Marketing Plan Authors: Prof. Keegan, Prof. Malcolm Presenters: M. Azadi M. Tabatabaei Chapter 8

Objectives Marketing planning Tactical and Strategic Marketing Plans Marketing planning process Marketing audits Corporate Planning Assumptions Marketing Objectives Marketing Strategy Marketing Program Mission statements

Marketing planning

Tactical and Strategic Marketing Plans

Marketing planning process

Marketing audits

Corporate Planning

Assumptions

Marketing Objectives

Marketing Strategy

Marketing Program

Mission statements

Marketing Planning An outline of a design to accomplish a specific objective: To create value for customers at a profit, or in the new concept of marketing, To create a mutually beneficial relationship

An outline of a design to accomplish a specific objective:

To create value for customers at a profit, or in the new concept of marketing,

To create a mutually beneficial relationship

Marketing Planning Market Needs Wants Strengths of organization Weakness of organization Existing competitors Expected competitors Design for creating value

Marketing Planning Process Definition: The application of marketing resources to achieve marketing objectives.

Definition:

The application of marketing resources to achieve marketing objectives.

Marketing Planning Process Performing a situation analysis Formulating basic assumptions Setting objectives for what is being sold and to whom Deciding how the objectives are to be achieved Scheduling and costing out the actions necessary for implementation

Performing a situation analysis

Formulating basic assumptions

Setting objectives for what is being sold and to whom

Deciding how the objectives are to be achieved

Scheduling and costing out the actions necessary for implementation

Develop a Market Plan Management provides little guidance as to how the process should be managed. To Compromise between what is desirable and what is practicable Management must be customized to their particular organization Size Complexity Character and diversity of company operations

Management provides little guidance as to how the process should be managed.

To Compromise between what is desirable and what is practicable

Management must be customized to their particular organization

Size

Complexity

Character and diversity of company operations

Essential of Marketing Planning We need marketing planning when hostiles increased and environment is complex.

We need marketing planning when hostiles increased and environment is complex.

Our Challenge We should manage: Cost Optimization Revenue Profit Return on investment

We should manage:

Application of Marketing Plan To help identify sources of competitive advantage To force an organized approach To develop specificity To ensure consistent relationships To inform everyone in the organization about priorities To obtain resources needed to implement plans To engage organizational support at all levels, form the bottom to the top of the organization To set objectives and strategies To gain commitment towards goals

To help identify sources of competitive advantage

To force an organized approach

To develop specificity

To ensure consistent relationships

To inform everyone in the organization about priorities

To obtain resources needed to implement plans

To engage organizational support at all levels, form the bottom to the top of the organization

To set objectives and strategies

To gain commitment towards goals

The Elements of Strategy Stepping back form the day to day Ideas and thought Activity/Action Setting Objectives and goals Important decisions and choices Significant commitment of resources Not easily reversible Involves choice/tradeoffs Differentiation Insight Vision Defines the business we are in Defines the business we are becoming Value Tradeoffs Objectives and goals Strategy Vs. Tactics

Stepping back form the day to day

Ideas and thought

Activity/Action

Setting Objectives and goals

Important decisions and choices

Significant commitment of resources

Not easily reversible

Involves choice/tradeoffs

Differentiation

Insight

Vision

Defines the business we are in

Defines the business we are becoming

Value

Tradeoffs

Objectives and goals

Strategy Vs. Tactics

Strategic Plan Definition: A clear and simple summary of Key market trends, Key target segments, The value required by each segment, How the company intends to create value, With a clear prioritization of marketing objectives and strategies, together with financial consequences.

Definition:

A clear and simple summary of

Key market trends,

Key target segments,

The value required by each segment,

How the company intends to create value,

With a clear prioritization of marketing objectives and strategies, together with financial consequences.

Biggest Danger for Organizations Most Managers prefer to sell the products they find easiest to sell to customers who offer the least line of resistance.

Most Managers prefer to sell the products they find easiest to sell to customers who offer the least line of resistance.

Strategy Strategy describes: The direction a business will pursue and guides the allocation of resources and effort The business we are in and becoming. And provides: The logic that integrates the Perspectives of functional departments and operating units and points them all in the same direction.

Strategy describes:

The direction a business will pursue and guides the allocation of resources and effort

The business we are in and becoming.

And provides:

The logic that integrates the Perspectives of functional departments and operating units and points them all in the same direction.

Strategy Statement The strategy statement for a business unit is composed of the following three elements: A business definition that specifies the area in which the business will compete. A strategic thrust that describes where competitive advantage is to be gained. Supportive functional strategies.

The strategy statement for a business unit is composed of the following three elements:

A business definition that specifies the area in which the business will compete.

A strategic thrust that describes where competitive advantage is to be gained.

Supportive functional strategies.

Marketing Strategy Definition: It is a statement of how a brand or product line will achieve its objectives It Provides decisions and direction regarding variables such as: Segmentation of the market, Identification of the target market, Positioning, Marketing Mix elements and expenditures.

Definition:

It is a statement of how a brand or product line will achieve its objectives

It Provides decisions and direction regarding variables such as:

Segmentation of the market,

Identification of the target market,

Positioning,

Marketing Mix elements and expenditures.

