Tag: Tactical Marketing

Is Marketing Planning a Strategic or Tactical Process?

Last week in this blog I complained that too many small and medium-sized enterprises see marketing solely as a tactical exercise. I regularly see small businesses advertising for marketing staff and predominantly the job description focuses on day to day activities such as writing social media content, designing print adverts or entering product content onto websites. These activities are no doubt related to marketing; BUT THEY ARE NOT MARKETING.

That last statement may seem counter-intuitive but bear with me.

Advertising is an activity closely linked to marketing.  It is the process which will likely follow the determination of a marketing mix. You can also say the same of sales force management, copywriting and web design.  Those are all activities which derive from the creation of a marketing mix. Marketing isn’t the derivative activities needed after the creation of a marketing mix; it is the analysis of the market, and of an organisation within that market, and the development of a plan which allows that organisation to make best use of profitable gaps in that market.

Marketing is the process of taking the aims, goals and mission of an organisation and putting a consumer focus upon them.  Marketing is the process of giving an organisation a clear and differentiated identity in the minds of consumers.

Business Planning should be structured and systematic process.  It has three main components:

  1.  Objectives: which have to be achieved,
  2.  Actions: which define how objectives are to be achieved
  3.  Resources: what is required to implement those actions

Corporate planning involves creating objectives for all parts of a business.  It is the overall coordination of an organisation’s functionality. Different functions contribute to common organisation wide goals e.g. turnover, profit generation and dividend value. A corporate plan will integrate functional objectives e.g. productivity levels, creation of market share, sales volumes, cash flow, efficiency, quality assurance.

So a corporate plan which aims to improve customer retention will likely lead to a marketing plan focused on key account management and customer service; a human resources plan aimed at attracting high quality staff and an operations plan focused on quality control and assurance.

A strategic corporate plan will be integrative; coordinating functional activity towards common goals.  It will take a whole organisation view and provide collective targets for functional groups.  It’s aim should be to provide focus by defining the overall scope of a business e.g. the markets served, the nature of its activities, so appropriate functional strategies and tactics can be developed.

Corporate plans should be concerned with making major business decisions over the long-term and set required resource profiles.  A corporate plan should match the organisation to the current and future business environment.

I suspect the senior management of many small businesses get the fact that corporate plans are long-term strategy documents. What they then do is assume that anything below the corporate plan level is a short-term tactical planning process.  So marketing is a campaign to campaign process where ad hoc activities are collated in the short-term. So a corporate plan is for five years, but a marketing plan is annual, or seasonal.

Many businesses will also see a marketing plan as being at the same level as other functional plans. I do not see marketing planning in this way.

Marketing is about having a consumer focus to your business.  That focus should be represented in your marketing mix. We know the seven Ps of that mix; Product, Price, Promotion, Place, People, Physical Evidence, Process.

So a marketing plan will directly influence other ‘functional’ plans.  So the process element of the mix will directly affect your operations planning; the price element of the mix will affect your financial planning; the place element of the mix affects your distribution and logistical plans; the people element will affect your human resources planning; The physical evidence element will affect your location and facilities planning; and so on.

So marketing planning is not a traditional functional plan. It sits between your corporate plan and your functional planning because your marketing plan reflects your corporate plan and influences your functional plans.

In truth marketing is both a long-term strategic process and a short-term tactical process. Your marketing plans should have both long-term goals and targets and short-term activities which deliver those long-term goals.

A marketing plan should have a broad focus that defines the market and your organisation’s place in that market.  Bear in mind that the information and problem-solving at this level may appear unstructured, external to the organisation and speculative.

So marketing can impinge on long-term strategic processes such as new product development.  This is strategic marketing planning.

Marketing planning can also be short-term.  These are the day to day activities involved in keeping your organisation on track with its strategic goals.

For example, your strategic plan may require your business to be the market leader (in terms of market share) within five years. However, the market is not static. it changes constantly. New competitors enter the market; others leave; consumers are fickle and change their preferences. So to achieve your long-term strategy, you need to constantly tweak the tactics used to achieve your goal of gaining market share.

So tactical marketing is the process of adapting your plan to the changing market.  This often involves addressing structural processes which are internal to your organisation and which may be repetitive.

Too many SMEs view marketing as only a short-term, tactical, exercise.  They ignore its strategic intent. Marketing is both a long-term corporate process AND a short-term functional process.

Marketing planning is key to adapting to environmental change, allocating resources, consistency in business practice, integration of activities via the marketing mix, motivating and communication with stakeholders and developing control over your organisation.  Marketing is not simply the process of producing some adverts or putting up social media content.

 

The difference between strategy and tactics

I repeatedly here colleagues talking about a strategy when they mean a tactic.  For example, digital marketers often talk about a ‘social media strategy’.  As a strategic marketer, I feel such comments should properly be referred to as a social media tactic.  So what is the difference between strategy and tactics.

There is often much confusion between non-marketing managers as to what constitutes a strategy and what constitutes a tactic.  The terms strategy and tactic often seem to be interchangeable.

