Marketing Planning

MARKETING PLANNING.

Introduction.

            A plan is a way of achieving something. Your revision plan is a way of helping to achieve success in business studies exams. In business, it is no different. If a business wants to achieve something, it is more likely to do so with a well-constructed and realistic plan.

What does planning involve?  Planning involves:

• Setting objectives, quantifying targets for achievement, and communicating these targets to people responsible for achieving them
• Selecting strategies, tactics, programmes etc for achieving the objectives.

The whole topic of planning brings with it some important terminology that it is worth spending time getting to know well. You will come across these terms many times in your study of marketing (and business studies in general):

Strategy

Strategy is the method chosen to achieve goals and objectives

Example: Our strategy is to grow sales and profits of our existing products and to broaden our business by introducing new products to our existing markets

Tactics

Tactics are the resources that are used in the agreed strategy

Example: We will use our widespread distribution via UK supermarkets to increase sales and existing products and introduce new products

Goals

Goals concern what you are trying to achieve. Goals provide the “intention” that influence the chosen actions

Example: Our goal is to achieve market leadership in our existing markets

Objectives

Objectives are goals that can be quantified

Examples:
- We aim to achieve a market share of 20% in our existing markets
- We aim to penetrate new markets by achieving a market share of at least 5% within 3 years
- We aim to achieve sales of growth of 15% per annum with our existing products

Aims

Aims are goals that cannot be measured in a reliable way. However, they remain important as a means of providing direction and focus.

Examples: We aim to delight our customers

Marketing is the process of developing and implementing a plan to identify, anticipate and satisfy consumer demand, in such a way as to make a profit. The two main elements of this plan are market research to identify and anticipate customer requirements and the planning of an appropriate marketing mix to meet these requirements. Market research involves gathering and recording information about consumers, market, product, and the competition in an organised way. The information is then analysed and used to inform marketing decisions. There are three main ways of gathering information for market research:
1.From internal information already held by an organisation, e.g. details of existing customers and their spending habits.
2. External primary information - i.e. information collected at first hand by interviewing customers and potential customers to get their views about a company, products and services.
3. External secondary information - using published sources of information e.g. those produced by marketing organisations about products, markets and brands.
Marketing planning can then be used:
1. To assess how well the organisation is doing in its markets.
2. To identify current strengths and weaknesses in these markets.
3. To establish marketing objectivesto be achieved in these markets.
4. To establish a marketing mix for each market designed to achieve organisational objectives.

Marketing Planning Process - Introduction

The extent to which each part of the above process needs to be carried out depends on the size and complexity of the business.

In a small or undiversified business, where senior management have a strong knowledge and detailed understanding of the overall business, it may not be necessary to formalise the marketing planning process.

By contrast, in a highly diversified business, top level management will not have knowledge and expertise that matches subordinate management. In this situation, it makes sense to put formal marketing planning procedures in place throughout the organisation.

From the diagram, the main components of a marketing plan can be summarised as:

Component of the plan	Description
Mission statement	A meaningful statement of the purpose and direction of the business
Corporate objectives	The overall business objectives that shape the marketing plan
Marketing audit	The way the information for marketing planning is organised. Assesses the situation of marketing in the business – the products, resources, distribution methods, market shares, competitors etc
Market analysis	The markets the business is in (and targeting) – size , structure, growth etc
SWOT analysis	An assessment of the firm’s current position, showing the strengths & weaknesses (internal factors) and opportunities and threats (external factors)
Marketing objectives and strategies	What the marketing function wants to achieve (consistent with corporate objectives) and how it intends to do it (e.g. Ansoff, Porter)
Marketing budget	Usually a detailed budget for the next year and an outline budget for the next 2-3 years
Action plan	The detailed implementation plan

Marketing planning - the mission statement

A strategic marketing plan starts with a clearly defined business mission.

Mintzberg defines a mission as follows:

“A mission describes the organisation’s basic function in society, in terms of the products and services it produces for its customers”.

A clear business mission should have each of the following elements:

Taking each element of the above diagram in turn, what should a good mission contain?

(1) A Purpose

Why does the business exist? Is it to create wealth for shareholders? Does it exist to satisfy the needs of all stakeholders (including employees, and society at large?)

(2) A Strategy and Strategic Scope

A mission statement provides the commercial logic for the business and so defines two things:

- The products or services it offers (and therefore its competitive position)
- The competences through which it tries to succeed and its method of competing

A business’ strategic scope defines the boundaries of its operations. These are set by management.

For example, these boundaries may be set in terms of geography, market, business method, product etc. The decisions management make about strategic scope define the nature of the business.

