MARKETING PLANNING

 

     MARKETING PLANNING

  MBA / BBA MARKETING MANAGEMENT QUESTION PAPER 2020 PUNE UNIVERSITY

Definition of Marketing Planning

"Marketing Planning is the process of developing marketing plan incorporating overall marketing objectives, strategies, and programs of actions designed to achieve these objectives."

 

Marketing Planning involves setting objectives and targets, and communicating these targets to people responsible to achieve them. It also involves careful examination of all strategic issues, including the business environment, the market itself, the corporate mission statement, competitors, and organisational capabilities.

 

INTRODUCTION

A marketing plan is a comprehensive document or blueprint that outlines the advertising and marketing efforts for the coming year. It describes business activities involved in accomplishing specific marketing objectives within a set time frame. A marketing plan also includes a description of the current marketing position of a business, a discussion of the target market and a description of the marketing mix that a business will use to achieve their marketing goals. A marketing plan has a formal structure, but can be used as a formal or informal document which makes it very flexible. It contains some historical data, future predictions, and methods or strategies to achieve the marketing objectives. Marketing plans start with the identification of customer needs through a market research and how the business can satisfy these needs while generating an acceptable return.^[1] This includes processes such as market situation analysis, action programs, budgets, sales forecasts, strategies and projected financial statements. A marketing plan can also be described as a technique that helps a business to decide on the best use of its resources to achieve corporate objectives. It can also contain a full analysis of the strengths and weaknesses of a company, its organization and its products.^[2]

The marketing plan shows the step or actions that will be utilized in order to achieve the plan goals. For example, a marketing plan may include a strategy to increase the business's market share by fifteen percent. The marketing plan would then outline the objectives that need to be achieved in order to reach the fifteen percent increase in the business market share.^[3] The marketing plan can be used to describe the methods of applying a company's marketing resources to fulfill marketing objectives.^[2] Marketing planning segments the markets, identifies the market position, forecast the market size, and plans a viable market share within each market segment. Marketing planning can also be used to prepare a detailed case for introducing a new product, revamping current marketing strategies for an existing product or put together a company marketing plan to be included in the company corporate or business plan.

 

Marketing Planning Process

Marketing planning process is a series of stages that are usually followed in a sequence. Organisations can adapt their marketing plan to suit the circumstances and their requirements. Marketing planning process involves both the development of objectives and specifications for how to achieve the objectives.

Following are the steps involved in a marketing plan.

1) Mission

Mission is the reason for which an organisation exists. Mission statement is a straightforward statement that shows why an organisation is in business, provides basic guidelines for further planning, and establishes broad parameters for the future. Many of the useful mission statements motivates staff and customers.

2) Corporate Objectives

Objectives are the set of goals to be achieved within a specified period of time. Corporate objectives are most important goals the organisation as a whole wishes to achieve within a specified period of time, say one or five years.

All the departments of an organisation including marketing department works in harmony to achieve the corporate objectives of the organisation. Marketing department must appreciate the corporate objectives and ensure its actions and decisions support the overall objectives of the organisation.

Mission statement and corporate objectives are determined by the top level management (including Board of Directors) of the organisation. The rest of the steps of marketing planning process are performed by marketing department. All the actions and decisions of the marketing department must be directed to achieve organisation mission and its corporate objectives.

3) Marketing Audit

Marketing audit helps in analysing and evaluating the marketing strategies, activities, problems,  goals, and results. Marketing audit is done to check all the aspects of business directly related to marketing department. It is done not only at the beginning of the marketing planning process but, also at a series of points during the implementation of plan. The marketing audit clarifies opportunities and threats, so that required alterations can be done to the plan if necessary.

4) SWOT Analysis

The information gathered through the marketing audit process is used in development of SWOT Analysis. It is a look at organisation's marketing efforts, and its strengths, weaknesses, opportunities, and threats related to marketing functions.

Strengths and Weaknesses are factors inside the organisation that can be controlled by the organisation. USP of a product can be the example of strength, whereas lack of innovation can be the example of weakness.

Opportunities and Threats are factors outside the organisation which are beyond the direct control of an organisation. Festive season can be an example of opportunity to make maximum sales, whereas increasing FDI in a nation can be the example of threat to domestic players of that nation.

5) Marketing Assumptions

A good marketing plan is based on deep customer understanding and knowledge, but it is not possible to know everything about the customer, so lot of different things are assumed about customer.

For example :-

Target Buyer Assumptions - assumptions about who the target buyers are.

Messaging/Offering Assumptions - assumptions about what customers think are the most important features of product to be offered.

