Transcript Planning: The Corporate, Marketing, & Communications Hierarchy

Planning: The Corporate,
Marketing, and
Communications Hierarchy
Sunarto Prayitno
1
The Overall Strategic Planning
Process
Marketing Communications strategy cannot exist
in isolation from marketing strategy which in turn
is directly linked to corporate strategy.
So, let us start with consider the simple strong
relationships between the three levels of
strategy, there are: Corporate Strategy,
marketing strategy, and marketing
communications strategy.
2
The Overall Strategic Planning
Process
1
CORPORATE
STRATEGY
2
MARKETING
STRATEGY
3
MARKETING
COMMUNICATIONS STRATEGY
3
The Overall Strategic Planning
Process
Planning can be carried out using a top-down or
bottom-up approach, or preferably using a
mixture of the processes at each of the three
levels.
This involvement of the different organizational
levels implying a planning hierarchy immediately
suggests that there is an effective sequence of
planning, in which the development of marketing
communications strategy proceeds after a
proper consideration of both corporate and
business strategy.
4
The Overall Strategic Planning
Process
Undoubtedly, however, there are situations
where marketing managers and their agencies
do undertake some bottom-up planning.
They are often called on to develop marketing
communications strategies to a different
timescale from corporate planning.
In some cases their knowledge of corporate
strategy may be limited. They therefore have to
do their best in a given situation.
5
The Overall Strategic Planning
Process
However, in all situations marketing
communications must be developed with an
awareness of its fit within the overall
strategic planning framework.
6
The SOSTAC Planning
Framework
Whatever the level of the planning hierarchy, the
SOSTAC planning model can be applied easily.
It will immediately be obvious that it is possible
to apply the SOSTAC model at each level of the
planning hierarchy, that is SOSTAC applies
equally at the corporate level, the marketing
level, and the marketing communications level.
7
The SOSTAC Planning
Framework
The SOSTAC Planning System
Stage:
Strategic Question:
1. Situation
Where are we now?
2. Objective
Where do we want to be?
3. Strategy
How do we get there? (Broad direction)
4. Tactics
The detail of strategy. What communications tools
should be used when?
5. Action
The detail of tactics. What steps are required to put
each tool into action?
6. Control
How do we know when we have arrived?
8
The Planning Hierarchy
The ‘Management by Objectives’ (MBO) system
became extremely popular and its in use today
since the 1960s.
The principle of the system is that individual
managers’ objectives have to be linked into
corporate objectives in a direct and distinct way.
9
The Planning Hierarchy
Each manager discusses and agrees with the
next level of management above them over what
action they will take in the following 1year in
order to contribute to achievement of the overall
corporate objectives.
This linkage into a hierarchy of objectives
ensures that an organization’s main resources,
its staff, are involved, integrated, motivated and,
hopefully, rewarded.
10
The Planning Hierarchy
MISSION STATEMENT
CORPORATE OBJECTIVES
CORPORATE STRATEGIES
MARKETING OBJECTIVES
MARKETING STRATEGIES
MARKETING COMMUNICATIONS OBJECTIVES
MARKETING COMMUNICATIONS STRATEGIES
MARKETING COMMUNICATIONS PROGRAMS AND BUDGETS
11
The Planning Hierarchy
At each level it is possible to consider the two elements
of objectives and strategy.
Objectives are the end result, and strategies are the
means of achieving the objectives.
The whole process can also be seen as an end and
means hierarchy. The means (strategies) at one level
become the ends (objectives) at the next level down.
Strategies cascade down to the next level of planning as
an objective.
12
The Strategic Planning Stages
of Marketing Communications
The detail of the planning hierarchy have been redrawn
in the form of a flowchart showing how the objectives at
the three planning levels – corporate, marketing, and
marketing communications – are directed and linked to
each other. This flowchart has been extended to form a
triad of objectives, strategy, and tactics.
Tactics refers to a number of relatively short-term
actions, but of course what is ‘short-term’ is relative to
the level of the organization being considered.
13
The Strategic Planning Stages
of Marketing Communications
Corporate level planning could typically extend up to five
years depending on the type of industry.
Marketing planning would extend two or three years, and
Marketing communications planning usually only looks at
a one-year timescale.
However, it should be noted that an organization’s
branding strategy may be planned over a longer period
of five years or more as this is of strategic importance.
14
The Strategic Planning Stages
of Marketing Communications
Corporate
Planning
Level
Mission Statement
Corporate Objectives
Corporate Strategies
Marketing
Planning
Level
Marketing Objectives
Operational
Objectives
Financial
Objectives
Product
Objectives
Pricing
Objectives
Place
Objectives
Marketing Strategies
Marketing Comm.
Objectives
Marketing
Comm.
Planning
Level
H. R.
Objectives
Marketing Comm.
Strategies
MarCom Tactics
MarCom Action
Plans
MarCom Control
15
The Operational Planning Stages
of Marketing Communications
At first sight in the operational planning may seem odd
that marketing communications budget is estimated
before detailed operational plans are drawn up. This,
however, represents many real situations for both large
and small companies.
Small companies often budget to spend all they can
afford, which is often too little. Large companies
sometimes base their budgets on previous experience or
use a formula such as the advertising to sales ratio.
