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Chapter 8: Strategic Planning

Chapter 8

Strategic Planning

CHAPTER CONTENT

KEY OBJECTIVES

1. Explain the differences between objectives, strategies, and tactics in strategic

planning as well as the three levels of planning and how they are connected.

3. Demonstrate the purpose and role of account planning and how it is used in

advertising and IMC.

CHAPTER OVERVIEW

Marketing and brand communication strategies are chosen from a wide array of possible

alternatives. Given this, the task of strategic planning, which includes brand

communication/IMC planning, must be approached comprehensively and with

consistency. In this chapter, strategic planning is presented as a series of cascading

objectives, flowing from the corporate business plan to the marketing plan, and from

there to the brand communication/IMC plan. Next, key strategic decisions that guide

CHAPTER OUTLINE

WHAT IS STRATEGIC PLANNING?

 Strategic planning for IMC is the process of identifying a problem that can be solved

with communication and then coming up with a great idea that solves the problem.

Here is the mission of planning: identifying a problem, determine objectives (what

you want to accomplish), decide on strategies (how to accomplish the objectives),

and implement the tactics (which make the plan come to life). This process occurs

within a specified timeframe.

 Strategic thinking is just as creative as coming up with a Big Idea for a brand

communication idea. Pat Fallon and Fred Senn, cofounders of the legendary agency

Fallon Worldwide, have identified seven principles that link creative thinking and

strategic planning to business results.

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 They are: 1) always start from scratch, 2) demand a ruthlessly simple definition of

business problems, 3) discover a proprietary emotion, 4) focus on the size of the idea,

not the size of the budget, 5) seek out strategic risks, 6) collaborate or perish, and 7)

listen hard to your customers and then listen some more.

The Business Plan

 Strategic planning is a process that gives direction to the entire organization. It starts

with the business plan and then moves to functional areas of the company, such as

marketing. A marketing plan outlines objectives, strategies, and tactics for all areas of

the marketing mix. A business plan is a snapshot of the company and how it intends

to advance in the environment in which it operates.

 External conditions, such as technological changes, can render companies obsolete.

External factors are the framework in which business plans are created. They also

Mission Statement and Business Philosophy

 A business plan begins with a description of the business itself – the history of the

company, its products, the scope of its offerings, its corporate strengths, and its

organizational structure and management team. A vision statement describes where

the business is headed. A mission statement is derived from its vision and is a

precise expression of more practical goals, purpose, and policies of the business.

 A company’s business philosophy is the set of fundamental principles that guide the

operations of the business. For many companies, the philosophy is simply to make a

Chapter 8: Strategic Planning

Research

 In business plans, it is particularly important to look both inside and outside the

organization to identify strengths and weaknesses, both corporate and brand. Being

able to foresee market changes, business opportunities, and technological

Goals and Objectives

 Business goals, which are long-term and general, provide direction to business plans.

Often these plans are stated in 5-year time frames and outline expectations for the

financial side of the business.

Strategies, Tactics, and Controls

 At the business plan level, planning decisions are focused on research and

development, operations, and sales and marketing. Strategies are plans that will

achieve the organization’s goals and objectives. Tactics are specific activities that

make the strategies come to life.

The Marketing Plan

 A marketing plan is developed for a SBU, brand, or product line. To a large extent,

a marketing plan mirrors the corporate business plan, although the strategies are

focused on a SBU or a specific brand rather than the larger organization.

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Step 2: Set objectives

At the marketing level, objectives tend to be focused on sales and share of market,

measurements referring to the percentage of the category purchases that are made by

the brand’s customers. Other objectives deal with specific areas of the marketing mix.

Step 3: Select Target Markets

Assess consumer needs and wants relative to the product, segment the market into

groups that are likely to respond, and target specific audiences and uncover insights

about their thoughts and behaviors.

Step 4: Differentiate and Position

Step 5: Develop marketing mix strategies

Based on the positioning strategy, develop the marketing mix strategy, such as

selecting product design and performance criteria, pricing approaches, distribution

decisions, and marketing communication.

Step 6: Design and Execute Action Plans

Implementing the marketing mix could include product testing, working with

 The SPAR story in the Matter of Practice feature in this chapter lets you see inside

the mind of a planner as he works through a series of strategic decisions.

The Brand Communication/IMC Plan

 Brand communication planning operates with the same concern for objectives,

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Briefly, a marcom planner’s goals can be stated as:

 Who are you trying to reach and what insight do you have about how they think,

feel, and act? How should they respond to your brand message?