(3) Policies and Standards of Behaviour

A mission needs to be translated into everyday actions. For example, if the business mission includes delivering “outstanding customer service”, then policies and standards should be created and monitored that test delivery.

These might include monitoring the speed with which telephone calls are answered in the sales call centre, the number of complaints received from customers, or the extent of positive customer feedback via questionnaires.

(4) Values and Culture

The values of a business are the basic, often un-stated, beliefs of the people who work in the business. These would include:

• Business principles (e.g. social policy, commitments to customers)
• Loyalty and commitment (e.g. are employees inspired to sacrifice their personal goals for the good of the business as a whole? And does the business demonstrate a high level of commitment and loyalty to its staff?)
• Guidance on expected behaviour – a strong sense of mission helps create a work environment where there is a common purpose

What role does the mission statement play in marketing planning?

In practice, a strong mission statement can help in three main ways:
• It provides an outline of how the marketing plan should seek to fulfil the mission
• It provides a means of evaluating and screening the marketing plan; are marketing decisions consistent with the mission?
• It provides an incentive to implement the marketing plan

Marketing Objectives

Let’s face it.  Of the four main functional areas of a business, marketing has to be the most important!
Marketing is at the heart of a business.  Remember the definition of marketing:

“The process of identifying, anticipating (predicting) and satisfying customer needs profitably”

Almost every activity that a business undertakes can be linked back to this definition, whether it is:

Raising finance to support an investment in new product development

Introducing quality assurance and lean production to improve product profitability

Training staff to improve customer service standards

Ultimately, almost every functional activity or objective can be linked back to marketing.

A similar picture emerges when you consider how corporate objectives link to the functional objectives for marketing.

Typical corporate objectives might be to:

Be a market leader within 5 years

To grow market share by 5% in core markets

To become the most trusted and recognised brand in our industry

Each of these has a strong marketing element.

Marketing objectives need to be seen as part of a hierarchy of objectives, in the sense that they are shaped and informed by the corporate objectives.  A corporate objective influences a marketing objective, which in turn shapes the marketing strategies and marketing tactics employed:

Because marketing is involved in every aspect of a business, you often find that marketing objectives are wide-ranging.  There can also be a lot of them!  Some examples are provided below

Objective area	Example objectives
Maintaining or increasing market share	Achieve revenue growth of 15% per year for the next four years Increase our market share in the UK by 4% by 2012 Improve the online order conversion rate from 65% to 75% by 2011 Add 1,000 new customer accounts generating at least £100,000 per account within three years Become the market leader in the UK educational sector by 2013
Developing new products / innovation	Launch at least 25 new products into the industrial channel in 2010 and 2011 Grow average first-year sales of new editions by 25% in the Higher Education sector
Meeting the needs of customers	Achieve at least an 95% excellent customer service rating each month Increase the proportion of sales bookings from repeat business to 45% for the summer season
Entering a new market / market positioning	Supply a minimum of 50,000 trial downloads per month Increase the number of customer enquiries from the EU by 10,000 per month Recruit five suitable distribution agents in the four target countries within 12 months
Gaining an advantage over competitors	Reduce average distribution costs to less than 5% of gross revenue Reduce the order lead time by 15% Improve brand recognition amongst the 25-34 age group

Marketing planning - the link with strategy

Businesses that succeed do so by creating and keeping customers. They do this by providing better value for the customer than the competition.

Marketing management constantly have to assess which customers they are trying to reach and how they can design products and services that provide better value (“competitive advantage”).

The main problem with this process is that the “environment” in which businesses operate is constantly changing. So a business must adapt to reflect changes in the environment and make decisions about how to change the marketing mix in order to succeed. This process of adapting and decision-making is known as marketing planning.

Where does marketing planning fit in with the overall strategic planning of a business?

Strategic planning (which you will cover in your studies of “strategy” is concerned about the overall direction of the business. It is concerned with marketing, of course. But it also involves decision-making about production and operations, finance, human resource management and other business issues.

The objective of a strategic plan is to set the direction of a business and create its shape so that the products and services it provides meet the overall business objectives.

Marketing has a key role to play in strategic planning, because it is the job of marketing management to understand and manage the links between the business and the “environment”.

Sometimes this is quite a straightforward task. For example, in many small businesses there is only one geographical market and a limited number of products (perhaps only one product!).

However, consider the challenge faced by marketing management in a multinational business, with hundreds of business units located around the globe, producing a wide range of products. How can such management keep control of marketing decision-making in such a complex situation? This calls for well-organised marketing planning.

