Building a Marketing Plan: A Complete Guide

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Building

A Marketing

Plan

A Complete Guide

Ho Yin W

on

g

Kylie Radel

Roshnee Ramsaran-Fowdar

The Marketing Strategy Collection

Ns M,

Editor

www.businessexpertpress.com

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Illustrations

Figures

1.1

1.1 Four Four steps steps to to successul successul marketing marketing planning. planning. 66 2.1

2.1 Te Te situation situation analysis. analysis. 1616 2.2

2.2 A A model model o o customer customer aggregation. aggregation. 1818 2.3

2.3 ypes ypes o o competitive competitive markets. markets. 2121 3.1

3.1 Steps Steps in in the the marketing marketing research research process. process. 3535 4.1

4.1 Factors Factors inuencing inuencing consumer consumer buying buying behavior. behavior. 4949 4.2

4.2 Consumer Consumer buying buying roles. roles. 5151 4.3

4.3 Te Te target target marketing marketing process. process. 5353 5.1

5.1 Relationships Relationships between between corporate- corporate- andand

marketing-marketing-level level objectives objectives and and strategies. strategies. 6060 5.2

5.2 Boston Boston Consulting Consulting Group Group product product portolio portolio matrix. matrix. 6262 5.3

5.3 BCG BCG product product portolio portolio matrix matrix example. example. 6464 5.4

5.4 Product Product A A location location on on the the BCG BCG matrix. matrix. 6666 5.5

5.5 Te Te Anso Anso product-product-market market matrix. matrix. 6868 5.6

5.6 Setting Setting SMARSMAR  marketing marketing objectives. objectives. 7272 6.1

6.1 Product Product lie lie cycle. cycle. 8080 6.2

6.2 Te Te new new product product development development process. process. 8484 6.3

6.3 Positioning Positioning map map or or the the watch watch industryindustry. . 9090 7.1

7.1 Internal Internal and and external external actors actors aecting aecting pricing pricing decisions. decisions. 9898 7.2 D

7.2 Demand emand curves curves or or most most goods goods and and luxury luxury goods. goods. 101101 7.3

7.3 Price Price elastic elastic demand. demand. 102102 7.4

7.4 Price Price inelastic inelastic demand. demand. 103103 7.5

Break-7.5 Break-even even point point analysis. analysis. 105105 8.1

8.1 Te Te promotions promotions mix mix elements. elements. 112112 8.2

8.2 Factors Factors aecting aecting IMC IMC decisions. decisions. 118118 8.3

8.3 Push Push and and pull pull strategies. strategies. 122122 9.1

9.1 Te Te marketing marketing value value chain. chain. 128128 9.2

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xii ILLUSTRATIONS xii ILLUSTRATIONS

9.3

9.3 Economic Economic order order quantity quantity and and the the relationshipsrelationships between

order-between order-processing cost,processing cost,

inventory-inventory-carrying carrying cost, cost, and and total total cost. cost. 139139 10.1

10.1 Functional Functional structure structure incorporating incorporating thethe marketing

marketing concept. concept. 145145 10.2

10.2 Product/brand Product/brand specialization specialization structure structure incorporatingincorporating the

the marketing marketing concept. concept. 146146 10.3

10.3 Geographic Geographic specialization specialization structure structure incorporating incorporating thethe marketing

marketing concept. concept. 146146 10.4

10.4 Matrix Matrix management management structure. structure. 147147 10.5

10.5 Designing Designing the the control control process. process. 154154

Tables

3.1

3.1 Useul Useul Inormation Inormation From From Marketing Marketing Research Research 3434 3.2

3.2 Likert, Likert, Semantic Semantic Dierential, Dierential, Stapel, Stapel, andand Importance

Importance Rating Rating Scale Scale Examples Examples 4242 5.1

5.1 Calculation Calculation or or Market Market Share Share Decisions Decisions 6464 5.2

5.2 Calculation Calculation or or Market Market Growth Growth Decisions Decisions 6565 6.1

6.1 Product Product Line Line Width Width and Dand Depth o epth o aa Beverage

Beverage Organization Organization 8888 7.1

Channel-7.1 Channel-Based Based Pricing Pricing Approaches Approaches 107107 7.2

7.2 Product Product Bundling Bundling Pricing Pricing Approaches Approaches 107107 7.3

7.3 Summary Summary o o Questions Questions to to Be Be Asked Asked to to Set Set a a Pricing Pricing Plan Plan 109109 8.1

8.1 Te Te Promotion Promotion Mix Mix Elements: Elements: Defnitions, Defnitions, Strengths,Strengths, and

and WWeaknesses eaknesses 113113 8.2

8.2 Summary Summary o o Questions Questions to to Be Be Asked Asked to to Set Set IMC IMC Strategies Strategies 123123 9.1

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Foreword

Operating a business requires many skills. A business must have its goals Operating a business requires many skills. A business must have its goals and prod

and products; iucts; it must kt must know its mnow its marketsarkets, oper, operate e ate e cientlcientlyy, have , have goodgood sta, m

sta, manage thanage those staose sta eecti eectively and evely and e  cientlcientlyy, adhe, adhere to many rere to many regu- gu-lations and laws, and market eectively. Out o this mix, the business lations and laws, and market eectively. Out o this mix, the business must produce a proft year ater year. Since the

mid-must produce a proft year ater year. Since the mid-1900s the world o 1900s the world o business has become more competitive every year—

business has become more competitive every year—yes, everyes, every year. Nevery year. Never has this increase in competitiveness been more apparent than now, has this increase in competitiveness been more apparent than now, ol-lowing the economic upheaval over the last 3 years. So, why do some lowing the economic upheaval over the last 3 years. So, why do some businesses prosper while others struggle or ail? In many cases the answer businesses prosper while others struggle or ail? In many cases the answer is simple: Struggling businesses have no practical or eective marketing is simple: Struggling businesses have no practical or eective marketing plan that optimizes and directs marketing eorts based on the actual plan that optimizes and directs marketing eorts based on the actual marketplace—

marketplace—based on customers’ needs and wants. It is this realm o based on customers’ needs and wants. It is this realm o marketing that is so oten neglected.

marketing that is so oten neglected.

