Marketing Planning: Meaning, Definitions, Scope, Concept, Process

Marketing planning is the starting point of any business activity. Planning is deciding at present what is to be done in the future. It involves not only anticipating the consequences of decisions but also predicts the events that are likely to affect the business.

The marketing planning, can be thought of as the practical application of your marketing strategy. It includes details about your business’ unique selling proposition, pricing strategy, the sales and distribution plan and your plans for advertising and promotions. So in effect, you can’t have a marketing planning without a marketing strategy.

But a marketing planning without a marketing strategy is a waste of time. The marketing strategy provides the goals for your marketing planning. It tells you where you want to go from here. The marketing planning is the specific roadmap that’s going to get you there.

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1. Meaning of Marketing Planning 2. Definitions of Marketing Planning 3. Scope 4. Concept 5. Components 6. Contents 7. Process 8. Classification 9. Approaches 10. Difficulties 11. Organization.

Marketing Planning: Meaning, Definitions, Scope, Concept, Components, Process and Difficulties

Marketing Planning – Meaning

The first step in developing a marketing planning is to create specific marketing objectives and write them down. What do you want your promotion efforts to do for you? If you’re selling herbs, for instance, perhaps you want to increase your monthly sales by 25 percent.

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If you’re a realtor, a good marketing objective might be to get 10 new listings each month. Whatever marketing objective you set, be sure it’s realistic; you need to be able to achieve the marketing objective if it’s going to motivate you or serve as a good benchmark to evaluate your success.

Once you set up your marketing planning, remember that it needs to be an organic, living document, not something you put into a nice folder and file somewhere and never look at again. Take fifteen minutes every day to review your goals and specific activities; what did you do that particular day to help you achieve the marketing objectives you’ve set?

What do you need to do tomorrow? Too often we make plans or list objectives and then get so enmeshed in all the things we have to do to run our businesses that we shunt them aside. Taking fifteen minutes a day to review your marketing objectives, marketing planning, and marketing activities goes a long way towards helping you stay focused and on track and market your products or services effectively.

Marketing Planning – Definitions

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The primary aim of Marketing Planning is to direct the company’s marketing efforts and resources towards present marketing objectives like growth, survival, profit maximisation, service to customers etc. However the marketing activity and objectives are the deciding factors on which all other activities of a company are based. Thus the entire activity of a company is actually based on the premise of the marketing plan.

The success of any business activity is the outcome of the successful management of its market. A marketing plan is an instrument to implement the marketing concept. It is the document of the future course of action that spells out as to how the resources at the command of the firm are to be used to achieve the marketing goals.

In simple words a marketing plan is a written document that specifies in detail the firm’s marketing objectives and how marketing management will use the controllable marketing tools such as product design, pricing, channels of distribution and promotion to achieve these objectives. It is the central instrument for directing and coordinating the marketing efforts. A marketing plan is a blue print for marketing action. It is a written document containing strategies to achieve present goals.

According to Malcolm H. B. McDonald, “Marketing Planning is a logical sequence of activities leading to the setting of marketing objectives and formulation of plans for achieving them.”

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In the words of Wendell R. Smith “Marketing Planning is the exercise of analysis and foresight to increase the effectiveness of marketing activities.”

In a nut shell any Marketing Planning is a managerial function that determines the future course of marketing action based on the analysis of past events so that the marketing objectives can be achieved. It is basically concerned with the allocation, development and future use of the marketing resources.

Marketing Planning –Scope

The scope of Marketing Planning in a company depends on the kind of orientation that the company has adopted. In a market-oriented company, Marketing Planning begins with the consumer needs and problems and covers all the components of the marketing mix. It covers marketing research, product planning and development, selling, distribution channels, advertising, sales promotion, pricing and physical distribution.

Within the broad framework of the company’s marketing objectives and policies, plans for each component of the marketing mix are formulated and these are known as area plans or sub functional plans. Each area plan has its own objective, policies and programmes.

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Once all the area plans are formulated they are integrated together and one master marketing plan is made which guides the marketing objectives of the company. However, while developing this master marketing plan not only are plans considered, but due attention is also given to the programmes of intermediaries operating in the company’s indirect channel.

This helps the company in developing its vertical marketing system. Thus the scope of marketing planning covers both – those operations that are controlled by a company’s marketing department and also those controlled by the company’s intermediaries, in so far as these are relevant to the company’s products.

Marketing Planning – Concept

Marketing strategy formulation is the prime concern of marketing planning. Marketing planning engages itself in shaping the future of a particular business unit. Meeting competition, protecting market share and achieving profits at the business unit level are its concern.

The task here 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.

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The marketing plan is highly detailed, heavily researched and hopefully, well written report that many inside and possibly outside the organization will evaluate. It is an essential document for both large corporate marketing departments and for start-up companies.

Essentially the marketing plan:

i. Forces the marketing personnel to look internally in order to fully understand the results of past marketing decisions.

ii. Forces the marketing personnel to look externally in order to fully understand the market in which they operate.

iii. Sets future goals and provides direction for future marketing efforts that everyone within the organization should understand and support.

iv. Is a key component in obtaining funding to pursue new initiatives.

The marketing plan is generally undertaken for the following reasons:

1. Needed as part of the yearly planning process within the marketing functional area.

2. Needed for a specialized strategy to introduce something new, such as new product planning, entering new markets, or trying a new strategy to fix an existing problem.

