Marketing plan
From Wikipedia, the free encyclopedia
A Marketing Plan is a written document that details the actions necessary to achieve a specified marketing objective(s). It can be for a product or service, a brand, or a product line. It can cover one year (referred to as an annual marketing plan), or cover up to 5 years.
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use.
Contents |
[edit] Content and presentation
[edit] Practical presentation
There are many formats for marketings plans and every company does it a little differently, but the outline that follows is a very complete format. Using this format will produce a 30 to 40 page plan. Many companies prefer an abridged format that would yield a 10 to 20 page plan.
- Title page
- Executive Summary
- Current Situation - Macroenvironment
- economy
- legal
- government
- technology
- ecological
- sociocultural
- supply chain
- Current Situation - Market Analysis
- market definition
- market size
- market segmentation
- industry structure and strategic groupings
- Porter 5 forces analysis
- competition and market share
- competitors' strengths and weaknesses
- market trends
- Current Situation - Consumer Analysis
- nature of the buying decision
- participants
- demographics
- psychographics
- buyer motivation and expectations
- loyalty segments
- Current Situation - Internal
- company resources
- financial
- people
- time
- skills
- objectives
- mission statement and vision statement
- corporate objectives
- financial objective
- marketing objectives
- long term objectives
- corporate culture
- company resources
- Summary of Situation Analysis
- external threats
- external opportunities
- internal strengths
- internal weaknesses
- key success factors in the industry
- our sustainable competitive advantage
- Marketing research
- information requirements
- research methodology
- research results
- Marketing Strategy - Product
- product mix
- product strengths and weaknesses
- product life cycle management and new product development
- Brand name, brand image, and brand equity
- the augmented product
- product portfolio analysis
- Marketing Strategy - Market share objectives
- by products,
- by customer segments,
- by geographical markets
- Marketing Strategy - Price
- pricing objectives
- pricing method (eg.: cost plus, demand based, or competitor indexing)
- pricing strategy (eg.: skimming, or penetration)
- discounts and allowances
- price elasticity and customer sensitivity
- price zoning
- break even analysis at various prices
- Marketing Strategy - promotion
- promotional goals
- promotional mix
- advertising reach, frequency, flights, theme, and media
- sales force requirements, techniques, and management
- sales promotion
- publicity and public relations
- electronic promotion (eg.: Web, or telephone)
- Marketing Strategy - Distribution
- geographical coverage
- distribution channels
- physical distribution and logistics
- electronic distribution
- Implementation
- personnel requirements
- assign responsibilities
- give incentives
- training on selling methods
- financial requirements
- management information systems requirements
- month-by-month agenda
- PERT or critical path analysis
- monitoring results and benchmarks
- adjustment mechanism
- contingencies (What if's)
- personnel requirements
- Financial Summary
- assumptions
- pro-forma monthly income statement
- contribution margin analysis
- breakeven analysis
- Monte Carlo method
- ISI: Internet Strategic Intelligence
- Scenarios
- Prediction of Future Scenarios
- Plan of Action for each Scenario
- Appendix
- pictures and specifications of the new product
- results from research already completed
[edit] Measurement of Progress
The final stage of any marketing planning process is to establish targets (or standards) so that progress can be monitored. Accordingly, it is important to put both quantities and timescales into the marketing objectives (for example, to capture 20 per cent by value of the market within two years) and into the corresponding strategies.
Changes in the environment mean that the forecasts often have to be changed. Along with these, the related plans may well also need to be changed. Continuous monitoring of performance, against predetermined targets, represents a most important aspect of this. However, perhaps even more important is the enforced discipline of a regular formal review. Again, as with forecasts, in many cases the best (most realistic) planning cycle will revolve around a quarterly review. Best of all, at least in terms of the quantifiable aspects of the plans, if not the wealth of backing detail, is probably a quarterly rolling review - planning one full year ahead each new quarter. Of course, this does absorb more planning resource; but it also ensures that the plans embody the latest information, and - with attention focused on them so regularly - forces both the plans and their implementation to be realistic.
Plans only have validity if they are actually used to control the progress of a company: their success lies in their implementation, not in the writing'.
[edit] Performance analysis
The most important elements of marketing performance, which are normally tracked, are:
[edit] Sales analysis
Most organizations track their sales results; or, in non-profit organizations for example, the number of clients. The more sophisticated track them in terms of 'sales variance' - the deviation from the target figures - which allows a more immediate picture of deviations to become evident. `Micro- analysis', which is a nicely pseudo-scientific term for the normal management process of investigating detailed problems, then investigates the individual elements (individual products, sales territories, customers and so on) which are failing to meet targets.
