Marketing Plan

Marketing Management Module-1 Lesson # 6 Marketing Plan

Meeting competition, protecting market share and achieving profits at the business unit level are its concerns. The task of marketing planning is to spot the needs of various segments of consumers in a given business, translate the needs into suitable products and make the required profits at the unit level. Marketing planning and marketing strategy accomplish this purpose.

Tasks of Marketing planning • 2. 3. 4. 5. 6. 7.

Tasks involved in marketing planning are: Analysing the marketing environment and spotting the opportunities and threats; Internal appraisal; Setting the marketing objectives of the unit; Formulating the marketing strategy of the unit; Developing detailed marketing plans and programs; Formulating the marketing budget.

1. Analysing the marketing environment and spotting the opportunities and threats •

Firstly, the marketing planner surveys his marketing environment. The main purpose of this exercise is to find out:

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the favorable and unfavorable factors prevailing/emerging in the environment; and

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the specific business opportunities available to the business unit and their relative attractiveness.

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The marketing planner analyses the mega environment as well as the environment closer to his business unit. The latter includes the market, the customer, the industry and the competition.

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Through detailed environmental analysis, the marketing planner develops an Opportunity Threat Profile(O-T). Marketing research and marketing information system provide much of the input needed in this regard.

2. Internal appraisal: •

The main tasks in internal appraisal are:

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Assessing the strength and weakness of the business unit: – – – – – –

Aspects to be covered in S-W analysis of a unit are to be assessed in the following functional areas: Marketing Finance Manufacturing/Operation R&D Human Resources General Factors: image of the unit, its relative priority, etc.

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Assessing the health and status of the different product lines, products and brands.

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Assessing the competitive advantages available to the unit.

3. Setting the marketing objectives of the unit: Marketing objectives of a business unit take the cue from the basic decisions taken at the corporate level regarding the future of the various businesses of the enterprise. A multi-business corporation decides the businesses that should be nurtured and developed, those businesses that should be merely maintained and the businesses that have to be phased out. • The objectives must be clear-cut, time bound and quantifiable. These include profits, sales volume, market share, productivity, research and development, and innovation. • Clarity is the foremost requisite in setting marketing objectives. It must make its intentions and desires clear and precise, definite and measurable.

4. Formulating the marketing strategy of the unit; •

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Marketing strategy formulation is the core of marketing planning. Marketing strategy realizes the marketing objectives. It is the strategy that renders a firm distinct from another and makes its offerings unique compared to those of its competitors. Again, it is the strategy that brings home the income and profits expected of the business. Marketing strategy involves mainly the following steps: • • •

Selecting a Target Market Positioning of the offer. Assembling the four Ps of Marketing mix in the best possible combination.

5. Developing detailed marketing plans and programs: Detailed functional plans will emanate from and be in tune with the marketing objectives and marketing strategy. The detailed plans are the instruments with which the firm translates board room strategy into a marketplace reality.

6. Formulating the marketing budget.

Like any other budget, marketing budget lays down all the details of income and expenditure related to marketing by the SBU and the surplus generated which should be in line with the marketing plans.

Marketing Plan The marketing plan is the central instrument for directing and coordinating the marketing effort. The marketing plan operates at two levels: The Strategic Marketing Plan layout the target markets, and the value proposition the firm will offer, based on the analysis of the best market opportunities. The Tactical Marketing Plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels and service.

• Teams develop the marketing plan with inputs and sign-offs from every important function. Management then implements these plans at the appropriate levels of the organization, monitors results and takes necessary corrective action. • Some corporations give their business units a lot of freedom to set their own sales and profit goals and strategies. Others set goals for their business units but let them develop their own strategies. Still others set the goals and participate in developing individual business unit strategies.

Corporate Planning Activities • • • • •

All corporate headquarters undertake four planning activities: Defining the corporate mission Establishing strategic business units Assigning resources to each SBU Assessing growth opportunities

Defining the corporate mission Organizations develop mission statements to share with managers, employees and customers. A clear thoughtful mission statement provides employees with a shared sense of purpose, direction and opportunity. Mission statements are at their best when they reflect a vision, an almost “ impossible dream” that provides a direction for the company for the next 10 to 20 years.

