Developing a Strategic Marketing Plan for Horticultural Firms

January 2000
EB 2000-01
Developing a Strategic Marketing Plan
for Horticultural Firms
Gerald B. White
and
Wen-fei L. Uva
Department of Agricultural, Resource, and Managerial Economics
College of Agriculture and Life Sciences
Cornell University
Ithaca, New York

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TABLE OF CONTENTS
INTRODUCTION ................................................................................................................................ 1
AN OVERVIEW OF STRATEGIC PLANNING .................................................................................. 2
Characteristics of Strategic Planning ..................................................................................................... 2
The Purpose of Strategic Planning ......................................................................................................... 3
Contents of a Strategic Plan .................................................................................................................. 3
Steps of the Strategic Planning Process .................................................................................................. 4
DEVELOPING THE STRATEGIC MARKETING PLAN ..................................................................... 7
A Suggested Outline ............................................................................................................................. 7
I. EXECUTIVE SUMMARY ......................................................................................................... 8
II. FIRM’S MISSION STATEMENT ............................................................................................. 8
III. SITUATION ANALYSIS ........................................................................................................ 8
A. Analysis of the External Environment .................................................................................. 8
B. Analysis of the Firm’s Strengths and Weaknesses ................................................................ 9
C. Description of Products/Services ......................................................................................... 9
D. Target Markets ................................................................................................................... 9
E. Market Potential ................................................................................................................. 10
IV. OBJECTIVES .......................................................................................................................... 11
V. STRATEGIES ........................................................................................................................... 11
A. Overall Strategy .................................................................................................................. 11
B. Competitive Strategies ........................................................................................................ 11
C. Pricing, Place(Distribution), and Promotion Strategies ....................................................... 13
D. Marketing and Advertising Budgets .................................................................................... 20
VI. FINANCIAL IMPACT EVALUATION ................................................................................... 20
A. Sales Forecast
21
B. Expense Forecast ................................................................................................................ 22
VII. POTENTIAL PROBLEMS IN ACHIEVING GOALS OR OBJECTIVES AND
PROPOSED SOLUTIONS...................................................................................................... 23
VIII. IMPLEMENTATION OR TACTICAL PLANS ..................................................................... 23
IX. REVIEW AND EVALUATION SCHEDULE .......................................................................... 23
X. APPENDICES .......................................................................................................................... 23
REFERENCES ..................................................................................................................................... 24
APPENDIX A ...................................................................................................................................... 25

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Developing a Strategic Marketing Plan for Horticultural Firms
Gerald B. White and Wen-fei L. Uva1
A marketing plan is essential for every horticultural business and for efficient and
effective marketing of any horticultural product or service. A marketing plan serves as a
road map. It establishes objectives, recommended actions, and timing for achieving the
objectives. An understanding of the marketing planning process is also a valuable aid in
helping managers organize their thinking about the marketing process and the various
methods and procedures used. A strategic marketing plan takes into account the market
environment facing the business (e.g. trends, competitive environment, regulatory issues,
technological advancements, etc.) Thus, the emphasis is not only on projections but also
on an in-depth understanding of the market environment, particularly competitors and
customers. Its goals are to take maximum advantage of opportunities, solve problems and
counter threats to the business.
Before discussing the details of a marketing plan, it is important to identify the three
different levels of planning activities that a firm may conduct to determine marketing
strategies.
• The company strategic plan defines the organization’s mission, sets long-range goals
and formulates broad strategies to achieve these goals.
• The strategic marketing plan is the long-term plan for the marketing area and deals
with the overall marketing objectives of the organization.
• The operating marketing plan focuses on the tactical decisions needed to carry out the
strategic marketing plan. It is a detailed plan indicating the results of a situation
analysis and offering a set of objectives and tactical statements to accomplish these
objectives by the end of the year. Fundamentally, a tactical plan provides the answers
to the questions – WHO, DOES WHAT, and WHEN (timelines).
The firm’s marketing strategy must support the overall business mission and be
consistent with other components of the business strategic planning.

1 Professor and Senior Extension Associate, Department of Agricultural, Resource, and Managerial
Economics, Cornell University, Ithaca, New York.
Special appreciation is expressed to our colleagues, Bruce Anderson and Meg Meloy, who provided helpful
reviews for this manuscript.
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AN OVERVIEW OF STRATEGIC PLANNING
Planning is deciding now what we are going to do later, including when and how we are
going to do it. Strategic planning is the managerial process of matching an organization’s
resources with its opportunities over the long run. The intent is to seize changing
opportunities and to counter the imminent threats.
