St.

Mary’s University Strategic Marketing Management

Chapter Two

Strategic Marketing Planning

Opening Case: Management Challenge

Coke might be the world’s most powerful brand, but that has not helped much lately. When
Douglas Daft took over as CEO of the Coca-Cola Company, he inherited a host of troubles.
Soda sales had slumped in the important U.S. market and to a lesser extent around the world,
and Coke had failed to match rival Pepsi’s aggressive moves into non-soda businesses. A high-
profile racial discrimination suit in the United States and a soda-contamination scare overseas
had damaged the company’s reputation and its relationships with customers, governments, and
bottlers. Under the previous CEO, M. Douglas Ivester, there was no real sense of crisis at
Coke’s headquarters, where managers pretty much continued business as usual. The Australian-
born Daft knew that needed to change if Coca-Cola was to remain one of the worlds’ most
admired and respected companies. During his first year on the job, Daft began dismantling the
stale old regime at headquarters and brought in new top managers willing to make the tough
changes to turn the company around. He also spent much of his time repairing relationships
with government regulators in Europe and handling the backlash from financially strapped
bottlers who charged that Coke had been trying to eke out profits at the bottlers’ expense.
Despite these early moves, Coke’s sales and profits have stayed flat and the stock has continued
to decline. The CEO knows he needs to come up with a powerful strategic plan to reignite the
company in a hurry. If you were the CEO of Coca-Cola, what strategies might you adopt to
regain the competitive edge? How would you go about formulating and implementing a new
strategic plan?

Strategic market planning is about having a vision for the future and a wining plan in place
before battling competitors in the marketplace. The strategic planning process is critical to
achieving long-term successes in meeting the challenges of a rapidly changing and uncertain
environment.

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The strategic planning process and the marketing process are closely related, since marketing
management decisions must be consistent with a firm’s overall business strategy. Although
strategic market planning can occur throughout the marketing organization ecocycle, it is most
noticeable in the growth phase, where conscious, rational decisions are made to guide the
direction of the company.

Strategic decisions are related to an understanding of customers’ needs, competitors’ activities,

and the financial implications of each decision. In turn, tactical marketing plans are based on a
clear vision of the firm’s overall business strategy and an understanding of its marketing
strategies. Both strategic and tactical panning must be responsive to changes in the marketplace.

Regardless of the size or scope of an organization, strategic planning generally occurs at several
levels: corporate, division or strategic business unit, and functional or operating level. Managers
at these levels are responsible for making a group of interdependent decisions that vary
somewhat at each level. At the corporate level managers have primary responsibility for
satisfying customers and for the financial performance of the entire company over the long-term.
Divisional managers are most concerned with strategies for their separate business unit or profit
centers that are operated within the larger corporation. Functional level managers take a short-
term view of strategy than managers do at higher levels in the business, although the day-to-day
decisions must be made within the requirements of the corporate and divisional strategies.

2.1 The Strategic Planning Process

Strategic planning provides a plethora (excess) of opportunities for an organization, such as

facilitating discussion and analysis of past performance using a methodical approach, providing a
method to prioritize performance needs and organization goals, supplying information that will
assist in prioritizing resources, and enabling the organization to be proactive rather than reactive
and therefore more in control. Developing a plan will enable your organization to:

 Ensure the products and services delivered to its customer base are consistent and of high
quality

 Appraise past performance and identify successes and areas for future improvement

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 Create a consistent, sharp marketing message that promotes realistic expectations about
the organization

 Promote better use of resources (people, things, time and finances)

 Manage customer expectations

 Limit resources investment in activities that do not provide results etc.

The uses of a strategic plan vary as much as one organization varies from another. Organizations
use strategic plans to direct business planning, to allocate funding during budgeting, to
communicate with employees, to form the basis for new employee orientation materials and to
aid individual performance planning, among many other uses. Because a strategic plan is the
foundation for the organization’s future it should be used for organizational performance
planning and evaluation, goal setting and assessment, communization, and financial planning.