6) Marketing Objectives and Strategies

After identification of opportunities and challenges, the next step is to develop marketing objectives that indicate the end state to achieve. Marketing objective reflects what an organisation can accomplish through marketing in the coming years.

 

Objective identify the end point to achieve. Marketing strategies are formed to achieve the marketing objectives. Marketing strategies are formed to determine how to achieve those end points. Strategies are broad statements of activities to be performed to achieve those end points.

7) Forecast the Expected Results

Marketing managers have to forecast the expected results. They have to project the future numbers, characteristics, and trends in the target market. Without proper forecasting, the marketing plan could have unrealistic goals or fall short on what is promised to deliver.

Forecasting Customer Response - Marketing managers have to forecast the response that the average customers will have to marketing efforts. Without some idea how the marketing will be received, managers can't accurately plan the promotions.

Forecasting Marketing cost - To make the marketing plan stronger, accurate forecast of marketing cost is required to be done.

Forecasting the Market - To accurately forecast the market, marketing managers have to gain an intimate understanding of customers, their buying behaviour, and tendencies.

Forecasting the Competition - Forecast of competition like - what they market, how they market, what incentives they use in their marketing can help to counter what they are doing.

 8) Create Alternative Plan

A alternate marketing plan is created and kept ready to be implement at the place of primary marketing plan if the whole or some part of the primary marketing plan is dropped.

9) Marketing Budget

The marketing budget is the process of documenting the expected costs of the proposed marketing plan. One common method to allocate marketing budgeting is based on a percentage of revenue. Other methods are - comparative, all you can afford, and task method.

10) Implementation and Evaluation

At this stage the marketing team is ready to actually start putting their plans into action. This may involve spending money on advertising, launching new products, interacting with potential new customers, opening new retail outlets etc.

The marketing planning process is required to be evaluated and updated regular. Regular evaluation of marketing efforts helps in achieving marketing goals.

 

OUTLINE-

 

Outline

A marketing plan should be based on where a company needs to be at some point in the future. These are some of the most important things that companies need when developing a marketing plan:

 

Market research: Gathering and classifying data about the market the organization is currently in. Examining the market dynamics, patterns, customers, and the current sales volume for the industry as a whole.[3]

Competition: The marketing plan should identify the organization's competition. The plan should describe how the organization will stick out from its competition and what it will do to become a market leader.

Market plan strategies: Developing the marketing and promotion strategies that the organization will use. Such strategies may include advertising, direct marketing, training programs, trade shows, website, etc.[3]

Marketing plan budget: Strategies identified in the marketing plan should be within the budget. Top managers need to revise what they hope to accomplish with the marketing plan, review their current financial situation, and then allocate funding for the marketing plan.[3]

Marketing goals: The marketing plan should include attainable marketing goals. For example, one goal might be to increase the current client base by 100 over a three-month period.[3]

4P's of Marketing Mix.jpg

Marketing Mix: The marketing plan should evaluate the appropriate marketing mix. This includes setting up the marketing 4 P's the product, price, place, and promotion. These four elements are modified until the best combination have been found that will cater the needs of the product's customer that would result to the maximum profitability of the company.

Monitoring of the marketing plan results: The marketing plan should include the process of analyzing the current position of the organization. The organization needs to identify the strategies that are working and those that are not working.[3]

 Purpose

One of the main purposes of developing a marketing plan is to set the company on a specific path in marketing. The marketing goals normally aligns itself to the broader company objectives. For example, a new company looking to grow their business will generally have a marketing plan that emphasizes strategies to increase their customer base.[4] Acquiring marketing share, increasing customer awareness, and building a favorable business image are some of the objectives that can be related to marketing planning. The marketing plan also helps layout the necessary budget and resources needed to achieve the goals stated in the marketing plan. The marketing plan shows what the company is intended to accomplish within the budget and also to make it possible for company executives to assess potential return on the investment of marketing dollars. Different aspects of the marketing plan relate to accountability.[4] The marketing plan is a general responsibility from company leaders and the marketing staff to take the company in a specific direction. After the strategies are laid out and the tasks are developed, each task is assigned to a person or a team for implementation

 Medium-sized and large organization

The main contents of a marketing plan are:^[9]

1.   Executive Summary

2.   Situational Analysis

3.   Opportunities / Issue Analysis - SWOT Analysis

4.   Objectives

5.   Marketing Strategy

6.   Action Program (the operational marketing plan itself for the period under review)

7.   Financial Forecast

8.   Controls

In detail, a complete marketing plan typically includes:^[9]

