Chapter 12 Strategic marketing management

Plans are nothing. Planning is everything. This quotation is generally attributed to Dwight D. Eisenhower (1890–1969), US general and later president. The actual quotation is: ‘In preparing for battle I have always found that plans are useless, but planning is indispensable.’ Source: R. Andrews, The Columbia dictionary of quotations, Columbia University Press, New York, 1993, p. 688. The quotation has also been attributed (unsourced) to Napoleon; refer to N. Rees, Brewer’s Quotations, Cassell, London, 1994, p. 250.

Objectives By the end of this chapter, you should: understand the importance of strategic management be able to prepare marketing budgets be able to develop action plans to facilitate the effective implementation of the recommended marketing strategies be able to develop an effective marketing performance evaluation and control system.

The strategic marketing planning process Situation analysis Problems & opportunities Strategic marketing management – budgeting and implementation The steps are: senior management approval of strategy recommendations and budget implementation – action planning evaluation and control of marketing performance. Marketing objectives Marketing strategies Budget Implementation Evaluation & control

Marketing budgets (1) One of the most scrutinised parts of any strategic marketing plan (SMP) is the budget. Those responsible for approving the strategies outlined in the SMP want to know just what impact these actions will have on the bottom line over the time frame of the SMP.

Marketing budgets (2) Marketing budgets comprise of two main sets of information: Estimated revenue – This work is undertaken in the marketing objective setting process (discussed in Chapter 4). Therefore, incorporate this revenue data into the budget section. Estimated costs – These costs need to be based on a realistic assessment of the costs likely to be incurred, in order to achieve the marketing objectives, over the time frame of the SMP.

Implementation (1) ‘OK, so the recommendations in the SMP are approved. So, what are you going to do on Monday?’ The first stage of transforming a strategy plan into reality is to prepare a comprehensive action plan. This includes immediate actions and actions to take place over the time frame of the SMP.

Implementation (2) For each level of marketing organisation, prepare an implementation planning grid (shown in the next slide). Use this grid to identify specific tasks to be performed by those individuals who are responsible for various facets of implementation. Not all of the boxes are applicable for each individual. Therefore, only complete those boxes that are relevant for the given individual, or groups of individuals, with implementation responsibilities.

Implementation planning grid Functions Interacting Allocating Monitoring Organising Actions Programs Systems Policies Skills

Evaluation and control (1) ‘If it can’t be measured its not worth doing.’ Evaluation and control processes are essential for strategic marketing planning. Performance needs to be evaluated against the marketing objectives that were established.

Evaluation and control (2) A marketing control system Benchmarking Measurement Performance Corrective action

Evaluation and control (3) A marketing control system Benchmarking Identification of an appropriate standard Comparative – to competitors, industry averages, world best practices or historical performance levels. Ideal – against what is thought to be perfection. Measurement Performance Corrective action

Evaluation and control (4) A marketing control system Two classes of measurement Effectiveness – comparison of outputs to objectives. Includes assessment of competitive positioning, customer satisfaction and loyalty, customer attitudes, as well as market share, sales and profits. Efficiency – measures productivity. ‘Efficiency is concerned with doing things right whereas effectiveness is doing the right things.’ (Drucker) Benchmarking Measurement Performance Corrective action

Evaluation and control (5) A marketing control system Benchmarking It is necessary to determine why problems have occurred. Essentially, problems can occur due to either unsatisfactory marketing effort or changes that have occurred in the external environment. Strategic fit may be a problem (see next slide). Measurement Performance Corrective action

Evaluation and control (6) Strategic fit Strategy Excellent Poor Implementation Success Rescue or ruin Trouble Failure Excellent Poor A model developed by T.V. Bonoma.

Evaluation and control (7) A marketing control system Benchmarking Adaptive control system – a proactive system whereby objectives are modified against changes that have occurred in the external environment. Performance is assessed against the modified objectives. Measurement Performance Corrective action