The strategic plan is central to a company’s ability to make critical business decisions and is the
springboard for operational planning. It serves as a communication vehicle for the company’s
mission, vision, values, and long-term objectives; and it inspires and excites employees,
customers, partners, shareholders, and others about the organization as it operates today and
where it is headed in the future. A strategic plan directs and predicts how the customer base and
product line will react or change in the future, and it identifies risks the organization will have to
bear if it’s to move in the desired direction.

During the strategic planning process, organizations usually set priorities for the next two to five
years and identify how major resources will be allocated. If done correctly, a strategic plan will
motivate employees to achieve the company’s goals. When organizational realignment or
redirection takes place, a strategic plan explains the change in direction and refocuses the
organization’s efforts by redefining organizational goals and tactics.

But how do you develop a successful plan? The 10 steps to successful strategic planning is
process driven and comprise the following 10 steps:

1. Laying the foundation for the plan

2. Scanning the business environment

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3. Collecting relevant data

4. Analyzing collected data

5. Stating mission, vision, and values

6. Prioritizing needs and identifying risks

7. Designing and validation tactics

8. Prioritizing tactics and resources

9. Documenting and communicating the plan

10. Maintaining the plan

Step one: Laying the Foundation for the Plan

In this step you’ll find the information, tools, and worksheets to help you initiate the planning
process. These are the topics we’ll cover:

Defining the plan’s scope: the first action in strategic planning is defining the scope of the plan.
Questions such as, what outcomes are desired as a result of this strategic planning effort? And,
what results do we really want to achieve? Need to be answered

It is important to understand these two things: (1) strategic planning is not a reaction to the
environment but an attempt to shape the future; and (2) using the information you have on hand
will help determine priorities that will shape your entity into the organization, group or
department you want it to become. This effort will define the direction the organization will take
generally, and the direction the departments and groups will take specifically. Ultimately, it will
define what individual workers should do to make the company successful. A completed
strategic plan frequently is the basis for funding, operational, or business planning, and for
growth and management planning.

Identifying plan outcomes, goals, and objectives: to help you prioritize and decrease the
number of outcomes you have identified, ask yourself the following four sets of questions. (1)
how broad is the impact of this outcome? Will it affect the entire organization? What is the

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overall business impact? Will it improve the way we do business? Will it decrease quality
problems or delays? (2) if we don’t do this now, what will happen? Can this wait a couple of
years? Will we lose market share, customers, or employees? How big is the impact of not dealing
with this now? (3) what is the financial impact of not addressing or fulfilling these outcomes,
goals, and objectives now? Will it cost less to do it now than later? Is this an opportunity that
will bring us a great deal of money? Is there a risk to the budget if this is not completed-a risk
such as regulatory compliance, penalty, or fine? (4) Will it enrich or make employees’ lives
better and help the organization retain the “right” employees?

Determining the timeframe for developing the plan: this depends on many factors including;
size of the organization, complexity of the organization, success rate of strategic planning,
availability and accessibility of information

Identifying key participants in developing the plan:

Class Room
Gaining commitment for developing the plan:
Discussion Points
Initiating the marketing of the plan:

Table 2.1 Differences between Strategic Planning and Marketing Planning

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Step two: Scanning the Business Environment

Is the assessment of the external forces and how it influences the firm, its products, and its
customers, and that create threats and opportunities which includes; Demographic, Economic,
Natural, Technological, Political, Cultural, Customers, Suppliers, Marketing Intermediaries...

Step three: Collect Relevant Data

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Discussion Points
Step four: Analyze Collected Data

Step five: Stating Mission, Vision, and Values

More and more organisations now write mission statements that seek to describe the purpose of
the business and its essential character. A mission statement has four functions. First, it is meant
to motivate employees by providing them with an external goal worth striving for. Second, it can
provide a shared sense of purpose to people working in widely separated business units. It can
provide a feeling of belonging to a family of like-minded people. Third, it gives a sense of
direction by identifying those markets or technologies where management sees the best
opportunities. Finally, it identifies major policies that define how it should treat customers,
employees, suppliers, distributors and other key stakeholders.

