Planning – Designing the Bl Ueprint For the Future
Planning is the process of designing the blueprint for the future. The future of marketing in an organization should stem from the future of the organization itself. The basic function of management includes planning, organizing, executing, coordinating, and controlling the future course of Action.
Planning is the process of envisioning the future, establishing objectives and goals for the firm, and designing organizational and marketing strategies and tactics to be implemented at different points time in the future to achieve the goals.
Table of Contents
- 1 Planning – Designing the Bl Ueprint For the Future
- 2 Characteristics of a Good Marketing Plan
- 3 Importance of Marketing Planning
- 4 Designing an Overall Marketing Plan
- 4.1 Marketing Planning and Management Process
- 4.2 Contents of a Marketing Plan
- 4.2.1 Executive Summary and Table of Contents
- 4.2.2 Mission Statement
- 4.2.3 Summary of Performance To Date
- 4.2.4 Summary of Financial Projections
- 4.2.5 Market Overview
- 4.2.6 Swot Analysis for Major SBUs
- 4.2.7 Portfolio Summary of All the SBUs
- 4.2.8 Market Assumptions
- 4.2.9 Marketing Objectives and Goals
- 4.2.10 Financial Projections for at Least Three Years
- 4.2.11 Marketing Strategy
- 4.2.12 Marketing Action Plans
It involves analysis of perceived opportunities and threats, evaluating various alternatives, and selecting the best course of action to achieve organizational goals. Planning goes beyond analysis and helps in predicting the future and in devising means to adjust to an ever-changing environment. It helps organizations to shape their destiny by anticipating changes in the marketplace rather than taking firefighting measures.
Strategic planning is long-term planning by the top management. This plan specifies the organization’s primary goals and objectives and focuses on the entire organization. As we move down in the management hierarchy, the focus of planning also narrows down.
While at the middle level, managers are involved in business planning at Strategic Business Unit (SBU) level; the lower level managers do operational planning.
For example, the top management may plan to make a product a market leader, say in five years, and achieve the highest brand recall in the market; the middle management is responsible for developing a marketing mix strategy by allocating resources and coordinating activities of lower level marketing managers.
The lower-level management will be concerned with daily operations and routines to achieve the desired goals at both SBU and corporate levels.
When the head of marketing is planning for a new product and campaign launch, a sales manager spends time supervising and motivating its sales force to achieve the desired territorial goals.
|Management Levels||Planning Focus||Key Marketing Questions||Examples|
|Top Level of Management||Corporate Plan||What is the organization’s mission? How do we organize the business?||Generate over $400,000 in sales by the end of next|
|Middle Level of Management||Business Unit Plan||What is our competitive strategy for growth in that particular business unit? What are our competitive advantages?||Diagnose why sales in a retail location have dipped and suggest ways to|
|Lower Level of Management||Operational Plans||How can we best support both the corporate plan and the business unit plan? What are our operational schedules?||Determining which work units will get which|
In most organizations, strategic planning is an annual process covering the year ahead but organizations like Wipro and HLL have their long-term plans also. A good marketing plan should also be consistent with the overall corporate, business unit, and departmental plans.
It should take into account the plans of previous years, minimizing the idea of firefighting during the plan period. A good marketing plan should also identify the individual responsibilities of planners and also for people responsible for execution. The performance of individuals can thus be monitored against the planned responsibilities.
Characteristics of a Good Marketing Plan
A good marketing plan involves the following characteristics:
- A good marketing plan should communicate to every member what is desired of each member so that they have some level of goal clarity, an understanding of assumptions that lie behind the goals, and the context of each activity and decision.
Example: Communicating with the employees regarding the medium of advertisements such as print and broadcast advertising, digital media, direct mail, in-store promotions, cause marketing, event sponsorships, and cross-promotions, so that they are able to make sales of the product accordingly.
- Since in most organizations, planning is a mutually agreed upon activity, a good marketing plan should also stimulate individual and group commitment.
- An effective marketing plan provides you with objective information to confidently make decisions. This includes research that identifies the consumer need for your product or service, customer demographic characteristics, the competition from which they are buying, the places they are buying, and the prices they are willing to pay.
- Different organizations follow different kinds of planning approaches. Organizations, where top management sets both the goals and plans for the lower management, follow a top-down approach.
Example: Communicating the employees to carry out the aforesaid objectives by a deadline, say reaching a 10% increase in sales in the coming quarters.
