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Marketing Strategy: What It Is and How to Create One

A marketing strategy can set your business up for success. Learn why and how to make one for your business.

[Featured image] A women stands in front of a digital whiteboard and leads a marketing strategy meeting with several coworkers.

A marketing strategy is a long-term vision outlining a business’s value proposition to its customers. Rather than describing the concrete actions required in specific advertising campaigns, marketing strategies are a compass used to guide marketing efforts. 

While it may be tempting to hash out a marketing plan right away, thinking about the marketing strategy first can improve your product's success and give you a competitive advantage. Learn what marketing strategy is, why it matters, different types, and steps to create your own.

What is a marketing strategy? 

A marketing strategy is an overview of how a business or organization will articulate its value proposition to its customers. Generally, a marketing strategy outlines business goals, target market, buyer personas, competitors, and value for customers. It provides a long-term vision for overall marketing efforts, often looking many years ahead. 

Advantages of a marketing strategy

Marketing strategies can have a measurable impact on success. 

In 2022, CoSchedule surveyed 3,599 marketers and bloggers to identify their most successful marketing practices. They found that marketers who documented their marketing strategy were 331 percent more likely to report success than those who didn’t. Furthermore, marketers who were the most organized were found to be a whopping 674 percent more likely to report success [ 1 ].

Taking the time to create a marketing strategy can benefit your company's brand and bottom line. Watch this video to learn more about how to develop a winning marketing strategy:


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Marketing strategy vs. marketing plan

People often use the terms “marketing strategy” and “marketing plan” interchangeably, but in reality, they are two different processes.  

A marketing plan describes the concrete actions and marketing tactics undertaken to complete a marketing campaign. Meanwhile, a marketing strategy outlines the big picture of a marketing effort, such as the business's target customers. The strategy describes what the marketing objectives are, while the plan describes how those objectives are going to be achieved.

For example, imagine an e-commerce business that is trying to grow its customer base. They start a referral program to encourage word of mouth but it has little success. If they had created a strategy, they might have realized they needed to tap into new potential customers instead. A digital marketing strategy focused on targeted blog posts and search engine optimization (SEO) would have yielded better results.

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Types of marketing strategy 

There are many different approaches to marketing – such as social media marketing or content marketing – but strategies for market growth can be found in Ansoff’s matrix . These four strategies are: 

Market penetration 

Product development 

Market development


H. Igor Ansoff is a mathematician and business manager who created the matrix to help businesses define their strategies by varying what product is being sold and who the product is being sold to [ 2 ].

An image of Ansoff's matrix. The matrix includes tiles for "market penetration," "product development," "market development," and "diversification."

Ansoff’s matrix encourages markets to consider the four Ps , or the “marketing mix":

Product: What is being sold 

Place: Where it is being sold 

Price: What the product costs

Promotion: How the product is marketed to the target audience

The exact way that a marketer defines the four Ps for their marketing efforts will depend on the growth strategy they are using and the political and economic outlook of their market. 

Let’s take a closer look at each strategy from Ansoff’s matrix. 

Market penetration strategy 

Market penetration strategy is a growth strategy that involves selling existing products to existing markets. It is considered the least risky of all the strategies in Ansoff’s matrix. The strategy is typically considered most beneficial if the market is either growing or the marketer alters its promotional efforts through existing marketing channels [ 2 ]. 

McDonald's "I'm Lovin' It" campaign

An example of a market penetration strategy can be found in McDonald’s “I’m Lovin’ It” campaign from 2003. 

In the early 2000s, McDonald's faced flagging sales and plummeting stock prices. Rather than creating a new product (product development strategy), McDonald's instead focused on attracting existing customers in an existing market with a catchy ad campaign. The result was their wildly successful “I’m Lovin’ it” campaign, which featured a catchy new jingle sung by Justin Timberlake [ 3 ]. 

“I’m Lovin It” has since become McDonald’s longest-running marketing campaign since its founding in 1940 [ 4 ]. 

Product development strategy

A product development strategy involves the development of a new product for an already existing market. Typically, it is considered riskier than a market penetration strategy because it requires the creation of a totally new product. In order to be successful, product development strategies typically require innovation and further research into the existing market, including the profiles and needs of the target audience [ 2 ].  

Uni Kuru Toga's mechanical pencil for every day writing

An example of a successful (and surprisingly interesting) product development strategy can be seen in the Uni Kuru Toga mechanical pencil. 

As odd as it may seem, in the mechanical pencil world the Uni  Kuru Toga is something of a star. “[T]he Uni Kuru Toga is the best mechanical pencil for every day writing,” opined the New York Time’s Wirecutter in a 2018 article [ 5 ]. Wired, meanwhile, called it “the ultimate geek tool” [ 6 ]. 

What makes the pencil so unique? A specially designed internal gear mechanism that rotates the lead so it stays sharp as you write and diamond infused lead that doesn’t easily break under pressure. In effect, as a 2009 commercial for the pencil demonstrated, it was meant for people concerned with even handwriting and durable lead [ 7 ]. 

While the market for mechanical pencils was already well-established, the Uni Kuru Toga was able to find success through a product development strategy that offered consumers something new and useful.

Market development strategy

A market development strategy takes an existing product into new markets. Much like a product development strategy, a market development strategy is considered riskier than a market penetration strategy because it involves introducing a familiar product into an unfamiliar marketplace. While the product remains the same, the new place it is sold requires possibly new pricing and promotional efforts [ 2 ].  

Microsoft's Hololens technology

An example of a market development strategy is when Microsoft introduced its Hololens technology to an additional 29 markets in Europe in November of 2017 [ 8 ]. The augmented reality headset provides a unique user experience that allows professionals to work in a “mixed reality” environment. To promote their efforts, Microsoft released a YouTube video showcasing the unique use cases of the product in the workplace, such as through interactive employee training programs in industrial environments [ 9 ]. 

Diversification strategy

A diversification strategy involves the development of a new product for a new market. The novelty required of a diversification strategy means that it is also the riskiest of the Ansoff matrix’s four strategies. Diversification strategies require full attention on all of the four Ps – product, price, place, and promotion—but the biggest risks can also lead to the biggest rewards [ 2 ]. 

Apple's first iPhone

An example of a diversification strategy is when Apple introduced the first iPhone on June 9, 2007 at the MacWorld Expo. At the time, Apple was new to the mobile phone market, but they innovated in the space by adding a music player and web browser to their new touchscreen phone [ 10 ]. 

“Today Apple is going to reinvent the phone,” CEO Steve Jobs declared before an audience of reporters [ 10 ]. Through much of the presentation, Jobs outlined the phone’s unique value proposition to customers.

It worked. As of June 2022, there were an estimated 1.8 billion active iPhone users [ 11 ].

How to create a marketing strategy

A marketing strategy can set you up for marketing success. As you are creating your own marketing strategy, consider the following steps to help guide your process.

1. Define your business and marketing goals.

The first step in creating an effective marketing strategy is to clarify your business objectives and marketing goals. What are you trying to achieve with your market growth strategy?

The answer to this question will inevitably depend on your particular place in the market and your own comfortability with different risk levels. 

Some examples of business and marketing goals include: 

Grow customer base 

Increase sales 

Increase brand awareness 

Whatever your objectives, the purpose is simply to consider what you want to actually accomplish by expanding your marketing efforts. These goals will guide the development of your marketing strategy.

2. Conduct market research. 

Strategic marketing requires a comprehensive understanding of the marketplace, its economic and political context, and your product or service's place within it.

As you are conducting market research, you'll want to consider these factors: 

Competitors, particularly their value proposition and market share

Market size, including the realistic number of customers that would be interested in your products  

Market gaps where you can provide value

Possible economic and political realities that could impact the market in the long-term

 As you gain a better understanding of the market, you will also better understand how you fit into it and where you can grow in it. 

Read more: What Is Competitor Analysis? Definition + Step-by-Step Guide

3. Create a customer profile. 

The purpose of every marketing campaign is to connect with potential customers. Your marketing strategy needs to include a comprehensive profile of your target audience.

Consider your target audience in relation to the four P's. Think through the following: 

Based on what you know about the market, who is your target audience? What are their key demographics? 

What is your product’s value proposition to your customer? (Product)

How much is your target audience willing to pay for your product or service? (Price)

Where does your target audience shop? (Place)

What marketing tactics are most persuasive to your target audience? (Promotion)

As you research and consider these questions, your customer should come more clearly into view, so you can create a strategy with maximum impact. 

4. Synthesize and strategize. 

Finally, take the goals you have outlined, research you have conducted, and profiles you have created to construct a marketing strategy. The critical question you will want to answer is: how will you align with your target market to meet your overall objectives?

Your answer to this question will be your strategy.  

Ultimately, your marketing strategy should cover the following: 

Business and marketing objectives

Market overview, including key facts and figures

Competitor research 

Customer profile

General statement of strategy highlighting the product’s value proposition to customers

You might consider whether a social media strategy makes sense for your product or service. If so, your strategy could include user-generated content. Go a step further to consider which social media channels fits best with your target audience.

While you may have collected much information as you were conducting research, your marketing strategy doesn’t need to be too long. In fact, a strong marketing strategy can be as short as one page. Remember, this is meant to act as long-term guide for directing specific marketing tactics, not an action plan of how a marketing campaign will be done. 

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Article sources

CoSchedule. “ The Marketing Management + Strategy Statistics You Need to Know in 2019 , https://coschedule.com/marketing-statistics.” Accessed February 6, 2023.

Oxford College of Marketing. “ Using the Ansoff Matrix to Develop Marketing Strategy , https://blog.oxfordcollegeofmarketing.com/2016/08/01/using-ansoff-matrix-develop-marketing-strategy/.” Accessed February 6, 2023.

The Take Out. “ TIL McDonald’s ‘I’m Lovin’ It’ jingle was born out of desperation , https://thetakeout.com/history-of-mcdonald-s-i-m-lovin-it-jingle-1846400888.” AccessedFebruary 6, 2023.

Chicago Magazine. “ Five Things You Never Knew About ‘I’m Lovin’ It’ , https://www.chicagomag.com/Chicago-Magazine/November-2014/McDonalds-Im-Lovin-It-Campaign/.” Accessed February 6, 2023.

NYT Wirecutter. “ The Best Mechanical Pencils , https://www.nytimes.com/wirecutter/reviews/best-mechanical-pencils/.” Accessed February 6, 2023.

Wired. “ Kura Toga: The Ultimate Geek Tool , https://www.wired.com/2011/11/kuru-toga-the-ultimate-geek-tool/.” Accessed February 6, 2023.

YouTube (Uni Ball UK). “ Uni Kuru Togat from Mutsibishi Pencil Company , https://www.youtube.com/watch?v=80k7Jl1o8Lc&t=22s.” Accessed February 6, 2023.

Tech Crunch. “ Microsoft expands HoloLens headsets to 29 new markets, now up to 39 , https://techcrunch.com/2017/11/01/microsoft-expands-hololens-headsets-to-29-new-european-markets/.” Accessed February 6, 2023.

YouTube (Microsoft HoloLens). “ Microsoft HoloLens: Mixed Reality in the Modern Workspace , https://www.youtube.com/watch?v=EIJM9xNg9xs.” Accessed February 6, 2023.

Computer World. “ Update: Jobs touts iPhone, Apple TV , https://www.computerworld.com/article/2549128/update--jobs-touts-iphone---appletv-.html.” Accessed February 6, 2023.

Earthweb. “ How many people use iPhones in 2022? , https://earthweb.com/how-many-people-use-iphones/.” Accessed February 6, 2023.

This content has been made available for informational purposes only. Learners are advised to conduct additional research to ensure that courses and other credentials pursued meet their personal, professional, and financial goals.

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The Definitive Guide to Strategic Marketing Planning

By Joe Weller | June 23, 2017

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In this article, we’ve researched and outlined the key components of a strategic marketing plan that will help you align your overall marketing and business goals.

Included on this page, you’ll find the essential steps to develop a strategic marketing plan with free downloadable templates, examples of how various marketing processes work , and how marketing automation can give you a competitive edge .

5 Essential Steps for a Successful Strategic Marketing Process

The strategic marketing process is a deliberate series of steps to help you identify and reach your goals. Even more, you’ll discover what your customers want and develop products that meet those needs. Here are the steps to a successful strategic marketing process.

Marketing Process Overview

Strategic marketing planning involves setting goals and objectives, analyzing internal and external business factors, product planning, implementation, and tracking your progress. Consider the example of Apple, winner of the CMO Survey Award for Marketing Excellence for the past seven years. Here’s an example of the strategic marketing plan for one of the most successful companies in the world.   Mission: Apple is dedicated to making innovative, high-quality products.

Situation Analysis: Apple’s competitive advantage is driven by its commitment to understanding customer needs, focusing on the products that are core to its mission, and fostering a collaborative work culture.

Marketing Strategy: Apple usually is first to the marketplace with new products and the company relies on brand loyalty from existing customers as a strategy when launching new products and services.

Marketing Mix: While Apple offers a range of products, it values premium pricing and relies on strict guidelines for distribution.

Implementation and Control: Each Apple product complements the others and work within the same ecosystem, so customers tend to stay with the brand, creating loyal consumers.   The strategic marketing process puts all the pieces together so that everything you do contributes to the success of your business. Rather than executing haphazard activities and ideas, developing a solid plan that weaves goals and tactics into a seamless experience is essential. You can follow these steps to create products and services that will delight your customers and beat out your competitors.

Step One: Mission

First, identify and understand the company’s mission. Maybe it’s written down and promoted throughout the organization. If not, talk to stakeholders to find out why your company exists. A mission statement explains why a company is in business and how it can benefit consumers. Sometimes, the mission statement is aspirational, motivating staff and inspiring customers. Or it is simply a straightforward statement about who you are. Either way, you can’t plan a marketing strategy without knowing clearly what business you are in and why.   Here are some example mission statements:   Citigroup: Our goal for Citigroup is to be the most respected global financial services company. Like any other public company, we’re obligated to deliver profits and growth to our shareholders. Of equal importance is to deliver those profits and generate growth responsibly.   IKEA: At IKEA, our vision is to create a better everyday life for many people. Our business idea supports this vision by offering a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them.   Universal Health Services: To provide superior quality healthcare services that: PATIENTS recommend to family and friends, PHYSICIANS prefer for their patients, PURCHASERS select for their clients, EMPLOYEES are proud of, and INVESTORS seek for long-term returns.   Unlike the other steps in the planning process, senior leaders or the board of directors typically develop the mission statement and corporate objectives. Your role is to identify those objectives in the planning process to ensure that your efforts stay aligned with corporate leadership.   The mission statement is a core message that guides and influences your marketing strategy. Questions to ask when evaluating the mission:

Step Two: Situation Analysis

The second step of the strategic marketing process is to evaluate internal and external factors that affect your business and market. Your analysis will illuminate your strengths and the challenges you face — either with internal resources or with external competition in the marketplace. Situation analysis provides a clear, objective view of the health of your business, your current and prospective customers, industry trends, and your company’s position in the marketplace.   There are several methods to conduct this analysis. A typical analysis is called a SWOT analysis: strengths, weaknesses, opportunities, and threats.

Strengths and weaknesses are internal factors, under your company’s control. What do you do well? What needs to be better? Opportunities and threats are external factors, such as interest rates or a new competitor in the market. Here are some questions that can help you identify internal and external factors:

SWOT Analysis with Summary Template

Download SWOT Analysis Template With Summary

WORD | Smartsheet

A 5C analysis (Company, Customers, Competitors, Collaborators, Climate) is another way to evaluate the market environment. Like SWOT, it includes an internal analysis as well as an exploration of external factors.

strategic marketing plan combines

Here are some questions you can ask when working on a 5C analysis:

Download 5C Analysis Template

Excel   |   PDF

You can also conduct a PEST analysis (Political, Economic, Social, Technological), which is similar to the climate section of a 5C analysis. This method provides a comprehensive analysis of external factors that could affect your company.

PEST Analysis

Here are some questions you can ask when performing a PEST analysis:

Download PEST Analysis Template

Your analysis, no matter which method you use, will help you list the most critical problems and relevant opportunities, as well as show you how well your company can tackle projects. Once you have a clear picture of your business, you can identify potential markets and products.

Step Three: Marketing Plan

Now that you’ve identified opportunities through your analysis, you should prioritize and map out which ones you are going to pursue. Writing a marketing plan will specify your target customers and how you will reach them, and should also include a forecast of the anticipated results. These questions can help:

The data from your market research and situation analysis will help you build these projections into your plan.   Define Your Target Audience

Few companies can meet the needs and wants of the entire market. You want to split the market into a segment that aligns best with your strengths and opportunities. Your goal is to identify customers. You can select your target market by choosing all kinds of characteristics, behaviors, and demographics. The important thing is to make sure the audience is clearly defined and large enough to support your product or service.  

how to segment your target market

  Even though you may have some information about your customers based on your situation analysis, you may need to conduct more research on their needs and wants. With research, you can create detailed profiles or personas of your ideal customers. The more you know about your target audience, the more effectively you can offer them value through your product or service. Nothing matters more than how you make customers feel about your company.   Set Measurable Goals 

How will you know if your plan succeeds? You need specific, measurable goals with milestones that measure your progress. Do you want to increase your sales? The goal you set should specify how much you want to grow the sales number, and the timeframe for meeting that target. Each goal should be actionable and attainable through tactics you control. At this stage, avoid contingent goals, which are dependent on circumstances beyond your control. With each goal, list the tactics or steps you will take to achieve it. Combine simple, clear, and precise goals (whether it’s gaining customers, improving brand recognition or something else) with a detailed plan that defines the tactics to meet your goal. For more information on writing SMART (Specific, Measurable, Achievable, Relevant, Time-Bound) goals, read this article .    Identify and Set a Marketing Budget 

Now it’s time to allocate the resources that will turn your plan into action. Your budget will outline all the expected costs for implementing your marketing plan, including advertising, online content, branding, public relations, staffing costs, and more. Depending on the size of your budget, you may have to make some tough choices about which goals and tactics are the top priorities. Or you may have to adjust your tactics until you reach a budget that’s affordable. By creating the budget, you can finalize and stick to your plan. For more help with marketing budgets, read 12 Free Marketing Budget Templates .

Step Four: Developing Marketing Mix Decisions

At this stage of the strategic marketing process, it’s time to focus on the “how” of planning. Your marketing mix is based on the 4Ps of marketing, including Product, Price, Promotion, and Place.  In 1960, E. J. McCarthy first expressed the 4Ps, and it is probably the best-known way to describe the marketing mix. The 4Ps will guide the way you convey the value of your product to your customers. You are positioning your product and its competitive advantage. You need to be clear about what you are marketing: convenience or quality? And you need to know who is likely to buy your product or service.    By using the market research conducted in step two, you can develop the ideal marketing mix for your target audience and the type of product or service you sell. Although there are dozens of marketing channels, you will want to choose the tactics that will reach your prospects when they’ll be most receptive to your message.  

The Four Ps of Marketing

  Product: A product is a good or service that meets the needs of your target market. Even more, products solve problems. Whether you are developing a marketing plan for Coca-Cola, a luxury hotel, or a cell phone, you have to know what problem it solves and why your product is a unique solution. Make sure you have a clear understanding of all the details of your product, including its features, branding, and packaging.

Price: The price is the amount of money your target market is willing to pay for your product. Factors for price include any discounts, payment periods, and list price, as well as how much it costs your company to produce the product. You also need to consider overall marketplace conditions and your competition. How healthy is the economy? How much are your competitors charging for a similar product? Do they have the same business model?   The marketing message around your price depends on your market and your audience. Maybe it’s a way to position your product in a crowded marketplace. It might be a competitive advantage or a way of demonstrating the value of your product.

Promotion: The way you communicate with your target audience about the value and benefit of your product is promotion. Think of promotion as an opportunity to educate your customers about your products and services. You teach them the value of what you offer and how your product meets their needs or solves their problem. There are countless ways to educate them through marketing channels including direct marketing, paid search and social, advertising, public relations, and sales promotions that create brand awareness. This extends to almost every aspect of how you present the product to your target market, and is everything that teaches your audience about your product or brand. 

Place: Consider place as product distribution or how you plan to get your product to your customers and make the buying process easy. Place includes distribution channels, outlets, and transportation to get the product to the target market.

Step Five: Implementation and Control

Now it’s time to put your plan into action. Identify how and when you will launch your plan. At this stage of the strategic marketing process, you will reach out to customers to inform and persuade them about your product or service. Your next steps include getting the resources (cash and staffing) to market your product, organizing the people who will do the work, creating calendars to keep the work on track, and managing all the details for each goal. It will help you stay focused and energized if you create monthly benchmarks and projects, weekly action steps, and daily marketing appointments.   Remember, the strategic marketing process is dynamic. You need to regularly measure and evaluate the results of your plan in order to succeed. This will help you see whether you are accomplishing your goals and where you need to adjust tactics to improve your results. This can include looking at revenue, sales, customer satisfaction, the number of views your website receives, or other metrics. If the numbers aren’t meeting your projections, you can make changes to get back on track. You also need to monitor the actions of your competitors. How does the success of your product affect the price of similar items on the market? Are new products being released that could be perceived of greater value by your audience? Use this information to make informed decisions about the 4Ps for your product.

What Is the Definition of Strategic Marketing?

A marketing plan establishes the goals and tactics of every marketing campaign. It keeps everyone in your organization on the same page about the direction and purpose of your marketing efforts. A marketing plan also provides a way for you to measure your success. Without a plan, you won’t really know whether you’re succeeding.

While every individual campaign should have a plan, your company also needs a strategic marketing plan to guide your overall efforts. A strategic plan identifies your business goals, the marketplace in which you compete, your target audience, the ways you want to reach them, and how you will evaluate your success. It integrates everything you say and do to grow your company. A strategic marketing plan is not a static document that gets tossed in a drawer once it’s written. Instead, a plan is a living document that guides your work and is regularly updated to reflect changes in your business, your customers, and your competition.

The process of developing a strategic marketing plan is crucial to your business. You cannot create strategic marketing without strategic thinking. This planning helps you clarify your goals and identify where you see your business in the future, which ultimately strengthens your strategy. A strategic marketing planning process also helps with:

One caution: A strategic marketing plan focuses on your goals for your products and customers. The overall business plan, which outlines all of your company’s goals, should support the marketing plan. If they don’t work together, neither plan will succeed.   What Problems Should You Anticipate in the Strategic Marketing Process 

Every manager knows to expect the best but plan for the worst. In the marketing planning process, here are some challenges you may face:

How Do Specific Marketing Processes Work?

The steps of the strategic marketing process (mission, situation analysis, marketing plan, marketing mix, and implementation and control) are different than the process for a specific marketing effort. Specific efforts may support one goal or business line, but the strategic process supports the entire mission of your organization.   Target Marketing Process

Target Marketing Process

Target marketing identifies the specific market segments that will help your business grow. The three main activities of target marketing are segmenting, targeting, and positioning. Organizations use this S-T-P approach to pinpoint the best prospective customers.

Content Marketing Process 

Content marketers generate demand for a product by generating a steady flow of content that focuses on the problems and desires of potential and current customers. Here are the five steps of the content marketing process: 

Product Marketing Process

The product marketing process is the pipeline from strategy to implementation for a product marketing campaign. To be successful, this process focuses on making sure the product continues to meet the needs of customers throughout the product cycle. Here are the stages of this process:

Inbound Marketing Process

Inbound Target Marketing Process

Inbound marketing draws prospective customers to your product by providing useful and quality content that entices them to find out more. The inbound approach includes content marketing, social strategies, and search engine optimization, all tactics that bring your target audience to you. It’s different than outbound marketing, a traditional approach in which you advertise your product or service, typically through television and radio, print ads, and direct mail. Here’s how inbound marketing works:

Email Marketing Process  

Email Campaign Segmentation Process

  Email marketing is one of the most powerful drivers of sales for many businesses. It has an advantage over direct mail because you can track and measure your results, and it tends to be less expensive than other marketing channels. Here’s an overview of the email marketing process:

How Is Marketing Automation Changing the Strategic Marketing Process?

Marketing automation is about software that streamlines, automates, and measures marketing processes and tasks. It reduces the amount of manual effort and tracking that marketing campaigns require. Automation makes your marketing, and your company, more efficient, effective, and profitable. Whether you have a small company or a large organization, you can gain a competitive edge by automating your ability to target your audience and track and measure your results. Here’s how:

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The Best Companies Combine Marketing and Strategy

One discipline was born from sales, the other, military theory.

My dear friend AG Lafley and I have written a book called Playing to Win: How Strategy Really Works and we are gratified by all of the positive reviews — The Economist, the Financial Times, Fortune, etc. Even on Amazon.com, the reviews have been 100% 4’s and 5’s.

But sometimes those 4’s inspire a blog post.

One of the Amazon reviewers, ‘Greg’ , said lovely, positive things about the book, but ranked it a 4 because: “I seriously question whether this is a strategy book or a marketing book. Yes, the word strategy pops up a lot, but the examples and the cases … belong to marketing.”

In his head, I am sure Greg has a definition of marketing and the book reflects his definition of marketing. But to make his point, he has to have a useful definition of strategy that is truly distinct from marketing. 

Therein lies the rub. As business thought and understanding has evolved, any useful definition of the difference between marketing and strategy has disappeared. That is why Greg could call a strategy book a marketing book. The dividing line between strategy and marketing has disappeared in practice.

It was not always so. Strategy and marketing emerged out of very different traditions.

Marketing came out of sales: given that a company wanted to sell stuff to customers, how could it think about doing that in an intellectually rigorous and planned way? The answer that emerged in the late 1940s was a thoughtful ‘marketing mix’ which gave rise in 1960 to the most famous concept in marketing history: the 4 Ps — Product, Price, Promotion, and Place.

The implicit notion behind this approach was this: if the company was going produce some kind of product (or service but this thinking really emerged in a products environment), it had better optimize the 4 Ps in order to sell as much of it as possible. The players explicitly considered in this equation were the company and the customer.

In stark contrast, business strategy emerged out of military theory: how could a company beat it is enemy? In the case of business, that meant its competition. Thus, the early business strategy thinking that emerged in the 1960s focused on the capabilities of the company relative to its competitors. Was the company farther down the experience curve than its competitors? Was it using the resources from its Cash Cows to fund its Stars to a greater extent than competitors could?

Unsurprisingly, the customer did not loom large in this early view of strategy. In military strategy, customer needs was a pretty simple notion. They — i.e., your citizens — wanted you — their military — to defend against or conquer the enemy. That is about it in terms of customer understanding.

Hence the roots of marketing involved the company and its customer while the roots of strategy involved the company and its competitors. And in that era, marketing and strategy looked a lot different.

But as the practice of each scrolled forward over time, they converged. Marketers figured out that the crux of the issue was product, price, promotion and place relative to competition and sometimes that meant completely changing every P in order to carve out a useful place relative to competitors with some set of customers. Strategists figured out that beating competition entailed having intimate knowledge of exactly what customers wanted so that the capabilities they invested in would actually meet a customer need in a way that would result in better performance than that of competitors.

When these two realizations manifested themselves, the line between marketing and strategy disappeared. Good marketing and good strategy are both about making choices that build and maintain a particular set of capabilities that enables the company to outperform its competitors with a particular set of customers.

Because business schools are generally dedicated to narrow knowledge fields and opposed to integrative knowledge, they have assiduously maintained two separate disciplines in marketing and strategy to the benefit of no one. And because companies have fallen in love with specialization in skill development and fragmentation of organizational structures, they have followed suit and generally maintain separate marketing and strategy departments. That is probably Greg’s organizational experience.

The very best companies in the world have eschewed this unproductive distinction between marketing and strategy, and P&G is one of them. That is one of the reasons why Playing to Win is co-written by its former CEO.

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What Is Strategic Marketing and Its Process?

June 1, 2022 max 7min read.

Strategic Marketing

This Article Covers :-

What Is Strategic Marketing?

What is the distinction between marketing and strategic marketing, what is the purpose of strategic marketing, factors that can make and break strategic marketing, what are the five steps of the strategic marketing process, what are strategic marketing examples.

Strategic marketing definition:

Strategic marketing is what companies do when they have a written marketing strategy that guides all of their activities. It is long-term in character and serves as the foundation for all marketing decisions. A strategic marketing is a viable plan for gaining a specified marketing-related goal (or goals). It considers what your company is already working well and what you’re missing in your dream, making you more likely to achieve it.

Is it safe to interpret that ‘digital’ is now a significant aspect of your marketing strategy? Yes.

“Make your marketing so beneficial that people will pay you for it,” chisel this into your minds throughout the product management process . In order to carry out strategic marketing, you should plan the process well in advance.

This blog will describe what it is and why it is vital to business success.

Strategic marketing has grown in popularity inside businesses over the last few years. However, there is still considerable misunderstanding about strategic marketing and its function in industries.

Strategic marketing, often known as marketing strategy, is a concept you may hear frequently but may not wholly comprehend and is solely relevant to larger businesses. In reality, strategic marketing thought should underpin all marketing activities undertaken by a small organization.

However, the ever-changing digital landscape may rapidly become daunting when a firm grows. How do you efficiently establish, fine-tune, and manage an agile digital marketing strategy while juggling various other duties and tasks?

Follow us along!

Let’s look at what marketing is and how it varies from strategic marketing.

Knowing what your customers want is essential to marketing. Through marketing, companies or enterprises continue to develop new methods and tactics to meet the demands and desires of customers. 

People sometimes confuse marketing and selling, although these are “two” completely separate concepts. Selling entails enticing clients to your goods to exchange them for cash, whereas marketing is concerned with the value of the trade. 

Put it like this; marketing is the process of identifying, developing, producing, and meeting customers’ demands.

The difference:

The distinction between marketing and strategic marketing is similar to the difference between a piece of cheese and using that piece of cheese to make some delicious lasagna – while the former is great on its own, it pales in comparison to its use as part of a larger plan that maximizes the benefit of all components.

Marketing efforts are put to plan using a variety of tools and strategies. The 4P’s of marketing, often known as the marketing mix , are essential tools and approaches that marketing specialists can utilize to align their marketing operations with company objectives (price, product, place, promotion). 

The 3C’s, corporation, customer, and competition are strategic marketing tools and strategies. According to Mintzberg, top strategic marketers spend most of their time analyzing each of the 3C’s to build a market strategy successfully.

Marketing promotes the company, its brand, and its products. Strategic marketing, on the other hand, aids business growth and success by providing a competitive advantage.

A strategic marketing plan combines targeted marketing methods with common goals, whereas marketing on its own is often a pointless activity.

Marketing plans reveal the goal of strategic marketing. Organizations have found that plans containing strategic marketing are critical to achieving positive results in areas such as product and brand recognition and retaining and expanding their customer base. 

Strategic marketing highlights this approach’s ability to refine organizational objectives.

Strategic marketing is the implementation of marketing disciplines to gain corporate objectives by creating and maintaining a sustainable competitive advantage . It covers high-level issues, including which markets to target, which services to provide, and how to price and promote them.

Your marketing strategy is arguably one of the most crucial components of expanding your business. 

You’ll be able to flesh out things such as prospective new growth prospects, which your actual customers are against who you thought they were, how to acquire more customers, and where to spend future marketing expenditures with an effective marketing plan.

Your knowledge of your intended market

Every marketing strategy has a specific target market in mind. Even if you’re unsure who you should target, start with information you already have. Finding out about your target audience’s demographics is good to start and create a buyer’s persona once you’ve nailed down the demographics.

Communicating The Value To Your Customers

Even the most stunning marketing methods won’t work until your customers understand the value of your product or service. It would help if you adequately described the benefits of your product.

Data Monitoring

There’s no excuse for not keeping a tight check on the data these days, especially with Google Analytics, a free marketing analytics tool. Companies can track which web pages generate the most hits, how long visitors remain on pages, where visitors come from, and much more, thanks to marketing data. Failure to devote the necessary time to data analysis can result in the loss of the overall marketing strategy.

The most successful businesses prioritize customer service before profit. Placing customers ahead of profits is counterintuitive, yet it works. “As soon as your firm focuses on providing value to clients, an almost spontaneous growth develops that is almost incomprehensible,” explains Marine-creator.

Include your marketing staff in R&D meetings and look for other ways your organization may provide value to people’s lives to achieve this level of attention.

The strategic marketing planning process allows marketers to assess their own and their competitors’ industry positioning and the techniques that can help them reach their target audience, answer consumer wants, increase brand awareness, and achieve other marketing and commercial objectives.

The steps to a successful strategic marketing approach are below.

1. Create a mission statement, goals, and objectives.

Before you do anything else, get down with your marketing executives and stakeholders and identify your company’s mission and the goals and objectives that will drive your strategic marketing.

2. Situation Assessment

Evaluating internal and external elements that affect your organization and market is the second step in the strategic marketing process. 

Your study will reveal your strengths and the challenges you face, whether they are related to internal resources or external competitors. 