[edit] Market share analysis
Relatively few organizations, however, track market share. In some circumstances this may well be a much more important measure. Sales may still be increasing, in an expanding market, while share is actually decreasing - boding ill for future sales when the market eventually starts to drop. Where such market share is tracked, there may be a number of aspects which will be followed:
- overall market share
- segment share - that in the specific, targeted segment
- relative share -in relation to the market leaders
[edit] Expense analysis
The key ratio to watch in this area is usually the `marketing expense to sales ratio'; although this may be broken down into other elements (advertising to sales, sales administration to sales, and so on).
[edit] Financial Analysis
The `bottom line' of marketing activities should at least in theory, be the net profit (for all except non-profit organizations, where the comparable emphasis may be on remaining within budgeted costs). There are a number of separate performance figures and key ratios which need to be tracked:
- gross contribution<>net profit
- gross profit<>return on investment
- net contribution<>profit on sales
There can be considerable benefit in comparing these figures with those achieved by other organizations (especially those in the same industry); using, for instance, the figures which can be obtained (in the UK) from `The Centre for Interfirm Comparison'. The most sophisticated use of this approach, however, is typically by those making use of PIMS (Profit Impact of Management Strategies), initiated by the General Electric Company and then developed by Harvard Business School, but now run by the Strategic Planning Institute.
The above performance analyses concentrate on the quantitative measures which are directly related to short-term performance. But there are a number of indirect measures, essentially tracking customer attitudes, which can also indicate the organization's performance in terms of its longer-term marketing strengths and may accordingly be even more important indicators. Some useful measures are:
- market research - including customer panels (which are used to track changes over time)
- lost business - the orders which were lost because, for example, the stock was not available or the product did not meet the customer's exact requirements
- customer complaints - how many customers complain about the products or services, or the organization itself, and about what
[edit] Use of Marketing Plans
A formal, written marketing plan is essential; in that it provides an unambiguous reference point for activities throughout the planning period. However, perhaps the most important benefit of these plans is the planning process itself. This typically offers a unique opportunity, a forum, for `information-rich' and productively focused discussions between the various managers involved. The plan, together with the associated discussions, then provides an agreed context for their subsequent management activities, even for those not described in the plan itself.
[edit] Budgets as Managerial Tools
The classic quantification of a marketing plan appears in the form of budgets. Because these are so rigorously quantified, they are particularly important. They should, thus, represent an unequivocal projection of actions and expected results. What is more, they should be capable of being monitored accurately; and, indeed, performance against budget is the main (regular) management review process.
The purpose of a marketing budget is, thus, to pull together all the revenues and costs involved in marketing into one comprehensive document. It is a managerial tool that balances what is needed to be spent against what can be afforded, and helps make choices about priorities. It is then used in monitoring performance in practice.
The marketing budget is usually the most powerful tool by which you think through the relationship between desired results and available means. Its starting point should be the marketing strategies and plans, which have already been formulated in the marketing plan itself; although, in practice, the two will run in parallel and will interact. At the very least, the rigorous, highly quantified, budgets may cause a rethink of some of the more optimistic elements of the plans.
[edit] Approaches to budgeting
Many budgets are based on history. They are the equivalent of `time-series' forecasting. It is assumed that next year's budgets should follow some trend that is discernible over recent history. Other alternatives are based on a simple `percentage of sales' or on `what the competitors are doing'.
However, there are many other alternatives:
- Affordable - This may be the most common approach to budgeting. Someone, typically the managing director on behalf of the board, decides what is a `reasonable' promotional budget; what can be afforded. This figure is most often based on historical spending. This approach assumes that promotion is a cost; and sometimes is seen as an avoidable cost.
- Percentage of revenue - This is a variation of `affordable', but at least it forges a link with sales volume, in that the budget will be set at a certain percentage of revenue, and thus follows trends in sales. However, it does imply that promotion is a result of sales, rather than the other way round.
Both of these methods are seen by many managements to be `realistic', in that they reflect the reality of the business strategies as those managements see it. On the other hand, neither makes any allowance for change. They do not allow for the development to meet emerging market opportunities and, at the other end of the scale, they continue to pour money into a dying product or service (the `dog').
- Competitive parity - In this case, the organization relates its budgets to what the competitors are doing: for example, it matches their budgets, or beats them, or spends a proportion of what the brand leader is spending. On the other hand, it assumes that the competitors know best; in which case, the service or product can expect to be nothing more than a follower.
- Zero-based budgeting - In essence, this approach takes the objectives, as set out in the marketing plan, together with the resulting planned activities and then costs them out. Diferences between marketing and business plans.
[edit] References
[edit] See also
- business plan
- marketing
- marketing management
- plan
- strategic management
- Internet Strategic Intelligence
from Andy E. Harry