Marketing
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Strategic planning is a vital component to any business future prospects. The Strategic Planning process is a proactive method that enables the organization to take a long term approach at managing growth. The strategic planning process must provide the companys decision makers with enough information to enable them to make decisions that will impact the companys future prospects. Missteps in the planning process could cost the company sales and impact the ability to survive in todays market place. The executive leadership team must ensure their strategy is disseminated effectively to all department/division level leaders to ensure the business decisions they make are inline with the overall strategic plan.
The Marketing Departments ability to interpret and execute the strategic plan is of paramount importance. The organization is tasked with executing the Marketing Concept which states “an organization should seek to make a profit by serving the needs of customer groups”. The marketing function is the primary interface to the organizations customer base. They gather pertinent information on the wants and needs of the customers through their research processes and information systems. The data collected by the marketing function will be a primary input into the key decisions that will come out of the strategic planning process. If the data is incorrect, misinterpreted or a faulty decision is made regarding how the company should allocate resources the company will be adversely impacted. The organizations leadership makes decisions based on the strategic planning process that will impact the companys products or their target markets
The Strategic planning process begins at the highest levels of an organization. The executive leadership team determines the purpose for the organization. They review the Situational Analysis, which include data on competitive environment, the economic environment, the social environment, the political environment, the cooperative environment, and the legal environment. The leadership team sets the marching orders of the organization by creating a Mission Statement. The Mission Statement briefly outlines the purpose of the organization. The mission statement should answer who is the primary customer/market the organization is pursuing. A well written Mission Statement should provide a specific direction for employees through outlining an achievable vision and providing the organization with the idea of working towards a single purpose. The executive leadership team must periodically remove and adapt their mission statement. Changes in external stimuli may require a change in what or how an organization executes.
In 1982, a small retail outlet opened on Hilton Head Island, SC. Developers had discovered the pristine island and through word of mouth started to attract more tourists to the area. A local craftsman, George Pinckney, realized that there was a small, but growing market for gifts and collectables for visitors wanting to remember their time on Hilton Head. He developed a mission statement, so he could communicate his vision for the shop to his family, friends and future employees: “To be the premier retailer of Low Country memorabilia and crafts to island visitors”. He opened his small store and included visitor staples such as T-Shirts and Magnets, but also added items with local flair including food stuffs (i.e.) Low Country Boil packets), locally made crafts (Sea grass baskets), and books with a local flair. He also routinely had Gullah oral historians in the store to tell stories and artisans to display their craft to attract more customers to the shop. The business became very successful and almost a necessary stop to island visitors. One afternoon, George was working the counter and overheard two customers wishing they could buy Georges famous shrimp grilling sauce over the internet. George became intrigued and began conducting research into the markets conditions, including the internet. When completed, George decided to modify the vision for his store: “To be the premier retailer of Low Country memorabilia and crafts to the world”.
Once the Mission Statement is finalized, a set of actionable organization objectives are created. The Objectives will outline what the organization wants to achieve and when. The objectives need to cover every aspect of the organizations operations. The objectives are a set of long term actionable priorities that the organization wants to achieve. The objectives will set the general direction for the company and set high level benchmarks for performance.
When George completed Low Country Gifts new mission statement, he realized the need to reexamine all aspects of his strategic plan. He started thinking though what he wanted his company to accomplish within the next 5-10 years. The store had achieved his original objectives years ago and he had been to busy running the store to think through where he wanted to guide his company. After re-reviewing his new mission statement, George began to develop the new objectives for his company.
Expand into 3 new markets within 6 years.
To introduce 10 new Low Country Gifts branded products per year.
Achieve a 15% return on investment per year.
Decrease full time employee turnover ratio by 2007.
Increase market share from 25% to 35% of the Hilton Head Island memorabilia market by 2007.
Increase average profit margin from 15% to 20%
Establishing Goals is the next step in the Strategic Planning process. A Goal is a specific measurable tactic that must be completed to achieve an objective. An organization will likely have multiple goals that will need to be completed, before an objective can be completed.
As George wrapped his objectives, he knew the next step was to figure out what steps needed to be completed in order to meet his objectives. A partial list of the business Goals George developed is listed below:
Establish an online presence and store by end of 2006.
Ensure online retail outlet self sustaining by end of 2007
Lower private label acquisition expenses by 10%.
Lower private label food acquisition expenses by 15%.
Increase foot traffic in Hilton Head Island store by 40%.
Setting the Organizational Strategy is the next step in the Strategic