implementing an organization's objectives. In any organization, strategic planning occurs in two phases: (1) deciding on the products to produce and/or the services to render; (2) deciding on the marketing and/or manufacturing strategy to follow in getting the intended product or service to the proper audience. Strategic planning decisions will have long-term impacts on the organization while operational decisions are day-to-day in nature.
- management act of determining a firm's future environment and response to organizational challenges; crucial decisions determining the direction of a firm.
determination of the steps required to reach an objective that makes the best use of available resources. In marketing, a strategic plan involves selecting a target market segment or segments and a position within the market in terms of product characteristics, price, channels of distribution, and sales promotion. For example, consider the case of a firm or manufacturer that decides to select the New York gourmet delicatessen market. The firm's strategic plan would include a gourmet-quality product line that is high-priced, that is purchased from New York area wholesale distributors and sold in various small retail outlets in wealthy areas of the city, and that is promoted in local shoppers and regional publications or on local TV. The company's long-term strategy might include diversifying into the direct-mail business with a gourmet-food gift catalog.
Part of a strategic plan involves deciding whether to enter a new untapped market, to grow an existing market, to dominate an existing market, or to dominate a small segment of an existing market by replacing competitors or by filling an unmet need. Advertising plans are an important part of strategic planning that must support the overall objective of the seller. For example, the firm or manufacturer in our example would not profit from purchasing commercial television time on a national basis but might benefit greatly from a regular spot on a local talk show or from a local newspaper advertisement.