Situation analysis delivers a clear, realistic picture of your company’s health, present and future consumers, industry trends, and market position.

3. Develop Marketing Strategies

Consider your marketing mix that relies on the 4 Ps of marketing .

Product : The goods or services your company provides in answer to client desires and demands.

Price : The product’s cost and the value it provides to the buyer.

Promotion : Your product’s marketing activities, which may include messaging tailored to your target market.

The physical and digital distribution channels that you use to facilitate sales.

4. Start Using Your Process

Execution is the final phase.

The content development process is now in motion, with benchmarks established, investments made, and agreed-upon strategies. 

You’ll need to collect and validate all data related to your marketing activity in addition to developing content.

5. Control and implementation

It’s now time to put your strategy into action. Determine how and when you will implement your plan. You will contact clients at this step of the strategic marketing process to inform and persuade them about your product or service.

Looking for some marketing strategy examples that can motivate you? It’s right here!

The marketing ecosystem is constantly changing, and it’s impossible to keep up with new trends, methods, and technologies. You can’t prosper if you’re trapped in the past and adopt outdated marketing tactics.

Spotify: Offer a Different User Experience

Spotify is one of the most well-known global brands today, but how did this Swedish company get popular? Spotify stands out as the first among the many streaming music providers because it focuses on helping consumers find new content.

Spotify, for example, allows users to choose music depending on their moods in addition to the standard genre filter. We’ve got you covered up whether you want to work out, sleep, or even sing in the shower!

Coca-Cola: Champion of Cause

Brands exploit social causes as a marketing technique, according to 56% of customers. This is one of the reasons why consumers are skeptical of brands. On the other hand, Coca-Cola has defied the stereotype by promoting “happy.” 

In Brazil, Coca-Cola developed “The Happiness Track,” a red truck that toured the streets and gave away free items to everyone who pressed the red button on the car.

The “sharing is caring” campaign aided the brand’s positioning in international markets.

Looking for the most successful growth marketing methods for generating leads and boosting sales? This article serves as a comprehensive guide to it. I hope you found it interesting!

More Like This :-

Failure to design a marketing strategy can lead to financial issues, low consumer volume, and business collapse in the worst-case situation.

Strategic marketing aids in the development of profitable products and services for the company. This is because strategic marketing begins with a SWOT analysis of the company, a consumer market analysis, and a market trend analysis.

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See how TeamGantt helps teams like yours meet deadlines, streamline communication.

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Successful marketing project starts with a plan.

Track event details and to-dos.

Scope out roadmaps and manage backlogs.

Manage design, copy, and video work.

Learn step-by-step how you can be a project manager that teams love.

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Strategic Marketing Plan Template & Examples

strategic marketing plan combines

Imagine setting out to climb Mt. Everest guided only by intuition. You wouldn’t make it very far without a detailed plan (and an experienced sherpa) to guide the way. 

Marketing may not be an extreme sport with life-or-death consequences, but you’ve got big goals to reach nonetheless. And your team’s success relies on a lot more than gut instinct. 

That’s why a strategic marketing plan is a must, no matter your industry. Think of it as the roadmap that gets your business where it needs to go each and every year. 

Drafting your first marketing plan can feel intimidating, but don’t worry. We’ll walk you through the basics, show you what a strategic marketing plan looks like, and even give you a couple of free templates to get started. Here’s what we’ll cover:

What is a strategic marketing plan?

Essential elements of a strategic marketing plan, free marketing plan templates and examples.

Let’s start from square one and define what a strategic marketing plan is. 

A strategic marketing plan is a formal document that guides your team’s marketing efforts throughout the year. It maps your annual marketing goals to your company’s overall business objectives, while also outlining how you’ll spend your yearly marketing budget.

A good marketing plan clearly outlines:

Keep in mind that your plan may vary based on your industry and goals. Length and format don’t matter as much as the details you include. Do your research, and make it as easy as possible for company leaders to understand how your strategic marketing plan helps business grow.

What’s the difference between a marketing strategy vs. marketing plan?

A marketing strategy details how you’ll execute a piece of your marketing plan with a specific tactical goal in mind. You might do this by launching an email or social media campaign, publishing a blog series, offering a special promo, or hosting a live event. 

A marketing plan , on the other hand, is the high-level framework that drives all your marketing strategies. It’s a big-picture look at the who, what, and why behind your marketing goals, with a focus on tying them to larger organizational objectives. 

No two marketing plans are exactly the same, but they do share some common threads. Here are 6 important elements you’ll want to identify and research before you build out your next strategic marketing plan.

Everything you do as a marketing team should support your company’s overall strategy and goals. So summarize your organization’s business objectives, and let it serve as your marketing plan’s true north. Your team and stakeholders should be able to clearly see how the marketing strategies and goals you outline in your plan align with your company’s top priorities.  

A SWOT analysis breaks down your company’s strengths, weaknesses, opportunities, and threats. This enables you to assess both the internal and external factors that influence your success so you can build targeted strategies that close gaps and drive results. 

Research is the core of any marketing plan because it’s what you’ll use to shape your goals and strategy. Don’t be afraid to dive deep into the details here. A well-researched marketing plan is worth the time invested. 

Focusing your research energy on these areas will equip you with a solid base for smart marketing decisions.

It’s important to understand major movements in the industry you’re marketing to so you have a feel for the pulse of the market. Thoroughly research the industry your organization works in, and be sure to report on the general climate, as well as any noteworthy happenings. If your company serves any subindustries, don’t forget to include them in your analysis too. 

Target market

Marketing to the masses rarely pays off. That’s why narrowing down your target audience is a must for any marketing plan. Consider it the filter you run every marketing strategy through. 

The more specific you can get, the better. Answering questions like these can help you paint a clear picture of your ideal buyer so you know how to focus your resources for a bigger impact on the people you want to reach.

Competitive analysis

It’s also important to understand who and what you’re up against when it comes to attracting your perfect buyer. Identify the key players in your space, and give a brief rundown of what they’re doing to win. This groundwork will make it easier to see how to differentiate yourself from the competition. 

Now that you’ve laid the groundwork, it’s time to talk strategy. Outline your strategic marketing goals for the year, and briefly explain how these strategies support company-wide goals. Use a gantt chart to establish a timeline for each goal and monitor results along the way. This is an easy way to set expectations and keep your team and stakeholders in the loop.

Metrics are where the rubber meets the road in your marketing plan. Use your market research to define specific KPIs or key marketing metrics that will serve as your measure for success. This will help you track progress so you know if you need to change course mid-project to ensure you hit your strategic marketing goals.

Marketing channels are the vehicles you’ll use to reach your target audience and grow your brand. Choose your channels wisely based on where you expect to get the most bang for your marketing buck. Briefly explain the purpose of each channel and how it supports your overall marketing strategy and business goals. 

Want to build a more detailed plan for each marketing channel so you can bring your ideas to life? Check out our free social media strategy plan and editorial content plan templates for more information on planning by channel. 

Marketing budget

Establishing a monthly budget for your marketing plan—and tracking it along the way—helps you maximize ROI and identify wasted spend before it drains your marketing dollars. 

Start by listing any ongoing expenses you have so you know what you can afford to spend on new initiatives. Then do your best to estimate any new costs you expect in the coming year. Don’t forget to account for any new hires, freelance workers, or third-party agencies you might need to rely on to get the work done. 

Not sure where to start? We’ve got you! Here are a few examples of how you might structure a marketing plan so you can easily start writing your own. 

Your marketing plan may shake out differently depending on the industry you work in or the goals you’re focused on. Use these marketing plan templates and samples as a guide to jumpstart the process and come up with a marketing plan structure that works for you. 

Google Docs marketing plan template and example

The most common way to create a marketing plan is simply to write it out as a text document. This format enables you to freely elaborate on any research findings you gathered during discovery, while also making a clear case for the marketing goals you’ve set for the year.

We put together a free Google Docs marketing plan template to help you save time so you can get your planning process off the ground faster. This marketing plan example is perfect for documenting and sharing the full scope of your strategic marketing plan with your team and stakeholders.

strategic marketing plan combines

Here’s a basic breakdown of what the Google Docs marketing plan template covers:

Save a copy of the template to your Google Drive or download it as a Word document, and customize it to fit your own strategic marketing plan needs.  ‍

Use template in Google Docs

Gantt chart marketing plan template and examples

A plan’s no good if you set it and forget it. That’s where a gantt chart comes in handy. Use this free gantt chart marketing plan template to track your strategic marketing plan all the way to success. 

A gantt chart is a great way to lay your marketing plan out in a simple, visual timeline that’s easy to update as work progresses. It gives you a high-level view of your plan’s major goals and strategies, while enabling you to collaborate on and share your plan with your team and stakeholders.

How you use a gantt chart to put your plan into action is up to you. Build a timeline for the tasks you need to complete as you develop your marketing plan, like the example below. 

strategic marketing plan combines

Once you’ve fleshed out the details of your marketing plan, you can use a gantt chart to define and track your strategic marketing goals. For example, you could break your marketing plan down by quarter to show when specific objectives will come into play and update progress as you close in on your goal. Here’s how that might look.

strategic marketing plan combines

Use template in TeamGantt

Ready to build a strategic marketing plan of your own? 

We’ve created a free marketing plan template for you in TeamGantt so you can jump right in!

Customizing the template is quick and easy, thanks to TeamGantt’s drag and drop simplicity. And since everything’s online, your whole team can collaborate on activities in real time.

Here are a few pointers to help you get the most out of our free TeamGantt strategic marketing plan template.

Drag and drop tasks to schedule your plan

Configuring your marketing plan is as easy as dragging and dropping tasks—or entire task groups—into their new rightful place. Click and drag the edges of each taskbar to set a new task duration. 

strategic marketing plan combines

Communicate with comments 

Collaboration is easy with TeamGantt's discussion feature . Share documents and chat with your team directly from a task’s Comments section. Use Notes to communicate important information—like goals, target audience, and budget—at the project level. 

Have a more formal marketing plan document? Attach the file or link to your project so everyone has easy access to it.

strategic marketing plan combines

Share a copy with stakeholders

Plans are meant to be shared, so we made it easy to keep even the most inquisitive stakeholders in the loop. Export your plan to a printer-friendly PDF , or share a view-only link to your project so stakeholders can see your marketing plan progress in real time. 

strategic marketing plan combines

Sign up for a free TeamGantt account today , and save time on project setup with this free marketing plan template!

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Building a Strategic Marketing Plan for 2023

Your complete guide to building a strategic marketing plan for 2023 (from an agency owner who helps build a dozen every year).

Pat Ahern Intergrowth® headshot

Pat Ahern is the Managing Partner at Intergrowth®. He breaks down SEO/content marketing concepts & strategies into laymen’s terms to show you how to grow your business. Outside of work, Pat spends his time rock climbing, traveling, and enjoying the best IPAs that he can get his hands on.

Building a strategic marketing plan

Written by Pat Ahern

Table of Contents

Review 2022 Marketing Expenses

Broad suggestions for your 2023 marketing efforts, how to build your annual marketing plan for 2023 (from a marketing agency owner who helps build a dozen every year).

It’s time to start thinking about how we should be spending our marketing dollars in 2023.

That’s right: it’s time to start thinking about your 2023 marketing plan.

I know, it’s a lot to think about. Fortunately, we’re here to share some guidance.

We’ve helped 100+ businesses review their marketing performance and build their annual marketing strategies. Today, we’re going to talk about how to create the right annual plan to help your business have a successful 2023.

It would be foolish to write an all-encompassing article designed to give every business the exact formula to define their marketing budget. Every business is unique. There are far too many variables to consider to write a catch-all guide –  let’s schedule a consultation call if that’s what you’re looking for .

We’ll delve into how target growth rates, competitive landscape, and much more should inform the development of your strategy.

The 6 Questions to Ask Yourself When Building a Strategic Marketing Plan

1. how much did your company grow last year.

Would you be satisfied with seeing similar growth metrics this upcoming year?

If so, ask yourself how much of your 2022 marketing strategy needs to change for 2023. Minimal movement in the competitive landscape could mean that copying your marketing plan from last year will get you 80% of the way there.

2. What marketing channels drove the most value last year?

We recommend breaking down the value of each marketing channel into two categories: marketing qualified leads (MQLs) and sales qualified leads (SQLs).

Both channels are essential for long-term growth. SQLs-centric efforts (sales-centric blog content, Google Ads, etc.) are great for short-term sales and converting MQLs into sales over time.

MQL-centric efforts (educational blog content, speaking engagements, etc.) will fill your pipeline and drive long-term growth.

Every company will define these differently. Here’s a breakdown of how our team distinguishes these two:

Marketing Qualified Leads

MQLs are those that express interest in learning about our services, either through submitting a contact us form on our website or schedule a call through our chat widget.

Sales Qualified Leads

SQLs are leads that have proven  BANT  (budget, authority, need, and timing). In other words, an SQL at Inter is someone who:

We recommend identifying the top SQL and MQL drivers from 2021 and 2022. Focus your marketing budget on these two channels first (more on how to analyze these in our section about Reviewing your 2022 Marketing Expenses ).

3. What’s your growth timeline?

Do you need to see a 10% growth every month to keep your job? Does your team understand that exponential growth often requires a longer time horizon?

Pay-per-click, or PPC, advertising (Google Ads, LinkedIn Ads, Facebook Ads, etc.) is a better short-term investment if you need to see consistent growth. Within a few months, you’ll have a strong understanding of the cost per customer acquisition (CPA) and will be able to ramp up spending accordingly to meet growth goals.

For example, you may see that your CPA with Google Ads is $500. Knowing that, you can comfortably assume that investing $5,000 will yield ten customers.

Long term, search engine optimization (SEO) and content marketing will help you to see exponential growth and much lower CPAs.

A company investing in SEO vs. PPC could expect to see an ROI curve similar to this:

SEO vs. paid search ROI

(More on the  ROI of SEO  here)

However, SEO results are less predictable on a day-to-day basis. Most SEO efforts take 3-6 months to see traction – which can be difficult to explain to a boss in the short term.

4. How has your competitive landscape changed?

Run a competitor analysis to identify how each competitor has evolved:

What are smaller competitors doing? Are they growing at an alarming rate?

Run a  SWOT analysis  to see how you stack up against the newly updated competitive landscape.

5. Is your market saturated?

Are you operating in an untapped market where you can collaborate with your competitors to increase the size of your industry?

Or are you operating in a highly-saturated market where one customer for your competitor means one less customer for you?

For those in untapped markets, look for opportunities to partner with your competitors on larger marketing campaigns to increase the awareness around your industry.

For those in saturated markets, think about how you can improve customer experiences to retain existing customers. Think about weaknesses in competing businesses that you can attack to gain more market share.

6. What did customer feedback look like over the past year?

Were customers happy with your products/services?

Or did you receive a spike in complaints?

Work towards isolating the biggest customer pain points. This could be:

Great customer experience drives repeat and referral business.

If you’re struggling to isolate the root cause of negative sentiment, invest in market research to better understand your customer:

Providing a great customer experience is the backbone of many of the most successful companies in the world. Marketing will have an uphill battle ahead of it unless you put your target customer first.

How Marketing and Sales Interact to Drive Revenue

The next step to building out your 2023 marketing strategy is understanding how your marketing efforts interact with your sales efforts to drive revenue.

The goal of marketing is to educate your target market on their pain points, develop a relationship between your target audience and your brand, and hand your sales team smoking hot leads.

These goals are part of a predictable process.

Borrowing a graphic from our friends at  HubSpot :

Buyers Journey

A potential customer realizes that they have a problem or need.

They start researching the problem to learn more about the issue. In the process, they uncover several potential solutions. The potential customer evaluates those solutions and decides on one.

Later, they reflect on whether their choice solved their problem. If it did, they are likely to use that solution again and recommend the same solution to friends.

(More on the  sales funnel  here).

Most marketers break those customers into the following groups:

MQLs, SQLs, sales, and sales funnels are most commonly referred to in businesses that have a long sales cycle (3+ months).

Businesses with a shorter sales cycle and smaller average order values can still employ this mindset. However, businesses with lower average order values need to focus on how to automate as much of this funnel as possible to make it sustainable in the long term.

For example, our friends at  Brevitē might describe email subscribers as MQLs and SQLs as people who add items to the shopping cart on the Brevitē website.

Intergrowth sales CTA

Take the time to review last year’s marketing expenses.

Here, we’ll break down your marketing expenses by channel (both in terms of time and money) and ROI.

Identifying the cost per hour of marketing activities

Set an hourly rate for your marketing department to compare apples to apples.

The best way to look at this is to review time tracking for your marketing team. If you don’t have this data, you can estimate the amount of time that your marketing team spent working this year.

Assuming 40-hour workweeks and 50 working weeks per year, each full-time team member had 2,000 hours of working time.

Take that total number of hours and identify how much of this time was taken up by meetings, admin work, product development, training, and other non-marketing related tasks.

The remaining time is a safe estimate of how much time those team members spent on actual marketing activities. Combine the annual salaries of all of those individuals. Divide the salary total by the number of hours spent on marketing activities.

The dollar amount is the cost per hour of marketing activities.

For example, Paul earned $50,000 in 2022 and spent half of his workweek on marketing activities (1,000 hours). Paul’s hourly rate is $50/hour.

Identifying total costs of marketing expenses

Now take that dollar per hour total, billboard expenses, Google Ads expenses, and more. Break these expenses down by advertising channel, and then identify the primary goal for each advertising channel.

Sample business objectives of various marketing channels:

Building your marketing goals

Identify 1–2 key performance indicators (KPIs) that can be used to evaluate each marketing objective. Review results from last year to identify the count of each of those metrics that each channel brought.

Based on expenses allocated for each channel, you can now break down the exact cost per goal completion for each advertising channel, as well as the estimated value per goal completion.

We’ve built out a sample template that you can use as a starting point here .

With all this being said, here are a handful of broad marketing suggestions based on what we’ve seen generate the best ROI for our partners in the past.

1. Focus on PPC and SEO if looking for customer acquisition

Time and time again, investing in PPC and SEO yields the best ROI for businesses that we work with.

If you have a fixed marketing budget, replace portions of your PPC budget with additional content marketing and SEO initiatives as you start seeing more traction from organic search.

PPC investments result in linear growth. SEO investments result in exponential growth .

PPC is a reliable crutch for growing your business as you scale organic traffic visibility. However, as Andrew Chen points out in  this article , investing in PPC can quickly get out of hand, especially in the case of VC-backed businesses that are pressured to scale their customer base exponentially.

Those investing in PPC should pay close attention to cost per customer acquisition (CPAs) and profitability per customer to understand how long PPC will be a smart investment for their business.

2. Spend money on social media if you’re looking to enhance your brand

Social media is a powerful tool for businesses that are looking to improve their brand perception or connect with their customers on a deeper level.

Social media is expensive when considering the time that needs to be invested in it.

However, it’s a powerful tool for those businesses that do value their brand.

Five years ago, I tweeted at JetBlue on a Sunday morning when I was struggling to find flight info for my flight the next day.

Social Media Playing into Marketing Strategy

JetBlue’s social media team responded four minutes later, and I will never forget that.

JetBlue Customer Service Exampe

To this day, I cite this as the best customer service I’ve ever experienced. Having employees monitor your social media channels around the clock is expensive as hell, but here it paid off for JetBlue.

3. Spend money on brand awareness if you’re looking for mindshare

The ROI of billboards and TV commercials is questionable at best. However, these channels, as well as lifestyle-centric content for your customer base, serve to boost brand awareness. They all help you to become first-to-mind when customers realize that they have a need.

These channels also help to preemptively prescribe your solution to customers before they realize that they need it. This helps build market share, especially in saturated markets.

4. Growth hacking has its place, but there’s more to marketing plans

We see a lot of startups that are consumed with thoughts of growth hacking and “going viral.”

Innovative marketing tactics have their place in helping early-stage businesses to build visibility (more on proven  viral marketing techniques  here). Techniques like this were designed to drive a spike in website traffic and sales in the short term.

However, visibility and sales wane as these techniques run their course. More importantly, most of these types of techniques fail to achieve business goals.

Viral marketing techniques have their place. However, those who fail to build longer-term traffic and sales from more established marketing channels will see their businesses decline and will find themselves reliant on “lucking out” with successful growth hacking campaigns.

Think through each of these questions and look at last year’s performance to build out the full marketing strategy that makes sense for your business’s unique needs.

Looking for help with scaling your sales in 2023? Learn more about how our content marketing services  have helped businesses like Ridester to  grow 487.1% in 20 months.

Interested in hearing more that we have to say?  Subscribe to our monthly newsletter or  follow us on Twitter  to be the first to read our latest insights.


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Chapter 5: Marketing Structures

After reading chapter 5 you should understand the following:.

Chapter 5 covers marketing structures—the element of the Integrated Model of Marketing Planning (IMMP) that falls between marketing strategies and marketing functions. Marketing structures are arranged in order to realize marketing strategies and to facilitate marketing functions. For example, if a company emphasizes product quality as a core competency in its marketing strategy, implementation of a total quality management system may be an appropriate approach to management.

Marketing structures include management and organizational structure as well as planning and information systems, and especially marketing channels. Marketing structures are created to facilitate marketing functions. In this chapter we discuss how business trends are impacting the way marketing is conducted. Customer relationship management, supply chain management, and planning and information systems are discussed and illustrated, and marketing channels are discussed with an emphasis on the marketing channel as a social system.

5.1 The Evolution of Marketing Management

General business management trends have a significant impact on the way marketing is managed and practiced. For example, moves toward lean thinking, total quality management, supply chain management, and customer relationship management all change in some way the manner in which marketing is conducted. These shifts in management practices have influenced the evolution of the marketing concept described in Chapter 2, and in turn the evolution of marketing management.

The evolution of marketing management can be described as a shift from viewing marketing as competition and discrete transactions to viewing it as cooperation and relationship building. Webster provides a comprehensive description of the range (seven categories) of marketing relationships and suggests that marketing is clearly moving from “arm’s-length transactions and traditional hierarchical, bureaucratic forms of organization toward more flexible types of partnerships, alliances, and networks.” [1] The most basic marketing relationship is the transaction , and the most comprehensive relationship is vertical integration , where a company owns its upstream suppliers and downstream channel members. The forms of relationships and the idea of marketing have changed, and therefore marketing management approaches must change accordingly. The following outlines the general concept of the six relationship categories (Figure 5-1).

A Range of Marketing Relationships. Adapted from Webster

Transactions – At this lowest level there is no relationship between buyer and seller. In this traditional microeconomic approach to a transaction, price contains the necessary information and marketing is expected only to find buyers. When a pure transaction takes place, it is a one-time event with no interaction between the buyer and seller either before or after the transaction, a rare situation in industrial marketing.

Repeated Transactions – A more realistic view of exchange is repeated transactions between a buyer and seller that result in the formation of a relationship (though likely still distant and weak). Marketing is expected to develop differentiation in order to create preference and loyalty that will result in higher prices and profits.

Long Term Relationships – Industrial marketing has typically been based on long-term relationships through contracts, but relationships were often arm’s length and adversarial. Competitive bidding for contracts was a common practice and multiple suppliers were maintained in order to remind the main supplier of competitive options. Increased competition and the need to cooperate have caused firms to move away from the adversarial model to partnerships and interdependence.

Buyer-Seller Partnerships (mutual total dependence) – Strong partnerships became common during the move toward quality management. Japanese manufacturers found that producing high quality products is not only more attractive to customers, but also costs less. To produce high quality products, those Japanese companies also found that partnering with a small number of suppliers was much more successful than the adversarial supply approach. The success of these Japanese companies has caused companies in other parts of the world to follow suit.

Strategic Alliances (including joint ventures) – The basic characteristic of a strategic alliance is an intention to achieve a strategic goal. The partners may be working toward the development of a new product, new market, or new technology. A joint venture is one form of strategic alliance where the partners create a new firm.

Business Networks – Webster uses the term “network organizations” to refer to multiple strategic alliances, but we use the term “business networks” to describe the myriad relationships that exist among modern companies.

The basic evolution described above provides a meaningful context for discussing a variety of concepts and tools that have accompanied the evolution. The following discussion covers the topics of relationship marketing, information technology (IT) in service of marketing management, and supply chain management. Finally, the interaction of these elements, and the potential impact on future marketing management practices, is outlined.

5.1.1 Relationship Marketing

Traditionally, the study of marketing has been based on the transaction. This is because of marketing’s historical ties to economics. In a theoretical, discrete transaction, the buyer and seller do not interact before or after the sale, and price is the determining factor in making the transaction occur. A one-time purchase by a retail lumber yard from a wholesaler as a result of a cold call is basically a discrete transaction, but these sorts of transactions are uncommon in industrial marketing.

If we think of transactions between the buyer and the seller as a continuum, discrete transactions are at one end and relational transactions are at the other. In relational transactions, there are long-term relationships and high levels of cooperation between the buyer and seller.

Prior to industrialization, the exchange of goods and services was primarily local and based on long-term relationships between small-scale producers and final consumers. As industrialization pervaded society, production-oriented organizations were forced to find ways to sell the large quantities of goods that new technologies allowed them to produce. This situation resulted in the formation of a transactional approach and aggressive selling through marketing intermediaries, a situation in which marketers were more focused on sales and promotion than on building customer relationships. [2]

The post-industrial era is much more relationship-oriented. Firms now recognize the value of repeat purchases and brand loyalty and the nature and complexity of true transaction costs. [3] Paying the lowest price is not always the best choice, because the supplier offering the lowest price might, for example, offer mediocre quality. Also, the process of finding suppliers and engaging in negotiation is costly. By relying on fewer, long-term suppliers, many transaction costs are minimized.

Rapid changes in technology and the competitive environment have forced companies to seek cooperative relationships. [4] Customer demand for quality and performance have increased to the point that firms often must cooperate in order to access the necessary expertise to satisfy those demands. Even though it is somewhat paradoxical, cooperating to compete is becoming essential in today’s global marketplace. [5]

So what is relationship marketing? It has been seen as a rebirth of marketing practices from the pre-industrial age where marketing activities help establish, develop, and maintain relational exchanges. [6] , [7] Instead of competition, the direction of relationship marketing is cooperation. Models for effective relationships are sought from social psychological group theory which emphasizes cooperation and social values. In other words, successful, long-lasting business relationships are based on mutual commitment and trust. [8]

It is clear that the day-to-day practice of marketing involves increased cooperation, and evidence suggests the trend will continue (Example 5-1). This is not to say that strong relationships always exist between buyers and suppliers, or even that they should. In fact, companies should concentrate on key customers to develop strong relationships and invest less in minor customers.

Although fundamental aspects like cooperation instead of competition are emphasized here, we do not suggest that relationship marketing covers the whole area of marketing as it is defined in Chapter 2. Relationship marketing can be thought of as customer relationship management, which provides the principles and tools to establish, develop, and maintain successful business relationships. We emphasize that relationship marketing (customer relationship management) be seen in its strategic marketing context. As we will see later in this chapter, marketing strategies give direction to appropriate structures, including management systems.

In relationship marketing the primary idea is that the producer chooses the customers that best fit its resources. It is also important that the producer knows the value creation process of its customer. It is possible to develop value-added products and satisfying customer support if the relationships between producers and customers are close. This is the essence of relationship marketing.

Example 5-1: Great Recession Illustrates Importance of Relationships

The Great Recession decimated the North American forest industry, but its outcomes illustrate the importance of strong relationships – especially in tough times. Merchant Magazine interviewed lumber company managers in the western U.S. and concluded that relationships between mills and customers, “will take on even greater importance as sales start to recover” and that, “Many mill sales executives said fortifying those relationships are a priority.” Managers claimed that during the Recession they had been working to improve relationships by:

Merchant Magazine concludes by saying that buyers who stayed with mills through the difficult times of the Recession will be the ones that get supply when the market heats up. One manager was quoted as saying, “Our best customers are those who understand that we rise and fall together. Those are the people we want to do business with, in good times as well as bad.” [9]

5.1.2 Information Technologies in Marketing Management

Information technology (IT) covers a broad set of technologies used to document, process, utilize, and communicate information. The infrastructure allowing a company to do business and communicate with other companies can be called a commerce platform. [10] The commerce platform has changed dramatically in recent years. Prior to computers, the commerce platform was based on the telephone and paperwork maintained by a company. If, for example, a buyer and seller negotiated a deal over the phone, the seller would typically prepare a bundle of papers outlining the deal that would then be mailed to the seller for a signature. The buyer would sign and return papers by mail (Example 5-2).

The advent of the fax machine increased the speed of this process. It was no longer necessary to mail paperwork to be signed; it could simply be faxed between the buyer and seller. Computerization has had a dramatic impact on the daily work-life in every industry. For example, efficiency in order processing and other paperwork is greatly enhanced by eliminating the need for manual typewriting. Many other simple changes have also occurred. Traditionally, salespeople carried files documenting information about their various clients, but today nearly anything is available via smart phones.

Both internal and external business operations based on IT can be referred to as e-commerce. E-commerce allows a company to better organize and utilize resources through the effective use of information. E-commerce can result in a variety of benefits including cost savings, rationalization and automation of operations, and more efficient use of resources. Enterprise resource planning software allows all departments in the company to use the same system based on a common database. With this integrated structure, other e-commerce functions can be added to the company’s system (e.g., supply chain management or customer relationship management).

Example 5-2: Evolution of the Commerce Platform

In his 1970 textbook, Rich outlined the impact of Wide Area Telephone Service (WATS) on the marketing and distribution of wood products. At that point in time, WATS, which allowed a company to make unlimited calls within a certain geographical area for a fixed monthly charge, helped eliminate the practice of double wholesaling of West Coast lumber. Double wholesaling meant that local wholesalers in the West acted as finders of supply for local wholesalers in major Eastern markets. These Eastern wholesalers then resold the lumber in their market areas. The lower costs of communication meant a trend toward Western wholesalers dealing directly with players in the Eastern market areas, and Eastern wholesalers dealing directly with Western sawmills, thus eliminating one stage in the marketing channel. [11]

5.1.3 Supply Chain Management

Supply chain management (SCM) illustrates well the increased importance of strong and close business relationships, as well as the role of e-commerce in a company’s ability to manage its operations. Therefore, we have developed a deeper explanation of SCM as an illustration of a marketing structure. Supply chain management has its roots in logistics and is used in place of more traditional terms such as physical distribution. SCM has been defined as “the management of upstream and downstream relationships with suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole”. [12] A well-functioning supply chain has been described as a highly-trained relay team where the strongest relationships exist between the two parties that exchange the baton, but the whole team must be well coordinated in order to win. [13]

The basic concept of supply chain management means taking a systems viewpoint. This means, for example, that firms participating in SCM are not looking only at minimizing costs in their own situation, but also minimizing costs for the entire system. It is a long-term approach with continuous joint planning and widespread sharing of information. [14]

A supply chain can be viewed as shown in Figure 5-2. Between each member of the chain, and within any given member’s organization, there is the potential for time delays and excess inventory, both of which equate to costs. The buildup of excess inventory between members of the chain has been described as snowdrifts against a fence. The more members of the chain, the more snowdrifts and more inventory in the system. [15]

Through close cooperation and efficient flow of information up and down the chain, costs can be minimized. If real-time information regarding demand, forecasts, orders, inventory levels, etc., can be communicated back through the chain, members of the chain can provide just the product and volume needed at exactly the right time. Without this information flow (communication), members of the chain are operating based on only their individual information. This may cause them (for example) to maintain inventory levels high enough to cover unexpected orders and shifts in demand, and again, high inventory levels equate to costs.

The two key components of successfully implementing SCM are the development of strong and close relationships among members of the chain that allows their integration into a fully linked and functional supply chain.

A Supply Chain. Adapted from Hill

SCM and Relationships

It is generally accepted that competition is moving away from company versus company and towards supply chain versus supply chain. A supply chain is made up of a variety of different channel members and these members must work closely together in order to bring about cost reductions and enhanced customer satisfaction. Accordingly, the quality of relationships among members is of paramount importance to successful implementation of SCM. [16]

Looking at the link between two successive members of a supply chain (dyads), Figure 5-3 provides a view of how the interaction of two companies must change in order to create the strong relationship needed to implement SCM. The interaction must change from only between sales and purchasing towards integrated interaction at multiple levels of the organizations so that the interface allows rich communication and strong cooperation.

A high degree of cooperation must exist among all the supply chain members to effectively share the information and duties necessary to optimize the whole supply chain from raw material producer to final consumer. A level of trust must exist among the members of the supply chain so that they are comfortable sharing proprietary information. This level of cooperation means that joint planning will be commonplace and members are likely to collaborate in other areas such as new product development. It is also important to note that the performance of the supply chain is not only dependent upon the cooperation of the firm with its partners, but also upon the cooperation of those partners with their partners. [17] This leads to looking at the supply chain more as a network than as a chain, a concept further discussed below.

