introduction to strategic marketing planning

By Maxwell Ranasinghe “facilitating students to realise their fullest

potential”

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)

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.

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.

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

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

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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)

–Segmenting ,Targeting and Positioning

  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.

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.

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.

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

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.

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.

Product, Price, Place, Promotion, Process, People and Physical evidence would be used as marketing mix tools to

achieve marketing objectives.

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.

Description Notes Year -2 Year-3

Sales Units 1

Sales amount 2

Less-

Manufacturing cost 3

Less-

Administrative Cost 4

Distribution Cost 5

Financial Cost 6

Other Cost 7

Net Profit 8

Tax 9

ROI 10

Break Even point 11

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.

Action Plans◦ Who does what and when

Activity responsibility

Budget Jan Feb March

Market analysis

max 20000 xx

New adds

Nimal 30000 xx

New Brand name

Jagath 40000 xxx XXX

Marketing controls are important to ensure that the set marketing plans are carried out as planned.

Importance-Proper implementation of the plansSet Key Performance indicatorsDeviations could be detectedNecessary corrective actions could be takenProactive rather than reactiveCompare and contrast with budgets

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.

Marketing plan •Objectives•Strategies

•Action plans

Set Performance indicators

Collect Performance details

Compare performancesDeviation

Nocontinue

yesCorrectiveaction