Marketing Planning Concept - Essay Example

Introduction Marketing planning is defined as the “planned action of marketing resources to achieve marketing objectives” (McDonald 2007, p. 8). The marketing planning concept on the other hand indicates that an organisation can identify and create its own competitive advantage through a systematic and disciplined approach to the market (McDonald 2007). The concept further indicates that all levels of an organisational management need to be involved in marketing planning, and that market intelligence should emanate from the market itself, rather than from planners who at times have little or no involvement with business operations. The product of marketing planning is a market plan, which contains a logical series and sequence of activities that include marketing objectives and plans on how to achieve the identified objectives. The marketing planning concept involves several steps which include: goal setting (where the marketing mission and corporate objectives are identified); analysing the prevailing market situation (through a market audit, SWOT analysis and marketing assumptions); creating a market strategy (by identifying marketing objectives and strategies, forecasting marketing results, and creating alternative plans); and allocating resources for marketing and monitoring the same (through a marketing budget and indicating a detailed action plan) (Dibb & Simkin 1996). While marketing planning is intellectually easy to grasp, implementing the same is notoriously difficult (McDonald 2007). The main reason for the aforementioned difficulty is that marketing planning requires an organisation to bring together “into one coherent, realistic plan all elements of marketing, and this ‘coalescence’ requires at least some degree of institutionalised procedures as well as inevitable compromise between conflicting objectives” (McDonald 2007, p. 9). In other words, the marketing planning concept indicates that an organisation has to develop a coherent and realistic marketing plan in order to compete favourably in the market. Notably, marketing planning has been indicated as being a complex procedure that brings together different contextual issues with the aim of gaining a structured approach with which to approach the market. Usually, the concept suggests two approaches with which to conduct marketing planning. These include tactical (operational) marketing planning and strategic marketing planning (McDonald 2007). Strategic marketing planning involves determining where an organisation wants to be in the long-term (usually in three to five years), and indicating how the company will reach identified long-term goals and objectives. Operational decisions are mainly made based on strategic marketing planning. Tactical marketing planning on the other hand focuses on the short-term (one year and below) and is much detailed when compared to strategic marketing planning. According to McDonald (2007), tactical marketing planning focuses on establishing the schedules and costs of all actions necessary to achieve specified marketing plans in not more than a year. Although tactical marketing planning focuses on short-term objectives, their implementation and outcomes, it should never be done before strategic marketing planning (McDonald 2007). Instead, all the short-term operational decisions must be based on long-term inspired strategic marketing planning. The marketing planning concept further indicates that for organisations to thrive in marketing their products or services, they need to combine effective marketing strategies with efficient marketing tactics (McDonald 2007). Marketing strategies are defined as the way in which an organisation organises “its activities to achieve a profitable growth in sales at marketing mix level” (Kotler 1997, p. 34). The marketing strategy specifies the resources allocated to marketing, and further specifies how the resources will be used in order to take advantage of opportunities arising in future. Marketing tactics on the other hand are defined as the resources (or tools) used in implementing an identified strategy (Kotler 1997). If the marketing planning process combines an efficient marketing tactic with an ineffective marketing strategy, the product dies slowly. However, by combining an ineffective marketing strategy and an inefficient marketing tactic, the marketed product or service dies quickly. On the other hand, combining an effective marketing strategy and inefficient marketing tactics means that the marketed product or service may survive in the competitive market, but will fall short of thriving. A critical appraisal of the value of implementing the marketing planning concept As indicated above, marketing planning starts with an examination of existing customers and establishing their relative worth to the company. The foregoing review is meant to assess an organisation’s marketing approach, and based on the results therein, a new marketing plan can be developed (Dibb & Simkin 1996). The foregoing is important because most companies understand their customers based on a combination of historical information relating to individual customers and the market and commonsense. For example, a manufacturer of beauty soaps can use the responses received from customers, combine them with sales figures and generate deeper understanding about the market. As indicated by Nijssen and Frambach (2001), marketing