Let’s start with a simplified definition of strategy and then move on from there. Many if not most of you have watched a football game, either live or on TV. Perhaps you’re a fan of a particular team or you’ll watch the Super Bowl (perhaps just to see the commercials). Every football coach knows that you don’t enter a game without a game plan—the process of taking plays out of the playbook and putting them into a game plan for a specific opponent. This isn’t an easy task. The coaching staff has to consider the skills and experience of the players on the team as well as the strengths—and weaknesses—of the opposing team, and they will develop the plays that they feel will best neutralize the strengths of the opposing team while taking advantage of the strengths of their own players.
That football game plan is a great analogy for a business’s overall strategy —the plans, actions, objectives, and goals that outline how the business is going to compete in its chosen markets given its portfolio of products or services. In marketing, a portfolio is a collection or listing of all the goods and services that a company sells to customers.
Distinctions are often made between corporate-level strategy, business-level strategy, and functional strategy, so let’s briefly define them here. Corporate-level strategy covers the entire business in a complex organization where there are multiple businesses, divisions, or operating units (sometimes called strategic business units , or SBUs). Corporate-level strategies are formulated and implemented by upper management. Business-level strategy is the strategic plan created for a single business or operating unit, and these plans are generally developed by middle management to support the corporate-level strategy. Corporate-level and business-level strategies lead to the development of functional strategy , which is the plan to achieve the corporate- and business-level objectives in functional areas such as human resources, marketing, and production.
People say a picture is worth a thousand words, so take a look at how this breaks down in Figure 2.2.
Figure 2.2 Different Levels of Strategy Required in Complex Organizations (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
Many organizations have only a single product line, market focus, or business, so they will require only a business-level strategy. However, with larger organizations, it can be important to break the overall business into smaller, more manageable strategic business units to maintain an overall focus on the business as a whole and pull the business-level strategies into a cohesive whole.
Consider, for example, Procter & Gamble . The producer of such diverse products as diapers, Tide detergent, and Oral-B toothpaste has five industry-based strategic business units—baby, feminine, and family care; beauty; health care; grooming; and fabric and home care, family care, and new ventures. Each of these SBUs has its own chief executive officer and functions essentially as a standalone business under the corporate “umbrella.” 5
When you consider the complexities of the diverse markets Procter & Gamble serves, this makes sense. Competing in the oral care market is vastly different than competing in baby products, so separate SBUs require separate strategic plans.
There are many variations of the strategic planning process—almost as many as there are publications on strategic planning. For our purposes in this textbook, we’re going to use the five-step process outlined in Figure 2.3. Keep in mind, however, that the process may be a little different for some organizations depending on the stage of their products in the product life cycle (which we’ll learn more about in Products: Consumer Offerings), the maturity of the industry in which the business participates, how competitive the marketplace is, and other factors.
of arrows pointing to the right. Starting at the left, the steps are define the vision statement, establish the mission statement, perform a gap analysis, establish objectives and goals, and monitor progress." width="1939" height="228" />
Figure 2.3 Steps in the Strategic Planning Process (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)
These elements will all be defined in more detail in the sections that follow.
The strategic planning process begins with a solid understanding of what the organization is trying to create—that is, its vision statement . A vision statement is forward-looking and is intended to create a mental image of what the organization wants to achieve in the longer term. Vision statements should be both inspirational and aspirational.
Let’s look at some vision statements from companies with which you might be familiar so you’ll see how this works:
For more information on how to write a vision statement, take a look at this brief video from RapidStart Leadership.
Now that the vision statement is complete, it’s time to tackle the mission statement, which quite simply answers the question, Why does the company exist? The mission statement of an organization sums up in one to three sentences what the company does, who it serves, and what differentiates it from its competitors. Whereas the vision statement provided the destination (i.e., Where is the business going?), the mission statement provides the guideposts for the business to get there.
Mission statements serve two purposes. First, a well-written mission statement helps employees remain focused on the aims of the business. Second, it encourages them to discover ways of moving toward increasing their productivity in order to achieve company goals. Mission statements aren’t just for internal use, however. Prospective investors also often refer to a company’s mission statement to see if their values align with those of the company. Once again, let’s bring this definition to life by including a few mission statements from well-known companies:
There are also two types of mission statements: customer oriented or product oriented. What’s the difference? A customer-oriented mission statement defines the business in terms of how it intends to provide solutions to customer needs. As examples, take a look at some of these customer-oriented mission statements:
The other type of mission statement is a product-oriented one. With a product-oriented mission statement, the focus is on the offering itself rather than the needs of customers. Again, look at a couple of examples of product-oriented mission statements so you can see the difference between these mission statements and the customer-oriented mission statements shown above:
For more information on how to write an effective mission statement, check out this brief video from Bplans.