What are the key issues that should be addressed in marketing planning?

The following questions lie at the heart of any marketing (or indeed strategic) planning process:

• Where are we now?
• How did we get there?
• Where are we heading?
• Where would we like to be?
• How do we get there?
• Are we on course?

Why is marketing planning essential?

Businesses operate in hostile and increasingly complex environment. The ability of a business to achieve profitable sales is impacted by dozens of environmental factors, many of which are inter-connected. It makes sense to try to bring some order to this chaos by understanding the commercial environment and bringing some strategic sense to the process of marketing products and services.

A marketing plan is useful to many people in a business. It can help to:

• Identify sources of competitive advantage
• Gain commitment to a strategy
• Get resources needed to invest in and build the business
• Inform stakeholders in the business
• Set objectives and strategies
• Measure performance

Marketing planning - values and vision

Introduction to Values and Vision

Values form the foundation of a business’ management style. Values provide the justification of behaviour and, therefore, exert significant influence on marketing decisions.

Why are values important in marketing?

Many Japanese businesses have used the value system to provide the motivation to make them global market leaders. They have created an obsession about winning that is communicated at all levels of the business that has enabled them to take market share from competitors that appeared to be unassailable.

For example, at the start of the 1970’s Komatsu was less than one third the size of the market leader – Caterpillar – and relied on just one line of smaller bulldozers for most of its revenues. By the late 1980’s it had passed Caterpillar as the world leader in earth-moving equipment. It had also adopted an aggressive diversification strategy that led it into markets such as industrial robots and semiconductors.

If “values” shape the behaviour of a business, what is meant by “vision” and how does it relate to marketing planning?

To succeed in the long term, businesses need a vision of how they will change and improve in the future. The vision of the business gives it energy. It helps motivate employees. It helps set the direction of corporate and marketing strategy.

What are the components of an effective business vision? Davidson identifies six requirements for success:

- Provides future direction
- Expresses a consumer benefit
- Is realistic
- Is motivating
- Must be fully communicated
- Consistently followed and measured

Marketing plan - how to write

A customer focused business ethos is a proven method to increase the chances of a sustainable and profitable future. The marketing planning process is at the heart of any truly marketing orientated company, and ensures the customer is at the center of all key decisions.

The plan is a detailed written document which can be used to promote a single product, of form the annual business strategy. We have split the marketing plan into three steps, which are easy to follow and equally relevant to both small and large businesses.

Stage 1: Research and planning

Understand your customer and the marketing environment, look for opportunities for growth.

Stage 2: Developing your marketing strategy

Identify objectives and choose the right path to exploit opportunities highlighted in the research stage.

Stage 3: Determining actions and controls

Implement your strategy and track success.

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The marketing planning process is summarised in the diagram below

Marketing plan

The marketing plan should provide direction for all relevant members of the organization and should be referred to and updated throughout the year. The main purpose of the marketing plan is to provide a structured approach to help marketing managers consider all the relevant elements of the planning process.

Stage 1: Research & planning

This section includes the following:

Statement of your current situation and scope of the plan

Research into potential / current customers

Examining the marketing environment

Identifying opportunities for growth

a.      Current business situation

Summarise your current position, possible items include:

Financial results

Sale figures and trends

Market share

Customer satisfaction

Level of repeat business

The marketing environment

Examining both the internal and external marketing environments can identify both opportunities and threats to the business and is a core component of the plan. The whole area is usually broken down into the macro, micro and internal environments as summarised in the diagram below.

The marketing environment

The macro-environment

A commonly used method of quantifying the macro external environment is with a PEST analysis. PEST is an acronym which divides the macro-environment into four areas – Political, Economic, Social, and Technological, examples of which are explained below.

Political environmental factors

Trading agreements

Tax rules

Employment regulation

Environmental legislation

Legal issues

Economic environmental factors

Recession

Interest rates

Exchange rates

Rate of inflation

Population wealth

Growth of the housing market

Social environmental factors

'Green' behaviour

Eating habits

Shifts in attitude

Population demographics

Attitudes to career

Technological environmental factors

Emergence of new communications channels

Improved production processes

Advances in computing and the internet

New technologies such as electric vehicles

Automation

Reduced cost of materials

Micro-environment

The micro-environment includes factors which are still not directly under the control of the company, but more directly relevant to strategy such as consumer trends, stakeholders, suppliers and competitors. Some example items are listed below.