 What do you say to them? What directions from the consumer research are useful

to the creative team?

 How and where will you reach them? What directions from the consumer research

are useful to the media team?

 Recall that we previously mentioned the difference between strategies and tactics.

This difference exists in brand communication plans, as well as marketing and

business plans. The various levels of planning set up a cascade of goals and

objectives. As illustrated in Figure 8.1, the business and marketing plans provide

direction to the brand communication (IMC) plan, as well as to specific plans for

specialist areas, such as advertising and other areas of marketing communication.

Plans for Marketing Communication Functions

 Advertising, public relations, sales promotion, and other marcom areas all operate

with their own plans, activities, and deadlines, drawn from the brand

communication/IMC plan. They begin with the same strategic decisions found in a

marketing or brand communication (IMC) plan.

KEY STRATEIC DECISIONS

Key strategic decisions that guide marcom plans include the analysis and statement of

communication objectives, the target audience, brand position, and consumer insights.

The Communication Objectives

 After planners have examined the external and internal environments and defined the

critical areas that need to be addressed, they can develop specific communication

objectives to be accomplished during a specified time period. These objectives are

formal statements of the goals of the advertising or other marketing communications.

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 The six categories of the Facets Model of Advertising Effects can also be used to

The Target Audience

 Segmenting and targeting are important because a marketing communication strategy

is based on accurately targeting an audience that will be responsive to a particular

type of message. Market segments are identified in marketing plans, but targeting

audiences happens in brand communication plans.

Diversity and Empathy

 There is more to targeting than just identifying and profiling a possible audience.

Multicultural communication demands an appreciation of diversity, as well as the

empathy that results from such appreciation. To achieve that goal, agencies are

adding multicultural specialists as well as creating or buying firms that specialize in

multicultural marketing.

 Professor Peggy Kreshel defines diversity as “the acknowledgement and inclusion of

a wide variety of people with differing characteristics, attributes, beliefs, values, and

 The industry’s troubled, largely unsuccessful efforts to create a racially and ethnically

diverse workplace tell part of the story. Minority-owned advertising agencies provide

opportunity for diversity but are often viewed as being capable of speaking only to

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 Similarly, marketers routinely define the Hispanic market primarily as ‘Spanish-

speaking.’ The richness and diversity of the many cultures that comprise that group

have been lost in the desire to construct a homogeneous market large enough to be

economically viable.

Brand Identity Strategy

 A brand identity must be distinctive. In other words, it represents only one particular

product within a category, so it needs to be recognizable and therefore memorable.

Recognizing the brand means that the consumer knows the brand’s identification

markers—name, logo, colors, typeface, design, and slogan—and can connect those

marks with a past experience or message.

 To better understand how a brand can become an integrated perception, this textbook

proposes an outline of the communication dimensions of branding using the same six

effects presented in the Facets Model in Chapter 5. They are:

 Brand Personality and Liking. Brand personality – the idea that a brand takes on

familiar human characteristics – contributes an affective dimension to the meaning

of a brand. The point is to profile the brand as if it were a person that persons in

the target audience like or respect.

 Brand image. Understanding brand meaning involves understanding the

symbolism and associations that create brand image, the mental impression

 Brand Promise and Brand Preference. A brand is sometimes defined as a

promise because it establishes an expectation based on familiarity, consistency,

and predictability.

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 Brand Loyalty. A personal experience with a brand can develop into a brand

relationship, which is a connection over time that results in customers preferring

 By putting all of this together, we see that a brand perception is created by different

fragments of information, feelings, and personal experiences with a brand. You could

say that a brand is an integrated perception—in other words, all of these different

aspects of brand communication work together to create brand meaning.

Brand Positioning Strategy

 A position is how consumers define the product or brand in comparison to its

competitors. A position is based upon two things. First, it is based on a particular

feature or attribute. Second, that feature must be important to the consumer.

 A position is based upon some notion of comparison. It is about locking the brand in

the consumers’ mind, based on some quality relevant to them where the brand stands

out. If that point of relevance changes, then the position may need to be adjusted.

Product Features and Attributes

 An initial step in crafting a position is to identify the features of the brand, as well as

those of the competition, in order to determine where the brand has an advantage over

its competitors. That means a marketer carefully evaluates the product’s tangible

features and other intangible attributes in order to identify the dimensions of the

product that are relevant to consumers and make it different from its competitors.