3. Is component within an overall business plan, such as – a new business proposal to the financial community?

Marketing planning is an integral part of marketing management. Marketing management concept involves integration and coordination; it involves consistent plans and programmes to create profitable markets and customers. Therefore, a marketing planning organization must be an integral part of any organization whose purpose is to implement effectively the marketing management concept.

According to a research survey conducted by the American Marketing Association, most marketing plans look back five years in detail, ahead one year in detail and ahead four more years in more general terms.

They most often include:

i. A statement of basic assumptions regarding economic, technical, social and political developments.

ii. A five-year review of sales and profit performances of the company’s major products by market and geographical area.

iii. The objectives for the next year with a detailed breakdown in units and dollars for each product, market, geographic area and division of company’s marketing force.

iv. An analysis of the competitor’s strengths and weaknesses.

v. A programme schedule which is carefully constructed to show the sequence of all marketing activities that public relations, advertising and sales promotion activities can be coordinated.

vi. A less detailed statement of objectives for each of the next four years.

vii. A summary statement of how the company intends to capitalize on its opportunities and correct its weaknesses.

The planning process makes possible a planned application of marketing resources to accomplish marketing objectives. A marketing plan is developed to assure that the needs of the present and potential customers are met; that the product or service being marketed is priced competitively, supported by promotional activities and that the field sales force is directed to the most promising prospects.

Most marketing plans are divided into three basic parts:

i. Situational analysis – An attempt to get a picture of the external environment in which planning will take place. It will help to reveal trends which may affect the firm’s performance. It includes such elements as demand, competition, the stage of the product life cycle, the resources of the firm and legal constraints.

ii. Problem and opportunities – The firm attempts to analyse and process the information uncovered in the situational analysis. Problem areas are sources of potential opportunities are clearly defined.

iii. Marketing strategy – The Company sets up ways in which it will manipulate situational variables to attempt to achieve marketing objectives. It can include such areas as target market segments, sales volumes, profit goals and various marketing mix decisions.

According to John Winkler, “The planning process is a function which identifies corporate problems and searches for solutions, as well as providing the corporate body with focus and direction”.

According to the author, the rate of R&D in achieving technical advantages, the broad social and cultural movements, the fact that business is becoming more capital intensive, and the information explosion have placed a greater emphasis on the planning process and marketing planning in particular.

The marketing planning function must be integrated throughout the four basic areas of the marketing mix – price, product, promotion and distribution. Market research must find out the needs, desires and characteristics of the market; product planning has to design and maintain the product accordingly, and marketing management has to develop and administer the opportunity -goal-strategy plan to sell against competitors who are going through an identical exercise.

Marketing Planning – 3 Basic Components: Objectives, Policies and Programmes

A marketing plan is composed of three basic components.

They are:

1. Objectives,

2. Policies and

3. Programmes.

Component # 1. Objectives:

The first component of a marketing plan is the marketing objective. The objective is the end towards which all marketing activities are directed. The marketing objectives usually answer the question where are we heading or what are we aiming at. In order to facilitate understanding, marketing objectives may be divided into three parts, namely basic objectives; goals and targets. The basic objectives define the long range fundamental purpose of the company’s marketing operations. They are not bound by time, nor are they quantifiable.

Some examples of basic objectives are given below:

(a) To develop and maintain product leadership;

(b) To win the loyalty and co-operation of dealers;

The marketing objectives may also be expressed as goals and targets. The marketing goals and targets are specific and not vague or philosophical like the basic objectives. The marketing goals are statements of specific achievement standards whereas targets are the quantified expressions of these standards to be achieved within a given time frame. The basic marketing objectives, goals and targets are closely inter-related. The basic objectives shape goals which in turn shape targets.

Component # 2. Policies:

Marketing policies are broad guidelines which guide the marketing personnel in decision-making. Policies are general statements or understandings which guide or direct the thinking and decision-making process of the subordinates. A policy limits the area of action.

The examples of marketing policies include statements like the following:

(a) “We will be competitive in price but not be a price cutter”.

(b) “Our after sale service will be most comprehensive”.

Component # 3. Programmes:

A marketing programme is a sequence of pre-determined marketing actions made after taking into accounts the time and resources available. A programme has to be formulated within the limits of the policies of the organisation and it should be designed in such a manner that it achieves the marketing objectives. A marketing programme is made up of procedures, rules and budgets.

Marketing Planning – Contents of a Marketing Plan

1. Executive Summary – The Marketing Plan should start with a summary of the whole plan. This summary enables managers and top management to have a bird’s eye view of the complete plan.

2. Mission and Vision Statement – The mission and vision statement of the marketing plan should be derived from the organizational mission and vision.

3. Market Research Findings – A summary of the findings that have been formulated through market research should be included in the plan.

4. Details of Previous Performance – The plan should include the previous years’ performances. If possible data of past 3 years to 5 years should be included.

5. Segmentation, Targeting and Positioning (STP) – The past, present and future STP strategy should be mentioned in the plan.

6. Financials – The financial statements such as profit and loss statements, fund flows and cash flows should be included. This will give a picture on how revenue is coming in and how it should be allocated for different marketing activities.

