INTRODUCTION
In the dawn of various phenomenons such as globalization, industrialization and technological advancement, the international marketplace including the particular areas and systems is overly affected. Among the observable impacts of such emerging conditions in the business world is competition. Competition among the various industries in every given economy is rapid and stiff. It is as if ‘survival of the fittest, extinction of the weakest’ phenomenon. Today, as various industries are aiming for competitive advantage and sustainable development among its management and operations, there are numerous actions that are being implemented and are directed to the eventual success and growth of the company’s assets. In competition, there is motivation in every business to improve and develop their objectives. For an enterprise to succeed in global competition, hence, there is a continuous plan to develop marketing techniques such as innovation of new products with higher quality than its competitors.
The ability of a business to stay in significant period of time in the industry where it belongs is one measure of its success. This means that being able to survive is a necessity and survival translates to the ability of a business to compete. Since the 1980s, marketing strategies have played key roles in planning to overcome challenges. It is believed that this line of thinking will continue to direct the activities of business into the 21st century (Paley 1999). Every business is subject to factors that affect its function as a whole. These factors are the ones attributed for the success or even the failure of a business (Oliver 1997). In lieu, there are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the marketplace in terms of marketing. In a profit-making business, the business organization obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit (Moschis 1994).
However, there are several other factors that are relevant to consider when talking about the future of the business. Among these are the internal as well as external conditions affecting the overall operations and its management. Basing it from the existing knowledge of management, internal conditions such as management, financial capability, human resources, etc. are supplemental factors to the overall business status. On the other hand, external conditions like target market, competition, economic environment of the business environment, legal matters and legislations, emerging approaches, etc. are sample determinants of business progression or downfall.
In marketing, it is important to recognize the most appropriate technique to be used in promoting the goals of the business. With this, the management‘s decision in conceptualizing the strategy to be utilized in all the operations of the business is crucial. The position that the management will take in relation to this matter can make or break the overall stature of the firm. As a universal fact, it is natural for every goal-oriented business to plan. So, it is also relevant to consider planning. Strategic planning is the most useful technique that any profit-generating institution might apply. Thus, there is a need to know what strategy and strategic planning are?
This paper explores the art of extensive and descriptive researching in order to find out the meaning, similarities, and differences of the terms – strategy and strategic planning in relation to marketing. Furthermore, this research paper aims to provide a discussion on the areas in which strategy planning and implementation are applicable.
WHAT IS STRATEGY?
A plan is important. This is a universal fact as there are no coincidences and spur of moment in business. In reality, planning is indispensable. So, in every endeavor where effective planning is concerned, expect a good outcome. Plan, policy, approach, framework, tactic, or strategy – they are all synonymous. In this case, the discussion focuses on the term ‘strategy’. Meanwhile, Bruckner and colleagues (1999) affirmed that market expectations are hard for managers to understand and even harder for them to change. They also noted that there are applicable and practical ways that could be use to deal with such. It is much more bounded by science than the abstractions present in the marketing field. As they evaluate the relationship of the market and the business, they particularly put emphasis on strategy. Then, what is strategy?
Strategy is defined as a long term plan that is directed to an achievement of goal. It is a commonly used word that applies to different areas such as business, economy, military, politics, marketing, management, technology, and others. In the field of marketing, strategy falls in various areas and types (e.g. market segmentation, competition, innovation, growth, etc.). Proctor (2000, p. 1) comprehensively stipulate the term as:
A strategy is a plan that integrates an organization’s major goals, policies, decisions and sequences of action into a cohesive whole. It can apply at all levels in an organization and pertain to any of the functional areas of management. Thus there may be production, financial, marketing, personnel and corporate strategies, just to name a few.