Increasingly, businesses see the mission statement as a means of inspiring employees.

Maximising profits or shareholder value is not a great motivator. Profit anyway is better seen as
a result of a successful competitive strategy rather than as an actionable objective itself.
Competitiveness – being the best – does seem to be more capable of inspiring commitment and
enthusiasm if convincingly articulated. Companies such as GE, Coca-Cola, Microsoft and
Toyota have achieved outstanding commitment and pride among their workers by challenging
them to make their organisations the leader in their fields.

An effective mission statement should clearly articulate most of the following components:

1. The basic product or service, primary market, and technology to be used in delivering the
product or service

2. Organizational goals, such as growth, profitability, stability, or survival, stated in a

strategic sense

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3. Organizational philosophy-the code of behavior that guides the organization’s operation

4. Organizational self concept-a self evaluation based on a realistic determination of its

strengths and weaknesses

5. Public image-how those outside the organization view the particular entity

Mission Statement example

To distribute automotive parts to the automobile repair industry, providing customers with
quality products, services, and information; to present our company in an honest and trustworthy
manner in all transactions; to empower our employees to conduct the business; and provide our
company a reasonable and consistent profit.

The Vision statement is the owner’s view of where the enterprise should be in the future. The
Vision statement is stated in general terms on key measures of importance. The Vision includes
selective items such as sales volume, market share, market penetration, earnings, customer
satisfaction, research and development investment, and relationships with strategic partners.
Statements on cost position relative to competitors and productivity or efficiency are also
appropriate for the key measurement items discussed in the Vision statement.

Vision Statement example

To be the market leader and the low cost distributor of high quality automotive parts in the Ohio
and Indiana market. The right material, to the right place, at the right time, for each customer! At
a price delivering value for the customer and a fair return for the company.

Step six: Prioritizing Needs and Identifying Risks

The result of the Needs Assessment is an analysis of potential market: The concerns of each
market sector and the information needed by each customer or potential customer. The
Information Audit helps to analyze what products the organization is capable of offering and
how effective it has been in marketing its products.

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Step seven: Designing and Validation Tactics

The best place organizers should look for tactics needed in the strategic plan is in the initial
strengths, weaknesses, opportunities, and outside competition or threats listings outlined during
the investigation. Testing and validating tactics used within the strategic plan should be seen as
an intrinsic (essential) part of the process and must be recurring in today's dynamic environment.

Tactics testing can eliminate an unwanted rise in function failures, errors, cost overruns, and
customer dissatisfaction – especially since all these failures create unexpected expenses. Process
testing and validation is vital for an organization's reputation. The false steps lead to a loss of
money, time, and confidence from organization personnel, shareholders, and customers. By
having procedures in place to test and validate new processes, this gives everyone within the
organization confidence in the new steps and plan. The testing gives employees' confidence that
the desired outcome from the new steps will be achieved with the new strategic plan tactics.

The pre-testing also assures leadership the new tactics serve their purpose – they meet all criteria,
end results meet specified demands, all requirements are met with the new steps, and all
assumptions meet known demands. Key to the testing is leadership, shareholders, and in some
cases customers, having confidence in the new processes that the implemented steps will deliver
added value.

For validation and testing to take place, all the key players must agree on the following:

 The tactics to be validated and tested

 Who is responsible for said validating and testing

 The time frame for the testing to take place

 The methods used for validating and testing

 The resources and cost needed for the validation process

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Before the validation steps takes place, leadership should evaluate any anticipated issues to
ensure all inherent risks are within the organizational tolerance levels.

Five "Ps" for Tactical Success

Leadership and management should follow the five "P's" to ensure the tactics used will have a
positive impact on the organization. The plan's tactics should be:

 Precise – do not use vague language – be specific with goals, instructions and the plan's
tactics; do not leave anything open to interpretation

 Perceptible – steps and tactics should be clear cut, measurable, able to be understood by
everyone

 Pertinent – every sentence – tactics incorporated, steps used, goals listed, etc. – should
bring the organization closer to its ultimate goal

 Practical – management and employees should not look at their tasks and ask "why are
we doing this?" Everything should make sense and be easily understood. Employees
should be able to look at the mission statement, vision, and values and see how their task
plays a role in the organization reaching its goals

 Punctual – If the first four "P's" are followed then everything should be "done right and
right on time." Do not leave tactics, steps, and goals open ended – without a timeframe.
Do not make everything due "yesterday," but at the same time, do not say everything is
due "whenever."

