Dale Bruder's Strategic Planning Series
In order to develop an effective marketing strategy, it is necessary to first determine the factors contributing to the present situation facing the firm. Use this 11 page planning tool with a Coach Dale Bruder. Call 520-331-1956.
External factors are those which exist in the market and over which there is no control.
I. Nature of Demand
The nature of demand refers to the characteristics of the potential consumers and the relevant factors affecting their buying decision process. Specifically, how do buyers currently go about deciding whether or not to purchase a particular good or service and, if so, which brand to buy? Key issues to consider are:
1. How many stores are visited?
2. What is the degree of overt information being sought?
3. What is the degree of consumer's awareness of the competing brands and how loyal are consumers in general to their current brand?
4. Where is the decision to buy made - at home or at the business location or during a presentation?
5. What are the consumers' sources of information regarding competing brands and what are their knowledge levels?
6. Who makes the actual decision to buy ---- male, female, partners, committee, purchasing agent, a joint consideration of any combination?
7. Who influences the decision maker?
8. What is the duration of the decision process (quick/slow, frequent/infrequent. first time/repeat)?
9. What is the extent of the consumer's interest/excitement in the decision (highly involved/not involved)?
10. How much risk or uncertainty is attached to a negative purchase outcome - high, medium, low?
11. Is this decision governed by rational or psychological factors?
II. Segmenting the market into viable sub-groups
1. The market can be meaningfully segmented or broken down into several homogeneous groups with respect to what and how they buy. What segments can your market be broken down into?
Group 1 Buying Criteria
Group 2 Buying Criteria
Group 3 Buying Criteria
Group 4 Buying Criteria
III. Extend of Demand
Now estimate the size of the potential market for each product or service. The goal is to develop an accurate estimate of the size of the total market.
1. What is the population criteria's of each segment being considered?
2. How much can each consumer be expected to spend on each type of product or service?
3. Which segment (or segments) should be targeted? Why?
IV. Nature of Competition
1. Identify the five to ten key competitors and their strategies.
2. What are their marketing resources and skills?
3. What are the strengths of their product offerings?
4. What are the current marketing strategies of the existing competitors? What makes them successful or unsuccessful?
5. Is there room in the market for additional competition?
6. How capable are they of reacting to various strategies the new business venture might initiate?
V. Distribution structure in the industry
1.How do existing firms distribute their product?
2. What are the margins at each level of distribution?
VI. Assessing the Environmental Climate
Research the economic and regulatory factors affecting the business geographically, technologically, socially and culturally.
1. Identify the relevant social, political, economic, legal and technological trends.
2. What are the opportunities and problems of this business venture?
INTERNAL FACTORS The one area you can exercise some control and where Dale Bruder Dynamic Strategy Coach can partner with you.
I. Skills of the Enterprise
1. What skills and advantages does the business operation bring to the market?
2. Describe the business advantages?
a. Personnel - use the strengths inventory tool for each key personnel candidate
3. Compare the skills of the company to the venture's competition.
II. Financial Resources of the Company
1. Detail the financial resources and their distribution during the pre launch period of the enterprise.
2. Detail the budgets and funding resources for launching the enterprise.
3. Detail the monthly and quarterly expenses for the first 4 to 8 quarters of the enterprise.
4. Use the SWOT exercise tool to determine the enterprise or venture Strengths, Weaknesses, Threats and Opportunities with an eye on Solutions.
DEVELOPING AND EVALUATING ALTERNATIVE STRATEGIES
Every venture needs measurable's to determine when to take alternative action. Every venture also needs to face the variables that confront even the best laid plan -- shifting targets, broken promises and unexpected events. Have the business strategy tool on hand at every strategic session.
- Market penetration may be quick or it may be slow.
- Supply chains may change materials, costs, payment conditions, quantity availability, delivery schedules or even dry up.
- The workforce may not be available when needed due to one of two factors;
- a) the employee mix isn't skilled or disciplined to sustain production or
- b) the skilled employees were unwilling to remain in an enterprise that hasn't ramped up to the market it targeted.
- New money for second and third tier investment may be late or be diverted to more attractive ventures.
- Key executives and resource people leave or underperfrom at critical times.
I. Define Objectives Consistent with the Mission
1. Determine the appropriate target market.
2. Establish sales and profit goals for the short and long term.
II. List Strategic Options Consistent with Objectives
What options should the business be considering with respect to the product it is offering its consumers?
1. What products/options should the business develop?
2. How should the business be positioned in the consumer's mind?
III. What options should the business be considering with respect to distribution?
1. What is the extent of market coverage desired?
2. How will the business use distributors or sell direct?
IV. What promotional decisions should the business be considering?
1. Emphasize personal selling or advertising?
2. What are the budgets and expenses to be spent on promotion?
3. What is the message the business wants its present and potential customers to receive?
4. Which media areas will be most effective in reaching the target market?
V. What pricing options are being considered?
1. Price level (above, equal to or below competition)?
2. Price variation (discount structure)?
3. Profit margins.
VI. Evaluate the advantages and disadvantages of each strategic option.
Use multiples of pages 10 through 13 to lay out each strategy. The key to this phase is to evaluate the potential options by carefully examining the pro's and con's of each alternative. Once you are complete and only then, move on to the next phase of the Situational Analysis.
SELECT AND IMPLEMENT THE OPTIMAL STRATEGY
The preceding analysis should have produced one or two alternatives whose advantages outweigh the disadvantages. A specific business strategy is revealed from the analysis reviews. Once selected, it is important to establish a program for monitoring the implementation and the progress of the strategic initiatives so that adjustments and changes can be made quickly. Use the enterprise focus tool to assist in this area.
1. Monitor the results by using all of these methods on a weekly basis for the first 3 quarters after business launch and biweekly afterwards. This discipline is one way to drive the record keeping function of the business.
- Actual sales vs. forecast sales
- Actual market share vs forecast market share
- Actual profit vs forecast profit
- Competitors reactions and responses
Now it's time to think about how to operate the company.