Summary of your market segment

Market growth, trends and competition

Potential new markets

Direction from shareholders

Supplier costs and service quality

Changes in consumer behaviour

Understanding your customers and market

Ensuring a thorough knowledge of the consumer is vital for successful marketing planning. Use the primary and secondary (first and second hand) market research information at your disposal to describe your customer. As your understanding of the audience improves, you'll be able to design products which cater for their needs better, and you will be able to communicate with them more directly. If you have a broad customer base, you might need to split your customers into groups (segmentation). Some examples are shown below.

Typical customer demographics

Customer profile

Market size

Market geography

Understanding your competitors

Who are your competitors?

What are they likely to be doing?

Strengths

Weaknesses

Reputation and brand equity

How are they using the marketing mix?

Infrastructure and supply chain

Product strategy

Competitor analysis

Internal environment

The internal marketing environment includes factors that the business can directly influence. This can include:

The organisational structure

The strengths and weaknesses of a department

Financial stability and resources

Staff morale

Spare production capacity

Client base

Pricing structure

Selling channels

Staff skills

Identifying opportunities in the marketing environment

Once you have completed the internal and external environmental audit, you can summarise your findings using a SWOT analysis which can be used to make key decisions.

SWOT analysis

A 'SWOT analysis' is a useful way of summarizing the results of the environmental audit and presenting the current status of a business. SWOT simply stands for the Strengths, Weaknesses, Opportunities and Threats which have emerged from examining the macro, micro and internal marketing environments.

Marketing environment

For example, here is a SWOT analysis for a fictional electric car manufacturer

Strengths Our electric motors are cheap to produce and maintenance free Charge time is class leading Production capacity can be increased R&D department is class leading	Weaknesses Batteries are heavy, slow to charge and provide limited mileage Dealer network is small Customer trust in the segment is low Market is highly competitive
Opportunities Government grants are available Road tax breaks for electric cars Market is growing rapidly Battery technology is evolving	Threats Tesla has secured a large government grant The big players are investing heavily Hybrid and diesel technology is evolving fast

Stage 2: Marketing strategy

This section includes the following elements:

Development of a mission statement

Statement of objectives

Strategy and tactics to accomplish the objectives

Mission statement

Your mission statement is a formal commitment and focus for the business. It should explain to customers concisely what the nature of your business is and where you are going, and also provide a motivational tool for employees. It should be aspirational, something to strive for, yet obtainable and relevant. Once this has been defined it should form the focus for your business strategy.

Vision statement

A vision statement is a more long term, ideal-world statement which outlines where you would like to take the business in the long run.

Objectives

Combined with the mission statement, your objectives should be the key statements that drive your business. The most successful goals follow the SMART acronym. Specific, measurable, achievable, realistic and time bound.

What do you want to achieve by the end of this year?

Where do you want to be in one, five, ten years?

Objectives must be quantitative in order to measure success accurately. For example, 'sell 600 units in the next year' or 'increase customer retention by 20%'.

Selecting a suitable strategy

Developing a strategy for growth - the Ansoff Matrix

Most businesses need to grow, and the Ansoff Matrix (below) is a method of determining the best course of action if growth is your priority.

The Ansoff matrix

Market penetration

Increasing market share in a current market with a current product.

Example tactics:

Aggressive pricing policy (see 'cost leadership' in Porter's model)

Re-branding

Increasing marketing spend

Porter's model

Market development

Taking existing products into new markets

Example tactics:

Finding a new use for an existing product

Expanding the distribution network

Strategic partnerships in international markets

Product development

Developing a new product for a market that you have already entered

Example tactics:

Creating a range of similar products, for example, shaving foam if you are already manufacturing razors

Diversification

Developing a new product for a completely new market

Example tactics:

Market research

Product research and development

Developing a pricing strategy

Once you have determined the product and market you want to be in, the next problem will be setting a price. Porter's model discusses three strategies for competitive advantage based on price.

Three generic strategies for competitive advantage - Porter's model

Cost leadership: A good quality product at a lower price than the competitors

Differential strategy: A product or service which is perceived as unique within a particular market

Focus strategy: Delivering focused attention to a particular segment to deliver service which competitors cannot compete

Determining which products to invest in

If you have a range of products, it is likely that some will do better than others. The Boston Consultancy Group matrix is a method of determining which to invest in, and which to drop, shown below.

The Boston Consultancy Group matrix

Stars

High growth products with a strong market presence. Probably need high investment to maintain position.

Cash cows

Low growth products with a high market share. Probably don't need much investment, but require management to maintain profitability.

Question marks

Products which have potential, but may require investment to yield decent profits.

Dogs

There are rarely worth investing in. Dogs should at least break even to be retained.

