Strategic marketing planning as an Essential Marketing Tool Essay

Strategic marketing planning as an Essential Marketing Tool - Essay Example Strategic Marketing Planning Strategic marketing plan is a â€Å"management process leading to a marketing plan† (McDonald, 2008, p.7). It is a systematic approach by managers that includes the written or detailed plan of the current status of the company, its goals, and how to attain it. The company obtains information about the mission statement and corporate objectives; analyses the financial performance of the company through the marketing audit; reviews the strength, weaknesses, opportunities, and threats; forecasts the marketing impact; sets marketing objectives and strategies; estimates the anticipated outcome; classifies alternative plans and mixes; and projects the budget needed. Marketing planning is essential for business establishments that aim to gain competitive advantage, which is limited to establish brand, build, defend, and maintain. To achieve competitiveness, firms must employ techniques or models such as Porter’s generic competitive strategies. Gene ric Competitive Strategies Porter’s Model was developed to encourage the firm to gain competitive advantage through following the suggested strategies. The famous hypothesis of Porter is â€Å"stuck in the middle† when firms failed to utilise one of the strategies such as differentiation, cost leadership, focus, or combination as illustrated in Figure 1 below. The model of Porter is determined by the forces in the environment that have a direct influence to the firm’s competitive position. These are â€Å"threat of new entry, intensity of rivalry among existing firms, pressure from substitute products, bargaining power of buyers, and suppliers† (Ormanidhi & Stringa, 2008, p.57). Porter argues that companies must examine its competitive position so that they will know their strength and weaknesses that would form into strategies for defensive or offensive actions. Figure 1 Porter’s Model * Grant 1998 cited in Kossowski, 2003, p.6 Differentiation Thi s is one of the business strategies that Porter identifies in the framework. Differentiation is the firm’s strategy to produce â€Å"unique products or services† (Allen, 2006, p.434). This strategy is essential when the companies’ objective is to build customer’s loyalty because it satisfies the customer’s needs and preferences. The product or service is designed based on the customers’ wants; hence, it produces satisfaction. The customers are concerned with the product quality, features, or after-sales support that increases their value. It results to the positive perception of customer regarding the quality of services the company rendered. Due to additional expenses caused by differentiating products, the company must charge a premium price to return its investment. Regardless of this, perceptive customers prefer quality in terms of delivery system, product, and services. Thus, this strategy is limited to customers who are willing to pay despite the higher price. However, product differentiation is relevant in establishing a brand name for its recall. The differentiated products influence the customers’ perception of the firms’ dissimilarity with their competitors. In addition, it eliminates price conscious consumers by focusing on unique products. The research literature is interested with the widely accepted and used model designed by Porter. Akan, et al. (2006, p.45) include the tactics that managers must utilise in applying this strategy that will