- In democratic and participative organizations, there is a bottom-up approach in which each unit in the organization creates its own goals and plans, which are then approved by the top management.
- The third approach is to have a goals down-plans approach. In this approach, the top management sets the goal but various business units create their own plans to meet these goals.
Example: To encourage 200 new persons to try the product in the first three months.
- A good marketing plan would include a section on identifying, comparing, and recommending distribution strategies.
Importance of Marketing Planning
Marketing planning is a systemic and disciplined exercise to formulate marketing strategies. Marketing planning can be related to the organization as a whole or to Strategic Business Units (SBU). Marketing planning is a forward-looking exercise, which determines the future strategies of an organization with special reference to its product development, market development, channel design, sales promotion, and profitability.
We can summarize the importance of marketing planning in the following manner:
- It helps in avoiding future uncertainties.
- It helps in management by objectives.
- It helps in achieving objectives.
- It helps in coordination and communication among the departments.
- It helps in control.
- It helps the customers in getting complete satisfaction.
Here is an example of how HUL benefited by doing effective marketing planning:
- HUL has gone into strategic partnerships with technology companies for such targeted market development. In this direction, the company’s salespersons will be expected to carry hand-held devices in which all details of kirana stores will be there of the areas they operate in.
- HUL has also launched initiatives like ‘go to market’ and ‘Bushfire’ so that the company can ensure reaching its products to seven million outlets instead of selling the product in just 2,000 modern trade stores.
Knorr is again a perfect example of their good marketing strategy. From just soup, Knorr has moved to soupy noodles and become a satiating snack for kids, which is another success story of the brand, but now it’s positioned as a complete cooking aid for Indian homemakers.
Designing an Overall Marketing Plan
The planning process must begin with setting down the corporate objectives and should be followed through with strategies and plans for each separate function. The first step in the marketing planning process is setting down marketing objectives and policies. The objectives here must be only the long-term objectives, which can be fixed in terms of sales and revenue turnover.
The second step is designing the marketing system. In the marketing system, a company has to design/ define each function with its contribution. The third step is to develop separate objectives, programs, and strategies for each function (like new product development function, pricing decisions, distribution function, and promotion function) so that they can be assessed for the target purpose and the broad objectives.
If any function cannot meet its objectives, the latter has to be modified for that functional area. The fourth step is drawing of detailed plans for each function for a shorter period, i.e., a quarter, half a year, or a year. It will be helpful in defining the responsibilities, timing, and costs needed to achieve the short-term objectives. The fifth step is merging the marketing plans into organizational plans.
Marketing Planning and Management Process
The marketing manager at each level of the organization is expected to develop a marketing plan. While at the corporate level, the marketing planning is done for the whole organization; the SBU marketing manager does it for his specific business unit.
Functional managers like sales managers, product or category managers, logistics managers, and advertising and sales promotion manager need to come up with their functional plans in support of the execution of the overall marketing plan.
We have already defined marketing management as a process of identifying marketing opportunities, researching and selecting the target markets, designing marketing strategies and relevant marketing programs; organizing, implementing, and controlling the marketing program. We will discuss this process again from the planning perspective.
A marketing manager needs to analyze trends in the marketing environment to find out new product or service marketing opportunities. To evaluate the business opportunity, we need to conduct market research and estimate demand for the product, both in the short term and long term.
Marketing research will help in analyzing consumer behavior and forecasting buying intention of the consumers in the market. This also helps in estimating current and future demand potential.
The aggregate demand estimated in the market need not be a proper indicator of the new product opportunity. So it is necessary to segment and target a portion of the market where either customer are very similar or their responses to the proposed marketing program will be similar. Depending on the objective and goals, companies can decide what kind of target marketing strategy to follow in the market.
The next task is to find out the customer’s perception of various brands and how the company’s brand is positioned in the market. In the case of a new product, positioning research helps the firm in mapping the perception of consumers on existing competitors and finding out a suitable position for the product.
Once the target segment is identified, the segment profile is developed and the positioning decision is made, the marketing manager comes out with a marketing strategy. Marketing strategies will vary depending on what position the firm has already taken in the market.
A firm can play different roles depending on what kind of market share it holds. The largest player is called the market leader who is challenged by a few challengers. There are followers, nichers, and clones in the market also.