Tactically Oriented Company Board Senior Management Middle Management Operations Tactical Orientation Strategic Orientation

Strategic Oriented Company Board Senior Management Middle Management Operations Tactical Orientation Strategic Orientation

Rules of Marketing Planning Develop the strategic marketing plan. Scanning the external environment Identifying early on the effect this may have on the company A strategic plan should cover a three-year period. Never write the one-year plan first and extrapolate from it.

Develop the strategic marketing plan.

Scanning the external environment

Identifying early on the effect this may have on the company

A strategic plan should cover a three-year period.

Never write the one-year plan first and extrapolate from it.

Marketing Planning Process A strategic marketing plan should contain the following: Executive summary Mission Statement Financial Summary of revenue, expenses and earnings Marketing audit SWOT analysis Assumption of key determinants Overall marketing objectives and strategies Expected results Alternatives (contingency plan) Budget

A strategic marketing plan should contain the following:

Executive summary

Mission Statement

Financial Summary of revenue, expenses and earnings

Marketing audit

SWOT analysis

Assumption of key determinants

Overall marketing objectives and strategies

Expected results

Alternatives (contingency plan)

Budget

Stages of Marketing Plan 1. Mission 2. Corporate objectives 3. Marketing audit 4.SWOT analysis 5. Assumptions 6. Marketing objective and strategies 7. Estimate expected result 8. Identity alternative plans and mixes 9. Budget 10. First year detailed implementation program Phase one -Goal Setting Phase Two –Situation Review Phase Three-Strategy Formulation Phase Four-Resources allocation and monitoring Measurement and review

Critical Factors Delegation When companies delegate marketing planning to planner, the plan invariably fails, because planning for line management cannot be delegated to a third party. Commitment Without it, those charged with introducing the planning found that there was great resistance to planning on the part of local managers.

Delegation

When companies delegate marketing planning to planner, the plan invariably fails, because planning for line management cannot be delegated to a third party.

Commitment

Without it, those charged with introducing the planning found that there was great resistance to planning on the part of local managers.

Marketing Audit I “ Marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance” Philip Kotler

“ Marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s—or business unit’s—marketing environment, objectives, strategies, and activities with a view to determining problem areas and opportunities and recommending a plan of action to improve the company’s marketing performance” Philip Kotler

Marketing Audit II Goal: To see how well the firm is applying the marketing concepts Examine external and internal information and procedures Identify problems in the environment

Goal:

To see how well the firm is applying the marketing concepts

Examine external and internal information and procedures

Identify problems in the environment

Marketing Audit III Need for an audit does not manifest itself until things start to go wrong for a company in the form: Declining sales Falling margins Lost market share Underutilized production capacity

Need for an audit does not manifest itself until things start to go wrong for a company in the form:

Declining sales

Falling margins

Lost market share

Underutilized production capacity

Marketing Audit IV External Audit -By independent experts -Starts with an examination of information on the general economy and then moves on to the outlook for the health and growth of the markets served by the company. Internal Audit -By members of the marketing organization -To assess the resources of the organization as they relate to the environment and the resources of Competitors

External Audit

-By independent experts

-Starts with an examination of information on the general economy and then moves on to the outlook for the health and growth of the markets served by the company.

Internal Audit

-By members of the marketing organization

-To assess the resources of the organization as they relate to the environment and the resources of Competitors

Marketing Audit V At least once a year Using: Normal information, Control Procedures, Marketing Research

At least once a year

Using:

Normal information,

Control Procedures,

Marketing Research

Marketing Audit VI Company Executives and Managers Few Consultants have the in-depth knowledge of market, customers, company culture, and the industry that company line managers have. External Consultants Every company is at risk of becoming blinded to reality by the influence of company culture

Company Executives and Managers

Few Consultants have the in-depth knowledge of market, customers, company culture, and the industry that company line managers have.

External Consultants

Every company is at risk of becoming blinded to reality by the influence of company culture

Kind of variables for Controlling Non Direct Control These usually take the form of what can be described as: Environment, Market, Competitive variables Company has Control Operational variables

Non Direct Control

These usually take the form of what can be described as:

Environment,

Market,

Competitive variables

Company has Control

Operational variables

Auditing Process Identification, measurement, collection, and analysis of all facts and opinions that affect a company’s problem The application of judgment to uncertain areas that remain after the initial analysis

Identification, measurement, collection, and analysis of all facts and opinions that affect a company’s problem

The application of judgment to uncertain areas that remain after the initial analysis

Marketing Audit Procedure Marketing environment audit Marketing strategy audit Marketing organization audit Marketing system audit Marketing productivity audit Marketing function audit Marketing excellence review Ethical and social responsibility review

Marketing environment audit

Marketing strategy audit

Marketing organization audit

Marketing system audit

Marketing productivity audit

Marketing function audit

Marketing excellence review

Ethical and social responsibility review

SWOT Analysis Opportunities Threats Strengths ST SO Weakness WT WO Internal External