Within some planning processes this is called SMART – strategic, measurable, attainable,
results-based, and time-bound.

Validation Process

From the information above, it is evident designing and validating tactics used in the strategic
plan process is time consuming and can be expensive. For this reason, it is wise to utilize the risk

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register to identify the major risk processes within the plan. These top risks can easily be
justified for validating. Also, because they are major risks, it can be safely assumed these
processes affect a majority of other steps within the plan. By validating their process, a domino
effect is implemented, which conceivably could reduce the known risks in other processes within
the plan.

Since the validation process does require a number of resources and time by its leadership and
others, it is wise that each evaluation be justified and the following developmental tactics should
be identified when developing each evaluation strategy:

Its objective – what is its purpose and what information will be provided; who will benefit from
said information; how will this information be used; the timeframe involved to tabulate the
evaluation results.

Timing– ensure the timing of this validation is in harmony with the overall strategic plan process
and the validation tactics. To ensure this, leadership should ask if there is a prior process that has
been identified that needs to be validated too. If so, will the validation of that step have an impact
on the remaining steps in the process? If the answer is yes, then the preceding step should be
evaluated first.

Resources – who will be needed to test the tactics for evaluation; who will be the evaluators;
how much time will be needed to accurately validate the process; what materials or departments
are needed for this test; what other resources will be needed; what is the cost.

Process future – is this a temporary process that is vital for the overall strategic plan or is this a
recurring area where validation could be recurring, meaning some of the resources utilized for
the validation might need to be assigned to that process on a permanent basis.

Foreseen problems – yes, validating a process does eliminate problems, but if previous issues
within that area or process are identified prior to the testing and validation, then a fresh
perspective and new viewpoint can be given possibly creating an ideal solution to existing issues.

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Ensure goal alignment – the validation evaluation should ensure the process aligns with the
mission, vision, and value statements identified within the strategic plan. Furthermore, the steps
should ultimately lead to the organization obtaining its ultimate goal. If this is not the case, then
the step or process needs to be reevaluated for its necessity within the overall plan.

Lessons learned– with any process there are lessons learned. These should be documented for
reference in future validating processes to possibly save the organization time and money.
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Step eight: Prioritizing Tactics and Resources Discussion Points

Step nine: Documenting and Communicating the Plan

It's critically important that employees understand your strategy. Employees who understand
your strategy will be able to make better day-to-day decisions that will support your vision. But,
while most of us understand this — at least intellectually — we often have difficulty effectively
communicating our strategies to people outside of the strategic planning team. This may be
especially difficult if you feel that parts of your strategy are sensitive and should not be shared
with people outside of your management team. In addition, it may be undesirable to load
employees with the task of thoroughly understanding all of your strategic planning documents
when many employees only touch on one small operational area. How can we reconcile these
difficulties?

First, you should probably have a separate vehicle for communicating your strategy. Handing
out photocopies of your strategic planning binder will not achieve the effect you desire.
Definitely prepare a separate document for communicating your strategy to employees.
Secondly, you want to use something short and to-the-point, since many employees won't want
to spend a lot of time reading about your vision. Our clients have found that a one-sheet
summary combined with a short (15-30 minute) informational meeting with managers is most
effective vehicle for communicating the outcome of your strategic planning meetings. Thirdly,
you should "sanitize" your communication document. This isn't as hard as it sounds — you
simply need to look at everything you might share with employees and ask "will it hurt us if
other people know this?" A very good example of something that's unlikely to hurt you is sharing
your view of your company's strategic competencies — if they are real.

