5. Strategic planning
Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing market opportunities. It relies on developing a clear company mission, supporting objectives, a sound business portfolio, and coordinated functional strategies.
The steps in the strategic planning are as follows: at the corporate level, the company first decides its overall purpose and mission. This mission is then turns into detailed supporting objectives that guide the whole company. Next, top management decides what portfolio of businesses and products is best for the company, and how much support to give each one. Each business and product unit must in turn develop detailed market and other functional plans that support the company-wide plan.
When management senses that organization is drifting it must renew its search for purpose. It is time to ask: What is our business? Who is the customer? What is value to the customer? What will our business be? What should our business be?
Company traditionally defined their business in product terms such as, “We manufacture video games”, or in technological terms such as, “We are a chemical-processing firm”. But some years ago, Theodore Levitt proposed that market definitions stated in terms of particular customer groups or needs were better.
Management should avoid making its mission too narrow or too broad. Mission statements should be specific, realistic, and motivating. As an illustration, the International Minerals and Chemical Corporation is in many businesses including the fertilizer business. The fertilizer division does not say that its mission is to produce fertilizer. Instead, it says that its mission is “to fight world hunger”. This mission leads to a hierarchy of business objectives, marketing objectives and, finally, marketing strategy.
The mission of fighting world hunger leads to the company’s prime business objective of “increasing agricultural productivity”. This in turn leads to “researching new fertilizers which promise higher yields”. But research is expensive and requires improved profits to plough back into research programs. So a major objective becomes “to improve profits”.
Profits can be improved by increasing sales or reducing costs. Sales can be increased by enlarging the company’s share of the US market and by entering foreign markets. This became the company’s current marketing objectives.
Marketing strategies must be developed to support these marketing objectives. To raise its US market share, the company will increase its product’s availability and promotion. To enter new foreign markets, the company will cut prices and call on large farms abroad. These are the broad marketing strategies.
6. The Four p’s
There are four principal controllable factors that provide the most effective choice for the consumer – the Four P's: product, price, place and promotion. The owner of a factory manufacturing transportation equipment could produce an economy car, a luxury car, truck, van, tractor, motorcycles and apply different marketing techniques.
Place includes location of production and distribution. The place to see your product could be in dealers’ showrooms or directly from the factory or from catalogs, direct-mail coupons, even telemarketing with telephone sales people or through computer shopping services.
Promotion includes all forms of marketing communication (advertising, direct mail, customer service, image, special events, sales and the product or service itself.) Promotion is the most complex thing — how to select and divide your market according to .the type of product, its price and where it will be available. Each group of the population has its own values to which you want to make your product appeal.
The most controllable of these factors is the first "p" — product (service.)
All products and services have what have been traditionally called "product life cycles".
The stages of the product life cycle are: introduction, growth, maturity and decline. The length of a product life cycle depends upon the
intensity of the competition
extent to which the new product is an innovation, a modification of an existing product
introductory timing of technologically superior products
marketing techniques.