Whatever the situation, the budget level is indeed a
broad starting point for making decisions on the most
appropriate communications elements. After detailed
planning it is then possible to submit a revised budget.
16
Linking Marketing and
Communications Strategy
The previous sections have asserted that marketing
communications strategy should derive directly from
marketing strategy which in turn derives directly from
corporate strategy.
This suggests that there is a strong body of knowledge
and practice which provides a framework for making
these linked decisions.
In reality, although marketing theories and concepts are
well developed across specific planning levels, their
vertical integration is rather less developed. This is
perhaps understandable on two counts.
17
Linking Marketing and
Communications Strategy
Firstly, individuals tend to specialize in certain areas of
marketing. For example, those who specialize in
strategic marketing are not necessarily experts in
marketing communications and this inhibits the vertical
linkages.
Secondly, the marketing communications strategy area
is a complex one in which many factors play a part. This
makes the development of the models more difficult.
The communications models that are develop are either
simple as the AIDA and ATR models, they considerably
more complex such as the FCB Grid.
18
Linking Marketing and
Communications Strategy
At the simplest level marketing communications can be
seen as one of the seven Ps: product, price, place,
promotion, people, process, and physical, ie marketing
communications is the promotional element.
Each of these Ps should be considered when planning
marketing communications strategy.
The communications strategy is a complex and
challenging task. Marketing communications strategy
integrates all these Ps since every P communicates.
19
Linking Marketing and
Communications Strategy
PRODUCT ELEMENT:
PRICING ELEMENT:
CHANNEL ELEMENTS:
•Product objectives
•Pricing objectives
•Channel objectives
•Positioning Strategy
•Determining demand
•Channel level
•Product Life Cycle
•Estimating costs
•Evaluating Alternatives
•New product development
•Pricing methods
•Selecting channels
•Marketing testing
•Adapting the price
•Motivating Channel Members
•Organizational aspects
•Responding to competition
•Evaluating members
PROMOTIONAL
ELEMENTS:
OTHER Ps IN THE
MARKETING MIX:
•Promotional objectives
•People
•STP strategy
•Process
•Advertising
•Physical aspects
MARKETING
ELEMENTS
•Sales promotion
•Public relations
•Personal selling
20
Linking Marketing and
Communications Strategy
ADVERTISING:
PUBLIC RELATIONS:
SALES PROMOTION:
•Advertising objectives
•Public Retains objectives
•Sales promotion objectives
•Target audiences
•The role of public relations
•Sales literature
•Choosing the message
•Corporate identity and
image
•Customer incentives
•Deciding the media
•Evaluating advertising
efectiveness
•Defining of public
•Merchandising
•Point of Purchase Advertising
•Media relations
•Internal marketing
•Crisis management
PERSONAL SELLING:
•Personal selling objectives
•Salesforce structure
•Salesforce size
•Motivating the salesforce
•Compensating the salesforce
•Training the salesforce
•Evaluating and controllingb
salesforce
OTHER
COMMUNICATIONS
TOOLS:
MARKETING
COMMUNICATIONS
ELEMENTS
•Direct marketing
•Packaging
•Exhibitions
•Corporate identity
•The internet
21
Using the PLC Concept for Marketing
and Communications Strategy
Though criticized because of its simplistic nature
and because real business situations are more
complex, the product life cycle (PLC) concept is
a useful tool in planning both marketing and
communications strategy.
22
Using the PLC Concept for Marketing
and Communications Strategy
The PLC can also be used to link the other three concepts
adopted in marketing planning, namely:
The Diffusions of Innovation Curve, which indicate the
speed at which potential buyers will accept new ideas.
The Ansoff Growth Matrix, which sets out alternative
strategies based on existing and new products and
markets.
The Boston Consulting Group Portfolio Matrix, which
distinguishes a company’s product by market share and
growth rate.
23
Using the PLC Concept for Marketing
and Communications Strategy
CONCEPTS
PHASE 1
PHASE 2
PHASE 3
PHASE 4
Product Life Cycle
Introduction
Growth
Maturity
Decline
Diffusion of
Innovation
Innovation
Early adopters
majority
Late majority
Laggards
Ansoff Growth
Matrix
Product
development
Market
development
Market
penetration
Diversification and
alliances
Boston Consulting
Group Portfolio
Matrix
Problem Child
Stars
Cash Cows
Dogs
24
Product Life Cycle
A graphic depiction of a product’s sales history from
inception to withdrawal
Brand
reinforcement
Brand
revitalization
Brand
harvesting
Brand
establishment
Introduction
Growth
Maturity
Decline
25
BCG Product Portfolio Matrix
HIGH
Star
Problem
Child
Market
growth
rate
LOW
Cash cow
HIGH
Dog
LOW
Relative market share
26
Growing Your Market – Ansoff
Matrix
M A R K E T
Existing
New
Market
Share
growth
P
R
O
D
U
C
T
Existing
Low Risk
New
Product
development
Medium risk
Diversification
New
Higher risk
Very
High Risk
27
Using the Marketing Mix
Customer
Needs & Wants
Customer
Price sensitivity
Convenience
& control
Communication
& education
Products &
Services
Pricing
Placement
Promotion
Reliability
& assurance
Responsiveness
& empathy
Process
Target
Customers
Positioning
strategies
People
Physical
evidence
Credence
qualities
28