While the niche plays in a small market segment, a clone survives on the image of the leader or one of the large players. The marketing strategy will also depend on the decision of the firm on what kind of geographic market it intends to cover.
Firms can follow a country-specific marketing strategy as well as a global marketing strategy, depending on the number of countries of their operation. New product planning, launch, and management across the life cycle of the product form a part of the marketing strategy. Firms pursue different kinds of marketing strategies at different stages of the product life cycle.
Subsequent to the marketing strategy decisions, the marketing manager should plan marketing programs. Planning for marketing programs involves investment and expenditure decisions on elements of the marketing mix, which include product, price, place or distribution, and promotion decisions.
The marketing manager makes budgetary or expenditure decisions, which involves deciding on what amount of expenditure will bring the desired result. Finally, the budget is spread across different products, distribution channels, consumer segments, and on promotional tools like advertising, sales promotion, and publicity.
The final step in the marketing process is to organize marketing resources, and implement, control, and evaluate the marketing plan. There is a need to develop a marketing organization with roles and responsibilities for each member of the hierarchy. The larger the product mix and market coverage, the more complex will be the marketing organization.
The people in the organization are responsible for the implementation of the marketing plan. There is a need to control the marketing efforts on the basis of time performance or profitability and on the adaptability of the strategy to the evolving marketing environment.
Cost control is a budgetary evaluation and performance control is individual and department evaluation. Adaptability control finds out how often the marketing manager has to do firefighting because of some assumption at the planning level going wrong when implementation happens.
A smooth and systematic feedback mechanism helps the organization bring fresh ideas and marketing information into the subsequent stages of business planning.
Contents of a Marketing Plan
A marketing plan is to be developed in detail on the basis of functional plans and programs. Further, detailed plans will act as a guide for marketing objectives and marketing strategies. Functional plans are instruments, which translate grand strategy to marketplace reality.
If the functional plans are not drawn properly, the marketing strategy may turn into failure in the marketplace. The marketing plan should be formalized as a written document.
A standard marketing plan should contain elements as explained below:
Executive Summary and Table of Contents
The marketing plan should start with an executive summary of the plan and should include a table of contents. The summary would help the senior management to get a glimpse of what is included in the plan.
The mission statement should come out of the corporate and business unit level plan and should explain the why of the existence of the business.
Summary of Performance To Date
The plan should present a summary of past performance. It should explain the results of the previous strategies followed by the marketer, which will help in developing a base for future planning. This section provides relevant background data on sales, profits, markets, competitors, the number of intermediaries, and relationships with them.
Summary of Financial Projections
Past marketing performance must have been measured in financial terms to explain the efficacy of financial investments. A summary of projections for the future comes out of past performance and will help in giving a snapshot of what is going to happen in the future.
This comes out of the trend analysis and monitoring of the market and gives an indicator of the behavior of the market in the future. A marketer can use scenario analysis to explain the likely behavior of the market.
Swot Analysis for Major SBUs
If the company has more than one SBU, the marketing planner needs to evaluate each SBU and conduct a SWOT analysis of each SBU, as both the marketing opportunities and strengths of SBUs will vary from business to business.
Portfolio Summary of All the SBUs
A summary of portfolios helps in allocation decisions. It will show where the money should come from and which business needs further investments. The portfolio summary will show how balanced the company is among its portfolios.
Plans are always made under certain assumptions. If the assumptions go wrong then the plans will go wrong. So a careful list of assumptions should be included in the marketing plan based on which the rest of the plan will flow.
Marketing Objectives and Goals
Marketing objectives and goals in clear, measurable terms should be included in the plan. This will serve as a milestone for the execution of the plan. In this section, the marketing planner would include the plan’s major market goals expressed in measurable terms like sales volume, market share, profit, etc.
Financial Projections for at Least Three Years
This is necessary from both the implementation and control points of view. Financial projections for the three coming years will help the firm to regulate the marketing function, and break overall projections into achievable targets for each responsible person and into each territory of the market.
In this section, the marketing planner will define the target segment(s) to cater to, the target marketing strategy to be followed, and the positioning of the product in the market in relation to competitors. This is done by taking into consideration the value chain followed by the company.
Marketing Action Plans
Each marketing strategy element like product, price, place, and promotion should be elaborated through a set of functional plans and programs. This section should answer questions like what will be done? Who will do it?
When shall it be done? What will be the result of that action? The marketing action plan should cover the functional plans as explained.