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Differentiation and Competitive Advantage

 Most markets involve a high level of competition. A company competes in a crowded

market by using product differentiation, a strategy designed to focus attention on

differences that are important to consumers and distinguish the company’s product

from that of its competitors. Products that really are the same, such as milk and

unleaded gas, are called undifferentiated or parity products. For these products,

marketers often promote intangible or psychological differences through branding.

 According to the Fishbein multi-attribute model, there are four possible strategies you

might use to help your brand better compete in its marketplace. They are: 1) improve

your rating on a key feature, 2) change the relative importance of a feature, 3)

demonstrate your advantage over a competitor on a key attribute, or 4) add an

attractive new feature to your brand that competitors don’t offer.

Locating the Brand Position

In addition to specific product attributes, a number of other factors can be used to locate a

position for a brand. They include:

 Superiority Position: Jack Trout suggests that positioning is always easy if

something is faster, fancier, safer, or newer.

 Preemptive Position: Being first in the category often creates category leadership

and dominance.

 Value Position: Walmart and Hyundai have both used this very successfully.

 Psychological Position: Often brands are designed around non-product

differences. Volvo, Coke, and Hallmark are examples.

 Benefit Position: How does the product help the consumer?

 Usage Position: How, where, and when is the product used and who is using it?

 Competitor’s Strategy: How can the product go head-to-head or move completely

away from the competition?

 Category Factors: Is the competition coming from outside the category and, if so,

how does the brand compare to these other categories and how does that change

the analysis of strengths and weaknesses?

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 Principle: Strong brands are known for one thing. The test is: What do you think of

when you hear the brand’s name?

Repositioning

 Positions are difficult to establish and are created over time. Once established, they

are difficult to change. Category dominance is important, as positioning expert

Al Reis argues, but sometimes the category changes and the brand has to change also

 The role of brand communication in a repositioning strategy is to relate the product’s

position to the target market’s life experience and associations. A classic example of

CONSUMER INSIGHT AND ACCOUNT PLANNING

 The concept of consumer insight is the last of our key strategic decisions. It may

also be the hardest decision that planners make because it calls for solid research

and thoughtful analyses that lead to, in many cases, unexpected conclusions about

the direction the brand communication should take.

 Exactly what does the term ‘consumer insight’ mean? In the textbook, Larry Kelley

and Donald Jugenheimer provide five statements to answer that question. “A true

insight into consumer behavior will connect with the consumer at an emotional level,’

according to them.

 Consumer insights and the account planning function responsible for identifying them

has transformed marketing research as well as communication planning. It calls for

Account Planning

 Account planning analyzes the research to uncover consumer insights. Insights are

what happens when the light bulb goes off and the planner sees something in a new

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 Account planning is the research and analysis process used to gain knowledge of the

consumer that is expressed as a key consumer insight. An account planner, then, is a

person in an agency who uses a disciplined system to research a brand and its

 Principle: The account manager is seen as the voice of the client, and the account

planner is seen as the voice of the consumer.

 The account planning function develops the marketing communication strategy with

other members of the client and agency team and guides its implementation in the

creative work and media planning. Account planners do not design the creative

 Susan Mendelsohn, a leader in the U.S. account planning industry, explains the

account manager’s task as follows: 1) understand the meaning of the brand, 2)

The Consumer Insight Process

 Through the process of strategic and critical thinking, the planner interprets the

consumer research to find a key consumer insight that will help move the target

Research: Brand Intelligence

 Insight begins with research. The objective is to puzzle out a key insight that will help

move the target audience to respond to the message. Insight research, in other

words, is about asking and listening and then asking more questions to probe deeper

into thoughts, opinions, attitudes, desires, and motivations.

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Insights: The Fuel of Big Ideas

 Account planners look at advertising as an insight factory. Insight mining—finding

the “aha” in a stack of research reports, data, and transcripts—is the greatest

challenge for the account planner. The Account Planning Group Association

 How do you get started on finding these elusive insights? The account planning

toolkit is made up of questions that lead to useful insights that are culled from

research. Kelley and Jugenheimer recommend seven topics or questions you might

ask to begin your search. They can be found in the text.

The Creative Brief

 An important outcome of strategic research is a document called a communication

brief or creative brief, which explains the main consumer insights and summarizes

the basic strategy decisions. The brief is an outline of the message strategy that guides

the creative team and helps keep its ideas strategically sound. As the planner’s main

product, it should be clear, logical, and focused.

 Here is an outline of a typical communication brief:

 Problem: What’s the problem that communication can solve?