Marketing planning is one o those areas o marketing that everyone Marketing planning is one o those areas o marketing that everyone knows we should do, but most businesses do not do. O those businesses knows we should do, but most businesses do not do. O those businesses that do attempt to write a marketing plan, most ail to produce a that do attempt to write a marketing plan, most ail to produce a mean-ingul document. One reason or this outcome is that ew people know ingul document. One reason or this outcome is that ew people know just what to put in and what to leave out. Tis monograph provides a just what to put in and what to leave out. Tis monograph provides a

complete guide with all o the essential elements—

complete guide with all o the essential elements—the must-the must-have parts,have parts, but without all the unnecessary clutter that so many texts would have you but without all the unnecessary clutter that so many texts would have you believe is essential.

believe is essential.

Tis text is aimed at two main audiences: the student taking a ormal Tis text is aimed at two main audiences: the student taking a ormal course and the busy business manager who needs to build a solid and course and the busy business manager who needs to build a solid and practical marketing plan

practical marketing plan in an acceptable in an acceptable time rame. time rame. Tis is Tis is a di a di cultcult task. Te authors have succeeded by bringing together in a single volume task. Te authors have succeeded by bringing together in a single volume a practical approach and method, based on many years o experience. All a practical approach and method, based on many years o experience. All o the essential elements o a marketing plan and the methods to ollow o the essential elements o a marketing plan and the methods to ollow are described using a nice balance o theory and practicality. Tis are described using a nice balance o theory and practicality. Tis inor-mation is then embedded or the reader with a comprehensive marketing mation is then embedded or the reader with a comprehensive marketing plan case study based on a real scenario.

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xiv FOREWORD xiv FOREWORD

Te result is a text that provides the reader with a practical “can do” Te result is a text that provides the reader with a practical “can do” approach to market planning—

approach to market planning—a text that readers will fnd they continu-a text that readers will fnd they continu-ally return to year ater year. I wholeheartedly recommend it!

ally return to year ater year. I wholeheartedly recommend it! Associate

Associate Proessor Anthony WarProessor Anthony Wardd Australia Australia January 31, 2011 January 31, 2011

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Acknowledgments

We would like to sincerely thank the ollowing people or reviewing the We would like to sincerely thank the ollowing people or reviewing the

manuscript: manuscript: Kelly Choong Kelly Choong Lecturer

Lecturer, University o the Sunshine Coast, , University o the Sunshine Coast, AustraliaAustralia Proessor Harish C. Chopra

Proessor Harish C. Chopra Visiting Faculty

Visiting Faculty, R. , R. A. Podar Institute o A. Podar Institute o Management, University o Management, University o Rajasthan,

Rajasthan, JaipurJaipur, , IndiaIndia

Formerly Fellow at the University o Mauritius, Mauritius Formerly Fellow at the University o Mauritius, Mauritius Bob Green

Bob Green

Lecturer, CQUniversity, Australia Lecturer, CQUniversity, Australia Assistant Proessor

Jia- Assistant Proessor Jia- Yi Hung Yi Hung

Department o Health Administration, 

Department o Health Administration, zu Chi Colzu Chi College o lege o 

echechnolnology, ogy, aiwaiwanan Ronda MacLeod

Ronda MacLeod

Lecturer, CQUniversity, Australia. Lecturer, CQUniversity, Australia. Proessor Bill Merrilees

Proessor Bill Merrilees Depart

Department oment o Marke Marketing, ting, Gri Gri th Busth Business iness SchoolSchool, Gri , Gri thth University, Australia

University, Australia Barry Mitchell

Barry Mitchell

Lecturer, CQUniversity, Australia Lecturer, CQUniversity, Australia Associate

Associate Proessor Anthony Proessor Anthony WWardard

Adjunct Faculty, CQUniversity, Australia Adjunct Faculty, CQUniversity, Australia

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CHAPTER 1

CHAPTER 1 Introduction to

Introduction to

Marketing Planning

We are involved in marketing every day as marketers and as consumers. We are involved in marketing every day as marketers and as consumers. When we get up in the morning, we encounter marketing. Te alarm When we get up in the morning, we encounter marketing. Te alarm clock on the nightstand, the bed in which we sleep, the V we turn on, clock on the nightstand, the bed in which we sleep, the V we turn on, the toothbrush and toothpaste we use to brush our teeth, and the list the toothbrush and toothpaste we use to brush our teeth, and the list goes on. Marketing is defned as “an organizational unction and a set o goes on. Marketing is defned as “an organizational unction and a set o processes or creating, communicating, and delivering value to customers processes or creating, communicating, and delivering value to customers and or managing customer relationships in ways that beneft the and or managing customer relationships in ways that beneft the organi-zation and its s

zation and its stakeholders.”takeholders.”11

In order to beneft the organization and its stakeholders, a In order to beneft the organization and its stakeholders, a oriented approach needs to be established. A

customer-oriented approach needs to be established. A customer-orientedoriented organization develops a

win-organization develops a win- win situation between itsel and its cus- win situation between itsel and its cus-tomers by concentrating on satisying customer needs and wants and tomers by concentrating on satisying customer needs and wants and achieving its own objectives at the same time. Tis is oten called achieving its own objectives at the same time. Tis is oten called rela-tionship marketing, as the organization monitors and responds to market tionship marketing, as the organization monitors and responds to market inormation—

inormation—including competitor actions and customer needs—including competitor actions and customer needs— with with the view to building stronger relationships with its

the view to building stronger relationships with its target audiences wher-target audiences wher-ever possible. Market planning should be a means o building

long-ever possible. Market planning should be a means o building long-termterm relationships with customers through the development o a relationships with customers through the development o a customer-ocused mission statement and objectives and goals at the corporate ocused mission statement and objectives and goals at the corporate through individual product line levels. It is necessary to examine all o through individual product line levels. It is necessary to examine all o these levels to implement the marketing concept and determine the these levels to implement the marketing concept and determine the appropriate marketing strategy to provide the right level o value to the appropriate marketing strategy to provide the right level o value to the customer.

customer.

