Strategic Marketing Planning and Control

Plannning and Control

Graeme Drummond, John Ensor, Ruth Ashford

• Publisher: Routledge
• Year: 2010
• Print ISBN: 9780750682718
• eBook ISBN: 9781136362583
• Topic: Business
• Subtopic: Business generale
• Index: Business

The completely revised and updated 3rd edition of the hugely successful Strategic Marketing: planning and control continues to provide a concise yet comprehensive synthesis of the key strategic marketing concepts. The text cuts through the complexity and jargon surrounding the subject and is tightly written to accommodate the reading time pressures on students. A clear, comprehensive and user-friendly text it provides an unrivalled digest of the tools, techniques and knowledge required to understand strategic marketing. Covering contemporary issues by exploring current developments in marketing theory and practice. It offers- • Coverage of key developments in customer relationship management, business ethics, market-led orientation and resource/asset-based approaches to internal analysis and planning • A highly exam focused approach which has been class tested and refined • A new chapter offering a 'problem-based learning' (PBL) approach to the subject • Thoroughly revised and updated case studies and vignettes of real world best practice throughout the text Now established as one of the leading texts in the field Strategic Marketing 3rd edition will continue to be an essential learning tool for CIM students and marketing undergraduates and postgraduates. It will also be ideal for marketing professionals who want to improve their strategic knowledge and those on relevant executive courses.

The strategic perspective

DOI: 10.4324/9780080561219-1

About this chapter

Increasingly competitive market conditions require strategic responses. Strategic decisions define core competencies and integrate activities. Strategic management recognises the importance of implementation and managing change. Essentially, strategic marketing management and subsequent marketing strategies, contribute to overall business goals through a three stage process: analysis, formulation and implementation.

■ Introduction

The concept of marketing is inherently simple – business success through a process of understanding and meeting customer needs. Few would argue with this basic principle, and even the most inexperienced of business managers would intuitively see the sense in this. Given this basic simplicity, why do we need something as complicated, and time consuming, as a marketing strategy?

While basic business principles may be simple common sense, achievement involves many complex, interdependent or even conflicting tasks. Increasingly, such tasks are undertaken against a backdrop of constant change, intense competition and limited resources. To further enhance the challenge, managers are often at the mercy of incomplete data and unexpected events, often being left to ‘second guess’ customer and competitor reactions. It is to this end, marketing strategy has become a vital component of success. A well considered, effectively implemented, marketing strategy should go some way to alleviating the aforementioned problems and reduce the complexity of business tasks. Strategy should restore simplicity to the art of management. In essence, it is a series of tools and techniques that guide (hopefully) the organisation to the marketing panacea – success through a process of understanding and meeting customer needs.

The modern business world now recognises the importance of strategic issues and the contribution of strategic management to business success. While this has many benefits it also brings many problems. It could be argued that ‘strategy’ (or ‘strategic’) is the most overused/misused phrase in business today. Everybody seems to have a ‘strategy’ for everything. By attaching the term ‘strategy’ to an activity, it somehow becomes more important – more grand – but in reality very little actually gets done! To illustrate this, the authors recall the recent experience of sitting through a seemingly endless meeting, listening to people jabber on-and-on about their ‘strategy’ or the need for a strategic view. Finally, someone said something sensible; ‘… there's too much strategy and not enough people doing things!’. This blunt comment is memorable for two reasons. Firstly, it ended a tedious meeting. Secondly, and more importantly, it illustrated a key point: strategy must lead to action, not be a substitute for it. Ultimately, all organisations need ‘… people doing things’. The goal of strategy is toensure that they are doing the right things. These actions need to be co-ordinated, efficiently executed and focused on meeting customer need.

Essentially, strategy is a three stage process involving analysis, formulation and implementation. During the analysis phase management needs to look both internally and externally. Understanding the wider business environment is fundamental. It is then necessary to formulate plans appropriate to current and future circumstances. Finally, implementation needs to make sure our plans are put into practice. Managers must ensure that due care and attention are paid to each of these stages. In this way, strategy avoids being little more than rhetoric and starts to become a practical reality of business life.

■ What is strategy?

Over the years, many definitions of ‘strategy’ have been developed and close examination of such definitions tends to converge on the following – strategy is concerned with making major decisions affecting the long-term direction of the business. Major business decisions are by their very nature strategic, and tend to focus on:

• Business definition: A strategic fundamental is defining the business we are in. Organisations need to anticipate and adapt to change by keeping in touch with the external competitive environment. Business leaders need to define the scope (or range) of the organisation's activities and determine the markets in which the organisation will compete. We are defining the boundaries of activity and ensuring management face up to the challenges of change.
• Core competencies: The organisation must be competitive now and in the future. Therefore, strategic decisions need to define the basis of sustainable competitive advantage(s). What skills and resources are needed in order to prosper within our defined markets and how can they be used to optimum advantage? It is essential that this is considered over the long-term and aims to match organisational capability with desired goals and the external environment. This process often has major resource implications, both in terms of investment and rationalisation.
• Integrative: Strategy has a wide ranging impact and therefore affects all functional areas within the organisation. Effective strategy is able to co-ordinate the different functions/activities within the organisation in order to achieve common goals. By taking a ‘whole-organisation's’ view of the corporation, managers should be better able to target resources, eliminate waste and generate synergy. Synergy occurs when the combined effect of functions/activities is greater than their individual contribution. It is vital that business leaders articulate a common vision and sense of purpose, in order to achieve an integrative approach.
• Consistency of approach: Strategy should provide a consistency of approach, and offer a focus to the organisation. Tactical activities may change and be adapted readily in response to market conditions, but strategic direction should remain constant. Additionally, strategicmanagement can provide common tools and analytical techniques enabling the assessment and control of complex issues, situations and functional areas.

