Introduction
Marketing is an important business process which entails planning and implementation of activities relating to pricing, promotion, and distribution of goods, services & ideas to create exchanges and meet organizational objectives together with those of present and potential customers of a company (Westwood, 2002). Large and small businesses need a marketing process so as to effectively carry out their operations. In line with plans established by the top management, product managers develop a marketing plan for their individual products, brands, lines, channels, or customer groups. Marketing plans are increasingly becoming more and more customer-and competitor-oriented as well as better reasoned and increasingly realistic than in the past (Bosiljevac, 2011). Consequently, marketing executives are increasingly regarding themselves as professional first, and then as specialists. This is especially the case because planning is first becoming a continuous process designed to effectively respond to the rapidly changing market environment. In this respect, it goes that a marketing plan is clearly one of the most crucial outputs of the marketing process of any given company.
Definition
A marketing plan is defined as a formal, written document designed to direct the activities of a company for a given period of time. It carries analysis and research efforts besides providing an outline for how to enter a product to the market, advertise it, and sell it. In addition, a marketing plan provides the goals, objectives as well as strategies of a company’s management team (Burrow et al 2007). The particulars allow managers to realize their responsibilities, the budget, along with timelines for completion. In other words, a marketing plan serves to help a company monitor its performance. It is common practice for small retail businesses to design a simple marketing plan for a year, while large manufacturer s often prepare a five year marketing plan.
Elements of a marketing plan
Different companies develop different marketing plans to best suit their goals. Accordingly, a marketing plan is referred to as a business plan by some organizations but as a ‘battle plan’ by others. The marketing plans for different companies vary in length, with some consisting of mere 5 pages while others being bulky with as many as 50 pages or more. Similarly, the seriousness accorded to the marketing plans also vary from company to company because some consider it as a very important element of business while others regard them simply as rough guides to action (McDonald & Wilson, 2011).
However, there are some common elements for all marketing plans. Such elements include: an executive summary, situation analysis, marketing objectives/goals, marketing strategies, implementation, and a system for both evaluation and control.
I. Executive Summary
The Executive summary is the introductory and most significant section of a business/market plan. It responds to the ‘who’, ‘what’, ‘where’, ‘when’, ‘why’, and ‘how’ elements of a marketing plan. Here there is specific focus on the product, pricing, placement, and promotion with additional elements touching on staff (people), process of providing service, physical evidence (how service is made more tangible to potential customers), as well as philosophy (reflected by the product) (Raju. (nd).
The main purpose of an executive summary for a marketing plan is to introduce the business/organization/company and give explanation to all core elements of the plan in brief. A person reading the executive summary thus clearly understands the key aspects of the company without necessarily going through the entire marketing plan. While the executive is often though of first, it is advisable to write it last so as to capture al the important details presented in the marketing plan itself (McDonald & Wilson, 2011). Every section of the executive summary should be clearly indicated in whichever order deemed best with the company’s mission and goals. Generally, an executive summary for a marketing plan is not more than 2 pages in length and consists of the following:
i) The Mission Statement – states the vision of the entrepreneur regarding to what the company or business is, what is to become, as well as what it stands for. It is the most broad expression of the purpose of the company and the direction it is desired to move in.
ii) Starting date of the business, the founders and their functions, and current number of employees.
iii) Physical location of the company and any subsidiaries or branches
iv) Brief description of plant and facilities, products and services dealt in.
v) Banking relationships and relevant information relating to current investors
vi) Brief summary of company growth such as financial/market highlights
vii) Brief indication of the management’s future plans.
Table of Contents
Immediately following the Executive Summary is the Table of Contents, which outlines the remainder of the marketing plan along with the supporting rationale as well as operational detail of the business (Westwood, 2002). The Table of Contents serves to help the reader to locate specific parts of the business/market plan.
II. Situation Analysis
This part presents the results of the study of internal and external factors affecting marketing strategies of the company in question (Mercer, 1998). Many businesses, especially those entering new markets, finding the necessary metric required to develop this section often proves difficult. The information contained in this section is derived from the company’s SWOT analysis in addition to those from the environmental scan of the market. There is relevant information on sales, costs, competitors, the market, and the different forces in the macro environment of the business. External environment addresses aspects relating to regulatory, political, economic, social and international factors affecting the company (Westwood, 2010).