Defining the corporate mission(contd.) • Good mission statements have five major characteristics: • (1) they focus on a limited number of goals; • (2) they stress the company’s major policies and values; they narrow the range of individual discretion so that employees act consistently on important issues • (3) They define the major competitive spheres within which the company will operate. • (4) They take a long-term view. They should be enduring; management should change the mission only when it ceases to be relevant. • (5) It is as short, memorable and meaningful as possible.

Establishing strategic business units Large companies manage different types of businesses, each requiring its own strategy. This is done through Strategic Business units. An SBU has three characteristics: • It is a single business, or a collection of unrelated businesses, that can be planned separately from the rest of the company. • It has its own set of competitors. • It has a manager responsible for strategic planning and profit performance. The purpose of identifying the company’s SBUs is to develop separate strategies and assign appropriate funding.

Assigning resources to each SBU Once it has defined SBUs, management must decide how to allocate corporate resources to each. 1970s saw several portfolio planning models introduced to provide an analytical means for making investment decisions. In modern times, such models have fallen out of favour. More recent methods firms use to make internal investment decisions are based on shareholder value analysis, and whether market value of a company is greater with an SBU or without it (whether it is sold or spun off).

Assessing growth opportunities • This includes planning new businesses, downsizing, and terminating older businesses. • If there is a gap between future desired sales and projected sales, corporate management will need to develop or acquire new businesses to fill it.

Desired Sales

Strategic Planning Gap

owth r G n o i ificat Divers

rowth

Sales (in millions)

eG Integrativ

Intensive Growth

Current Portfolio 0

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2 3 Time (years)

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5

Assessing Growth Opportunities (contd.) • Lowest curve represents expected sales, highest curve desired sales and the gap between the two is the strategic planning gap which needs to be filled in. • The first option is to identify opportunities to achieve further growth within the current businesses (intensive opportunities) using market-penetration strategy. • Second is to build or acquire businesses that are related to current businesses (integrative opportunities) by market-development strategy and product-dev elopement strategy. • Third option is to identify opportunities to add attractive businesses unrelated to current businesses (diversification opportunities).

Marketing Plan A marketing plan is a written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives. It contains tactical guidelines for the marketing programs and financial allocations over the planning period. It is one of the most important outputs of the marketing process. Most marketing plans cover a one year period. Most frequently cited shortcomings of current marketing plans, are lack of realism, insufficient competitive analysis, and a short-run focus.

Contents of the Marketing Plan 1. Executive summary and Table of Contents. The marketing plan should open with a brief summary for senior management of the main goals and recommendations. The table of contents outlines the rest of the plan and all supporting and operational detail.

Contents of the Marketing Plan 2. Situation Analysis: This section presents relevant background data on sales, costs, the market, competitors, and the various forces in the macroenvironment. How do we define the market, how big it is, and how fast it is growing? What are the relevant trends? What is the product offering and what critical issues do we face?

Firms will use all this information to carry out a SWOT analysis.

Contents of the Marketing Plan 3. Marketing Strategy: Here the product manager defines the mission, marketing and financial objectives, and groups and needs that the market offerings are intended to satisfy. The manager then establishes the product line’s competitive positioning, which will inform the “game plan” to accomplish the plan’s objectives. All this requires inputs from other areas such as purchasing, manufacturing, sales, finance, and human resources.

Contents of the Marketing Plan 4. Financial Projections: Financial projections include a sales forecast, an expense forecast and a break-even analysis. On the Revenue Side, the projections show the forecasted sales volume, by month and product category. On the Expense Side, they show the expected costs of marketing, broken down into finer categories. The Break-even Analysis shows how many units the firm must sell monthly to off-set its monthly fixed costs and average per unit variable costs.

Contents of the Marketing Plan 5. Implementation Controls:This last section of the marketing plan outlines the controls for monitoring and adjusting implementation of the plan. It spells out the goals and budget for each month and quarter, so management can review each period’s results and take corrective action as needed. Firms must also take a number of different internal and external measures to assess progress and suggest possible modifications. Sometimes, contingency plans are included which outline steps the management would take in response to specific environmental developments, such as price wars or strikes. (Go through Sample Marketing Plan of MITHILA FOOD PRODUCTS LTD given on Page-57-58 of Kotler, Keller, Koshy and Jha)