Specifically in marketing, they may be pricing, product, promotion, distribution, marketing research, sales, advertising, merchandising, etc. strategies. Strategy is concerned with effectiveness rather than efficiency and is the process of analyzing the environment and designing the fit between the organization, its resources and objectives and the environment (Porter 2000, p. 1). Marketing strategy is the fundamental groundwork of marketing plans designed to achieve measurable marketing objectives (Meek and Meek 2003). It is given that a good strategy in marketing encompasses the organization’s marketing goals, policies, and action cycle. With this fact, strategy is the foundation of the marketing activity.
Additionally, the strategic process, according to Proctor (2000, p. 1) refers to the manner in which strategy is formulated. There are several approaches: a) the rational approach, making use of tools such as SWOT analysis and portfolio models, b) the flexible approach, which employs multiple scenario planning, c) the creative approach reflects the use of imagination in planning, d) the behavioral approach reflects the influence of power, politics and personalities, and e) the incremental approach is based on small adjustments or changes to previously successful strategies.
WHAT IS STRATEGIC PLANNING?
Strategic planning, on the other hand, consists of the process of defining objectives and developing strategies to reach those objectives. In marketing, strategic planning is defined as an organization-wide planning as a way of responding to market opportunities, external environment and target audiences; when doing strategic marketing planning, the decision must be in line with the mission, vision, internal strengths and resources available to the company (Hannagan 1992; Kotler & Andreasen 1996; Andreasen & Kotler 2003; Meek & Meek 2003). It has been stated that strategic marketing planning takes place in the context of corporate planning (Thomas and Gardner 1985; Schendel 1985; Hannagan 1992; Meek & Meek 2003).
This may be the case since strategic management is an organization-wide task. Corporate management is process of leading an organization by deploying and manipulating resources. As such, strategic management, which includes strategic marketing planning, takes place in the context of the corporate planning. In addition, the analyses being performed include the investigation of the internal weakness and strengths of the company in relation to the competitors. This means that the whole organization is involved in the process. Aside from investigating the weakness and strengths of the company, strategic positioning is also and important aspect of strategic marketing planning (Kotler & Andreasen 1996; Hooley et al. 1998; 2001). Thus, strategic planning creates an avenue for future positive results in relation to the outside world as well as adaptation of potential programs and actions within a long-range planning process of the organization.
DIFFERENCES and SIMILARITIES
Strategy and strategic planning differs and same in various aspects. First, it is necessary to take note that strategy is the plan itself while strategic planning is process. Basing from analysis, the differences can be manifested in the following instances:
Strategic planning encompasses the strategy (marketing) especially in making corporate objectives and the overall business environment.
Strategic planning provides overall direction to the strategic management of the organization (e.g. financial strategies, HR strategies, marketing strategies, etc.).
It has the capability to achieve set goals.
Effective strategic planning provides the most feasible opportunity towards organization’s sustainable competitive advantage.
It can stand on its own without having the risk of cross-subsidization.
It is very specific in nature – exclusively for the chosen field of application.
On the contrary, similarities cover the following aspects:
Strategy and strategic planning are both formulated by the management (see Appendix A).
They both have measurable goals to be achieved in the end stages.
Strategy and strategic planning both proves dynamic, flexible, and able to adapt to changing situations.
They can be both situated in connection to external environment and core competencies of the organization.
Both have methodologies to implement – although unique and critical in some ways.
With such differences and similarities, strategy and strategic management is undeniably dependent with each other. Technically, they complement each other in such manner that the strategy is the plan and serve as the framework while strategic planning is the process that uses the strategy. in marketing, there are many instances that strategy and strategic planning uses the characteristics and mechanism of both. For instance, According to the Department of Corporate Strategy and International Business of Stephen M. Ross School of Business in the University of Michigan, corporate strategy or strategic management is concerned with the management of a corporation as whole, integrating the marketing, finance and accounting departments into a single and specific aspect of a firm (www.bus.umich.edu). It is the strategic planning or management decisions that affect the direction of the company used primarily in order to promote company diversification, reorganization, restructuring or reengineering initiated by the company (www.etextb.ohiolink.edu).
DISCUSSION
The following relevant areas are identified to be essential areas in which strategy planning and implementation should be focused.