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Here are a few additional tips that will help you communicate your strategy more effectively:

1. Use a few defined categories: You will lose a little detail by having five market
segments rather than ten. What you will gain is a framework that your employees can and
will remember — which means they are more likely to use it in their day-to-day thinking,
as well.

2. Say what you don't do: Don't give a lengthy list of good intentions. Instead of defining
strategy in terms of the obvious, cut to the chase and let your people know the things your
company isn't going to do. It may be harder to come up with, but it will give a much
clearer sense of your strategy, faster. Many companies use the "good intention laundry
list" to avoid admitting that they haven't made any real decisions — and their employees
know it. It's a very good idea to let your people know your strategic focus in clear,
unambiguous language.

3. Make the difference between you and your competitors clear: If your strategy doesn't
set you apart from the competition, it won't work — so make sure your employees
understand how they can help put some teeth into your differentiation. This is especially
important for your people in sales.

4. Limit yourself: Don't try to list everything you can do or should do — define your
strategy in terms of a simple vision with a limited number of objectives. Companies that
set themselves more than 10 objectives tend to do far worse on implementation.

5. Make objectives concrete and measurable: Vague objectives may make your
management team comfortable by giving them "wiggle room", but concrete, measurable
objectives with deadline dates are better for quickly clarifying the results you are seeking
as well as who is accountable. If you have difficulty with this, try to identify a
measurable objective that is close to the half-way point.

In experience, companies that share their strategy with their employees get far greater alignment
with their vision. This makes implementation much easier, and helps to give your vision a life of
its own.

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Step ten: Maintaining the Plan

Plan must be maintained and reflect any changes that arise in the workplace. These changes
would include new systems or business processes that have been implemented since the Plan was
originally developed and any organizational or business re-engineering changes that may have
altered the way the organization conducts business.

2.2 Planning for Long Term

Business owners develop plans to reach their overall goals, and they usually find it useful to
separate planning into phases. This allows you to track immediate improvements while
evaluating progress toward eventual goals and targets. The different time frames of the planning
process place the focus on time-sensitive aspects of the company's structure and environment.
You can differentiate planning based on the time frames of the inputs and expected outcomes.

Planning is required in making a choice among the many equally attractive alternative
investment opportunities a firm may have. No firm can afford to invest in each and every
“good’’ opportunity. Planning, thus, is essential in making the right selection.

Planning for future action has been called by many different names: long-range planning,
corporate planning, comprehensive planning, and formal planning. Whatever its name, the
reference is obviously to the future.

Planning is essentially a process directed toward making today’s decisions with tomorrow in
mind and a means of preparing for future decisions so that they may be made rapidly,
economically, and with as little disruption to the business as possible. Though there are as many
definitions of planning as there are writers on the subject, the emphasis on the future is the
common thread underlying all planning theory.

Long-term planning is the process by which the leaders of an organization determine what the
organization wants to look like at the end of a specified period of time-usually three to five
years-then use that vision to establish multi-year goals and objectives which describe what the
organization wishes to accomplish, and develop programs, tasks, and timelines for achieving
them. Long-range planning predicts future conditions and realities, internal and external, and

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plans how the organization can function effectively within them. Because it involves multi-year
projections, it cannot be as specific as short-term or operational planning, which generates a
work plan with detailed annual objectives, tasks, methods, timelines, and responsibilities.
However, it tends to be more focused on specific objectives and timelines than strategic
planning.

Strategic planning on the other hand is the process by which leaders of an organization determine
what it intends to be in the future and how it will get there. To put it another way, they develop a
vision for the organization’s future and determine the necessary priorities, procedures, and
operations (strategies) to achieve that vision. Included are measurable goals which are realistic
and attainable, but also challenging; emphasis is on long-term goals and strategies, rather than
short-term (such as annual) objectives. Strategic planning assumes that certain aspects of the
future can be created or influenced by the organization. Strategic planning is ongoing; it is “the
process of self-examination, the confrontation of difficult choices, and the establishment of
priorities”. Strategic planning involves “charting a course that you believe is wise, then adjusting
that course as you gain more information and experience”.

