The strategic marketing planning process for small and mid-sized businesses can be difficult.
An understanding of business strategy and competitive advantage is important for strategic marketing planning, specifically for small and mid-sized businesses. Marketing management needs to be involved in the business planning process and three important ways:
- They participate in strategic analysis and planning for the business.
- They serve with other functional managers as members of a business unit strategic planning team.
- They develop and implement strategic marketing plans for the market served by the company.
In this article, I’ll discuss strategic marketing and the strategic marketing planning process for developing, implementing, and managing your marketing strategy.
Strategic Marketing Planning
The chief marketing executive’s strategic planning responsibility includes:
- Participating in the company’s strategy formulation.
- Developing marketing strategies in accordance with the company’s business goals.
Since these two areas are closely interrelated, it is important to examine marketing’s role and functions in both areas to gain more insight into marketing’s responsibilities and contributions.
Marketing is so basic that it cannot be considered a separate function within the business, on par with other such as manufacturing or human resources. Marketing requires separate work and a distinct group of activities. But it is, first, an essential dimension of the entire business. It is the whole business seen from the point of view of its final result, that is, from the customer’s point of view.
This description of marketing’s role in the company can be combined with a traditional view of marketing management to define strategic marketing as a process consisting of:
- analyzing environmental, market, competitive, and business factors affecting the corporation and its business units; identifying market opportunities and threats and forecasting future trends in business areas of interest to the company; and participating in setting objectives and formulating company and business unit strategies.
- selecting target market strategies for the product markets in each business unit, establishing marketing objectives as well as developing, implementing, and managing the marketing program positioning strategies in order to meet target market needs.
Look at several key characteristics of strategic marketing reveals its nature and scope.
Characteristics of Strategic Marketing
Traditional marketing management concentrates on the marketing strategy of product, distribution, price, and promotion. Strategic marketing includes the strategies and marketing budgets but also incorporates ever important strategic considerations outside the domain of marketing management. Strategic marketing follows a market-driven process of strategy development. This requires you to take into account a constantly changing business environment and a continual requirement to deliver customer satisfaction. Strategic marketing focuses on financial performance rather than marketing’s traditional concern about increasing sales.
Market-Driven Strategies. Competitive advantage is customer-driven and focused on the target audience. This is based on (1) the degree of customer satisfaction achieved by of company, and (2) the extent to which the company exceeds the customer satisfaction levels of the competition. Marketing strategy contributes to competitive advantage by combining the customer influencing strategies of the business into an integrated array of market-focused actions. Strategic marketing includes the actions of the business for the purpose of providing customer satisfaction. Strategy development considers business scope, competitive advantage, and organizational effectiveness. Customer targeting and assembling the marketing programs of the company are coordinated among the functions within the business. Strategic marketing provides the companies linked with the environment and emphasizes marketing as an integrated responsibility of the business rather than a specialized function. Achieving competitive advantage requires teamwork and functional integration.
Environmental Turbulence. The turbulence in today’s business environment places a special importance on strategic marketing, the target market, and competitor monitoring capabilities. I will highlight the importance of strategic management processes that function effectively in a rapidly changing business environment. External forces all through the composition and attractiveness of markets and the competitive structure that it presents in markets.
Because of marketing’s boundary orientation between the company and its customer, channel members, in competition, the function is central to the strategic planning process. Strategic marketing provides the expertise for environmental monitoring, for deciding what customer groups to serve, for product specifications, and for deciding which competitors to position against. Marketing executives provide the professional skills and experience needed to meet these responsibilities. In addition, it is important to recognize that the company strategies involved in integrating marketing and other functional strategies. Successfully integrating multifunctional strategies is critical to providing high levels of customer satisfaction.
Customer Satisfaction. The key to achieving customer satisfaction is linking buyers needs with the company’s product and or service planning process. Customer preferences for product attributes must be transformed into product design and production guidelines. Success in achieving high-quality products and services depends importantly on finding out which dimensions of product and service quality drives customer satisfaction. Marketing professionals have the experience and skills essential for analyzing customer satisfaction with surveys and net promoter scores (NPS).
Financial Performance. Finally, strategic marketing moves beyond or revenue emphasis on marketing management. Instead, the objective is to make strategic marketing decisions that contribute to the financial performance of the business. Return on investment (ROI) replaces sales as the basis for guiding marketing decisions. Strategic choices such as which markets to enter or exit are guided by estimated financial performance using the same criteria in time horizon used to gauge business success. Several basic financial analysis concepts and methods are needed for these actions. Learn more about marketing budget models.
Corporate and Business Unit Plans (SBU)
Before work can start on marketing strategy, management must clearly understand its objectives and plans for each SBU. within the guidelines of the business mission and objectives, the strategy selected for each unit of the business has an important bearing on the marketing plan as well as other functional plans such as operations, finance, and human resources. It is essential to understand the business purpose, scope, objectives, and strategy make strategic marketing decisions that correspond to the corporate and business unit plan.
Top management must answer these key questions. First, based on an assessment of the business units strength in attractiveness in each product market, what broad strategy will the unit pursue and what financial resources will be made available to carry out the strategies? Will the unit be managed for cash flow, growth, or earnings? Second, what are the specific expectations of top management regarding sales, market share, profit contribution, and other aspects of performance? These guidelines provide the basis for developing SBU and marketing strategies.
Strategic priorities for SBU’s should be set by the management team for each business unit, working closely with the executives responsible for corporate strategy. For example, in determining sales and market share targets for a business unit, participation by key executives is essential. Moreover, some flexibility in the negotiations may be necessary to motivate managers and to give them an opportunity to execute strategies with a high probability of success.
Strategic Marketing Planning Process
The strategic marketing planning process used is shown in Exhibit 1. The situation analysis considers market structure and supply and demand, market segmentation, customer analysis, and competitor analysis. Marketing strategy design examines marketing advantage, customer targeting, positioning analysis, strategy selection for different situations, and the new product strategy. Marketing program development select product, distribution, price, and promotion strategies that correspond to the needs of targeted buyers. Strategy implementation and management considers organizational design and effectiveness, marketing strategy implementation and control, and the strategic role of information. Each stage of the strategy process will be examined in a future post. So stay tuned.
Marketing strategy is an analysis, planning, implementation, and control process designed to satisfy customer needs and wants. The process starts with an understanding of the corporate mission statement and the strategy of each strategic business unit. Strategic marketing is organized around the strategic marketing planning process. Product market analysis, market segmentation, and competition analysis are all important for the strategic planning process. These analyses guide the choice of marketing strategy. Market definition establishes the overall competitive arena. Market segmentation identifies and analyzes the alternative customer group for targeting by the company. Competitor analysis examines the strengths, weaknesses, and strategies of key competitors.
When was the last time you and your organization reviewed your marketing strategy and how it stacks up to your competitors?
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