7. 4P’s or 7P’s Strategies – Strategies relating to the 4P’s or 7P’s (Product, Price, Place, Promotion, People, Process & Physical Evidence) should be mentioned in detail in the marketing plan.

8. SWOT Analysis – A complete SWOT analysis of the organization clearly depicting the strengths, weaknesses, opportunities and threats should be included.

9. Marketing Objectives and Goals – The Company’s marketing objectives and goals should be clearly mentioned. This will give the marketing plan a good direction and will help the management to understand what it is intending to achieve in the coming months or years.

10. Conclusion – The marketing plan should conclude with a brief summary of why the plan has been prepared and what is the main intention of such a plan.

Marketing Planning – Process

It is fundamental to effective planning that there has to be a goal to aim for. A good, and often used, analogy is that of a journey since the route can be planned only if the starting point and the destination are both known. This does not go far enough since the real purpose of planning is to improve the effectiveness in achieving an agreed objective or task.

When considering the journey this could be the reducing of the time taken to reach the destination. But, of course, to decide between the different options it is necessary that the objectives must be known. The situation tends to be more complicated in the social or business context since many, apparently sensible, objectives are not fixed, like a point on a map for example, but instead they are moving targets, such as being market leader.

It is often difficult to formulate useful objectives even for commercial organisations where the basic objective is to increase asset value within acceptable levels of risk. It is even more difficult for other types of organisation.

One approach which has been adopted by many large organisations is to set overall objectives in a mission statement. This sets out how that organisation intends to fulfil its main business objectives while recognising the legitimate interests of other stakeholders such as customers, employees, suppliers and the communities in which the organisation operates.

The mission statement is an important communication from an organisation and so it must also be seen as part of the overall marketing statement made by the company.

While a mission statement tends to be a general statement, objectives for any business, big or small, need to be specific to that business. For instance, say an entrepreneur wished to open a clothes shop in a town where there are already all the standard high street retailers. Then he is likely to be more successful if his objective is framed to emphasise how his offering and shop will differ from the competitors’ shops.

Marketing Planning – Classification: Long-Term Planning and Short-Term Planning

The activities of marketing planning are generally divided into two divisions according to time:

1. Long term Marketing Planning; and

2. Short term or annual Marketing Planning.

1. Long Term Marketing Planning:

Long range planning involves developing the basic objectives and strategy to guide future company efforts. The long range plan provides the frame work within which the other plans of the company are prepared. Long run planning may involve a time horizontal of two or more years, although it uses even a longer horizon of five to twenty years. Long range planning is done by the top management with the help of specialised planning authorities.

Philip Kotler has pointed out that while preparing long term marketing plan the following situations should be considered:

(i) Objectives:

If the prognosis indicates that the company has no future, then the company should decide upon fresh objectives as to the amount of sales.

(ii) Tactics:

Tactics suggest how to use the company’s strategies to achieve its objectives. In other words tactics are the methods for carrying out the strategies. Philip Kotler has very interestingly distinguished objectives, strategies, and tactics in the following words—”The objectives of a company indicate where it wants to be, the strategy indicates the intended route; the tactical decisions are not primary, they nevertheless are very important.”

(iii) Diagnosis:

The planning process begins with an attempt by the company to size up the present market situation and the factors responsible for it. In short, diagnosis consists of where the company stands and why. The size up requires developing data on absolute levels of company sales and market shares and their receives trends, by product, territory and other breakdowns.

Supplementary data on marketing costs, plant utilisation, profit levels and other variables are also required. Plans must be taken to make a careful analysis of the recent trends instead of being relying simply of impressions.

(iv) Strategy:

Strategy lays down the broad principles which the company hopes to secure an advantage over competition an attractiveness to buyers and a full exploitation of company resources. There may be several alternatives of the strategy. The company should carefully study these alternatives and choose the best possible alternative strategy under the circumstances.

The control section of a long range plan should contain performance targets. They should be checked periodically. In short, control is necessary- If at any stage the variations are not favourable the underlying causes are discovered and then changes are introduced to remedy the shortfalls, and profits in the changed circumstances.

(v) Prognosis:

In addition to diagnosing its present position, the company must also estimate where but is likely to go if present market trend continues. What sales and profits can the company make in the long period?

A systematic sales and profit prognosis consists of five steps— (a) Projection of industry sales over the planning period; (b) Forecasts of company sales; (c) Forecast of company revenues, costs and profits; (d) Forecast of investment; and (e) Forecast of rate of return on the investment (R.O.I.) Prognosis indicates that if the company’s future seems to be bright, its present policies should be continued but if the future is dark and doubtful then the planning needs modification so that the objectives may be achieved.

(vi) Control:

The long range plan represents the best vision of management at the time of planning of a proper set of objectives, strategies and tactics. It is based on a detailed set of assumptions and expectation whose validity will be revealed only in the course of time. More often, then not new events will occur that challenge some of the basic assumptions in the plan.

This means two things—first the plan must include a control section that specifies the type of monitoring that will go on to check the plan’s effectiveness; second the company might prepare one or more contingency plans to meet new challenges.

2. Short Term or Annual Marketing Planning:

Short range plan, of course, is not possible where the company has no long range plan. A long range plan is necessary if the short range plans are not to be chaotic series of expedient solution to short run crisis. Sometimes annual plans only reflect over reactions to previous year’s result and next year’s problems rather than the progressive implementations of long range plan.

