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Wednesday, August 4, 2010

Characteristics of a Strategic Plan

Strategic planning consists of developing a company mission (to give it direction), objectives and
goals (to give it means and methods for accomplishing its mission), business portfolio (to allow
management to utilize all facets of the organization), and functional plans (plans to carry out daily
operations from the different functional disciplines). Since most companies are interested in
growth, this chapter explores several growth alternatives within the context of strategic planning
and portfolio analysis. The product/market expansion grid shows four avenues for growth: market
penetration, market development, product development, and diversification. Many companies
operate without formal plans. However, formal planning can provide many benefits:

1). It encourages management to think ahead systematically.
2). It forces managers to clarify objectives and policies.
3). It leads to better coordination of company efforts.
4). It provides clearer performance standards for control.
5). It is useful for a fast-changing environment since sound planning helps the company
anticipate and respond quickly to environmental changes and sudden developments.
II. Marketing organization
A. Evolution of the marketing department
1. Simple sales department—sales vice president, selling orientation, occasional outside support
2. Sales department with ancillary marketing functions
3. Separate marketing department—still with a focus on sales
4. Modern marketing department/effective marketing company—beginning of customer orientation
a) Sales and marketing relatively equal
b) Planning from marketing
c) Implementation by sales
d) Key is that all employees must realize that their jobs are to create, serve, and satisfy customers.
5. Process- and outcome-based company—focus of structure on key processes (new-product development, customer acquisition, etc.) versus departments
B. Organizing the marketing department
1. Functional organization
2. Geographic organization
3. Product- or brand-management organization
a) Advantages and disadvantages
b) Alternative to product managers is product teams
4. Market-management/customer management organization
a) For firms that sell their products to many different markets
b) Or those that deal with individual customers versus the mass-market or even market segments
5. Product-management/market-management organization
a) Known also as a matrix organization
b) Focus on meeting their market’s needs versus selling a particular product
6. Corporate/divisional organization—from no corporate marketing staff to a strong corporate marketing staff
In carrying out marketing analysis, planning, implementation, and control, the marketing manager needs information at almost every turn. He or she needs information about customers, competitors, dealers, and other forces in the marketplace. One marketing executive puts it this way: “To manage a business well is to manage its future; and to manage the future is to manage information”.

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