MARKETNG PLAN

A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. It can be for a product or service, a brand, or a product line. Marketing plans cover between one and five 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.

The questions to be answered in a marketing plan are :

Who are the customers?

What are their key characteristics?

What differentiates them from other members of the population?

What are their needs and wants?

What do they expect the `product' to do?

What are their special requirements and perceptions?

What do they think of the organization and its products or services?

What are their attitudes?

What are their buying intentions?

Also, points to be considered are

'Portfolio planning'. In addition, the coordinated planning of the individual products and services can contribute towards the balanced portfolio.

'80:20 rule'. To achieve the maximum impact, the marketing plan must be clear, concise and simple. It needs to concentrate on the 20 per cent of products or services, and on the 20 per cent of customers, which will account for 80 per cent of the volume and 80 per cent of the `profit'.

'7 Ps': Product, Place, Price and Promotion, Physical Environment, People, Process. The 7 Ps can sometimes divert attention from the customer, but the framework they offer can be very useful in building the action plans.

The main contents of a marketing plan are

1. Executive Summary2. Situational Analysis3. Opportunities / Issue Analysis - SWOT Analysis4. Objectives5. Strategy6. Action Programme (the operational marketing plan itself for the period under

review)7. Financial Forecast8. Controls

In detail, a complete marketing plan typically includes

Title page

1. Executive Summary2. Current Situation - Macroenvironment

o economyo legalo governmento technologyo ecologicalo socioculturalo supply chain

3. Current Situation - Market Analysis o market definitiono market sizeo market segmentationo industry structure and strategic groupingso Porter 5 forces analysiso competition and market shareo competitors' strengths and weaknesseso market trends

4. Current Situation - Consumer Analysis [4] o nature of the buying decisiono participantso demographicso psychographicso buyer motivation and expectationso loyalty segments

5. Current Situation - Internal

o company resources financial people time skills

o objectives mission statement and vision statement corporate objectives financial objective marketing objectives long term objectives description of the basic business philosophy

o corporate culture6. Summary of Situation Analysis

o external threatso external opportunitieso internal strengthso internal weaknesseso Critical success factors in the industryo our sustainable competitive advantage

7. Marketing research o information requirementso research methodologyo research results

8. Marketing Strategy - Product o product mixo product strengths and weaknesses

perceptual mappingo product life cycle management and new product developmento Brand name, brand image, and brand equityo the augmented producto product portfolio analysis

B.C.G. Analysis contribution margin analysis G.E. Multi Factoral analysis Quality Function Deployment

9. Marketing Strategy [5] - segmented marketing actions and market share objectives o by product,o by customer segment,o by geographical market,o by distribution channel.

10. Marketing Strategy - Price o pricing objectiveso pricing method (eg.: cost plus, demand based, or competitor indexing)o pricing strategy (eg.: skimming, or penetration)o discounts and allowances

o price elasticity and customer sensitivityo price zoningo break even analysis at various prices

11. Marketing Strategy - promotion o promotional goalso promotional mixo advertising reach, frequency, flights, theme, and mediao sales force requirements, techniques, and managemento sales promotiono publicity and public relationso electronic promotion (eg.: Web, or telephone)o word of mouth marketing (buzz)o viral marketing

12. Marketing Strategy - Distribution o geographical coverageo distribution channelso physical distribution and logisticso electronic distribution

13. Implementation o personnel requirements

assign responsibilities give incentives training on selling methods

o financial requirementso management information systems requirementso month-by-month agenda

PERT or critical path analysiso monitoring results and benchmarkso adjustment mechanismo contingencies (What if's)

14. Financial Summary o assumptionso pro-forma monthly income statemento contribution margin analysiso breakeven analysiso Monte Carlo methodo ISI: Internet Strategic Intelligence

15. Scenarios o Prediction of Future Scenarioso Plan of Action for each Scenario

16. Appendix o pictures and specifications of the new producto results from research already completed

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.

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.

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 - Ven:

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. Differences between marketing and business plans.