Chapter 8
Marketing Plan
Authors: Prof. Keegan, Prof. Malcolm
Presenters: M. Azadi
M. Tabatabaei
Objectives
Marketing planning Tactical and Strategic Marketing Plans Marketing planning process Marketing audits Corporate Planning Assumptions Marketing Objectives Marketing Strategy Marketing Program Mission statements
Marketing Planning
An outline of a design to accomplish a specific objective:
– To create value for customers at a profit, or in the new concept of marketing, – To create a mutually beneficial relationship
Marketing Planning
Strengths of organization Weakness of organization Market Needs Wants Existing competitors Expected competitors
Design for creating value
Marketing Planning Process
Definition: The application of marketing resources to achieve marketing objectives.
Marketing Planning Process
1. 2. 3.
4.
5.
Performing a situation analysis Formulating basic assumptions Setting objectives for what is being sold and to whom Deciding how the objectives are to be achieved Scheduling and costing out the actions necessary for implementation
Develop a Market Plan
Management provides little guidance as to how the process should be managed.
– To Compromise between what is desirable and what is practicable
Management must be customized to their particular organization
– Size – Complexity – Character and diversity of company operations
Essential of Marketing Planning
We need marketing planning when hostiles increased and environment is complex.
Our Challenge
We should manage:
Revenue
Profit
Return on investment
Optimization
Cost
Application of Marketing Plan
1. 2. 3. 4. 5. 6. 7. 8. 9.
To help identify sources of competitive advantage To force an organized approach To develop specificity To ensure consistent relationships To inform everyone in the organization about priorities To obtain resources needed to implement plans To engage organizational support at all levels, form the bottom to the top of the organization To set objectives and strategies To gain commitment towards goals
The Elements of Strategy
1. 2. 3. 4. 5. 6.
7. 8.
Stepping back form the day to day Ideas and thought Activity/Action Setting Objectives and goals Important decisions and choices Significant commitment of resources Not easily reversible Involves choice/tradeoffs
9. 10. 11. 12.
13.
14. 15. 16. 17.
Differentiation Insight Vision Defines the business we are in Defines the business we are becoming Value Tradeoffs Objectives and goals Strategy Vs. Tactics
Strategic Plan
Definition: A clear and simple summary of – Key market trends, – Key target segments, – The value required by each segment, – How the company intends to create value, – With a clear prioritization of marketing objectives and strategies, together with financial consequences.
Biggest Danger for Organizations
Most Managers prefer to sell the products they find easiest to sell to customers who offer the least line of resistance.
Strategy
Strategy describes: The direction a business will pursue and guides the allocation of resources and effort The business we are in and becoming. And provides: The logic that integrates the Perspectives of functional departments and operating units and points them all in the same direction.
Strategy Statement
1.
2.
3.
The strategy statement for a business unit is composed of the following three elements: A business definition that specifies the area in which the business will compete. A strategic thrust that describes where competitive advantage is to be gained. Supportive functional strategies.
Marketing Strategy
Definition: It is a statement of how a brand or product line will achieve its objectives It Provides decisions and direction regarding variables such as:
– Segmentation of the market, – Identification of the target market, – Positioning, – Marketing Mix elements expenditures.
and
Tactically Oriented Company
Board
Senior Management
Middle Management
Operations
Strategic Oriented Company
Board
Senior Management
Middle Management
Operations
Rules of Marketing Planning
1.
Develop the strategic marketing plan.
• • Scanning the external environment Identifying early on the effect this may have on the company
2.
A strategic plan should cover a threeyear period.
•
Never write the one-year plan first and
extrapolate from it.
Marketing Planning Process
A strategic marketing plan should contain the following: 1. Executive summary 2. Mission Statement 3. Financial Summary of revenue, expenses and earnings 4. Marketing audit 5. SWOT analysis 6. Assumption of key determinants 7. Overall marketing objectives and strategies 8. Expected results 9. Alternatives (contingency plan) 10. Budget
Stages of Marketing Plan
Phase one Goal Setting
1. Mission
2. Corporate objectives
Phase Two – Situation Review
3. Marketing audit 4.SWOT analysis 5. Assumptions
Phase ThreeStrategy Formulation
6. Marketing objective and strategies 7. Estimate expected result 8. Identity alternative plans and mixes
Phase Four9. Budget Resources allocation and 10. First year detailed implementation program monitoring
Measuremen t and review
Critical Factors
Delegation
– When companies delegate marketing planning to planner, the plan invariably fails, because planning for line management cannot be delegated to a third party.
