Explain the factors influencing Market-Oriented Strategic Planning.

 Marketing management is a process of planning, organizing, implementing, and controlling marketing activities to facilitate and expedite exchanges.    It consists of analyzing market opportunities, researching and selecting target markets, developing marketing strategies, planning marketing tactics, and implementing and controlling the marketing effort.

The goal of strategic planning is to develop and maintain a fit between the organization objectives and resources in light of changing market opportunities.  The aim is to shape or reshape the firm’s business and products to derive profits and growth.

Factors Influencing Marketing Strategy

The customer is at the heart of the marketing effort.  In order to satisfy the customer needs, marketers must work with TWO (2) sets of variables: the controllable variables (the 4 P’s also called the marketing mix – these are under the direct control of the marketer) and the uncontrollable variables (those not under the direct control of the marketer).  To be effective and efficient, the marketer must develop strategies – hence the strategic planning process. 

Planning in business is a relatively new development.  Firms go through five stages on their way to sophisticated planning:

1)      Unplanned Stage: Newly formed firms have little planning time available.  Management is engrossed in day-to-day operations for survival and most of the time is spent looking for critical resources

2)      Budgeting System Stage:  Budgeting used to improve control of cash flow.  Incoming sales for the coming year are estimated and related to costs and budgets are prepared with less elaborate thought process.

3)      Annual Planning Stage: Top-down planning is instituted.  This involves setting goals and plans by top management for all lower levels.  Bottom-up planning involves the aggregation of each lower level plan into plans submitted to higher management.  Management is based upon Theory Y assumptions – people like and would take responsibility if given the chance.  Management looks at the firms as needing established goals from upper management.  Planning encourages systematic thinking, leads to better coordination of effort, development of performance standards for control, and causes the firm to focus on policies and objectives.   This results in better preparedness and brings about a greater sense of purpose and participation.

4)      Long-Range Planning: The annual plan developed into a detailed version of the first year plan.

5)      Strategic Planning: The firm reexamines which business it should grow, maintain, harvest and terminate and which new businesses it should enter.  Strategic Planning deals with the adaptability of the firm to rapidly changing environment.

Market oriented strategic planning involves the development of a fit between the firm’s objectives, skills, and resources in response to market opportunities and threats.  The goal is to shape the firms market response so that customers are satisfied and profit is realized.  The Marketing Plan is a central element of the planning process and is used to coordinate the marketing effort.