SOSTAC: a framework for Marketing planning
The SOSTAC framework for Marketing planning captured my interest some days ago during a lecture at university. Not much as far as the professional application of the system is concerned, but because of the concept behind it and the possible implementation in our personal lives. In this post, I will discuss some of the key ideas behind SOSTAC.
To begin with, let's broadly define what SOSTAC is (I am using my own words here).
“SOSTAC® is a marketing planning system developed by writer and speaker Smith in the 90s and used in the corporate world to draw up marketing plans. The name is an acronym formed by the initials of the steps composing the framework: “Situational Analysis” - “Objectives” - “Strategies” - “Tactics” - “Actions” - “Control”. ”
So, this is a comprehensive, step-by-step process used to give a direction to a corporation, however its size may be. Direction which, however, cannot be given if the organization has not got well-defined vision and mission. These are the "why" of the existence of the enterprise (the values/principles are also important here). While the vision is the impact the company wants to leave in the world in the future, the mission is the impact the organization wants to have in the 'here and now'. So, as the professor explaining this framework to us stated, the very beginning stage of this system is represented by the definition and clear communication of the vision and the mission of the business. That's because without clear principles there would be a lack of purpose and human values that would result in people not being on the same page, which can be detrimental if not in the short-run, for sure in the long-term.
Situational Analysis
The first step of the SOSTAC process is to answer the question "where are we now"? This is referred to as situational analysis. It lays down the context from which the organization is starting the planning stage. It represents the past and present occurrences that have shaped the corporation and have led it to where it is now. No future vision is involved at this stage.
In the organizational world, situational analysis means accounting for two main areas that influence the business significantly: the macroenvironment and the microenvironment (also including the enterprise itself).
Some renowned models of analysis used at this stage are PESTLE (macro), Porter's 5 forces (micro), SWOT analysis (micro and macro).
The first step of the SOSTAC process is to answer the question "where are we now"? This is referred to as situational analysis. It lays down the context from which the organization is starting the planning stage. It represents the past and present occurrences that have shaped the corporation and have led it to where it is now. No future vision is involved at this stage.
In the organizational world, situational analysis means accounting for two main areas that influence the business significantly: the macroenvironment and the microenvironment (also including the enterprise itself).
Some renowned models of analysis used at this stage are PESTLE (macro), Porter's 5 forces (micro), SWOT analysis (micro and macro).
Objectives
Next up, it's time to address the future, figuring out an answer to the question "where do we want to go"?
Objectives are the goals the organization wants to achieve within the plan's term. In a marketing plan, the objectives may be related to marketing (e.g. market share, customer satisfaction, sales) or to marketing communication (e.g. AIDA model).
In addition, the conventional rule to follow rigorously when setting objectives is that they should be S.M.A.R.T.. This is an acronym for Specific, Measurable, Achievable, Realistic, Time-based, which emphasizes the importance of being precise and including as much detail as needed during this stage. I would consider the time aspect of this framework very relevant. The reason being that Parkinson's law, which states that "work expands so as to fill the time available for its completion" is a powerful productivity tool to leverage when setting targets.
Normally, the main objectives will be broken down into smaller, more specific milestones in order to depict a clear roadmap leading to each final objective.
Strategies
The strategy-development stage addresses the question "how do we get there?" - broad direction. So, strategies are the specific means and processes used to achieve objectives.
The market/s the organization will operate in, the set of products offered, the competitive stance to adopt (e.g. cost leadership, differentiation) are examples of decisions made during this stage. And a very important point concerning strategy-setting is that strategies are the foundation of tactics. Which implies that tactics (the next step of the process) will be much more detailed and actionable.
Two of the most renowned management tools used at this point are the BCG Matrix (Boston Consulting Group matrix) and the Ansoff Matrix.
The former (BCG) is a framework that helps identify the position of business units of the organization in the market. It shows two variables: market growth rate on the Y axis, and relative market share on the X axis. Four possible scenarios can be identified.
The Ansoff Matrix, on the other hand, is a growth-strategy management tool. It takes into consideration markets and products and defines four possible expansion strategies based on the organization's context and targets.
Tactics
Once broad strategies have been drawn up, it's time for tactics to come into life. Tactics are based on the marketing mix, the 4 Ps (can be 7). "How do we get there?" - details of strategies (tactical tools).
It can be noticed that as we move further between steps of the SOSTAC model, the field of action becomes increasingly narrow and specific.
So, while strategies refer to the long-term view of the organization, tactics are short-term decisional measures to take in order to follow the proper path.
When it comes to the 4 Ps composing the Marketing mix, they are: product, price, place, promotion. They have been integrated over time with 3 additional elements: people, physical evidence, process management. Here is a paper to read more about the marketing mix.
Action and Control
To sum up, strategies and tactics must be implemented. Action is all about setting up the system of doing the tasks necessary to achieve sub-objectives and objectives in the long run (what are the specific actions required for each tactical step?). So, in the action stage the questions "what will be done?" "who will be doing it"? "When will it be done?" are addressed.
Coordination, communication, interaction are required at this point, and teams must be held responsible for their outcomes.
Control is the review of results and milestones, the measurement, the updating and modification of the tasks where necessary.