Principles of Marketing: Marketing Strategy and Planning - Strategic Planning Process, Corporate SBU Functional Levels

What It Is

The Strategic Planning Process is a systematic approach to developing a marketing plan that aligns with an organization's overall goals and objectives. It involves analyzing the internal and external environment, identifying opportunities and threats, and creating a roadmap for achieving desired outcomes. For example, Amazon's strategic planning process helped the company expand from an online bookstore to a global e-commerce leader.

Key Concepts & Frameworks

• SWOT Analysis: Identifying an organization's Strengths, Weaknesses, Opportunities, and Threats to inform strategic decisions. Example: Nike's strength in brand recognition helped the company capitalize on opportunities in the global sports market.
• PESTEL Analysis: Examining the Political, Economic, Social, Technological, Environmental, and Legal factors that impact an organization's marketing strategy. Example: Coca-Cola's PESTEL analysis revealed the need to adapt to changing consumer preferences and environmental regulations.
• AIDA Model: A step-by-step process for creating a marketing message that grabs Attention, generates Interest, creates Desire, and prompts Action. Example: Apple's AIDA model helped the company launch the iPhone and create a loyal customer base.
• 4Ps/7Ps: A framework for understanding the marketing mix, including Product, Price, Promotion, and Place (4Ps), as well as People, Process, and Physical Evidence (3 additional Ps). Example: Amazon's 7Ps strategy helped the company create a seamless customer experience across online and offline channels.
• CLV (Customer Lifetime Value): A formula for calculating the total value of a customer over their lifetime. Example: A company with a CLV of $1,000 per customer can invest in marketing efforts that generate a return on investment (ROI) of 10% or higher.
• ROI (Return on Investment): A formula for calculating the return on investment in a marketing campaign. Example: A company with a ROI of 20% on a social media campaign can expect to generate $20 in revenue for every $1 invested.
• Market Segmentation: Dividing a market into distinct groups based on demographics, needs, or behaviors. Example: Procter & Gamble's market segmentation strategy helped the company create targeted marketing campaigns for specific consumer groups.
• Target Market: A specific group of customers that an organization aims to serve. Example: Patagonia's target market is outdoor enthusiasts who value sustainability and quality.

How to Apply It

• To develop a marketing strategy, start by conducting a SWOT analysis to identify internal and external factors that impact your organization.
• Use the AIDA model to create a marketing message that resonates with your target audience.
• Apply the 4Ps/7Ps framework to understand the marketing mix and create a cohesive customer experience.
• Calculate CLV to determine the value of your customers and inform marketing decisions.
• Use ROI to evaluate the effectiveness of your marketing campaigns and make data-driven decisions.

Common Mistakes

• Mistake: Failing to conduct a thorough SWOT analysis before developing a marketing strategy.
• Correction: Conduct a comprehensive SWOT analysis to identify internal and external factors that impact your organization.
• Mistake: Ignoring the importance of market segmentation in targeting specific customer groups.
• Correction: Use market segmentation to divide your market into distinct groups based on demographics, needs, or behaviors.
• Mistake: Focusing solely on short-term gains without considering long-term customer value.
• Correction: Calculate CLV to determine the value of your customers and inform marketing decisions.

Exam / Interview Tips

• Be prepared to explain the difference between market research and marketing research.
• Understand the key components of the 4Ps/7Ps framework and how to apply them in a marketing context.
• Be able to calculate CLV and ROI, and explain how these metrics inform marketing decisions.
• Be prepared to discuss the importance of market segmentation and how to apply it in a marketing context.

Quick Practice

Scenario: A company wants to launch a new product in the market. What is the first step in developing a marketing strategy?

A) Conduct a SWOT analysis B) Create a marketing message using the AIDA model C) Apply the 4Ps/7Ps framework to understand the marketing mix D) Calculate CLV to determine the value of customers

Answer: A) Conduct a SWOT analysis

Explanation: Conducting a SWOT analysis is the first step in developing a marketing strategy, as it helps identify internal and external factors that impact the organization.

Scenario: A company wants to evaluate the effectiveness of a marketing campaign. What metric should they use?

A) CLV B) ROI C) Market share D) Customer satisfaction

Answer: B) ROI

Explanation: ROI is a metric that measures the return on investment in a marketing campaign, making it an effective way to evaluate its effectiveness.

Scenario: A company wants to target a specific customer group. What should they do?

A) Conduct a market segmentation analysis B) Create a marketing message using the AIDA model C) Apply the 4Ps/7Ps framework to understand the marketing mix D) Calculate CLV to determine the value of customers

Answer: A) Conduct a market segmentation analysis

Explanation: Conducting a market segmentation analysis helps identify distinct groups of customers based on demographics, needs, or behaviors, making it an effective way to target specific customer groups.

Last-Minute Cram Sheet

• SWOT Analysis: Identifies internal and external factors that impact an organization's marketing strategy.
• PESTEL Analysis: Examines the Political, Economic, Social, Technological, Environmental, and Legal factors that impact an organization's marketing strategy.
• AIDA Model: A step-by-step process for creating a marketing message that grabs Attention, generates Interest, creates Desire, and prompts Action.
• 4Ps/7Ps: A framework for understanding the marketing mix, including Product, Price, Promotion, and Place (4Ps), as well as People, Process, and Physical Evidence (3 additional Ps).
• CLV (Customer Lifetime Value): A formula for calculating the total value of a customer over their lifetime.
• ROI (Return on Investment): A formula for calculating the return on investment in a marketing campaign.
• Market Segmentation: Dividing a market into distinct groups based on demographics, needs, or behaviors.
• Target Market: A specific group of customers that an organization aims to serve.
• Marketing Myopia: Focusing on the product instead of the customer need.
• Market Research: Gathering data about a target market to inform marketing decisions.
• Marketing Research: Gathering data about a target market to inform marketing decisions, but also involves developing and testing marketing strategies.