As in any relationship, when a firm commits to cooperation in a supply chain, it places itself at some risk. Examples of this risk include poor performance by other members of the chain, other members sharing trade secrets with competitors, or members venturing into the business on their own. [18]

SCM and Integration

As mentioned in Chapter 2, integration has always been a key role of marketing. As one in a series of marketing structures, SCM is a way to integrate both internal and external supply chains, and this integration is the cornerstone of excellence. [19] Integration must begin within the firm, but involves combining elements from inside and outside the company. Integration forces a company to consider management in a more holistic manner. Traditionally, companies have been organized along functional lines, a structure which leads managers to feel territorial and defensive about their individual areas. SCM, on the other hand, requires that these functions work more closely together. [20]

An Evolving Relationship Between Firms (Adapted from Christopher).

Close collaboration within a company may require a new form of business structure described as horizontal or market facing. [21] In this structure, multifunctional teams are organized around processes (e.g., customer management) rather than traditional functions such as production or sales. Multifunctional teams have the knowledge and understanding of the entire business to help minimize those costs and delays that occur between steps internal to the company.

Once a company has succeeded in integrating its own operations, it can begin to consider integrating other channel members. Integration of channel members allows a firm to begin creating a truly linked supply chain with the ability to transfer information up and down the chain (Figure 5-4).

Evans and Danks suggest four forms of integration: information, decision, financial, and operational. [22]

Information Integration – enables companies in the supply chain to share useful information among themselves. For example, information sharing between producer and retailer can help in production scheduling and in maintaining stock. This could be especially important when just-in-time (JIT) delivery is required by the customer.

Decision Integration – allows the ability to manage planning and control functions across multiple firms. As in the team analogy, decisions are no longer made by individual firms within the supply chain, but instead are made jointly for the benefit of the whole.

Financial Integration – changes the payment terms and conditions across the supply chain. For example, a supplier might expect payment when the customer sells the product rather than when the customer buys the product.

Operational Integration – means sharing assets, both physical and human. A manufacturing company might supply office and floor space for a supplier within its own production facility so that it can better supply components or raw materials.

What is the difference between an integrated and a non-integrated supply chain? Figure 5-4 simply shows that in an integrated supply chain, the channel members are linked together as the word “chain” implies. Without integration, the channel members are independent links that do not benefit from close association with other members. This means that, for example, the likelihood of delays and excess inventory to exist between links is very high. As previously noted, a fully linked and functioning supply chain includes the efficient flow of information both up and down the chain.

Difference Between Integrated and non-integrated Supply Chain (Adapted from Hill).

Results of Successful SCM

Researchers have found that appropriate SCM practices result in superior financial performance. [23] A number of benefits can result from supply chain collaboration, a situation where members of the supply chain actively work together as one to achieve common objectives such as the following [24] :

The basic goals of SCM, improved customer satisfaction at lower costs, are clearly evident in the items listed above. In the context of SCM, Coppe and Duffy outline the following potential benefits of the Internet. [25]

Supply chain management can also be used as a tool for enhanced environmental performance. Many companies in the forest industry have implemented environmental management systems such as ISO 14000. As the use of these systems matures, the integration with management tools such as SCM will allow companies to view the supply chain not only through the ideals of improved customer satisfaction and lower costs, but also through improved environmental performance. Climate change strategy is the area where companies are currently focusing with respect to environmental performance, including reverse logistics and ecorouteing.

Supply Chain Management in a Marketing Context

One way to see and use SCM is to equate it with logistics, in which case the objective is to economically optimize the physical product flows from producer to customer. The supply chain can be extended to cover the flow from raw material suppliers to the customer. Effective use of information is the main tool of economic optimization.

The broadest definitions of SCM cover the whole business. SCM is seen as a management tool for integrating and coordinating raw material procurement, manufacturing, and marketing. The goal is to achieve internal efficiency and customer satisfaction by being able to deliver a perfect order (i.e., giving to customers what they want, when they want it, in the right quantity, and at the right price).

We suggest that SCM should be seen in a strategic marketing context. It is a management tool to implement marketing strategies by seeking cost effective solutions and solving problems connected to material and information flows between supplier and customer. The final goal is value creation for the customer.

5.1.4 The Future of Marketing Management

As can be seen from the previous discussion, a range of factors is contributing to the changes in the way companies manage the marketing function. Technologies are opening up new possibilities for communication and business management. Globalization has forced companies to reconsider logistics as they source raw materials globally and market to global customers. Heightened competition is causing companies to reconsider the traditional adversarial approach to other channel members. Instead they are concentrating on becoming customer-focused. To do this, companies are working to eliminate functional boundaries, creating cross-functional teams, and seeking relationships and alliances with outside partners. [26] Each of these factors, in combination with the rate of change in the marketplace, is forcing companies to reconfigure their basic structure away from hierarchies towards the flexibility of networks.

Firms are beginning to view networks as a competitive necessity, since competition is increasingly based on a network-to-network paradigm, rather than firm-to-firm. [27] E-commerce and advanced IT capabilities are helping evolve the supply chain into what can readily be seen as a network. Figure 5-5 shows the evolution to an e-commerce-facilitated network. The idea is that e-commerce allows not only the connecting of firms, but the coordinating of firms and their inter-firm processes. This creates a coordinated – rather than a merely connected – environment.

A network structure is inherently more flexible and more efficient in moving information, allowing the firm to continuously adapt to change and become superior in learning. In a network organization, there are task- or skill-specialized units that operate as an interdependent coalition without hierarchical control. The units (often cross-functional teams) are closely linked with other units in the company and share a value system that defines roles and responsibilities. [29] Just as marketing has generally evolved toward closer relationships, the units or departments in a company are moving toward closer interaction and cooperation. Key account management is a good illustration of this idea, where cross-functional teams manage important customer accounts. This is only possible through close cooperation among the various units of the firm.

An E-commerce-facilitated Network. (Adapted from Kahl & Berquist)

As a result of these many changes, the significant role of marketing in the organization will continue to evolve. Marketing will be an expert on the customer and will keep the network organization informed about the customer. The marketing department will create knowledge from information. For example, marketing might create expert systems and decision models that can be used on an interactive basis by field personnel. Marketing has the potential to be the strategic core of the company by acting as the network integrator helping shape the company’s external network of partners. Marketing will also have the responsibility for managing team-based processes. [30] , [31] , [32] , [33]

Even though marketing as a function will remain important, it will increasingly be seen as a philosophy or orientation that is present throughout the company. Marketing will not be the sole responsibility of specialists, but everyone in the firm will have the responsibility to understand customers and contribute to the delivery of value. Accordingly, a major role of the marketing specialists will be training and educating other members of the organization about marketing and the customer. [34] , [35] , [36] , [37]

Marketing strategies and the management of structures and functions must change to meet an evolving business environment. Technology development will continue to provide potential enhancements to marketing in the forest industry. Business management structures in the industry will continue to change in order to take better advantage of technology and business management innovations.

5.1.5 Choice of the Management System

In previous sections we analyzed relationship marketing, supply chain management and the role of IT in connection with marketing management. In customer-oriented companies, marketing aspects are central to general management approaches. When choosing a marketing management system, we can consider a variety of approaches or combinations of approaches.

When new management systems or approaches (fads) are continually introduced to the business world, there is a danger that the basic principles and structures of marketing are forgotten. When adopting new, popular ideas, their connection to strategic marketing contexts must always be considered. Enthusiastic authors believing in their own ideas may indicate that a new system solves all marketing problems. They may even indicate that the new system can replace the principles of general marketing thinking. However, it is improbable that the whole marketing paradigm can be replaced. Recent popular management approaches have many valuable characteristics, but before considering implementation, they must be carefully evaluated in the context of the company’s strategic marketing plan.

Modern marketing management approaches generally follow the principles of customer-oriented marketing – they fit special or custom-made product strategies and selective customer strategies. Our view is that in most cases, a company does not choose a management system per se, but combines those aspects of various systems which best implement the chosen strategies.

Relationship Marketing & Customer Relationship Management (CRM) – CRM is a general management approach following the philosophy of customer orientation. In a strategic marketing context, CRM is a natural choice when customers are known and products are custom-made. The company wants to emphasize long-standing customer relationships, with mutual commitment and trust.

Strategic or Key Account Management (SAM) – A company following selective marketing strategies (known end-users) may realize that some customers are clearly more important or profitable than others and should be prioritized in marketing. Appropriate ideas for managing these customers may be found in the principles of SAM. SAM gives guidelines for choosing strategic accounts, how to keep them, and how to increase the profitability of these customers to the company.

Supply Chain Management (SCM) – SCM emphasizes streamlining the chain between supplier and customer. Streamlining the supply chain means cost savings to all of the participants of the distribution structure. This should motivate participants in the chain towards closer cooperation and integration. Transparency and effective use of information are the most powerful tools of SCM.

As a method for improving logistics, SCM could be connected to both selective and unselective marketing strategies. Theorists developing SCM argue that the final aim of SCM is increasing the value to the customer, and that this implies a customer-orientation. Streamlining the supply chain also means close cooperation and system integration between the supplier and customer, which is only possible between companies that have deeply internalized the idea of partnership. This also implies that SCM is connected to a customer-orientation and selective marketing strategies (known end-users).

Environmental Management & Environmental Management Systems (EMS) – If a company is responding to environmental issues in its marketing, this can be supported by environmental management and environmental management systems. The holistic view of environmental marketing demands that ecological issues must be integrated on each level of marketing decision-making, strategies, structures, and functions. Environmental management systems support environmental marketing by guaranteeing that environmental issues are taken into account at every stage of production. An EMS can be broadened to cover raw material procurement and product distribution. The main ingredients of an EMS are company environmental policy, mapping the environmental impacts, and a plan to reduce the harmful environmental effects of the company. Climate change strategies and carbon footprint reduction are areas of high focus among forest industry companies today.

A company can certify its EMS and use the certificate as a marketing tool to indicate that environmental issues are taken seriously by the company. All partners in the supply chain or network may need a certified EMS to prove environmental friendliness of the entire supply chain to the final customer.

IT in Marketing Management – IT applications are a part of all the above-mentioned management approaches. IT has had, and will continue to have, a profound effect on business. Because of its systematic nature, IT will deepen partnerships by forcing suppliers and customers to integrate their systems. All transactions that can be automated will be in electronic information networks in the future.

However, while IT can make business relationships closer, it can also make them more distant. Information sharing and integrated information systems are examples of closer relationships. Trading through e-marketplaces is an example of more distant business connections. The challenge for management is to choose the future direction of IT-supported business.The failure of most forest industry e-marketplaces in the early 2000s illustrates that closer, not more distant, relationships are necessary for business-to-business marketing (Example 5-3).

Example 5-3: The Development and Demise of Electronic Marketplaces

At the turn of the century there were major developments in electronic marketplaces in the forest sector. An electronic marketplace is a Web service provided by a third party and is basically a vertical portal including several suppliers. Typically the marketplaces were separate for chemical and mechanical forest industry products.

A marketplace allows customers to search available items from stock notes provided by sellers. It also allows customers to make enquiries to all or some of the sellers in the marketplace. It allows the customer to search the availabilities and receive quotations from a large number of suppliers in a convenient manner, on a single Website. On the other hand, relying on a random supplier making the cheapest offer can also cause problems in reliability and product and service quality.

It is difficult to describe the characteristics of a product or a producer in detail on a third-party Website. This means that the competitive situation is intense, and buying decisions are essentially dependent on availability and price. Obviously this is not a desirable situation for companies trying to establish competitive advantages beyond price leadership. Generally, third-party marketplaces counter the idea of special and custom-made products, which may explain why most of the marketplaces failed.

A marketplace that has survived since the early days of electronic marketplaces is FORDAQ, The Timber Network . The company describes itself as a communication and information network tailored to the needs of the timber professional. With over 200,000 members in 186 countries, the company provides a mechanism for buyers and sellers to connect. Beyond the marketplace, the company offers a directory of members, daily industry news, and other services.

5.2 Organization

Companies, associations, and most organizations are based on the idea of combining human resources. People are specialized to conduct various tasks, and the combined result is bigger or better than that which could be achieved through individual efforts. The goal behind the division of labor is to use human resources as effectively as possible and this is matter of organizing.

5.2.1 Basic Idea of Organizing and Organization

The term “organization” is often used to describe a whole company; however, in this case organization refers to the way tasks in a company are divided among people or groups of people. In an organization there is a stable division of roles that dictate who does what, who is responsible for what, and who controls what people. In other words, in a company the organization defines the internal division of power, responsibility, and communication. A simple idea of organizing can be seen in Figure 5-6.

The Idea of Organizing

Goals – On a very general level the mission defines the goals of a company. According to the basic idea of strategic marketing, marketing strategies contain the goals of a company. The structural requirements of an organization are derived from the strategies. The organization must be planned so products are marketed as effectively as possible to defined customers in defined market areas, using the company’s core competencies.

Tasks to be done – Marketing science and practice have created descriptions of the tasks included in marketing. The IMMP and its operationalization is one example of a systematic way to describe marketing tasks. Marketing philosophies and various marketing management approaches emphasize different tasks in marketing. For example, SCM emphasizes logistics, while CRM and SAM emphasize customer relations and customer support.

Group of people – Marketing tasks are conducted by a group of people. The challenge for the organizer is to structure the tasks in an appropriate way and to assign the best possible person to each job. An educated, motivated, and skilled team is the best possible starting point for marketing success. A critical task for the manager is to collect a good team, keep it motivated, and continually improve its performance.

Organizing – A group of people and a list of tasks to be done is the starting point for organizing. Organizing requires understanding the basic dimensions of human organizations (groups) and knowledge of formal structures of organizations.

Basic group dimensions – Social psychology is a behavioral science that contributes to an understanding of organizations, because it studies how groups, such as companies, function. As to the performance of a group, the most important internal dimensions are: roles, power, and communication. The better the roles are defined, the power is balanced, and communication is arranged, the better the group performs.

Roles are positions in a group identified by certain tasks associated with positions. Group performance requires power relations between role positions. Responsibilities must be clearly defined. This leads to hierarchical, supervision-reporting relations. Communication is a tool that allows the group (organization) to function. Without proper communication, there is no group performance. The manager must regulate and balance the social processes in an organization.

Documenting the organization – Although it is often difficult to describe the roles, power, and communication in complicated relationships, organizational structures must be documented for various purposes. Often, if not always, detailed job descriptions are also documented. A simplified organizational chart is presented in Figure 5-7. Corresponding job descriptions are described below.

The marketing manager is the head of the marketing department. He or she may have a marketing assistant. The division of responsibility between the two salespersons could be based on products/product lines, markets or customers/end-use sectors. Each salesperson has a sales assistant.

Example of Marketing Department Organization Chart

Examples of tasks and responsibilities in a marketing organization:

Responsibilities of the marketing manager

Responsibilities of the marketing manager’s assistant

Responsibilities of the salesperson

Responsibilities of the sales assistants

From these job descriptions, it is clear that the marketing manager is responsible for marketing planning, supervision, and control. His or her subordinates are responsible for individual marketing functions (personal selling in this case). The marketing manager is responsible for planning and the salespersons for executing the plans. The higher the organizational position, the more important it is to have total view of marketing and to be able to work with abstractions.

5.2.2 Basic Forms of Organizational Structures

When considering organizational structure, it is important to think of both its vertical and horizontal aspects. Vertical design refers to the hierarchy within an organization; a company might have six layers of managers, starting at the CEO then stepping to the Executive Vice Presidents, Vice Presidents, General Managers, Sales Managers and equivalents, and line employees. Horizontal refers to the way the organization chooses to group its functions and/or divisions. [38]

Organizational behavior specialists speak of a continuum with mechanistic structures residing at one end and organic structures residing at the other (Figure 5-8). [39] In a sense, the mechanistic structure can also be labeled “traditional” and organic can be labeled “modern.” The mechanistic approach is hierarchical and bureaucratic; employees tend to specialize in their own thing and defend their turf from others. On the other hand, in an organic structure, there is a much stronger tendency to collaborate through teams based on shared authority.

The roles that marketing personnel play can vary greatly depending on the approach of the organization. A marketer working within a mechanistic structure might find him or herself in a corporate or division office with very little personal contact with production or sales. That individual would answer to one boss who would likely in turn report to the Vice President of Marketing. A marketer in an organic structure, however, would likely be in the field working with specialists from other areas of the company on specific projects. This individual might have two or more bosses depending on the number of projects.

Basic organizational structures are described below. It is important to remember that in real-world structures, there are often combinations of these theoretical types.

Functional Organizational Structure

A person in the marketing or engineering department is working within a functional area of a company. Companies can be structured around basic functions such as those shown in Figure 5-9, often referred to as silos , a reference to the vertical space they occupy in the organizational hierarchy.

Divisional Organizational Structure

A divisional structure is usually based on geography, products, or markets. A company in Brazil might have North American, Latin American, European, and Asian divisions. When based on products, the structure might include divisions associated with fine papers, packaging papers, and timber products. If a company is structured according to its markets or customers it might have publishing, packaging, and specialty paper divisions.

Matrix Organizational Structure

A matrix organization combines the concepts of functional and divisional structures. As shown in Figure 5-9, there is a vertical flow of functional responsibility and a horizontal flow of geographical areas. In practice each individual in the organization has two different bosses, one from the functional area and one from the product area. [40]

Mechanistic and Organic Structures

5.2.3 Choice of Organizational Model

Recent research has shown that there has been a general shift by firms toward customer-focused organizational structures. This means that there is increased emphasis on key account managers and cross-functional teams led by customer segment managers. This doesn’t necessarily mean that companies are always proactively working in this direction; rather, they are often pushed by customers who are becoming larger and more centralized in their purchasing decisions. This sort of evolution results in a more complex organizational structure. For example, individuals will report to more than one boss, as in a matrix structure. [41]

Large forest industry companies typically have divisional structures. The structure of the organization has a significant impact on marketing. We expect that companies in the forest industry will continue to evolve toward network structures and away from traditional structures.

Choice of the organizational model or structure is a corporate level decision, and marketers are likely to have little influence over the choice. Marketing personnel can actively minimize the drawbacks of any structure by working to fully understand those drawbacks and learning the best possible way to function within its confines. Marketers can work to negate some of the drawbacks of mechanistic structures by actively forming and working in cross-functional teams. However when companies increase their customer orientation, the organizational structures will also become more market-oriented. This means that the organizational structures are planned to serve customers in the best possible way.

5.3 Planning and Information Systems of Marketing

Management accounting and marketing research have traditionally been the main sources of internal and external information used in business and marketing planning. Although they have been computerized for decades, expanded and diversified computer applications that exist today lead us to speak of e-commerce. New systems make it possible to analyze and manage business processes more effectively than before. This means moving from data processing to knowledge management and problem solving systems.

The same systems carry information between business actors, register and analyze it, and may automatically create reports to be used in business planning. When electronic information systems support customer relationships, customer services, and channel intermediary relationships, they simultaneously register and analyze the behavior of all the actors. This information can then be used in marketing planning and customer relationship management.

The explosive growth in the information environment has created huge challenges for information systems. The danger of this technology is information overload – although information is abundant, it is often difficult to find useful and relevant information when needed. It is important that designers and users of marketing planning and information systems know and understand both the basic nature of marketing planning and the structure and content of the information environment. That is why we emphasize a scientific and planning approach to marketing planning.

IT has made it possible to develop a wide variety of management support systems for managers to cope in a complicated and demanding information environment.

Computer-based planning and information systems are built by IT-experts, but a marketing person must be able to cope in the IT-environment and use all possible systems and tools. IT will play a significant role in the future of marketing practice and will be both a challenge and an opportunity. Advanced tools are worthless if the user has not internalized the basic idea of marketing planning and the information needed. The next three sections aim to illustrate the context or framework where marketing plans are made and information is used.

5.3.1 Marketing Planning Systems

Based on the IMMP we know what must be done when planning marketing. The marketing planning system explains the context of marketing planning and how it is executed. Marketing planning and planning systems are different from one company to the next, but it is possible to list the main components of the systems. According to Figure 5-10, a marketing planning system is composed of a planning process, the people participating in planning, and the tools used in planning.

Planning Process

If planning follows the principles of the IMMP, the stages of planning might be as follows (terms may vary).

Strategic Marketing Plan

The strategic marketing plan builds a basis for marketing across the company. Strategies are developed or changed as needed, and structures and functions are developed or changed accordingly. Chapter 7 offers a real-world example of strategic marketing planning.

Marketing Planning System

Marketing Action Plans

Marketing action plans are often called annual plans, operational plans, or simply budgets. What is important to remember is that action plans implement the strategic marketing plan on an annual basis. Production is allocated to customers and markets defined in the strategies. This allocation produces quantitative market and customer targets for the planning period. Financial targets can be created by adding price estimates to the plans.

It is presumed that on an annual basis, marketing structures are constant and follow the strategic plan. Marketing functions also follow the principles of the strategic plan, but specific annual plans are necessary in order to define how and when various marketing measures are used during the planning period, how much money is budgeted to marketing functions, and so forth.

Often, annual planning begins by updating strategies. If changes are needed, they are made, and structures and functions are then changed accordingly. Updating strategies is followed by other stages of marketing action plans. Chapter 7 offers an example of actual annual marketing planning.

Plans for Shorter Planning Periods and Follow-up

Shorter planning periods may mean quarterly, monthly, weekly, and daily planning. The market situation is dynamic – customers sometimes do not behave as expected, prices often fluctuate, and so forth. Reallocation of market and customer targets might be necessary. The better marketing can cope with its plans, the better possibilities there are for reasonable production plans. Regular follow-up is needed to determine how well plans have been carried out and if corrections are needed.

People Participating in Planning

Marketing planning is done in a team setting. All the people involved in executing the plans should be included in the planning processes, and several different teams may be needed. When strategies of an SBU are defined, they must be in accordance with divisional strategies. Division managers, SBU level managers, production managers, marketing managers, and sales managers must participate in the planning or updating of SBU-level strategies.

While it may not be necessary for division managers to participate in creating action plans on the SBU level, it is important that the SBU level manager, marketing manager, production manager, and sales manager all participate. Representatives of support functions may also be included. When quarterly, monthly, weekly, and daily planning is in question, people from lower organizational levels, especially from production facilities, are needed.

Tools of Planning

As mentioned above, planning and information systems have become increasingly integrated due to developments in IT. Planning systems cannot be described without information systems, and vice versa. As illustrated in Figure 5-10, tools of planning include information files, models, and methods to process information. Both external and internal information is used. In chapter 3 we broadly analyzed external information in marketing planning.

5.3.2 Information Systems

The first step in planning and decision-making is effective use of information and information systems. There is always room for improvement in the use of information. It may be that the manager has insufficient information, there is information that he or she does not know how to use, or that decisions are based on intuition even though the right amount and type of information was available.

In principle, every organization has some kind of information system, be it informal or formal. Broadly speaking, information systems can cover all the systematic processes that create the knowledge needed in business planning or everyday decision-making. A narrow definition of information systems refers to electronic systems and processes for collecting, analyzing and filing information for decision making in the organization.

Figure 5-11 presents how an information system acquires, processes, and files both internal and external information. Based on this view we can briefly define a marketing information system as follows: A system that acquires, processes, and files both internal and external information to be used in marketing.

Acquisition and Processing of Internal Data

Traditionally, sales figures, manufacturing costs, operating costs, and inventories have been the key data incorporated in the information system. Today, in principle, all company processes can be continuously traced by electronic systems and described through key figures/metrics that can then be used to improve those processes.

Accounting systems also produce internal information to be used in marketing planning. Financial accounting gives an overview of the financial situation while management accounting is designed to help managers make decisions.

Profitability information should always be emphasized in information systems since it is central in all strategic decision-making. Information systems must be planned so that profitability of products, customers, and market areas can be followed, as well as the costs of marketing structures and functions (especially logistics).

Acquisition and Processing of External Data

Acquiring information in a company can be irregular or regular, unsystematic or systematic. Typically in smaller wood industry companies, information acquisition is irregular and unsystematic. As companies grow, their information functions clearly become more sophisticated. The intensity and type of external data acquisition may vary considerably.

Information Files

Collecting, analyzing, and storing information demands very specific skills, knowledge, and systems. Outsourcing may seem a natural choice to acquire these necessities. However, information is a strategic resource that the company should control. For example, information can be a success factor and a source of competitive advantage only if the company learns effective information management.

The Idea of Information Systems

In any case, information management has proved to be a problematic issue. If information acquisition is irregular and unsystematic, it may be that information files are totally lost. Market research reports may be unused and simply gathering dust on the shelf of a manager. If full-time information officers and/or separate departments are responsible for information files, it may happen that the information is not used by those for whom it is meant – marketing directors, managers, and salespeople.

The biggest challenge with information files is to assure that the structure, content, and user interface are appropriate and attractive. The information should be in a form to help with everyday decision making situations or planning processes. The technical possibilities to construct information files (databases) are nearly unlimited. The one responsible for information files must fully understand the idea of marketing, marketing planning, and information in order to construct appropriate and attractive systems.

Use of Internal and External Information

As mentioned earlier, information should be in an appropriate and attractive form to be used in everyday decision-making. This means that the information must be compiled into a form that is easy for managers to use, whether it comes through a decision support system, or even a simple research report. Earlier this sort of information was available only in the manager’s office either in paper form or directly from a desktop computer. Today, information can be remotely accessed to assist decision-making in the field. As Figure 5-11 shows, marketing plans are implemented and feedback information is returned to the company’s information system. In many cases a manager will have a “dashboard” on her computer that displays key metrics for her area of responsibility. The dashboard will be tailored to her specifications so that she has precisely the information she wants at her fingertips.

5.3.3 Relationship between Marketing Strategies and Planning and Information Systems

Advanced decision-making demands sophisticated information. Specifically, special and custom-made product strategies require more advanced planning and information systems than commodity product strategies. Toivonen analyzed this relationship empirically and based on a broad literature review drew the hypotheses seen in Figure 5-12. [42] Empirical data from the Finnish forest industry supports these hypotheses. The more selective the marketing strategy, the greater the emphasis on applications which support information services and consulting type of services in the marketing information system strategy.

Hypotheses of Connections Between Strategy and Information Systems

5.4 Marketing Channels

5.4.1 concept and nature of marketing channel.

In most cases a forest company does not sell its products directly to the consumer. Products are transferred as a result of the cooperation of various companies and organizations. The marketing channel can be viewed as a link between the producer and the consumer. We define marketing channel as all the organizations, functions and flows that are needed to get the product or service from producer to customer. Sometimes the term marketing channel is confused with the channel of physical distribution . According to our definition, physical distribution is a part of the marketing functions in a marketing channel, but there are also many other functions. A channel of physical distribution contains all those organizations and functions that facilitate the physical flow of products. A channel containing buying and selling organizations, or those organizations facilitating buying and selling, can be called a contact channel. Marketing communication and collecting market information are examples of marketing functions facilitating buying and selling. So a company’s advertising and market research agencies are part of its marketing channel.

From a production point of view, the marketing channel might be seen as a buffer between the production unit and the environment. It should cushion the shocks and discontinuities coming from the market. This is especially important in capital-intensive, process industries like the paper industry since there must be a continuous flow of raw materials to the production core of the company and continuous flow of products from the production core to the markets. It is the responsibility of marketing and the marketing channel to assure this continuous flow. In some cases the speculative behavior of the marketing channel intermediaries strengthen the fluctuation of demand. This happens most frequently with commodity products like sawn timber and pulp, where the marketing channel can work against its original purpose and principles.

Because connecting the producer and the customer can be seen from many different perspectives which emphasize different issues, it is worth reviewing the following definitions:

Marketing Channel – creates a relationship between the producer and customer. Included in that relationship are all the measures needed to move products and/or services from producer to customer. The relationship can be direct or through intermediaries (merchants, agents or facilitators). The marketing channel concept emphasizes managing the relationships between marketing channel members to execute the marketing measures to the full satisfaction of the customer.

Channel of Physical Distribution – enables the transportation of products from mill to customer. It contains the organizations which facilitate the physical movement of products. The basic components of physical distribution are order processing, inventory control, material handling, transportation, and warehousing. Physical distribution emphasizes satisfying customers with the right product in the right place at the right time at a minimal cost with the desired service level.

Supply Chain – The supply chain begins earlier than the marketing channel and includes raw material supply and manufacturing. Supply chain management (SCM) can be defined as management of upstream and downstream flows of products and information between raw material suppliers and customers to deliver superior customer value at less cost to the supply chain as a whole. [43] SCM emphasizes optimized product flows and abundant and transparent information flows.

Value Chain – A supply chain can be interpreted as a value chain creating value for the customer all the way from the source of the raw material to the final end-use of the product. To gain competitive advantage over its rivals, a firm must promote value to its customers through performing activities more effectively than its competitors or by performing activities in a unique way that creates superior buyer value. [44] The value chain emphasizes optimal or differentiated accumulation of customer value.

Distribution System – Each market has its own structure of marketing channel intermediaries. This structure provides possibilities and limitations to the marketer in arranging marketing and choosing marketing channels in that particular market. We call the structure the “distribution system of the market.”

Because a marketing channel is a group of independent organizations that work together to make a product or service available to a customer, it can be seen as a network creating value for the customer. There are three basic kinds of organizations within the channel. First are intermediaries that buy and sell a product (take title). These merchants can be organizations such as wholesalers, stocking distributors, and retailers. Agents do not take title of the product, but negotiate a deal between the buyer and the seller and often make transportation arrangements. A final set of organizations provides services that facilitate the activities of the marketing channel and are called facilitators . [45] Facilitators consist of companies involved in transportation, storage and warehousing, advertising, finance, insurance, and marketing research. [46]

5.4.2 Objectives and Functions of Marketing Channels

Objectives for a company’s marketing channel are dictated by product, customer, market area, and core competency strategies. For example, the marketing channel must move the product defined in the product strategy to the customers and markets defined in the customer and market area strategies and be supported by the company’s core competencies.

The objectives of marketing channels can also be defined more precisely – if, for example, customers emphasize reliability of delivery, the company should also emphasize this aspect in its objectives. If the company is emphasizing special or custom-made products, the marketing channel must be able to carry information and create closer contacts with customers.

A number of different flows occur in a properly functioning marketing channel:

Product flow – physical flow from producer to customer

Negotiation flow – deal making among members of the channel

Ownership flow – movement of product title among the channel members

Information flow – both up and down the chain

Promotion flow – advertising, etc. used to communicate with customers [47]

Merchants, agents, and facilitators perform a variety of functions to assist in delivering a product to the customer. A company can own or control major components of the marketing channel. Larger companies in the North American forest industry commonly developed their own distribution businesses in earlier times, but most have exited this business area. For example, Georgia Pacific was a major distributor of building products in the US, but chose to sell that business (now operates as BlueLinx). Global paper companies tend to operate their own marketing channels, at least for their largest customers. However, smaller companies are more reliant on other organizations to form the marketing channel. This is also true of larger companies, if they are serving a diverse set of small customers or final consumers. A final consumer usually wants to:

Because consumer preferences are so specific, few companies have the resources necessary to provide all the functions of a full marketing channel. Even if a company has the resources to have its own captive marketing channel, it may not be in its best interest to do so. Instead, it may be more productive for the company to concentrate on its core operations.

Intermediaries in the marketing channel provide services that benefit both the producer and the customer. In essence, they shorten the distance between the producer and the consumer in terms of time, culture, etc., and they move information in both directions. Below is a summary of some of the key functions of intermediaries.

Relationship maintenance with final consumer – With a product that is consumed by many people, it is difficult to maintain so many relationships. As the customer base in some sectors moves increasingly towards end-users, the number of contacts increases rapidly. An intermediary can take care of this. On the other hand, if a company’s total customer base is few in number, it may make sense to have in-house sales and distribution.

Handling details of price and delivery with final consumer – Every time someone orders a product, a transaction cost is incurred. Once again, if there are many customers placing orders, it may be advantageous to let an intermediary handle much of the order taking. For sawn timber, the average importer may buy 1000-2000 m 3 per shipment, whereas the average industrial end-user may need only 50-100 m 3 . Using an intermediary allows the company to process a few large orders from the intermediary rather than numerous small orders from final customers, effectively reducing total transaction costs.

Provide credit/collection – accounts payable can be a significant problem for the small business, as the delay in payment interrupts cash flow. Another significant problem is bad debt – those companies that buy a product but choose to never pay. Letting an intermediary handle credit and collection effectively lowers risks. In addition, changes in the global financial system as a result of the Great Recession has increased the difficulty for small companies to obtain debt financing or a line of credit.

Provide inventory/storage – Space constraints, inventory holding costs, demands for just-in-time delivery, and demand for large orders all may be good reasons to let an intermediary take care of inventory and storage. To the extent that the intermediary can provide these services more efficiently, the producing company’s costs may decline and total product utility may increase.

