Introduction
In the modern world, competition among businesses in various sectors is significant. Customers have many alternative products and brands to choose from, and this has a substantial impact on business planning and operations. When competition is high, businesses become concerned not only with their day-to-day operations but also with long-term threats and the development of competitive advantage. For this reason, many people believe that an organization that does not have a strategic marketing plan is destined to fail. The present paper will discuss this claim based on the benefits of strategic marketing plans, the issues that often arise if these are not developed and implemented, and examples of companies from various industries.
Strategic Marketing
In order to set the background for the discussion, it is essential to explore the concept of strategic marketing and highlight how companies use it to support their growth and development. As explained by Wilson and Gilligan (2005), marketing can be broadly defined as a management process that seeks to identify consumer needs, define target segments, and create and sustain a differential advantage to support competitive positioning. As Hooley et al. (2020) state, the strategic success of most organizations relies heavily on their ability to meet the needs and expectations of customers, which necessitates marketing. The interplay of strategy and marketing is thus significant, as most organizations set strategic goals that cannot be completed without marketing activities and resources.
Consequently, the concept of strategic marketing was proposed, which views marketing from the corporate perspective of top management (Abratt and Bendixen, 2019). Strategic marketing activities may be similar to those of general marketing, but they are more interconnected with corporate strategy and involve long-term decision-making and repercussions (Abratt and Bendixen, 2019). Strategic marketing stems from the resource-based view of marketing, which seeks to align the requirements of the chosen market with the organization’s resources and capabilities. Hence, strategic marketing is focused on planning and implementing activities that help organizations to use their resources and capacities in a way that grants better market performance and improves their competitive position (Hooley et al., 2020). The primary goals of strategic marketing activities are thus to set and achieve market-oriented goals that would allow businesses to grow, achieve higher profitability, and survive in highly competitive environments.
Strategic Marketing Planning
The process of strategic marketing is complex and requires the input and support of various decision-makers in the organization. The long-term nature of strategic marketing necessitates the development of plans to clarify strategic marketing goals and activities so that these could be implemented by the company (Abratt and Bendixen, 2019). Strategic marketing planning is thus one of the pivotal steps of the process that enables businesses to carry out the actions necessary to achieve success in the market.
Strategic marketing planning seeks to support the business’ strategic marketing in five ways. First, it involves defining the purpose and mission of a business, which become the core of its future strategy and can serve to guide important decisions at various organizational levels (Hooley et al., 2020). Secondly, it identifies and explores the target market or markets to determine the requirements for success (Hooley et al., 2020). Next, the organization’s resources and capabilities are analyzed for congruence with market requirements. This helps companies to determine whether the market can be pursued and if any gaps need to be filled before the organization can do it. A core strategy is then developed, which defines the path for the business to develop in the chosen market, distinguish itself from competitors, and maintain competitive advantage (Hooley et al., 2020). Finally, strategic marketing planning also sets the steps necessary for the strategy to be implemented and develops appropriate monitoring and control tools (Hooley et al., 2020). The result of this complex process is a strategic marketing plan, which is implemented by the organization to meet the objectives set.
Potential Issues and Examples
Some people might argue that strategic marketing plans are not as important to businesses as they are perceived to be. For instance, some fear that long-term planning can restrict the organization’s ability to respond to minute changes in the environment, thus threatening its survival and growth (Abratt and Bendixen, 2019). Acting without a long-term plan gives more power and flexibility to the top management to deal with short-term challenges and problems. However, in current realities, long-term planning is essential for organizations to win over their competitors because competitive advantage has to be developed and maintained through continuous efforts (Abratt and Bendixen, 2019). There are numerous examples where companies had significant issues tied to underdeveloped or poorly executed strategic marketing plans. The present section will examine some of the problems that organizations might experience in the absence of a strategic marketing plan, thus showing why planning is essential to the survival of a business.
Unclear Objectives
One of the most significant issues that come along when an organization does not engage in strategic marketing planning is a lack of clarity regarding its objectives. As explained by Kenny (2018), a company’s plan is almost certainly doomed if it lacks specific, actionable objectives that specify how an organization will fulfill a certain goal. When it comes to marketing, many companies set goals, such as to attract more customers and develop products that better meet their needs. However, these goals cannot be attained unless they are broken down into actionable objectives. If an organization seeks to attract more customers, it might set objectives to perform market research at a certain frequency to identify what attracts customers to its competitors and develop characteristics to match them (Hooley et al., 2020). If these steps are not defined in a detailed plan, the organization is likely to struggle in meeting its growth and developing goals, leading to failure in the long term.