Tactics - the marketing mix

The marketing mix is a selection of customer focused business elements which work together as a toolkit to market your product or service. The tactical section of a marketing plan summarises how you intend to use each element of the marketing mix, which can be summarised in seven 'Ps' as shown in the illustration below.

The marketing mix (7 P model)

Product

Product refers to the items you are selling or service you are providing. Your product based tactics link back to your overall strategy - if your strategy is market penetration (see the Ansoff matrix), then there may be little need to do anything to the product. However, if you have chosen product development or diversification then a certain amount of research and development, and product design will be needed.

Should the product be premium, or good value? Disposable or last a lifetime? Fast or slow? How will it be packaged? Where will it be made? Is it environmentally sound?

Price

Pricing is one of the most important factors when deciding your marketing tactics, which could involve the following:

Skimming – low market penetration, high pricing strategy for premium products

Comparable pricing – if you are not the market leader, competitors will have set a price expectation which can be followed

Market penetration strategy – deliberately low pricing in order to enter or control a market quickly.

Place

Place refers to the method of getting your product to the consumer - this could be a dealership or an online shop.

How will you attract more retailers to sell your product? How will you maintain a premium appearance? How will your distribution network function? How many countries should you operate in?

Promotion

Promotion is much more than just advertising - this is the discipline of marketing communications.

What is your branding strategy? Which promotional channels will you use? How will you divide up the budget? Will billboards work better than TV ads? What should be the discount for special offers? How will you generate positive PR? Should you out-source the creative work?

People

People refers to all the customer facing staff in your organisation, not just the sales staff.

What training do they require? Do they know the products well? How much commission should they get? Should you out-source? Do they need a uniform? What incentives can you give?

Process

Process refers to the procedures which are followed when delivering a service to a customer.

For example, for a hotel - how are customers greeted? Who takes the baggage to the room? When are the rooms cleaned? What time is breakfast?

This element of the marketing mix should also include your customer relationship management (CRM) process, or in other words, how you manage customers through the purchasing funnel.

Physical evidence

This element of the marketing mix is mostly used to promote services. If you're not selling anything tangible, how will people know what they're getting?

This is where physical evidence becomes important. Examples of physical evidence include a brochure for a holiday tour, customer testimonials for a dentist, or a portfolio for a website design company.

Segmentation, targeting & positioning

When using the marketing mix, it is important to keep in mind the three generic stages of marketing - segmentation, targeting and positioning. Segmentation is the detailed breakdown of your customers into as much detail as practical, targeting then ensures all elements of the mix are tailored to your identified consumer group. Positioning is the process of ensuring potential and current customers perceive your company in the intended way

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Stage 3: Actions, measurement and controls

How will you monitor progress? Who will do which jobs? When will each element be completed? How will you adjust the plan? What will be the budget? This section discusses action plans, controls, measurements and reporting.

Actions

Developing an action plan

An action plan is core to the marketing process – a constantly evolving document which is cascaded to the relevant people and monitored regularly. Most action plans are relatively short term documents which focus on the coming year, but longer term implications should also be considered.

Action planning is a stages approach:

Clarify goals, and ensure they are SMART

Link back to your objectives and tactics

Set criteria for success

Prioritize

Set timings

Determine who will complete each action point

Monitor the progress of the plan and review regularly

Measurements, controls and reporting

The final stage of the action plan is the implementation of measurements and controls and reporting results. Many models for monitoring the performance of businesses have emerged, many of which address the needs of key stakeholders and allow them to evaluate the overall success of a company.

The balanced scorecard approach for monitoring company performance

The balanced scorecard approach is a widely used method of monitoring overall performance and ensuring daily work is focused on the strategic objectives. The scorecard is a "strategic planning and management system…which is used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals". This approach encourages open communication throughout the business and allows tracking of performance throughout the year.

Traditionally, businesses have tracked success based on just one measure – financial results. However, the scorecard system views the business from four external perspectives to gain a more relevant approach to performance metrics.

Learning & growth – how you are innovating and improving to meet your goals

Business process – how critical processes are measuring up

Customer perspective – usually measured in terms of time, quality, performance and cost

Financial perspective – financial performance from the stakeholder point of view

Each element is tracked using four items, which are listed individually:

Objectives - as identified in stage 2 of the marketing planning process

Measures - how will success be measured?

