Three levels of strategy in business .. Corporate, Business, and Functional, are the three main levels of strategy required for any business operation, each of them has sub-functions.
- Corporate level strategy
These are strategies implemented at the top level of a corporation. The plans are distributed to the lower levels as needed. - Business level strategy
The focus is shifted to specific goals and requirements of each business entity within the corporation to achieve the corporate strategy. - Functional level strategy
This comes down to individual departments within the business. It is the foundation of the corporation and without it, the corporate strategy and goals cannot be reached.
You cannot be successful in any area of business, or rather in life, without a specific strategy. The same goes for marketing. However, strategy, including marketing strategy, is not an easy issue. I spent a lot of time exploring this topic and I must say that it is extremely complex. However, I will try to guide you step by step through the basics of creating a marketing strategy.
Strategic planning, i.e. let’s start with the basics
To introduce you to the subject of strategic planning, I have to start from… the beginning. Based on the words of Philip Kotler, the author of the book Marketing, I will discuss what strategic planning should look like, as well as building a marketing strategy in organizations and levels of strategy in business.
A basic rule you must remember: a company does not have just one strategy. The marketing strategy is built on various levels and covers various aspects. It will be different for each of the products in the portfolio, and also different for each of the departments or businesses of the company. The most important thing is that they form a single, coherent whole.
The author of the book lists the 3 most important areas of strategic planning :
- Management of the business of an organization in the form of a portfolio of investment investments;
- Assessment of the strength of each of the aforementioned businesses;
- Creating a strategy, which is simply a game plan for each of your businesses.
In today’s article, I will focus on creating a strategy for specific products. Before I do that, however, let me tell you a bit about managing the full spectrum of products, brands, and businesses in an organization’s portfolio.
After the levels of strategy in business
There are 4 organizational levels in every large company :
- corporate level,
- the level of a specific department,
- business level,
- product rung.
Each management board is responsible for creating levels of strategy in business for the entire company. Its task is to give the organization a direction, as well as to decide which products should be developed and which are better to withdraw from the market, as well as what budgets to allocate to them.
Separate strategies are also developed within departments. Following this path, also each Independent Business Unit ( IBU) should have its own strategy, as well as each product in the company’s portfolio.
What about the marketing plan levels?
If you want to further complicate the assumptions of your marketing strategy, it is worth remembering that you should distinguish between two levels of the marketing plan.
- The first level – a strategic plan is one in which target markets are defined, as well as their value estimated on the basis of earlier analyzes.
- The second level is the tactical plan, which specifies the tools that will be used to implement the assumptions of the strategic plan. It is in the tactical strategic plan that the marketing tactics for price, product, distribution, and promotion ( marketing mix ) are included.
Marketing strategy at the corporate level
At the corporate level, it is strategic to:
- definition of the company’s mission;
- creating Strategic Business Units, i.e. individual businesses or groups of businesses of a similar nature that can be managed independently of each other in the company. Each Strategic Business Unit has its own competitors as well as managers who should be responsible for creating the unit’s strategy;
- setting budgets for SBU;
- planning new areas of activity and managing products available in the company’s portfolio.
How do companies manage their product portfolio?
This is a topic for a separate article, but it is worth mentioning that when creating and managing a portfolio of products belonging to a given company, among others, portfolio models such as the Boston Consulting Group (BCG) matrix or the General Electric matrix.
Creating portfolio models allows management boards to build marketing strategies for products, taking into account their growth rate, relative market share, competitive positions, and market attractiveness. These are all sub-functions of the levels of strategy in business.
When the organization has already set priorities for Strategic Business Units, as well as designated products that are to achieve specific goals of the company, it is necessary to ensure that each of them has a marketing strategy along with a schedule and a specific budget for development and promotion.
What is a Marketing Strategy?
The marketing strategy is to analyze all aspects of both the company’s operations and its market environment. On the basis of analyzes and research, as well as taking into account the company’s goals, activities are planned aimed at, among others:
- increase the efficiency of the company’s operations,
- develop products and brands,
- plan development on new markets,
- develop the enterprise,
- increase competitiveness,
- raise sales results,
- take care of recognition.
A marketing strategy is a process that allows an organization to focus on the available resources as well as maximize the possibilities of their use.