Tis book is concerned with building a marketing plan that has Tis book is concerned with building a marketing plan that has the

customer-the customer-oriented marketing defnition in mind. In this book, weoriented marketing defnition in mind. In this book, we provide a ramework or marketers to develop

customer-provide a ramework or marketers to develop customer-oriented mar-oriented mar-keting strategies and plans that match an organization with its internal keting strategies and plans that match an organization with its internal

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2

2 BUILDING BUILDING A A MARKETING MARKETING PLANPLAN

and external environments. In this chapter, we introduce the role o and external environments. In this chapter, we introduce the role o marketing planning by discussing the benefts and barriers o marketing marketing planning by discussing the benefts and barriers o marketing planning, ollowed by the marketing planning process.

planning, ollowed by the marketing planning process.

The Role of Marketing Planning

Marketing planning is the process that leads to an understanding o an Marketing planning is the process that leads to an understanding o an organization’s position in the market and a series o marketing decisions organization’s position in the market and a series o marketing decisions and actions to achi

and actions to achieve an organization’eve an organization’s goals within s goals within a specifc time a specifc time rame.rame. Te emphasis is on the process that includes tasks such as perorming Te emphasis is on the process that includes tasks such as perorming analysis, designing actionable strategies, implementing the strategies, analysis, designing actionable strategies, implementing the strategies, controlling the whole marketing process, and setting up a time rame or controlling the whole marketing process, and setting up a time rame or the sta concerned. A marketing plan is the record o the activities rom the sta concerned. A marketing plan is the record o the activities rom marketing actions, and it should be comprehensive, exible, and logical. marketing actions, and it should be comprehensive, exible, and logical.22

A marketing plan can be considered a manual or marketing actions that A marketing plan can be considered a manual or marketing actions that is based on an analysis o the internal and external situations, clear is based on an analysis o the internal and external situations, clear mar-keting objectives and strategies or targeted customers, and management keting objectives and strategies or targeted customers, and management o marketing activities through implementation and control. It states o marketing activities through implementation and control. It states where an organization is, where to go, how to get there, and by when. where an organization is, where to go, how to get there, and by when.

The Benefits of Marketing Planning

Building a marketing plan can have a great, positive

Building a marketing plan can have a great, positive impact on an organi-impact on an organi-zation. Tere are fve main benefts o marketing planning:

zation. Tere are fve main benefts o marketing planning:

Learning Objectives

Ater studying this chapter, you will be able to Ater studying this chapter, you will be able to

•

• identiy identiy the stages the stages in in the strategic the strategic market plannmarket planning ping process,rocess, •

• discuss the discuss the benefts o benefts o marketing plannmarketing planning ing or anor an organization,

organization, •

• identiy the identiy the key components key components o the o the market plan market plan and useand use these as a basis to start a plan,

these as a basis to start a plan, •

• discuss discuss market market planning planning in in a a customer-customer-orientedoriented organization.

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INTRODUCTION

INTRODUCTION TO TO MARKETING MARKETING PLANNING PLANNING 33

1. Marketing planning allows the marketers to thoroughly examine 1. Marketing planning allows the marketers to thoroughly examine their internal and external situations with the aim o understanding their internal and external situations with the aim o understanding the organization’

the organization’s overall poss overall position in the ition in the market.market.

2. Marketing planning orces the marketers to consider the needs and 2. Marketing planning orces the marketers to consider the needs and wants o their stakeholders, especially their target customers who wants o their stakeholders, especially their target customers who

provide sales revenue (or

or-provide sales revenue (or or-proft organizations) or other mon-proft organizations) or other mon-etary and nonmonmon-etary returns (or nonproft organizations).

etary and nonmonetary returns (or nonproft organizations).

3. Marketers can utilize the planning process to systematically identiy 3. Marketers can utilize the planning process to systematically identiy

and evaluate a variety o scenarios, possibilities, and results. and evaluate a variety o scenarios, possibilities, and results.

4. Planning identifes the resources that will be needed to perorm the 4. Planning identifes the resources that will be needed to perorm the

planned marketing activities in order to achieve

short-planned marketing activities in order to achieve short-, medium-, medium-,, and

long-and long-term corporate objectives.term corporate objectives.

5. Marketing planning helps marketers evaluate the results so as to 5. Marketing planning helps marketers evaluate the results so as to

revise objectives and marketing strategies i necessary. revise objectives and marketing strategies i necessary.

In general, marketing planning can prepare marketers to have a frm In general, marketing planning can prepare marketers to have a frm understating o the business, its strategies, a

understating o the business, its strategies, and the underlying actors thatnd the underlying actors that orm those strategies. Given such a shared understanding, executives will orm those strategies. Given such a shared understanding, executives will be able to respond rapidly to new threats and opportunities.

be able to respond rapidly to new threats and opportunities.

The Barriers to Effective Marketing Planning

Building a marketing plan is not an easy task. In addition to the Building a marketing plan is not an easy task. In addition to the com-plexity o various marketing issues, marketers need to deal with potential plexity o various marketing issues, marketers need to deal with potential barriers to eective marketing planning. Tere are a number o barriers to eective marketing planning. Tere are a number o barri-ers

ers33 _{to marketing planning, including cognitive, procedural, resource,}_{to marketing planning, including cognitive, procedural, resource,}

organizational,

organizational, cultural, cultural, and and data data availability availability di di culties. culties. Te Te ol- ol-lowing is a summary o 10 o the main impediments to successul lowing is a summary o 10 o the main impediments to successul planning:

planning:44

1.