planning commences with the firm defining its problem. Defining the problem (or marketing need) enables the firm to deal with it. Generally however, insiders do not detect a problem or need in their firms because they are too close or used to the problem. It therefore takes the critical self-inspection (e.g. through a SWOT analysis) for the firm’s management to realise the status-quo, identify problems and suggest possible solutions to the same. Marketing planning is vital in updating perceptions especially where organisations have informational gaps (McDonald & Wilson 2011). To allow for effective planning, an organisation needs to conduct market research, during which information relating to the organisation’s internal and external environments is gathered. For example, through market research, an organisation gets to understand its competitors better. It also gets to understand consumer needs, preferences and product perceptions. Additionally, market research, which is an essential part of the marketing planning process, is used to gather intelligence which the organisation uses to position itself better. Another value of implementing marketing planning is that the planning creates room for efficacy. As Armstrong and Reibstein (1985) indicate, the development of marketing plans must be based on careful planning because there is a likelihood that marketers may prepare complex plans without bothering to test their efficacy. Where an organisation is facing changes, Armstrong and Reibsten (1985) observe that marketing planning allows for the management to obtain control and steer the company accordingly. The value of marketing planning can also be generated through the organisation obtaining marketing intelligence, and using the same to develop a product that appeals to the target market (Richard & Wilson). For example, through marketing planning, an organisation can engage in product development for purposes of providing the right quality, guarantees and levels of consistency in a product. Similarly, an organisation in the services sector can effectively offer accessible, convenient, flexible, and fast services through marketing planning. As Richard and Wilson (2012) further note, value in marketing planning can be generated through developing a brand that appeals to customers through utilising the marketing intelligence obtained during the marketing planning processes. Value can also be generated in the delivery and through the product or service experience (Richard & Wilson 2012). The value of marketing planning should be audited in order to ensure that there is co-creation between the organisation and the consumers (Prahaland & Ramaswamy 2004; Zwick, Bonsu & Darmody 2008), and in order to ensure “not only that the value in the customer’s eyes is leveraged, but also that anything that might damage or destroy customer value and the value of the brand is understood and managed” (Richard & Wilson 2012, p. 450). Notably, marketing planning should be cognisant that in order to create value, the consumers and the firm must be perceived as both collaborators and competitors; they collaborate in creating value, but compete in extracting economic value from a product or service (Prahalad & Ramaswamy 2004). Implementing marketing planning also has value in that it helps a firm identify its sources of competitive advantage (McDonald 1999). For example, a company that analyses its external and internal environment identifies its competitors and the relative threat to the firm’s ability to meet its short and long-term objectives. Marketing planning also forces an organised approach to handling the firm’s problems (McDonald 1999) and this means that its implementation bolsters internal cohesion in the firm. Closely linked to the organised approach is marketing planning’s potential to enhance consistent relationships. For example, involving all departments in the firm in marketing planning enables them to share ideas, bond and work as a team. The relationships formed during marketing planning may however endure in the organisation much longer hence creating cohesion therein. Information value is also something that implementing marketing planning enables the organisation (Dibb, Simkin, Pride & Ferrell 2005). Specifically, the firm is able to attain market intelligence which it may use to boost its competitive position in the market. An example would be when a firm conducts research in order to establish its relative market position as compared to its competitors. The research findings may indicate some of the approaches that competitors use to gain more market share, hence meaning that in the future, the firm may use similar or more superior techniques. Getting resources is also another marketing planning-related value that organisations get (McDonald & Wilson 2011). Not only does a firm get resources, but the resources are sufficient to accomplish its plans and attain set goals and objectives. Closely related to resources is the support that a firm get after implementing marketing planning. The support comes from different stakeholders including the investors/shareholders, and/or even government and communities (McDonald & Wilson 2011). Shareholders’ support comes in handy when a firm may need additional capital. Government support on the other hand is important when dealing with legal and political matters. Lastly, community support is essential not only because communities