Marketing in strategic planning

 The role of marketing in strategic planning

Q4: What is the role of marketing in the strategic planning process?
Defining strategic planning:

According to Philip Kotler:

Developing and developing strategic alignment between the organization's goals and capabilities and its changing marketing opportunities.

Marketer role definition:

Each organization has a process for finding the most reasonable long-term survival and growth given its particular circumstances, opportunities, goals and resources. Define your game plan. Strategic planning forms the basis for further planning of the company. Strategic planning involves adapting a company to take advantage of opportunities in an ever-changing environment.

At the corporate level, a business begins the strategic planning process by defining its overall purpose and mission. This mission is reflected in detailed support objectives that guide the entire organization. Headquarters then decides which portfolio of stores and products is most suitable for the company and what support is provided for each of them. Each company and product then develops detailed marketing and other departmental plans to support the company-wide plan. Marketing planning is therefore done at the business unit, product and market level. Support your company's strategic planning with more detailed plans for specific marketing opportunities.

STEP 1: Define a market-oriented mission

An organization exists to achieve something and its purpose should be clearly defined. As a result, many organizations create a formal mission statement. i.e.

,

A mission is a statement of an organization's purpose (what it wants to achieve in the larger community).

Your mission should be market-oriented and defined with regard to satisfying the basic needs of customers. At the same time, it should be meaningful, concrete and motivating. They should highlight the company's strengths in the market. The company's mission should not be to increase sales or profit. Profit is simply the reward for creating value for your customers. Instead, the mission should focus on the customer and the customer experience the company is trying to create.

For example, Google's mission is

.

Mission differs from vision in that the former is the cause and the latter the effect. Mission is what needs to be accomplished and vision is what needs to be pursued to achieve it.

Step 2: Establish organizational purpose and goals

The organization should translate its mission into detailed objectives that support each level of management. Every manager should have goals and be accountable for achieving them. Marketing strategies and programs must be developed to support these marketing objectives. Next, you need to define your comprehensive marketing strategy in more detail.

It should be noted that goals and objectives have different meanings. Goals are often open-ended and unstructured. Goals are usually individual achievable results,

They are specific in their statement and purpose. There is no ambiguity as to whether they have been achieved or not.

They say that goals without goals can never be achieved, while goals without goals will never get you where you want to be. In fact, the two terms are related, yet separate. Using both allows you to be and do what you want.

Step 3: Business portfolio design

Based on the company's mission and goals, management should plan the business portfolio. A business portfolio can be defined as:

"The collection of businesses and products that make up a company." . Planning a trading portfolio involves two steps.

1. The company should analyze its current business portfolio and decide in which companies to invest more, less or not at all.

2. Future portfolios need to be shaped by developing growth and contraction strategies.

Business portfolio strategy

For current business

BCG Matrix

For future business

For extension

Product/Market Expansion Grid

To reduce the size

(FOR CURRENT BUSINESS)

i) Analysis of the current business portfolio:

create. analysis of our products; Portfolio analysis is the process by which management evaluates the products and businesses that make up a company. Following this analysis, the company will want to invest strong resources in more profitable businesses and phase out or eliminate weak ones.

To this end, we use the Boston Consulting Group (BCG) matrix approach.

Boston Consulting Group (BCG) Matrix:

The best-known portfolio planning methodology was developed by the Boston Consulting Group, a leading management consulting firm. It evaluates SBUs based on its two key aspects: the attractiveness of the SBU's market or industry and the strength of its SBU's position in that market or industry.

SBUs (Strategic Business Units) are the main businesses that make up a company. SBUs are divisions, product lines within divisions, and sometimes individual products or brands.

The Boston Consulting Group developed a matrix known as the "Growth Share Matrix" and commonly known as the BCG Matrix. It is essentially a portfolio planning methodology that evaluates a company's SBUs in terms of market growth and relative market share.

The Growth Share Matrix defines four types of its SBU.

1. Stars:

Stars are high-growth companies or products with high share. They often require large investments to finance rapid growth. Growth eventually slows down and he becomes a cash cow.

2. cash cows:

Cash cows are companies or products with low growth and high share. These established and successful SBUs require less investment to maintain market share. As such, it generates much of the cash that the company uses to pay its bills and support its other SBUs that need investment.

3. Question mark:

The question mark is a business segment with a small share of the growing market. They need a lot of money to maintain, let alone increase their deposits. Management should carefully consider which question marks to include in the stars and which to phase out.

4 dogs:

dogs are low growth, low market companies and products. They can generate enough money to support themselves, but they do not promise to be the main source of funding.

Strategy for each block:

It can follow one of four strategies for each SBU. It can invest more in the business unit to build its share. Or he can invest just enough to keep SBU's stake at current levels. It can harvest SBU and milk its short-term cash flow regardless of the long-term effect. It may eventually dispose of the SBU by selling it or phasing it out and using resources elsewhere.

