Marketing Plan Issues - Essay Example

? Marketing Plan: Individual Reflective Essay I.D. Number: Term and Year Marketing Plan: Individual Reflective Essay Introduction In the age of market economy, marketing plan has emerged as a major substitute to the standard and traditional tools of budgeting and forecasting in business management. This essay is aimed at discussing the various aspects of and issues related to marketing plan. In this context, first the role and nature of a marketing plan is discussed. Next, the structure of a standard marketing plan is explained. After that, there are the sections in which elements of marketing plan are elaborated sequentially. The links between marketing plan elements are discussed in the following section. In the section of assumptions, there is a discussion related to the common misconceptions regarding the marketing plan as a whole. Reputable journal, text, and Internet based sources have been used throughout the paper. Role and Nature of Marketing Plan What is a Marketing Plan? A marketing plan is used in backend and management operations. It is aimed at the potential consumers and also the public at large. The complete plan is kept like a guiding document for personnel involved in advertising, sales, and marketing. Marketing plans contain the results obtained by research, which help in identifying tactics and strategies for communicating with the consumers. Hence, it must have an ethical but persuasive orientation. (Solomon et al, 2012; Kang et al, 2002) What is the relationship between a Marketing Plan and a Business Plan? Marketing and business plans have a significant number of elements and subsections in common. In drafting the overall strategic plan, both marketing and business plans may lead to common or overlapping implications. Business plans cover market analyses and marketing research in the context of the whole business including the fiscal affairs. Nevertheless, there are certain differences between a marketing plan and a business plan. Differences between a Marketing Plan and a Business Plan Marketing Plan Business Plan The plan is intended for the potential customers and general public. It is implemented by the personnel involved in sales, advertising, distribution and promotion. (Solomon et al, 2012) Potential investors are shown a business plan as a first step to help them decide whether or not to invest. According to Mason and Stark (2004, p. 227), “Bankers stress the financial aspects of the proposal and give little emphasis to market, entrepreneur or other issues.” Marketing plan has a customer or consumer oriented persuasive approach (Cravens et al, 2009) Business plan has a financier or investor oriented persuasive approach (Chen et al, 2009) The planner must concentrate more on preparing milestone charts, sales forecasts, marketing research, etc. (Wood, 2011) The planner must refer to the marketing plan but adequately cover the financial information and other details related to the organization. It must be used along with the business plan to draft the strategic plan Business planning is precondition to strategic planning Helps in the processes like “product line asset development” (Kang et al, 2002, p. 203) Helps in a variety of processes such as management accounting, cash flows, preparing financial statements, etc. Table – 1: Marketing Plan versus Business Plan What are Marketing Plans used for? The marketing plan includes various kinds of analyses to determine marketing strategies like pricing, distribution, and perks that are to be rewarded to the salespeople and retailers who generate better sales for the company. Further, strategic incentives are provided on the basis of market plans. These incentives include different types of offerings, special packages, free gifts, etc. to retain the existing clients and/or attract new clients particularly for service-oriented businesses. In sum, a marketing plan is drafted for achieving sales & distribution targets, winning customers, achieving competitive advantage, increasing sales volumes, and enhancing the organization’s market share. (Solomon et al, 2012; Cravens et al, 2009) Structure of Marketing Plan In strictest sense, no uniform format can be assigned to a marketing plan. The reason is that each and every organization has its specific marketing needs. Marketing plan has lots of common themes with the superseding business plan or the more improvised strategic plan. But regarding the issues like sales, product portfolio, market research, etc., marketing plan involves more intricate analyses. However, management professionals and experts like Solomon et al (2012), Wood (2011), Stapleton and Thomas (1998), etc. have attempted to divide the typical format of a marketing plan roughly in the following major sections: Elements of Marketing Plan 1 Title Page, Executive Summary, and Introductory Notes 2 Situational Analysis 3 Marketing Research & Analysis 4 Strategic Analysis or Development of Marketing Strategies 5 Implementation 6 Control & Evaluation 7 Analyses of Marketing Scenarios 8 References and Appendices Table – 2: Elements of Marketing Plan The sections like situational analysis, marketing research & analysis, strategic analysis, implementation, control & evaluation, and analyses of marketing scenarios are the most critical sections of a marketing plan that ultimately define the very course of the marketing processes. In more complicated circumstances (such as the launching of a new product), each section has to be subdivided further so that the more intricate analyses can be facilitated. This involves determining the marketability of the product or service that is going to be marketed. (Mullins et al, 2009; Thomas, 2006) Potential Differences in Marketing Plan Structures Different organizations have different structures and purposes. An organization might be a product manufacturer (e.g. Volkswagen), a service provider (e.g. AT&T), or both (e.g. Microsoft Corporation). Those who are product manufacturers must construct product portfolios and production oriented/constrained marketing analyses. When the organization is a service provider, it should project the service it provides as its product. (Solomon et al, 2012; Cravens et al, 2009) Intricacies of techniques involved in making a product portfolio and a service portfolio may differ, although statistical and evaluative parameters generally remain the same. Moreover, after selling a product, after-sales services and troubleshooting become crucial and hence marketing plan must include dependable guidelines for both the service persons and sales executives (Tanner and Raymond, 2012). Likewise, the size of the organization is also a critical consideration. For small businesses, a detailed marketing plan might be cumbersome and confusing. But for medium and large enterprises, the marketing plan should not only be detailed but also adaptable with custom needs. Elements of Marketing Plan Every professional presentation has certain specifications to define the structures of its opening and concluding portions. In the case of a marketing plan, it should open with a title page, an executive summary, and introductory notes (if necessary). The executive summary is a detailed but concise outline of what the audience/reader of the plan should expect from it. (Wood, 2011; Stapleton and Thomas, 1998) However, certain critical information may be highlighted in the introductory notes following an executive summary. At the end of the marketing plan, list of references (if applicable) and appendices should be provided. The main elements of a marketing plan that follow the executive summary/introduction are explained as the following in proper sequence: Situational Analysis Situational analysis involves analysis of current situations in and around the organization. It provides a solid grounding of the expected deliverables to be attained in the course of the scheduled service or product deliverance. (Solomon et al, 2012) Purpose Situational analysis can further be subdivided in parts dedicated to different purposes. Subsection Purpose External analysis or analysis of the macro-environmental factors Entails analyzing the existing socio-economic, legal, political, ecological, and technological issues that are generally beyond the control of the management Market analysis Involves market research, industry research, and examination of Porter’s 5 Forces. It will help in identifying and analyzing the market and industry segments, collaborators, and competitors. Customer or consumer analysis Entails socio-psychological study covering demographic and ethno-cultural issues along with consumer decision making and behaviors Internal analysis Analyzes the current situation of human resources, capital, skills, culture, etc. in the corporation and helps to organize the different marketing activities Table – 3: Main parts of Situational Analysis (Adapted from Solomon et al, 2012; Wood, 2011) Information type and sources Information would primarily consist of analytical notes of managers, directors, and/or consultants (if any). Qualitative data can be considered as more important in building certain subsections. Internal surveys of company staffs may be required as well. Survey of contemporary business literature and news archives can also help. Techniques The most important technique applicable in building this section is Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis. Opportunities and threats come from the external macro-environment (revealed through external analysis), while strengths and weaknesses are uncovered by assessing the organization internally (by internal analysis). (Wood, 2011; Stapleton and Thomas, 1998) Figure – 1: SWOT Analysis (Stapleton and Thomas, 1998, p. 82) Marketing Research & Analysis Marketing research involves comprehensive research and analysis of the market wherein the product will be released. It not only serves the marketing plan but also provides essential quantitative data for preparing the business and strategic plans. (Wood, 