Marketing Mix (4Ps)
Marketing is about satisfying the wants and needs of customers. By doing so, it also facilitate the achievement of an organization’s objectives. By paying attention to customer wants and needs, organizations are more likely to achieve their objectives in the marketplace (Porter 2000). Analyzing the status, strategies and resources of businesses and their products or services is very essential as it allows the management to determine how they will progress in the years to come. This also enables them to identify their strengths and how they will optimize them. On the other hand, business analysis also makes operators realize their weak points, allowing them to address them immediately with effective strategic actions. Conducting a business analysis also helps organizations to prepare for their future development and growth. Considering that competition in the business field is continuously growing, implementing efficient strategies through business analysis is indeed significant for all operators in any industry. Thus, the marketing strategy in relation to the product, price, place, and promotion of the organization must be directed market dominance.
According to Borden (1964) (in Enis and Cox1991), the marketing mix is the model in implementing marketing strategies.
1. Product – The product of the organization is considered to be one of the main aspects of the marketing mix as it serves the major representation of the business. In addition, this is also considered as an important element of the marketing mix because provides support to the firm, particularly in terms of profit generation and brand building (Enis and Cox 1991).
2. Price – It is the amount of money in which the organization allocates and the customer will pay in order to obtain the product or service. Most of the time, marketing principles uses numerous suggestions regarding the formulation of pricing strategy, among this is an affordable product or service but guaranteed to be a quality one.
3. Place – The place variable of the marketing mix theory refers to how the company is able to distribute its products to the consumers. This aspect of the marketing mix theory is important part as it enables the company to offer its products to the consumers.
4. Promotion – Promotion, a marketing mix theory variable, can be a combination of personal selling, advertising, public relations and sales promotion. Through promotion, the company will be able to relay marketing messages to consumers and potential consumers. In spite of the presence of various business challenges, promotion is one effective mean to increase product sales, enhance consumer support, and broaden market coverage.
Marketing Communications
The emergence of technology affects the overall function of the organization. Thus, the communication systems of the firm must be armored with an efficient and effective strategic plan. The modern age of digital electronics made it possible for business and corporate organizations to keep up with the demands of their industries. At present, most business organizations are equipped with the latest information technology systems that enable them to function fully and effectively in the delivery of their products and services. Businesses have evolved since the emergence of this convenient and useful company resource. Communications, information, and knowledge are the blood stream of every company on which every staff, employee, and supervisor must work on to be able to meet the demands of the clients and customers of the business (Alter 1999). This is the reason why there should be proper management flow within the organization. Managing the communications, information, and knowledge that the company uses in its daily operations is crucial in any business organization especially in its decision making.
These computer-based information systems used within an organization consist of the network of all paths of communication within an organization which assists management in collecting, manipulating, and analyzing data or information for decision-making. It operations include input of data, processing of data, storage of data and information from raw input, and the creation of management outputs such as reports and business analysis (Mourdoukoutas 1999).
Customers and Customer Satisfaction
Along with the changing business world, customers change as well, becoming more demanding and knowledgeable than before. In turn, company management had shifted their focus on their clients or customers so as to stay successful in business. This transition meant that organizations have to completely reformulate their conventional business aims and purposes from being process-focused to customer-centered. Moreover, employing proactive customer commitment involves the consideration on culture and infrastructure (Lowenstein 1997). Organizations that capitalize on customers' active participation in organizational activities can gain competitive advantage through greater sales volume, enhanced operating efficiencies, positive word-of-mouth publicity, reduced marketing expenses, and enhanced customer loyalty (Lovelock & Young 1979; Reichheld & Sasser 1990). Rather than going after every potential source of revenue, companies eliminate useless assets that do not add value for customers’ satisfaction. Business organizations implement bureaucratic policies and procedures for the benefit of the staff, customers and the company in general. According to Bowers, Martin and Luker (1990), if consumers somehow become better customers – that is, more knowledgeable, participative, or productive – the quality of the service experience will likely be enhanced for the customer and the organization.
