Straight Talk About Strategy and Marketing

In common practice, the concepts of strategy, strategic planning and strategic marketing are defined in multiple ways by multiple sources. Which definition is correct?. Our approach to resolving the confusion is to simply offer an explanation of how we define these terms and apply them to our work.

What does the word “strategy” mean?

Hosfeld & Associates uses the term “strategy” most often to mean an approach that gives an organization sustainable competitive advantage. Strategy is a military term that refers to the mobilization of resources and tactics to accomplish a specific goal. In organizational life, strategy can be applied to a variety of goals – cost-cutting, information management, quality improvement, etc. Our work focuses strictly on the goal of how an organization promotes its own long-term success and viability by offering something unique to the market. We focus on the questions “What business are we in?”, “In what unique way do we better serve our audiences,” and “How do we compete and cooperate in our field?” Hosfeld & Associates includes in strategy a consideration of meaning, purpose and values. Whereas traditional competitive strategy might rely solely on market opportunity for profit; Hosfeld & Associates also supports clients who seek to define how they will create social and world benefit through their strategy.

What's the definition of “marketing”?

Our definition of marketing is holistic: “Everything that an organization does that makes a customer or stakeholder want to ‘do business’ with it.” Management guru Peter Drucker said something similar: “Marketing is the entire company as seen through the eyes of the customer.” In college business courses, marketing is defined as decision-making about products and services, pricing, sales and distribution, promotion and positioning. In many companies, all of these marketing skill sets may be dispersed throughout an organization and some may not be called marketing. Depending on your industry, you may be accustomed to defining marketing as promotion or brand and communication. Or you might define it as sales. Hosfeld & Associates embraces a holistic view that incorporates product, pricing, sales, promotion and positioning.

What is the intersection of strategy and marketing?

In many companies and in academic settings, strategy and marketing are separated from one another. Hosfeld & Associates works at the intersection of marketing and strategy because they are interrelated and undeniably intertwined. When we use the definition of strategy as “competitive strategy,” marketing contributes in a variety of ways. Will we have a single product-market orientation, a product specialization, a market specialization or some other product strategy? Will we have a broad product line or a narrow product line? Will we be a single brand entity or a multi-brand entity? In promotion will we have a push strategy or a pull strategy? Will we focus on market penetration, market development or product development? These are marketing questions, none of which can be answered in a vacuum of management decision-making. They must be decided in an iterative “dialogue” with the market and its changing conditions. Marketers should be stewards of the quality of that dialogue between the organization and its environment.

What is “strategic planning”?

Just as there are many different types of strategies, there are many forms of strategic planning. When Hosfeld & Associates uses the words strategic planning, we are referring to a process of self-discovery where organizations find out their source of sustainable “unequal advantage.” Hosfeld & Associates will interchangeably use the terms “strategic planning” or “strategy design” to refer to the same group process. “Strategic planning” is an older, more commonly understood term. Planning, however, has historically been a top-down affair, where decisions were made by some and implementation was forced on others. Many who took this approach found that implementation suffered because people didn't understand or agree with the plan. Hosfeld & Associates' approach to strategic planning addresses these and other short-comings of classic strategic planning in order to create strategies that are embraced and implemented successfully. For this reason we use the term “strategy design” to indicate the more collaborative, creative, learning approach we use in working with clients.

What's the difference between a business plan, a marketing plan, a strategic plan and a long-range plan?

Often the terms are used interchangeably. Here is how Hosfeld & Associates defines the differences:

Business Plan – A business plan is an operationally focused document used in “start up” situations or as a management tool. The start-up business plan describes what the firm will look like when it is launched: what its business will be, how it will be staffed and managed, where it will be located, what equipment and real estate will it need. A start-up business plan has to make a case for why investors or lenders should financially support the business, so it typically contains information about the market opportunity the company will address, the market potential of its products or servi ces, how those products or services will be marketed and what the company projects for financial viability. A business plan created for an existing business is used for management purposes to determine capital needs, project cash flow and to manage other assets like people and equipment.

Marketing Plan – A marketing plan is a specialized management document that focuses on actions the organization will take over a defined period of time to create revenue. Marketing plans are based on predetermined decisions about “what business are we in?”and an understanding of organizational goals and targets. They typically include an evaluation of the market situation – what’s happening that presents an opportunity or a challenge—and a quantitative analysis of how big the market is and how much of it the organization plans to capture. Thereafter it contains the specific product, segment, brand, pricing, distribution, promotion, customer, research and development and other strategies that will be deployed to accomplish the organizations goals. Ideally the marketing plan also includes budgets and timelines for the activities therein described. Start-up business plans often include a complete marketing plan.

Long-Range Plans – Long-range plans are often confused with strategic plans. In truth, a strategic plan is almost always long range in nature. But a long-range plan is not necessarily strategic in nature. Many organizations use long-range plans to think ahead about their desires for growth and change in the organization. Strategic thinking – as in focused on competitive strategy – offers a view of what problems or obstacles an organization will face and what opportunities it will exploit to achieve its growth goals. Some business plans can be long-range in nature – typically determined by the timeline they cover. Six months is not long-range. Two to four years can be considered long-range.

Strategic Plan – There are many forms of strategic plans. The type of plans we create define how the organization will compete and cooperate in its market over the long-term. In today’s dynamic environment, that means developing a strategic framework – rather than a static plan -- in which the organization understands what it does best, how that compares with others in its market, and how that meets needs and wants of its customers or other stakeholders. We identify the core competencies of the organization that are the basis of long term advantage, evaluate the growth potential those core competencies represent, and determine how the organization must invest in and cultivate them in order to increase and sustain success. The first part of a strategic plan revisits and restates “What business are we in?” and creates a template to which members can compare current and future opportunities for fit and synergy. This allows organizations to make new strategic decisions on an ongoing basis long after the “planning” is complete. The second part of our strategic plan defines the action steps the company must take in a time frame following planning to invest in, cultivate and align resources around its source of “unequal advantage” in order to grow and succeed.

Persons can also create business plans that serve the objectives defined in a strategic plan. In that case, the business plan explores the operational and capital implications of the strategy in greater detail and can be used as a case for investment or financing.

For more information on Hosfeld & Associates' approach to strategy and marketing please contact us.