Targets - specific quantifiable targets

Initiatives - how to make the targets more readily achievable

Key performance indicators (KPIs)

Depending on your industry, you may also have certain specific metrics which determine success, these could include:

Market share analysis

Sales analysis

Quality control

Financial results

Market research

Marketing information systems

CRM - New customers acquired, retention

Service levels

Brand awareness

Competitor performance

Benchmarking

Profitability

Gap analysis

Gap analysis is another useful tool which answers two questions: Where are you? Where do you want to be? It can be useful to identify where you are with the following facets of the business:

Organisation

Business direction and marketing mix

Business processes

Information technology

Requirements vs capability

Market potential vs existing usage

Your business vs competition

Feedback

Now that you have an accurate picture your plan's success it isimportant to feedback this information in order to fine tune the strategy and update your actions accordingly.

Final words

The marketing planning process is a comprehensive method for examining your business, your market and the environment in order to develop a strategy to exploit opportunities. This is a vital process which should be used by almost every company to ensure a profitable and sustainable future.

Marketing planning aims and objectives

Behind the corporate objectives, which in themselves offer the main context for the marketing plan, will lie the "corporate mission," which in turn provides the context for these corporate objectives. In a sales-oriented organization, the marketing planning function designs incentive pay plans to not only motivate and reward frontline staff fairly but also to align marketing activities with corporate mission. The marketing plan basically aims to make the business provide the solution with the awareness with the expected customers.
This "corporate mission" can be thought of as a definition of what the organization is, or what it does: "Our business is ...". This definition should not be too narrow, or it will constrict the development of the organization; a too rigorous concentration on the view that "We are in the business of making meat-scales," as IBM was during the early 1900s, might have limited its subsequent development into other areas. On the other hand, it should not be too wide or it will become meaningless; "We want to make a profit" is not too helpful in developing specific plans.

Detailed plans and programs

At this stage,you will need to develop your overall marketing strategies into detailed plans and program. Although these detailed plans may cover each of the 7 Ps (marketing mix), the focus will vary, depending upon your organization's specific strategies. A product-oriented company will focus its plans for the 7 Ps around each of its products. A market or geographically oriented company will concentrate on each market or geographical area. Each will base its plans upon the detailed needs of its customers, and on the strategies chosen to satisfy these needs. Brochures and Websites are used effectively.
Again, the most important element is, indeed, that of the detailed plans, which spell out exactly what programs and individual activities will take place over the period of the plan (usually over the next year). Without these specified — and preferably quantified — activities the plan cannot be monitored, even in terms of success in meeting its objectives. It is these programs and activities which will then constitute the "marketing" of the organization over the period. As a result, these detailed marketing programs are the most important, practical outcome of the whole planning process. 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.
• 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.

Content of the marketing plan

A marketing plan for a small business typically includes Small Business Administration Description of competitors, including the level of demand for the product or service and the strengths and weaknesses of competitors

1. Description of the product or service, including special features
2. Marketing budget, including the advertising and promotional plan
3. Description of the business location, including advantages and disadvantages for marketing
4. Pricing strategy
5. Market Segmentation

Medium-sized and large organizations

The main contents of a marketing plan are:^[4]

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:^[4]

1. Title Page
2. Executive Summary
3. Current Situation - Macroenvironment
• economy
• legal
• government
• technology
• ecological
• sociocultural
• supply chain
4. Current Situation - Market Analysis
• market definition
• market size
• market segmentation
• industry structure and strategic groupings
• Porter 5 forces analysis
• competition and market share
• competitors' strengths and weaknesses
• market trends
5. Current Situation  - Consumer Analysis ^[5]
• nature of the buying decision
• participants
• demographics
• psychographics
• buyer motivation and expectations
• loyalty segments
6. Current Situation  - Internal
• company resources
• financial
• people
• time
• skills
• objectives
• mission statement and vision statement
• corporate objectives
• financial objective
• marketing objectives
• long term objectives
• description of the basic business philosophy
• corporate culture
7. Summary of Situation Analysis
• external threats
• external opportunities
• internal strengths
• internal weaknesses
• Critical success factors in the industry
• our sustainable competitive advantage
8. Marketing Research
• information requirements
• research methodology
• research results
9. Marketing Strategy - Product
• product mix
• product strengths and weaknesses
• perceptual mapping
• product life cycle management and new product development
• Brand name, brand image, and brand equity
• the augmented product
• product portfolio analysis
• B.C.G. Analysis
10.   Marketing Strategy ^[6] - segmented marketing actions and market share objectives

• by product
• by customer segment
• by geographical market
• by distribution channel

·  Marketing Strategy - Price

• pricing objectives
• pricing method (e.g.: cost plus, demand based, or competitor indexing)
• pricing strategy (e.g.: skimming, or penetration)
• discounts and allowances
• price elasticity and customer sensitivity
• price zoning
• break even analysis at various prices

