Introduction
In the current competitive business environment, preparation of effective marketing plans has become increasingly necessary. Small and large organizations are using marketing plans to monitor and track their performance in the market against rivals and also as an essential guide for periodically revising their marketing strategies (Sherman, 2011). Market plans are included in the overall business plan. For a company to meet its marketing objectives, a company needs an effective and strong marketing strategy as its foundation of well-written and organized marketing plan. A market plan that lacks sound and strategic basis will not be of much benefit to an organization regardless of whether it clearly outlines a list of well-detailed action plans for the organization (White et al, 1991).
With the increasing relevance of marketing plans in corporate world, more and more marketing plans are being designed to more customer-and competitor-oriented, better reasoned and increasingly realistic than in the past. As a result, those tasked with leading marketing planning in organizations are first perceiving themselves as professional and then as specialists.
Definition
Planning is a process that organizations undertake in anticipation of future events and determine strategies to attain organizational objectives in the constantly changing marketing environment. Therefore, a marketing plan is a detailed written document that spells out the strategies and steps a company has formulated in the effort to achieve its marketing strategies for a given product or service, product line or a brand name (Phillips & Pittman, 2009). The marketing plan serves a tool used by management to gauge whether the adopted strategies have been implemented, and the extent to which they have achieved or failed to achieve the desired goals. Generally, small retail businesses often develop a simple marketing plan that cover a year, while large manufacturing companies design a five year marketing plan.
Generally, business executives write a marketing plan to gain insight into the marketing environment and how it affects the inner workings of the organization. It thus serves as a solid reference tool for the success of future activities. In addition, a marketing plan enables the marketing executives to venture the marketplace with enough background information of possibilities and risks. Although marketing plans can be presented in varied forms, it is better for an organization to have a written document because the plan can be both complex and bulky. As such there is danger of missing out of losing critical details relating to planned tasks and activities if the marketing plan is merely communicated verbally (Longenecker et al, 2005). The choice of the alternative to use when designing a marketing plan is based on the overall philosophy and culture of the organization in question. Similarly, the choice is also based on the particular tool employed in making the decision. Generally, companies often have a single or a couple of philosophies regarding on when they expect to reap profits: either they target to make profit right away, or first target to increase their market share followed by pursuit of profits. A good marketing plan results when there is good marketing information system together with a wealth of competitive intelligence which produces a thorough and more accurate situation analysis (Boone & Kurtz, 2011). The creation and selection of effective marketing strategies are also heavily depended on the key role of managerial intuition among the marketing executives.
Elements of a marketing plan
Different companies prepare different marketing plans to best suit their organizational objectives. This effectively translates that different organizations have different marketing plans which vary in length and content. While some documents may be as brief as 5 pages, others could be voluminous consisting 50 pages or even more (Boone & Kurtz, 2011). In the same vein, different organizations accord different degree of seriousness to their marketing plans – some consider it as a rather crucial tool of business while others regard it as simply as a rough guide to organizational action.
However, there are common elements that characterize all marketing plans designed by different organizations, for different purposes. The overall structure of a marketing plan ought not be taken as a mere series of sequential planning steps. It must be appreciated that majority of the marketing plan elements are reached upon simultaneously and in conjunction with each other. Nonetheless, similar questions and topics are addressed in all marketing plans despite the flexible nature of the plans (Longenecker et al, 2005). Generally, the following are covered in any marketing plan:
– Executive summary & Business mission statement
– Situation Analysis (SWOT analysis)
– Marketing goals and objectives
– Marketing strategy/Target market strategy
– Marketing mix – product, promotion, price, place (distribution)
– Budget & resource requirements (Pride & Ferrell, 2011)
– Implementation evaluation
Figure 1. Structure of marketing plan
(Airstrip consulting, 2010)
I. Executive Summary
This is the first and most important part of a business/market plan. It addresses the ‘who’, ‘what’, ‘where’, ‘when’, ‘why’, and ‘how’ elements of a marketing plan. Its main aim is to briefly introduce and explain the organization to the reader of the marketing plan (Phillips & Pittman, 2009). One is able to make out the key aspects of the business without having to go through the whole document. The executive summary is thought of first but written last for the purpose of including all the important details addressed in the marketing plan. Individual sections of the executive summary are clearly indicated in line with the organization’s mission and goals (Moore, 2008). Most executive summaries do not exceed 2 pages in length. The contents of the executive summary are:
i) The Mission Statement – the organization’s mission statement adequately states the intended strategy and business philosophy that is adhered to in realizing the the firm’s vision and objectives. It briefly describes how combined efforts from all sectors of the business will achieve its goals. Mission statements vary in content, length and specificity from company to company. It is a requirement that the mission statement is made simple, believable and achievable (Longenecker et al, 2005).
ii) Business starting date, founders & their functions, and number of employees at present.
iii) Business geographical location, subsidiaries or branches
iv) Summary description of plant and facilities, products and services.
v) Banking relationships & relevant information on current investors
vi) Summary of company performance i.e. financial/market highlights
vii) Summary of management’s future plans.