Three different approaches are generally taken to annual planning:

(i) External Planning:

Management considers continuing its current strategy and estimates the likely profits and sales it could achieve. If these are satisfactory, they are established as the company goals.

(ii) Optimisation Planning:

Management considers major alternative strategies and their likely impacts on profits, sales, market shares and future investment opportunities. The management selects the strategy with the most attractive consequences. This sort of planning is most logical of the three approaches.

(iii) Goal Planning:

Management sets sales and profit goals for the year that if achieved, would satisfy the shareholders. It is left to goes for whom the goals are set to find ways of achieving them.

Marketing Planning – 6 Major Approaches

There are many ways to develop & format a marketing plan.

The approach taken here is to present a 6-part plan that includes:

Approach # 1. Purpose and Mission:

Clarifying the purpose and mission of a corporation is the first task in the marketing planning process. The mission is the expression of the corporate intent. It tells insiders and outsiders what the corporation stands for. The mission carries the grand design of the firm and communicates what it wants to be. It clarifies the very purposes of the corporation.

It also represents the corporation’s guiding principles. Some of the information, in particular the mission statement, may require the input of upper management. The information in this part will prove useful later in the plan as a point of reference for material that will be introduced (e.g., may help explain pricing decisions). In cases in which there are separately operated divisions or SBU there may also be mission statements for each.

Purpose of the Marketing Plan:

i. Offer brief explanation for why this plan was produced. For example, new product enters new market, continue growth of existing product, yearly review, planning document etc.

ii. Suggest what may be done with the information contained in the plan. For example, set targets to be achieved in the next year, represents a departmental report to be included in larger business or strategic plan etc.

Mission Statement:

For larger firms this may already exist in a public way (e.g., found in annual report, found on corporate website) but for many others this may need to be formulated.

The mission statement consists of a short, finely-honed paragraph that considers the following issues:

1. Identifies a stable (i.e., not dramatically changing every year), long-run vision of the organization that can answer such questions as:

i. Why is the company in business?

ii. What markets do we serve and why do we serve these markets?

iii. What are the main benefits we offer our customers?

iv. What does this company want to be known for?

v. What is the company out to prove to the industry, customers, partners, employees, etc.?

vi. What products/services does the company offer?

2. In developing the vision presented in the mission statement consider:

i. Company History – How company started and major events of the company, products, markets etc.

ii. Resources and Competencies – Consider what the company currently possesses by answering the following –

a. What are we good at?

b. What is special about us compared to current and future competitors?

c. What do we do that gives us competitive advantage?

iii. Environment –

a. Consider the conditions in which company operates including physical equipment, political regulatory, competitive, economic, technological, legal, others.

Examples of Mission Statement:

i. Cadbury India – To attain leadership position in the confectionery market and achieve a strong national presence in the food drinks sector.

ii. McKinsey & Co – To help business corporations and government to be more successful.

iii. Reliance Industries – To become a major player in the global chemical business and simultaneously grow in other growth industries like infrastructure.

iv. Tata Information Systems – To be India’s most successful and most respected IT Company.

Approach # 2. Situational Analysis:

The situational analysis is designed to take a snapshot of where things stand at the time plan is presented. A marketing plan has its origin in the situation analysis or situation audit. This part of the marketing plan is extremely important and quite time consuming. For many, finding the numbers may be difficult, especially for those entering new markets. This analysis will help the marketer to identify opportunities and threats as also a firm’s strengths and weaknesses.

The situational analysis covers six key areas:

i. Product,

ii. Target,

iii. Market,

iv. Distribution,

v. Competitors,

vi. Financial and other issues.

1) Current Product Analysis:

Provide detailed analysis of the company’s current products offering in terms of:

i. Product Attributes – Describe the main product features, major benefits received by those using the product, current branding strategies etc.

ii. Pricing – Describe pricing used at all distribution levels such as – pricing to final uses and to distributors, incentives offered, discounts etc.

iii. Distribution – Describe how the product is made accessible to final users including channels used, major benefits received by distributors, how product is shipped, etc.

iv. Promotion – Describe promotional programmes and strategies in terms of advertising, sales promotion, personal selling and public relations, how product is currently positioned in the market, etc.

v. Services offered – Describe support services provided to final users and distributors before, during and after the sale.

2) Current Target Market(s):

Describe in detail the company’s current target market(s). Examining this section correctly takes a great deal of customer-focused research.

i. Target market approach – What general strategy is used to reach target customers? Approaches include –

a. Mass market aim to sell to a large broad market.

b. Segmentation approach aim to selectively target one (niche) or more markets.

ii. Demographic / Psychographic profile of the market – Profile criteria may include gender, income, age, occupation, education, family life cycle, geographic region, lifestyle, attitudes, etc.

iii. Characteristics of targeted customers –

a. Needs / benefits sought by market

b. Product usage –

(1) Who is using the product

(2) Why do they use the product?

(3) When do they use the product?

(4) How is the product used?

c. Product positioning –

How customers perceive the product in relation to the competitors’ products or to other solutions they use to solve their problems?

d. Attitudes –

Examine the general attitude regarding how products from all companies serve the target market’s needs.

iv. The purchasing process –

a. How does the target market make their purchase?