The functions of marketing channel intermediaries can be derived by analyzing the basic task of marketing and can be classified according to the functions mentioned in the Integrated Model of Marketing Planning:

Personal contacts

Marketing communication

Market information

Functional communication and service (routines of marketing/selling)

Product planning

Physical distribution

5.4.3 Structure of Marketing Channels

Structural Alternatives

The concept of the marketing channel structure refers to different intermediary chains functioning in the marketing channel. In theory, almost any combination of intermediaries is possible; however, for any one industry sector, there will be only a few combinations that account for the majority of product flow. For example, the producer might use an in-country (domestic) agent in order to export products to another country. That agent might arrange for the product to be sold to an importer in the other country that in turn sells the product to an industrial end-user and, finally, the product arrives at the final consumer. Figure 5-13 provides examples of marketing channel structure alternatives.

A significant change over time in marketing channels has been disintermediation. In other words, intermediaries are being eliminated from the channels, in favor of more direct distribution. In the 70s, small sawmills might have utilized a channel that included export and import agents, an importer, and a distributor. However, by the 90s this had changed significantly, with larger companies using a more vertical structure with more steps under their immediate control (Figure 5-14).

Intermediaries in the Marketing Channels

The role of intermediaries can vary depending on market areas and the historical developments of trade and marketing channels in a country or region. In some countries big importers are dominating the majority of retail trade. In other countries, agents have an important position in the marketing channel. The same company can perform the jobs of several traditional intermediaries. Generally it can be said that there are fewer intermediaries today than in the past. This is partially a result of larger customer or producer companies and the power they bring to the marketplace. However, equally important is a new preference by customers, especially industrial end-users, to deal directly with the producer rather than an intermediary. Often they want to deal with the person in the mill that can actually make decisions rather than filter the communication through different levels of intermediaries.

Important Marketing Channel Alternatives

It is important to note that names for intermediaries differ from one country to another – and even sometimes within countries – even when they provide much the same service. For example, the US Census Bureau divides wholesalers into three different categories: [48]

Those that sell goods on their own account – wholesale merchants, distributors, jobbers, drop shippers, import/export merchants.

Those that sell goods manufactured by the parent company – manufacturers sales branches and offices.

Those that arrange sales and purchases for others for a commission or fee – agents, brokers, commission merchants, import/export agents and brokers, auction companies, and manufacturers’ agents.

While this categorization is useful, it does not fully describe the situation in the wood products industry. For example, in the first category above, the Census Bureau states that goods are generally sold without transformation. This is not always the case in the wood products industry, as is shown in the discussion of wholesalers below. In fact, one major category of wholesalers in the wood industry is those that re-manufacture and resell the product. In the following sections we give an overview of the major intermediaries in the forest industry marketing channels. Example 5-4 provides examples of each of the types of intermediaries outlined below.

Example 5-4: Examples of Intermediaries in the Value Chain

Agent – Gratenau & Hesselbacher GmbH G&H is an international trading group located in Hamburg, Germany. The company was founded in 1874 and is involved with trading pulp, paper, and packaging products.

Sales Office – Stora Enso (France)

Stora Enso maintains a sales office in Lormont, France for its wood operations.

Importer – Vanport International, Inc.

Vanport International does both imports and exports via its head office in Boring, Oregon as well as through its representatives in Japan, Europe, South America, and throughout Asia.

Wholesaler – Forest City Trading Group, LLC

Forest City Trading Group, LLC was established in 1964 in Portland, Oregon. With 12 operating divisions and 305 traders, the company offers a wide range of lumber and panel products as well as other building materials.

Reload Center – Westran Services Limited

The Westran group of companies specializes in transloading services. Its roots are from 1985 when it was formed to provide British Columbian mills access to the Burlinton Northern Railroad (now BNSF).

Industrial End-User – 9 Wood

9Wood, Inc. is a manufacturer of suspended wood ceilings. Formed in 2004, the company is located in Springfield, Oregon. Their products utilize a variety of species and typically are used in high-end commercial applications.

Retail Store – Kingfisher

Kingfisher is a retail group that includes multiple store brands and employs nearly 80,000 people across 1,300 stores. One Kingfisher brand, B&Q, is a DIY retail chain similar to The Home Depot in the US. B&Q is the largest DIY chain in the UK with nearly 300 stores.

An agent is a general term for intermediaries that do not take title to a product but rather negotiate sales between buyer and seller. The two most common agents in North America are brokers and manufacturer’s representatives. Brokers are common players in situations where large quantities of bulk goods are being handled. Manufacturer’s representatives are like salespeople for hire; they substitute for a company’s sales force. Manufacturer’s representatives are still important in some parts of the building products marketplace in the Americas.

In countries that are more import- and export-oriented, export and import agents are common, ranging in size from very large organizations to one-person companies. The position of these agents has generally weakened in many market areas. For example the use of both export and import agents by Finnish companies has decreased because the number of small sawmills has decreased and the bigger companies have created their own sales offices in the main countries in middle Europe. In addition, even those companies without sales offices have developed the expertise to handle the services typically offered by an agent. Smaller agents who specialize in specific geographic areas and clearly identified end-use markets have more recently been formed. Today, large companies typically use agents for smaller market areas and in countries that are not an important component of total sales.

Small companies still see agents as a cost-effective alternative when attempting to cover a wider market area.

With agents, the actual buy/sell agreement is made between the producer and the customer. For assisting in finding the customer and helping to negotiate the sale, the agent gets a commission (1-5% of the value of the trade minus delivery costs), which is paid by the seller. The commission is highly negotiable and varies depending on aspects such as risk, paying ability of the customer, delivery method, and volume. Some agents choose to shoulder some of the risks and may even provide financing for the customer. Agents can have several clients or may work exclusively for one company.

Advantages of Dealing with an Agent

Challenges of Dealing with an Agent

Sales Office/Sales Company

A sales office is a unit located in a foreign country that belongs to the producing company. A company may open a new sales office on its own, or it may purchase an existing business (e.g., an agent) and adapt it to its needs. Typically, big forest products companies have their own sales offices and/or sales companies in their most important export countries. The sales office takes care of selling the company’s product in that specific market area and is responsible for every-day contacts with customers. It also provides feedback to the production sites and corporate headquarters regarding customer needs and market trends.

Advantages of a Sales Office

Challenges of Maintaining a Sales Office

Importers usually specialize in importing commodities. They may also have exclusive rights to import a company’s products and to represent the company in certain market areas. In addition to storing and distributing the product, many importers also add value to the product through such activities as planing or drying. As with agents, import companies range in size, but importers are usually bigger than agent companies. Big importers sell most of their products to retailers like do-it-yourself retail chains and lumberyards or they may even own their own retail chain. Smaller importers usually specialize in serving specific end-use sectors with a more limited product selection.

Advantages of Dealing with an Importer

Challenges of Dealing with an Importer

A wholesaler is a specialist in matching seller products with buyer needs and can provide a number of functions that are of value to both buyer and seller. For example, in a marketplace where there are many small buyers of a commodity product, the wholesaler typically specializes in breaking down large shipments of product into delivery sizes appropriate for those small buyers. This function is typically difficult for the average manufacturer to do cost effectively. The wholesaler can also provide a wide array of other services such as re-manufacturing, packaging, grading, arranging transportation, and providing credit. Some specialty wholesalers may even provide services such as product demonstrations and training of retail salespeople. In North America, wholesalers of commodities can gross between three and six percent of the transaction value.

The roles of a wholesaler and an importer are in many ways the same. Both are buying, storing, and handling product in large quantities and selling in small quantities. The main difference is that an importer is buying from other countries, whereas a wholesaler is normally buying within the same country. In practice, the same company can serve as both an importer and a wholesaler. Wholesaling is usually specialized in certain product groups, just like the importer.

Wholesalers (i.e., paper merchants) are important in paper marketing. Even if the publishers and printing houses have the potential to buy directly from the mill, the mills are not always selling in small enough quantities or at the right times. Merchants distribute the large quantities of paper they have bought to publishers and printing houses in the quantities that they need. Many merchants are also buying straight from foreign mills which means that they are also functioning as importers.

Wholesalers are also important for solid wood products. As with agents, the role of wholesalers has declined somewhat, as the market has shifted towards direct marketing and distribution. This trend can be expected to continue in the future (Example 5-5).

Example 5-5: North American Lumber Wholesalers and the Great Recession

The Great Recession had a number of impacts on North American wholesalers. As the sawmill sector decreased production (by nearly half between 2007 and 2009), wholesalers faced limited product availability. Many wholesalers had developed niche markets based on species or market segment, limited supply was especially difficult for these specialty players. At the same time, buyers were changing their habits to deal with the recession and began buying smaller volumes and more highly mixed loads. Buyers tended not to take positions based on marketplace expectations, so large-volume orders became less common. Price volatility and judging market swings are important ingredients to the profitability of wholesalers. Price volatility changed dramatically during the recession. In 2006 the difference between the highest and lowest price for Douglas-fir standard and better two by four was $161/MBF, but by 2009 this spread had shrunk to $31/MBF. Finding margin within such a narrow spread was especially challenging. [49]

Advantages of Dealing with a Wholesaler

Challenges of Dealing with a Wholesaler

Example 5-6: Speculation by Intermediaries

Historically office wholesalers (and other intermediaries) have speculated on the direction of the markets. If they feel the price is low, they might buy product without a customer in mind; conversely, they might sell product they don’t yet own when the price is high. Typically this is done on a rail car or truckload basis. Speculating in this way can create high profits. Of course, there are also high risks of incorrect predictions. The following explains some of the terminology used in these situations:

Long Position: A speculative position when a shipment is purchased without being sold.

Short Position: A speculative position when a shipment is sold without being purchased. [50]

Reload Centers

Reload centers or transloaders in North America have developed because of the complexities surrounding transportation of wood products. Essentially, reload centers are logistics specialists that receive and warehouse products, list them in inventory, mix products to meet final customer needs, and ship them when needed. One of the main factors speeding their development was the need for producers to connect short haul trucking to long haul railroad. [51] Prior to many of the rail mergers in North America, reloads were used to transfer materials between a supplier served by one rail line and a customer served by another. Another major factor has been the increase of demands, especially by large retailers, for just-in-time deliveries. This demand by retailers has effectively moved the inventory maintenance role back to the reloader. Reloads have become a place for both suppliers and customers to keep inventory. For example, large retailers tend to keep consignment inventories at reloads and Canadian lumber producers often use reloads in the US as extensions of their mill inventories. Car swapping is also an important function of some reloads in the upper Midwest. By unloading Canadian railcars and transferring the product to US-based company railcars, the overall freight costs are reduced. While this may seem illogical, the rates charged by the Canadian company are lower because the cars are returned more quickly. [52]

Advantages of Dealing with a Reload Center

Challenges of Dealing with a Reload Center

Industrial End-User

An industrial end-user acts both as a user of the product and an intermediary. All companies that further process a product fit this category. Planing companies, furniture manufacturers, homebuilders, window and door manufacturers, printing houses, and packaging producers are all industrial end-users. Even though publishing companies don’t themselves process a product further (they have this done by the printing house), they can also be included in this group.

Industrial end-users can buy products from any other member of the marketing channel. The biggest end-users are buying their products directly from forest products companies. Though it is changing over time, much of the volume purchased by industrial end-users is from wholesalers and importers. Smaller industrial end-users such as homebuilders also buy from retailers.

Advantages of Dealing with an Industrial End-User

Challenges of Dealing with an Industrial End-User

Retail Stores

The retail group is very heterogeneous and includes companies selling products ranging from rough lumber to furniture. The aim of all retail companies is similar – to serve consumers and the smallest industrial end-users with the product selection they want in the way they want to buy. Product selection offered by a retail company is usually quite broad.

Retailers can be independent, part of a chain, or part of a dealer-owned cooperative. The traditional retailer was small and independent. For example, small lumberyards were the traditional retailers of building materials. This has changed as small companies have found it difficult to compete with large chain-store retailers and the resources they command. There are basically two kinds of retailers for building products. Do-it-yourself (DIY) retailers who target final consumers, and other retailers (pro dealers) that target professional contractors. The mix of products offered by each is quite different and depends on the needs of the target customer group.

In many countries around the world, large, warehouse-style retailers are becoming dominant players in the wood and paper products marketing channels. Because of their size, large chains like The Home Depot, B&Q, and OBI possess considerable buying power and are able to access supply more cheaply than smaller retailers. In addition, they have the resources to manage their own distribution systems, develop brand name merchandise, and guarantee low prices to their customers. The growth of this type retailer has had a profound impact on the marketing channels of the forest industry (Example 5-7).

Cooperatives are an attempt to combine the good aspects of small, independent stores and the buying power that accompanies large purchases. Many small retailers form an organization to buy large volumes of product that can be divided appropriately among the members. They may also cooperate to create generic advertising and other marketing communications. An example from the US is Ace Hardware. This cooperative has over 4,500 members with stores in all 50 US states and 60 countries. Retail sales of member companies total approximately $12 billion. [53]

Example 5-7: DIY Retailers Change Forest Products Marketing Channels

According to the Joint Center for Housing Studies at Harvard University, Americans spend over $300 billion per year on repair and remodeling. This demand explains the prevalence of “Big Box” DIY retailers such as The Home Depot and Lowes. The Home Depot sales were approximately $15 billion in 1995, but had grown to approximately $100 billion by 2017. These big box retailers have forced a major shift in distribution practices away from the use of intermediaries and toward dealing directly. The lines between manufacturers, wholesalers, and retailers have blurred, as large manufacturers have created their own distribution companies and retailers have developed their own major distribution centers, effectively integrating the functions of most intermediaries. [54]

5.4.4 The Marketing Channel as a Social System

When establishing, developing, and managing a marketing channel, it should be seen as a whole – as a system or network or a set of organizations outside company borders. When analyzing a marketing channel, we are interested in its structure and functioning. The structural components of a marketing channel and channel intermediaries have already been described. With respect to the functioning of a marketing channel, it is important to analyze the relationships among intermediaries. After a marketing channel has been established, changes and corrective actions are mostly necessary when intermediaries are not performing as expected or when there are other conflicts in the relationships among intermediaries. We can gain a deeper understanding of the functioning of a marketing channel by considering it as a social system.

It is important to remember that a marketing channel is not only a rationally-managed economic system, but also a social system where most of the typical behavioral features of social systems are present. A social system results from the socio-cultural interaction of a person or group of people (organization). [55] Business-to-business marketing channels should especially be considered as social systems, because of the multifaceted relationships a firm has with its partners (suppliers and customers).

The most central relationships among members of a social system are:

These relationships have a significant impact on the functioning and performance of the whole system. Management of a marketing channel is all about regulating these relations. Problems in power relations, roles, and communication lead to channel conflict, which impacts the performance of the channel. Solving conflict requires management actions either in the structures or in the functions of the marketing channel. On the other hand, the ability of the producer (supplier) to influence the marketing channel structures or functions also depends on the social relationships in the marketing channel. The producer may not have sufficient power to influence the behavior of the other members of the system. These ideas are summarized in Figure 5-15.

Basics Factors Affecting the Efficiency of the Marketing Channel

Power in Marketing Channels

As Figure 5-15 indicates, power has an impact both on role formation and communication.

Power in the marketing channel can be defined as a channel member’s ability to get another member to do something it otherwise would not do [56] , [57] For example, a producer’s power over a merchant can be seen in how well it persuades the merchant to act in the way it desires.

Power is often seen as negative phenomenon; people do not want to acknowledge it in the relationships of individuals or organizations. Therefore, power must be used with care. A channel member that exerts too much overt power on other members of the chain creates enemies. Even cooperative relations also contain power aspects. Managing a marketing channel requires an understanding of power relations and the ability to influence them.

Power relations in a marketing channel are not always readily evident. The hierarchical structure typical in organizations is generally absent in marketing channels. However it is easy to see and understand that marketing intermediaries are mutually dependent upon each other. Dependency is an outcome of motivational investments to the relationship and the possibilities (options) outside the relationship. [58] For example, the power of an importer over a manufacturer is dependent upon how large a proportion of the manufacturer’s production the importer sells and/or how big and important market the importer covers (producer’s motivational investments). The power of the importer is also dependent upon the ability of the producer to pass the importer (to use other marketing channels, to sell to other markets etc.). Social psychological theory suggests the following five sources of power:

Coercive power – if an organization can force another to act in a certain way by threatening to terminate a relationship, it has coercive power.

Reward power – if an organization has benefits in its possession that are valued by the other, it has reward power.

Legitimate power – an organization has legitimate power over another if the other approves use of power because of tradition, norm, law, contract, etc.

Expert power – if an organization has specialized knowledge, skills, or other capabilities that are of value to other organizations, it has expert power.

Referent power – when an organization is so well respected that other organizations are proud to be associated with it, it has referent power. [59] , [60]

So the sources of power are those resources possessed by one partner that are important to the other partner in reaching its goals. Accordingly, the sources of an agent’s power could be:

An agent’s power may be strong over a supplier (producer) who doesn’t have enough volume or capital to establish its own sales unit. Existence of an intermediary always reduces the producer’s power over the customer.

Other channel intermediaries have similar potential sources of power. For example, an importer might have the same sources of power cited above for the agent plus the following:

Roles in Marketing Channels

As in an organization, a social system is composed of positions (roles). The total structure is formed around the principle of division of labor, and labor is divided in such a way as to reach the goals of the system as effectively as possible. The functioning of the system is based on reciprocity and mutual expectations of the functioning of the system.

Each intermediary has its own role in the marketing channel structure. The performance of a marketing channel depends on how the functional roles in the system have been differentiated, whether the functions are appropriate from the whole systems point of view, and if reciprocity is working as it should.

The starting point for division of labor and role definition in a marketing channel system is the basic task of marketing – moving the products from production to consumption (right product, at right time, in right place, to right customer). Marketing channel managers must understand and be able to discern why a channel intermediary behaves as it does and where marketing channel conflicts originate.

The intermediary’s objectives, perceptions of its role, and role qualifications (knowledge, skills and motivation) are the internal factors modifying role behavior. When choosing a sales representative (intermediary), the marketer should carefully analyze the objectives of the candidate, what the candidate sees as proper tasks and functions of a sales representative, and whether the candidate possesses the necessary qualifications.

External factors also influence the intermediary’s behavior, according to its own interpretation of basic marketing tasks. Changes in the operating environment (distribution structures, business cultures etc.) have an impact on the behavior of the intermediary. According to theory, role partner expectations are the primary factors in modifying role behavior. Again it must be emphasized that role expectations are interpreted by the role position holder. In a marketing channel an intermediary must balance expectations from all its role partners and adjust the expectations to its perception of its own role.

In the following sections we cover the sorts of conflicts role behavior and different role perceptions and expectations can cause and how to manage the conflicts.

Communication in Marketing Channels

Communication in a marketing channel is different than power or roles. Information is a driving force of marketing, and information and communication are tools in the implementation of marketing measures. According to one definition, marketing is the creation of a communication relationship between producer and consumer. The longer the marketing channel, the more important are the communication issues and the more difficult it is to attend to them. Communication problems can be especially problematic in international marketing. Building and maintaining two-way channels of communication is one of the most important tasks of the international marketer.

Communication challenges in international marketing have created the need for several intermediaries between producer and customer. Communication problems have been one reason for the strong position of agents in international trade of forest products. As conditions have changed (i.e., globalization) and the skills of producers have developed, the need for intermediaries has diminished or almost disappeared. Nowadays it is often said that the existence of several intermediaries causes communication problems rather than removing them.

Information, communication, and power are closely related. Information can be a source of power. If an intermediary offers the only communication channel between producer and customer it has considerable power over the producer. Acting as a gatekeeper always creates a power advantage. In many cases an intermediary may attempt to keep a power advantage by not sharing information, or by sharing only the information that works to their favor.

Conflict in the Marketing Channel

We define conflict in a marketing channel as a situation where one channel member feels that reaching its objectives has become more difficult or has been totally prevented because of the behavior of another member. Conflicts in a marketing channel can be analyzed through the closely interrelated concepts of power, roles, and communication.

Power Conflicts

The root of conflict in the channel is the interdependence of channel members. This interdependence means, for example, that the individual objectives of the channel intermediaries should be parallel with the general objectives of the channel. If this is not the case, the general objectives should be clarified and individual objectives harmonized to be compatible with the general objectives. This requires an actor capable of defining the general objectives and making the individual objectives parallel. Sometimes this kind of actor is called a “channel captain.”

It is inevitable that when managing a marketing channel, power relations emerge. If the power relations are not harmonious, we say there is a power conflict in the channel, making it very difficult to implement changes to enhance channel efficiency. Diffuse power relations may also cause a power conflict, as an intermediary may not have made it clear for whom it is working.

Role Conflicts

Role conflicts that are harmful to the performance of a marketing channel are based either on role expectations or role behavior. [61] There are three types of conflicts associated with role expectations :

There are also three types of conflict situations associated with role behavior:

Role conflicts may make it necessary to restructure the channel by, for example, establishing a sales office, as we will see in the next section.

Communication Problems

Communication problems are the most frequently cited cause for ineffective organizations. In marketing channels it is typical that there is insufficient communication between the most distant channel members. For example, there may be frequent communication between an agent or sales office and the producer, but the producer may know nothing about the problems the retailer has with the products or service. As mentioned above, the longer the channel the more possibilities for communication problems.

The information transmitted in communication relations may also be inappropriate. An intermediary may supply lots of market information dealing with the general demand/supply situation, but this may be of little use to the producer, who needs exact descriptions of end-use and end-users for strategic marketing planning. A major communication conflict can be caused by an intermediary misusing its gatekeeper position by hiding information to maintain its power advantage.

Managing the Marketing Channel as a Social System

Based on the principles of social systems, it is easy to see that marketing channels should be managed as social systems. Power relations should be harmonized, should satisfy all participants, and should allow execution of necessary marketing tasks. According to the principles of strategic marketing, marketing channels should implement marketing strategies. The producer should have the power to define appropriate structures and functions for its own marketing channels. If this is not the case, the producer should create measures to increase its relative power. In some cases, however, marketing channels may restrict execution of marketing strategies and the producer must adapt its strategies to the prevailing marketing structures.

Roles may be the most important area when managing the marketing channel as a social system:

It is important that there is an appropriate amount and type of communication within the marketing channel. Efficient and sufficient communication is the glue that holds the marketing channel together, and at the same time, the lubricant that keeps it running smoothly. Example 5-8 demonstrates market channels as social systems through the context of the export marketing channels of the Finnish forest industry.

Example 5-8: Marketing Channel Evolution of Finnish Companies

Situation in the Marketing Channels in late 1970’s

In late 1970’s, a softwood purchasing manager of a UK importer was asked how he evaluates the marketing skills and operations of Finnish sawmills. Slightly surprised by the question, he answered, “No marketing is needed. It is enough that Finnish sawmills have the right volumes of the right kind of sawn timber when an importer, through an agent, asks for it.” This is a good description of the marketing channel situation at that time. The importer considered itself as channel captain that defined what kind and amounts of sawn timber was needed, and when. Agents were important intermediaries and most sawn timber was marketed through channels containing both agent and importer. Although the establishment of sales offices by producing companies had begun, there were typically few contacts with industrial end-users.

Marketing Objectives of Sawmills and Panel Mills

Although value-added timber was a central topic of discussion, sawmills basically only produced commodity products. However, a genuine need to develop operations was recognized, and it created a demand to improve the efficiency of export marketing channels. Serious strategy discussions were started in the early 1980s to begin producing special and custom-made products. The panel industry had started specializing earlier and already had special and custom-made products and selective customer strategies. The clear strategic objective was to increase production and sales of value-added products. These strategic objectives were clearly reflected in the demands placed on the marketing channels. Different types of operations were needed and there was also much discussion about the need for structural changes. Marketing channels were in a state of transition, and channel conflicts were inevitable.

Power Relations in Marketing Channels

Both sawmills and panel mills felt they lacked power in marketing channels and needed more influence upon the operations of the channel. Structural changes in marketing channels appeared to be the only way of increasing power, which meant establishing a sales office in important export market countries. Other sources of power could also be subsequently strengthened.

Channel intermediaries resisted this change and tried to maintain the power status quo. Consolidation restructured the distribution systems of the markets and made the established players in the markets even stronger. The resistance to change required producers to be active, systematic, and firm in order to execute the changes in the structures or functions of the marketing channels.

Role conflicts are typically connected to marketing development situations where a new type of behavior is expected from marketing channel intermediaries. The panel industry has experienced the strongest role conflicts because of changes in marketing strategies. According to the panel industry, agents were both unable and unwilling to sell value-added products. Traditionally, agents have not had the necessary expertise needed to conduct marketing measures connected to special and custom-made products. This has meant that sales offices replaced agents. The most active and advanced agents have developed special knowledge or skills of certain markets or products, and maintained their role in the marketing channel.

Because of their many competitive advantages, importers have maintained their role in the marketing channel for commodity products. On the other hand, their role has profoundly changed because (especially in some markets) most importers are also industrial end-users. This dual role makes them very strong in the marketing channel of sawn timber.

Communication in the Marketing Channel

Earlier we emphasized the importance of communication in marketing channels. Communication problems have been very evident in the marketing channels of both sawn timber and wood-based panels. Restructuring of marketing channels has been implemented to improve customer contacts. Information flows – especially from markets to producer, but also from producer to end-users – have been insufficient.

5.4.6 Design of Marketing Channels – Choice of Channel Structure

We see two different ways to approach the design of a marketing channel or to choose the channel structure. The design of a marketing channel can be seen as an independent business decision that takes place in an environment composed of the company and its products and markets, or it can be seen from the perspective of strategic marketing where the whole marketing planning context is considered. A company is free to choose its marketing channels for its products, but the environment places many limitations on this choice. Although many of the limitations in these two approaches are the same or similar, there are differences in the philosophy or basic principles in choosing the channel structure. Depending on a manager’s philosophy, he or she may want to emphasize various aspects differently.

Choice Based on Characteristics of the Marketing Environment

It is popular to see the design of a marketing channel as an independent decision determined by various company and environmental factors. According to Kotler every producer sets channel objectives and chooses channel structures under certain constraints. [62] These are customer and product factors, characteristics of intermediaries, competitive factors, characteristics of the company, and environmental factors.

According to Rosenbloom, there are six classes of determinants that influence the structure of a marketing channel [63] :

These factors are associated with both physical distribution and contact channels. Customers are mentioned on both lists. Kotler speaks about the customer’s desired service output level and Rosenbloom refers to customers when mentioning market behavior under market factors. [64] , [65] Whatever the approach is when designing marketing channels, the customer must be the first consideration. The chosen marketing channel structure should maximize total product utility for the customer.

Where does the customer want to purchase the product? – Some consumers like to shop in upscale stores with many amenities, while others like large discount centers with bare concrete floors and low prices. Still other consumers want the convenience of sitting at home and buying products online. Where the product is placed will contribute to or detract from the image that the company is trying to develop for itself and its product. For example, an up-scale image cannot be developed on the shelves of a discount store.

Who does the customer want to deal with? – Is the customer accustomed to dealing with a specific broker or wholesaler? If so, it may be imperative to involve that intermediary in the process. On the other hand, many buyers like to deal directly even with very small manufacturers.

In what form does the customer want to receive the product? – Is the customer a low volume or high volume user? Will the customer be purchasing one item, a case, a gross, or a truckload? Each of these scenarios potentially involves a different marketing channel structure. With some products it may be necessary to develop different structures for different target markets. Small manufacturers may face a situation where they cannot supply sufficient volume to satisfy many customers. This is an example of when a wholesaler can play a significant and valuable role. By purchasing from numerous manufacturers, the wholesaler can accumulate enough volume to cater to larger customers.

How often does the customer want to receive the product? – The type, location, and size of the customer, as well as a variety of other variables, will influence how often they want to receive shipment. This could range from yearly or monthly on down to just-in-time delivery based on their production schedule. Each of these different requirements has distinct implications for the structure of the marketing channel as well as production planning and inventory control.

Choice Based on Marketing Strategies

If marketing channels are designed in the context of strategic marketing planning, company strategies define clear objectives for the channels. When choosing the marketing channels, we ask what sort of channel is best for company products and customers in the market area where the company operates. We also ask if company core competencies can be used effectively when using certain channels, so strategic position is always made explicit and present when channel decisions are made.

A detailed definition of strategy determines the marketing functions that the channel should enable. Those channel structures which best implement the needed functions can be regarded as ideal. Whether it is possible to use the ideal structures depends on the company and its environmental factors. In summary, strategies define the objectives and performance requirements of the marketing channel, and these requirements subsequently drive the design of the channel. Ultimately, company and environmental factors will dictate how perfectly the ideal channel structures can be implemented.

The marketing planning which is described on both theoretical and practical levels in chapter 7 demonstrates how marketing channels are defined in the context of strategic marketing planning.

Marketing channel design in a marketing planning process:

Market analysis as desk research with secondary data – The attractiveness of various markets, market segments, or customers are analyzed in order to define hypothetical (preliminary) marketing strategies. For channel design, all the secondary material that supports designing marketing channels is also produced. The descriptions of distribution systems in the potential market areas are needed. Information about the other macro environment is also needed in channel design. An example of the macro environment is the laws that regulate business. The channel designer must know the limits laws place on channel management. Information concerning competitor channel design and performance is also valuable.

Adding internal information to the planning process – Those strategies are chosen which fit the strengths and weaknesses of the company. Internal information needed in planning of marketing structures and functions is made explicit.

Defining preliminary strategy-structure-function combinations – At this stage appropriate structures and functions are generated to implement the hypothetical strategies. As to channel design both marketing theory and manager experience offer ideas on what sort of channel structures best implement the chosen strategies. Internal information dictates what is possible for the company. Market information produced at stage one dictates what is possible from the perspective of the market. As a result of this stage we have created a hypothetical marketing plan that contains marketing channel design based on information available this far.

Testing the preliminary marketing plan by customer survey – The hypothetical marketing plan must be tested in markets among customers. Markets and customers are those defined in the preliminary strategies. The customer survey is conducted to determine if the hypothetical marketing plan works in practice. To test the preliminary channel design, detailed information concerning customer needs, requirements, and purchasing behavior is produced. Based on this information, we know if the planned channel design is suitable for customers. The detailed marketing functions implementing the strategies, needed by the customers, and performed by the marketing channel are also defined at this stage.

After this planning process is complete, we have a channel design which implements strategies and contains necessary role and communication descriptions. What is important to notice is that it meets the requirements of the customers, because they could express their needs and requirements concerning both the structure and performance of the channel.

Examples of how marketing strategies relate to various channel structures:

Product strategies – When Finnish paper companies marketed their products through sales associations (long channel), the channel structure prevented or impeded companies’ abilities to develop their product strategies from commodities to special products. Companies seeking more advanced strategies left the sales associations and designed their own shorter channels. After the sales association system ended, paper companies concentrated on differentiating their products through branding, for example. In the Finnish sawmilling industry, special and custom-made products are often marketed straight to industrial end-users.

Customer strategies – The type of customer targeted has a clear impact on channel structure. The trend is toward more direct contacts that bypass intermediaries, but this is not always possible. For example, the Finnish newsprint and magazine paper business is a “reel business.” It is business-to-business trading where customers are few and orders are big. Paper in reels is sold mostly straight to the end-users (catalogers, publishers, printing houses). Only a small share of paper is sold through intermediaries (brokers or merchants). Fine paper is quite the opposite case. The fine paper business is referred to as a “sheet business,” where orders are small and the number of customers is considerably larger. Therefore the use of merchants is highly appropriate. Only a very small share of fine paper is marketed without merchants.

As mentioned earlier, the structure of the customer base is changing. Customers are growing bigger and more global. Growing and globalizing producers are developing their customer strategies to match with these large customers (their strategic accounts). Strategic account management presupposes very close connections and keen cooperation between supplier and customer. This development has had, and will continue to have, an effect on both the structures and functions of marketing channels.

Market area – Market area may influence channel structures in two ways. A strategic market area may need a special channel design. A market area may limit the possible design choices because of special characteristics of the distribution system of the market. If possible, strategically important market areas are covered by sales offices. Volumes are larger, channels are shorter and contacts are closer. More distant markets with minor importance are taken care of by intermediaries like agents or brokers. These are general principles regardless of the industry sector.

Both the distribution systems and the nature of various intermediaries in various markets may be different. For example, importers or wholesalers have much more powerful positions in some markets than in others. Intermediaries are used at times because of their powerful position in the market, even though customer and product strategies suggest direct contact with customers would be preferable.

Core competencies – Intangible resources as a basis for competitive advantage are becoming more important. Those resources are needed when increasing total product quality or the quality of customer relationships. Again, this means close contacts and keen cooperation with customers, factors to be considered in channel design.

5.5 Chapter Questions

Strategic Marketing in the Global Forest Industries by Eric Hansen & Heikki Juslin is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License , except where otherwise noted.

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7 Steps to Create a Complete Marketing Strategy in 2023

Kayla Carmicheal

Published: December 08, 2022

Creating a marketing strategy is essential to effectively nurture your customers, improve the bottom line at your business, and increase the ROI of your efforts.