The process aims to specify corporate objectives and establish ways of achieving such objectives. The intent is to react to, and of course influence, the competitive environment to the advantage of the organisation. Any such advantage must be sustained over the long-term, but be flexible enough to adapt and develop as required.

Note, strategy and a corporate/strategic plan are not one and the same. Strategy defines the general concepts of future competitive advantage and reflects intent, whereas a strategic plan specifies the selection, sequence, resources, timing and specific objectives required to achieve the strategy.

Figure 1.1 summarises the above issues. Note: issues of strategy, tactics and corporate planning are further developed in Chapter 11.

Figure 1.1 The basics of strategy

■ Towards strategic management

Over a period of some 30 years, we have seen the concept of strategy evolve. Aaker (1995) provides a historical perspective showing how this evolution has progressed and acknowledges that strategic activity has been described over the years as:

• Budgeting: Early strategic activity was concerned with budgetary and control mechanisms. Structured methods of allocating, monitoring and investigating variances from budget provided a means of managing complex processes. The process was often based on past trends and assumed incremental development.
• Long-range planning: Here greater emphasis was placed on forecasting. Planning systems and processes tended to extrapolate current trends (with varying degrees of sophistication) and predict factors such as sales, profits and cost. Management could use such forecasts as a basis for decision making.
• Strategic planning: The 1970/1980s was the era of strategic planning, with emphasis placed on: (i) specifying the overall direction and (ii) centralised control of planning activities. While still based around forecasting and extrapolation of past trends, far greater attention was paid to understanding the business environment. Managers hoped to be able to anticipate events through a detailed analysis of cause-and-effect relationships. Planning systems aimed to provide data and logic as a means of decision support. While promoting more awareness of strategic issues in terms of the external environment, the process still tended to focus on the preparation of corporate-wide plans. This was often achieved in a highly bureaucratic, centralised fashion.
• Strategic management: We are currently in the age of strategic management. Strategic management concerns both the formulation of strategy and how such strategy is put into practice. While still undertaking analysis and forecasting, far greater prominence is placed on implementation. The concern is with managing change and transforming the organisation within an increasingly turbulent business environment.

Johnson and Scholes (1999) provide a useful model (see Figure 1.2) summarising the main elements of strategic management. Strategic problems can be viewed as having three distinct components. Firstly analysis, we need to understand the business environment and the resource capabilities of the organisation. This needs to be considered in the context of the organisation's culture and the aspirations and expectations of the stakeholders. Note, ‘stakeholders’ are taken to be anyone with a stake in the organisation (e.g. customers, employees, suppliers, etc.). Secondly, managers need to make strategic choices. This is achieved via a process of identifying, evaluating and selecting options. The organisation needs to define: (i) what is the basis of our strategy – so-called ‘generic’ strategy, (ii) what product/market areas will we operate in and (iii) developing specific strategies to achieve corporate goals. Finally, the issue of implementation must be considered.There is the need to plan actions, allocate resources and, where appropriate restructure, to achieve strategic change.

Figure 1.2 Elements of strategic management (Source: Johnson and Scholes, 1999).

It is important to remember that strategic management is not the orderly, logical sequence of events/activities that managers wish for. Practical reality means processes are interlinked and overlapping. For example, strategic analysis does not stop (or at least should not stop) when other stages take place. Analysis is an on-going activity. Equally, creativity, vision and leadership are required to turn analysis into successful strategy. Given the volatility in today's business world, a contingency approach may be required. This provides flexibility by developing contingencies for a range of future scenarios.

Porter (1998) provides an interesting perspective and views of strategy in terms of: (i) developing a unique position by choosing to perform differently from the opposition, (ii) making ‘trade-offs’ with other possible competitive positions, in order to protect your competitive advantage, (iii) combining activities to fit into, and reinforce, an overall competitive position and (iv) ensuring operational effectiveness when executing activities.

Illustrative Example 1.1 DSL International launches ‘TechGuys'

DSL International owns leading electrical retailers such as Currys, Dixons and PC World. The company now hopes to expand its service operations in the UK through the launch of ‘TechGuys’. This service aims to provide rapid technical support to the increasingly IT-dependent UK consumer. Services include installation, upgrades and maintenance of computers and audiovisual devices regardless of where they were purchased. Chief Executive John Clare states that ‘… calling out an engineer to help connect a laptop to the Internet will become as commonplace as using plumbers and electricians’ (Cavazza, 2006). Support will be available on-site, call centre or over the Internet. DSL feels demand for such services will grow rapidly and will be bolstered by...

Table of contents

• Cover Page
• Half Title Page
• Title Page
• Copyright Page
• Contents
• Preface
• Acknowledgements
• 1 The strategic perspective
• Part 1 Strategic Analysis
• Part 2 Formulation of Strategy
• Part 3 Strategic Implementation
• Part 4 Contemporary Issues in Strategic Marketing
• Part 5 Teaching Strategic Marketing
• Index