Over time, SBUs change their positions in the growth and share matrix. Many SBUs start out as question marks and move into the star category if successful. They later become cash cows as market growth declines and eventually die out or turn into dogs at the end of their life cycle. The company needs to keep adding new products and units so that some of them become stars and eventually cash cows to help fund other SBUs.

However, such centralized approaches have their limitations. Their implementation can be difficult, time-consuming and expensive. It can be difficult for management to define SBUs and measure market share and growth. Furthermore, these approaches focus on classifying current businesses but provide little guidance for future planning.

Downsizing strategy:

Companies must not only develop strategies for growing their business portfolios, but also strategies for reducing them. It can be defined as:

Intentionally reducing the size of the business portfolio by canceling a brand or brands. It also includes reducing the workforce at all levels to survive a downturn, increase efficiency, or become a more attractive candidate for acquisition or merger.

Reasons for downsizing:

There are many reasons why a firm might want to exit products or markets.

 The firm may have grown too quickly or entered areas where it lacks experience. This can happen when a business enters too many international markets without proper research, or when a company introduces new products that do not offer greater value to customers.

 The market environment may change and some products or markets will become less profitable. For example, in tough economic times, many firms cut weaker, less profitable products and markets to focus their more limited resources on the strongest ones.

 Some products or business units simply age and die.

 When a firm finds brands or businesses that are unprofitable or no longer fit its overall strategy, it must carefully prune, harvest, or dispose of them.

Read More

What is Marketing ?

 Q1: What is Marketing? What are its primary goals?

OR

Define Marketing. Discuss the important objectives of marketing?

DEFINITION OF MARKETING:

According to Philip Kotler:

“The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return”.

OR

According to William J. Stanton:

“Marketing is the total system of business activities designed to plan, price, promote, and distribute want satisfying products to target markets in order to achieve organizational objectives”.

OR

According to American Marketing Association:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large”.

OLD CONCEPT VS NEW CONCEPT OF MARKETING:

Difference of Selling and Marketing:

In old days, marketing was just considered as selling goods to consumers by using attractive words and

diverting consumer’s attention to the product. But now-a-days, marketing is no more a selling activity.

Selling is considered as just a tip of marketing ice-burg. Now, marketing involves creating profitable

customer relationships by satisfying needs of customers through a valuable product.

Difference between advertising and Marketing:

Some people, who are not familiar with actual definition of marketing, consider that marketing is just

making an effective advertisement and publishing it on different media at effective rates. Core concept of

marketing is entirely different. Advertising is just a part of marketing, not a whole of marketing. It is

included in a small description of one of the 4Ps of marketing 

1. COORDINATED MARKETING EFFORTS:

One of the important objectives of marketing is to develop an effective coordination and harmony among all

the marketing activities so that we can maintain profitable customer relationship by delivering them a valuable

product. It is necessary because we have to generate value in every step of the process otherwise delivering

value to customers will not be possible. This is called TQM (Total Quality Management).

As explained by William J. Stanton, it is a system of implementing an organization-wide commitment to

quality that involves every employee accepting responsibility for continuous quality improvement. Consider, we have best suppliers of raw material for our product. It is essential to have up-to-date

machinery, people and other overheads for having value in processing. After that, we must have distributors that

create value through their services. At the end, after creation of value at every step, we will be able to deliver

actual value that a customer is expecting us to deliver.

For Example: Walmart, cannot deliver its products at low prices i.e., value for customers, unless it

successfully creates value at every step of its process. Similar is the case with TCS, which tries to create value

at every station to make timely delivery of parcels possible.

a) Quality product

Building a quality product for customer can be an aim of the business. Customer may consider quality of a

product as its value. Customer may define quality of a product in many ways. Like a person can say that it is a

measure of excellence or a state of being free from defects, deficiencies and significant variations. It can also be

defined as the totality of features and characteristics of a product or service that bears its ability to satisfy

stated or implied needs.

Although most firms don’t ignore quality of the firm. But we must have to consider the acceptable levels of

quality for customers determined by our engineers and manufacturing people. It is necessary because if quality

of a product goes up, its cost also goes up. But increase in cost relative to quality can be controlled through

affective marketing, like:

i) Assessing customer’s point of view of quality:

Marketing can help marketer by obtaining and responding to input from customers about how they

define quality and what they expect in a particular product.

ii) Reducing problems of Production processes:

Marketing can help marketer by improving designs to reduce problems in manufacturing, and

identifying and correcting problems early in the production process to reduce excessive reworking

and wastes.

iii) Call employee’s attention towards quality:

Marketing can help marketer by Encouraging employees to call attention to quality problems, and

empowering them to initiate action to improve quality.

Marketers’ determine that return on quality can be measured which is a refined form of TQM.

Read More