Key elements of a situation analysis in a marketing plan
Source: http://www.sba.pdx.edu/faculty/bills/464/BestCh14ho.pdf
Thus, the Situation Analysis provides a clear picture of the business’ current position. In addition, a company should provide an analysis of both opportunities and problems expected to be encountered within the environment to show their understanding of the company’s own capabilities and risk in the specific market (Solomon, 2011).
III. Marketing Mix Strategies, Objectives, and Tactics
In this section the company outlines how it intends to meet its objectives with its marketing mix i.e. the four P’s (product, promotion, price, place). The section contains the company’s mission statement, objectives, together with focused strategy that includes marketing segment focus as well product positioning (McDonald, 2008). The aim of this section is have the company show that a profitable market is in existence by proving customer interest and market claims. Thus, a marketing strategy describes the company’s strategies pertaining to market penetration, growth, channels of distribution, communication, sales force, and sales activities.
Goals and objectives ought to be SMART (specific, measurable, attainable, realistic, and timely) and complimenting the company’s mission and vision statements (Pride & Ferrell, 2011).
IV. Budgeting, Performance and Implementation
This is the section that spells how the company desires to put its plans into effect and it is designed to ultimately “sell” the marketing plan to those with the power to give final approval. It provides the controls to monitor and adjust the implementation of the plan (McDonald, 2008). Also some contingency plans on how management would respond to particular environmental developments such as strikes should also be included (Burrow et al, 2007). This section generally addresses three areas:
i) Marketing budget – gives a clear snapshot of the financial consequences of the marketing plan
ii) Performance analysis – gives the expected outcomes of the marketing plan including the financial impact
iii) Implementation schedule – provides timelines and identification of those tasked with particular tasks and responsibilities in the implementation of the plan.
Generally this section identifies the schedule of activities, task assignments, sales forecasts, budgets, specific details of every activity, and those responsible for them (Pride & Ferrell, 2011). It is a phase that demands great communication among members on the management team so as to ensure that scheduled activities are completed as planned.
V. Evaluation and Control
This is the section of the marketing plan that explains how it will be evaluated and the measures to be taken in the case that the objectives are not met. A performance standard represents the company’s expectation for performance which depict the marketing plan’s objectives (McDonald, 2008). In the control phase, a company strives to reduce the gap planned performance standards and the actual attained performance.
VI. Appendix
This is final section of a marketing plan that reflects supplementary material such as comprehensive financial statements, sample ads and articles, organization charts, patents, management resumes. Care should be taken to ensure that appendix is manageable enough and carrying just enough data or information (Sherman, 2011).
A market plan must pass the following three tests:
a) The reality test – this proves that a real market for the company’s product or service does exist, and that the company is in a position to build it for cost estimates provided in the marketing plan.
b) The competitive test – this is an evaluation of the company’s position in comparison to that of its key competitors, and management’s ability to build a company with competitive advantage over its rival in the market/industry (Lamb et al, 2011).
c) The value test – this serves to proves that the marketing plan developed by the company does indeed offer its investors or lenders a desirable rate or return of higher profitability of repayment.
Figure 2. Stages of a marketing plan
Phase one
– Goal Setting – Executive Summary
– Mission statement
– Corporate Objectives
Phase Two
– Situation Review – Marketing Audit
– SWOT Analysis
– Assumptions of key determinants
Phase Three
– Strategy Formulation – Marketing Objectives & Strategies
– Estimate expected results
– Alternative plans & mixes (contingency plan)
Phase Four – Resources Allocation and Monitoring – The Budget
– Measurement and review of implementation
Appendix – Explanations of materials used
Benefits of a marketing plan
A marketing plan is a priceless tool a company seeking to gain competitive edge in the market.
i) A good marketing plan is equivalent to a blueprint for the action that a company requires to take in order to attain certain set goals. It identifies the most cost effective ways of undertaking particular functions and show the best way to present the business to the target audience. A marketing plan saves a company money by eliminating unnecessary expenses through making sure that the operations of the company fit well in its budget and that its marketing drive reaches the target audience.