1. ConfusionConfusion betweenbetween tactics tactics and and strategy strategy . Managers might ocus more. Managers might ocus more on

short-on short-term tactics that help sell a product than short-on a strategy term tactics that help sell a product than on a strategy that aims at

long-that aims at long-term sustainable competitive advantage. Manag-term sustainable competitive advantage. Manag-ers oten make the mistake that marketing planning is not required ers oten make the mistake that marketing planning is not required with

short- with short-term tactics. On the contrary, an organization with aterm tactics. On the contrary, an organization with a strategic ocus needs the assistance o the holistic approach o strategic ocus needs the assistance o the holistic approach o mar-keting planning to materialize

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4

2.

2. Isolating Isolating the the marketing marketing function function from from operations operations . In order to overcome. In order to overcome this barrier, marketers need to work with sta rom other this barrier, marketers need to work with sta rom other depart-ments such as research and development and engineer

ments such as research and development and engineering to developing to develop new products, accounting and fnance to set appropriate budgets, new products, accounting and fnance to set appropriate budgets, production to deal with logistics and channel management issues, production to deal with logistics and channel management issues, and sales departments to overcome barriers to eective selling and and sales departments to overcome barriers to eective selling and gathering relevant market intelligence. op management plays an gathering relevant market intelligence. op management plays an important role to ensure that marketers receive all necessary support important role to ensure that marketers receive all necessary support and resources so they can perorm marketing planning properly. and resources so they can perorm marketing planning properly. 3.

3. ConfusionConfusion betweenbetween the the marketing marketing function function and and the the marketing marketing concept concept .. Some top management conuse piecemeal marketing unctions Some top management conuse piecemeal marketing unctions with the holistic marketing concept. Te ormer is concerned with with the holistic marketing concept. Te ormer is concerned with separate marketing unctions, such as advertising, customer service, separate marketing unctions, such as advertising, customer service, sales, and product management, whereas the latter holds an sales, and product management, whereas the latter holds an inclu-sive view o marketing and integrates all marketing activities in a sive view o marketing and integrates all marketing activities in a marketing plan that can satisy the needs o selected customer marketing plan that can satisy the needs o selected customer seg-ments in order to achieve the objectives.

ments in order to achieve the objectives. 4.

4. Organizational Organizational barriers barriers . Depending on the organization structure,. Depending on the organization structure, an organization may be divided into various departments or units. an organization may be divided into various departments or units. Marketers ace potential barriers when departments or units other Marketers ace potential barriers when departments or units other than marketing or

marketing-than marketing or marketing-related areas are not interested in mar-related areas are not interested in mar-keting planning. Other departments or units may have their own keting planning. Other departments or units may have their own agendas to run their sections.

agendas to run their sections. 5.

5. Lack Lack of of in-in-depth analysis depth analysis . Organizations don’t ace the issue o too. Organizations don’t ace the issue o too little inormation but rather a lack o i

little inormation but rather a lack o inormation management. Tenormation management. Te major challenge is the capacity to provide

in-major challenge is the capacity to provide in-depth analysis o thedepth analysis o the inormation available. Without

in-inormation available. Without in-depth analysis, marketers won’tdepth analysis, marketers won’t know where their organizations stand in the market, and the know where their organizations stand in the market, and the conse-quence is a ailure to provide a strategic direction.

quence is a ailure to provide a strategic direction. 6.

6. ConfusionConfusion betweenbetween process process and and output output . Some organizations tend to. Some organizations tend to make their marketing plans, the output, too bulky to be o any make their marketing plans, the output, too bulky to be o any par-ticular use. Tis is the outcome o ocusing on the plan rather than ticular use. Tis is the outcome o ocusing on the plan rather than the process. Some marketers mistakenly believe that a bigger output the process. Some marketers mistakenly believe that a bigger output reects a better process.

reects a better process. 7.

7. Lack Lack of of knowledge knowledge and and skills skills . Some marketers rarely apply market-. Some marketers rarely apply market-ing concepts and techniques in their marketmarket-ing plannmarket-ing. Some ing concepts and techniques in their marketing planning. Some are unable to dierentiate between corporate objectives, marketing are unable to dierentiate between corporate objectives, marketing

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INTRODUCTION

objectives, and advertising objectives. Adding to this conusion, objectives, and advertising objectives. Adding to this conusion, communication and interpersonal skills oten need to be communication and interpersonal skills oten need to be strength-ened or marketing plans will be ineectively implemented.

ened or marketing plans will be ineectively implemented. 8.

8. Lack Lack of of aa systematic systematic approachapproach toto marketing marketing planning planning . Within an orga-. Within an orga-nization, there may be dierent strategic business units conducting nization, there may be dierent strategic business units conducting marketing planning. Consequently, each unit develops its own marketing planning. Consequently, each unit develops its own marketing plan. Te variations o these plans might be caused by marketing plan. Te variations o these plans might be caused by dierent levels o data analysis, dierent opinions o

dierent levels o data analysis, dierent opinions on how to achieven how to achieve corporate objectives, or perhaps dierent motivations o corporate objectives, or perhaps dierent motivations o partici-pating managers. Te large discrepancy in marketing plans rom pating managers. Te large discrepancy in marketing plans rom dierent units makes corporate headquarters’ coordination work dierent units makes corporate headquarters’ coordination work very

very di di cult, icult, i not imp not impossibossible.le. 9.

9. Failure Failure toto prioritize prioritize objectives objectives . Some organizations set too many . Some organizations set too many objectives. Tere are too many subobjectives o subobjectives. One objectives. Tere are too many subobjectives o subobjectives. One o the major contributions o marketing planning is to provide a o the major contributions o marketing planning is to provide a strategic ocus. Marketing planning should assist marketers to ocus strategic ocus. Marketing planning should assist marketers to ocus more on the important objectives and take out the trivial ones.

more on the important objectives and take out the trivial ones. 10.