2011) Purpose Marketing research accomplishes consumer research in broader sense (Deighton et al, 2010), which involves establishment of marketing objectives and identification of target market. Marketing research also generates themes for subsequent development of strategies, planning, and analyses (Wood, 2011). Information type and sources Information type and sources exclusively depend on the research methodologies followed by the market research team. Quantitative data are of paramount importance, while most of the qualitative data gathered through situational analysis are quantified. Techniques The research team to whom the task of marketing research is delegated may select a number of mathematical, scientific, and psychological techniques. For example, De Jong et al (2008, p. 104) devised their marketing research technique on the basis of “item response theory.” Strategic Analysis Strategic analysis can be considered as a major common theme between marketing plan, business plan, and strategic plan. It is generally defined as the development of marketing strategies. Purpose The purpose of strategic analysis is to synchronize the objectives, decision making processes, and actions of the organization so that optimum performance levels can be determined before formulating an effective project management and damage control mechanism. (Solomon et al, 2012) Figure – 2: 4Ps of Marketing (Stapleton and Thomas, 1998, p. 96) The essentialities of developing a marketing strategy (see Figure – 2) involve making of a product portfolio followed by effective pricing. Subsequent steps are product promotion through advertising campaigns and apposite placement of the product by taking up different channels for distribution & supporting services. Information type and sources Information type can be quantitative as well as qualitative including surveys, literature research, customer feedback, historical trend analysis, experiential analysis, etc. Resources from various market stakeholders such as competitors’ financial data, survey results from media houses, etc. can be used. Techniques Figure – 3: GE Matrix (Stapleton and Thomas, 1998, p. 106) Techniques such as quality function deployment, Boston Matrix, GE Matrix (see Figure - 3), etc. can be used. (Wood, 2011; Stapleton and Thomas, 1998) Implementation The section of implementation describes the roadmap of materializing the marketing plan. Purpose In this section, needs of the company personnel are addressed by determining the incentives to be provided (on the basis of a reward and punishment technique), sales training, and delegation of responsibilities. Execution program of the marketing plan is interpreted in the form of a project, which is organized on the basis of process benchmarks and timely milestones. Hence, project management is applied followed by risk management and appropriate adjustment mechanisms. (Mullins et al, 2009) Information type and sources Information generated mainly from the elements like situational analysis and strategic analysis are used with suitable usage of project management tools. Techniques Since execution program of the marketing plan can be structured in the form of a project, standard project management techniques like PERT, CPA, PBS, etc. are used. For example, PERT or Project Evaluation and Review Technique is often used to determine the task sequences and interdependencies. PERT utilizes probabilistic time estimation methods so that the project may not become too optimistic or too pessimistic (Schawlbe, 2010). Control & Evaluation The section of control & evaluation of the marketing plan is defined as financial summary as well. Purpose The section includes monthly income statements and helps the management to calculate possible expenses. The quantities of investment along with short term and long term fiscal goals are determined through the process of budgeting. Calculations of potential net income, costs, and sales are appended in this section. Information type and sources Previous sections of the marketing plan provide most of the necessary information. Since numerical analyses are conducted in this section, quantitative data and methodologies are important. Techniques Statistical tools are used to organize, analyze, and interpret the different sorts of fiscal data to provide quantitative information necessary for management accounting and decision making. Techniques such as Contribution Margin Analysis help in correlating the different variables involving product, volume, and cost analyses that culminate at balancing the revenues against variable costs (Gietzmann and Ostaszewski, 1996). Analyses of Marketing Scenarios By analyzing the possible marketing scenarios the tasks related to risk management, damage control, time adjustments, etc. are accomplished. Purpose In this section, the planning team forecasts the future scenarios after and during the execution of marketing operations. It also provides an action plan for each scenario. Information type and sources This section