Marketing Plan
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.These are also 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 the corporate world, more marketing plans are being designed,which are customer-and-competitor-oriented, better reasoned, and increasingly realistic than in the past. As a result, those tasked with leading marketing planning in organizations perceive themselves as professionalsand specialists.
Definition
Planning is a process that organizations undertake in anticipation of future events anddetermine strategies to attain organizational objectives in the constantly changing marketing environment. A marketing plan is a detailed written document that spells out the strategies and steps a company has formulated in order to achieve its marketing strategies for a given product or service, product line or brand name (Phillips & Pittman, 2009). The marketing plan serves as a tool used by the management to gauge whether the adopted strategies have been implemented, and the extent to which they have achieved or failed to reach the desired goals.Small retail businesses often developa simple marketing plan that coversone year, while large manufacturing companies usually 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 or 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 based on the particular tool employed in making the decision. Generally, companies often have a single or 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.
relationship between a marketing plan and a business plan
the marketing plan and a business plan of an organization must be consistent with each other. A business plan is also the vision statement of the business and it spells out what the business is all about. It says what the business does and does not do as well as the its ultimate goals. Thus, a business deals with more than marketing – it includes such discussions as locations, financing, and strategic alliances. The business plan creates the environment upon which the marketing plan flourishes.
Tactical and Strategic uses of a marketing plan
Strategic uses
An organization uses a marketing plan strategically by defining, outlining the desired goals and the need to achieve them. The owners or top management of the business establish guiding values and philosophies, the accepted code of conduct in the attainment of the set objectives. The business is able to establish a realistic starting point or baseline and its current position in the market. Both the internal and external realities expected to impact the marketing plan are able to outlined and relevant contingencies planned. Ultimately, the marketing plan is able to strategically position the business after extensive research of the target market.
Tactical uses
A marketing plan is used for an organization’s tactical planning, which refers to short range planning (one year or less). The marketing plan is thus executed during tactical marketing through such activities as generating leads, creating marketing tools, placing media, and implementing follow-up systems.
Structure of a Marketing Plan
Different companies prepare different marketing plans to best suit their organizational objectives. This means that different organizations have different marketing plans which vary in length and content. While some documents may be as brief as five pages, others could be voluminous consisting 50 pages or even more (Boone & Kurtz, 2011). In the same vein, different organizations accord different degrees of seriousness to their marketing plans.Some consider it as a rather crucial tool of business while others regard it simply as a rough guide to organizational action.
However, there are common elements that characterize all marketing plans designed by different organizationsfor different purposes. The overall structure of a marketing plan ought not to 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 addressesthe 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 butwritten last for the purpose of including all the important details addressed in the marketing plan. Individual sections of the executive summary areclearly indicated in line with the organization’s mission and goals (Moore, 2008).Most executive summaries do not exceedtwo pages in length. The contents of the executive summary are the following:
i) The Mission Statement – the organization’s mission statement adequately states the intended strategy and business philosophy that is adhered to in realizing the firm’s vision and objectives. It briefly describes how the combined efforts from all sectors of the business will achieve its goals. Mission statements vary in content, length, and specificity from company to company. The mission statement should be simple, believable, and achievable (Longenecker et al., 2005).
ii) The business’ starting date, founders and their functions, and number of current employees.
iii) The business’ geographical location, subsidiaries or branches.
iv) Summary description of plant and facilities, products, and services.
v) Banking relationships andrelevant 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 environmental scan of the market is used to conduct the strategic analysis. Internal strengths and weaknesses relate 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 the presentation of information pertaining to external opportunities and threats where external forces, events, and relationships affect 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 the marketing assumptions that relate to the industry (McDonald & Wilson, 2011).
Marketing Assumptions
Making assumptions is another important step in the 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 due to the rapid changes in the business environment both domestically and globally. As such, developing viable and challenging assumptions entails 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 the implementation of the marketing plan to suit the 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 will the competitor’s newest technology 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 the 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 the four Ps namely price, product, 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
This section identifies the schedule of activities, task assignments, sales forecasts, budgets, specific details of every activity, and those responsible for them. This stage spells how the business plans to carry out its plans and convince the stakeholders to approve it.
There is a budgetbreakdown 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 alsoa timeline or chart that indicates the hours of work together with the ultimate deadline of implementing the plan (Kotler et al., 2011). It is a phase that demands great communication among members of 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 as 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 of investors, managers/owners, facilities, product photographs, marketing research studies, pertinent published research, professional references or the organization’ssigned 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 attests that real market existsfor 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 the management to build a company with competitive advantage over its rival in the market/industry (Lamb et al., 2011).
Finally a good marketing plan fulfills the value test, which proves that the marketing plan indeed offers its investors or lenders a desirable rate or return of higher profitability of repayment.
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