10. Hostile Hostile corporate corporate cultures cultures . Sinc. Since coe corporarporate cte cultures ultures are are di di cult cult toto change and tend to maintain the existing power structure and the change and tend to maintain the existing power structure and the status quo, the introduction o marketing planning might create status quo, the introduction o marketing planning might create tensions that lead to changes in organizations. Resistance to change tensions that lead to changes in organizations. Resistance to change and o

and o ce politics ce politics are oten are oten barriers to barriers to building an building an eective market-eective market-ing plan.

ing plan.

Marketing planning is not a straightorward task, nor can it be Marketing planning is not a straightorward task, nor can it be com-pleted in a linear,

one-pleted in a linear, one-o manner. Marketers are likely to encountero manner. Marketers are likely to encounter various organizational, attitudinal, process, and cognitive barriers that various organizational, attitudinal, process, and cognitive barriers that hinder eective planning. Successul planning takes patience, knowledge, hinder eective planning. Successul planning takes patience, knowledge, persuasion, and negotiation skills. Understanding the potential barriers persuasion, and negotiation skills. Understanding the potential barriers to marketing planning helps marketers to be better prepared or the to marketing planning helps marketers to be better prepared or the chal-lenges ahead.

lenges ahead.

The Marketing Planning Process

Te marketing planning process goes through our major steps, as shown Te marketing planning process goes through our major steps, as shown in Figure 1.1. Step one is the situation analysis. Te main purpose o this in Figure 1.1. Step one is the situation analysis. Te main purpose o this step is to understand where the organization stands. Step two is to analyze step is to understand where the organization stands. Step two is to analyze

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6

the target market so that marketers can understand the buying behavior the target market so that marketers can understand the buying behavior o their target customers. Tis is ollowed by the step o setting marketing o their target customers. Tis is ollowed by the step o setting marketing objectives and strategies. Te fnal step is concerned with

objectives and strategies. Te fnal step is concerned with implementationimplementation o the strategies and evaluation o the results in terms o the objectives. o the strategies and evaluation o the results in terms o the objectives.

Te cycle o a marketing plan is usually 1 year. Data gathering and Te cycle o a marketing plan is usually 1 year. Data gathering and analysis sometimes takes months to complete. Marketers need to actor analysis sometimes takes months to complete. Marketers need to actor in the time issue whe

in the time issue when preparing a marketing plan. In addition, as shownn preparing a marketing plan. In addition, as shown in Figure 1.1, marketing planning is a continuous eort rather than a in Figure 1.1, marketing planning is a continuous eort rather than a

once-once-a-a-year exercise. What ollows is a brie summary o the our majoryear exercise. What ollows is a brie summary o the our major steps. Each o these steps is discussed in more detail in later chapters. steps. Each o these steps is discussed in more detail in later chapters.

Step 1: Situation Analysis Step 1: Situation Analysis

A situation analysis is an assessment o the environment in which the A situation analysis is an assessment o the environment in which the organization operates and o the organization itsel. Te ormer organization operates and o the organization itsel. Te ormer assess-ment is called external analysis and the latter internal analysis. Te ment is called external analysis and the latter internal analysis. Te external analysis helps marketers

external analysis helps marketers identiy the trends and changes o exter-identiy the trends and changes o exter-nal actors, such as social, political, technological, e

nal actors, such as social, political, technological, economic, natural, andconomic, natural, and competitive environments, and develop an

in-competitive environments, and develop an in-depth understanding o depth understanding o customers (current and potential). Tese external actors are beyond the customers (current and potential). Tese external actors are beyond the control o the marketers. In the case o the external environment, the control o the marketers. In the case o the external environment, the best marketers can do is understand the issues and adapt. On the other best marketers can do is understand the issues and adapt. On the other hand, the internal analysis is meant to assess internal actors that can be hand, the internal analysis is meant to assess internal actors that can be

Figure 1.1. Four steps to successful marketing planning. Figure 1.1. Four steps to successful marketing planning.

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INTRODUCTION

controlled by the organization. Te principal internal actors to consider controlled by the organization. Te principal internal actors to consider are the organization’s marketing, fnance, human, and manuacturing are the organization’s marketing, fnance, human, and manuacturing resources, and the organization must develop knowledge o its resources, and the organization must develop knowledge o its manage-ment and organizational structure and culture. Te situation analysis o ment and organizational structure and culture. Te situation analysis o the external and internal actors will lead to the construction o a SWO the external and internal actors will lead to the construction o a SWO (strengths, weaknesses, opportunities, and threats) analysis. Te strengths, (strengths, weaknesses, opportunities, and threats) analysis. Te strengths, weaknesses, opportunities, and threats should be analyzed in relation to weaknesses, opportunities, and threats should be analyzed in relation to

the organization’

the organization’s current situation as current situation and market needs. Tis nd market needs. Tis analysis assistsanalysis assists marketers to determine what the organization does well and what it does marketers to determine what the organization does well and what it does not. It also identifes the issue

not. It also identifes the issues that need to be s that need to be improved. Wimproved. We will discusse will discuss the situation analysis in chapter 2.

the situation analysis in chapter 2.

