To grow and prosper, organizations set strategic directions based on sales data and sales forecasts, market analysis, and competition. Setting strategic directions require sales projections for such periods as one, three, five, and ten years ahead. These projections predict customer and competitor reactions; attempt to gauge acceptance for new products; and highlight economic, social, demographic, technological, psychological, and political changes, all of which are difficult tasks to perform -nor can they be performed with the degree of precision available in other more concrete situations (Dobson & Starkey 2004). Information that provides a perspective for future operations is invaluable for corporate decision-making. Gap Inc. is an American clothing retailer. This company is based with strong competition and market changes influenced by demographic variables and lifestyles changes. Strategic objectives and marketing processes are the main method for Gap to remain competitive and plan its future growth.
The main techniques which help companies like Gap Inc to assess where there are now are historical sales and financial analysis, historical growth rates and profitability, the position towards competitors, and market share. Setting strategic directions is a rational way of translating experience, research information, and thought into marketing action. It is a pragmatic, organized procedure for analyzing situations and meeting the future (Drejer, 2002). Based on information about ends and means to determine various causal relationships, trends, and patterns of behavior, it is concerned with the selection of alternative strategies. In essence, purposeful research, experience, judgment, and decision making (all of which are directed toward guiding the corporate system and bringing it growth, survival, and adjustment) form the fabric of the marketing process. Marketing planning is an integrated, intelligent, rational process for guiding business change (Kotler & Armstrong 2005).
To set strategic directions, companies use PEST and SWOT analysis, Pareto analysis, and different mind maps. Sales forecasting promotes and facilitates the proper planning of many segments of a firm’s total business and marketing activity. Influencing every budget that is established, it affects almost every other projection and prediction of business operations (Kotler & Armstrong 2005). Marketing efforts, sales forecasting determines the boundaries for management programs and executive decisions. Through the use of such forecasts, business activity can be planned and guided toward the achievement of objectives. For Gap Inc, effective planning of marketing activities can be achieved only if market-related information is available. Such information must pertain to future potentials. Sales forecasting, which is both based on and part of marketing intelligence, furnishes management with information about what market conditions are likely to be during some specified future period (Drejer, 2002). This information helps in planning broad company goals and strategies and the programs to achieve them. The establishment of potential volume and profit targets expected market shares, and sales quotas become the basis for guiding and controlling operations. Thus, the sales forecast becomes the foundation for marketing programs, financial budgets, purchasing plans, personnel budgets, production schedules, plant and equipment demands, expansion programs, and other aspects of management programming (Dobson & Starkey 2004).
Although focusing on the company and its position in the market, the first phase of marketing planning does not merely describe the current situation or outline opportunities. Rather, it attempts to delineate the distinguishing features of a company, and plan for ways of translating present position to future opportunity. The position is defined in terms of customers, suppliers, and competition. The business intelligence system is extremely important in providing the input for such an assessment. Position, environmental, and projected intelligence are the bases of determining planning constraints (Kotler & Armstrong 2005). The latter guide directional or fundamental planning activities of the firm, and are concerned with such problems as to whether to diversify and, if so, into what lines; whether new products should be added; whether acquisitions should be undertaken; where marketing investments should be directed; and, in general, the future orientation of the company. The second phase of marketing processes relates to the development of marketing programs. Programming is concerned with specifying a sequence of activities over time and geographic areas so that strategies may be executed effectively. Programs put marketing strategies into effect. In marketing terms, programming determines the marketing mix. To a very large extent, success in managing a marketing operation depends on combining, integrating, and coordinating marketing ingredients into a mix that will achieve company goals. Some of the sophisticated techniques being used to accomplish this are Program Evaluation Review Technique, Critical Path Method, Decision Trees, and Simulation. The result of this phase is a planned market offering (Drejer, 2002).
In sum, strategic marketing processes help companies to analyze their current position and market share and develop a clear and concise strategic plan for future growth and development. However, current actions and decisions greatly influence a company’s well-being ten or twenty years hence. Today’s intelligent action has significant consequences for hazy long-range plans. The alert marketing manager keeps the need for planning always uppermost in mind.
Dobson, P., Starkey, K. (2004). The Strategic Management: Issues and Cases. Blackwell Publishing.
Drejer, A. (2002). Strategic Management and Core Competencies: Theory and Application. Quorum Books.
Kotler, Ph., Armstrong, G. 2005, Principles of Marketing. Prentice Hall; 11th edition.