In today's competitive marketplace, organizations need a strategy to help them stay focused. In setting the course for the company, management needs to identify where they are now and where they want to go (Kerin, 2004). Once these questions are answered, Kerin suggests that secondary questions emerge on resource allocation, converting the plan into action, and revising the plans, if necessary, the basis of the Strategic Marketing Process.
The Planning Phase
Strategic marketing planning examines three areas: their own business, competitors and the current business environment. The Business Portfolio Analysis examines strengths and weaknesses of organizational market growth rate and relative market share. The Market Product Analysis (MPA) views growth opportunities of markets and products. These tools provide management with their current position and assists with resource allocation based on the company's objectives. These techniques are the groundwork for the SWOT Analysis, which stands for strengths, weaknesses, opportunities and threats.
The SWOT establishes overviews of the company, examines industry trends, competition, internal assessments and customer research according to (Kerin p.34), and helps to suggest which type of strategic thrust the firm should use to gain competitive advantages (Prahalad and Hamel, 1990).
Stalk, Evans and Schulman (1992) propose that a SWOT analysis is carried out to determine whether the company has the strengths necessary to deal with the specific forces in the external environment. This analysis enables managers to identify: External threats, opportunities, and distinct competencies that can ward off the threats and compensate for weaknesses.
Phase 2: Market-Product Focus and Goal Setting
Once a SWOT Analysis is complete, management moves to the product phase by determining which products are marketed to the consumer. Typically these decisions are based on market segmentation (Kerin, p. 35). By tailoring marketing programs to individual market segments, management can do...