·  Marketing Strategy - Promotion

• promotional goals
• promotional mix
• advertising reach, frequency, flights, theme, and media
• sales force requirements, techniques, and management
• sales promotion
• publicity and public relations
• electronic promotion (e.g.: web, or telephone)
• word of mouth marketing (buzz)
• viral marketing

·  Marketing Strategy - Distribution

• geographical coverage
• distribution channels
• physical distribution and logistics
• electronic distribution

·  Implementation

• personnel requirements
• assign responsibilities
• give incentives
• training on selling methods
• financial requirements
• management information systems requirements
• month-by-month agenda
• PERT or critical path analysis
• monitoring results and benchmarks
• adjustment mechanism
• contingencies (what ifs)

·  Financial Summary

• assumptions
• pro-forma monthly income statement
• contribution margin analysis
• breakeven analysis
• Monte Carlo method
• ISI: Internet Strategic Intelligence

·  Scenarios

• prediction of future scenarios
• plan of action for each scenario

·  Appendix

• pictures and specifications of the new product
• results from research already completed

Measurement of progress

The final stage of any marketing planning process is to establish targets (or standards) so that progress can be monitored. Accordingly, it is important to put both quantities and timescales into the marketing objectives (for example, to capture 20 percent by value of the market within two years) and into the corresponding strategies.
Changes in the environment mean that the forecasts often have to be changed. Along with these, the related plans may well also need to be changed. Continuous monitoring of performance, against predetermined targets, represents a most important aspect of this. However, perhaps even more important is the enforced discipline of a regular formal review. Again, as with forecasts, in many cases the best (most realistic) planning cycle will revolve around a quarterly review. Best of all, at least in terms of the quantifiable aspects of the plans, if not the wealth of backing detail, is probably a quarterly rolling review — planning one full year ahead each new quarter. Of course, this does absorb more planning resource; but it also ensures that the plans embody the latest information, and — with attention focused on them so regularly — forces both the plans and their implementation to be realistic.
Plans only have validity if they are actually used to control the progress of a company: their success lies in their implementation, not in the writing'.

Performance analysis

he most important elements of marketing performance, which are normally tracked, are:

Sales analysis

Most organizations track their sales results; or, in non-profit organizations for example, the number of clients. The more sophisticated track them in terms of 'sales variance' - the deviation from the target figures — which allows a more immediate picture of deviations to become evident.
`Micro-analysis', which is simply the normal management process of investigating detailed problems, then investigates the individual elements (individual products, sales territories, customers and so on) which are failing to meet targets.

Market share analysis

Few organizations track market share though it is often an important metric. Though absolute sales might grow in an expanding market, a firm's share of the market can decrease which bodes ill for future sales when the market starts to drop. Where such market share is tracked, there may be a number of aspects which will be followed:

• overall market share
• segment share — that in the specific, targeted segment
• relative share

Expense analysis

The key ratio to watch in this area is usually the `marketing expense to sales ratio'; although this may be broken down into other elements (advertising to sales, sales administration to sales, and so on).

Financial analysis

The "bottom line" of marketing activities should at least in theory, be the net profit (for all except non-profit organizations, where the comparable emphasis may be on remaining within budgeted costs). There are a number of separate performance figures and key ratios which need to be tracked:

• gross contribution<>net profit
• gross profit<>return on investment
• net contribution<>profit on sales

There can be considerable benefit in comparing these figures with those achieved by other organizations (especially those in the same industry); using, for instance, the figures which can be obtained (in the UK) from `The Centre for Interfirm Comparison'. The most sophisticated use of this approach, however, is typically by those making use of PIMS (Profit Impact of Management Strategies), initiated by the General Electric Company and then developed by Harvard Business School, but now run by the Strategic Planning Institute.
The above performance analyses concentrate on the quantitative measures which are directly related to short-term performance. But there are a number of indirect measures, essentially tracking customer attitudes, which can also indicate the organization's performance in terms of its longer-term marketing strengths and may accordingly be even more important indicators. Some useful measures are:

• market research — including customer panels (which are used to track changes over time)
• lost business — the orders which were lost because, for example, the stock was not available or the product did not meet the customer's exact requirements
• customer complaints — how many customers complain about the products or services, or the organization itself, and about what

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.