ii) Goal setting – a marketing plan affords a company a chance to set SMART goals and benchmarks. This is because a marketing plan is characterized by full meaning that it offers purpose and a destination for the company’s venture. The company gets a clear picture of where it is at the present time, where it wants to reach and how to get to that target position (McDonald & Wilson, 2011).
iii) Company operational instructions – a marketing plan provides the framework that informs the operations of a company for a specific period of time. A company’s marketing plan reflects instructions to its full operation.
iv) Top level reflection – developing a market plan is good way for a company to do some high-level thinking amidst the highly competitive nature of business today (Pride & Ferrell, 2011). The market plan enables the management of a company to evaluate whether the company is achieving what is desired, and think of more innovative ideas to achieve value for its stakeholders and itself.
v) Building a market plan leads to increased sales, customer retention, and positive brand image from the perspective of customers and better understanding of the needs and preferences of customers and how to meet them. This is because when a company develops a marketing plan it is able to focus on its target market and find existing gaps in the market thus providing new opportunities and more business in turn.
vi) A good market plan also benefits a company in the sense that it provides its external financiers with confidence that the company is knowledgeable about its market and how to attain its objectives. This makes the investors to keep their investment in the company besides opening a window for better deals (Lamb et al, 2011).
vii) A company also benefits from a good marketing plan in the form of creating new networking opportunities and getting new leads for the greater benefit of the company and its stakeholders. A marketing plan often serves to define the business and its customers as well as its future plans. Furthermore, a good marketing plan helps a business to set a timeline and metrics to ensure that all of its employees are working towards achieving the mission and vision of the business (Westwood, 2010).
Marketing Assumptions
Making assumptions is one of the most critical steps in the development of a marketing plan. These are key facts which are few in number and consistent with relevant known facts. This is to mean that must be founded on accurate information together with sensible estimates of what is achievable basing on previous performance (Montana, 2000). They only relate to key aspects such as economic, competitive or technological factors believed to have a significant effect on the likelihood of achieving the marketing plan’s objectives.
Making of assumptions happens during the stage of situation analysis where the assumptions are used to gauge what the company is able to achieve as well as what is beyond its limits. They come after the completion of marketing audit and SWOT analyses. Most assumptions are based on external factors to which the business has no power over (Mercer, 1998). They could include: the market growth rate, the exchange rate, interest rates, government legislation, and employment/recruitment aspects.
However, the challenge to making accurate assumptions while preparing a marketing plan is that getting sound information about potential trends and happenings is increasingly becoming problematic thanks to the rapid change in the business environment both domestically and globally. As such, developing viable and challenging assumptions entails much creativity, lateral thinking and extreme break with the past. This explains why only a few major assumptions ought to be included in a marketing plan (Montana, 2000). The assumptions are subject to periodic review, from the planning phase to during the implementation of the marketing plan to suit changing circumstances. Examples of assumptions in a marketing plan could include the following:
Generic areas Assumptions
1) Macro-environment forces
e.g technological forces
Possible emergence of new technology?
At what time competitor’s newest technology will hit the market?
2) Markets
e.g. substitutes
Emergence of dominant substitute products?
3) Customers Change in the consumer purchase channel?
Significance of branding in purchase decision?
4) Stakeholders How change in demands of key stakeholders may occur over time
5) Financial management Availability and cost of new finds?
Focusing on market or margin share?
6) Internal processes How future changes in internal processes happen?
7) Asset management Need to outsource?
Role of branding?
Physical location of new facilities?
8) The workforce Need for new skills? Which?
Availability of suitable pool of skilled labor force?
9) Background of shared obviousness Who are we?
How do we function?
Conclusion
A marketing plan comes in handy to a company when the business environment becomes hostile and more complex. A marketing plan is most applicable when there is need to identify a company’s sources of competitive advantage, have an organized approach, develop specificity, ensure consistent relationships, and inform company members on organization priorities (Bosiljevac, 2011). Furthermore, the marketing plan helps a company in obtaining needed resources to implement plans, engage organizational support at all levels, set objectives and strategies, and gain commitment towards goals.
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