Step 2: Target Market Analysis Step 2: Target Market Analysis

Once the marketer understands

Once the marketer understands his or her his or her organizationorganization’’s strengths, weak-s strengths, weak-nesses, opportunities, and threats, the next step in marketing planning nesses, opportunities, and threats, the next step in marketing planning is to understand the markets and customers. Marketing inormation is is to understand the markets and customers. Marketing inormation is critical in understating markets and customers. wo important tools are critical in understating markets and customers. wo important tools are available to allow the marketer to gather marketing inormation. One is available to allow the marketer to gather marketing inormation. One is marketing research, and the other is marketing intelligence. Both tools marketing research, and the other is marketing intelligence. Both tools generate marketing inormation or the marketer to understand generate marketing inormation or the marketer to understand con-sumer behavior—

sumer behavior—that is, who is buying or would buy what, and how,that is, who is buying or would buy what, and how, how oten, where, when, and why that person buys. Marketing research how oten, where, when, and why that person buys. Marketing research goes through fve steps: (a) defning the problem and the research goes through fve steps: (a) defning the problem and the research objec-tives, (b) developing the research design or collecting inormation, (c) tives, (b) developing the research design or collecting inormation, (c) collecting the data, (d) analyzing and interpreting the data, and (e

collecting the data, (d) analyzing and interpreting the data, and (e) report-) report-ing the research fndreport-ings. While marketreport-ing research is usually conducted ing the research fndings. While marketing research is usually conducted on an ad hoc basis, marketing intelligence is perormed on a continuing on an ad hoc basis, marketing intelligence is perormed on a continuing basis.

basis.

Once marketing research has been completed, the organization must Once marketing research has been completed, the organization must undertake the steps o the target marketing process: market undertake the steps o the target marketing process: market segmenta-tion, market targeting, and market positioning. Because resources are tion, market targeting, and market positioning. Because resources are limited, the organization is unable to target every market. Te limited, the organization is unable to target every market. Te organiza-tion has to divide the markets into segments that it can target. Segments tion has to divide the markets into segments that it can target. Segments can be classifed on the basis o geographic, demographic, psychographic, can be classifed on the basis o geographic, demographic, psychographic, and behavioral characteristics. argeting is the evaluation o each market and behavioral characteristics. argeting is the evaluation o each market segment’s attractiveness so that the marketers can ocus on one or more segment’s attractiveness so that the marketers can ocus on one or more

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8

segments that suit the organization best. Market positioning is a segments that suit the organization best. Market positioning is a market-ing strategy to place a product or br

ing strategy to place a product or brand to occupy a distinctive position inand to occupy a distinctive position in the minds o target customers relative to competitive products or brands. the minds o target customers relative to competitive products or brands. We will take a closer look at target market analysis in chapter 3.

We will take a closer look at target market analysis in chapter 3.

Step 3: Marketing Objectives Setting and Step 3: Marketing Objectives Setting and Marketing Strategy Formulation

Marketing Strategy Formulation

Ater the target market analysis and segmentation, targeting, and Ater the target market analysis and segmentation, targeting, and posi-tioning strategies are set, marketers can develop SMAR (specifc, tioning strategies are set, marketers can develop SMAR (specifc, measurable, achievable, realistic, and

time-measurable, achievable, realistic, and time-bound) marketing objectivesbound) marketing objectives and the various elements o the marketing mix can be deployed to and the various elements o the marketing mix can be deployed to pro-vide value that will satisy the needs and wants o the target customers. vide value that will satisy the needs and wants o the target customers. SMAR

SMAR marketing objectives state what products are to be sold to whi marketing objectives state what products are to be sold to whichch markets—

markets—addressing market growth, market share, or profts. Market-addressing market growth, market share, or profts. Market-ing objectives should provide a tangible guide or action, provide specifc ing objectives should provide a tangible guide or action, provide specifc actions to ollow, suggest tools to measure and control eectiveness, actions to ollow, suggest tools to measure and control eectiveness, be ambitious enough to be challenging, take account o the company’s be ambitious enough to be challenging, take account o the company’s strengths and weaknesses, capitalize on opportunities and avoid or strengths and weaknesses, capitalize on opportunities and avoid or minimize potential threats, be well matched with corporate objectives minimize potential threats, be well matched with corporate objectives and individual product line objectives, and have a specifc time or and individual product line objectives, and have a specifc time or completion.

completion.

Te basic elements o marketing mix are product, price, place, and Te basic elements o marketing mix are product, price, place, and promotion and are sometimes reerred to as the Four Ps (4Ps):

promotion and are sometimes reerred to as the Four Ps (4Ps):

1. Product strategy is concerned with managing existing products over 1. Product strategy is concerned with managing existing products over time, adding new products, and dropping ailed ones. In addition, time, adding new products, and dropping ailed ones. In addition, strategic decisions about the width and depth o a product line, strategic decisions about the width and depth o a product line, packaging, and branding need to be made.

packaging, and branding need to be made.

2. Pricing strategy tries to determine an optimal price or a product. 2. Pricing strategy tries to determine an optimal price or a product. Internal and external actors that aect pricing decisions should Internal and external actors that aect pricing decisions should frst be examined beore deciding which pricing approach is to be frst be examined beore deciding which pricing approach is to be adopted.

adopted.

3. Place strategy, which is also called distribution strategy, ocuses on 3. Place strategy, which is also called distribution strategy, ocuses on the transer o products rom an organization to the target the transer o products rom an organization to the target cus-tomers. Te transer may go through other organizations, such as tomers. Te transer may go through other organizations, such as wholesalers and retailers. Te management o this transer process wholesalers and retailers. Te management o this transer process

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INTRODUCTION

is reerred to as channel management. Another strategic decision is reerred to as channel management. Another strategic decision in relation to place strategy is logistics management, which is in relation to place strategy is logistics management, which is con-cerned with the physical movement o a product rom one place to cerned with the physical movement o a product rom one place to another.

another.

4. Promotion strategy relates to coordinating an organization’s 4. Promotion strategy relates to coordinating an organization’s com-munications and marketing messages between dierent media and munications and marketing messages between dierent media and ensuring there is consistency o the message throughout. Te ensuring there is consistency o the message throughout. Te pro-motion mix elements (e.g., advertising, sales propro-motions, direct motion mix elements (e.g., advertising, sales promotions, direct marketing, online and interactive marketing, among many others) marketing, online and interactive marketing, among many others) all have dierent strengths and weaknesses th

all have dierent strengths and weaknesses that must be coordinatedat must be coordinated to provide an integrated message about the organization’s products, to provide an integrated message about the organization’s products, brands, corporate identity, and social and environmental go

brands, corporate identity, and social and environmental goals.als.

