An Analysis of the Fundamentals of Marketing (part 43)

Marketing, Planning and Implementation 

(part A)

by

Charles Lamson

Introduction

Marketing does not just happen. Products and services have to be developed in the most efficient manner to ensure that the goods or services reach the consumer in the right manner at the right place, time and price to create customer satisfaction and appropriate profit to the supplier. It is the planning required throughout the marketing process that will be discussed in the next few posts.

The Nature of Planning

While it may be tempting for a young entrepreneur to rush off to market his/her new product or service, very soon hurdles will be encountered for which he/she is not prepared. The good idea will be unlikely to be successfully implemented, causing considerable loss of face, time and money through the venture. Although frustrating, it is better to sit down and plan out the process of getting the offering to market. However, good planning takes time and careful consideration to implement. Even established marketers who have products at various stages of the  product life cycle (PLC) find marketing planning challenging. Various academics have written useful texts which will provide further guidance to the process of developing and implementing effective marketing plans. The reader is referred to the work of McDonald (2002) and Cooper and Payne (1996) who extend the coverage to services marketing.

Business Plan

The business plan is central to the planning process, often being the critical document that is needed to persuade others to support the venture. Business plans form a framework which outline the route to reach the business goals. Usually business plans are made to cover a period of up to three, maybe even five years. Generally the detail is provided for year 1 of the operation, with more indicative expectations thereafter for years 2 and 3. Many business plans are prepared as part of the process of getting financing in the form of venture capital or loans from a bank or equivalent institution. The firm's management will require the plan to ascertain that the proposals have been well considered and that projections of likely performance match expectations. The business plan will incorporate details of the proposed marketing plan (see Box 1) showing the direction that the marketing mix is expected to take. It will give estimates of customer demand in terms of market size, competitor activity, projected profit and loss together with the time scale, human resource and financial implications estimates. Supporting evidence in the form of test marketing findings may also be provided in the plan.

Generally, while the business plan is taken as the 'blueprint' for the venture to follow, it should not be a document that is written on tablets of stone. Time spent at this early stage can avoid costly mistakes as the plan is put into practice. However, ultimately, the plan acts as a guide which may have to be adjusted and revised over time to match the market conditions faced in its implementation. The business plan is a tool to help manage the venture through the various stages of its development.

BOX 1

STRUCTURE AND CONTENTS OF A TYPICAL BUSINESS MARKETING PLAN Business Mission Mission statement encompassing the whole operation, often following a general goal, e.g. to be ‘market leader’, ‘the most ethically aware’ or ‘the most innovative supplier of goods and services’ within a selected industry Corporate Objective Covers the specifics of the business mission statement. Usually objectives are given in quantifiable terms, e.g. to achieve a given turnover, profit, market share or to increase on the previous year’s performance; supporting qualitative objectives may be used, e.g. to raise product quality awareness among customers Environmental Audit Market environment in which the firm operates in terms of Political (including legal), Economic, Social and Technological (PEST) issues Marketing Audit Analysis of competitor activity, providing relative position of the organization within the market. It involves undertaking a SWOT analysis covering:    Firm’s internal strengths and weaknesses;    Firm’s external opportunities and threats. Market Analysis Involves assessment of market size, trends and segments; regional and local market characteristics, seasonal variation in sales, etc. Marketing Objective and Major Strategies Defines objectives in terms of forecasts of increased sales, customer awareness, channel coverage for  the product or service, etc. Corporate strategies relate to the analyses of environmental and marketing audits discussed above Marketing Programs and Tactics Implementation of marketing tactics to achieve the strategic objectives through the marketing mix, balancing product development, pricing, promotion and channels of distribution (place) decisions Market Information Analysis Discovery of market gaps, new markets/segments, customer characteristics, product life-cycle positioning and targeting, etc. It incorporates developing the Marketing Information System (MIS), marketing research methodology and marketing research implementation including selection of marketing research agency, if appropriate. Marketing Mix Favored combination of product, price, promotion and channels of distribution (place) approaches Product Assessment of product characteristics, range, features; sales trends, performance history and planned developments. Ascertaining competitive analysis and advantage Pricing Assessment of positioning strategy, customer-perceived values. Ascertaining competitive analysis and advantage Promotion Assessment of media advertising, direct mail, sales promotions, sponsorship, exhibitions, public relations, selling activity and measurement of communication effectiveness. Ascertaining competitive analysis and advantage Place - Channels of Distribution Assessment of channel strategy, channel selection, selling strategy, sales plan and sales force organization. Ascertaining competitive analysis and advantage   Resources Constraints within which plan has to operate Finance Marketing budget, revenue and gross margin forecast, target marketing ratios and cash flow projection Time Scheduling of proposed marketing activities within the plan (often portrayed using a Gantt Chart - see Figure 1) Human Resource Management Personnel requirements for implementing the plan, including appropriate recruitment and training