While closely related to long-term planning, strategic planning is generally considered to place a
greater emphasis on strategies-on how the organization will achieve it vision-while long term
planning places greater emphasis on determining the vision.

Throughout human history, people have tried to achieve specific purposes, and in this effort
some sort of planning has always found a place. In modern times, the former Soviet Union was
the first nation to devise an economic plan for growth and development. After World War II,
national economic planning became a popular activity, particularly among developing countries,
with the goal of systematic and organized action designed to achieve stated objectives within a
given period. Among market economies, France has gone the furthest in planning its economic
affairs. In the business world, Henri Fayol, the French industrialist, is credited with the first
successful attempts at formal planning.

Accomplishments attributed to planning can be summarized as follows:

1. Planning leads to a better position, or standing, for the organization.

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2. Planning helps the organization progress in ways that its management considers most
suitable.

3. Planning helps every manager think, decide, and act more effectively and progress in the
desired direction.

4. Planning helps keep the organization flexible.

5. Planning stimulates a cooperative, integrated, enthusiastic approach to organizational

problems.

6. Planning indicates to management how to evaluate and check up on progress toward

planned objectives.

7. Planning leads to socially and economically useful results.

2.3 Strategic Planning and the Challenge of Change

In the past, strategic plans could be developed with some level of confidence for perhaps 5 to 10
years. Today, however, the rate of change in most industries is such that the strategic planning
horizon is more likely to be 3 to 5 years maximum, with periodic reassessment during this time
to determine the need for strategic realignment. In dealing with change, an organization needs to
consider several factors.

o What changes are occurring in the ways firms are approaching strategy development?

o What roles do flexibility and adaptability play in long-range planning?

o Who are the firm’s stakeholders, and what level of involvement do they have or should
they have in determining strategic direction for the long term?

o With ethics and social responsibility issues permeating the business environment, how
should these concepts be integrated into practice through the strategic planning process?

o What is the role of marketing information systems in strategic market planning, and what
criteria should be considered in determining the types of data to include?

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Changes in Approach to Strategy Development

The complexity and uncertainty that face most business organizations today in their rapidly
changing operating environments have had a major impact on the strategic planning process. As
a result, managers experience the frustration of not being able to predict the future with a
desirable degree of accuracy and not having sufficient time to engage in necessary long range
planning activities.

The threats of change can be converted into opportunities by following a generic series of
actions. The five force model that is used to analyze the competitive environment, include
suppliers, buyers, potential entrants, and substitutes with the fifth comprised of the force of
rivalry and competition within the industry. A more recent update of this model has added a sixth
force – complementors (the dependence developed in a business on other companies whose
products work in conjunction with its own, creating a synergistic effect).

Where these forces are more or less in equilibrium with one another, the industry environment
remains relatively favorable. However, when one of these forces becomes significantly larger or
more powerful than another force, the environment is less favorable. For example a substitute
may be introduced to the market with a force that is many times greater than exiting forces
distorting the usual way of doing business. The result is generally a change in the framework in
which the business operates, eventually leading to a different type of framework where the
business operates under a different set of influence. Essentially the business is reinvented and
becomes a completely different structure. This refers to the period of time during the transition as
the strategic inflection point. During a strategic inflection point the way a business operates, the
very structure and concept of a business undergoes a change.

Complexity and Uncertainty

The complexity and uncertainty that characterize most industries today – particularly in high
technology areas have caused many firms to reassess their long term strategies. Complexity
refers to the interrelationship of a company and the industry in which it operates, making it
difficult to analyze, understand or solve complicated problems. Strategic marketing management

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requires the ability to separate elaborately intertwined environment forces to simplify their
analysis to the extent possible.

Uncertainty refers to vagueness and doubt about a company’s industry and general operating
environment – not being sure what is happening now or what is going to happen in the future.
Several scenarios generally are possible, ranging from worst case to most optimistic. The
question is which is most likely to occur, and how soon?