Characteristics of Strategic Planning
Strategic planning is more of an art than a science; it is more intuitive, systematic and
analytical, rather than quantitative. Some characteristics of strategic planning are:
• Looks at the “Big Picture”
Strategic planning should be coordinated with company-wide planning and
coincide with the company’s vision and mission.
• Leads to Substantial Changes
Long-range planning deals with broad, company-wide issues. There will be
discontinuities from past projections and new trends. Both will require strategic
adjustments and often lead to substantial changes, e.g. additional capital
investments, potential gain in market share, new or discontinuation of product
lines, and formation of strategic alliances with other firms, etc.
• Considers Future Environmental Forces in the Industry
Strategic planning will be influenced by external environmental forces such as
new technology, government policy, economic conditions, industry structure,
competition, and consumer trends.
• Anticipates the Reactions of Competitors
A proactive strategy attempts to influence rather than simply react as competitors
change their policies or strategies.
• Looks at a Longer Time Horizon
Strategic planning is usually long-range planning. The planning process typically
involves projecting sales, costs, and technology into the future using data and
experience from the past. The time frame can cover three, five, or ten years,
depending on the context. Given today’s fast changing markets and economy, any
time frame over five years is probably unrealistic.
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The Purpose of Strategic Planning
Strategic planning attempts to identify and isolate present actions and forecast how
results can be expected to influence the future. Reasons a firm can gain a competitive
advantage from the strategic planning process include:
• Establishing goals, objectives, priorities and strategies to be completed within
specified time period; hence, a clear direction for management and employees to
follow
• Defining in measurable terms what is most important for the firm
• Establishing a basis for evaluating the performance of management and key
employees
• Providing a management framework which can be used to facilitate timely
response to changed conditions, unplanned events, and deviations from plans
• Anticipating problems and taking steps to eliminate them
• Allocating resources more efficiently to meet changes including labor, machinery
and equipment, buildings, and capital
Contents of A Strategic Plan
The contents of strategic plans can vary considerable; however, such plans will usually
contain the following common elements:
• Mission Statement
A firm’s mission statement defines what the firm will be, not necessary what the
firm is now. It describes what product and/or services the firm will produce; to
whom it will sell; and what are its primary goals, values, policies and procedures.
• Objectives
These are a set of measurable statements of what the business wishes to
accomplish in areas such as growth, profitability, market share, volume of
production and cost control. These objectives will guide the organization in
accomplishing its mission and serves as principles for planning at lower
functional levels in a company.
• Alternative Strategies
These are broad, basic plans of action by which an organization intends to achieve
its goals and fulfill its mission.
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Steps of the Strategic Planning Process
Step 1. Define the firm’s mission
The mission statement defines the purpose of the firm and answers the question, “What
business are we in?” Defining the firm’s mission requires the manager to carefully
identify the firm’s orientation regarding customer groups to be served and the needs to
be satisfied. The firm’s mission statement provides employees, customers, and other
organization stakeholders with a business definition to establish a sense of purpose,
identity, and commitment. It answers questions such as:
• What type of agricultural products and services will be produced?
• What are the markets?
ü Who are the consumer groups to be served?
ü What are the needs that will be satisfied?
• What, if any, other activities are we involved in and what are the priorities of
these activities?
• Why are we in business? What are the goals, beliefs and values of the company?
ü For profits?
ü To provide employment/security for other family members and/or
stakeholders?
ü To increase wealth?
ü Gain community status?
Step 2. Assess the external environment
The external environment analysis involves an examination of the relevant elements
external to an organization. It should include competition, technological environment,
economic environment, political environment, legal and regulatory environment, and
social and cultural environment. It focuses on identifying and understanding the present
and potential opportunities and threats facing the organization.
Step 3. Identify major opportunities and threats for the firm
Challenges in the external environment for one sector can present opportunities in
another segment of agriculture. Health concern about cholesterol intake created new
markets for poultry, fish and produce. Concern about carcinogens in the environment,
including some pesticides, has brought new opportunities for organic-, IPM-, and other
eco-labeled products.
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Step 4. Assess the firm’s strengths and weakness
A self-analysis aims to provide every business operator an understanding of the aspects
that every firm is constrained by the internal environment to some extent. Future
strategies are often developed by building on the firm’s strengths and neutralizing
weaknesses.
Candid answers should be provided to the following questions:
• What are the quantity and quality of resources?
• What are the abilities and limitations of management?
• What are the skills and abilities of labor force?
• What is the financial position of the firm?
• What is the condition of the physical plant?
Steps 2, 3, and 4 constitute a “SWOT” analysis. “SWOT” stands for “Strengths,
Weaknesses, Opportunities, and Threats.”
