Introduction to strategic marketing planning


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Introduction to strategic marketing planning

  1. 1. By Maxwell Ranasinghe “facilitating students to realise their fullest potential”
  2. 2.  Management is “a set of activities including planning and decision making, leading and controlling directed at organisation’s resources: human, financial, physical and information, with the aim of achieving organisational goals in an efficient and effective manner “– ( R.W. Griffin -2005)
  3. 3. Of the five management functions — planning, organizing, staffing, leading and controlling , planning is the most fundamental.  All other functions stem from planning. Therefore planning is a major component of management.  However, planning doesn't always get the attention that it deserves.    
  4. 4. A goal is a desired future state that the organization attempts to realize in a given environment.  A plan is a blueprint for goal achievement that specifies the necessary resource allocations, schedules, tasks, and other actions.  Goals specify future ends; plans specify today's means of achieving them. 
  5. 5. The word planning in context of management, incorporates determining the organization's goals and defining the means for achieving them.  “If you fail to plan you are planning to fail” Prof. Peter Drucker  “ If I had eight hours to chop down a tree I’d spend six hours of sharpening my axe” Abraham Lincoln 
  6. 6.  Therefore, planning is an essential strategic activity and it is an intrinsic part of efficient and effective management.  When it relates to marketing, purpose of planning is to achieve marketing goals in an efficient and effective manner
  7. 7.  There are many types of plans in organizations.  Strategic Corporate Plans addresses the entire organization, it emanates from the corporate vision of a firm.  Then comes the Business Unit Plans which addresses the requirements of specific business units.
  8. 8. There are other functional plans such as operations, logistics, HR, Financial, Production and Marketing which are supporting to achieve the broader objectives of the corporate plans.  These plans are internal and they are not divulged to others.  Our subject matter here is “Marketing Planning” and therefore we would deal it in detail 
  9. 9. A Marketing Plan is a blue print that elaborates a systematic, inter connected, logical step by step processes for achieving marketing goals.  It specifies what should be done today to achieve goals ahead and it is the marketer’s road map for desired destination.
  10. 10. It analyses the:  internal and external environment,  markets,  competitors,  specifies the marketing objectives, necessary strategies, tactics, resource allocations,  schedules, tasks,  embeds the controls and other actions required in connection with attaining marketing goals in an efficient and effective manner. 
  11. 11. Hiebing and Cooper( 2003) succinctly sates that a marketing plan should be a disciplined, target market driven, interlocking ( not just integrated) and comprehensive plan in order to make it a successful tool in the process of achieving marketing goals.  Therefore, it has to be a comprehensive plan that gives importance to each and every element of a plan. 
  12. 12. Nothing is taken for granted and nothing or very little is left for chance.  Thus they call the marketing plan as “ Disciplined Marketing Plan” and lists important steps to follow in the process of marketing planning. 
  13. 13. This is the background where you develop your marketing plan. It is called the Situation Analysis or the Marketing Audit.  It could simply called “ where are we now” .   It will analyse the internal and external environment of the business.
  14. 14.  In the internal analysis, following key factors of the company are studied extensively  Managerial, marketing, financial, human resource, production, technology, systems and controls etc.  Through this analysis, Strengths and Weaknesses of a firm can be found well.
  15. 15.  In the external analysis, PESTEEEL Factors (political, economic, social, technological, ethical, environmental and legal factors), competitor analysis and market analysis etc will be studied in detail.  Through this analysis, Opportunities and Threats to the firm can be found well.
  16. 16.  Combining   the Strengths and Weaknesses and Opportunities and Threats, a firm can from a SWOT Analysis, which is a snap shot of the firms internal and external status.
  17. 17.  This indicates the forecasted amount of sales that the firm expects to meet.  This is a very vital element of the marketing plan as most of the other tasks that follows in the marketing plan are designed to achieve the sales target.  