1. What does the decision making process involve?

2. What sources of information are sought?

3. What is a timeline for a purchase?

b. Who makes the purchase?

c. Who or what may influence the purchase?

v. Market size estimates –

a. Size estimate for the potential market.

b. Estimates of size for the current target market.

c. Estimate of future growth rates.

3) Current Distributor Network:

Evaluate how the company’s products is distributed. Distribution decisions are critical in nature as they affect the viability of the firm and the product. These decisions affect the market share of the firm and hence great care has to be taken in selecting distribution alternatives.

This includes:

i. Describe the channels/supply chain employed to sell and deliver the product. Options may include –

a. Direct to customers

b. Indirect via a distributor

c. Combination of both.

ii. What are the needs/benefits sought by distributors?

iii. Describe the product’s role within the distributor network.

a. How is this product used within the distributor’s business?

b. How important is product within the distributor’s strategy?

c. How is product positioned?

d. Attitudes and perceptions about company’s product(s).

iv. Purchase Process –

a. How does distributor network make their purchase?

b. Who or what influence distributor’s purchases?

v. Demographics –

Who makes up the distributor network?

4) Competitive Analysis:

Analysis of competition and how well the market is serviced tells us if the market is attractive enough to enter. For example, if a market is well served and customers are satisfied with what they are getting, then very little opportunity exists for any new entrant. In short, dissatisfaction with a competitor’s products and services provides an opportunity for a firm to enter the market and make profits.

Competitive analysis includes:

i. Describe direct competitors in terms of –

a. Target markets served

b. Product attributes

c. Pricing

d. Promotion

e. Distribution

f. Services offered.

ii. Discuss competitor’s strengths and weaknesses in terms of –

a. Financial standing

b. Target market perception

c. R & D capabilities.

iii. Discuss competitive trends.

5) Financial Analysis for Product or Product Line:

Financial analysis for product or product line is required for detailed planning of marketing revenues and expenses.

Financial analysis should take into consideration the following attributes:

i. Current Sales Analysis:

a. Overall industry sales and market share (for at least last year) –

(1) Total market sales

(2) Total for company’s produces)

(3) Total for competition.

b. By segments / product categories –

(1) Total for segments / product categories

(2) Total for company’s product(s)

(3) Total for competition.

c. By channel of distribution –

(1) Total for each channel

(2) Total for company’s product(s) by channel

(3) Total for competition by channel.

d. By geographic region –

(1) Total for each region

(2) Total for company’s product(s) by region

(3) Total for competition by region.

ii. Profitability Analysis:

a. Revenues – For highly detailed plans break out into various categories as market share, segments, products, channel of distribution, geographic region, etc.

b. Marketing expenses –

(1) Direct – those expenses that can be directly associated or ties to the product

(2) Indirect or proportional – generally administrative or broad marketing expenses that may be assigned to a product based on some established criteria (e.g., a product’s percentage of overall company sales).

6) Other Analysis:

i. Environment Problems and Opportunities:

Facilitating the corporation’s strategic response to the changes taking place in environmental factors is the ultimate purpose of environment analysis. Analysis is essential to know where the environment is heading; to observe and size up the relevant events and trends in the environment.

The various areas of consideration are:

a. Social and cultural environment.

b. Demographic environment

c. Economic environment

d. Technological environment

e. Political environment

f. Legal, regulatory, ethical environment.

ii. Strength-Weakness Analysis:

While a small enterprise may be in a position to straightaway list out its strong points and weak areas, it is not easy for large, multi-business corporations to do so, especially when one’s strength or weakness has to be reckoned against that of completion and the changes taking place in the environment.

The firm has to assess carefully its capabilities in the various areas, such as – marketing, finance, human resources, operations, R&D and general management. In each of these areas, several aspects have to be covered. And, both qualitative and quantitative evaluations form part of this appraisal.

Approach # 3. Marketing Strategy and Objectives:

A marketing plan needs a clear picture of the direction the product will take. Some accountability has to be built into the plan so that the plan is not just false but results in measurable actions.

Therefore, it is necessary to identify the key strategies and objectives for the product(s).

Three major issues covered under this are:

1) Marketing Strategy

2) Financial Objectives

3) Marketing Objectives.

1) Marketing Strategy:

In this section identify the general marketing strategy under which this plan is being developed. It is very possible that a product will follow more than one strategy (e.g.- sell more of same products to current customers but also find new customers in new markets.) This section contains inputs on sales growth plan.

A marketer has the following options to achieve an increase in the firm’s sales turnover:

a) Increase in the price of the SBU.

b) Convert non-users into users.

c) Convert the competitor’s customers into firm’s customers

d) Increase consumption of the SBU in existing customer groups by identifying new applications of the existing product.

e) Launch new product for different customer groups.

f) Improvements in service strategy.

The marketing strategy should also reflect positioning of the product in the target market, pricing policies, distribution alternatives, sales force operations, advertising and sales promotion programmes and customer service policy.

2) Financial Objectives:

For many organizations the ultimate goal of the marketing plan is the effect it will have on the bottom line. The firm should analyze the cash flow/investment that is normal for a business, given its market environment, competitive position, production structure, budget allocation, and the historical pattern of strategic moves.

Strategic strengths and weaknesses are identified on the basis of the impact of individual profit, cash flow on forecasts or return on investment (ROI). This analysis will help the firm to identify key success factors in the industry.