Strategy should be viewed as the pursuit of long-term goals, tactics are for the shorter-term.  Strategy has a broad focus and is key to determining your competitive position and in defining your market. Long-term projects such as new product development may be viewed as strategic activity.

Strategy is the development of effective responses to the changing business environment through market analysis, market segmentation and the positioning of your business in the marketplace.

A strategy will apply across all or the majority of the elements of your marketing mix.  This is why I feel it is wrong to talk of  ‘social media strategy’ as that activity has a narrow focus on one element of your communications mix not the far wider marketing mix.

Tactical marketing is for the short-term and has narrow focus.  Often it is the day-to-day activities of marketing your products and services. Tactical marketing often deals with individual components of your marketing mix such as promotion, sales or pricing.  Often tactics will deal with specific elements within a particular marketing mix element e.g. promotion may involve email, social media, traditional advertising or direct marketing.

Often strategic problems will be new and unpredictable whilst tactical problems will be repetitive and well structured.  Strategy often depends on analysis of data external to your business whilst tactics rely on data generated internally.  For example, your strategy may rely of financial data from external bodies like the Bank of England whilst your tactics may rely on internally generated sales or productivity figures.

Strategic Marketing is a concentration on an organisations long-term aims and objectives whilst considering and maintaining market advantage.

To give a military analogy, the allied invasion of France during World War Two was part of a wider strategy of stretching German military resources over several fronts therefore making it impossible for the Germans to properly defend its borders.  Within that strategy there were numerous tactics such as extensive bombing campaigns, commando raids, sabotage by special forces and partisans behind German lines on transport and communication infrastructure, the use of double agents to spread misinformation, assassinations and even prisoner of war camp escapes.

In the peninsular war, the Duke of Wellington knew that Napoleon’s army relied for supplies by raiding the country they invaded, so he had a defensive strategy which stretched the French supply lines.  To weaken those lines he used a burnt earth policy denying the French sustenance and would use irregular forces to raid French supply convoys denying the French supplies of food and ammunition.

Bowman created his ‘strategy clock’ which correlates with Michael Porter’s generic marketing strategies; Differentiation, Cost Focus and Niche.

The clock identifies eight strategic options, some of which are of use, some of which are recipes for disaster:

  1.  Low Price/Low Added Value: This equates to Kotler’s less for less strategy, a common practice amongst ‘pile it high, sell it cheap’ discounters.
  2. Low Price: This equates to Porter’s cost leadership strategy.  This strategy can lead to damaging price wars.
  3. Hybrid:  This is a low-cost approach combined with appropriate market segmentation.  This is a good value at a low cost strategy. It smacks of a dual strategic approach which Porter states leads to a marketing ‘No man’s land’.
  4. Differentiation:  This strategy can be split into two categories.  The first is differentiation without an added price premium.  This category can help grow market share.  The second category is differentiation with a specified price premium i.e. the added value perceived by consumers justifies the price premium.
  5. Focused Differentiation:  This is where there is perceived added value amongst a tightly defined market segment which warrants a premium price.  For example, a cruise ship operator who focuses on wealthy customers over the age of 55.
  6. Increased Price/Standard:  This is a common strategy in B2B markets where there is a requirement to continually raise the bar in terms of product usability and levels of service.  It can be an appropriate strategy where higher margins can be generated by transcending the offer and standards of competitors or where competitors are losing market share.
  7. Increased Price/Low value:  This is often a disastrous strategy.  it is only really applicable when there is an absence of competition such as in a monopoly situation or where there are significant entry barriers.
  8. Low Value/Standard Price:  This is also a suicidal strategy in terms of marketing.  it inevitably leads to loss of market share.  it is only suitable when you are managing your exit from a declining market e.g. Harvesting a dog product before it is withdrawn.

Both strategic and tactical planning matter.  Strategic planning, adapting your organisation to a changing environment is critical.  Successful organisations are continually adapting to their changing environment to survive and remain successful over the long-term.

Strategic marketing facilitates that process.  A strategic marketing plan provides a systematic framework for market analysis and a well-defined methodology to pursue strategic goals.

Successful plans are not simply concerned with process.  They are valuable in communicating goals, motivating staff and developing staff ownership of those goals.

The following are key reasons to plan:

  1.  Adapting to Change: Management can focus on strategy whilst staff focus on day-to-day tactics.
  2. Resource Allocation: Planning allows for the appropriate allocation of scarce resources to meet opportunities and to counter threats.  No plan can succeed if it doesn’t have appropriate resources.
  3. Strategic Windows of Opportunity:  Disrupting markets through the application of new technology, the creation of new market segments, developing new distribution channels, redefining markets as demand changes, dealing with legislative change and environmental shocks.
  4. Consistency:  Strategic plans provide a common base to work from across organisational functions and inform the decision-making process.  Strategic plans help improve communication between organisational functions.
  5. Integration:  Strategic plans help integrate the marketing mix across an organisation.  They can help generate synergies across marketing mix elements.
  6. Communication and Motivation:  Strategic plans communicate strategic intent.
  7. Control:  To control activities they must be based on a pre-determined plan.  Such plans must include meaningful targets which can be measured.