The process of strategic planning helps companies to avoid these repercussions by enabling them to set clear goals and develop objectives and steps to fulfill them. Most importantly, these objectives are tied to the company’s strategic capabilities, environmental analysis, and business purpose, which makes them relevant and ensures that achieving them will bring the success that the business aims for (Hooley et al., 2020). Hence, strategic marketing objectives contribute significantly to the implementation of the company’s overall strategy and help it to attain relevant business goals.
Inadequate Resource Planning
Another essential feature of strategic marketing plans is that they support the effective use of the company’s resources. Hooley et al. (2020) state that strategic marketing plans are based on the evaluation of the business’ resources, including financial, human, operational, and others. These evaluations and their application in planning are instrumental to strategic performance. On the one hand, the resource-based view of marketing prevents companies from setting unattainable or unrealistic goals and making development plans that cannot be fulfilled regardless of the effort put in (Hooley et al., 2020). On the other hand, it helps in making sure that all of the company’s resources and capabilities are used to further its position in the market (Hooley et al., 2020). As a result, companies can avoid wasting their resources or missing opportunities that their capabilities bring.
One example where a company missed an important opportunity because it failed to assess its resources adequately is Toys R Us, a large toy retailer that has ceased its operations globally in 2018. According to Bomey (2018), one of the main reasons for the company’s failure was the accumulated debt, which led it to file for bankruptcy. The fact that the company went too far into debt suggests that it did not evaluate and plan its financial resources adequately. At the same time, the company also failed to recognize its capabilities for innovation when it was still possible to update its business model in accordance with the developing demands of customers (Bomey, 2018). Together, these failures resulted in years of decline and the company’s essential demise. Strategic marketing planning could have changed the situation for the company early on by allowing it to understand its resources, capabilities, and the opportunities they provide.
Implementation Failures
Strategy implementation is critical to the success of any organization, and it determines whether or not the business will fulfill its long-term goals in terms of profitability and performance. It is also considered to be the most complex part of strategic management that organizations can easily fail (Cândido and Santos, 2015; Ivančić, 2013). For instance, customer relationship management (CRM) strategies depend on various enabling processes, from value creation and information management to performance assessments (Payne and Frow, 2006). If any one of these processes is not carried out correctly, the entire strategy risks failure.
Hence, it comes at no surprise that many scholars focused on researching strategy implementation failures and the factors contributing to them. It is commonly suggested that between 50 and 90 percent of all strategies fail at the implementation stage (Cândido and Santos, 2015). Inadequate planning can result in issues that are responsible for implementation failures, such as poor monitoring, insufficient prioritization, unclear accountability, and more (Alharthy et al., 2017). By ensuring that strategy implementation efforts are well-planned, organizations can achieve a greater success rate, which will contribute to their future growth and development.
At the same time, strategic planning can prevent barriers to implementation that are related to the company’s human resources. The lack of engagement and poor communication are important causes of strategy implementation failures (Alharthy et al., 2017). Planning efforts can assist in clarifying communication with the personnel while also engaging them in the process of planning and implementation, leading to reduced resistance and increasing the chances of success (Alharthy et al., 2017; Vila and Canales, 2008). In this way, strategic marketing plans support strategy implementation throughout the organization and are essential to preventing common mistakes that are responsible for a significant share of failures based on research.
Lack of Cohesion Across the Organization
Strategic efforts are equally critical to the success of large and small enterprises. Whereas all types of companies rely on successful strategy implementation for performance, it can be more challenging for large companies to ensure cohesion across all of their business functions. When the top management establishes a strategy, fulfilling its goals necessitates the aligned commitment of all key organizational functions, from HR to manufacturing. The lack of a clear plan for action increases the risk of disarray in the company’s strategic activities, leading to higher risks of failure.
The contribution of poor planning and the resulting lack of cohesion to failed strategic marketing efforts is evident in many real-life business cases. One of such cases is Sears Holdings, which is on the verge of bankruptcy (Cohen, 2018). The history of the company’s decline suggests that strategic efforts involved contradictory decisions that benefitted one function while diminishing the other, which ultimately led to the company’s performance losses and debt accumulation (Cohen, 2018). The company also lacked cohesion across units, which contributed to organizational and strategic issues (Thomas and Hirsch, 2018). Scholars agree that the demise of Sears Holdings is inevitable because the company has already made too many important mistakes (Cohen, 2018).
