring, and reflective of the market's needs rather than just the company’s products. It
should guide the company's long-term decisions and strategies, ensuring they align with
the market's demands.
2. Setting Company Objectives and Goals
Objective: Convert the broad mission into specific, measurable, and actionable
objectives for all levels of management.
Hierarchy of Objectives: This involves establishing a cascade of objectives that align
across various levels of the organization, from top management down to individual
departments.
Business Objectives: Broad goals that align with the company's mission.
Marketing Objectives: Specific targets within the marketing domain that support
the overall business objectives.
Features of Effective Goals and Objectives:
Goals provide a general direction and are often qualitative.
Objectives are specific, measurable actions with defined timelines.
3. Designing the Business Portfolio
Purpose: Assess the current array of businesses and products to determine how each
contributes to the company’s goals.
Portfolio Analysis: Analyze which elements of the business should receive investment,
which should be divested, and potential new areas for growth.
Strategic Business Units (SBUs): Identify and evaluate the distinct units within the
company, each with its own strategy and objectives.
Tools:
BCG Matrix: A framework that helps in evaluating each SBU based on its market
growth rate and relative market share. It classifies SBUs as Stars, Cash Cows,
Question Marks, or Dogs, which assists in strategic decision-making regarding
resource allocation.
4. Developing Growth Strategies
Assessment: After evaluating the current business portfolio, the next step is to identify,
evaluate, and select market opportunities.
Growth Tools: Utilize tools like Ansoff’s Matrix to determine strategies for market
penetration, market development, product development, and diversification.
Strategic Directions:
Market Penetration: Increase sales of current products to existing markets.
Market Development: Expand into new markets with existing products.
Product Development: Develop new products for existing markets.
Diversification: Introduce new products into new markets.
5. Partnering to Build Customer Relationships
Internal Alignment: Ensuring all departments within the organization understand and
align with the market-oriented mission and contribute to the strategic goals.
External Collaboration: Strengthen relationships with stakeholders like suppliers,
distributors, and partners to enhance the overall value chain.
Marketing Strategy and the Marketing Mix
Marketing Strategy Definition: The overarching approach by which a company intends
to create and deliver value to its customers, thereby achieving profitable relationships.
Marketing Mix Components:
Product: What the company sells.
Price: At what price point.
Place: Where the products are available.
Promotion: How the products are communicated to the market.
Managing the Marketing Efforts
Marketing Analysis Tools: Includes tools like SWOT analysis, which helps assess
internal strengths and weaknesses, alongside external opportunities and threats.
Marketing Planning and Implementation:
Marketing Planning: Selecting strategies that align with broader corporate
objectives.
Marketing Implementation: Executing these strategies effectively through
detailed action plans.
1. Product
Definition: The product is what the company sells. It can be a tangible good, an
intangible service, or a combination of both. Products must fulfill existing consumer
needs or create new consumer demand.
Key Aspects:
Quality: Ensuring the product meets certain standards and satisfies customer
expectations.
Design: The aesthetic and functional design of the product, which can be a
significant factor in the consumer's purchase decision.
Features: Additional features that distinguish the product from its competitors.
Brand Name: Developing a strong brand identity that resonates with customers
and fosters loyalty.
Packaging: The packaging not only protects the product but also serves as an
important marketing tool.
Services: Additional services related to the product, like customer support,
installation, and warranties.
2. Price
Definition: Price is the amount of money customers must pay to obtain the product. It
influences consumer perception and profitability.
Key Aspects:
Pricing Strategy: Methods of setting prices, which can range from cost-based
pricing to value-based pricing.
Discounts: Incentives offered to stimulate sales or reward loyal customers.
Payment Terms: Options provided to customers, such as financing, leasing, or
credit terms, which can influence the purchase decision.
Seasonal Pricing: Adjusting prices based on the season or demand cycle.
3. Place
Definition: Place refers to how the product is distributed and where it is made available
to the consumer. The goal is to make products available in the locations where
customers are most likely to make a purchase.
Key Aspects:
Distribution Channels: Routes through which the product travels from producer
to consumer (e.g., wholesalers, retailers, direct-to-consumer).
Coverage: The extent of market coverage (intensive, selective, or exclusive
distribution).
Locations: Geographical locations where the product is sold.
Inventory Management: Ensuring that the product is available where and when
customers want it.
Transportation and Logistics: Efficiently managing the logistics to optimize the
supply chain.
4. Promotion
Definition: Promotion encompasses all the activities that communicate the product’s
features and benefits and persuade customers to purchase the product.
Key Aspects:
Advertising: Paid form of communication through various media (TV, radio,
online).
Sales Promotion: Short-term incentives to encourage the purchase or sale of a
product or service.
Personal Selling: Direct interaction between a sales representative and one or
more prospective buyers.
Public Relations: Building good relations with the company's various publics by
obtaining favorable publicity, building a good corporate image, and handling or
heading off unfavorable rumors, stories, and events.
Direct Marketing: Communicating directly with targeted individual consumers to
obtain an immediate response.