1.   Title Page

2.   Executive Summary

3.   Current Situation - Macroenvironment

o    Economic State

o    Legal State

o    Governmental State

o    Technological State

o    Ecological State

o    Sociocultural State

o    Supply chain State

4.   Current Situation - Market Analysis

o    Market definition

o    Market size

o    Market segmentation

o    Industry structure and strategic groupings

o    Porter 5 forces analysis

o    Competition and market share

o    competitors' strengths and weaknesses

o    Market trends

5.   Current Situation  - Consumer Analysis ^[10]

o    Nature of the buying decision

o    Participants

o    Demographics

o    Psychographics

o    Buyer motivation and expectations

o    Loyalty segments

6.   Current Situation  - Internal

o    Company Resources

§  Finances

§  People (workforce)

§  Time

§  Skills

o    Objectives

§  Mission statement and Vision statement

§  Corporate objectives

§  Financial objective

§  Marketing objectives

§  Long term objectives

§  Description of the basic business philosophy

o    Corporate Culture (Organizational Culture)

7.   Summary of Situation Analysis

o    External threats

o    External opportunities

o    Internal strengths

o    Internal weaknesses

o    Critical success factors in the industry

o    Sustainable competitive advantage

8.   Marketing Research

o    Information requirements

o    Research methodology

o    Research results

9.   Marketing Strategy - Product

o    Unique selling proposition (USP)

o    Product mix

o    Product strengths and weaknesses

§  Perceptual mapping

o    Product life cycle management and new product development

o    Brand name, brand image, and brand equity

o    Augmented product

o    Product portfolio analysis

§  B.C.G. Analysis

§  Contribution margin analysis

§  G.E. Multi Factoral analysis

§  Quality Function Deployment

10. Marketing Strategy ^[11] - segmented marketing actions and market share objectives

o    By product

o    By customer segment

o    By geographical market

o    By distribution channel

11. Marketing Strategy - Price

o    Pricing objectives

o    Pricing method (e.g.: cost plus, demand based, or competitor indexing)

o    Pricing strategy (e.g.: skimming, or penetration)

o    Discounts and allowances

o    Price elasticity and customer sensitivity

o    Price zoning

o    break even analysis at various prices

12. Marketing Strategy - Promotion

o    Promotional goals

o    Promotional Mix

o    Advertising reach, frequency, flights, theme, and media

o    Sales force requirements, techniques, and management

o    Sales promotion

o    Publicity and public relations

o    Electronic Promotion (e.g.: web, or telephone)

o    Word of Mouth marketing

o    Viral Marketing

13. Marketing Strategy - Distribution

o    Geographical coverage

o    Distribution channels

o    Physical distribution and logistics

o    Electronic distribution

14. Implementation

o    Personnel requirements

§  Assigning responsibilities

§  Giving incentives

§  Training on selling methods

o    Financial requirements

o    Management information systems requirements

o    Month-by-month agenda

§  Gantt chart using PERT or critical path analysis systems

o    Monitoring results and benchmarks

o    Adjustment mechanism

o    Contingencies (what ifs)

15. Financial Summary

o    Assumptions

o    Pro-forma monthly income statement

o    Contribution margin analysis

o    Breakeven analysis

o    Monte Carlo method

o    ISI: Internet Strategic Intelligence

16. Scenarios

o    Prediction of future scenarios

o    Plan of action for each scenario

17. Controls

o    Performance indicator

o    Feedback Mechanisms

18. Appendix

o    Pictures and specifications of products

o    Results from completed research

Use of marketing plans

A formal, written marketing plan is essential; in that it provides an unambiguous reference point for activities throughout the planning period. However, perhaps the most important benefit of these plans is the planning process itself. This typically offers a unique opportunity, a forum, for information-rich and productively focused discussions between the various managers involved. The plan, together with the associated discussions, then provides an agreed context for their subsequent management activities, even for those not described in the plan itself. Additionally, marketing plans are included in business plans, offering data showing investors how the company will grow and most importantly, how they will get a return on investment.

 These plans must therefore be:

·         Clear - They should be an unambiguous statement of 'exactly' what is to be done.

·         Quantified - The predicted outcome of each activity should be, as far as possible, quantified, so that its performance can be monitored.

·         Focused - The temptation to proliferate activities beyond the numbers which can be realistically controlled should be avoided. The 80:20 Rule applies in this context too.

·         Realistic - They should be achievable.

·         Agreed - Those who are to implement them should be committed to them, and agree that they are achievable. The resulting plans should become a working document which will guide the campaigns taking place throughout the organization over the period of the plan. If the marketing plan is to work, every exception to it (throughout the year) must be questioned; and the lessons learnt, to be incorporated in the next year's .