Commitment
– Without it, those charged with introducing the planning found that there was great resistance to planning on the part of local managers.
Marketing Audit I
“Marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance” Philip Kotler
Marketing Audit II
Goal: To see how well the firm is applying the marketing concepts
1. Examine external and internal information and procedures 2. Identify problems in the environment
Marketing Audit III
Need for an audit does not manifest itself until things start to go wrong for a company in the form: Declining sales Falling margins Lost market share Underutilized production capacity
Marketing Audit IV
External Audit -By independent experts -Starts with an examination of information on the general economy and then moves on to the outlook for the health and growth of the markets served by the company.
Internal Audit -By members of the marketing organization -To assess the resources of the organization as they relate to the environment and the resources of Competitors
Marketing Audit V
At least once a year Using:
– Normal information, – Control Procedures, – Marketing Research
Marketing Audit VI
Company Executives and Managers
– Few Consultants have the in-depth knowledge of market, customers, company culture, and the industry that company line managers have.
External Consultants
– Every company is at risk of becoming blinded to reality by the influence of company culture
Kind of variables for Controlling
Non Direct Control
These usually take the form of what can be described as: – Environment, – Market, – Competitive variables
Company has Control
– Operational variables
Auditing Process
1.
2.
Identification, measurement, collection, and analysis of all facts and opinions that affect a company’s problem The application of judgment to uncertain areas that remain after the initial analysis
Marketing Audit Procedure
Marketing environment audit Marketing strategy audit Marketing organization audit Marketing system audit Marketing productivity audit Marketing function audit Marketing excellence review Ethical and social responsibility review
SWOT Analysis
External Opportunities Internal Strengths Threats
SO WO
ST WT
Weakness
Corporate Planning
Step 1: Corporate Financial Objective Step 2: Manageme nt Audit Step 3: Objective and Strategy Setting Step 4: Plans Step 5: Corporate Plans
Targeted Marketing Marketing Marketing Growth in Distribution Distribution Distribution Sales and Manufacturi Manufacturi Manufacturi earnings ng ng ng Financial Financial Financial Personnel Personnel Personnel
Issue: corporate objectives and strategies Marketing …
“
Elements of Corporate Plan
1. 2.
3.
The desire level of profitability Business boundaries • What Kinds of products will be sold to what kinds of market (Marketing) • What Kinds of facilities will be developed (Production and distribution) • The size and character of the labor force (Personnel) • Funding (Finance) • Technology to be developed (Research and development) Other corporate objectives • Social Responsibility and corporate • Stock-market • Employer image
Assumptions
This is one of the most critical steps in the preparation of a marketing plan because it is the easiest step to do carelessly. They should be:
– – – – Key, Critical and few in Number Consistent with relevant known facts – With defensible assumptions
Examples:
Industrial overcapacity will increase from 105 percent to 115 percent as new plants come into operation. Price competition will force price levels down by 10 percent across the board. A new product that competes with ours will be introduced by our major competitor before the end of the second quarter.
Marketing Objectives and Strategies
Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid
Existing Products Existing Markets 1. Market Penetration
New Products 3. Product Development
New Markets
2. Market Development
4. Diversification
The Marketing Mix
Marketing Mix
Product
Customer Solution
Place
Convenience
Price
Promotion
Customer Cost
Communication
Use of Marketing Plan
To determine: Where the company is now, Where it wants to go, How to get there
Includes: Advertising Plan Sales Promotion Plan Pricing Plan Distribution Plan Product Plan Target Market Plan
The Marketing Budget
To justify all marketing expenditures from a zero base each year against the task that you wish to accomplish.
Mission Statements
It is one of the most difficult aspects of marketing planning to master, largely because it is philosophical and qualitative in nature.
1. Role or Contribution
Key points:
2. 3. 4. 5.
Business definition Core Competencies Company/Division Positioning Indications for the future
Profit Service Opportunity seeker
Types of Mission Statements
Motherhood It found in annual reports designed to “stroke” shareholders/Non Practical Use The Real Thing Meaningful Statement/impact on the behavior of the executives at all levels. Purpose Statement Lower-Level mission statement/Appropriate on the strategic business unit, departmental or product group level of the organization.
Examples of Corporate Mission
SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company
Examples of Corporate Mission
MARRIOTT’S Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value
Last Word
There is no secret magic or a formula. It is more of an age-old adage that harder they work, the luckier they get. It is not necessary to be a mighty corporation to do all this and a company of any size should be able to do so and succeed.
A Goal is a dream with a deadline
Zig Zaglar