Budgets as managerial tools

The classic quantification of a marketing plan appears in the form of budgets. Because these are so rigorously quantified, they are particularly important. They should, thus, represent an unequivocal projection of actions and expected results. What is more, they should be capable of being monitored accurately; and, indeed, performance against budget is the main (regular) management review process.
The purpose of a marketing budget is, thus, to pull together all the revenues and costs involved in marketing into one comprehensive document. It is a managerial tool that balances what is needed to be spent against what can be afforded, and helps make choices about priorities. It is then used in monitoring performance in practice.
The marketing budget is usually the most powerful tool by which you think through the relationship between desired results and available means. Its starting point should be the marketing strategies and plans, which have already been formulated in the marketing plan itself; although, in practice, the two will run in parallel and will interact. At the very least, the rigorous, highly quantified, budgets may cause a rethink of some of the more optimistic elements of the plans.

Controls in a Marketing Plan

To maximize the return on a marketing plan, there need to be controls in place to monitor the plan's progress. As a marketing plan moves along, the controls are constantly analyzed to determine how the plan's actual performance compares to the projections. Any changes that need to be made are done based on the analysis of marketing controls. Understanding what the controls in a marketing plan are will help you develop effective performance measurement indicators.

Customer Feedback

Marketing is designed to persuade consumers to purchase a product or invest in a service. One control put into place in any marketing plan is the monitoring of customer feedback through polls and surveys. You can reach customers indirectly by hosting online polls on the Internet that ask specific questions about your latest marketing plan. Conversely, surveys can be done with marketing groups or via individual interviews by phone or in person. Adjust your marketing plan according to the results of your research. For example, if your marketing campaign includes a new company mascot and customer feedback indicates that the mascot is not popular, then the mascot should be removed from the marketing plan.

Target Market Sales

Sales can be measured in units sold, revenue generated or profit amount. Each marketing plan sets out to determine the effect of the plan on the target market. Once again, this is done through market surveys or at the point of sale with the assistance of retail partners. Actual sales in the target market are compared to the marketing plan projections to see if any changes need to be made. For example, if the target market for a marketing plan is males ages 15 to 21, then the target market sales reports would monitor sales made to that group. If sales are down, then further market research needs to be done to see why the target audience is not responding to the marketing. In some cases, analyzing a demographic breakdown of sales may indicate that the initial target market was inaccurate and a new target market may emerge based on sales data.

Budgeting

A marketing budget is a balance between the cost of generating the advertising materials and the revenue created by the marketing plan. There are several controls in place that can be used to monitor a marketing budget, including print advertising expenses, travel expenses for trade shows, the cost of market research studies and internal personnel costs for the company's marketing department. All of these costs need to be closely monitored to minimize spending and maximize profitability. By examining expenses, you are able maintain your budget and see exactly where spending increases come from.

Market Share

Market share is that percentage of consumer sales dominated by your product. For example, you may have several competitors in a particular industry, with your product sales making up 15 percent of all product sold into that marketplace. In most cases, market share is broken down by product to get a comprehensive look at consumer patterns. A marketing plan outlines the market share of a product before the plan is in place, and then projects the changes to the marketplace when the plan is over. For example, your marketing plan may call for increasing market share of your newest product from 10 percent of all products sold to 15 percent. During the plan's timeline, there will be milestone percentages you will want to reach on your way to the 5 percent increase. For example, you may want to see a 3 percent market share increase at the halfway point of the marketing plan. If your analysis does not show a 3 percent increase by that point, then you need to analyze why the plan is falling short and what can be done to correct it.

External and internal analysis for your marketing plan

Understanding the environment your business operates in is a key part of planning, and will allow you to discern the threats and opportunities associated with your area of business. A PEST analysis helps you to identify the main opportunities and threats in your market:

• Political and legal changes such as new regulations
• Economic factors such as interest rates, exchange rates and consumer confidence
• Social factors such as changing attitudes and lifestyles, and the ageing population
• Technological factors such as new materials and growing use of the internet

You also need to understand your own internal strengths and weaknesses. For example, the main strengths of a new business might be an original product and enthusiastic employees. The main weaknesses might be the lack of an existing customer base and limited financial resources.

A SWOT analysis combines external and internal analysis to summarise your Strengths, Weaknesses, Opportunities and Threats. You need to look for opportunities that play to your strengths. You also need to decide what to do about threats to your business and how you can overcome important weaknesses.

For example, your SWOT analysis might help you identify the most promising customers to target. You might decide to look at ways of using the internet to reach customers. And you might start to investigate ways of raising additional investment to overcome your financial weakness.

SWOT Analysis

SWOT is an acronym used to describe the particular Strengths, Weaknesses, Opportunities, and Threats that are strategic factors for a specific company. A SWOT analysis should not only result in the identification of a corporation’s core competencies, but also in the identification of opportunities that the firm is not currently able to take advantage of due to a lack of appropriate resources.