Putting Together a Marketing Strategy
So far, we've looked at marketing strategies from the perspective of specific marketing activities across all industries and businesses. However, it can help to be more specific. Read this section on the global forest industry, which gives a much more detailed look at how the industry operates and formulates its marketing strategies. This section covers the forest industry in specific markets in Europe, including a case study of a sawmill that shifted its focus from one aspect of its business to another. This section gives an in-depth look at its strategic planning process and how that process led to choosing specific marketing efforts.
Planning Stages and Approaches
What, When, and How to Plan
When planning marketing strategies a company relates its resources (strengths and weaknesses) to the opportunities and threats of the market environment (especially demand and competition) and tries to seek customers (business partners) whose needs best fit the company offerings (products and services). The combination of marketing strategy components, results in marketing strategy. It is important to remember the logic of how strategy components are combined. The following steps include planning marketing structures and functions. Strategies, structures, and functions together form a strategic marketing plan. The next stage of planning, the marketing action plan, helps implement the strategic marketing plan on an annual basis. Marketing action plans are often called annual plans, operational plans, or simply budgets.
Full scale strategic marketing planning, in conjunction with investment planning, is necessary when new products, new customer, or new customers needs require starting from the very beginning. Alternatively, the prevailing marketing plan may need profound development because of changes within the company (e.g., acquisitions), changes in customer needs (special or custom-made products), or changes in technology (product innovations). It may also simply be that the present marketing plan does not work, and a strategic planning project must be started in order to determine what is wrong.
Although big changes in strategic marketing plans take place rather seldom, they are often reviewed annually in connection with annual planning. In annual marketing planning, quantitative market and customer targets are defined and marketing measures for the next planning period are specified. It must be emphasized that all the outlines for annual planning come from the strategic marketing plan.
Information Input
The Information Environment Model (Figure 7-1) implies that information is present and influences marketing and marketing planning all the time. The environment is changing and it must be monitored continuously. The information and intelligence systems of a company follow all aspects of the environment that could have an impact on strategies. Especially important is to monitor the weak (vague) signs of strategically important issues. This makes it possible for the company to operate proactively in situations where reactive responses would mean falling behind competitors.
Revealing the Planning Gap
For a marketing planner it may sometimes be difficult to recognize and justify when, how, or why marketing practices (structures or functions) should be developed. Marketing theory can help in this process. Identifying the need for further development of marketing strategies and practices can be done by using an "ideal model" of marketing as a benchmark. Marketing theories are the most typical form of ideal models of marketing. The Integrated Model of Marketing Planning (IMMP) is one example of an "ideal model" that can be used when identifying needs for further development. Figure 2 shows how the accuracy of marketing strategies, structures and functions is evaluated against marketing theory.
Analysis of market opportunities and threats and company strengths and weaknesses helps identify appropriate strategies for the company in its present situation. According to theory, marketing structures and functions should flow logically from the chosen strategies. Thus, when we know the strategies of a company, we should also know what sort of marketing structures and marketing functions it should utilize. Based on SWOT analysis and theoretical reasoning, we conclude which strategies, structures, and functions the company should have, in theory. Comparing the "should be" with the real marketing strategies, structures, and functions reveals the need for development in these areas.
An example could illustrate the use of the principles mentioned above. Based on competitor analysis, customer demands, and company capabilities, SWOT analysis might indicate the need for special or custom-made product strategies. Theory (regarding the relationships between strategy components) tells what sort of customer groups and market areas the company should serve and what sort of core competencies it should exploit. Also, according to theory, we might expect that a company moving from a commodity product strategy to a special or custom-made product strategy should change its marketing structures and functions accordingly. Customer contacts must be closer, marketing channels shorter, planning and information systems more sophisticated, product planning more active, etc. Identifying the research and development gap is based on a comparison between "should be" marketing (based on theory) and actual marketing practice. If a company's marketing structures and functions don't meet the theoretical requirements described above, they must be developed. This reasoning leads us to initial marketing planning.
Initial Marketing Planning
In industrial marketing, the various markets and end-use sectors are so vast, and the individual end-users so numerous, that it is nearly impossible (and far too expensive) to produce detailed information on all possible markets. Even if an attempt were made to study all possible markets and end-use sectors, it would probably provide a description that is too general for a detailed strategic marketing plan. On the other hand, a partial, more detailed analysis might omit some prospective customer groups. One solution to this problem is to analyze the markets in two phases. The first phase can be referred to as initial marketing planning and refers to using existing knowledge and secondary information to formulate initial or proposed marketing strategies.
The first step in the marketing planning process is the market analysis, which is carried out as desk research with secondary data. This can be done at a reasonable level of cost and effort. The market analysis is structured according to the Model of the Information Environment. Only secondary information is used to produce a marketing strategy. Marketing theory and planning experience provide ideas concerning which criteria are useful for evaluating the attractiveness of various industry sectors.
Results from an internal company (business unit) analysis are then combined with initial marketing strategies. Those strategies are chosen which fit the strengths and weaknesses of the company. Marketing theory and manager experience provides ideas about appropriate structures and functions for the chosen strategies. As a result of this phase, there are proposed marketing strategy-structure-function combinations.
The proposed strategy-structure-function combinations must be tested in markets among customers. This test is conducted via a survey among the customer sectors defined in the initial marketing plan. The test reveals if the planned products, marketing channels, and marketing communications fit with the needs and behaviors of the chosen customers or customer groups. The survey also produces detailed information needed to complete a strategic marketing plan. The necessary corrections are made and as a result, there is a strategic marketing plan for the business unit.