Marketers planning their 2023 marketing strategy.

A marketing strategy is especially critical if you want to leverage the highest-ROI trends for 2023 : short video, influencer marketing, and branded social media. To get powerful results, you must carefully weave both emerging trends and proven strategies into your plan.

Let's dive into the critical components of a complete marketing strategy in 2023, followed by some examples for inspiration.

Marketing Strategy

A marketing strategy is a detailed, structured plan of a company’s promotional efforts across a wide range of platforms and channels. A marketing strategy typically includes objectives, target audience profiles, content creation steps, key performance indicators, and other components.

A marketing strategy will:

The last one is especially important for this upcoming year. Keeping up with marketing trends is important for your strategy, but could be a full-time job.

Why? Because in one year alone, we've seen a major shift to short-form video content ; the rise and fall of new platforms (looking at you, Meta); and the continuing impact of the global pandemic. In short, what worked for your marketing strategy in the past might not fly today.

To succeed in the fast-paced marketing world — and maintain a sense of relevance with your audience — it's vital to stay ahead of the curve.

To help ease some of that uncertainty, we've going to show you step-by-step how to create a marketing strategy that leaves no stone unturned. But first, let’s go over the individual components that make up a strong marketing strategy.

Free Marketing Strategy Template

Fill out the form to access your free strategy doc., marketing strategy components.

1. Marketing Mix

marketing strategy components: marketing mix

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The marketing mix, also known as the 4 Ps of marketing, is the preliminary document you must create to understand what you will be marketing, where you’ll be marketing it, and how you’ll be marketing it. The following P’s make up this framework:

You can then extrapolate this information into a full-fledged marketing plan for each promotional channel. It’s important to lay out the information in broad strokes so that you understand the overall direction of your marketing strategy.

2. Marketing Objectives

marketing strategy components: marketing objectives

You can set your marketing objectives in conjunction with your 4 Ps, or right after. Either way, you should outline your marketing goals before building upon your strategy. Why? Because your goals will inform other components of the plan, including the budget and content creation process.

With every objective, you should aim to be as specific as possible. Try to create SMART marketing goals divided by channel or promotional tactic, and don’t forget that you can always come back and revise your goals as your priorities change.

3. Marketing Budget

marketing strategy components: marketing budget

A marketing budget is an essential element of your strategy. Without allotting funds to hiring the right talent, using the right software, advertising on the right channels, and creating the right content, your marketing strategy won’t have a powerful impact. To get a high return on investment, you must first invest.

Remember that you can always start small — hyper-focusing your budget on one or two efforts — and build upon them once you generate an ROI.

4. Competitive Analysis

Knowing your competition is key when creating a marketing strategy. Otherwise, you risk “yelling into the void” without measurable results. Worse, you won’t know whether you’re differentiating yourself enough from the competition and effectively drawing the attention of your intended audience.

You might already have an idea of whom your competitors are, but it’s still essential to sit down and identify them. You might end up uncovering a surprise competitor who’s vying for your target buyer’s attention and engagement.

5. Segmentation, Targeting, and Positioning

marketing strategy components: audience segmentation, targeting, and positioning

Segmentation, targeting, and positioning (STP) refers to the process of delivering “more relevant, personalized messages to target audiences.” In other words, rather than publishing posts and advertisements on a whim, you’ll go through a methodical process for creating content that resonates with your target buyer.

During the segmentation, targeting, and positioning process, you’ll take three steps:

6. Content Creation

marketing strategy components: content creation

Once you have your budget, competitive outlook, and STP information, it’s now time to take the most critical step: Creating your marketing content . But it’s essential to undertake this effort strategically. For one, you don’t want to publish random content that doesn’t solve for the customer, and for two, you must aim to capitalize on emerging trends so that your brand enjoys high visibility in the marketplace.

The competition is fierce across all formats. According to HubSpot Research , "half of marketers are using videos, with 47% leveraging images, followed by 33% posting blogs articles, infographics (30%) and podcasts or other audio content (28%)." Of these, video has the highest ROI.

marketing strategy components: content strategy data

It’s even more essential to invest in trends that have a high ROI, such as short-form video, influencer marketing, and social media DMs.

That doesn’t mean you shouldn’t invest in blogging , one of the most proven content marketing techniques. It’s simply important to know where to allot the most resources, especially if you have a limited budget.

7. Metrics & Key Performance Indicators (KPIs)

marketing strategy components: metrics and kpis

Last, but certainly not least, your marketing strategy must include metrics and key performance indicators to understand how well your strategies are working. The KPIs you choose will vary depending on your business type and preferred customer acquisition channels . Examples of KPIs include:

Now, let’s dive into why it’s important to follow the steps of a marketing strategy.

The Importance of Customer-Driven Marketing Strategy Steps

A robust marketing strategy will reach your target audience — this includes those who have never heard of your brand all the way to repeat customers.

Without a defined strategy, you’ll essentially be throwing things to the wall to see what sticks. And it’s costing you cost, time, and resources.

There are seven key steps to crafting a successful marketing strategy: Build your marketing plan, create your buyer personas, identify your goals, select the tools, review your existing resources, audit and plan media campaigns, and lastly, execute your strategy.

Let’s get into the details of each step in the next section. Or you can jump to the section you're most interested in.

Examples of Successful Marketing Strategies

7 Steps of a Marketing Strategy Process

1. Build a marketing plan.

Wait, I have to make a plan for my strategy? What's the difference?

Your marketing strategy provides an overview of the reasons why your marketing team will need certain resources, take certain actions, and set certain goals over the year. Your marketing plan is the specific actions you'll take to achieve that strategy.

Not sure where to start? This free marketing plan template can help.


Download for Free

The right template can help you build a marketing plan that identifies your budget for the year, the initiatives your marketing organization needs to tackle, and the marketing channels you'll use to implement those initiatives.

Plus, it’ll tie everything back to a business summary, to keep you aligned with overarching company goals.

2. Create buyer personas.

If you can't define who your audience is in one sentence, now's your chance to do it. A buyer persona is a snapshot of your ideal customer.

For example, a store like Macy's could define a buyer persona as Budgeting Belinda, a stylish working-class woman in her 30s living in a suburb, looking to fill her closet with designer deals at low prices.

With this description, Macy's Marketing department can picture Budgeting Belinda and work with a clear definition in mind.

Buyer personas have critical demographic and psychographic information, including age, job title, income, location, interests, and challenges. Notice how Belinda has all of those attributes in her description.

You don't have to create your buyer persona with a pen and paper. In fact, HubSpot offers a free template you can use to make your own (and it's really fun).

You can also use a platform like Versium , which helps you identify, understand and reach your target audience through data and artificial intelligence.

Buyer personas should be at the core of building your strategy.

3. Identify your goals.

Your marketing strategy goals should reflect your business goals.

For example, if one of your business goals is to have 300 people attend your annual conference in three months, your goal as a marketer should be along the lines of boosting online registration by 10% at the end of the month to stay on track.

Other marketing goals might be to increase brand awareness or generate high-quality leads. You might also want to grow or maintain thought leadership in your industry or increase customer value.

Whatever your goals, identify what they are and how your marketing organization can work to achieve them over the next year.

4. Select the appropriate tools.

Once you have your goals identified, make sure you have the right tools to measure the success of those goals.

Online software like social media schedulers gives you analytics to help you keep track of what your audience likes and doesn't. Alternatively, you might consider Google Analytics to measure blog and web page performance.

Additionally, make your goals SMART – to do so, take a look at How to Write a SMART Goal [+ Free SMART Goal Template ].

Here are a few tools that can help you track and measure the success of your marketing goals:

HubSpot Marketing Hub

The Marketing Hub allows you to consolidate all of your marketing tools into one centralized platform.

hubspot marketing hub dashboard

You can also transform data pulled from timeline and Gantt views to track your projects on Monday.com and ensure deadlines have been met. Plus, with more than 40 integrations — from SurveyMonkey to Mailchimp and, of course, HubSpot — you can visualize your data and ensure your whole company is collaborating.

Pricing : Basic, $8/month/seat; Standard, $10/month/seat; Pro, $16/month/seat; Enterprise, contact for pricing.

semrush dashboard

Crazy Egg also offers recordings, A/B testing, and more to help ensure your website is offering the best user experience.

Pricing : Basic, $24/month; Standard, $49/month; Plus, $99/month; Pro, $249/month; Enterprise, contact for pricing.

5. Review your media.

Decide what you already have in your arsenal that can help you create your strategy. To streamline this process, think of your assets in three categories – paid, owned, and earned media.

  • Paid media means any channel you spend money on to attract your target audience. This includes offline channels like television, direct mail, and billboard to online channels like social media, search engines, and websites.
  • Owned Media refers to any of the media your marketing team has to create: pictures, videos, podcasts, ebooks, infographics, etc.
  • Earned media is another way to say user-generated content . Shares on social media, tweets about your business, and photos posted on Instagram mentioning your brand are all examples of earned media.

Gather your materials in each media type and consolidate them in one location to have a clear vision of what you have and how you can integrate them to maximize your strategy.

For example, if you already have a blog that's rolling out weekly content in your niche (owned media), you might consider promoting your blog posts on Twitter (paid media), which customers might then reTweet (earned media). Ultimately, that will help you create a better, more well-rounded marketing strategy.

If you have resources that don't fit into your goals, nix them. This is a great time to clean house and identify gaps in your materials.

6. Audit and plan media campaigns.

Cleaning house segues straight into this step. Now, you must decide which content is going to help you.

Focus on your owned media and marketing goals. For instance, will updating the CTAs at the end of your blog posts help you increase RSVPs to your event?

Next, look at your buyer personas. Let's say you work for a video editing software company. If one of your persona's challenges is adding clean sound effects to their videos but you don't have any content that reflects that, make a 15-second demo video for Instagram to show how great your product is at solving that challenge.

Finally, create a content creation plan. The plan should include topic clusters, goals, format, and channel for each piece of content. Be sure to include which challenge it's solving for your buyer persona.

For ideas on content creation or a more in-depth look at how to create a content plan, check out our post, The Ultimate Guide to Content Creation .

7. Bring it to fruition.

At this point, your market research and planning should help you visualize how your strategy will be executed – and by which teams.

The final step is to bring that all together and assign actions to your plans.

Create a document that maps out the steps you need to take to execute your campaign. In other words, define your strategy.

Think long-term when creating this document. A standard strategy document is 12 months. This structured timeline should be the home base for your strategic marketing efforts.

To paint an example, let's go back to the video software company.

Maybe in January, you will launch a software update that improves the exportation process for users. In April, you want to publish an ebook that explains editing terms to your buyer personas, and in September, you plan to launch an integration with other software.

Remember, your digital strategy is unique to your business, so the document should be as well. As long as the strategy includes the pertinent details outlined in previous sections, you'll be set.

Now that we've explored the critical steps of a complete marketing strategy, let's look at some "Why didn't I think of that?" strategies to inspire your own.

1. Regal Movies

Digital strategy: owned media.

Regal Movies took the Halloween spirit to a new level, even renaming its Twitter account to reflect the spirit of the season. This "Monster Madness" poll is a fun, interactive way to get followers invested in Regal's content:

regal movies' owned media

In this case, the consumer is praising the brand’s product. Doesn’t get better than a fantastic review like that.

3. Small Girls PR

Digital strategy: event marketing.

Wait, is that Keke Palmer?


Small Girls PR is a boutique PR company based in New York, and one of the company's talents is throwing amazing events for their clients, like Olay. This event recap carousel on Instagram is an effective event marketing example, as it boosts awareness for your brand and offers social proof by featuring a public figure.

4. Superside

Digital strategy: paid media.

Design agency Superside launched an Instagram ad to promote a lead magnet: Their digital ad design guide. While the brand may have created the guide specifically for paid promotions, it’s also possible that they repurposed a high-performing blog post into a downloadable ebook.

marketing strategy paid media example

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Thursday 28th Mar 2019

How to write a strategic marketing plan

The power of a well thought through and executed strategic marketing plan can have a profound impact on your growth ambitions. It’s overarching goal is to identify your target market and customers, understand how to reach and engage in a way that suits them, and in doing so, turn them from a potential customer into a raving fan. Your marketing strategy is one of the most important strategies you will ever develop, and it’s worth taking the time to get it right.

strategic marketing plan combines

The power of a well thought through and executed strategic marketing plan can have a profound impact on your growth ambitions. It’s overarching goal is to identify your target market and customers, understand how to reach and engage in a way that suits them, and in doing so, turn them from a potential customer into a raving fan.  Your marketing strategy is one of the most important strategies you will ever develop, and it’s worth taking the time to get it right.

One of the easiest things in the world today is to find a book, a website, or a blog about marketing. Which is why I’m NOT going to talk endlessly about marketing theory, strategies, techniques or tactics here.

You see, most entrepreneurs, business owners and leaders get caught with the ‘ shiny object syndrome’  (SOS). The shiny object syndrome is simply getting distracted by endless new ideas, developments or innovations without truly understanding whether it’s right for their business or their customers or whether it’s the right time to implement. Anything new or ‘sparkly’ catches their eye and before you know it they or their team are researching, investigating and implementing it.

So what I want to do is give you some practical ideas to help you write your strategic marketing plan. A single document that combines all of your marketing goals and priorities with the strategic objectives of your business so if, or when, you are overcome with ‘SOS’ you can refer back to your strategic marketing plan and say ‘thank you, but no thank you. I don’t want to take my business down the wrong path’.

What to include in your strategic marketing plan

You’ve probably heard the principle of spending an hour to save five minutes (those five minutes being saved over and over again, forever, thanks to the hour long investment you have made), and that’s precisely the point of a structured strategic marketing plan.

Don’t allow ideas to live in your head, or to be the basis of informal, or even formal discussions. A strategic marketing plan is your comprehensive document or blueprint that details the current market position of your business, your target market, a description of the marketing mix you’ll use to achieve your marketing goals and most importantly, how you’ll measure whether it’s working or not.

How to write a strategic marketing plan

Section 1: Executive Summary

This is the last section you’ll write as it summarises everything included in your plan. It should be short and succinct. Your executive summary should allow the reader to easily grasp the fundamentals of what you are trying to achieve and instantly make the decision as to whether they want to read more.

Section 2: Market Potential & Target Customer

Defining your market potential will identify the overall market size, the total revenue opportunity for your product or service, and your target customer. When looking at market size and opportunity it’s important to quantify how many customers are willing to pay for your products or services and who those customers are. A baseline estimate is better than no estimate at all. Without knowing your market size you may be conducting business in a market so small, it’s next to impossible to make any money. This section should validate your target market can deliver sustained and profitable business growth, making your marketing efforts viable and realistic.

Market Size: 13 questions to help you define the opportunity

Not sure how to define your market potential and target customer? Check out these 13 questions here

Section 3: Compelling Value Proposition

Document how you differentiate your products and services, and what you believe is your competitive edge. Most likely if a business doesn’t have or can’t develop competitive advantages they won’t survive. Know your business; your strengths, weakness, threats and opportunities ( SWOT analysis ) and know the same of your competitors.

Create a baseline of precisely where you’re at with the maturity of your current product & service offering as this will give you the platform to systematically and strategically enhance and develop your value proposition. Knowing your ultimate goal is to become truly market leading.

How to write a strategic marketing plan

Not sure how to map out your CVP? Read 5 steps to building a compelling value proposition .

Section 4: Market & Price Positioning

Market and price positioning is a highly complex area: get it right and sales and profit flow; get it wrong one way and sales flow, but profit is poor; the other way and sales are poor, but profit per transaction is good. Any market and price positioning should be based on informed, decision making aligned to your long-term strategic goals.

A good book to check out is ‘ Blue Ocean Strategy’ which focuses on how to create new market space, and in doing so, you make the competition irrelevant. Consider your market position; differentiated, undifferentiated, low end or high-end and identify your white space opportunity.

Detail how you set or adjust your prices including any promotional pricing you may implement (discounts, product bundling etc.) across your various product lines and most importantly, the rational for this (end of product line, up-sell or cross sell opportunity).

Section 5: Distribution (Place)

Your distribution channel – your route to market  – should make it easy for your customers to buy what you are offering, in the way they want to buy it, at the time they want to and are ready to consume it. Include your current channels to market and your plans or aspirations to consider new ones i.e. e-commerce / online.

Section 6: Promotion

Naturally this section should be the largest section in your strategic marketing plan. It will detail how you are going to ‘promote’ your products and services (section 3), to your target audience (section 2), with your agreed pricing strategy (section 4) and channels to market (section 5).

How to write a strategic marketing plan

Your promotional activity will probably be multi-faceted, a mix of online (digital) and/or offline activities, taking into consideration your target audience and your product and service offering. Taking your overarching marketing strategic priorities (section 12) outline the initiatives you intend to implement in order to achieve that particular goal. This will detail amongst other things the initiative (i.e. advertising), channel (i.e. social – Facebook), timeframes (6 week campaign).

It is this section of your strategic marketing plan which you can lift and transfer into a more tactical marketing plan detailing your key milestones, action owners, budget allocation and deadlines per initiative. This is a great sense check because if you find you are working on tasks which are not in your marketing plan then you can bet they are not in your strategic marketing plan. If that’s the case, stop and sense check why you are doing them (are you suffering from SOS?). Ask yourself ‘will this help me achieve my business growth goals?’

Section 7: People

All companies are reliant on their people from front line Sales staff to the Managing Director. Having the right people is essential because they are as much a part of your business offering as the products or services you are offering.

Outline any people developmental gaps you may have identified or are aware of. For example, are you proposing an advertising campaign for a product which will require a refresher of knowledge. Or are you planning a brand awareness campaign and you want to ensure all your people are ‘on brand’ with key messages. Include it. If you’re responsible for people development as well as marketing, great, you’ve started outlining your people plan. If you’re not, you’ve just demonstrated you can think outside of marketing.

Section 8: Processes (Customer Journey)

The delivery of all products and services need to be underpinned by clearly defined and efficient processes. Customer journey maps are extremely useful as they will help you map your end to end customer interactions, from prospect to sale to long-term relationship,  identifying those moments where you add real value to your customers and those which don’t.

How to write a strategic marketing plan

Your customer journey links directly to your customer experience. Check out 4 components of the customer experience you should know.

Section 9: Presence (Physical Evidence)

Physical evidence is what attracts your customers first – they will judge your service or product after looking at your physical evidence. Customers tend to rely on physical cues to help them evaluate the product before they buy it or before they buy it again! The role of the marketer is to design and implement such tangible evidence; your website, packaging, materials, store or ‘shop front’, invoices, email templates, newsletters etc.

This ‘physical evidence’ is the proprietary channels and customer touch-points you control. Businesses are missing opportunities every day to maximise their engagement, marketing messages, brand building and sales through these touch-points which they already own and have genuine legitimacy to communicate through.

List all your proprietary channels and how you are maximising their effectiveness.

Section 11: Financials

In financials include a three-year line of sight: target financial goals, revenue and profitability for years 3, 2 and 1. Plus the business growth aspirations to give context to the numbers. For example, plans to enter a new market, or merger, or new proposition launch. The numbers and background context should be easily available / extracted from the business’s strategic plan.

How to write a strategic marketing plan

Haven’t got a strategic plan? Check out Strategic Plan: what to include in yours.

Section 12: Marketing & Communications Key Strategic Priorities

Documenting your key strategic priorities will keep you focused on what you want to achieve and not become distracted by SOS (there it is again!). Create 4-5 strategic objectives to keep you laser beam focused as opposed to having 10-15 which all start to merge into one over time. Examples areas include; brand awareness, lead generation, customer engagement and nurturing, online presence, thought leadership, new product launch.

Your strategic marketing priorities should naturally come off the back of your business growth plans. If they don’t, then question whether they are in alignment.

Section 13: Marketing & Communications Key Performance Indicators/Metrics

Your KPI’s are an imperative element of your strategic marketing plan. If you don’t know what’s working how do you know what to change or improve? There are a number of KPI’s that should be on your radar but the most important thing to remember is that you need to be able to measure them.  There is no point building a complex dashboard of metrics if you haven’t the means to measure the results. Identify the KPI’s you absolutely need and want to track and then ensure you have the tools in place to measure the outcomes.

KPI’s to consider…

Sales growth derived from marketing effort (actual ROI per activity)

Leads & opportunities created

Website traffic – unique visitors, impressions, landing page conversions

Social media reach & engagement

Email marketing performance

Tracking your marketing KPI’s will help validate everything you do and provide you with transparency in your marketing efforts.

Why writing your strategic marketing plan is like completing a jigsaw puzzle

How to write a strategic marketing plan

The interdependencies between marketing and the other nine business growth enablers is so tightly woven that the boundaries where one stops and another one starts can often become blurred, especially when you focus in on market potential, customer experience and products & services.

It is important to recognise this because, in your business, if you own and manage all these areas you can easily find the interdependencies and work to make them stronger. If on the other hand, you’re part of a wider organisation with stand-alone functions, there is a real risk insights and lessons won’t be shared unless you take action to ensure they are.

This is where your strategic marketing plan comes in. It will bring the different elements into one place, into your strategic marketing plan. One view of the world. One version of the truth.

Want to know how your strategic marketing plan shapes up?

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Learning Outcomes

By the end of this section, you will be able to:

What Is the Promotion Mix?

We are all consumers, and we have all been the target of promotional campaigns. To connect with consumers of a target market, companies conduct extensive market research so that they may better understand the consumer. When companies understand the consumer, they can better structure a message to appeal to the consumer and also find the best channels for reaching the customer.

The created messages aim to get consumers’ attention. Sometimes they create awareness of a new event, a new product, a new idea, or a place to visit. Sometimes they are asking consumers to make a purchase. Marketing promotion is all around us.

According to the marketing firm Yankelovich Inc. , the average digitally connected person is exposed to around 5,000 ads per day. 4 Among the biggest promotional spenders in the United States is Disney . 5 Disney produces ads for everything from its movies and toys to its vacation clubs and theme parks. While we should be flattered that these companies are thinking of us and trying to figure out how to reach us and what messages they should send, many consumers are busy trying to figure out how to shut out the messages.

When you sit down to watch television, you are typically exposed to ads that a company believes that you will respond to based on the research it has done about the audience watching the show you tuned in to watch. During your time scrolling through your news feed on Facebook , you are being served ads that correspond to your Internet search history and even products you may have mentioned while your phone was on and your news feed open. Digital advertising relies heavily on algorithms of your search history and site visits.

As recipients of these marketing messages, many consumers believe that marketing is only advertising or sales. However, advertising and sales are simply two options in a marketer’s arsenal of communication tools used to connect with the target market. Developing a marketing communications strategy is something marketers should only do after they have developed the rest of the marketing mix.

In fact, marketers have a wide variety of strategies to use from the overall promotional mix (see Figure 13.2 ). Most companies choose to use a combination of the promotional mix methods to create an integrated marketing communication message that reaches the customer in many different ways. When the messaging is integrated, the consumer receives the same message no matter which method of promotion is chosen. If the consumer is watching the news and hears a story about the company or product, public relations has impacted them. If they then scroll through their social media accounts at the end of the day and they see an ad for the same product, advertising has impacted them. When they sort through their email and have a message from the company, they have received a direct marketing communication.

No longer does promotion need to rely heavily on just one method of marketing communication. Marketers can be much more targeted and more cost-effective in the promotional methods they choose. Using a combination of methods to send the same message allows the marketer to be more strategic in their messaging and in their budgeting.

The best products are nothing until the consumer knows about them. Without good promotion, the best products are just secrets. We all have things we want to say, and on any given day we make phone calls, create Instagram posts, upload TikTok videos, send emails, shoot off text messages, and talk face-to-face with people. And just like us, marketers also have things to say. Usually, they want to tell consumers about their new brand extension of Reese’s, a trade-in allowance for a new Toyota Camry that just hit the car lot, or even a buy-one-get-one-free promotion for your Starbucks latte. How marketers decide to say and send the message is the promotion mix.

The promotion mix is the set of strategies marketers use to communicate with their customers. With combined strategies, the promotion mix creates a powerful method of connecting with the customer and conveying all the other marketing mix elements for a holistic marketing approach. The promotion mix allows marketers to reach customers in many different ways, ensuring that the message is seen, heard, and understood. After determining and defining the target market, creating a good product, selecting a pricing strategy and optimal price, and deciding on the distribution method, the marketer is ready to communicate with the customer.

Messages sent by multiple methods provide a better opportunity for consumers to see and hear the message and make the connection back to the company. When a message is only sent by one method, the potential for interference, noise, and avoidance is more likely to occur. Marketers use a multichannel approach to send an integrated message.

Promotional mix methods include advertising, personal selling, sales promotion, direct marketing, and internet or digital marketing.

Promotion Mix Defined

The full set of strategies that combine to make up the promotion mix include advertising, sales promotion, personal selling, public relations, direct marketing, and Internet/digital marketing. Each of these methods is intended to produce different results when used. Combining the elements creates an overall integrated message designed to reach consumers at various points in their path to purchase. Marketers call this integrated messaging integrated marketing communications.

The Importance of the Promotion Mix

Of all the marketing mix variables, the promotion mix can be further divided into different message channels that allow for connection and communication with the customer. When the promotion connects with the customer, it is the moment when all the marketing activities come together. When the messaging and method of delivery reach the customer and create the desired result, the marketing has achieved its purpose.

The strategies in the promotion mix provide the marketer with an arsenal of methods to achieve their marketing objectives, such as increasing sales or introducing a new product. However, consumers are bombarded with marketing messages throughout the day, and these are combined with the business of everyday life events like news, music, work, chores, family, and friends. With this busy pace and activity, the consumer is very difficult to reach. For the busy consumer, one communication method alone is not likely to cut through the clutter and noise to reach them and make an impact. Marketers must combine the various communication elements to connect with the customer and meet the communication objective.

Elements of the Promotion Mix

When analyzed individually, each of the promotional mix elements is powerful. They each have a part to play in the overall success of a company. When combined and carefully executed, they create powerful brands with legions of loyal fans and followers—the consumers. What do each of these promotional mix elements do, and how do they contribute to the whole process of connecting with the consumer?

Advertising is a multibillion-dollar industry. According to Statista, in 2020 alone, worldwide advertising spending reached $586 billion. 6 Advertising is paid, nonpersonal communication from an identified source that allows for creative messaging about all aspects of a product, service, idea, person, or place. Consumers are able to quickly point to advertising as a form of promotion. It is perhaps the element of the promotional mix that we are most familiar with and the one we have been most exposed to throughout every phase of our lives.

From our very first commercial showing how much fun it is to build with LEGO to imagery of a toddler walking the Disney streets with a costumed princess and Cinderella’s castle in the foreground, we know what advertising looks like. And while advertising can take many forms, it is important to note that advertising consists of carefully designed messaging from the company to the consumer. Advertising is meant to produce a response in the viewer. And advertising is all about what the company wants to tell us.

Advertising can be the pop-up window while we are doing a Google search. It can be the Chick-fil-A billboard we pass every day on our way to work. Advertising can be the trailer we watch before our movie starts. And advertising can be the fun Doritos spots we look forward to during the annual Super Bowl.

While advertising can be a costly means of communication with the customer, it is relatively inexpensive based on the number of people reached. When NBC priced the 2021 Super Bowl at $6 million for a 30-second spot, with a record 96 million viewers, the price averaged out to around $0.06 per person reached. 7

Advertising is effective based on the frequency with which it is usually viewed. And because of the media, the advertising message can usually be repeated many times, depending on the budget. Due to its repeatability, production costs have a better return on investment (ROI) the more an ad is used, and the recall of the ad increases significantly.

Sales Promotion

Most consumers love a sales promotion . It creates a feeling of excitement and often includes a bit of a gaming experience into the purchase decision. Marketers value the benefits of sales promotions because the results are immediate and they have a wide variety of options when using this promotional mix element. A sales promotion is a method for a marketer to induce sales in the short term. Sales promotion is not a long-term strategy but is geared toward specific calls to action, typically aimed at getting the consumer to buy something immediately or enter a sweepstakes or contest (see Figure 13.3 ).

A retail window shows two mannequins wearing shirts that say sale. There are two signs in the window that say sale up to 50% sale sale.

Using sales promotions can be an effective method of getting the consumer to try a product or buy more of a product, or it can be a way to quickly deplete an inventory to make way for new products.

While sales promotions have many tactics that the marketer can employ, several commonly used examples of sales promotion include the following:

For National Ice Cream Day (see Figure 13.4 ), Cumberland Farms wanted to increase the sales of its house brand of ice cream, Ultimate Scoop . 8 It offered consumers a digital coupon for $1 off a pint of the ice cream. Cumberland Farms’ existing customers received their coupon via text message, and new customers could text in to get the coupon.

A hand holds a vanilla ice cream cone with strawberry syrup and rainbow sprinkles.

Personal Selling

Personal selling is one of the most expensive forms of promotion because it is a one-on-one, person-to-person form of communicating with the customer. The role of the salesperson is to inform and persuade the customer. This is usually done in what is termed an exchange situation. The salesperson is exchanging knowledge and something of value, while the customer is exchanging money for the item of value. Personal selling is ideal for products that can be customized, are complex, and have a relatively high price point.

Typically, personal selling is most often used in business-to-business (B2B) markets. Business buyers have longer buying cycles, more complex buying situations, and larger budgets. The pharmaceutical industry is well-known for using personal selling. Company representatives must have a high degree of training and knowledge about the products they are selling to physicians and hospitals. It is also very common to have a sales force to sell equipment and machinery to manufacturing plants. Businesses rely on the knowledge and service of the sales force selling them products.

In the business-to-consumer (B2C) market, personal selling is used for items that cost more or items that have a high degree of variation. We find sales representatives when we buy automobiles, home improvement products, and insurance. The job of the sales representative is to determine our needs and provide solutions that fill those needs.

When compared to advertising, which has a very general message directed to a very large audience, personal selling is an individualized message for one or several people within the buying group. When evaluating the costs of personal selling, it is typically hundreds to thousands of dollars per person reached.

The process of personal selling can be time-consuming. The process of selling and the tasks of the sales force can be complex. The sales professional is tasked with prospecting to identify the right customers and then qualifying them to make certain they are a good fit for the product.

It is not uncommon to hear people say, “You talk a good game. You could sell to anyone.” In reality, salespeople do not want to talk people into a product. A good sales force only wants to sell to customers who want and need the product. The best sales force knows that when the customer is a good fit, they will bring repeat business and good word of mouth.

While some salespeople have a natural inclination for selling, others are highly skilled with the technical knowledge of the products they are selling. Understanding customers, the buying situation, and the product being sold are a few of the skills needed to master the art of selling. Good sales professionals know that the real work of the sale is to service the needs of the client long after the sale has been made.

Public Relations

Public relations is a nonpaid, nonpersonal form of promotion. Because it is nonpaid, it has a high degree of credibility and is beneficial because a typically credible, non-biased third party is the messenger. While there are many tactics that marketers might use for public relations, some of the most commonly used include press releases, press conferences, events, and annual reports.

Many of the other promotional tools focus specifically on communication with the customer. By contrast, public relations includes efforts to work with the community where it operates, media, government officials, educators, and potential investors.

When Nordstrom opened its flagship store in Manhattan, it unlocked the doors a few days early for a VIP celebration that included Vogue ’s editor, Anna Wintour , along with actresses, models, and designers. Some of the noted attendees included Zoe Saldana , Katie Holmes , Olivia Wilde , Karlie Kloss , Joan Smalls , Winnie Harlow , Tory Burch , Tommy Hilfiger , and Stacey Bendet of Alice + Olivia . Guests formed long lines around the store in an attempt to access the party. 9

TOMS shoes has long been a leader in cause marketing (see Figure 13.5 ). When you buy from TOMS, one-third of the profits go to Grassroot Good . 10 TOMS’ annual report highlights the people the company helps and how it helps them. Investors and any interested parties receive the annual report that details the work TOMS does right along with the profits it is making.

A close up of a TOMS loafer has a bracelet and a person who is saying “fly”.

When celebrities wind up in the news, it is public relations, and it works to keep their name before the public and their fans. So the headline that hits the front page of the New York Times or is a leading story on the NBC nightly news both create publicity for the celebrity. Businesses also use publicity. A business might have a product as part of a movie, such as BMW vehicles showing up in 37 of the highest-grossing movies of 2018. 11

Public relations can also include crisis communication when negative issues occur. One of the biggest public relations issues happened in 1982 to Tylenol . A malicious person or persons in the Chicago area tampered with a few bottles of Tylenol Extra Strength capsules by replacing the actual capsules with cyanide-laced capsules. Consumers who unwittingly bought the Tylenol ended up dead. Johnson & Johnson , the maker of Tylenol, was facing issues that could easily have destroyed its business. The issue was the leading story for every news outlet.