Poverty of time

Traditionally, small business managers have less time available for strategic planning than do
managers in large business. In large firms, the strategic planning process tends to be more
formal, often with individuals or departments charged with this responsibility. Further,
stockholders, lenders, and other interested parties demand evidence of accountability that may be
found in a firm’s strategic marketing plan. The rate of change and resulting volatility in business
environments increase the need to anticipate the future in order to maximize opportunities and
minimize threats. Many firms have turned to outside analysts who are knowledgeable about their
industry and experts in strategic planning to facilitate this process. Regardless of the size of the
business, time must be made available for reflection and planning for the future.

The Importance of Flexibility and Adaptation

The strategic planning process establishes clear guidelines for future marketing decisions, but at
times this formal process may result in establishing directives and constraints that make it
difficult for a firm to adapt to changing circumstances. Therefore, a realistic strategic plan should
allow for needed flexibility and provide parameters for adapting to new situations. This requires
easily understood guidelines that cover a relatively broad range of decisions – particularly
focused on the firm’s mission and objectives to maintain consistency and take advantage of the
company’s core competence.

Stakeholder Involvement

Many firms bring their important stakeholders into the strategic planning process. These valued
stakeholders may include customers, suppliers, and employees at various levels in the

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organization, consultants, and others. Their contribution may be in the nature of market
feedback; projections about product supply and demand; and information about competitors,
technological breakthroughs, legal and political activities and other environmental issues. A
firms overall marketing effort should include the development of strategic relationship with key
stakeholders that can provide useful insights throughout the strategic planning process.

Integrated Ethics and Social Responsibility

If a direction for ethics and social responsibility is not integrated into the strategic market
planning process from the very beginning, the organizational culture may not provide the needed
direction for ethical and socially responsible marketing programs. In the drive for profits,
productivity, and efficiency – all values that are necessary for success.

Ethical behavior is fundamental to building trust and long term relationship between a company
and its employees. Companies need to develop and enforce a code of ethics that will guide
decisions in marketing and other business areas. A code of ethics sets standards and provides
guidelines for acceptable behavior.

2.4 Strategic Planning and Customer Orientation

It has become increasingly evident that a successful strategic plan must start with the customer.
Marketing opportunities are based on an identification of market wants and needs, an
understanding of how customers make buying decisions, how they use the goods and services
they buy, and their level of commitment to current brands. The strategic planning process should
incorporate the following:

- outstanding approaches to delivering customer satisfaction

- A plan for value creation from the customers’ perspective

- Plans for continuous quality improvement in products and processes

- The ability and willingness to re-engineer or redesign as indicated by the marketing

environment or internal conditions.

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Customer satisfaction

The ultimate success of a strategic marketing plan lies in the amount of customer satisfaction and
profitability that it can generate. A strategy that results in high levels of customer satisfaction
gives a firm one of the greatest long-term assets it can have: loyal customers who return time and
again for repeat purchases. However, the ability to deliver customer satisfaction must start with a
customer focus, and this business philosophy must start with top management. This requires
giving attention to the quality not only of the goods and services offered by the business but also
the processes involved before, during, and after a sale.

Value Creation

Value is in the eye of the beholder it is important to consider the perspective of the final
consumer or business customer when deciding how to add value to a company’s goods and
services. The value added to a sale differentiates one company’s offering from that of a
competitor. It provides the basis for a positioning strategy that can be used in product design
(redesign) and marketing communication. While many firms pursue a low-cost strategy and
many purchase decisions are made on the basis of price, the most successful approaches include
a competitive advantage obtained through a value – added strategy. Customer value may be
created in a variety of ways, such as exceptional customer service, product assortment, unusual
product design features, unique packaging, creative distribution methods, and higher-quality
component parts and materials.

Porters value chain includes both primary and secondary activities that create value for
customers. The value chain reveals ways to obtain competitive advantage through differences in
primary and secondary value-creating activities. Primary value activities include inbound and
outbound logistics, operations, marketing and sales, and services. Secondary value activities
include procurement, technology development, human resource management, and the firms
infrastructure. Each of these activities may be strength or weakness when compared with
competitors.

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Department of Marketing Management