- Dec 15, 2003
Marketing Plan FAQ
What do I include in a Marketing Plan?
The syllabus details what is included in a marketing plan:
elements of a marketing plan
• situational analysis including SWOT and product life cycle
• establishing market objectives
• identifying target market
• developing marketing strategies
• implementation, monitoring and controlling — developing a financial forecast, comparing actual and planned results, and revising the marketing strategy
What does a situational analysis involve?
It looks at the current state of the business, the marketing environment, customer needs and wants, and the competition.
The business environment affects business. Factors inside and outside the business can have a direct on customers and marketing opportunities. Environmental factors will influence the business’s ability to make promote and distribute goods and services. It also must try to predict what could happen in the future.
Are usually powerful forces that can affect a whole industry and, in fact, a whole economy. They can include:
• General economic conditions
• Government policy and regulations
• Overseas influences
• Demographic patterns
• Technological change
• Changing consumer attitudes and values
At best a business can adjust its operations to take advantage of opportunities arising from changes in the environment. The main focus looks on how changes will create opportunities or threats in the marketplace. Marketers predict how these external influences will affect the marketing activities of the business. The marketing plan will created with the external influences and possible changes in mind.
Are such things as the quality and quantity of business resources, the characteristics of the products and the different strategies used to combat the competition can be controlled to varying degrees.
The business’s production facilities, location and experience of employees are all variables which affect whether a businesses operations.
The product analysis examines various issues relating to the different goods and services provided by the business.
Products go through a lifecycle from their introduction into the market to their removal.
• In the introduction phase, sales grow very slowly because the product is new and people are yet to accept or try it.
• In the growth stage, more and more people are buying the product, and as the sales rise, profits rise.
• In the maturity stage the growth rate of sales starts to slow down
• In the decline stage, sales start to fall.
A business needs to understand how competitors think by analysing their strategies, assessing their strengths and weaknesses, and predicting what they may do in the future.
Working out the competitors objectives gives the business a good idea of their current strategies, and suggest what they might do in the future.
An analysis of the strengths and weaknesses of competitors is also important. The aim of the competitors analysis is to predict their likely marketing strategies, how the react to moves of introduction of new products. This allows the business to work out competitors strengths and weaknesses which means the business is able to develop its own strategies with confidence.
Businesses can use the SWOT analysis to evaluate themselves and their competitors.
• STRENGTHS – The things that the business does better than its competitors
• WEAKNESSES- The things that the business does not do as well as its competitors
• OPPORTUNITIES – That can arise from the external environment
• THREATS-That can arise from the external environment
By answering questions such as these, a business can work its competitive advantage, as well as its future directions and strategies.
What does establishing marketing objectives involve?
The marketing plan gets is objectives form the business plan. Objectives need to be SMART.
• Specific – stated as Cleary and precisely as possible
• Measurable – So that the business can accurately see whether the objective has been achieved.
• Achievable- With the resources and capabilities of the business
• Realistic – In terms of time frame, present technology
• Timed – A time period must be set for the market to be reached.
What does Identifying the target market involve?
The business must choose the market segments that have the greatest potential because the total market is so large. The target market is the group of customers on whom the business focuses attention.
Identifying the Target Market
The target market is defined and described in terms of states, regions, demographic stat, etc.
Selecting Target Markets
When selecting a target market the biggest isn’t always the best as competition tends to be fierce in these markets. Often by targeting smaller segments that have been ignored is a way to gain a foothold in the market. The business also needs to be able to serve the market segment in cost-efficient ways. That is accessing the market through normal marketing channels.
Target Market Strategies
A business can adopt one of 3 target market strategies:-
• Un-differentiated marketing: When a business tries to provide one product for the whole market, it is taking an undifferentiated marketing, or ‘mass market’.
• Differentiated marketing: Involves grouping their customers according to different characteristics such as age, income level, family size, desire for image and prestige, and type of business. The companies then design different products for each of these groups and prepare a marketing program that appeals to each specific group.
• Concentrated marketing: Selecting just one part of the total market.
Micro-marketing: Is the smallest possible niche – the individual customer
Mass-customisation: Business caters for many customers, while efficiently meeting the needs of individuals
What does developing marketing strategies involve?
Marketing strategies should:
• Satisfy the needs of the target markets
• Meet the objectives of the business and marketing plans
• Capitalise on corporate strengths and minimise the effect of any weakness
• Work together in achieving overall marketing objectives
Marketing Mix Tactics
This is where the marketing tactics for each product are determined.
• Product – All the different goods and services offered to customers, the range of styles, colours and features available.
• Price- The cost of the product in the marketplace which includes setting the base price of the product.
• Promotion- The different methods used to let customers know about the product and to persuade them to buy it, more than just once.
• Place- The methods and channels that can be used to get the product to the marketplace
What does implementation, monitoring and control involve?
• The process of turning plans into actions, and involves all the activities that put the marketing plan to work.
• It depends on how well the business blends its people, organisational structure and company culture into a cohesive program that supports the marketing plan. Production needs to be on time, standards set for quality, sales force needs to be motivated about the product, needs to be efficient and promotional needs to be effective.
• The key parts of this process involve developing a financial forecast, monitoring the performance of the plan by comparing actual and planned results and revising the planning strategy as a result of the process.
Developing a Financial Forecast
A financial forecast looks at the expected costs and revenue for the next year or over a number of years. First, estimates have to be made of the cost of the marketing plan and this is compared to the expected revenue.
Marketing costs can be broken down to include:-
• Research costs- Incurred costs in order to find out want customers want
• Product development costs- The new product development is expensive
• Product costs- Such as design and production of packaging and cost of warranties
• Promotion costs- Including costs of having a sales force and advertising.
• Distribution costs- Such as warehousing, transportation and order processing.
As long the estimates are logical and realistic they can be a good guide for decision making.
Marketing also has a number of different methods to predict revenue, these include:-
• Sales force composite- Using estimates of what individual salespeople expect to sell
• Buyer intensions- Taking a survey of a group of customers to measure how much they will buy of a product in a particular point in time.
• Executive judgment – Using the opinions of executives in the business, or those of ‘experts’
Out of them the most popular methods are sales force composites and executive judgement. Management must always refer to the objectives before making the final decision on the expected budget.
Monitoring the Marketing Plan
Controlling is important because it keeps the business informed about its performance. Three tools used to monitor the marketing plan are:-
• Sales analysis – Breaks down the total business sales by different products, market segments, individual sales representatives and individual sales territories.
• Market share analysis – Compares the business’s sales performance with that of its competitors.
• Market profitability analysis: looks at the cost of marketing and the profitability of products, sales territories, market segments and sales people.
The results of all three tools can be compared with results in different periods of time to determine any emerging trends. The key to control is if actual performance is less than what was forecast then the marketing plan must be adjusted.
Revising the Marketing Strategy
The marketing mix is probably one of the best places to start changing the plan to suit the conditions in the business environment.
The controlling process is linked with the planing process and marketing is a continual cycle of research, change, implementation and monitoring.