Johnson & Johnson faced the issue head-on and made the bold move to have Tylenol removed from all shelves. The recall resulted in the removal of 30 million products from store shelves. 12 In the end Tylenol was a hero and won the trust of a nation.

Direct Marketing

Direct marketing allows for direct communication with the customer. Messages can be tailored to specific market segments and even personalized toward individual consumers. Early tactics of direct marketing included telephone and mail; however, technology has allowed for new methods of connecting with the customer to include text messaging and email marketing.

In 2019, the Data & Marketing Association (DMA) reported that the direct mail industry was valued at $44.2 billion. 13 It’s the second largest channel for ad spend in the United States, and it continues to grow. Transformed by technology, direct marketing is finding new methods to connect with the customer. Most connection includes a call to action that provides for immediate feedback on the effectiveness of the method.

Internet/Digital Marketing

Internet/digital marketing includes uses of technology to reach customers at many different points of interaction. Marketers have at their disposal a variety of methods to reach their customers and brand products. Some of the tools include websites, landing pages, social media pages, widgets, and customer relationship management (CRM) systems. All the digital properties work together to drive traffic to the branded properties and engage the consumers.

Digital marketing is geared toward very specific market segments and is primarily interactive. Think of digital marketing as the mechanism that produces the immediate interaction with the customer and produces some type of feedback. Digital is considered two-way communication between the company and the customer. During the early stages of launching the SPANX brand, Sara Blakely primarily used digital marketing with a heaving emphasis on social media. 14 She involved her women friends who were in her target market demographic and had them post about the brand through their social media.

By contrast, Internet marketing is sending a message to a mass audience. The Internet is used to for digital marketing and includes websites and digital ads as well as the two-way communication of social media. Other forms of digital marketing include mobile technology such as SMS and mobile apps.

When a consumer completes a Google search for shoes and then jumps to Facebook to scroll their feed and are served shoe ads from Nordstrom, Macy’s , and Steve Madden , they have been targeted by these shoe companies. The targeting, immediacy, and changeability of the messaging makes digital a quick and efficient method of reaching consumers. Digital promotional tools are extremely effective and can cut through the clutter and reach the consumer when they are in the demand phase of the buying process and have signaled an intent to purchase.

According to a 2020 chief marketing officer (CMO) survey from Gartner , two-thirds of promotional budgets are being spent on digital. 15 Because of the tremendous analytics available, marketers are able to assess the effectiveness immediately. Messages can be tested for effectiveness and quickly changed if they are not producing results. It is very difficult to get the same quick feedback with any of the other forms of promotion. Through careful tracking and robust customer relationship management (CRM) systems, marketers are quickly able to promote products, increase brand awareness, and move consumers down the sales funnel to instantly purchase through online e-commerce sites.

Utilizing mobile app technology, marketers are able to push promotions to customers while segmenting them by their behaviors and simultaneously filling their CRM with insights and analytics that can help drive promotions and sales.

Careers In Marketing

Integrated marketing career.

An integrated marketing communications (IMC) professional builds and manages campaigns that integrate all the facets of marketing—advertising, public relations, digital campaigns, sales, etc. If you’re interested in this job role, check out this article to learn about the qualifications, experience, and salary . You can also refer to programs offered by educational organizations that specialize in integrated marketing. A few examples of those educational organizations include San Diego State University , Marist , Northwestern , and Eastern Michigan University, to name a few. Check out this list for the Best Marketing Communication Colleges according to Best Accredited Colleges .

Additional resources to explore include the following video:

Knowledge Check

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.

Want to cite, share, or modify this book? This book uses the Creative Commons Attribution License and you must attribute OpenStax.

Access for free at https://openstax.org/books/principles-marketing/pages/1-unit-introduction

© Dec 20, 2022 OpenStax. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution License . The OpenStax name, OpenStax logo, OpenStax book covers, OpenStax CNX name, and OpenStax CNX logo are not subject to the Creative Commons license and may not be reproduced without the prior and express written consent of Rice University.

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Strategic Marketing vs. Tactical Marketing: What’s the difference?

  • July 21, 2020

About Rita Cox

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At Cox Marketing Solutions, we love the challenge of finding the perfect marketing strategies to work for every client. It’s our passion.

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Strategic Marketing vs. Tactical Marketing: What's the difference?

Strategic marketing and tactical marketing are like peanut butter and jelly or macaroni and cheese. They are very different and work on their own, but the magic doesn’t happen until they come together.  Strategic marketing  directs marketing tactics with the company’s short and long term goals in mind. Tactical marketing brings strategies to life with attention to detail – and measurement. They work differently, but together, to help you achieve your goals.

What is Strategic Marketing?

Strategic marketing is focused firmly on your  company’s goals.  The strategic marketing plan combines market knowledge and customer behavior. It brings together a series of different tactics designed to help you achieve your goals. The process may include discovery questions such as:

  • What are your company’s realistic goals?
  • Who are the customers you need to achieve your goals?
  • How do you reach these customers?

Strategic marketing also requires involvement from other departments within your organization such as the financial, sales, operations, and human resources teams. Their input and intel are invaluable when creating a strategy. After all, if the operations team is planning a new service launch and marketing isn’t aware, it is not going to be successful. Once a unified strategy is assembled, you’re ready to go. Make sure to include measurement strategies and regularly check back to be sure you are on the right track.

What is Tactical Marketing?

Tactical marketing is rolling up your sleeves and getting in the weeds. The word ‘tactical’ just like ‘strategy’ comes from the military mindset of how to win a battle or organize troops and execute an operation. Tactical marketing is not so different. Instead of ships, tanks, and infantry, we use websites, blogging, social media, digital ads, and more. These tactics support the overall goals and should be evaluated on a continual basis to ensure success.

Who doesn’t like pizza?

Depending on who you ask, there is a strategy for making a pizza. A plan is needed to purchase the correct items to make the dough, sauce, and desired toppings.

Tactically, you lay out the pepperoni, cheese, homemade sauce, tomatoes, and you got a pizza, right? While each of these (tactical) items is delicious on its own, without the plan (strategy) to make the pizza, they are just not as good…. or as effective.

Marketing tactics are just like this. They are good on their own but without a common company goal and strategy, they may flounder and not succeed. The sum of the parts is  less  than the whole.

Now let’s tie the strategic and tactical marketing plans together.

Tactical marketing is practical. It is social media posts, digital ads, e-blasts, and much more. Without the strategy, tactical marketing efforts do not deliver the  why . They aren’t unified and working toward your company goals.

If the  Facebook  post differs from the message on the website, a customer may be confused and struggle to understand your message and offering. A confused customer is much less apt to engage or purchase and will leave the website – probably to visit your competitor’s instead. When messages across different channels aren’t firmly unified, marketing tactics simply don’t work as well.

Do you know if your marketing investment is generating the results you need?

Perhaps you are working the strategic marketing process without a strategy?

Is the strategy lost within the organization and it may be time to regroup and review the overall company goals?

Is your marketing reactionary rather than proactive?

Let’s  schedule some time  to talk about your company goals and how a strategic marketing plan can help you achieve them. Our passion is helping businesses just like yours use strategic  and  tactical marketing strategies to achieve those goals. We’d love to put our experience to work for you!

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How To Build a Strategic Marketing Plan (+ a Free Template!)

You know what you want your campaigns to achieve, but you’re not quite sure how to get there yet.

Sound familiar?

For even the most experienced marketing teams, it can prove difficult to turn aspirational business objectives into actionable steps. While you’re busy trying to figure out what actually works, resources are being spent left and right while showing minimal returns. Fortunately, you can avoid falling victim to this common trap.

Read on to learn how to create a strategic plan to hit your own marketing goals — plus, since you’re already here, be sure to grab your free template to get the ball rolling.

What Is a Strategic Marketing Plan?

A strategic marketing plan is a comprehensive outline for the advertising and marketing efforts of a brand or organization. Founded on audience research and industry trends, this ultra-focused, strategic plan formalizes the steps an organization will take to promote its offerings to a target market of existing and potential customers.

The strategic marketing planning process follows 6 key components:

  • Know where you are .
  • Know your audience .
  • Know where you want to go .
  • Pick your channels and tactics .
  • Develop your budget and your revised tactics .
  • Measure and adjust your strategy periodically .

By following these steps, your team will be well on their way to achieving a sustainable competitive advantage — all while making sure each marketing dollar is well spent.

Strategic marketing plan template

Why Is a Strategic Marketing Plan Important?

Planning for any major undertaking is essential for success.

The modern media landscape is crowded; researchers have estimated that most Americans see between 4,000 and 10,000 advertisements per day .

A strategic marketing plan lays the groundwork for your brand to delight and satisfy your customers. As the old saying goes: “Proper prior planning prevents poor performance.”

By taking the time to develop a thoughtful marketing strategy, you’ll gain several benefits, including:

  • A better understanding of your brand’s value proposition.
  • Deeper knowledge of your audience’s needs and desires.
  • A roadmap for how to manage your brand’s growth.
  • Methods for measuring your marketing performance.

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Creating an effective plan takes time, but when you see the results, you’ll know it was well worth the effort.

4 Basic Marketing Strategies: The 4 P’s of Marketing

Today’s digital marketers have a long pedigree of great thinkers who have shaped the way we think about appealing to customers.

We may be producing content for distribution on digital channels that few people could have predicted several decades ago, but the basic principles combining human psychology and economics are still relevant and powerful today.

In fact, the marketing mix commonly deployed in any modern campaign was first conceived by Harvard Business School professor Neil H. Borden and subsequently expanded upon by University of Minnesota professor E. Jerome McCarthy.

Though first published in 1960, McCarthy’s four P’s of marketing are still the common starting point of an effective marketing strategy.

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A product can be a tangible item or an intangible service that satisfies a need or want.

B2B and B2C marketers need to possess a firm grasp of both what the product is and how it provides value to customers. The more specifically you can define these aspects, the more confident you will be in your marketing strategies.

For example, when selling products and services to other businesses, you’ll need to know what challenges your customers face and understand how your offering solves those problems.

Importantly, marketing and sales departments need to be aligned so that every customer encounter can occur within the same context.

The cost of your offerings has an obvious influence over your customers.

Having a complete understanding of the product and its features will help stakeholders determine the best possible pricing strategy.

You may need to determine if it’s better to offer your product on a subscription basis or as a one-time purchase.

Your product’s price point will impact your organization’s profit margins, inventory requirements and more. The marketing team can work with other business units to determine the best course of action.

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3. Promotion

With deep knowledge of the product, it’s value and price point, you can more effectively promote the offering in the marketplace.

This is where your strategic marketing strategy will come into play.

As you’ll see a little further on, your marketing plan should include the various channels you’ll use to communicate with your customers.

These days, the avenues for communication are much more varied than when the four P’s were developed, but the advice remains the same. Whether you’re promoting your product on a billboard or on Instagram, you need to ensure that each touchpoint supports your brand’s goals and addresses key customer needs.

The fourth P can refer to a physical location, a digital touchpoint or a mindset.

As the old saying goes, it helps to be in the right place at the right time. Marketers can control this factor by developing thoughtful buyer journeys – or sales funnels – and lead nurturing campaigns that help customers make a purchase decision.

For example, if you find that your customers are most inclined to buy once they understand the cost-saving benefits of your offering, you can construct a marketing funnel that places your audience in that position before making the hard sell. So, if customers read a blog and then download a white paper about cost savings, you could include a call to action at the end of the white paper, encouraging readers to call for more information.

6 Steps of the Strategic Planning Process

When making a marketing plan, it’s a common mistake for new marketers to start with the deliverables. Full of enthusiasm, they’ll dash off several blog articles, social media posts and pay-per-click ad headlines. Often, their eagerness will begin to wane when they don’t see huge results from their efforts.

This happens due to a lack of foundation.

The best marketing strategies aren’t built on gut feelings, enthusiasm or brute force; they’re built on carefully researched information, scientific analysis and psychological understanding.

An effective strategic marketing process includes:

  • Deep knowledge of your organization’s goals and how your marketing plan promotes those objectives.
  • Researched findings about your customers’ needs and desires.
  • Campaign-specific marketing goals (E.g. building thought awareness or driving sales) supported by measurable performance indicators.
  • Tangible collateral and associated distribution channels.

Follow these 6 steps to create an actionable marketing plan for your business:

1. Know Where You Are

Before you can make a plan, you need to know where your organization stands today.

Work with relevant stakeholders to define the goals of the business and how the marketing department currently supports them. Consider the brand’s current search engine optimization strategy and how it will benefit the organization’s marketing efforts.

Conduct a SWOT analysis (strengths, weaknesses, opportunities, threats) to pinpoint what you’re doing right, what you can improve on and how external market factors will affect your customer relationships. This process can open up areas in need of further analysis.

The beginning of the planning stage is the time to consider everything that might influence your market position.

SWOT analysis

2. Know Your Audience

Understanding your organization is one side of the coin, knowing your customers is the other side.

Segmenting your audience is a good way to identify the number of marketing tactics you’ll need to employ. For example, if you find that only half of your customer base uses social media, you’ll need to spread your efforts across multiple channels.

The importance of scientific research at this stage cannot be overstated. Even if you have years of experience in the field, you can’t fully predict how your customers’ expectations, needs and wants will evolve over time.

Conduct surveys, do research and – most importantly – talk to your audience!

3. Know Where You Want to Go

With a firm understanding of your offerings and your audience, you can start thinking about next steps.

Define your goals for the year, then break them down into quarterly, monthly and weekly objectives. Tie these goals to the organization’s long-term goals. For example, if your organization wants to increase revenue by 10% over four years, what marketing objectives must be accomplished for that to happen?

Be optimistic when setting goals, but never lose sight of real market conditions.

For every target you establish, you should define metrics by which to judge your success. Metrics can tell you when to adjust your course of action.

4. Pick Your Channels and Tactics (Think Big)

An effective marketing strategy addresses the entire sales cycle.

For B2C brands, that might be as simple as making customers aware of your brand. For more complex B2B brands, you may need to build thought leadership, spread awareness, develop engaging relationships with potential buyers and more.

There are many unique ways to appeal to B2B customers .

strategic marketing plan combines

At this stage, you should think big.

  • How would you market your product or service if you had an unlimited marketing budget?
  • What channels would you use?
  • What type of content would you create?

Get all of your ideas out so you can consider each one carefully. At this stage, you may need to conduct further research into the cost and ROI of each tactic.

5. Develop Your Budget and Your Revised Tactics (Pare Down)

Now it’s time to solidify your plans into actionable tactics.

Decide which channels you want to use and create a calendar of content you want to promote. If you’re using paid advertising like billboards, radio ads or pay-per-click display networks, you’ll need to create budgets and bidding strategies.

Compared with the previous step, this is where you get realistic.

To maximize your marketing budget, and choose the ideal mix of collateral, you’ll need to be confident that each investment of time and resources is relevant to your business goals and your customers’ needs.

6. Measure and Adjust Your Strategy Periodically

Implementing your marketing plan isn’t the end.

Once your strategy is off the ground, you’ll need to watch it carefully to determine if it’s meeting expectations. By giving every tactic a metric by which to judge its performance, you can make valuable adjustments to your strategy over time.

These alterations may be small, like posting to your social media accounts at a different time of day; they might be big, such as swapping out one tactic for another. The important thing to remember is that any change you make should be informed by keen analysis of your current progress.

Your Free Strategic Marketing Plan Template

Use this template to structure your own marketing plan. It’s designed to be extensible and easy to use. Simply make a copy of it and add or delete fields as they apply to your needs. By filling it out, this template will help you visualize your strategy more clearly and ultimately become more confident in your ability to grow your brand’s footprint in the marketplace.

Your ability to clearly plan your marketing strategy will determine your future success. The more detailed your plan, the better your chances of success. Map out your goals, choose your metrics and commit to adjusting your strategy based on scientific evidence.

[Company name]

Marketing mission statement.

Briefly outline how your marketing strategy will support your organization’s business objectives.

SWOT Analysis

What are you currently doing that’s giving you an edge over your competitors? What do your customers like about your brand?

What do your competitors do better than you? What can you do more efficiently? Where do you struggle to fully support your customers?


How is your industry changing? How can you prepare for the future? How can you better define your value proposition to engage new customers?

What could draw your customers away from your brand? What industry disruptions are on the horizon? What could slow the growth of your organization?

Marketing actions

Overview: Briefly describe the initiative. (E.g. We’ll build a library of infographics to help our customers understand market trends.)

Desired outcome: What’s your goal? (E.g. We want to increase organic traffic to our resource library by 3% over the next quarter)

KPI / Metric: How will you objectively measure your outcome? (E.g. Page visitors, time-on-site, clicks, etc.)

Desired outcome:

KPI / Metric:

Market segments

[segment 1].

Demographics: Superficial details about your audience. (E.g. gender, age, income and marital status.)

Psychographics: What motivates your audience? (E.g. personal interests, attitudes, values, desires.)

Challenges: What problems do they need to overcome?

Preferred channels: Where do they absorb industry news? Where do they go to ask questions and seek professional insights?

Preferred content types: How do they prefer to gain new knowledge? Do they prefer video, audio or written content?

[Segment 2]




Preferred channels:

Preferred content types:

[Segment 3]

Buyer personas, [persona 1].

Name: Each persona should have a unique name.

Age: What’s the average age range of this persona?

Job title: List a few common job titles.

Motivations / goals: What do they hope to achieve? What drives them?

Personal interests: What do they like to do outside of work?

Challenges: What business challenges do they face? What’s stopping them from achieving their goals?

[Persona 2]

Motivations / goals:

Personal interests:

[Persona 3]

Competitor analysis, [competitor 1].

Company name:

Competing products: How are their offerings similar to your own? How are they different?

Areas of overlap: How do they market their offerings? Are you competing for space in the same channels ?

[Competitor 2]

Competing products:

Areas of overlap:

[Competitor 3]

Strategy overview, [product / service 1].

Price: What’s the current pricing strategy? How do customers perceive the price in relation to the value of the product?

Promotion: How will you communicate the offering’s value proposition?

Place: Which channels will you use to promote this offering?

[Product / Service 2]

[product / service 3], website / content.

Channel Name:

Intent: What’s your goal? (E.g. We will promote brand awareness through a series of blog posts written by our senior leadership.)

KPI / Metric: How will you measure your progress? (E.g. Organic traffic, bounce rate, conversions.)

Social media


Editor’s Note: Updated November 2021.

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Strategic Marketing Planning

strategic marketing plan combines

Market-oriented strategic planning is the managerial process of developing and maintaining a viable fit between the organisation’s objectives, skills, and resources and its changing market opportunities.

The aim of strategic marketing planning (SMP) is to shape and reshape the company’s businesses and products so that they yield target profits and growth.”

Strategic planning takes place at four levels- Corporate, division business unit and product.

Learn about:-


1. Meaning of Strategic Marketing Planning 2. Characteristics of Strategic Marketing Planning  3. Importance 4. Need 5. Approaches 6. Steps7. Techniques 8. Levels 9. Models 10. Strengths 11. Pitfalls.

Strategic Marketing Planning: Meaning, Characteristics, Importance, Need, Approaches, Techniques and Other Details

Strategic marketing planning – meaning and objectives.

Strategic Marketing Planning – “Without a strategy, the organisation is like a ship without a rudder” – Joel Ross and Michael Kami

In a hyper competitive marketplace, companies can operate successfully by creating and delivering superior value to target customers and also learning how to adapt to a continuously changing market place. So to meet changing conditions in their industries, companies need to be farsighted and visionary, and must develop long-term strategies.

Strategic planning involves developing a strategy to meet competition and ensure long-term survival and growth. The marketing function plays an important role in this process and it provides information and other inputs to help in the preparation of the organisation’s strategic plan.

The overall objective of strategic planning is twofold:

(i) To guide the company successfully through all changes in the environment.

(ii) To create competitive advantage, so that the company can outperform the competitors in order to have dominance over the market.

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 utilise all facets of the organisation), and functional plans (plans to carry out daily operations from the different functional disciplines).

No matter how well the strategic planning process has been designed and implemented, success depends on how well each department performs its customer-value-adding activities and how well the departments work together to serve the customer.

Value chains and value delivery networks have become popular with organizations that are sensitive to the wants and needs of consumers. The marketing department (because of its ability to stress the customer’s view) has become central in the implementation of most strategic plans.

Ultimately, the aim of strategic planning is to serve the company’s business products, services and communications so that they achieve targeted profits and growth.

Strategic Marketing Planning – Characteristics

Strategic planning provides a broad framework according to which all future organisational activities will be conducted. Thus, it is a very essential to do strategic planning for any organisation very prudently.

Strategic Marketing planning is said to have the following characteristics:

1. Top Management Involvement – Strategic planning or formulation of strategy is directly involved in building up the future of the company. Strategic decisions primarily involve development of long-term objectives and policy formulation of the organisation. Thus, it becomes imperative that these decisions are taken by the top level management of an organisation as it requires a lot of wisdom and insight on the part of decision-makers.

2. Involves Huge Allocation of Resources – Strategic decisions involve commitment of the firm for a long period of time and on major issues related to overall organisation. Thus, it requires deployment of resources in huge volumes in terms of men, material, money, machines and time.

3. Impact on Long-Term Survival and Success of the Firm – Strategic planning, having a long- term commitment in terms of organisational objectives, are usually said to have a strong impact on the success of the firm. A good strategy formulation may bring company to new heights whereas a weak strategy formulation may ruin the company.

4. Future-Oriented – Strategic planning is done for the purpose of implementation in future. It is shaping of the future today. Strategies are proactive plan of actions developed for future execution. Strategic planning aims at reducing the total uncertainty of the future by devising goals and objectives and methodologies to attain them.

5. Irreversible – Strategic planning due to its complexity, huge investment involvement and long-term commitment is generally said to be irreversible. Such decisions if required to be reversed or changed, requires a huge cost. That is the reason why strategic planning is to be done very carefully after detailed analysis of both internal and external factors.

6. Sensitive to the Environment – Strategic planning in order to be effective requires maintaining a balance between internal strengths and weaknesses of an organisation with the external opportunities and threats stemming from the environment. The main prerequisite of strategic planning is that it should be responsive to the environmental factors and be capable of adapting the changes.

Strategic Marketing Planning – Importance

Imagine starting college and just randomly taking classes because they are interest­ing, easy, or you have friends enrolled in a particular section. You could be a full-time student each semester, get good grades, and at the end of four years what would you have? Not much of anything except student loan debt.

Most of you have a check­list of courses you must complete to graduate in your selected field. Selecting your major as a freshman or sophomore and determining when you will take the required courses is a strategic plan you set for yourself.

Without the specific objec­tives of your degree program and a strategy for bal­ancing your classes with the personal and professional demands on your time, you likely will not succeed in achieving your desired result – a college diploma.

Whether you are marketing yourself or some other product, strategic planning can greatly increase the likelihood of success. Strategic planning is the process of thoughtfully defining a firm’s objectives and developing a method for achieving those objec­tives. Firms must continually undertake the task of strategic planning.

Shifting conditions, including changing customer needs and competitive threats, ensure that what worked in the past will not always work in the future, thus requiring firms to modify their strategy. Strategic planning helps to ensure that marketers will select and execute the right marketing mix strategies to maximize success. The primary stra­tegic planning tool for directing and coordinating the marketing effort is the marketing plan.

1. The Marketing Plan :

A marketing plan is part of an organization’s overall strategic plan, which typically captures other strate­gic areas such as – human resources, operations, equity structure, and a host of other non-marketing items. The marketing plan is an action- oriented document or playbook that guides the analysis, implementation, and con­trol of the firm’s marketing strategy.

Creating a marketing plan requires the input, guidance, and review of employees throughout the various departments of a firm, not just the marketing department, so it is important that every future business pro­fessional understand the plan’s components.

The specific format of the marketing plan differs from organization to organiza­tion, but most plans include an executive summary, situation analysis, marketing strategy, financials section, and controls section. These five components commu­nicate what the organization desires to accomplish and how it plans to achieve its goals.

Each of the components should be grounded in the firm’s overall mission, which is ideally defined in a clear and succinct mission statement. We’ll discuss the characteristics of an effective mission statement that follows before turning to a more in-depth discussion of each of the marketing plan components.

2. Mission Statement :

The first step in creating a quality marketing plan is to develop an effective mission statement. A mission statement is a concise affirmation of the firm’s long-term purpose. An effective mission statement provides employees with a shared sense of ambition, direction, and opportunity.

A firm should begin the process of devel­oping a mission statement by considering the following classic questions posed by Peter Drucker, who is considered the father of modern management –

i. What is our business?

ii. Who is our customer?

iii. What is our value to the customer?

iv. What will our business be?

v. What should our business be?

These basic questions are often the most challenging and important that a firm will ever have to answer.

From there, the firm should focus on instilling the three primary characteristics of a good mission statement:

i. The mission statement should focus on a limited number of goals:

Companies whose mission statements contain 10 or more goals are typically focusing too much on small, less meaningful objectives, rather than creating a broader statement that provides purpose and direction to the entire organization.

ii. The mission statement should be customer oriented and focused on satisfy­ing basic customer needs and wants:

Advanced technological products of just a generation ago, such as the VCR or Polaroid camera, are outdated technologies today. Still, consumers’ desire to watch movies in their home and to take and share pictures with friends and family is stronger than ever.

Apple has been one of the most successful companies of the past decade because it has designed innovative new products like the iPod, iPhone, and iPad. Since it is quite possible that consumers 20 years from now will think of these products the same way you think about VCRs and Atari game sys­tems today, Apple’s mission statement should reflect the firm’s customer orientation and focus on meeting customer needs.

iii. Mission statements should capture a shared purpose and provide motivation for the employees of the firm:

They should emphasize the firm’s strengths, as Google’s does – “Google’s mission is to organize the world’s information and make it universally accessible and useful.”

The following mission statements of other leading companies illustrate these three characteristics:

i. Amazon – We seek to be Earth’s most customer-centric company for four pri­mary customer sets – consumers, sellers, enterprises, and content creators.

ii. Citigroup – Citi works tirelessly to serve individuals, communities, institu­tions and nations. With 200 years of experience meeting the world’s toughest challenges and seizing its greatest opportunities, we strive to create the best outcomes for our clients and customers with financial solutions that are simple, creative and responsible. An institution connecting over 1,000 cities, 160 countries and millions of people, we are your global bank; we are Citi.

iii. CarMax – To provide our customers great quality cars at great prices with exceptional customer service.

iv. Xerox – Through the world’s leading technology and services in business process and document management, we’re at the heart of enterprises small to large, giving our clients the freedom to focus on what matters most – their real business.

v. Microsoft – Microsoft’s mission is to help people and businesses throughout the world realize their full potential.

vi. Ford – An exciting viable Ford delivering profitable growth for all.

A firm’s mission statement drives many of the other decisions it makes, includ­ing how best to market its goods and services to consumers. A sound mission statement provides a basis for developing the marketing plan and, as the firm con­tinues to modify its marketing plan to fit changing times, the mission statement provides a standard to ensure that the business never strays too far from its core goals and values.

Once the firm has established its mission statement, it can begin to develop the five main components of its marketing plan.

3. Executive Summary :

Once you have graduated and begun your career, you will likely come into contact with senior level executives at your firm in casual places, such as – the break room or elevator. When they ask what you are working on, you won’t have 20 minutes to discuss yourself and your projects.

More likely, you will have time for only a short elevator pitch, which is a one- to two-minute opportunity to market yourself and share the main points of the work you are doing.

The executive summary serves as the elevator pitch for the marketing plan. It provides a one- to two-page synopsis of the marketing plan’s main points. In the same way that you should put great effort into making sure that every second of your elevator pitch counts, every line of an executive summary should convey the most valuable information of the marketing plan.

Depending on your organization’s size and objectives, the marketing plan you create may be viewed by dozens or even hundreds of people. Some will take the time to read each line, but most are looking for a way to quickly understand the basic ideas and strategies behind your plan. The executive sum­mary provides this resource. While the executive summary is listed first, firms should complete this part of the marketing plan last.

4. Situation Analysis :

The situation analysis section is often considered the foundation of a marketing plan because organizations must clearly understand their current situation to make strategic decisions about how to best move forward. A situation analysis is the systematic collection of data to identify the trends, conditions, and competi­tive forces that have the potential to influence the performance of the firm and the choice of appropriate strategies.

The situation analysis comprises three subsec­tions:

i. Market summary,

ii. SWOT analysis, and

iii. Competition.

i. Market Summary :

The market summary sets the stage for the situation analysis section by focusing on the market to which the firm will sell its products. A market is the group of consumers or organizations that is interested in and able to buy a particular prod­uct. The market summary describes the current state of the market.

For example, a market summary for McDonald’s might look at the size of the fast food market in the United States and how rapidly its numbers are growing or declining. A quality market summary should provide a perspective on important marketplace trends. For example, the residential home phone market is a multibillion-dollar-a- year industry.

However, a market summary for this service should also point out that the number of traditional landline customers for AT&T, Verizon, and other carriers shrinks every year as more people decide to use only a cell phone. Understanding where a market is and where it might be going gives organizations a much better view of what resources to invest where, and what a firm can achieve through a specific marketing plan.

The market summary would also consider the growth opportunities internationally and potential sales through international expansion.

BCG Matrix:

One of the most popular analysis tools to describe the current market is The Boston Consulting Group (BCG) matrix. The tool is a two-by-two matrix that graphically describes the strength and attractiveness of a market. The vertical axis mea­sures market growth while the horizontal axis mea­sures relative market share, which is defined as the sales volume of a product divided by the sales volume of the largest competitor.

The BCG matrix combines the two elements of market growth and relative market share to produce four unique product categories—stars, cash cows, question marks, and dogs—each of which requires a different marketing strategy.

Star products combine large market share with a high growth rate. Apple’s iPad falls under this category. Firms with star products generally have to invest heavily in marketing to communicate and deliver value as the indus­try continues to grow. Marketing efforts around star products focus on maintaining the product’s market position as a leader in a growing industry for as long as possible.

b. Cash Cows:

Cash cows are products that have a large market share in an industry with low growth rates. An example of a cash cow product is the Apple iPod. The market growth rate for MP3 type players has slowed in recent years, but the iPod still retains a large share of the market.

As a result, Apple market­ers may decide to allocate only enough marketing resources (e.g., televi­sion commercials, special pricing discounts) to keep sales strong without increasing costs or negatively affecting profits.

c. Question Marks:

Question marks have small market share in a high-growth industry. Prod­ucts in this quadrant are typically new to the market and require significant marketing investment in promotion, product management, and distribution. A new iPhone application would be a question mark product.

Marketers for the new app must move quickly and creatively to reach Apple product users before competitors develop comparable apps. Question marks have an uncer­tain future and marketers must monitor the product’s position in the matrix to determine whether or not they should continue allocating resources to it.

Dogs are products that have small market share in industries with low growth rates. Products that fall into this category typically should be discontinued so the firm can reallocate marketing resources to products with more profit potential. An example of a dog product might be compact discs, an industry in which no firm has large market share and the growth rate is declining.

As part of the market summary, The BCG matrix allows a company to deter­mine where its product will fall in the marketplace and serves as a starting point for developing marketing strategies to address that market position.

ii. SWOT Analysis :

The evaluation of a firm’s strengths, weaknesses, opportunities, and threats is called a SWOT analysis. A SWOT analysis can be a valuable tool in the develop­ment of a marketing plan, but only if it’s executed well. Perhaps the most common mistake a firm makes when conducting a SWOT analysis is failing to separate internal issues from external issues. Consider how a firm like McDonald’s might conduct a SWOT analysis.

Internal Considerations:

The strengths and the weaknesses aspects of the analysis focus on McDonald’s internal characteristics. Strengths are internal capa­bilities that help the company achieve its objectives.

McDonald’s strengths include its strong brand recog­nition with consumers of all ages and backgrounds; a system that ties individual store owners’ profits to company profits; and the fact that it’s a profitable company, which gives it the financial strength to con­sistently develop new products, further promote its brand, and make strategic acquisitions when opportu­nities present themselves.

Weaknesses are internal limitations that may pre­vent or disrupt the firm’s ability to meet its stated objectives. One major weakness for a firm like McDonald’s is the challenge of finding and retaining quality employees.

Another weakness is the perception that McDonald’s drives profits by selling unhealthy foods to consumers, especially children. Marketers must be honest with themselves when identifying weak­nesses because developing strategies to overcome them begins with recognizing them as problems.

External Considerations:

The opportunities and threats aspects of the SWOT analysis focus on the external environment. Opportunities are external factors that the firm may be able to capitalize on to meet or exceed its stated objectives. Opportu­nities for McDonald’s in the years ahead include increased international expansion.

McDonald’s currently serves approximately 68 million customers each day in 119 countries. International growth, especially in Europe and Asia, has exceeded earn­ings growth at domestic McDonald’s restaurants in recent years.

Threats are current and potential external factors that may challenge the firm’s short- and long-term performance. McDonald’s faces a number of potential exter­nal threats, including a declining global economy and the domestic consumer trend of eating healthier and consuming less fast food.

