Plans and decisions made at the top levels of the organization provide guidance for planning in each business unit and in the marketing function. To prepare for a thorough internal analysis, part of Stage 1 of the marketing planning process, you first need understand the interaction among the plans at all three levels.
Three levels of planning for strategy
At the top level, planning for organizational (or corporate) strategy governs your organization’s overall purpose and its long-range direction and goals establishes the range of businesses in which it will compete and shapes how it will create value for customers and other stakeholders (including shareholders). Corporate strategy includes extended plans for the long term, as far as five to ten years in the future. In turn, organizational strategy and goals provide framework for the set of decisions made by business managers who must move their units forward towards the goals, given the organization ’s resources and capabilities.
Planning for business strategy covers the scope of each unit and how it will compete, what market(s) it will serve and how unit resources will be allocated and coordinated to create customer value. In establishing business strategy, senior managers must determine what functions should be emphasized or possibly outsourced. The business plan for one unit may span as long as three to five years.
Once the portfolio of business units is in place, planning for marketing strategy determines how each unit will use the marketing-mix tools of product, price, place and promotion-supported by customer service and internal marketing strategies-to compete effectively and meet business unit objectives. Typically, the marketing plan reflects the organization ’s chosen marketing strategy for the coming year (but it may cover multiple years).
Because marketing is the organizational functions closest to customers and markets, it is in the pivotal role of implementing higher level strategies while informing the market and customer definitions of these strategies. In a customer-oriented organization, marketing is a priority and concern of everyone at every level. Thus, marketing integrates floor-up , customer-facing knowledge of the market and the current environment with top-down development, direction and fine-tuning of organizational and business strategies.
Be aware that the marketing plan (prepared on the level of the marketing function) is not the same as the business plan, although the two necessarily overlap to some extent. Sir George Bull, former chairman of J. Sainsbury, observed that the marketing plan, which results from the marketing planning process, is distinguished from the business plan by its focus. ‘The business plan takes as both its starting point and its objective the business itself’ he said. In contrast, ‘the marketing plan starts with the costumer and works its way round to the business.