Te our elements o the marketing mix are interrelated. Te Te our elements o the marketing mix are interrelated. Te market-ing mix strategies should be built on the basis o segmentation, targetmarket-ing, ing mix strategies should be built on the basis o segmentation, targeting, and positioning with

and positioning with the organization’the organization’s objectives s objectives in mind. We will coverin mind. We will cover the marketing mix strategies in chapters 5 to 8.

the marketing mix strategies in chapters 5 to 8.

Step 4: Marketing Implementation and Control Step 4: Marketing Implementation and Control

Te fnal step o the marketing planning process is implementation and Te fnal step o the marketing planning process is implementation and control. Marketing implementation includes all the activities needed to control. Marketing implementation includes all the activities needed to make the marketing strategies work. Without a good implementation make the marketing strategies work. Without a good implementation plan, marketing objectives are unlikely to be achieved, irrespective o how plan, marketing objectives are unlikely to be achieved, irrespective o how good the marketing strategies are. A McKinsey Seven S (7S) model is a good the marketing strategies are. A McKinsey Seven S (7S) model is a practical tool to assist marketing implementation. Te 7S model consists practical tool to assist marketing implementation. Te 7S model consists o structure, systems, shared values, skills, sta, style, and strategy. o structure, systems, shared values, skills, sta, style, and strategy. Mar-keters need to have a

well-keters need to have a well-conceived and detailed 7S model in place toconceived and detailed 7S model in place to execute the marketing strategies.

execute the marketing strategies.

Te main purpose o control is to understand i the organization has Te main purpose o control is to understand i the organization has achieved the predetermined objectives. Te our major steps in a control achieved the predetermined objectives. Te our major steps in a control process are setting standards o perormance, identiying tools or process are setting standards o perormance, identiying tools or mea-suring marketing progress, evaluating actual perormance against the set suring marketing progress, evaluating actual perormance against the set objectives, and taking corrective actions

objectives, and taking corrective actions i necessary. Witi necessary. With the completionh the completion o the control process, a marketing planning cycle is basically complete o the control process, a marketing planning cycle is basically complete and can be considered as the start o the next cycle. We will explore and can be considered as the start o the next cycle. We will explore mar-keting implementation and control in more detail in chapter 10.

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10

Marketing Planning in Action:

A Comprehensive Example

In order to show how to apply the marketing planning ramework In order to show how to apply the marketing planning ramework discussed in this book, a comprehensive example detailing all the discussed in this book, a comprehensive example detailing all the mar-keting planning elements detailed rom chapters 2 to 10 is shown in the keting planning elements detailed rom chapters 2 to 10 is shown in the appendix. Te marketing plan example was developed or an imaginary appendix. Te marketing plan example was developed or an imaginary company but is loosely based on a real organization or which we company but is loosely based on a real organization or which we com-pleted a consultancy project years ago. Te example frst introduces the pleted a consultancy project years ago. Te example frst introduces the background o the organization—

background o the organization—Pindari Boomerang Factory. It thenPindari Boomerang Factory. It then demonstrates the external environment analysis, customer analysis, demonstrates the external environment analysis, customer analysis, internal analysis, SWO analysis, and strategic decision analysis or the internal analysis, SWO analysis, and strategic decision analysis or the business. Marketing objectives, marketing strategies, and business. Marketing objectives, marketing strategies, and implementa-tion and control systems are then developed in a step-by-step manner. tion and control systems are then developed in a step-by-step manner. It should be noted that the example intends to only demonstrate how to It should be noted that the example intends to only demonstrate how to use the concepts discussed in this text to build a marketing plan. It is not use the concepts discussed in this text to build a marketing plan. It is not intended to argue that the decisions and recommended actions are the intended to argue that the decisions and recommended actions are the only or the most appropriate ways to build a marketing plan.

only or the most appropriate ways to build a marketing plan.

As an introduction to the marketing planning process (and the layout As an introduction to the marketing planning process (and the layout or the remainder o this book), structure overview provides an overview or the remainder o this book), structure overview provides an overview o the structure and important eatures o a comprehensive marketing o the structure and important eatures o a comprehensive marketing plan.

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INTRODUCTION

Overview of the Structure and

Features of a Marketing Plan

Executive

Executive Summary Summary . Provide an overview o the entire plan, ocusing. Provide an overview o the entire plan, ocusing on recommendations and implications or management, competitive on recommendations and implications or management, competitive advantage(s), required investment, and expected sales/profts.

advantage(s), required investment, and expected sales/profts. Table of Contents

Table of Contents

List o Figures and ables List o Figures and ables

1

1 IntroductionIntroduction. Introduce the organization’s background, mission. Introduce the organization’s background, mission statement, and corporate objectives.

statement, and corporate objectives. 2

2 Situation Situation AnalysisAnalysis 2.1

2.1 External External Situational Situational Analysis Analysis . Include the PES (political,. Include the PES (political, economic, social, and technological) and natural economic, social, and technological) and natural environ-ment analyses, looking or trends and changes in the macro ment analyses, looking or trends and changes in the macro environments specifcally to expose potential opportunities or environments specifcally to expose potential opportunities or threats. (See chapter 2.)

threats. (See chapter 2.) 2.2

2.2 Internal Internal Situational Situational Analysis Analysis . Examine internal strengths and. Examine internal strengths and weaknesses, looking or resource levels, skills availability, weaknesses, looking or resource levels, skills availability, marketing capabilities, research and development marketing capabilities, research and development capabili-ties, management strengths, production capabilicapabili-ties, fnancial ties, management strengths, production capabilities, fnancial resources, and research and development potential. (See resources, and research and development potential. (See chap-ter 2.)

ter 2.) 2.3

2.3 Competitor Competitor Analysis Analysis . Examine competitors (both direct and. Examine competitors (both direct and indirect), looking or potential opportunities or threats indirect), looking or potential opportunities or threats (con-sider using a table to compare your products, skills, ancillary sider using a table to compare your products, skills, ancillary services, fnancial and human resource positions, etc. with services, fnancial and human resource positions, etc. with those o competitors). (See chapter 2.)

those o competitors). (See chapter 2.) 2.4

2.4 Customer Customer Analysis Analysis . Describe the target market(s) and develop. Describe the target market(s) and develop market segmentation inormation in detail, incorporating market segmentation inormation in detail, incorporating demographic, psychographic, and geographic descriptions. demographic, psychographic, and geographic descriptions. Develop market targeting and positioning statements. (See Develop market targeting and positioning statements. (See chapters 3 and 4.)