3) Marketing Objectives:

The contours of marketing objectives will emanate from the corporate-level objectives and strategy. The corporation would have already offered the direction in which the particular business should move. It is from this direction that the given business draws its objectives. In actual practice, however, the journey from corporate-level directions to specific marketing objectives for the unit is not so simple and direct.

The business unit has to figure out its marketing objectives after weighting the opportunities available in the environment, the threats, and the forces of competition, the resources available and the capabilities of its marketing organization.

Marketing objectives have to be set in all the key areas of the business. They include- profits, sales volume, market share, productivity, research & development and innovation. The objectives must be specified in clear cut and readily measurable terms. They must be quantified, with specific time schedules, so that they can be evaluated against performance. When the marketing objectives are left vague and ambiguous, activities will lose focus.

The marketing objectives section will indicate targets to be achieved across several marketing decision areas such as:

a. Target Market objectives

b. Promotional objectives

c. Channel objectives

d. Market research objectives

e. R &D objectives etc.

Approach # 4. Tactical Marketing Programs:

This is the heart of the marketing plan. It contains descriptions of detailed tactics to be carried out to achieve the objectives and goals established.

In this section detail timetables are presented for six key decision areas:

1) Target Markets

2) Product

3) Promotion

4) Pricing

5) Distribution

6) Other Areas.

1) Target Market Issues:

A marketer has to define the market to which it will direct its efforts. The specification and identification of market would enable the marketer to design specific marketing strategies. A target market is defined as a set of actual and potential buyers of a product, service or idea.

A buyer, who has interest in the product, income and willingness to buy, can broadly be called as potential buyer. However, it might not be possible for the marketer to target all of them. There might be geographical barriers, unsuitability of product to certain climate conditions, or inability of the marketer to reach certain hilly, or remote areas.

There might be some added qualifications that might be necessary to make the potential target to possess, before it is taken to be part of target market. Thus a small portion of potential market might become part of the target market.

2) Product Issues:

Almost everything that we came across is our daily life is a product. A product is not a mere object; it is not a mere assemblage of matter. It means something more than a physical commodity. People associate meaning with products; they drive satisfaction from them. The core of the basic constituent of the product is the first component in its total personality.

In marketing, the brand name is the major selling tool and one of the most important components of the “total product personality”. The package is another personality, especially in consumer products. The package performs, two essential roles – marketing strategies.

A target market is defined as a set of actual and potential buyers of a products, service or idea. A buyer, who has interest in the products, – (i) Giving protection to the product and (ii) Adding to its aesthetics and sales appeal. Label is part and parcel of a package. A label provides written information about the product.

The total personality of the product is not decided by these elements alone. They make the initial impact on the customer. The remaining 3P’s of the marketing mix namely, the price, place (channel) and promotion are crucial elements deciding the total product personality.

3) Promotion:

Promotion was for quite a long-time considered to be synonymous with marketing communications is a pointer to its pre-eminent role in marketing communication.

Promotion itself consists of four different components, namely:

i. Personal Selling – Personal selling is unique as it is a face-to-face transaction between a salesman and a prospective communication medium. Evidently, a well-trained and competitive spirited salesman can be an effective communication medium.

ii. Advertising – Advertising has been defined, “an any paid form of non-personal presentation and promotion of ideas, goods or service by an identified sponsor.” Through an advertisement, the advertiser intends to spread his ideas about his products/offerings among his customers and prospects. Popularization of the products is the basic aim of the advertising.

iii. Sales Promotion – Sales promotion is essentially a direct and immediate inducement. It adds extra value to the product and hence prompts the dealer/consumer to buy the product. Sales promotion, by and large, is practiced as a catalyst, and a supporting facility to advertising and personal selling.

iv. Publicity – Publicity is the fourth major tool in promotion. Whereas, advertising, personal selling and sales promotion are designed and controlled by the firm, publicity is not easily controllable by the firm. The firm’s interest is in ensuring that the publicity that builds up is favorable to it.

4) Distribution Issues:

Distribution is a broad concept that includes all activities and entities (e.g., value chain partners) responsible for getting the product or service to the customer. Distribution costs can represent a high portion of the overall cost of the product so an efficient distribution system may be critical for marketing success.

i. Physical Distribution – It is the process of delivering the product to the marketing channels and consumers. It encompasses the various activities involved in the physical flow of the product from the producer to consumer.

ii. Marketing Logistics – It covers physical distribution in full measure, plus a part of the function of marketing channels. Marketing logistics bring in greater value addition in the delivery chain, beyond mere transportation or distribution.

iii. Supply Chain Management (SCM) – It encompasses materials management task as well. Supply chain actually refers to the whole business chain, encompassing procurement of inputs, in-bound logistics and conversion of inputs into products, physical distribution / marketing logistics and channel function.

iv. Marketing Channels – It play a pivotal role in marketing, they perform a number of vital distribution functions. Manufacturers normally use intermediaries for taking their products to the users. The intermediaries bear a variety of names. All such intermediaries constitute the marketing channel.

5) Pricing Issues:

Pricing is undoubtedly a vital decision area in marketing. Price is the only element in the marketing mix of a firm that generates revenue. All else generate only cost. Price & sales volume together decide the revenue of any business. As sales volume in itself is dependent to a considerable extent on price, the latter becomes key to the revenue of the business. Price is also the most important determinant of the profitability of the business.