Figure 1 An example of a Gantt chart used in marketing planning

*SOURCE: FUNDAMENTALS OF MARKETING, 2007, MARILYN A. STONE AND JOHN DRESMOND, PGS. 395-399*

END

STRUCTURE AND CONTENTS OF A TYPICAL BUSINESS MARKETING PLAN

Business Mission

Mission statement encompassing the whole operation, often following a general goal, e.g. to be ‘market leader’, ‘the most ethically aware’ or ‘the most innovative supplier of goods and services’ within a selected industry

Corporate Objective

Covers the specifics of the business mission statement. Usually objectives are given in quantifiable terms, e.g. to achieve a given turnover, profit, market share or to increase on the previous year’s performance; supporting qualitative objectives may be used, e.g. to raise product quality awareness among customers

Environmental Audit

Market environment in which the firm operates in terms of Political (including legal), Economic, Social and Technological (PEST) issues

Marketing Audit

Analysis of competitor activity, providing relative position of the organization within the market. It involves undertaking a SWOT analysis covering:

•    Firm’s internal strengths and weaknesses;
•    Firm’s external opportunities and threats.

Market Analysis

Involves assessment of market size, trends and segments; regional and local market characteristics, seasonal variation in sales, etc.

Marketing Objective and Major Strategies

Defines objectives in terms of forecasts of increased sales, customer awareness, channel coverage for  the product or service, etc. Corporate strategies relate to the analyses of environmental and marketing audits discussed above

Marketing Programs and Tactics

Implementation of marketing tactics to achieve the strategic objectives through the marketing mix, balancing product development, pricing, promotion and channels of distribution (place) decisions

Market Information Analysis

Discovery of market gaps, new markets/segments, customer characteristics, product life-cycle positioning and targeting, etc. It incorporates developing the Marketing Information System (MIS), marketing research methodology and marketing research implementation including selection of marketing research agency, if appropriate.

Marketing Mix

Favored combination of product, price, promotion and channels of distribution (place) approaches

Product

Assessment of product characteristics, range, features; sales trends, performance history and planned developments. Ascertaining competitive analysis and advantage

Pricing

Assessment of positioning strategy, customer-perceived values. Ascertaining competitive analysis and advantage

Promotion

Assessment of media advertising, direct mail, sales promotions, sponsorship, exhibitions, public relations, selling activity and measurement of communication effectiveness. Ascertaining competitive analysis and advantage

Place - Channels of Distribution

Assessment of channel strategy, channel selection, selling strategy, sales plan and sales force organization. Ascertaining competitive analysis and advantage  

Resources

Constraints within which plan has to operate

Finance

Marketing budget, revenue and gross margin forecast, target marketing ratios and cash flow projection

Time

Scheduling of proposed marketing activities within the plan (often portrayed using a Gantt Chart - see Figure 1)

Human Resource Management

Personnel requirements for implementing the plan, including appropriate recruitment and training