Table of Contents
The table of contents immediately follows the executive summary, and outlines the rest of the marketing along with all supporting rationale and operational detail. It helps the reader to locate particular sections of the business/market plan (Phillips & Pittman, 2009).
II. Situation Analysis
A situation analysis is also known as a SWOT analysis, which identifies the organization’s strengths (S), Weaknesses (W), opportunities (O) and threats (T). This is the section of the marketing plan that discusses the internal and external factors facing the marketing strategies of the organization (White et al, 1991). Many businesses entering a new market often encounter the challenge of finding the relevant metric needed to prepare this section. The information from SWOT analysis and the environmental scan of the market is used to conduct the strategic analysis. Internal strengths and weaknesses relates to the organizational resources e.g. production costs, financial resources, marketing skills, employee capabilities, brand image, and existing technology (Lamb et al, 2011). External environment information relates to matters of regulatory, political, economic, social and international factors affecting the operations of the company.
Environmental scanning involves presentation of information pertaining to external opportunities and threats where external forces, events and relationships affecting the business. It helps in designing an effective marketing strategy. Macro environmental forces that can be discussed at this stage include economic, social, demographic, political and legal, technological, and competitive elements (Lamb et al, 2011).
Figure 2. Key elements of a situation analysis in a marketing plan
In assessing the threats, the organization must put into consideration marketing assumptions that relate to the industry (McDonald & Wilson, 2011).
Marketing Assumptions
Making assumptions is another important step conducted during situational analysis, after marketing audit and SWOT analysis, in the development of a marketing plan. Assumptions refer to key facts which are often few in number and compliment relevant known facts. They are based on accurate information and sensible estimates of what is achievable on the basis of previous performance (Forsyth, 2007). Majority of the assumptions relate to external factors to which the company lacks control over such as the exchange rate, market growth, interest rate, employment or recruitment and government legislation. They also 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. Assumptions are aimed to gauge what is within the means of the organization to achieve as well what the company cannot achieve in the specific time referred to by the marketing plan (Forsyth, 2007).
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 (Solomon et al, 2011). 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 (Mercer, 1998).
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?
III. Marketing Mix Strategies
In this section, the organization defines its target segments i.e. the groups and their specific needs by which the company’s offerings are intended to meet, followed by establishment of the competitive positioning of the offerings which will produce the strategies to attain the marketing plan’s objectives. It is explained how inputs from purchasing, sales, operations, finance, and human resources will be integrated to the successful implementation of the plan. Here the marketer is specific on the branding and customer strategies that will be employed.
The marketing mix refers to the resources and tactics that an organization uses in marketing its products and services. It includes “four P’s” namely: price, price, place and promotion. The marketer identifies how the company’s product or service shall be priced, explain the product’s life cycle, identify the channels of distribution, and the ways in which the product or service shall be promoted to the target audience (Longenecker et al, 2005). The marketer also outlines how each of the resources shall be allocated to meet the company’s objectives.
IV. Budgeting, Performance and Implementation
Generally this section identifies the schedule of activities, task assignments, sales forecasts, budgets, specific details of every activity, and those responsible for them The stage spells how the business plans to carry out its plans in a way aimed to convince the stakeholders to approve the plan.
There is breakdown of the budget for the marketing plan at this stage. The plan shows how resources shall be allocated, the persons in charge and their respective responsibilities. There is also timeline or chart that indicates the the hours of work together with ultimate deadline of implementing the plan (Kotler et al, 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. Also contingency plans on how management would specifically react to any environmental developments such as strikes are included.
V. Evaluation and Control
This is the final part of the marketing plan which explains how the entire implementation of the marketing plan shall be evaluated as well the specific measures to be taken should the goals fail to be met. With the control measures, the organization aims to reduce the gap between the planned performance standards and the actual attained performance (Solomon et al, 2011).
VI. Appendix
The appendix carries supplementary sources of information to further enhance the reader’s understanding of the marketing plan. The materials could include any items referenced in the text such as resumes/CV’s of investors, managers/owners, facilities, product photographs, marketing research studies, pertinent published research, professional references, or the organization’s signed contracts of sale (Westwood, 2010).
Conclusion
Adhering to the above structure and satisfying each section as required results in an effective marketing plan which will meet the organization’s objectives if well implemented. Finally, it is worth noting that a good marketing plan ought to pass the following three tests (Kotler et al, 2011). First, the marketing plan must pass the reality test which attest that real market exist for the company’s product or service, and that the company is in a position to build it for cost estimates provided in the marketing plan. Secondly, the marketing plan should pass the competitive test which is an evaluation of the organization’s position in relation to its key rivals together with the ability of management’s to build a company with competitive advantage over its rival in the market/industry (Lamb et al, 2011).
Finally a good marketing plan fulfils the value test which proves that the marketing plan does indeed offer its investors or lenders a desirable rate or return of higher profitability of repayment.
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