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12

3

3 SWOT SWOT Analysis Analysis and and Competitive Competitive Advantage(s) Advantage(s). Provide brie sum-. Provide brie sum-marized statements o the fndings rom the situational analysis. marized statements o the fndings rom the situational analysis. (See chapter 2.)

(See chapter 2.) 4

4 Marketing Marketing Objectives Objectives . Conduct a product lie-. Conduct a product lie-cycle analysis; Bos-cycle analysis; Bos-ton Consulting Group (BCG) matrix analysis; Anso matrix ton Consulting Group (BCG) matrix analysis; Anso matrix analysis (explained in chapter 5); state competitive advantage analysis (explained in chapter 5); state competitive advantage objectives or market leader, market ollower, or niche market objectives or market leader, market ollower, or niche market positions. Develop SMAR objectives that link directly with the positions. Develop SMAR objectives that link directly with the corporate objectives and the corporate mission;

corporate objectives and the corporate mission; take advantages o take advantages o internal strength and external opportunities; and avoid or internal strength and external opportunities; and avoid or mini-mize internal weaknesses and external threats. (See chapter 5.) mize internal weaknesses and external threats. (See chapter 5.) 5

5 Marketing Marketing Strategies Strategies . Precisely state how you will achieve each. Precisely state how you will achieve each objective by linking a target market segment with a marketing objective by linking a target market segment with a marketing objective and a product incorporating the marketing mix objective and a product incorporating the marketing mix ele-ments (the Four Ps—

ments (the Four Ps—4Ps). (See chapters 6 through 9.)4Ps). (See chapters 6 through 9.) 6

6 Marketing Marketing ImplementationImplementation. Calculate break-even points, budgets,. Calculate break-even points, budgets, and returns on investments; compute sales projections and cash and returns on investments; compute sales projections and cash ows on monthly and annual bases; evaluate the McKinsey Seven ows on monthly and annual bases; evaluate the McKinsey Seven S (7S) elements as they apply to your organization; and develop S (7S) elements as they apply to your organization; and develop actions/activities around each to ensure that your marketing plan actions/activities around each to ensure that your marketing plan is appropriately implemented. (See chapter 10.)

is appropriately implemented. (See chapter 10.) 7

7 Marketing Marketing Control Control . Develop marketing metrics to ensure that. Develop marketing metrics to ensure that your plan remains on track to meet the marketing objectives, and your plan remains on track to meet the marketing objectives, and corrective actions can be taken i needed. (See chapter 10.)

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INTRODUCTION

Summary

Marketing planning is the process that leads to an understanding o an Marketing planning is the process that leads to an understanding o an organization’s position in the market and a series o marketing organization’s position in the market and a series o marketing deci-sions and actions to achieve an organization’s goals within a time rame. sions and actions to achieve an organization’s goals within a time rame. Marketing planning is benefcial to the organization. It can assist the Marketing planning is benefcial to the organization. It can assist the marketers to understand their businesses, strategie

marketers to understand their businesses, strategies, and other related ac-s, and other related ac-tors. Consequently

tors. Consequently, the marketers are better equipped to dea, the marketers are better equipped to deal with threatsl with threats and oppor

and opportunitietunities. Marketis. Marketing planning is a di ng planning is a di cult task. Markcult task. Marketers neeters needed to handle 10 major barriers to marketing planning. Ater removing these to handle 10 major barriers to marketing planning. Ater removing these barriers, the marketers are more likely to develop a good marketing plan. barriers, the marketers are more likely to develop a good marketing plan. Te whole marketing planning process comprises our major steps: (a) Te whole marketing planning process comprises our major steps: (a) situation analysis, including internal and external analysis; (b) target situation analysis, including internal and external analysis; (b) target mar-ket analysis that indentifes the buying behavior; (c) marmar-keting objective ket analysis that indentifes the buying behavior; (c) marketing objective setting and strategic ormulation clearly stating where to go and how to setting and strategic ormulation clearly stating where to go and how to get there; and (d) implementation and control, ensuring the marketing get there; and (d) implementation and control, ensuring the marketing strategies are executed as planned and evaluating the actual results against strategies are executed as planned and evaluating the actual results against the marketing objectives.

the marketing objectives.

Chapter Review

1. Describe the 10 barriers to marketing planning and suggest 1. Describe the 10 barriers to marketing planning and suggest

solu-tions to each o these barriers. tions to each o these barriers.

2. Te 4Ps are the 4 basic elements o the marketing mix. Identiy 2. Te 4Ps are the 4 basic elements o the marketing mix. Identiy the 4Ps and describe the main aims o marketing strategies that the 4Ps and describe the main aims o marketing strategies that could be developed based on each o these elements.

could be developed based on each o these elements. 3. As the marketing manager or a

medium-3. As the marketing manager or a medium-sized business market-sized business market-ing children’s clothmarket-ing lines, outline a marketmarket-ing plan structure ing children’s clothing lines, outline a marketing plan structure and briey describe what you consider would be the main and briey describe what you consider would be the main ques-tions to address under each heading.