draws information mainly from the section of implementation. Statistical interpretations of the inferences of situational and marketing analyses are also utilized. Techniques Techniques that involve forecasting methods used in business mathematics and statistics are applied. Historical Trend Analysis (HTA) is an important tool in this context. Characteristically, the reason to use HTA is to predict the year-wise actual volumes of products that the customers would buy through different distribution channels. (Shermon, 2011; Thomas, 2006) Links between Marketing Plan Elements A study of marketing planning processes can help in linking the different elements of a marketing plan. According to the Government of South Australia (2011), setting the marketing objectives and defining the target market are the two most important preliminary steps. These steps pertain to Marketing Research & Analysis section. However, completing the Situational Analysis is essential to gather sufficient information so that marketing research can be embarked on. After this, development of the marketing strategies begins, which is covered under the element of Strategic Analysis. Further, Strategic Analysis can be directly linked to (i) Implementation and (ii) Analyses of Marketing Scenarios. These two sections are largely independent from each other. The section of Strategic Analysis provides information and statistics crucial in developing the two culminating marketing plan elements as mentioned. Again, the element of Implementation is an information provider to determine the extent and techniques of Control & Evaluation. Moreover, the SWOT analysis done in the course of Situational Analysis can provide ample quantifiable data necessary for determining the most effective ways of Control & Evaluation including budgeting (Stapleton and Thomas, 1998). Assumptions Most of the misconceptions regarding marketing plan originate from the misconceptions about marketing itself. According to Singh (2002, p. 190), there is a prevalent misinterpretation among some professionals that marketing just involves promoting services, products, or both to the markets (clientele base) with a prime focus on sales and advertising to persuade clientele toward a particular service and/or product. Hence, marketing is time and again understood as promotion and confused with the payment-based services. In the precise context of marketing plan, McDonald (1989) identified a number of barriers and misunderstandings. The misconceptions regarding marketing plan are summarized in Figure - 4: Figure – 4: Ten Barriers to Marketing Planning (McDonald, 1989, p. 1) From the points mentioned in Figure – 4, tow unwarranted assumptions that may affect the marketing plan can be diagnosed. Firstly, since some planners think that the financial aspects of a marketing plan are not as complex as those of a business or strategic plan, in-depth analyses (especially the fiscal ones) may be regarded as unnecessary. Secondly, it is often thought that marketing depends too much on advertising, packaging, promotion, etc. Hence, a systematic approach is not adopted at all and key ethical issues are neglected. Therefore, although marketing plans are acknowledged to be beneficial for the overall management of a company, “forecasting and budgeting systems” (McDonald, 1989, p. 1) are traditionally considered as more reliable techniques of futuristic planning. However, professional education and a well sequenced approach can eliminate misconceptions about marketing planning to a significant extent (Government of South Australia, 2011). Conclusion Marketing and business plans have both differences and similarities. Unlike business plan, a marketing plan puts more focus on the sections like consumer analysis, sales projection, target market, etc. In a marketing plan, the key elements are situational analysis, marketing research, development of marketing strategies, implementation, control & evaluation, and analyses of possible market scenarios. Most of the elements of a marketing plan can be linked with each other and sequenced according to technical, accounting, and inventory related considerations. Marketing plans are generally kept confidential by the management and shared only between the marketing officers, floor managers, sales teams, etc. A marketing plan can be used in diverse types of industries ranging from manufacturing to service sectors. However, there are some barriers present in marketing planning that may give rise to unwarranted assumptions and serious corporate issues. References Chen, X. P., Yao, X., & Kotha, S. (2009). Entrepreneur passion and preparedness in business plan presentations: A persuasion analysis of venture capitalists' funding decisions. Academy of Management Journal, 52, 199-214. Cravens, David W. and Nigel F. Piercy (2009). Strategic Marketing. New York: The McGraw- Hill Companies, Inc. De Jong, M.G., Steenkamp, J.B.E., Fox, J.P. and Baumgarten, H. (2008). 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