External factors can be both opportunities and threats. For example, the slug­gish economy following the global recession that began in December 2007 has made it harder for many firms to expand their businesses, secure loans, and hire new employees. Restaurants as an industry have faced additional challenges as consum­ers attempt to reduce the amount of money they spend on luxuries like going out to eat.

This reality threatens McDonald’s as well. However, the slow economy has also prompted consumers to look for cheaper food alternatives, and, as the world’s lead­ing choice for discounted dining, McDonald’s has an opportunity to take advantage of this trend. Firms must understand and analyse environmental factors—both internal and external—to develop a quality marketing plan.

iii. Competition :

Many firms struggle to successfully compile the com­petition section of the market summary. The section should begin by clearly stating the organization’s direct competitors. Continuing with our McDonald’s example, direct competitors would include Burger King and Wendy’s. The section should briefly describe how Burger King and Wendy’s position their products relative to McDonald’s.

It should also indicate where McDonald’s is most vulnerable to Burger King and Wendy’s on important customer metrics such as – taste, value, pricing, convenience, and customer satisfaction.

While most marketing plans examine direct com­petitors thoroughly, indirect competitors typically receive far less attention or are overlooked entirely. Indirect competitors can take market share away from a firm as macro trends or consumer preferences change.

McDonald’s must worry not only about other burger chains but also about the consumer trend of eating healthier, which has translated into massive expan­sion for chains like Subway. In 2011, Subway surpassed McDonald’s as the largest restaurant chain in the world, with almost 34,000 stores worldwide compared to less than 33,000 for McDonald’s.

Consumers choosing to eat at home rather than purchase fast food in a slow economy also compete indi­rectly with McDonald’s. A good study of the competition provides a thoughtful analysis of both the direct and indirect competitors.

Strategic Marketing Planning – Need

In a changed setting described above, it is interesting to know how the companies compete in a global marketplace. Philip Kotler found that one part of the answer is 9 – commitment to creating and retaining satisfied customers. He added a second part to this answer- Successful Company and high-performance businesses know how to adapt to a continuously changing marketplace.

They practice the art of market-oriented strategic planning. According to Philip Kotler, “Market-oriented strategic planning is the managerial process of developing and maintaining a viable fit between the organisation’s objectives, skills, 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 yield target profits and growth.” Strategic planning takes place at four levels- Corporate, division business unit and product.

Strategic marketing planning calls for action in three key areas:

1. The first-calls for managing a company’s businesses as an investment portfolio. Each business has a different profit potential, and the company’s resources should be allocated accordingly.

2. The second key area involves assessing accurately each business by considering the market’s growth rate and the company’s position and fit 111 that market. It is not sufficient to use current sales or profits as a guide. For example – if the Ford Motor Company had used current profits as a guide to investment in the 1970s, it would have continued to pour money into large cars, since that was where it made its money at that time.

But Ford’s analysis showed that the profits on large cars would dry up. Therefore, Ford needed to reallocate its funds to improving its compact cars, even though the company was losing money on compact cars at that time.

3. The third key area of strategic planning is strategy. For each of its businesses, the company must develop a game plan for achieving its long-run objectives. Because there is no one strategy that is optimal for all companies in that business, each company must determine what makes the most sense in the light of its industry position and its objectives, opportunities, skills and resources.

Strategic Linkages :

Marketing plays a critical role in the company’s strategic planning process. In the words of a strategic planning manager of General Electric, “The marketing manager is the most significant functional contributor to the strategic planning process, with leadership roles in defining the business mission – analysis of the environmental, competitive, and business situations; developing objectives, goals and strategies; and defining product, market, distribution, and quality plans to implement the business’ strategies. This involvement extends to the development of programmes and operating plans that are fully linked with the strategic plan.”

Thus, the chief marketing executive’s strategic planning responsibility includes:

1. Participating in corporate strategy formulation, and

2. Developing business unit marketing strategies in accordance with corporate priorities.

Since these two areas are closely interrelated, it is important to examine marketing’s role and functions in both areas to gain more insight into marketing’s responsibilities and contributions.

Peter Drucker describes this role, “Marketing is so basic that it cannot be considered a separate function (i.e., a separate skill or work) within the business, on a par with others such as – manufacturing or personnel. Marketing requires separate work, and distinct group activities. But it is, first, a central dimension of the entire business. It is whole business seen from the point of view of its final result, that is, from the customer’s point of view.”

Some more needs for Strategic Planning are as follows:

Many companies operate without formal plans.

However, formal planning can provide many benefits:

i. It encourages management to think ahead systematically.

ii. It forces managers to clarify objectives and policies.

iii. It leads to better coordination of company efforts.

iv. It provides clearer performance standards for control.

v. It is useful for a fast-changing environment since sound planning helps the company anticipates and respond quickly to environmental changes and sudden developments.

There are three different types of plans that companies might use:

i. Annual plans (deal with the company’s current businesses and determine how to keep them going).

ii. Long-range plans (also deal with company’s current businesses and determine how to keep them prosperous).

iii. Strategic plans involve adapting the firm to take advantage of opportunities in its constantly changing environment.

Strategic Marketing Planning – Practical Approach to Develop Strategic Marketing Plan

A Practical Approach to Developing a Strategic Marketing Plan:

Making spur of the moment strategic decisions reduces the likelihood that these decisions are the best marketing is an exciting process and one that lends itself to creativity, enthusiasm and innovation. Preparation of a marketing plan requires information that is available within the organization (e.g. sales data) and information that is external to the organization (e.g. demographic trends).

Development of a marketing plan can be approached in a variety of ways and, of course, is impacted by the size of the organization, the number of products and services offered and the number and size of the target market segments.

A better approach is to perform an annual comprehensive review of markets and opportunities, then make long-term strategic decisions without the distractions of day-to-day marketing and sales activities. Daily decisions then fit into the company’s overall strategic marketing goals.

It’s important for a strategic marketing planning process to look at the company from the customer’s point of view by asking questions that have a long time horizon, such as:

(i) What needs or problems cause customers to consider buying from our company?

(ii) What improvements in the customer’s personal or business life can we enable or improve?

(iii) Which customer market segments are attracted to our company or products?

(iv) Which customer motivations or values lead people to decide to purchase our products?

(v) What changes or trends in our customer base are affecting their general interest or attraction to products like ours?

Other Aspects:

Freewheeling Opportunism :

Under this approach, a business will not have any formal system of strategic planning, and will exploit the opportunities as and when they arise. The firm will not operate within the rigid structure of an overall corporate strategy. The opportunities are judged by their individual merits and not evaluated by preplanned strategy.

This approach is more appropriate in the following situations:

(a) Turbulent environment – where change is impossible to predict and the organization is in some respect vulnerable to change.

(b) Size of the firm – Small firms need to establish a market niche.

(c) Type of industry – Especially the industries in which the consumer tastes and habits change very frequently.

(d) Exploitation of synergies.


(a) It is flexible and adaptable.

(b) It encourages a more creative attitude among lower level managers.

(c) The environmental opportunities can be availed as and when they arise.

(d) Rigid planning framework is eliminated.


(a) It fails to provide a coordinating framework for the organization, as a whole.

(b) It cannot guarantee that all opportunities are identified and appraised.

(c) It emphasizes the profit motive to the exclusion of other considerations.

Milking Policy :

The management of some companies exploit their business by squeezing as much as possible from the operations of the firm and its profits. This is generally done through improper practices like by not transferring profits to reserves for expansion and modernization; declaration of liberal dividend; paying very high salaries than prevailed in the industry; insufficient provision of depreciation; improper methods of accounting; insufficient provisioning for estimated risks; losses and damages etc. Such financial practices will enrich the stakeholders at the expense of the company. The above situation is termed as ‘milking policy’. Such policy is adopted through management rather than mismanagement.

Position Audit :

It examines the current state of the entity in respect of resources of tangible and intangible assets and finance, products, brands and markets, operating systems such as production and distribution; internal organization; current results; return to stakeholders.

Miles and Snow’s Organization Typology :

Raymond Miles and Charles Snow have developed a typology of organizations that describes the relationship between an organization’s culture, strategy and mission. A firm’s culture shapes the internal strategies, policies and plans which guide the organization in its relationship to its environment.

Miles and Snow classify organizations as follows:

1. Defenders :

Defenders choose a position in the environment and attempt to maintain (or defend) that position. Defenders strive towards a stable form of organization in a stable market niche. Defenders focus on stability and maintaining their markets.

They defend their markets aggressively; compete through maintaining their internal efficiencies and produce reliable, high-quality products at low prices. Defenders are efficiency oriented, achieving high employee productivity and low direct costs through high capital intensity.

2. Prospectors :

These organizations are with fairly broad product lines, and they focus on product innovation and market opportunities. These are likely to adopt an offensive strategy by identifying weaknesses of the leader and attacking it.

Prospectors are organizations in a constant state of change and constantly seek new product and market opportunities, striving to pioneer in product-market development while avoiding becoming locking into any single product, market, technology or facility. These firms seek to innovate, take risks and aggressively seek new opportunities for growth. High product R&D expenses and marketing expenses deter the competitors from entering into the industry.

3. Analyzers :

These firms try to balance efficiency and innovation by maintaining core in established markets and look for expansion into new areas. Analyzers fall between the defenders and prospectors in their orientation toward efficiency, stability and product-market changes.

4. Reactors :

These firms do not have consistent strategy, but they are interested in Guerrilla warfare and consistently perform poorly. Reactors don’t have clear strategies and respond to whatever is happening in their environment.

They will not attempt to strategies and plans to meet the changing environment and to meet new opportunities. They maintain an existing strategy and structure when environmental changes require a major reorientation by the organization.

Sustainability :

The term ‘sustainability’ refers to a development process that improves economy, society and ecology, to meet the needs and wants of the current generation, while maintaining or increasing the resources and productive capacities that are passed along to future generations.

Sustainable Growth :

Sustainable growth is the term used to describe a view on growth which advocates that growth be limited to a relatively slow rate so that growth does not jeopardize the carrying capacity of the immediate physical environment. Organizations must recognize changes in the environment that will limit the organization’s growth. Specifically, population, resources, pollution and technology are important environment param­eters.

For e.g. the slower population growth in a country will lead to fewer people to consume products and a smaller workforce and limited growth opportunities for some organizations in such countries. Another environmental constraint on growth is resources availability. Technology is another factor in the environment that may limit the growth of some firms. The control of pollution is another constraint limiting growth prospects of some firms.

Sustainable Competitive Advantage :

A business strategy is powerful if it is capable of producing sustainable competitive advantage. Normally, a firm can sustain a competitive advantage for only a certain period due to rival firms imitating and undermining that advantage.

A firm must strive to achieve sustained competitive advantage by:

(a) Continually adapting the changes in external trends and events and internal capabilities, competen­cies and resources; and

(b) Effectively formulating, implementing and evaluating strategies that capitalize on those factors.

The organization has to develop its resources so that they reflect the uniqueness of the organization and they continue to remain within the organization. For a business unit’s competitive advantage to be sustainable, its resources must be valuable, scarce and difficult to imitate or substitute.

The advantage that results from generating core competencies can be sustained due to the lack of substitution and imitation capacities by the organization’s competitors. The generic building blocks of competitive advantage help the firm in charging premium price thereby it can improve sustainable competitive advantage.

Normally, imbalance between various dimensions of competitive advantage such as efficiency, quality, innovation and customer responsiveness are to be considered to be the basic causes for failure of a business firm. The new organizational structure, appropriate leadership style, proper control systems in response to the changed environment will help in maintaining competitive advantage.

Situation Audit :

In relation to strategic planning, the concept of situation audit is to break the business into its component parts and functions and then to evaluate them separately in relation to each other, in relation to the whole, and in relation to the environment that affects them. The concept tries to break the business into its component parts and functions, and then evaluates those parts and functions in relation to the environment that affects them.

The basic purposes of situation audit are:

(a) To identify and analyze the key trends and forces that has a political impact on strategy formulation.

(b) To emphasize on the systematic assessment of environment impacts.

(c) To analyze divergent views about relevant environmental changes.

(d) All such information collected provide a base for the strategic planning process – from evaluating missions to strategy formulation or implementation.

(e) A critical assessment of key market forces and its impact.

The situation audit refers to the analysis and appraisal of basic planning premises and covers some of the following issues:

(a) Expectations of major inside and outside interests in relation to customers, competitors, business community, managerial staff.

(b) Data base with respect to past performance, current conditions.

(c) Evaluation of the key forces of the market environment.

With these data, strategists will be in a position to define the basic mission of the organization, purpose, strategies and the various policies.

Strategic Marketing Planning – Process

Strategic marketing planning process consists of following steps:

1. Conduct a situation analysis

2. Determine marketing objectives

3. Select target markets and measure the market demand

4. Design a strategic marketing mix

5. Prepare an annual marketing plan.

Process # 1. Situation Analysis:

It is review of company’s marketing programme. By analysis where the programme has been and where it is now, management can determine where the programme should go in the future. A situation analysis normally includes an analysis of the external environmental forces and the non-marketing resources that surrounds the organization’s marketing programme.

A situation analysis also includes a detailed review of the company’s present marketing mix – its product and pricing situation, its distribution system and its promotional programme.

Process # 2. Determine the Marketing Objectives:

The next step in the marketing planning process is to determine the marketing objectives. As with organizational objectives, the marketing goals should be realistic, specific, measurable and mutually consistent. And they should be clearly stated in writing.

The goals at the marketing level are closely related to the company wide goals and strategies. In fact a company strategy often translates into a marketing goal.

Process # 3. Selection of Target Markets:

Selections of target markets is obviously the key step in marketing planning. Management should analyse existing markets in detail and identify potential markets. At this point, management also should decide to what extent and in what manner, it want to segment its markets. As part of this step in the planning process, management also should forecast its sales in its various markets.

Process # 4. Designing a Strategic Marketing Mix:

Management next must design a strategic marketing mix that enables the company to satisfy the wants of its target markets and to achieve its marketing goals. The design and later the operation of the marketing mix components, constitute the bulk of a company’s marketing effort.

Process # 5. Preparing Annual Marketing Plan:

Periodically, the ongoing strategic marketing planning process in an organization culminates with the preparation of a series of short term marketing plans. These plans usually cover a period of a year. In some industries, it is necessary to prepare these plans for even shorter time periods because of the nature of the product or market. A separate annual plan should be prepared for each product line, major product, brand or market.

An annual marketing plan is the master guide covering a year’s marketing activity for the given business unit or product. The plan then becomes, the how-to do it document that guides executives in each phase of their marketing operations.

The plan includes:

(i) A statement of objectives

(ii) The identification of target markets

(iii) The strategies and tactics pertaining to the marketing mix and

(iv) Information regarding the budgetary support for the marketing activity.

Strategic Marketing Planning – Techniques

SWOT Analysis is a simple framework generating strategic alternatives from a situation analysis. A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as Strengths (S) or Weaknesses (W), and those external to the firm can be classified as Opportunities (O) or Threats (T), such an analysis of the strategic environment is referred to as a SWOT Analysis.

SWOT Analysis is applicable to either the corporate level or the business unit level and frequently appears in Marketing Plans. SWOT (sometimes referred to as TOWS) stands for strengths, weaknesses, opportunities, and threats. The SWOT framework was described in the late 1960’s by Edmund P. Learned, (Ronald Christiansen, Kenneth Andrews, and William).

The SWOT Analysis is useful when a very limited amount of time is available to address a complex strategic situation. It provides information that is helpful in matching the firm’s resources and capabilities to the competitive environment in which it operates. As such, it is instrumental in strategy formulation and selection.

SWOT Analysis Framework :

By understanding these four aspects (Strengths, Weaknesses, Opportunities, and Threats) of its situations, a firm can better leverage its strengths, correct its weaknesses, capitalize on golden opportunities, and deter potentially devastating threats.

Technique # 1. Internal Analysis :

The internal analysis is a comprehensive evaluation of the internal environment’s potential strengths and weaknesses.

i. Strengths:

A firm’s strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage.

Example of such strengths include:

a. Your specialist marketing expertise

b. A new, innovative product or service

c. Location of your business

d. Quality processes and procedures.

f. Strong brand names

g. Goodwill among customers etc.

ii. Weaknesses:

The absence of certain strengths may be viewed as a weakness for example.

Weakness could be:

a. Lack of marketing expertise

b. ii. Undifferentiated products or services

c. Damaged reputation

d. Lack of patent protection

e. Weak brand name

f. Poor reputation among customers.

Technique #   2. External Analysis :

External Analysis refers to analysis of various opportunities and threats prevailing in the external environment i.e., outside the company.

i. Opportunities:

The external environmental analysis may reveal certain new opportunities for profit and growth.

Some examples of such opportunities include:

a. A developing market such as the internet.

b. ii. Mergers, joint ventures or strategic alliances.

c. Moving into new market segments that offer improved profits.

d. A new international market.

e. A market vacated by an ineffective competitors.

f. Arrival of new technologies

g. Loosening of regulations etc.

ii. Threats:

Changes in the external environmental also may present threats to the firm.

For example, a threat could be:

a. A new competitor in your home market.

b. Price wars with competitors.

c. A competitor with new, innovative product or service.

d. Competitors have superior access to channels of distribution.

e. Shifts in consumer tastes.

f. Emergency of substitute products.

g. New regulations.

h. Increased trade barriers etc.

The SWOT Matrix :

A firm should not necessarily pursue the more lucrative opportunities. Rather, it may have a better chance at developing a competitive advantage by identifying a fit between the firm’s strengths and upcoming opportunities. In some cases, the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity. Once the analysis has been complete, a SWOT profile can be generated and used as the basis of goal setting, strategy formulation and implementation.

The completed SWOT profile are sometimes arranged as follows:

When formulating strategy, the interaction of the quadrants in the SWOT profile- To develop strategies that take into account the SWOT profile, a matrix of these factors can be constructed.

i. S – O Strategies pursue opportunities that are a good fit to the company’s strengths.

ii. W – O Strategies overcome weaknesses to pursue opportunities.

iii. S – T Strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats.

iv. W – T Strategies establish a defensive plan to prevent the firm’s weaknesses from making it highly susceptible to external threats.

Rules for Successful SWOT Analysis:

i. Be realistic about the strengths and weaknesses of your organization when conducting SWOT analysis.

ii. SWOT analysis should distinction between where your organization is today and where it could be in the future.

iii. SWOT should always be specific. Avoid grey areas.

iv. Always apply SWOT in relation to your competition i.e., better than or worse than your competition.

v. Keep your SWOT short and simple. Avoid complexity.

vi. SWOT is subjective.

SWOT Analysis Limitations :

While useful for reducing a large quantity of situational factors into a more manageable profile, the SWOT frame work has a tendency to oversimplify the situation by classifying the firm’s environmental factors into categories in which they may not always fit the classification of some factors as strengths or weaknesses, or as opportunities or threats is some that arbitrary.

For example, a particular company culture can be either a strength or a weakness. A technological change can be a either a threat or an opportunity. Perhaps what is more important that the superficial classification of these factors is the firm’s awareness of them and its development of a strategic plan to use them to its advantage.

Strategic Marketing Planning – 3 Main Levels

A business plan should always have a strategic face. Strategy gives a specific focus to the plan. It throws light on how the plan gets into action. This is the reason why an organization dwells on strategic planning. Without strategic planning, the organization cannot cope with the vagaries of the market situation, insulate it from competitive thrust and attain targeted sales and profits. It aims to equilibrate corporate objectives and resources in perfect synchronization.

Kotler (1988) defined strategic planning as the managerial process of devel­oping and maintaining a viable fit between the objectives and resources of an organization. The aim of strategic planning is to shape and reshape the businesses and products of a company so that they combine to produce satisfactory profits and growth.

Strategic marketing planning finds development at three levels.

These are as follows:

1. Corporate level.

2. Business level.

3. Product/Functional level.

1. Corporate Level Strategic Plans :

These strategic plans are the ones that are chalked out at the helm of the organi­zational ladder where the top brass of management is entitled to decide about –

i. Corporate mission,

ii. Strategic business units (SBUs),

iii. Allocating resources to SBUs, and

iv. Filling up strategic planning gaps for existing and new businesses.

These issues are discussed briefly as follows:

i. A mission is a stated sense of purpose for an organization.

It answers the following questions:

a. Who are the organization’s stakeholders?

b. Why and how does the organization serve them?

c. Where does the organization intend to reach by serving its stake holders?

Through mission statements, a workforce can understand the shared sense of purpose, scope, values, direction, opportunity, and achievements of the business. Both sales managers and salespeople operate within the framework of corporate mission statements. Moreover, these statements are the bases of corporate guidelines that are observed by sales management.

ii. Most organizations are multi-business centres, manufacturing more than one product or service. Each of these businesses deals with at least one product or service and serves a definite customer group. So each business unit has a specific product/service-market combination with a definite strategic purpose. Each unit is called SBU.

Each SBU has its own objectives, strategies, profit motives, budgetary allocation because each unit is an independent business centre having its own target markets, customer groups, competitors, modalities of serving customer needs, and capacity to contribute profits to the organization.

So, the principle underlying the business-level planning is that all related products or services are grouped under one SBU. For example, the BPL group with more than one hundred products in its portfolio constituted six SBUs. These are entertainment electronics and appliances, components, telecom, power, soft energy, and financial services.

iii. The third activity of allocating resources to various SBUs is based on the business potentials and market demands. Resources add strength to the unit to become equal to or to surpass the competitors. Resources are needed to make further development (Build), maintain current position (Hold), reap short-term benefits regardless of long-term effects (Harvest), as well as, sell or liquidate the business because of no attractiveness (Divest).

Sales managers under the ‘Build’ strategy advise their subordinates to increase their efforts to increase sales volume and distribution network. The objective here is to increase market share of SBU and consolidate the business on financial fundamentals. ‘Hold’ makes sense when sales managers want to maintain their sales volume by securing the present sales force and distribution network.

The objective is to concentrate on the present target market(s). Maintenance of a steady cash flow is the smart way to stay uncluttered in the ‘Hold’ strategy. ‘Harvest’ involves the efforts of the sales managers to target profitable accounts and reduce selling costs. So, limiting ties with customers where business prospect is dim and shift attention to profit-making customers under the ‘Harvest’ approach is the strategy used by managers.

Fourthly, when an SBU finds no hope, both in short- or long-term business accruals, the company decide to sell it off or terminate the operation. Sales managers in the ‘Divest’ strategy suggest stopping all the selling activities except making desperate bids to clear off inventories. The ‘Divest Strategy’ also recommends expansion of present business in new geographical areas, if possible or establishment of new businesses to fill the strategic planning gap.

iv. In selling parlance, sales managers call for greater market expansion, penetration or development (intensive growth) or suggest ways to strengthen the supply chain by forward integration (e.g., pursuing exclusive distribution network to firm up customer service), backward integration (e.g., acquiring one or more businesses of the suppliers) or horizontal integration (e.g., acquiring one or more competitors).

The company, as an alternative move can also choose the diversification strategy that entails where and how it should venture out to explore other business opportunities not akin to the existing businesses. Sales managers need to bother more about intensive growth because they are to operate under varied product-market situations. Each situation evolves an opportunity for improving the performance of the organization.

2. Business Level Strategic Plans :

An organization consists of a number of SBUs. Each SBU develops its own missions, objectives, and strategies to achieve. Each SBU explores its marketing opportunities separately and analyses its external threats as well. It lays down its own strategic plans which must not contradict the overall corporate plan.

The components of the SBU’s strategic plan, in general, are:

i. Defining the business mission.

ii. Analysing the external environment for identifying opportunities and threats.

iii. Analysing the internal environment for introspecting strengths and weak­nesses.

iv. Developing business objectives and goals.

v. Developing business strategies.

vi. Preparing programmes or action plans.

vii. Implementing action plans.

viii. Monitoring feedbacks and take corrective actions.

These are discussed briefly in the following paragraphs.

Each business unit within the organization has its own mission to develop. The mission statements for the business covers up the market segment and the target market for a company that they will serve. For example, mission for a pharma­ceutical business that manufactures paediatric medicines is to spread goodwill amongst parents by taking care of their children’s health.

How better an organization can fulfil its mission depends on how better it can manage its resources and control its impediments in its way to success. This means the ability of the organization to capitalize on strengths by keeping weaknesses at bay and exploit business opportunities by thwarting threats convincingly. SWOT (strength, weakness, opportunity, and threat) analysis is an important strategic planning tool that helps the organization to do a critical review and compare its strengths and weaknesses with opportunities and threats.

SWOT analysis can be separately undertaken by the sales managers to review and identify the strategic advantages that they can use as promotional weapons. At the same time, the analysis will signal cautions on disadvantaged areas of the organization that the sales managers should take care of in the strategic planning process.

After the business mission is defined and the SWOT analysis is over, the sales manager decides on the objectives of the business dealing with specific product(s) or product line. Multiple objectives are set to cover up the major points of des­tination. Kotler (1988) viewed that most business units should pursue a mix of objectives including profitability, sales growth, market share improvement, risk containment, innovativeness, reputation, and so on.

Strategies lay down the activities and distribute resources with a long-term plan of how to compete with the designated products and markets zeroing in on busi­ness objectives and goals. A business strategy, in the same lines, suggests the plan of action which should be pursued by a business unit to accomplish objectives in a cost-effective manner.

In this regard, Porter’s strategic thinking is worthy of discussion because, according to him all strategic routes are condensed into three generic strategies. According to Porter, these generics provide food for strategic thoughts for managers to steer businesses towards accomplishment of objectives.

3. Product/Functional Level Strategic Plan :

A strategic plan provides the framework for preparing marketing strategies for a specific product or service. These product/functional level strategies should be consistent with the business strategies.

Marketing Mix Decision:

Marketing mix development is the central part of a marketing programme. A marketing programme should be designed in a man­ner that always surpasses that of competitors, which is termed as the competitive advantage. The development of marketing mix takes place basically in its four components, namely product, price, place, and promotion. Information on market potential, market size, growth, level of competitor’s activity, level of tastes and preferences of the customers, economic behaviour of customers, key buying influencers, cost factors for market entry, etc., are other factors to be studied before taking entry decisions.

Marketing mix decision is geared towards developing the marketing mix ele­ments product, price, place, and promotion in a way that meets the needs and preferences of specific target market. Kumar and Meenakshi (2006) advocated that competitive advantage can be built in the marketing programme by the following –

i. Being better – Superior quality or service.

ii. Being faster – Anticipate and respond to customer needs faster than the competitors.

iii. Being closer – Establishing close long-term relationships with the customers.

The objective is to create a clear competitive advantage over rivals. A higher fit amongst the dimensions of the marketing programme, as compared to other competitors, can bring competitive advantage to the organization.

Levels of Strategic Management:

Before we could discuss the various levels of strategy, we need to understand two terms:

1. Enterprise Strategy:

Enterprise Strategy seeks to answer the question “what do we stand for?” Enterprise strategy is the organization’s plan for establishing the desired relationship with other social institutions and stock holder group by maintaining the overall character of the organization.

2. Strategic Business Unit (SBU):

“A strategic business unit (SBU) is an operative division of a firm which serves a distinct product/market segment or a well-defined set of customers or a geographic area. The SBU is given authority to make its own strategic decisions within corporate guidelines as long as it meets corporate objectives.”

In a multi-business enterprise having several SBUs there would be three levels of strategy, viz:

i. Corporate strategy,

ii. SBU strategy and

iii. Functional strategy.

i. Corporate Strategy:

Corporate strategy is the long term strategy encompassing the entire organization. Corporate strategy addresses fundamental questions such as –

a. What is the purpose of the enterprise?

b. What business it wants to be in?

c. How to expand? etc.

Corporate strategy is formulated by the top-level corporate management. Corporate level strategic planning is the planning of activities, which define the overall character, and mission of the organization, the product/service segments it will enter and leave, and allocation of resources and management of synergy among its SBUs.

ii. SBU Strategy:

SBU level strategy, sometimes called business strategy or competitive strategy is concerned with decisions pertaining to the product mix, market segments and measuring competitive advantages for the SBU.

The responsibility for SBU strategy is with the top executives of SBU who are normally 2 nd tier executives in the corporate hierarchy. In single SBU organization, senior executives have both corporate and SBU level responsibility.

iii. Functional Strategy:

Functional level strategies are strategies for different functional areas like production, finance, personnel, marketing etc. Functional level strategy is the responsibility of functional area head.

Strategic Marketing Planning – Top 3 Models of SMP

Over the past few decades, a number of frameworks or tools – known as models have been designed to assist the strategic planning exercise. Most of these models can be used with both strategic company planning and strategic marketing planning.

A few other models are being discussed below:

1. Life-Cycle Portfolio Matrix:

The Arthur D Little model which is illustrated below uses two dimensions – the firm’s competitive position and the stages of industry maturity.

a. Dominant – This is a comparatively rare position and in many cases is attributable either to a monopoly or a strong and protected technological leadership.

b. Strong – By virtue of this position, the firm has a considerable degree of freedom over its choice of strategies and is often able to act without its market position being unduly threatened by the competition.

c. Favourable – This position, which generally comes about when the industry is fragmented and no one competitor stands out clearly, results in the giving market leaders a reasonable degree of freedom.

d. Tenable – Although the firms within this category are able to perform satisfactorily and can justify staying in the industry, they are generally vulnerable in the face of increased competition from stronger and more proactive companies in the market.

e. Weak – the performance of firms in this category is generally unsatisfactory although opportunities for improvement do exist.

2. The General Electric Model:

The General Electric Model (developed by GE with the assistance of the consulting firm McKinsey & Company) is similar to the BCG growth-share matrix. This also uses two factors in a matrix/grid situation.

The criteria used to rate market attractiveness and business position are assigned in different ways because some criteria are more important than others. Then each SBU is rated with respect to all criteria. Finally overall ratings for both factors are calculated for each SBU. Based on these ratings, each SBU is labelled as high, medium or low with respect to (a) market attractiveness, and (b) business position.

Every organisation has to make decisions about how to use its limited resources most effectively. That’s where these planning models can help in determining which SBU should be stimulated for growth, which ones maintained in their present market position and which one eliminated.

3. Porter’s Generic Strategic Model:

Michel Porter, a Harvard business professor proposed the following generic strategic models based on product market scope and competitive advantages.

Three generic strategies proposed by Michel Porter are:

a. Overall cost leadership – A company or an SBU, typically large, seeks to satisfy a broad market by producing a standard product at a low cost and then under-pricing competitors. The battle among Deccan Airways with other Airlines, and Maruti Udyog with other automobile companies revolves around cost leadership at the present time.

b. Differentiation – An organisation creates a distinctive, perhaps even a unique, product through its unsurpassed quality, innovative design, or some other feature and as a result, can charge a higher than average price. This strategy may be used to pursue either a broad or narrow target market.

c. Focus – A firm or an SBU concentrates on part of a market and tries to satisfy it with either a very low-priced or highly distinctive product. The target market ordinarily is set apart by some factor such as geography or specialized needs. For example, a small company in the auto parts business might target owners of cars that are no longer produced.

A low-cost leader’s basis for competitive advantage is lower overall cost than competitors. Successful low-cost leaders are exceptionally good at finding ways to drive cost out of their business. Outperforming rivals in controlling the factors that drive costs is a very demanding managerial exercise.

In markets where rivals compete mainly on price, low cost relative to competitor is the only competitive advantage that matters. A low-cost leader is in the strongest position to win the business of the price sensitive buyers and still earn a profit.

A successful differentiation strategy will provide customers with perceived and actual value that is difficult for competitors to copy. The essence of a differentiation strategy is to be unique in ways that are valuable to the customers and that can be sustained.

Focused (or Market Niche) strategy is based on competitive advantages either on- (a) lower cost than competitors in serving the market niche or (b) an ability to offer niche members something they perceive better suited to their own unique taste and preferences. Even though a focuser may be small, it may still have substantial competitive strength because of the attractiveness of the product offering and its strong expertise and capabilities in meeting the needs and expectations of niche members.

Best-cost provider strategies aim at giving customers more value for their money. The most successful best-cost producers have competencies and capabilities to simultaneously manage unit costs down and product caliber up. The most powerful competitive strategy of all is relentlessly striving to become a lower-and-lower cost provider of a higher-and-higher caliber product. The closer a firm can get to the ultimate of being the industry’s absolute lowest-cost provider and, simultaneously, the provider of the industry’s overall best product, the less vulnerable it becomes to rivals’ actions.

Strategic Marketing Planning – Strengths

Some benefits of strategic marketing planning are as follows:

(a) The increase in size of companies will increase its risk.

(b) It improves the quality of management’s decision making by encouraging creativity and initiative by tapping the ideas of the management team.

(c) The economic environment of business is fast changing.

(d) The reduction in entry barriers has intensified the competitive spirit.

(e) The long-run survival and growth of a business firm requires a well-planned decision making, evaluation and control systems.