6) Other Areas:

This section includes a discussion of other marketing decision areas. Two additional areas – customer relationship management and marketing research, – are provided though it is possible others exist.

i. Customer Relationship Management:

Each organization professes to encourage customer loyalty, most of them fail perhaps because they either do not understand the concept of loyalty or do not know how to develop it within the organization. Loyalty is an outcome of the customer’s faith or confidence in the company’s offer.

The customer believes and continues to buy or select it for the reason that he/she sees it reflecting his/her values. The basis for continuity in relationship between the company and the customer over a period of time is value maximization. The main objective of CRM is to enhance customer loyalty.

ii. Marketing Research:

Marketing Research is research or the manifold problems of marketing. Its purpose is to aid decision-making in marketing. Systematic gathering and analysis of information is what it does in achieving its mission. With the increasing complexity of business activity, marketing research too has been growing in complexity and it has emerged as a highly specialized function of marketing management.

Marketing research jobs can be classified in different ways such as:

a. Routine problem analysis and research on non-routine problems.

b. Research on short-term and long term problems.

c. Classification based on the actual subject of the research.

Approach # 5. Budgeting, Performance Analysis and Implementation:

In many ways this part of the marketing plan is the area that will ultimately “sell” the plan to those who have the power to give final approval.

This step consists of three key topics:

1) Marketing Budget – presents a clear picture of the financial implications of the plan.

2) Performance Analysis – presents the expected results of the plan including its financial impact.

3) Implementation Schedule – shows timelines and identifies those responsible for performing tasks.

1) Marketing Budget:

A budget is a plan for allocation of resources. It expresses objectives and resources in quantitative terms. A budget is a plan, which states expected results of a given future period in numerical terms. It is a plan of action or blue print designed to achieve a specific goal. It may be expressed in time, money or other units.

It is a projection defining the anticipated costs and results and the allocation of resources. A budget may reflect capital outlay, cash flows, production and sales targets. It expresses organizational objectives in financial and physical units.

A budget is an instrument of both planning and control. As goals are expressed in numerical terms, co-ordination of departmental plans becomes easier. Budgets serve as standards of performance. A budget is generally prepared for one year.

2) Performance Analysis:

The foundation of all performance analysis is the belief that human beings have great capacity for growth and improved performance and under right climate for performance, they will respond creatively and positively. People perform better when the performance criteria, goals and tasks are established clearly and by mutual agreement.

Likewise, their performance is considerably improved when they are given periodic feedback on how they are performing and in what areas they can improve by greater application, also by the necessary help and guidance on the job, and are rewarded promptly according to their contribution.

3) Implementation Schedule:

At this point the marketer now turns to converting strategy into an action plan. In other words, now the marketer creates deadlines to achieve certain objectives, develops action programmes, and assigns responsibilities to individuals. This makes the entire plan more meaningful.

Here the issue is that of the frequency at which the planning exercise needs to be undertaken. Should planning be an annual ritual, or as market development warrants. In today’s turbulent times, an annual exercise may not be as relevant as short term planning will be.

Approach # 6. Additional Considerations:

The final major section in the marketing plan prepares the marketer for potential situations that may affect the plan. In this way the marketer is provided with a somewhat more balanced picture of what the company may face as it attempts to implement the plan.

1) Internal Appraisal:

While environmental survey may help identify the opportunities in areas of interest to the firm, the latter obviously cannot tap all these opportunities. It has to find out whether it has the requisite capabilities for tapping the spotted opportunities. To facilitate this task, the firm attempts an internal appraisal and takes a close look at its various businesses, its strengths, weaknesses and competitive advantages.

Actually, internal appraisal has three distinct parts:

i. Assessment of the strengths and weaknesses of the firm in the different functions/areas.

ii. Appraisal of the status/health of the individual businesses of the firm.

iii. Assessment of the firm’s competitive advantage and core competence.

2) External Appraisal:

Companies and their suppliers, marketing intermediaries, customers, competitors, and publics operate in an environment of forces and trends that shape opportunities and pose threats. These forces represent “noncontrollables”, which the company must monitor and respond to.

In the economic arena, companies and consumers are increasingly affected by global forces. Within the rapidly changing global picture, the firm must monitor the major forces, the marketers must pay attention to their casual interactions, because these set the stage for new opportunities as well as threats.

Marketing Planning – 8 Main Difficulties

We know that “marketing planning is concerned with the identification or resources that are available and their allocation to meet specified objectives.” This task is not as simple as it appears. Even some thinkers consider the whole business of marketing planning waste of time energy and money.

They say that planning is concerned with uncertain future and quite uncertain situations. When future itself is to uncertain how can it be said that planning will hold cent true. The idea behind his pessimistic thinking is perhaps the difficulties which beset the path of marketing planning.

Some of the main difficulties are as follows:

(i) Diversity of Alternatives:

One great difficulty in the way of planning is that there are many alternatives to deal with a certain problem. For example there can be many alternatives how to take finished goods to the consumers. Every alternative has its own merit and demerits.

In the same way, ways and policies of advertising are so varied as the prevalent mediums. In this way diversity of alternatives present many difficulties in the way of marketing planning. Moreover, every alternative presents different results.