Thus, the organization management must be able to devise strategic plans that will eventually work to the overall welfare of the organization.
Competition
According to Proctor (2000), competition is important since it affects the success of a business venture. Proctor added that competition is more than just producing and distributing products and services that matches the needs of the consumers. Competition is about the company’s capability of positioning itself in the market so that they will stand out among the rest in the perception of the consumers.
Through an effective and efficient competitive advantage strategy, the organization will be able to reach its prescribed objectives and continuously operate in the chosen field of industry and at the same time earning more profit and expanding its operations.
Continuous Improvement (Change Management)
Organizations are neither the rational, harmonious entities celebrated in managerial theory nor the arenas of apocalyptic class conflict projected by Marxists (Bacharach & Lawler 1980). Hardy and Clegg (1996) believe that modern organizations passed by the guild structures and as organizations grew larger, skills become increasingly fragmented and specialized and positions become more functionally differentiated. Organizational change is part of and a result of struggles between contradictory forces, also change management practice is related with endeavoring to manage their competing demands. To fully understand why and how to change organizations, it is elementary and necessary to understand their structures, management and behavior.
These systems of ideas or organizational theories are crucial to change management in two respects. First, they provide models of how organization should be structured and managed. Second, they provide guidelines for judging and prescribing the behavior and effectiveness of individuals and groups in an organization. It is clear that in many organizations there is no clear understanding if the theories. Change cannot hope to be fully successful under circumstances (Burnes 1996).
It can be said that organizational change is one of the critical determinants in organizational success and failure (Appelbaum et al 1998). Further, Appelbaum and colleagues stated that the focus of successful organizations is on customers and their needs, which includes investing in ways to improve sales and provide superior service to clients, and they do not forget that their customers and their customers’ needs underlie their organization’s existence. In addition, adapting factors crucial to the success of certain missions and the implementation of solutions to problems are common traits of a successful organization (Appelbaum et al 1998). The lack of such initiatives can throw an organization into confusion, being stuck in traditional practices that cannot solve or handle the current problems faced. Thus, the lack of such factors stresses the need for a strategic organizational change. It is basically a flexible strategic planning process as opposed to a static form of strategic planning.
Thus, to fully cope up with the emerging changes in the globalized international market, organizations are advised to continuously study the potential areas that need improvement or alterations. In doing so, the organization is not left behind in terms of such innovative and technology-based applications.
Conclusion
Based on the discussions above, it is found out that strategy and strategic planning may be different and similar. But on thing is for sure, they may serve as a key resource of the organization, together with people, finances and material assets in achieving success. Thus, it is accepted to state that they are essential in every business endeavor. The discussion above revealed that through effective and efficient strategic planning and management, the organization’s resources and systems, organization administrators can add value to the services delivered to customers, reduce risks in the organization’s business, reduce the costs of business development and service delivery and encourage improvement in internal business processes and external service implementation. To employ these processes, there is the need to consider the risks, the opportunities, ability of the employees to handle and use, and the effectiveness in the locale or the setting. Intensive preparation and study should be conducted in order to ensure that these systems are successful and are able to perform its planned tasks or functions. The shaped information regarding strategy and strategic planning will have value and increases insight into organizational needs and the way the business is looked at. Adding more and more advantages to the whole organization and solving the problems as they occur will eventually lead to success and growth as mentioned. Having an experienced strategist in helping the management utilizes its resources, economic progression and corporate growth and success is promising.
The emergence of digitalization and globalization in all operating industries in the world paved way to the further improvements of all the aspects related to marketing and management techniques. Regardless of the unprecedented drawbacks of such when being used, every company and management, must manage and control the best possible and beneficial ways possible. Every decision made by the management must be directed to the welfare of the whole industry. With the right strategy and strategic planning, eventual growth, market dominance, competitive edge, and success are not really far at hand.
TOTAL WORD COUNT: 3,340 (including in-text citations)
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