(f) The long-term, medium-term and short-term objectives, plans and controls can be made consistent with one another.

Strategic Marketing Planning – Common Pitfalls

The common pitfalls in strategic marketing planning are as follows:

(a) Non-availability of correct and accurate data.

(b) Doing strategic planning only to satisfy accreditation or regulatory requirements.

(c) Failing to communicate the plan to the people who execute the plan.

(d) Top management making intuitive decisions that conflict with formal plan.

(e) Failing to use plans as a standard for measuring performance.

(f) Delegating tasks to a few persons rather than involving all managers.

(g) Failing to involve key employees in all phases of planning.

(h) Failing to create an environment conducive of change.

(i) Lack of flexibility and creativity.

(j) Strategic planning is a costly exercise, as well as, time consuming.

(k) Strategic planning usually restricted to hard business concerns, leaving without proper attention for soft issues like customer, quality, labour productivity, social concerns etc.

(l) Strategy planning sometimes becomes a routine exercise, without having proper attention to strategic issues.

(m) The planning process is isolated from the external groups that critically affect the company like labour unions, consumer advocates, social service organizations etc.

Related Articles:

  • Strategic Planning Process: 4 Stages | Business Marketing
  • Strategic Planning Process for Industrial Marketing
  • Strategic Planning, Alternatives and Implementation | Business Marketing
  • Process of Strategic Planning: 5 Stages | Management

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AI-powered marketing and sales reach new heights with generative AI

Artificial intelligence (AI) and machine learning (ML) continue to push the boundaries of what is possible in marketing and sales. And now, with the ongoing step-change evolution of generative AI (gen AI), we’re seeing the use of open-source platforms penetrating to the sales frontlines, along with rising investment by sales-tech players in gen AI innovations. Given the accelerating complexity and speed of doing business in a digital-first world, these technologies are becoming essential tools.

Inevitably, this will impact how you operate—and how you connect with and serve your customers. In fact, it’s probably already doing so. Forward-thinking C-suite leaders are considering how to adjust to this new landscape. Here, we outline the marketing and sales opportunities (and risks) in this dynamic field and suggest productive paths forward.

Our research suggests that a fifth of current sales-team functions could be automated.

How AI is reshaping marketing and sales

AI is poised to disrupt marketing and sales in every sector. This is the result of shifts in consumer sentiment alongside rapid technological change.

Omnichannel is table stakes

Across industries, engagement models are changing: today’s customers want everything, everywhere, and all the time. While they still desire an even mix of traditional, remote, and self-service channels (including face-to-face, inside sales, and e-commerce), we see continued growth in customer preference for online ordering and reordering.

Winning companies—those increasing their market share by at least 10 percent annually—tend to utilize advanced sales technology; build hybrid sales teams and capabilities; tailor strategies for third-party and company-owned marketplaces; achieve e-commerce excellence across the entire funnel; and deliver hyper-personalization (unique messages for individual decision makers based on their needs, profile, behaviors, and interactions—both past and predictive).

Step changes are occurring in digitization and automation

What is generative ai.

Many of us are already familiar with online AI chatbots and image generators, using them to create convincing pictures and text at astonishing speed. This is the great power of generative AI, or gen AI: it utilizes algorithms to generate new content—writing, images, or audio—from training data.

To do this, gen AI uses deep-learning models called foundation models (FMs). FMs are pre-trained on massive datasets and the algorithms they support are adaptable to a wide variety of downstream tasks, including content generation. Gen AI can be trained, for example, to predict the next word in a string of words and can generalize that ability to multiple text-generation tasks, such as writing articles, jokes, or code.

In contrast, “traditional” AI is trained on a single task with human supervision, using data specific to that task; it can be fine-tuned to reach high precision, but must be retrained for each new use case. Thus gen AI represents an enormous step change in power, sophistication, and utility—and a fundamental shift in our relationship to artificial intelligence.

AI technology is evolving at pace. It is becoming increasingly easy and less costly to implement, while offering ever-accelerating complexity and speed that far exceeds human capacity. Our research suggests that a fifth of current sales-team functions could be automated. In addition, new frontiers are opening with the rise of gen AI (see sidebar “What is generative AI?”). Furthermore, venture capital investment in AI has grown 13-fold over the last ten years. 1 Nestor Maslej et al., “The AI Index 2023 annual report,” AI Index Steering Committee, Institute for Human-Centered AI, Stanford University, April 2023. This has led to an explosion of “usable” data (data that can be used to formulate insights and suggest tangible actions) and accessible technology (such as increased computation power and open-source algorithms). Vast, and growing, amounts of data are now available for foundation-model training, and since 2012 there’s been a millionfold increase in computation capacity—doubling every three to four months. 2 Cliff Saran, “Stanford University finds that AI is outpacing Moore’s Law,” Computer Weekly, December 12, 2019; Risto Miikkulainen, “Creative AI through evolutionary computation: Principles and examples,” SN Computer Science, 2(3): 163, March 23, 2001.

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What does gen ai mean for marketing and sales.

The rise of AI, and particularly gen AI, has potential for impact in three areas of marketing and sales: customer experience (CX), growth, and productivity.

For example, in CX, hyper-personalized content and offerings can be based on individual customer behavior, persona, and purchase history. Growth can be accelerated by leveraging AI to jumpstart top-line performance, giving sales teams the right analytics and customer insights to capture demand. Additionally, AI can boost sales effectiveness and performance by offloading and automating many mundane sales activities, freeing up capacity to spend more time with customers and prospective customers (while reducing cost to serve). In all these actions, personalization is key. AI coupled with company-specific data and context has enabled consumer insights at the most granular level, allowing B2C lever personalization through targeted marketing and sales offerings. Winning B2B companies go beyond account-based marketing and disproportionately use hyper-personalization in their outreach.

Bringing gen AI to life in the customer journey

There are many gen AI-specific use cases across the customer journey that can drive impact:

A gen AI sales use case: Dynamic audience targeting and segmentation

Gen AI can combine and analyze large amounts of data—such as demographic information, existing customer data, and market trends—to identify additional audience segments. Its algorithms then enable businesses to create personalized outreach content, easily and at scale.

Instead of spending time researching and creating audience segments, a marketer can leverage gen AI’s algorithms to identify segments with unique traits that may have been overlooked in existing customer data. Without knowing every detail about these segments, they can then ask a gen AI tool to draft automatically tailored content such as social media posts and landing pages. Once these have been refined and reviewed, the marketer and a sales leader can use gen AI to generate further content such as outreach templates for a matching sales campaign to reach prospects.

Embracing these techniques will require some openness to change. Organizations will require a comprehensive and aggregated dataset (such as an operational data lake that pulls in disparate sources) to train a gen AI model that can generate relevant audience segments and content. Once trained, the model can be operationalized within commercial systems to streamline workflows while being continuously refined by agile processes.

Lastly, the commercial organizational structure and operating model may need to be adjusted to ensure appropriate levels of risk oversight are in place and performance assessments align to the new ways of working.

  • At the top of the funnel, gen AI surpasses traditional AI-driven lead identification and targeting that uses web scraping and simple prioritization. Gen AI’s advanced algorithms can leverage patterns in customer and market data to segment and target relevant audiences . With these capabilities, businesses can efficiently analyze and identify high-quality leads, leading to more effective, tailored lead-activation campaigns (see sidebar “A gen AI sales use case: Dynamic audience targeting and segmentation”). Additionally, gen AI can optimize marketing strategies through A/B testing of various elements such as page layouts, ad copy, and SEO strategies, leveraging predictive analytics and data-driven recommendations to ensure maximum return on investment. These actions can continue through the customer journey, with gen AI automating lead-nurturing campaigns based on evolving customer patterns.
  • Within the sales motion, gen AI goes beyond initial sales-team engagement, providing continuous critical support throughout the entire sales process, from proposal to deal closure. With its ability to analyze customer behavior, preferences, and demographics, gen AI can generate personalized content and messaging. From the beginning, it can assist with hyper-personalized follow-up emails at scale and contextual chatbot support . It can also act as a 24/7 virtual assistant for each team member, offering tailored recommendations, reminders, and feedback, resulting in higher engagement and conversion rates. As the deal progresses, gen AI can provide real-time negotiation guidance and predictive insights based on comprehensive analysis of historical transaction data, customer behavior, and competitive pricing.
  • There are many gen AI use cases after the customer signs on the dotted line, including onboarding and retention. When a new customer joins, gen AI can provide a warm welcome with personalized training content , highlighting relevant best practices. A chatbot functionality can provide immediate answers to customer questions and enhance training materials for future customers. Gen AI can also offer sales leadership with real-time next-step recommendations and continuous churn modeling based on usage trends and customer behavior. Additionally, dynamic customer-journey mapping can be utilized to identify critical touchpoints and drive customer engagement.
This revolutionary approach is transforming the landscape of marketing and sales, driving greater effectiveness and customer engagement from the very start of the customer journey.

Winning tomorrow’s car buyers using artificial intelligence in marketing and sales

Winning tomorrow’s car buyers using artificial intelligence in marketing and sales

Commercial leaders are optimistic—and reaping benefits.

We asked a group of commercial leaders to provide their perspective on use cases and the role of gen AI in marketing and sales more broadly. Notably, we found cautious optimism across the board: respondents anticipated at least moderate impact from each use case we suggested. In particular, these players are most enthusiastic about use cases in the early stages of the customer journey lead identification, marketing optimization, and personalized outreach (Exhibit 1).

These top three use cases are all focused on prospecting and lead generation, where we’re witnessing significant early momentum. This comes as no surprise, considering the vast amount of data on prospective customers available for analysis and the historical challenge of personalizing initial marketing outreach at scale.

Various players are already deploying gen AI use cases, but this is undoubtedly only scratching the surface. Our research found that 90 percent of commercial leaders expect to utilize gen AI solutions “often” over the next two years (Exhibit 2).

Our research found that 90 percent of commercial leaders expect to utilize gen AI solutions “often” over the next two years.

Overall, the most effective companies are prioritizing and deploying advanced sales tech, building hybrid teams, and enabling hyper-personalization. And they’re maximizing their use of e-commerce and third-party marketplaces through analytics and AI. At successful companies, we’ve found:

  • There is a clearly defined AI vision and strategy.
  • More than 20 percent of digital budgets are invested in AI-related technologies.
  • Teams of data scientists are employed to run algorithms to inform rapid pricing strategy and optimize marketing and sales.
  • Strategists are looking to the future and outlining simple gen AI use cases.

Such trailblazers are already realizing the potential of gen AI to elevate their operations.

Our research indicates that players that invest in AI are seeing a revenue uplift of 3 to 15 percent and a sales ROI uplift of 10 to 20 percent.

Anticipating and mitigating risks in gen AI

While the business case for artificial intelligence is compelling, the rate of change in AI technology is astonishingly fast—and not without risk. When commercial leaders were asked about the greatest barriers limiting their organization’s adoption of AI technologies, internal and external risk were at the top of the list.

From IP infringement to data privacy and security, there are a number of issues that require thoughtful mitigation strategies and governance. The need for human oversight and accountability is clear, and may require the creation of new roles and capabilities to fully capitalize on opportunities ahead.

In addition to immediate actions, leaders can start thinking strategically about how to invest in AI commercial excellence for the long term. It will be important to identify which use cases are table stakes, and which can help you differentiate your position in the market. Then prioritize based on impact and feasibility.

The AI landscape is evolving very quickly, and winners today may not be viable tomorrow. Small start-ups are great innovators but may not be able to scale as needed or produce sales-focused use cases that meet your needs. Test and iterate with different players, but pursue partnerships strategically based on sales-related innovation, rate of innovation versus time to market, and ability to scale.

AI is changing at breakneck speed, and while it’s hard to predict the course of this revolutionary tech, it’s sure to play a key role in future marketing and sales. Leaders in the field are succeeding by turning to gen AI to maximize their operations, taking advantage of advances in personalization and internal sales excellence. How will your industry react?

Richelle Deveau is a partner in McKinsey’s Southern California office, Sonia Joseph Griffin is an associate partner in the Atlanta office, where Steve Reis is a senior partner.

The authors wish to thank Michelle Court-Reuss, Will Godfrey, Russell Groves, Maxim Lampe, Siamak Sarvari, and Zach Stone for their contributions to this article.

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What Is A Digital Marketing Strategy? 5 Steps To Create One

A digital marketing strategy is part of a larger business plan that outlines how to reach its overarching business goals using digital channels.

Part of any successful business is a successful digital marketing strategy.

Creating a strategy is one thing, but the execution is just as important, if not more.

But with the digital landscape changing every day, where’s the best place to start creating and optimizing your strategy?

Read on to learn how to create a successful digital marketing strategy for your brand.

What Is A Digital Marketing Strategy?

Inevitably, digital must become the pillar of your overall marketing strategy.

With an average of 12 touchpoints and two months for a customer to convert from awareness to sale, many of those touchpoints will be digital.

While there’s not one clear-cut definition of what a digital marketing strategy is, it can be summarized as the following:

A digital marketing strategy must be tailored toward specific company key performance indicators ( KPIs ). Core elements of creating a successful strategy include:

  • Digital channels.
  • Target audience and regions.
  • Core messaging components.

As part of a digital marketing strategy, specific channels are identified to target the company’s ideal customers and lead them toward conversion .

These channels can include (but are not limited to):

  • Search engines.
  • Social media platforms.

Identifying channels is just one part of the digital marketing strategy. The second necessary key piece is consistent and relevant messaging to the target audience.

While the overarching message should be consistent across channels, the way brands engage and specifically talk to customers will, and should, vary by platform.

Digital Strategy Vs. Tactics

Many brands tend to confuse strategies and tactics and end up blending them together.

While both are essential elements of a marketing plan, strategy and tactics have different definitions and serve different purposes.

As mentioned above, a strategy is part of a larger business plan to help brands reach overarching company goals.

Conversely, tactics are planned actions to achieve a greater marketing strategy.

The Key Differences Between Digital Strategies And Tactics

One example of a digital strategy could be paid media marketing. The tactics that fit within paid media marketing could include:

  • Running paid search ads on Google or Microsoft.
  • Testing audiences on the Google Display Network (GDN).
  • Testing landing page or ad copy creatives for optimized conversion rates.

To summarize: Tactics do not equal strategies. Strategies are created to then inform which tactics should be used.

Digital Strategy Examples

While digital marketing strategies may contain similar characteristics across brands, each strategy and its tactics will look different. Strategies are not a “one size fits all.”

Below are some of the more common digital marketing strategies used by brands across the world:

  • Pay-per-click (PPC) advertising.
  • Search engine optimization (SEO).
  • Content marketing.
  • Email marketing.
  • Social media marketing.

PPC Advertising

PPC marketing is a form of online advertising where brands pay each time a user clicks on their ad and is driven to the company website. Typically PPC campaigns are run in Google and Microsoft Ads.

Within those two PPC platforms are multiple campaign types to choose from, depending on the advertiser’s goals. These can include:

  • Search ads.
  • Display ads.
  • Shopping ads.
  • YouTube ads.
  • Discover ads.
  • Performance Max.

PPC ads can be hyper-targeted to specific audiences or targeted to the masses, depending on the brand’s objectives. PPC is generally used to drive a brand’s traffic, sales, and conversions.

An example of a PPC search ad on Google is below.

An example of a Google paid search text ad.

An SEO strategy involves optimizing the brand’s website, app, or content to help rank higher in the search engine results pages (SERPs).

When a brand’s website and content are optimized, it helps drive improved organic (non-paid) search visibility, ultimately driving more traffic to the website.

SEO is considered a long-term strategy, and while there are typically no “direct” costs (like PPC advertising), it does involve indirect costs such as:

  • Employee or agency time and fees.
  • Third-party platforms or technology costs.

One benefit of having a strong SEO strategy is that, over time, the reliance on PPC marketing can be reduced, making the budget more efficient.

Using the same example of the search query [ppc software], an example of organic listings and answer boxes on the Google SERP is below.

An example of organic listings for the query 'ppc software' in Google.

Content Marketing

This strategy is more “behind-the-scenes” work, if you will. It includes creating (and sharing) unique and valuable content with a company’s target audience.

Part of a content marketing strategy involves creating different types of content for each digital platform.

For example, if a brand wants to create content for the TikTok platform, the content would be in the form of short video clips (maximum of three minutes).

Conversely, if a brand wants to increase brand authority, it may involve creating a long-form article and blog strategy to live on its website.

Content marketing aims to help build and establish trust with the target audience and turn them into long-term, repeat customers.

Using the same example as the PPC section above, an example of content marketing is below. The brand Skai (formerly Kenshoo) curates blog posts for its readers to increase engagement.


If a brand sells physical products, an ecommerce strategy should be crucial to a company’s business goals.

Enabling an ecommerce strategy means an online storefront is created for consumers to purchase products.

Some of the tactics in an ecommerce strategy can include:

  • Creating an online storefront where brands sell direct to consumers (DTC).
  • Selling physical products on online marketplaces such as Amazon.
  • Creating affiliate sales programs where others get paid to promote the brands’ products.
  • Paid shopping ads on Google and Microsoft to drive sales.
  • Influencer and brand ambassador marketing.

Email Marketing

This component of a digital strategy involves sending targeted emails to potential and current customers. The ultimate goal of email marketing is to drive leads, sales, or transactions and create repeat purchasers throughout the customer journey.

For example, a soon-to-be bride is looking for the perfect wedding invitations after getting engaged.

After this user is subscribed to the brand’s email or marketing communications, an email strategy cadence is created to guide them throughout the planning process. That could include:

  • Promoting free samples on wedding invitations.
  • Discounts on wedding invitation suites.
  • Free (or discounted) Thank You cards after the wedding.
  • Referral program to create word-of-mouth sales.

Email marketing is a great way to talk to the target audience and build lasting customer relationships, even after the initial purchase.

Below is an example of a targeted email offering a promotion in my inbox:

What Is A Digital Marketing Strategy? 5 Steps To Create One

Social Media Marketing

Depending on the brand, a social media marketing strategy will have different use cases and goals.

As part of the larger digital marketing strategy, social platforms should be chosen to promote content or interact with the target audience in some form.

Below are just a few tactics that can be used in social media marketing:

  • Creating organic content to post.
  • Running paid ads on platforms to target audiences.
  • Launching influencer marketing campaigns depending on the specific goal.

Using the same brand example as the email section, below is an example of a retargeting ad on Facebook (Meta):

Thrive Market Facebook ad

How To Create A Digital Strategy In 5 Steps

As mentioned above, a digital marketing strategy should be created after identifying the overarching business goals.

For this reason, the steps to create a successful digital strategy include specific steps to help achieve the larger business goals.

What Is A Digital Marketing Strategy? 5 Steps To Create One

Step 1: Identify Target Audience And Build Personas

A digital marketing strategy will only be as good as the target audience behind it. After all, they’re the ones who purchase your brand’s products and services.

When identifying a target persona , consider the following items:

  • Demographics : After identifying where to sell your products/services, determine if any key geographic areas may outperform others. Other demographic categories are age, parental status, household income, and more.
  • Interests : What kinds of hobbies does your ideal persona have? This information can help shape content for the customer.
  • Behaviors : How (and where) do these users consume content on the internet? Are they impulse shoppers? What social platforms do they frequent?
  • Pain points : What problems are users trying to solve? This is the key area to focus on. By providing your target audience with a solution to their pain points and speaking to them in a way they understand, you’ll likely win a customer for life.

Step 2: Conduct Competitor Landscape Analysis

It’s important to understand the digital landscape before diving into digital channels.

Some of the key components of conducting a competitor analysis include:

  • Which competitors are bidding on relevant keywords you’d like to target?
  • How are competitors messaging their target audience?
  • Which channels are competitors advertising on?
  • How do competitors rank organically compared to you?
  • How much are competitors’ monthly digital ad budgets?

Third-party tools like Semrush, SpyFu, Google Keyword Planner, and Google Trends can help answer many of these questions.

Note that with any third-party tool’s data, the information provided cannot be guaranteed 100% accurate and should be used as a guide, not as an absolute.

Step 3: Determine Necessary Digital Marketing Channels

Once you’ve figured out who your target audience is and where they hang out online, it’s time to determine the key digital marketing channels.

Ideally, a mix of channels will be chosen as it’s not best practice to choose one or two and put all your eggs in one basket.

The key is to diversify the digital channels and meet your customers where they’re online at any given point in time.

These channels will likely include any of the above in the digital strategy examples section.

Each channel identified should include its own set of KPIs . These are set by the marketers and greater business teams.

Be sure not to set the same KPIs and measurement goals for each channel, as they all serve different purposes.

Creating realistic measurement goals ensures that awareness channels are measured against awareness KPIs, such as brand lift instead of direct conversions.

As with any digital channel, it’s important to understand how they can be measured.

This step should include identifying a proper measurement platform, such as Google Analytics or another tool, to ensure that marketing dollars and channels can be measured.

Step 4: Create Content And Unique Value Proposition Plan

Once the digital channels have been identified, it’s time to plan your content for each channel.

The key is creating a consistent messaging framework that can be reused and reworked in each channel. That way, you’re not starting from scratch each time.

For example, if you want to introduce your brand on YouTube or the Google Display Network, the content should not be focused on a direct conversion or a “Buy Now” CTA. That’s simply asking for too much on an initial brand awareness touchpoint.

On the other hand, for someone well on their search journey and looking for specific products and services, that could be a time to introduce discounts and special offers.

Lastly, make sure that what you’re providing your customers is unique and differentiated in the market. Conducting a competitor analysis first will help identify what’s currently being offered in the market.

Even if your product or service is similar to your competitors, it’s important to find a way to differentiate your brand.

Step 5: Execute And Optimize Digital Marketing Strategy

Once you’ve defined steps 1-4, it’s time to launch your digital marketing strategy.

However, the work is not done yet. Your digital marketing strategy should be ongoing and fluid based on performance and the changing market landscape.

Digital marketing channels and campaigns should be continuously monitored and analyzed to ensure that marketing budgets and resources are utilized most effectively.

This should include daily, weekly, and monthly checkpoints in each channel.

Monthly reports and quarterly business reviews (QBRs) should be conducted to provide opportunities to shift and pivot strategy based on findings.

Digital marketing strategies are not a “one size fits all.” They also should not be the only strategy a brand has.

While it’s important to think about “digital-first” when it comes to strategies, it needs to align with the overarching business goals.

Don’t confuse strategy and tactics and end up rushing into a tactics-first approach.

By taking the time to create a solid digital marketing strategy, you’re setting the brand up for long-term success and the ability to pivot based on performance.

More Resources:

  • Lead Generation: How To Get Started
  • The Ultimate Guide To Digital Marketing
  • The Top 10 Digital Marketing Certificate Programs To Enroll In

Featured Image: ImageFlow/Shutterstock

Brooke Osmundson

Brooke serves as the Leader of Digital Marketing at Smith Micro Software, with over 10 years of experience. She helps ...

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LinkedIn Marketing Strategy: 6 Tips for 2023

Posted by Jackie Gualtieri on May 23, 2023

Marketing Tools & Tips Social Media Best Practices

With so many social media platforms out there, why should companies be on LinkedIn? Perhaps it’s the fact that LinkedIn has over 875 million members . Or maybe it’s because 52 million people use LinkedIn to look for work every week or that 101 job applications are submitted through LinkedIn every second, according to Hootsuite’s roundup of LinkedIn’s most recent statistics.

But LinkedIn isn’t just for recruiting. Marketers see up to 2x higher conversion rates on LinkedIn, according to LinkedIn’s research . It’s no wonder that their surveys also found that 40% of B2B marketers say LinkedIn is the most effective channel for finding high-quality leads. Those leads can help you convert followers to customers, making LinkedIn just as crucial for your sales team.

Whether you’re looking to help your company find new employees, generate more leads, or simply build your brand awareness, your LinkedIn marketing strategy matters. Let’s get into how you can leverage LinkedIn and help every facet of your company.

6 Tips for Your 2023 LinkedIn Marketing Strategy

1. solidify your goals.

How you use LinkedIn may vary depending on what your goals are, so it’s crucial to know what you’re striving for before trying to configure your LinkedIn presence. Some of the main reasons for using LinkedIn include building brand awareness, making sales in a B2B industry, or recruiting new potential hires.

Once you name your goals, you should then further determine the steps you want to take to reach those objectives. For instance, if your aim is brand awareness, what might that look like for your company? Some LinkedIn metrics you may want to look at include your posts’ reach, your page’s following, or your overall engagement rate. But if your goal were recruitment, you may be more concerned with the rate of your messages being opened when sent to potential hires.

Ready to start analyzing your LinkedIn metrics?

LinkedIn is a highly versatile social media platform, which is both helpful and sometimes overwhelming. Breaking down and addressing your goals is the best way to ensure you’re using it in the way that’s most beneficial to your company.

Disney Park, Experiences and Products , the division of The Walt Disney Company dedicated to its theme parks and licensing products, optimized its company page for recruitment. The majority of the division’s posts revolve around promoting working at the Disney Parks and often share information about the benefits of working with The Walt Disney Company. By setting a goal of recruitment, the company can focus on reaching the right target audience with their LinkedIn posts and boosting attendance at their job fairs.

Senior Industrial Engineer Michelle, shares her perspective on working with the company and her focus on the customer experience, making for a very authentic LinkedIn post.

2. Complete your LinkedIn Page

Your company’s LinkedIn Page is your home base. When LinkedIn users see your posts and click to view your page, you want them to get a full picture of your company. Regardless of what your goals are, it’s essential to have this page filled out with all the information someone might need or want about your company. What’s your company’s mission? What do you do? What’s your history?

Having a LinkedIn company page with all tabs completed can up your weekly views by 30 percent , according to LinkedIn research. On your home page, you should have crucial branding details, like your company logo, a cover photo that fits your brand, an overview of your company, and a call-to-action button, which is often connected to the company’s website. In the About section, dive deeper into your biography with more information like your origin, industry, company size, and headquarters location. In the Jobs section, you can share recruitment information, while in the People section, you can connect with your coworkers and give LinkedIn users an idea of their potential colleagues.

Dig deeper: Additional tips to get the most from your LinkedIn company page .

LinkedIn offers a way to go further with Showcase Pages. While you can build your company’s LinkedIn Page, you can also create additional pages that branch off of the parent company. Showcase Pages, which appear under the main business page’s Affiliated Pages section, allow you to highlight unique aspects of your brand. You can build Showcase Pages to show off sections of your company, brand initiatives, nonprofit work, and much more.

Penguin Random House uses their Showcase Pages to show off the different aspects of the parent company. The Showcase Pages were built around the several imprints that Penguin Random House has, including Doubleday , which has published Rudyard Kipling, Dan Brown, and John Grisham, among many others. The imprint’s Showcase Page shares additional information about this subsection of Penguin Random House, including its history, location, and company size. As a Showcase Page, you can find Penguin Random House listed in their Affiliated Pages, labeled “Parent.”

Doubleday's LinkedIn showcase page is curated with an in-depth overview and company information.

3. Plan high-quality content

Now that your LinkedIn Page and Showcase Pages are all up and running, it’s time to start posting. Posting content is a vital way to engage your audience, whether that audience be potential customers or hopeful new hires. According to LinkedIn’s research, companies that post to their pages weekly grow their following 7x faster than those who only post monthly. But those who post daily grow 8x faster than those who post weekly.

It’s clear that developing a schedule that allows you to post more frequently can boost your following and build your brand on LinkedIn. But if you do decide to post as often as daily, you may find it difficult to keep up with the demand of making and posting high-quality content every day. Many social media managers find it beneficial to use a tool where they can schedule their LinkedIn posts for the week or even month in advance. Some tools can even help you create content in-app, making it even easier to stick to a schedule of well-made posts.

An application like Sprout Social , which allows you to both make and analyze posts on LinkedIn, can help you schedule posts in advance. You can even use audience targeting to control who you want to see the post. Through the tool, you can keep up with your engagement by responding to comments. An all-in-one tool that keeps your content in one place can help you feel less overwhelmed by the demand of posting more frequently and allow you to maintain your standards for high-quality content.

Start analyzing your LinkedIn content with Rival IQ.

4. Utilize employee advocacy

When you share a post, your hope is likely that it will have a significant reach. But the reality is that an employee’s network is 10x larger than their company’s follower base on average . That discrepancy is a major reason why employee advocacy is so crucial. But it’s not just about reach. It’s also about authenticity. When an employee shares a post, LinkedIn found that it’s viewed as 3x more authentic than a company’s post.

Through LinkedIn’s research, they uncovered that employee-shared posts are responsible for a 30% increase in total engagement for their company. However, they also discovered that only 3% of employees share content about their company. Depending on your goals, you should work with your employees and coworkers to engage in employee advocacy. If your goal is brand awareness, you might ask your coworkers to share or reshare posts regarding what’s new at the company, significant events coming up, or blog posts from your company’s website. Or, if the goal is recruitment, you may want them to share information about upcoming job fairs, post details about what makes their job worthwhile, or talk about the perks that come from working at the company.

Pinterest has a strong employee advocacy network. Jeana Kim-Timmons, the social platform’s Strategic Partner Lead for Agencies and Public Figures, often posts about what’s happening at the company, from ticketing information on the Pinterest Creators Festival to new in-app features. She also reshares content from Pinterest’s website, such as in this timely post about the Pinterest board that inspired a celebrity stylist for her client’s Met Gala look. Posts like these boost brand awareness and give greater insight into what the company does.

Jeana Kim Timmons' LinkedIn page where she shares a post about Marni Senofonte's secret Pinterest board

5. Optimize your InMail

Sending a message on LinkedIn only works if you’re already connected to the person. Unfortunately, you won’t be connected in many cases, which is why LinkedIn has InMail. InMail is a Premium feature of LinkedIn. You’ll receive a number of InMail credits per month with your subscription, allowing you to message someone outside of your connections.

With a limited number of credits per cycle, you must make sure that every InMail message you send is optimized for your audience. There are many steps you can take to improve your response rate. First, pick the right people, especially if you’re recruiting. LinkedIn found that people with “Open to Work” in their profile or who fall in your category of “Recommended Matches” are about 35% more likely to respond .

Don’t send messages in bulk. LinkedIn’s data shows personalized InMail messages tend to perform about 15% better. When you do write your message, stick to under 400 characters. The data also proves messages under 400 characters have a response rate 22% higher than the average response rate. Staying under this number can give you a leg up on your competitors, as LinkedIn found 90% of all InMail messages are over 400 characters. The below example message from LinkedIn is just 345 characters and has a personalized approach.

Inmail sample from a recruiter prospecting for hires.

For the most part, timing isn’t particularly important when it comes to sending InMail. But there is one thing to keep in mind: Avoid sending messages on Fridays and Saturdays. According to LinkedIn’s research, these two days receive the lowest response rates. Messages sent on Thursdays also receive a slightly lower-than-average response rate, which suggests that sending InMail earlier in the week is your best bet, regardless of what time it’s sent.

6. Test and reinvest

As with any social media network, analytics play a crucial role in building your online presence. LinkedIn gives businesses the ability to see certain metrics . Through LinkedIn Analytics, you can see who is looking at your LinkedIn Page, who followed you, how people are engaging with your content, and how your competitors are doing. These metrics help you determine what’s working and what isn’t. By staying on top of your analytics, you can eliminate what isn’t helping you reach your goal and spend more time and resources on what is.

LinkedIn analytics tools , like Rival IQ, can help you dive even deeper. By using such a tool, you can create custom dashboards that help you visualize what you should be reinvesting in. Get insight into who your followers are, what types of posts perform best, what the best time of day to post is, and much more. These additional insights are crucial to building a successful LinkedIn marketing strategy that works for your company.

LinkedIn analytics in Rival IQ provides you with all the LinkedIn insights you need in the selected time period including followers, page views, engagement rate, and more

Wrapping Up Your LinkedIn Marketing Strategy

A well-planned and well-executed LinkedIn marketing strategy helps many different parts of your company, from your recruiting to your sales team, allowing you to reach your social media marketing goals. By taking steps like completing your LinkedIn page, scheduling your posts, and utilizing your employee advocacy, you can target new audiences and boost your online presence. And by optimizing your InMail, you can help develop relationships online, resulting in company or sales growth.

But most often, finding an effective LinkedIn marketing strategy takes being willing to try and try again. By keeping on top of your LinkedIn analytics through tools like Rival IQ, you can see what isn’t working, allowing you to run tests to determine what’s worth reinvesting in.

Already a Rival IQ user? Check out how to set up your LinkedIn analytics on your Rival IQ dashboard to learn how to get more out of your LinkedIn strategy.

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Jackie Gualtieri

Jacqueline is a writer and editor based out of the Central Coast of California. She initially started out as an influencer marketing strategist and continues to find herself fascinated with the way social media affects us. When she's not analyzing the world of social media, she can be found writing poetry and short stories. And if she's not writing, she's probably covering her house with more crochet and embroidery.

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