Laying the groundwork through strategic planning

“strategic planning is the managerial process of developing and maintaining a viable fit between the organization’s objectives and resources, and its changing market opportunities. The aim of strategic planning is to shape and reshape the company’s businesses and products so that they combine to produce satisfactory profits and growth” Ref: Philip Kotler

The above quote taken directly from the book is jam packed with concepts & ideas that we as marketers need to fully understand if we are to be good at marketing.

If marketing is a way of doing business, then strategic planning is right at the start of how a business works. We learnt in the previous chapter that businesses can be explained using a simple marketing system, i.e. connecting the organisation to its market by communicating the products/services offered, in return for cash/profit.

Strategic planning takes this model and says that for a business to achieve its objectives, there must be a viable fit between the objectives, the resources and the market that the organisation competes within.

In the UK, we have seen a number of large retailers fail recently because they have not maintained a viable fit between what they are looking to achieve, the resources they have and the changing market environment. HMV and Blockbuster are two case studies that history will probably show were too fixed in their ways of doing business and ignored the changing market environment they were trying to compete within.

Kotler mentions early in the chapter that strategic planning came into being in the early 1970’s post a “succession of shock waves” that rocked the markets in the US. Surely, we must ask ourselves the question; do we need a new way to manage businesses in 2013 post the global recession that we have lived through in recent years and are still probably in ?

From the work I do in helping businesses grow, I have followed Kotler’s approach to strategic planning with minor changes, depending upon the organisation I am working with.

The strategic planning process I most often use is as follows;

• Business Mission- why is the business in business ?

• What is the business objectives – in terms of value measure ?

• What is the market the organisation wishes to compete within ?

• Where are the market opportunities ? 

• What is the product & brand strategy ? 

• Who is the target audience ? 

• What is the marketing implementation plan ? 

• KPIs & CSFs and feedback/review

The above process is very similar to The Business Strategic Planning Process as seen on page 49 of Kotler’s book. It uses a different language that may be due to time span and culture.

The important point is that planning a successful business today follows the same key stages as strategic planning suggested back in the 1970’s.

Understanding the critical role of marketing in organisations and society

Marketing is a way of doing business rather than a function of the business. We all probably know organisations that have marketing departments but their core driving force is something else; it could be financial, sales or manufacturing.
Philip Kotler gives us a very simple model of a marketing system, it connects a group of sellers/an industry to a group of buyers/a market via an exchange of goods/services in return for money. This exchange is two way and involves communication about the goods/services and also a build up of information that provides a better understanding of each other.
If this system is applied effectively within the organisation, it will deliver the overall aims/goals of that organisation. If done badly, it can lead to closure.
Marketing can be explained by this simple model but it must be implemented well for it to be effective.
We are all aware that doing business in 2013 in Europe and North America, is extremely challenging and I would say that for businesses to survive in tough economic times, they need to embrace the principles of marketing like they have never embraced them before.
Many organisations I know are working in markets that are shrinking - just to stand still in terms of sales income and gross profit, often means having to put on double digit market share gains. Gaining market share in a static market means having to take business away from a competitor, not always easy but in a shrinking market, you can assume that all competitors will have their strategies and plans in place to do all they can not to lose valuable business.
Using the Kotler model of a marketing system, clearly shows us that to increase share in a shrinking market, organisations need to connect with more of the market, i.e. gain more customers. I always believe that it's important to make sure you look after what you have to ensure any leakage is kept to a minimum. Do this first to make sure any gains are not offset by losses. Then work out how you will take share away from your competitors.
Understanding your competitors as well as possible should highlight some areas where you could attack. It may be in the area of the brand proposition, service or some form of promotional offer to get them to switch brands.
At the end of the chapter, Kotler says "companies cannot survive today by simply doing a good job". In 1988 this was probably true but in 2013, it almost certainly is.
Marketing as a way of doing business is I believe the only way for orgainsations to develop their business cultures, set business objectives and go about developing long term profitable customers.

First ever blog

I have been fascinated by Philip Kotler's Marketing Management since I was introduced to his book when I first worked in marketing. I have often referred to his book during my marketing career and it has been very helpful on many occasions.

My blog is going to explore his book, chapter by chapter, and see how the concepts & ideas can be used in today's business environment.

The edition I will be referring to is the Sixth Edition - published in 1988.

The first chapter looks at "understanding the critical role of marketing in organizations and society"