Marketing strategy goals – do we plan for days, months, or years?
Planning the activities of the enterprise requires setting priorities. It is worth distinguishing 5 types of marketing strategy goals:
- strategic goals that define the vision of our activities, as well as how the organization, products, and the future, should look like;
- long-term goals, which most often range from 2 to 5 years. These are the overarching goals for a given individual, group, or organization as a whole;
- medium-term goals cover a range of approximately one year;
- short-term goals are set for one quarter;
- current goals are usually weekly goals.
Defining goals is essential to creating a marketing strategy. However, I know from experience that it is not that easy. The SMART concept comes in handy when setting goals!
SMART concept when building a marketing strategy
The SMART concept (acronym specific, measurable, achievable, relevant, time-bound) allows for the formulation of the goals of the strategy. It is composed of 5 elements that should be taken into account when formulating goals correctly. According to the SMART method, strategic goals should be:
- specific, i.e. they should be understandable and unambiguous;
- measurable, that is, those that can be formulated in numbers;
- achievable, i.e. achievable. The goals of the strategy should not be too ambitious, as too high expectations may undermine the motivation to achieve them;
- relevant, which means that strategic goals should be important to all those who set them, as well as to the entire organization that will implement them;
- time-bound, i.e. the goals of the strategy should be precisely defined in the period in which we plan to achieve them.
What does this mean in practice? Does this mean that instead of setting a general goal like “I will create a product campaign in social media”, we create a specific goal such as “I will create a product campaign on Facebook by the end of May 2022, the goal of which will be to generate 1000 hits to the product page within 1 month of advertising activity ” Doesn’t it sound better?
When creating a marketing strategy, it is worth mentioning the marketing mix
In order to achieve the goals of the marketing strategy that we have set for ourselves, appropriate activities must be planned. They are implemented taking into account the composition, i.e. the so-called marketing mix. A marketing mix is a very broad category of interrelated elements that create a coherent system of influencing the immediate and further environment of the organization.
Marketing mix in building a marketing strategy
Currently, we distinguish several marketing compositions, such as:
- The 4P concept includes 4 elements:
- place
- product
- price
- promotion
- Formula 4C, commitment, courage, capability, and confidence is built from the customer’s perspective and includes the following aspects:
- customer value,
- cost for the customer (cost),
- the convenience of purchasing a product or service (convenience)
- communication with the market.
- The 7P concept is an extended version of the 4P model and additionally includes:
- people (people),
- processes,
- physical evidence.
Knowing the above concepts of the marketing mix, we already know on the basis of which elements we should build our marketing strategies.
Why create marketing strategies?
Although marketing is developing very quickly and companies are becoming more and more aware of the importance of this field for the development of the organization, still nearly 75% of enterprises do not have marketing strategies. In addition, those that declare having them do not always have them written down. So why do organizations need marketing strategies? There are many reasons for this, and below you will find a few of them:
- Consistent internal communication in the company
Companies very often have problems with internal communication between departments of the organization. A written, clear, and accepted by all department representatives a marketing strategy allows for the effective implementation of activities. What does this mean in practice? The product development department, based on the research carried out by the marketing department, creates a product that meets customer requirements. The sales department properly communicates the unique values of the product among customers, and the marketing department properly personalizes the message to the appropriate audience segment. Consistent action implemented in this way guarantees success.
- Create products that sell
An extremely important stage in building a marketing strategy is analytics carried out inside the company, and research into the environment (PEST, SWOT analysis). PEST is the Political, Economical, Social, and Technological factors that affect business operations. SWOT is the Strengths, Weaknesses, Opportunities, and Threats that affect business operations. You also need to consider the analysis of competition and customer behavior and needs. Thanks to properly conducted analysis, corporations can create products most suited to the expectations of customers, taking into account the offer and activities of the competition, as well as the possibilities of the organization in a given market, as well as internal conditions of the company (availability of resources, know-how). It should be mentioned that the analysis also applies to the customer’s purchasing path. Thanks to it, the company knows better where their customers are and what methods and channels of communication they use.