Then watch this video from Entrepreneur.
Before we get into the specifics of how to perform a gap analysis, let’s define it. Simply put, a gap analysis is an internal analysis of the company or organization to identify and review any inherent deficiencies that may hinder its ability to meet its goals. In other words, a gap analysis determines what factors in the organization may be causing it to underperform.
A gap analysis answers the following questions:
A gap analysis as part of the strategic planning process is a way to determine where the “soft spots” are and where adjustments need to be made before setting a course of action.
There are four steps to completion of a gap analysis. Let’s take a look:
With the mission and vision statement in place, along with a candid view of the organization through gap analysis, we can now define the goals and objectives for the organization. Goals and objectives are a critical part of every organization, particularly in the strategic planning process. When written effectively, these goals provide a sense of direction and a clearer focus. It’s these goals that give the organization a target at which it can aim, so to speak.
But before we go further, let’s differentiate between goals and objectives. Both terms refer to desired outcomes that the organization wants to achieve, but that’s where the similarity ends. Goals are statements of desired outcomes that are expected to be achieved over a longer period of time, typically three to five years. Goals are broad statements of the desired results; they do not describe the methods that will be utilized in order to achieve those results. For example, common business goals may include increasing revenue or market share or reducing the company’s carbon footprint. 20
On the other hand, objectives are “action items.” They are specific targets to be achieved within a shorter time frame, generally one year or less, in order to achieve the stated goal. Whereas goals describe the end result, objectives describe the actions or activities that need to take place in order to achieve the goal. For example, if your goal was to increase market share, the objective would likely be stated as something like “Increase market share to 6 percent by the end of the year.” 21
The goals and objectives of an organization define the key actions that allow it to execute its chosen strategy. However, in order to be effective, goals and objectives should be SMART— specific, measurable, attainable, realistic/relevant, and time-bound—as shown in Figure 2.4.
For more information on establishing SMART Goals, check out this video from SMA Marketing .
If you had decided to save money from each of your paychecks to eventually purchase a new car, you’d probably check the balance in your savings account on a regular basis to see how you’re progressing toward your goal. The same is true in the strategic planning process. In order for goals and objectives to be effective, marketers need to monitor them on a continuous basis to determine if they’re on track or if the goals and objectives need to be refined in response to unforeseen circumstances.
One way that marketers accomplish this is through the use of a marketing dashboard. Like the dashboard in your car, which tells you at a glance how much fuel you have, how fast you’re going, and a host of other important information, a marketing dashboard summarizes important marketing metrics and key performance indicators (KPIs; to be covered later in this chapter) into easy-to-understand measurements. 23 This enables marketers to view ongoing progress so that they can be aware of potential problems before they actually become serious issues.
Marketing manager jobs differ by company and industry, but in general it’s a leadership position in charge of the marketing strategy at a company or for a product. Marketing managers often complete research, create pricing parameters, and work with other departments within the company such as finance, legal, advertising, promotion, and product development. Read this Marketing Manager article to learn more about the specifics of what a marketing manager does and the types of marketing manager that exist. It’s commonly known that marketing managers need to be proficient in problem-solving. Read this article to learn why it’s important and the specific skills you’ll need.
There is growth potential in being a marketing manager. The US Bureau of Labor Statistics projects a 10 percent growth in the job role from 2021 to 2031, and you can read more about the job outlook here.
Would you like to know more about the job role? Read this Forbes article to learn the top skills necessary, the typical path to this job, and degree requirements.
There are many types of jobs in marketing. You’ll be introduced to several throughout this textbook. You’ll also want to check out this list of 15 job titles and what the job role encompasses. Keep in mind that regardless of where you start in marketing, you have options as you move in your career journey. Many people move between marketing roles, and the skills you learn in each role will help you in other roles.
It’s time to check your knowledge on the concepts presented in this section. Refer to the Answer Key at the end of the book for feedback.
