Marketing planning involves deciding on marketing strategies that will help the company attain its overall strategic objectives. A detailed marketing plan is needed for each business, product or brand.
Markets Oriented Strategic Planning
The hard task of selecting an overall company strategy for long-run survival and growth is called strategic planning. The process of planning may be as important as the plans that emerge. Planning encourages management to think systematically about what has happened, what is happening, and what might happen.
We define strategic planning as the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies.
Formulation and Implementation of strategies
List and briefly review the four steps in the strategic planning process –
Strategic planning sets the stage for the rest of the planning in the firm. It relies on –
(a) defining a clear company mission,
(b) setting supporting company objectives,
(c) designing a sound business portfolio, and
(d) coordinating functional strategies.
At the corporate level, the company first defines its overall purpose and mission. This mission then is turned into detained supporting objectives that guide the whole company. Next, headquarters decides what portfolio of businesses and products is best for the company and how much support to give each one.
In turn, each business and product unit must develop detailed marketing and other departmental plans that support the company-wide plan. Thus, marketing planning occurs at the business unit, product and market levels. It supports the company strategically, planning with more detailed planning for specific marketing opportunities.
Corporate Strategies – How strategic planning is carried out at the corporate and divisional levels?
Corporate headquarters is responsible for setting the strategic-planning process in motion. The corporate strategy establishes the framework within which the divisions and business units prepare their strategic plans. Setting a corporate strategy entails four activities. All corporate headquarters undertake these four planning activities –
- Defining the corporate mission,
- Establishing strategic business units (SBUS),
- Assigning resources to each SBU,
- Planning new businesses, downsizing or terminating older businesses.
Most companies operate several businesses, Management first step is to identify the key business making up the company. These can be called strategic business units (SUB).
- Defining the corporate mission
An organization exists to accomplish something. Its specific mission or purpose is usually clear when the business starts. Over time the mission may change, to take advantage of new opportunities or respond to new market conditions: To define its mission, the company should; address some Classic questions: What is our business? Who is the customer? What is of value to the customer? What will our business be? What should our business be? Successful companies, continuously raise these questions and answer them thoughtfully and thoroughly.
- Establishing strategic business units (SBUs)
Most companies operate several businesses. Management first step is to identify the key business making up the company. These can be called strategic business units. A strategic business unit (SBU) is a unit of the company that has a separate mission and objectives and that can be planned independently from other company businesses. An SBU can be a company division, a product line within a division, or sometimes a single product or brand.
- Assigning resources to each SBU
The next step in business calls for management to assess the attractiveness of its various SBUs and decide how much support each deserves. In some companies, this is done informally. Management looks at the company’s collection of businesses or products and uses judgment to decide how much each SBU should contribute and receive. Other companies use formal portfolio-planning methods.
- Planning new businesses, downsizing or terminating older businesses
The company’s plans for ‘its existing businesses allow it to project total sales and profits. Often, these are less than what corporate management wants them to be. If there is a gap between future desired sales and projected sales, corporate management will have to develop or acquire new businesses to fill it.