 Target audience: To whom do we want to speak?

 Consumer insights: What motivates the target? What are the “major truths” about

the target’s relationships to the product category or brand?

 Brand imperatives: What are the important features? What’s the point of

competitive advantage? What’s the brand’s position relative to the competition?

Also, what is the brand essence, brand personality, and/or image?

 Communication objectives: What do we want customers to do in response to our

messages?

Chapter 8: Strategic Planning

 The proposition or selling idea: What is the single thought that the

communication will bring to life in a provocative way?

 Support: What is the reason to believe the proposition?

 Creative direction: How can you best stimulate the desired response? How can

we best say it?

 Media imperatives: Where and when should we say it?

END-OF-CHAPTER SUPPORT

REVIEW QUESTIONS

8-3. Define objectives, strategies, and tactics and explain how they differ.

For marketing communication, strategic planning is the process of identifying a problem

8-4. What information does a brand communication plan derive from the business

plan or marketing plan?

A business plan is a snapshot of the company and the environment in which it operates.

It directs the operations of an entire company, or in larger companies, a specific division

called a strategic business unit (SBU), which is a line of products under a single brand

name. A business plan begins with a description of the business itself – the history of the

Chapter 8: Strategic Planning

The marketing plan outline developed by students will vary, based on the amount of

research data each collects and how they interpret and choose to use it. However, each

student’s outline must include the following components:

• A situation analysis, which contains background research and a SWOT analysis.

• Business objectives that clearly articulate what they intend to achieve.

• Next, students must target their audience by identifying the group of customers most

likely to be interested in their product offering, developing a demographic profile of

them, and attempting to learn what’s going on in their heads and hearts.

8-12. You are in a meeting about the strategy for an automotive client who is proposing a

new upscale luxury version of an electric car. One of your team members says

positioning is an old strategy and no longer useful for modern products because the

market is so complex and changes so fast. Another person argues strongly that you need

to understand the position in the consumer’s mind before you can even begin to develop

an advertising strategy. Discuss one side of this issue for the launch of this new product

and develop your position to present and defend in a class debate.

Students may argue successfully for either position. Here are two perspectives:

In favor of positioning: A position is a place in a consumer’s mind where the product or

brand is located in comparison to its competitors. In the automotive market, this strategy

Consumer’s Response Advertiser’s Objective

Perceive Create brand identity

Feel Cue brand personality

Think Cue brand position

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169

In other words, brand perception is created by a number of different fragments of

information, feelings, and personal experiences with a brand. You could say that a brand

is an integrated perception—in other words, all these different aspects of brand

communication work together to create brand meaning. A positioning strategy does not

account for such a holistic, consumer-oriented view of brands and how they are created.

TAKE-HOME PROJECTS

8-13. Portfolio Project: Examine SUVs at the following websites: www.lexus.com,

www.infiniti.com, and www.mercedes-benz.com. Based on what you find on these sites,

compare the positioning strategies for these top-of-the-line SUV models. Analyze the

product features, competitive advantage, and points of differentiation. Draw two

perceptual maps that reflect your insights.

8-14. Mini-Case Analysis: Review the Chick-fil-A case that opened and closed this

chapter. Assume you are working on this account and have been asked to pull together a

presentation for the brand team for the next year of this campaign. What research would

you recommend conducting to decide if the campaign should be continued or modified?

What do you need to find out to make this decision?

Have each of the original objectives established for the Chick-fil-A brand been fully

TRACE NORTH AMERICA CASE

Planning for Multicultural Communication

Read the TRACE case in the Appendix before coming to class.

8-15. Develop a creative brief based on what you believe an account planner would have

developed. Keep it to one page.

8-16. Develop at least three business objectives and strategies, three communications

objectives and strategies, and three media objectives and strategies based on this case

study.

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P2-1. Compare and contrast these two campaigns. What lessons can you learn from these

cases that might help you communicate to diverse audiences?

P2-2: Explain how these campaigns work using the Facets Model of Effects. How do

these campaigns help communicate brand meaning?

P2-3: Evaluate Kraft’s strategy of reaching parents in less acculturated Hispanic

households by linking the fun of the Oreo ritual with the valued relationship between

parents and their children.

ADDITIONAL MATERIAL

ASSIGNMENTS

Individual Assignments

1. Through online research, locate and interview an advertising account planner at an

advertising agency. What are their main responsibilities and challenges? How do their

responses reflect the material found in this chapter? Also read some of the articles