  18. 18. Marketing success can be measured on several non financial market metrics.  It could be about the market share, retention of current customers, number of customers to attract, to increase the usage , level of brand awareness, number of dealers in the distribution network, etc.  Ansof’s growth strategy also gives guideline in this regard  Objectives should be ( SMART) measurable, achievable, realistic, time bound. 
  19. 19. A marketing strategy entails how an individual marketing objective will be reached.  While the marketing objectives are SMART, marketing strategies are descriptive.  They go into detail how objectives are achieved.   
  20. 20.  1. Target Marketing Strategies – Targeting and Positioning  2. Tactical Marketing Mix Tools ( although Ansof’s Growth Strategy is shown in many books as a marketing strategy, in my view it could be applicable more to setting marketing objectives)
  21. 21.  –Segmenting Positioning ,Targeting and
  22. 22.    A market segment means a large identifiable group of customers within a market with similar needs and wants, purchasing power, geographical location, buying attitudes or buying habits.  If all are having the same need then it could be considered as the mass market.  If each and every body’s need is separately identified and served it is called Mass Customization. 
  23. 23.  It talks about grouping customers with similar needs and serving them with the appropriate product proposition  Segmentation is something between the Mass Marketing and Mass Customisation.
  24. 24.  It does not talk about serving the whole market with one product or serving every individual with a different product.  A firm has to segment the market before it targets which market it should enter.
  25. 25.  Selecting the Target Market Review the segmentation done Now the challenge is to find out what market or market segments that you are going to serve with what product or products. It could be:  Single Segment  Selective Segments  Product Specialization  Market Specialization  Full Market Coverage
  26. 26.     Positioning the product When the firm knows where it is going to target its products and services it should also develop a positioning strategy. By positioning, a firm should try to get a special place in the mind set of the collective customers of the desired market. It could provide a direction to development of marketing strategies and using specific tactical marketing mix tools in achieving the expected positioning in the consumers of the market place.
  27. 27.  Marketing objectives are achieved through use of Tactical Marketing Mix Tools.  It could suit the selected target market and the positioning to be done  The firm can also use the stages of Product Life Cycle and use the marketing mix tools to suit the situation.
  28. 28. Product,  Price,  Place,  Promotion,  Process,  People and  Physical evidence  would be used as marketing mix tools to achieve marketing objectives. 
  29. 29.     Budget is a statement that enumerates how much of funds required to implement the marketing plan and how much of income it would generate. It will detail various expenses under different headings. It will also give the income, expenses and the profits in summary format and refer the details to notes of the budget. Further it could provide other management information ratios such as Return on Investment, Pay Back Period, Financial Ratios etc.
  30. 30. Description Notes Sales Units 1 Sales amount 2 LessManufacturing cost 3 LessAdministrative Cost 4 Distribution Cost 5 Financial Cost 6 Other Cost 7 Net Profit 8 Tax 9 ROI 10 Break Even point 11 Year -2 Year-3
  31. 31. Once the Marketing plan is developed, execution of it should happen. The execution may include specific details about who is responsible for different activities and when will it take place. It could be listed on an action plan or a calendar of events.
  32. 32.  Action Plans ◦ Who does what and when Activity responsi bility Budget Jan Feb Market analysis max 20000 xx New adds Nimal 30000 xx New Brand name Jagath 40000 xxx March XXX
  33. 33. Marketing controls are important to ensure that the set marketing plans are carried out as planned. ImportanceProper implementation of the plans Set Key Performance indicators Deviations could be detected Necessary corrective actions could be taken Proactive rather than reactive Compare and contrast with budgets 
  34. 34. Evaluation identifies what really was done while controlling involves evaluating the results with expected Key Performance Indicators and taking remedial actions without delay to ensure that the plan is on track and deviations are minimized or eliminated.  
  35. 35. Marketing plan •Objectives •Strategies •Action plans Set Performance indicators Corrective action yes Collect Performance details Deviation continue No Compare performances