1.1.3 How To Develop A Strategic Marketing Plan - NOW
Author’s note - this is the first appearance of The Wagon Wheel model. At this stage of my thinking, it was purely a planning model that owed its origins to the "dinner plate" referred to in 1.1. This was the first of four related pieces written for CEO Online and, together, they make up what would become known as the "Hub of the Plan".
One of the problems that confronts business planners is the variable use and definition of words commonly used in the planning process such as strategy, strategic, goals and objectives.
In Plans To Reality's The Wagon Wheel model of Strategic Business Planning, the term Commercial Plan has been used in place of Strategic Marketing Plan to avoid the multiple use of the term Marketing - which itself is open to more interpretations than just about any other.
But whether one has a preference for Commercial Plan or Strategic Marketing Plan, the components are the same. The final document should set out the following in relation to the company:
- Activities - now and in the future
- Markets served - now and in the future
- Products/Services provided - now and in the future
- Competitive Strategy
- Competitive Advantage
In addition to a model, a process is also needed. There are three stages:
- Stage - 1 is to work out where the company is NOW and the influences that will come to bear on the company’s future
- Stage 2 - is to decide WHERE it is that you want the company to be in the future (usually five years)
- Stage 3 - is the determination of HOW you will get from NOW to WHERE you want to be
It’s when undertaking the NOW or the Situation Analysis that the differences between strategic and the other forms of planning come into sharper relief. Because planning strategically emphasises the organisation’s environment and context, it is these factors that are the major determinants of WHERE and HOW rather than the organisation’s strength and weaknesses. Strategic planning tries to anticipate change, not simply extrapolate the future from the past.
But don’t get me wrong! You can’t - and shouldn’t - ignore an internal analysis of the company’s performance but you should place more emphasis on the external environment - for one fundamental reason. You have no control over the majority of the factors that make up the external environment so you have to adapt to them.
Ignoring them or fighting them is not an option. They won’t go away.
The external environment can be divided into two - macro and micro. The former is the one over which you have no control and must therefore adapt to. It comprises the following:
Macro-external environment
- Technology:
- How mature is the existing technology
- Are there new alternative technologies on the horizon
- Who are the indirect competitors that have or are likely to emerge
- Are there competing technologies for achieving the same outcomes
- How mature is the existing technology
- Economic activity:
- How influenced are your products or services by the level of economic activity in Australia and overseas
- Are some of your products or services more heavily influenced than others
- What is likely to happen to exchange rates
- How influenced are your products or services by the level of economic activity in Australia and overseas
- Social/cultural trends:
- Do relevant trends pose opportunities or threats
- Do they impact upon product life cycles
- What’s the impact on the rise in the number of single households etc.
- Do relevant trends pose opportunities or threats
- Political/Regulatory:
- Everything from new governments and free trade agreements to new regulations and new standards
- Everything from new governments and free trade agreements to new regulations and new standards
- Demographics:
- How will population migration impact on your business
- How will the aging of the population impact on the business
- What’s the impact of a declining birthrate
- How will population migration impact on your business
The influence of the Micro-external Environment is more immediate as it encompasses such factors as Markets, Customers, Competitors, Suppliers and Distribution channels. It is sometimes referred to as the Task Environment.
Micro-external environment
- Customer analysis:
- What are the various market segments
- What are the influences on the customers’ buying decisions
- Are their needs changing
- Are there unmet needs
- What are the various market segments
- Market analysis:
- What’s the size of the various market segments
- Are they growing, static or declining
- Are there segments that will buck the overall growth trends
- What will happen to the total market’s profitability
- What’s its cost structure
- Distribution systems - will these change
- What are the key trends and developments
- What are the key success factors - will these change
- What’s the size of the various market segments
- Competitive analysis:
- Who are our direct competitors
- Will the number of competitors increase or decrease
- What are the entry and exit barriers
- What are our key competitors’ strategies
- What are their strengths and weaknesses
- Who are our direct competitors
The skill in conducting such an analysis is, firstly, being able to pick the factors that are relevant to your business, secondly, being able to determine their potential impact and lastly adopting a strategy that either negates their impact or takes advantage of the opportunity they present.
Finally, there is the internal analysis - but it’s of a specific type. Rather than an examination of past sales and profitability, it’s an examination of the performance of your company from an external perspective. So it might include such factors as:
Internal environment
- Market share
- Customer satisfaction
- Brand loyalty
- Product or service quality
- Customer service levels
- Feedback from benchmarking exercises
- New product performance
- Product life cycle analysis
- Relative cost
Having determined where the company is now and the impact on the company’s future of the most relevant factors in the external environments, the next step is WHERE.
Go to next article in the series - How To Develop A Strategic Marketing Plan - WHERE