- Coherent image of the company, product, service
The marketing strategy cares for a consistent image of the product, company, and services provided. By analyzing the market, consumers, and competition, you adjust your image to the audience segment. Let’s assume that our segment is rich CEOs of American companies. Then the offer should be adjusted to them in terms of price, distribution, service, and promotion. Then the appropriate form of the message, the appearance of the product, the price level, and the place where the product can be purchased are selected.
- Better sales results and acquiring new customer groups
Better matching to the customer and the market also ensures the achievement of better sales results. Behind them are not only specific analyzes but also clearly presented goals, pricing and distribution policy, which are strong support for traders.
- Higher customer satisfaction
Keep in mind that your marketing strategy is not only about acquiring new customers, but also includes a strategy to look after your existing ones. Building loyalty and commitment should be key elements when writing a marketing strategy.
Elements of a marketing strategy
The marketing strategy is based on several areas that need to be “worked through” in order to be able to create a valuable document. I divided them into 4 key elements of my marketing strategy.
Analysis
An important sub-function for all levels of strategy in business is analysis. As you know, the market situation is evolving rapidly nowadays. The market, conditions, and customer expectations are changing. In order to adapt a product or service to modern realities, research on the market situation should be carried out on an ongoing basis.
Marketers should gather the information that may become crucial for them when taking action as well as when developing a marketing strategy. They should be collected both inside the organization, for example by analyzing the documentation available in the company, and outside – by analyzing the economic situation, demographic, economic, technological, socio-cultural environment, or changes taking place in the area of the natural environment. We must also not forget about the analysis of trends and megatrends as well as micro-and macro-environment.
Companies should conduct marketing research that eliminates the possibility of making a mistake when implementing new products, services, or strategies. It is also worth forecasting and measuring the demand to be sure that there are people willing to buy the offer. We should not rely on gut feelings. We should be based on data.
Customer analysis, determining the right segments, product targeting, and its correct positioning are also extremely important.
Marketers should know what influences the purchasing behavior of consumers. The path to buying customers has changed, especially in recent times, when most of them have moved from the offline world to the online world. They choose other channels of communication with the company, make purchases differently and make purchasing decisions based on different tips.
I have not mentioned yet the competition analysis, i.e. checking how competitive companies present themselves on the market, where they promote their products, and how they differ from ours.
Building a product strategy
When we finish the analysis in the process of building a marketing strategy, it is high time to create an appropriate development strategy for a given product, starting with its positioning and differentiation.
The SWOT analysis carried out in the first stage allows, among other things, to identify weaknesses and strengths, as well as opportunities and threats. Based on them, we are able to list the features that make us stand out among competing products.
Positioning is differently designing the offer and the image of the organization , the aim of which is to stand out in the awareness of the target market. As marketers, we should offer our clients a value proposition that stands out, which is why they should choose our product, not a competitor. In this way, the offer is also diversified.
Products that are similar to those already available on the market and do not have any distinctive features have very little chance of success.
What about the product life cycle?
When building a marketing strategy, we should take into account which stage of the product cycle is at. What does it mean? As you probably know, the product life cycle is divided into 4 stages of market launch:
- introduction phase,
- growth phase,
- maturity phase,
- decline phase.
It should be remembered that at each stage, different strategic actions are taken. For example, when introducing a product to the market, we must intensify promotional activities in the appropriate marketing channels, but in the event of a decline, we must develop a strategy for withdrawing the offer from the market. In both cases, we will use different marketing tools, and we will also work on different budgets.
Creating a market offer
The next step is to create a market that offers another sub-function of levels of strategy in business. This means that we should designate distribution channels, and make decisions about the appearance of the product, its logo, packaging, brand name, label, communication method, etc.
At this stage, pricing, distribution, and marketing strategies are also determined, which should be consistent with the full concept of the offer.
Management of individual activities
The marketing strategy should include the way departments and people responsible for the product communicate with each other. For this purpose, the form and frequency of meetings should be determined, as well as the form in which the responsible persons will account for the previously set goals.
We’ve made it to the end for the Levels Of Strategy In Business. I hope I didn’t bore you with the topic of marketing strategies. Even though the subject matter is complex and multi-threaded, it is worth exploring and understanding. Without a strategy, it is much harder to achieve any goal. Even the goal is hard to define!
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