Step 5. Establish “SMART” objectives
The next step in strategic planning is for management to decide on a set of objectives
that will guide the organization in accomplishing its mission. Specific objectives should
flow from the goals and core values expressed in the mission statement. Objectives
should stimulate actions. They should possess “SMART” attributes:
• S = Specific
• M = Measurable
• A = Attainable
• R = Rewarding
• T = Timeline
Step 6. Develop and evaluate alternative strategies
Considering the three elements:
• Product-market investment strategies: product-market scope, growth directions
and investment strategies.
• Functional area strategies: product lines, price and distribution.
• Bases of the firm’s competitive advantage: assets, skills and synergies.
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Step 7. Select the best strategy or strategies
A strategy must be supported by assets and skills and must be employed in a suitable
environment. The following are possible criteria for strategy selection:
• Be responsive to the external environment and reflect opportunities and threats.
• Be consistent with organization’s vision/mission/objectives.
• Be feasible.
• Fit with the other strategies of the firm.
• Result in reasonable changes.
Step 8. Implement strategy (Tactical plans – who, what, when, and how much will it
cost?)
The implementation stage involves converting a strategic alternative into an operating
plan. The operating plan may span more than one year. It might be useful to provide a
detailed plan for the upcoming year that contains specific short-term objectives.
Step 9. Evaluation and/or control phase
One of the key questions in a strategic market management system is to determine
when a strategy requires review and change. It is usually necessary to monitor a limited
number of key measures of strategic performance, i.e. sales, market share, margins,
profit and ROA.
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DEVELOPING THE STRATEGIC MARKETING PLAN
Marketing planning should be guided by the mission and objectives of the organization-
wide strategic plan. A strategic marketing plan is a written document containing four
basic elements: (1) a summary of the situation analysis, (2) a set of objectives, (3) a
detailed strategy statement, and (4) a set of procedures monitoring and controlling the
plan and a contingency plan.
A Suggested Outline:
I. EXECUTIVE SUMMARY
II. THE FIRM’S MISSION STATEMENT
III. SITUATION ANALYSIS
A. Analysis of the external environment, emphasizing those aspects which affect
the firm’s marketing plan
B. Analysis of the firm’s strengths and weaknesses with an emphasis on marketing.
C. Description of products/services
D. Target markets
E. Market potential
IV. OBJECTIVES
A.
Marketing objectives for next year and for the next three to five years
B.
Sales and profit objectives for next year and the next three to five years
V. STRATEGIES – HOW WILL YOU ACHIEVE YOUR GOALS?
A. Overall strategy
B. Competitive strategies
C. Pricing, place (or distribution), and promotion strategies
D. Marketing and advertising budgets
VI. FINANCIAL IMPACT EVALUATION
VII. POTENTIAL PROBLEMS IN ACHIEVING OBJECTIVES AND PROPOSED
SOLUTIONS
VIII. IMPLEMENTATION OR TACTIAL PLANS (TIMETABLE AND
BENCHMARKS)
IX. MONITORING AND CONTROL
X. APPENDICES - INCLUDE SUPPORTING DOCUMENTS
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I. EXECUTIVE SUMMARY
Prepare a one or two paragraph overview of the entire marketing plan.
II. FIRM’S MISSION STATEMENT
A business mission is a brief statement about the strategy of a business. The mission
statement provides a business definition. Reviewing the business mission statement can
provide a vehicle for generating and screening a wide variety of strategic options. The
development of a business mission statement is discussed in the previous section. The
firm’s marketing strategy should support the overall business mission.
III. SITUATION ANALYSIS
The situation analysis analyzes the environment facing the business with the proposed
products or services.
A. Analysis of the External Environment
External analysis involves an examination of the relevant elements external to an
organization. It identifies opportunities, threats and uncertainties facing the firms.
Some examples of strategic questions useful in the external analysis for a horticultural
business include:
1. Microeconomic Information
• Consumer Analysis – e.g. demographic changes, changing consumer lifestyles,
population growth in selected regions, etc.
• Competitor Analysis – identification of competitors, current and potential
• Market Analysis - e.g. market size, growth prospects, market profitability, cost
structure, distribution channels, trends, market forces and their effect on prices,
etc.
2. Macroeconomic Information
• Environmental Analysis
ð Technology, especially breakthroughs that would favor one country or
region over others)
ð Political/Legal, e.g. regulations of labor and pesticides.
ð Economics, e.g. globalization (NAFTA, WTO), value of the dollar relative
to other key currencies.
ð Social/Cultural, e.g. impact of society’s view toward animal rights,
environmental protection, genetically modified organisms (GMO’s), etc.
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