(ii) Vacillating Policy of the Government:

Another difficulty in the way of effective planning is the vacillating policies of the government. In India, there is no hard and fast Government Policy. Frequent changes are made by the government from time to time. It affects the planning.

Sometimes the government encourages exports, at another time restrictions are imposed on exports. In the same ways rates of taxation are all the time changing which affect the price level which in its turn influences demand and supply position. All this affects directly the marketing planning.

(iii) Rapid Changes in Costs:

Production costs are not fixed; they are changing all the time. It necessitates frequent changes in the price of products which in its turn has a direct bearing on the demand in the market. It exerts its influence on the objectives of marketing planning. Therefore, frequent and rapid changes in costs are also a hurdle in the way of marketing planning

(iv) Scientific Marketing Planning not Possible:

Some marketing thinkers are of the opinion that scientific marketing plan is not possible at all because the marketing factors are uncertain and changeable. They are not subject to logical analysis.

(v) Time Factor:

The top executives always complain lack of time. Their preoccupations in other affairs is a definite hurdle in the way of preparing a scientific marketing plan which demands time and efforts to analysis and evaluate the available data.

(vi) Difficulty in Marketing Research:

Some marketing authorities complain that the customer’s behaviour in India is very uncertain. In the face of uncertain behaviour correct forecasts are not possible. In the absence of accurate forecasts, marketing planning is a useless effort.

(vii) No Control over Supply:

Even if correct estimate of demand is made into the market, there is no control over supply. Sometimes supply cannot be possible in conformity with demand. In such circuit stances proper marketing planning is not possible. When the production targets cannot be achieved, how can one succeed in drawing a logical plan.

It is quite clear that there are certain factor is which are beyond the control of the producer. In the absence of complete control over the forces of supply marketing planning loses all its importance.

(viii) Marketing Planning is an Expensive Procedure:

Some experts opine that scientific marketing planning is a very expensive procedure which entails huge expenditure. Most of the companies are not in a position to meet the heavy burden of planning and hence do away with the luxury of marketing planning.

The difficulties of marketing planning discussion reveals that though the task of planning is brought with difficulties and hurdles vet it should not be concluded that marketing planning is a waste and unnecessary. Of course the difficulties are there but efforts should be made to overcome these difficulties. Difficulties in themselves do not prove that marketing planning is useless and unimportant.

Marketing Planning – Organisations for Marketing Planning

In order to understand how marketing work gets done, one must know a good deal about both organization in general and marketing organization in particular. An organization is the mechanism through which a managerial philosophy is translated into action- the marketing organization provides the vehicle for making decisions or products, marketing channels, physical distribution, promotion and prices. It is also the vehicle through which these decisions are implemented.

The basic goals of a company indicate what the company wants to be and have important implications for the marketing organization. Management looks more and more to its target markets for guidance and seek to structure the organisation so that the markets are served effectively and overall organizational goals are reached. Managerial attitudes towards the marketing concept show up the ways in which marketing activities are organised in various kinds of enterprises.

A company which wants to plan effectively may have any of the following organisations for marketing planning:

1. Marketing planning and committee

2. Marketing planning department and

3. Functional marketing planning organization

1. Marketing Planning Committee:

Under this planning organisation, a marketing planning committee is established. This committee consists of all the executives of the company and is responsible for drawing guiding principles of the marketing plan.

The meetings of this committee are held from time to time but to look after the day to day business planning- vice president is appointed who is directly responsible for planning. He works in co-operation with the top management and other executives. Planning vice president has a planning coordinator and staff to assist him.

He looks that:

(a) Necessary research work is carried on.

(b) Instructions and directions reach each department in time.

Infact, departmental plans are prepared by the needs of different departments. They are in conformity with the guidelines laid down by the marketing planning committee. Their departmental plans are sent to the vice president for scrutiny and evaluation.

The planning staff scrutinizes these departmental plans and suggests changes where ever necessary. Sometimes these plans are returned to their respective departmental heads to make the proposed changes. At least, in the final form the plan is approved by the marketing planning committee.

This organisation is suitable only for very big companies. Small and medium sized companies cannot afford such an organisation for marketing planning alone. They may take the help at the sales, production and other departments.

2. Marketing Planning Department:

In some other big concerns a marketing planning department is established and headed by marketing planning manager. This planning department is assigned with the task of collecting the relevant information on the various aspects of marketing; analysis of the information in the light of the marketing objectives; and preparing the various marketing objectives and plans.

The in charge of the department sends the plans to the top management through the marketing manager. Top executive scrutinizes, the plans and if he is satisfied, he gives his approval to the plans and if he feels that certain changes should be incorporated in the plans, he refers back the plans to the planning department.

Planning department makes the necessary changes in the plans as suggested by the top executive and sends it back to the two executive for approval. The top executive then finally approves the plans.

3. Function Marketing Planning Organization:

In medium sized organization the marketing planning function is the prime responsibility of the marketing manager. The marketing manager delegates his authority to managers at various other sub departments such as sales, sales promotion and advertisement, marketing research, etc. to plan for their own sub departments. Their authorities and responsibilities are made fixed.

The managers of such departments prepare their own plans and submit those plans to the marketing manager. Generally, these are three organizations for planning and the concern may choose any of them. It can also make certain modification in the process wherever and whenever it desires.