Strategic marketing planning could have contributed to the situation in the company. On the one hand, it would offer a step-by-step procedure for the company to follow in its recovery, taking into account the resources available and its environment (Hooley et al., 2020). On the other hand, it would ensure that strategic efforts of various functions and units align with one another, thus enhancing chances of success and minimizing losses in productivity. For the same reasons, strategic marketing plans are essential to other large companies at the implementation stage.
Failure to Respond to Market Forces and Challenges
While almost all cases of business failure were driven by internal issues, changes in the external environment of a business can exacerbate these problems and cause them to have a more negative effect, leading to significant losses. Consequently, environmental analysis is crucial to strategic management and marketing (Hooley et al., 2020). As part of strategic marketing planning, companies engage in environmental analysis and use the results to inform their plans (Hooley et al., 2020). This ensures that they are prepared to face any difficulties in the market, whether they are driven by sociopolitical, economic, or other factors. Failure to follow the strategic marketing planning process, on the contrary, prevents the organizations from developing and applying strategies that reflect their environments. In the long-term, the consequences of this can be drastic.
One of the most prominent examples of a company that had failed to recognize the need to change and act accordingly is Blockbuster. News about the company going bankrupt and closing its stores spread internationally in 2010 (Pugh, 2019). However, it was far from surprising given the company’s failure to adapt its business model and keep up with the competition. With the rise of the Internet and online viewing services, as well as DVD subscriptions and other types of competitive offers, Blockbuster stores became redundant and quickly lost their popularity with customers. It is likely that the company did not anticipate changes in its environment until it was too late or simply did not believe that they were significant enough to change its entire business model (Satell, 2014). Still, engaging in strategic marketing planning could have provided the organization with a clearer picture of long-term developments in the industry, thus supporting its transformation and leading to survival.
Non-Sustainable Competitive Advantage
For businesses operating in a highly competitive climate, developing a competitive advantage is the ultimate goal. However, short-term competitive advantage is often useless for the strategic development of companies because it can easily be replicated by other brands and lose its relevance (Vorhies and Morgan, 2005). Therefore, developing sustainable competitive advantage is typically the focus of strategic marketing initiatives. With a sustainable competitive advantage, companies can attract more and more customers, maintain customer loyalty, and grow their market share over time, even if they do not spend too much on advertising and other promotional activities (Abratt and Bendixen, 2019). Strategic marketing planning is necessary to develop a sustainable competitive advantage because it details the steps that a company has to fulfill, the activities that it has to perform, and the resources that it would require to achieve it (Abratt and Bendixen, 2019; Hooley et al., 2020). Without a strategic marketing plan, a company might never develop a long-term competitive advantage, which could threaten its survival.
Returning to the example of Toys R Us, it is easy to see how the failure to introduce a sustainable competitive advantage has contributed to the company’s eventual demise. As noted by Bomey (2018), the company’s only point of differentiation from its competitors was prise. Price leadership can be a viable strategy in the short term, but it is typically not sustainable because competitors can apply strategies that would help them to reduce prices to the same level. Thus, the advantage that drove the company’s success at first was not as efficient in the long run when online stores started offering competitive prices for the same goods (Bomey, 2018). Developing and implementing a strategic marketing plan would have supported the company in achieving a sustainable competitive advantage that would help it to face competition and survive.
Conclusion: The Necessity of Strategic Marketing Plans
On the whole, businesses that operate in today’s markets are bound to experience pressure to engage in strategic efforts. Otherwise, their survival will be threatened by competition, market changes, and even internal problems. Strategic marketing can support businesses in their long-term growth and development by offering tools and mechanisms to withstand competition, adapt to market changes, and develop new capabilities. The process of strategic marketing planning is pivotal here since it can assist in implementing efforts across the organization.
Based on research and examples of real-life business failures, the claim that strategic marketing plans are essential to the survival of businesses is justified. First of all, strategic marketing plans allow setting clear goals and objectives, thus showing exactly how the company will pursue its chosen strategy and removing any confusion among the staff. Secondly, strategic plans take into account the resources and capabilities available to the company, which is crucial for organizations to avoid wasting resources or setting unattainable goals. Thirdly, strategic marketing plans, help to anticipate and overcome challenges that hinder strategy implementation, including those related to the company’s human resources. Acting in accordance with the plan also promotes cohesion across the organization and helps in building sustainable competitive advantage. Lastly, strategic marketing also helps businesses to respond better to changes in their environments and adapt to sustain their high performance. Based on these arguments, a company without a strategic marketing plan is indeed doomed to fail in the modern world.
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