Although the importance of a periodic strategic marketing planning process is well established relatively few businesses actually have a strategic plan in place and fewer still utilize and implement any existing plan. We discuss the two main reasons the strategic planning fails to deliver results and a potential method to address these issues.
To survive for any length of time a business must be expert at whatever it delivers but this leads to a focus on today’s market and the short term that makes it difficult to step away and take a longer term view. Key staff often grow up with a business which blinkers their view of the market. The impact on growth (or even survival) of a short term view may be recognised but many businesses avoid market evaluation and long term planning for two key (and interrelated) reasons:
- The complexity of the process and the time and resources involved.
- The perceived usefulness of the finished plan to the day to day running of the business
The complexity of the planning process often generates information overload, a lack of clarity and a final plan which is difficult, if not impossible, to implement. Hence, if a strategic plan is produced it often sits on a shelf gathering dust. Kaplan and Norton research shows that >90% of organisations fail to implement their strategies.
Strategic Marketing Analysis
To simplify the process and to provide clarity and focus it is worth answering some simple questions before diving headlong into the market analysis and planning process, they are
- What does the business offer?
- Who needs what the business offers and why?
- Which other businesses offer the same product/service that satisfies that need?
- Given the above why should potential customers pick your business to service their needs?
Simple questions in principle but not so easy to answer in practice. In our experience it is often the last question that causes the most problems.
A brainstorming session can usually answer these questions in 40 minutes or so. Answering the last question often stimulates a re-evaluation of the answers to previous questions. A further 20 to 30 minutes can therefore be required to work back up through the relevant questions.
Identify Customer Needs
What basic customer need does whatever the business supplies satisfy? It is important to stop thinking in terms of products and services and to think instead about what customer problems are addressed. Fail to answer this question properly and any marketing analysis and strategy process will fail.
The natural next step is to define which potential customers (or groups of customers) may have this need and to profile and segment them appropriately. Unfortunately, in almost all cases, there will be other businesses attempting to satisfy this need and it is important to list them and their relative strengths and weaknesses.
When starting with needs and not product and services competitor analysis often throws up surprises. New potential competitors enter the mix and others that may have seemed a major threat may turn out to be less dangerous than previously imagined.
With competitor analysis complete it should be possible to answer the final key question and define what sets the business apart from the rest. It is the answer to this question that is the key and, once the answer is in place, an evaluation of which businesses may require what the business offers and competition is required.
Although the above short form method can be no substitution for a thorough strategic planning process it does give both some clues where to start and some focus to the activity that ensures the final plan has more relevance to the business and more chance of being implemented rather than just gathering dust.