Corporate Planning Issue: corporate objectives and strategies Marketing “ … Marketing Distribution Manufacturing Financial Personnel Marketing Distribution Manufacturing Financial Personnel Marketing Distribution Manufacturing Financial Personnel Targeted Growth in Sales and earnings Step 5: Corporate Plans Step 4: Plans Step 3: Objective and Strategy Setting Step 2: Management Audit Step 1: Corporate Financial Objective

Issue:

corporate objectives and strategies

Marketing “

…

Marketing

Distribution

Manufacturing

Financial

Personnel

Marketing

Distribution

Manufacturing

Financial

Personnel

Marketing

Distribution

Manufacturing

Financial

Personnel

Elements of Corporate Plan The desire level of profitability Business boundaries What Kinds of products will be sold to what kinds of market (Marketing) What Kinds of facilities will be developed (Production and distribution) The size and character of the labor force (Personnel) Funding (Finance) Technology to be developed (Research and development) Other corporate objectives Social Responsibility and corporate Stock-market Employer image

The desire level of profitability

Business boundaries

What Kinds of products will be sold to what kinds of market (Marketing)

What Kinds of facilities will be developed (Production and distribution)

The size and character of the labor force (Personnel)

Funding (Finance)

Technology to be developed (Research and development)

Other corporate objectives

Social Responsibility and corporate

Stock-market

Employer image

Assumptions This is one of the most critical steps in the preparation of a marketing plan because it is the easiest step to do carelessly. They should be: Key, Critical and few in Number Consistent with relevant known facts With defensible assumptions

This is one of the most critical steps in the preparation of a marketing plan because it is the easiest step to do carelessly.

They should be:

Key,

Critical

and few in Number

Consistent with relevant known facts

With defensible assumptions

Examples: Industrial overcapacity will increase from 105 percent to 115 percent as new plants come into operation. Price competition will force price levels down by 10 percent across the board. A new product that competes with ours will be introduced by our major competitor before the end of the second quarter.

Industrial overcapacity will increase from 105 percent to 115 percent as new plants come into operation.

Price competition will force price levels down by 10 percent across the board.

A new product that competes with ours will be introduced by our major competitor before the end of the second quarter.

Marketing Objectives and Strategies 4. Diversification Market Development New Markets Market Penetration Existing Markets Existing Products Product Development New Products Three Intensive Growth Strategies: Ansoff’s Product/Market Expansion Grid

Market

Development

Market

Penetration

Product

Development

The Marketing Mix Marketing Mix Customer Solution Customer Cost Communication Convenience Product Price Promotion Place

Use of Marketing Plan To determine: Where the company is now, Where it wants to go, How to get there Includes: Advertising Plan Sales Promotion Plan Pricing Plan Distribution Plan Product Plan Target Market Plan

To determine:

Where the company is now,

Where it wants to go,

How to get there

Includes:

Advertising Plan

Sales Promotion Plan

Pricing Plan

Distribution Plan

Product Plan

Target Market Plan

The Marketing Budget To justify all marketing expenditures from a zero base each year against the task that you wish to accomplish.

To justify all marketing expenditures from a zero base each year against the task that you wish to accomplish.

Mission Statements It is one of the most difficult aspects of marketing planning to master, largely because it is philosophical and qualitative in nature. Key points: Role or Contribution Profit Service Opportunity seeker Business definition Core Competencies Company/Division Positioning Indications for the future

It is one of the most difficult aspects of marketing planning to master, largely because it is philosophical and qualitative in nature.

Key points:

Role or Contribution

Profit

Service

Opportunity seeker

Business definition

Core Competencies

Company/Division Positioning

Indications for the future

Types of Mission Statements Motherhood It found in annual reports designed to “stroke” shareholders/Non Practical Use The Real Thing Meaningful Statement/impact on the behavior of the executives at all levels. Purpose Statement Lower-Level mission statement/Appropriate on the strategic business unit, departmental or product group level of the organization.

Motherhood

It found in annual reports designed to “stroke” shareholders/Non Practical Use

The Real Thing

Meaningful Statement/impact on the behavior of the executives at all levels.

Purpose Statement

Lower-Level mission statement/Appropriate on the strategic business unit, departmental or product group level of the organization.

Examples of Corporate Mission SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company

SINGAPORE AIRLINES is engaged in air transportation and related businesses. It operates world-wide as the flag carrier of the Republic of Singapore, aiming to provide services of the highest quality at reasonable prices for customers and a profit for the company

Examples of Corporate Mission MARRIOTT’S Mission Statement: We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value

MARRIOTT’S Mission Statement:

We are committed to being the best lodging and food service company in the world, by treating employees in ways that create extraordinary customer service and shareholder value

Last Word There is no secret magic or a formula. It is more of an age-old adage that harder they work, the luckier they get. It is not necessary to be a mighty corporation to do all this and a company of any size should be able to do so and succeed.

There is no secret magic or a formula.

It is more of an age-old adage that harder they work, the luckier they get.

It is not necessary to be a mighty corporation to do all this and a company of any size should be able to do so and succeed.

A Goal is a dream with a deadline Zig Zaglar