make part of the market, but also because the community is the source of human resource capital that a firm needs in order to meet it business goals and objectives. McDonald and Wilson (2011) also identify gaining commitment as another value that a firm gets by implementing the marketing planning concept. The commitment comes from shareholders, employees, business partners (e.g. people in the supply chain), community members and the legal/political entities. Such commitment is essential because each of the aforementioned stakeholders has a critical role to play if the firm is to realise its organisational goals and objectives. Through marketing planning for example, the firm is able to inspire confidence among suppliers, and this enables it to create effective value chains. Marketing planning also enables the firm to identify and create effective business relationships with other important players such as distributors. In an example, marketing planning would help the firm determine which distributors to deal with, the credit policy to use if any, and when to cut off relationships with distributors who do not live up to the expected performance. An additional value of marketing planning is that it enables the firm to set objectives and design effective strategies (McDonald & Wilson 2011). As indicated elsewhere in this essay, a marketing planning process generates a marketing plan. For the marketing plan to be effective however, it relies on relevant and clear objectives, which a firm is only able to identify after marketing planning, whereby the firm’s aims and objectives are identified. The final value that McDonald and Wilson (2011) identify as a product of marketing planning implementation relates to the firm being able to identify the right mix of products and/or services. For example, a brassiere manufacturer who has implemented marketing planning will most likely discover (during the market research phase), that while brassieres are a vital inner wear garment for women, most such women wear the wrong fit, or sometimes wear the same items for far too long until they are not effective anymore. Such a firm would then perhaps come up with a service that seek to measure women’s brassiere sizes and educate them on the importance of discarding old items (since I would presume, the research would have established that brassieres lose their supportive functionality on women’s breasts). Overall, it is important to note that the marketing planning process is complex. It involves establishing: where the firm is at the time (this is done through analysing the firm’s internal and external environment through processes such as customer analysis, competitor analysis, ratio analysis, and market audit among others); where the firm wants to be in future (through developing a mission and objectives; segmenting and targeting the market and positioning the product appropriately; and/or developing marketing strategies); how to get to the desired place (through the right product, price, place, and promotion combination); how best to get there (this can be through modelling or through choice criteria and screening); and how the firm must ensure it gets to its desired future (through identifying the problems that the firm needs to overcome and the management controls that it needs to put in place) (Oxford College of Marketing 2013). Conclusion This paper has established that the marketing planning concept indicates that an organisation can identify and create its own competitive advantage through a systematic and disciplined approach. The paper has identified market goal setting, analysing the prevailing market situation, creating a market strategy, and allocating resource for marketing and monitoring the same, as the main steps that a firm needs to take in marketing planning. After implementing the marketing planning concept, the paper indicates that a firm is able to access value, which includes identifying sources of competitive advantage, being able to forge consistent relationships, getting resource, commitment and support from different stakeholders; being able to set objectives and design strategies; and being able to use the right mix of products/services in order to attain goals and objectives. From the foregoing, it would seem that every firm needs to engage in marketing planning, not only because it is the main way to get a functional marketing plan, but also because it looks like an essential for every business firm. References Dibb, S & Simkin, L 1996, The Marketing Planning Workbooks: Effective Marketing for Marketing Managers, Cengage Learning, London. Dibb, S, Simkin, L, Pride, W & Ferrell, O C 2005, Marketing Concepts and Strategies, Houghton Mifflin, Boston, MA. Hollennbeck, N & Wright, G 2006, Human Resource Management: Gaining a Competitive Advantage, 5th edn, McGraw-Hill/Irwin, New York. Kotler, P 1997, Marketing Management: Analysis, Planning, Implementation, and Control, Prentice Hall International, Englewood Cliffs, New Jersey. McDonald, M 2007, Malcolm McDonald on Marketing Planning: Understanding Marketing Plans and Strategy, Kogan Publishers, London. McDonald, M & Wilson, H 2011, Marketing plans: How to Prepare Them, How to Use Them, John Wiley & Sons, London. Nijssen, E & Frambach, R 2001, Creating Customer Value through Strategic Marketing Planning: A Management Approach, Springer, Hoboken, NJ. Oxford College of Marketing 2013, ‘Marketing planning: The importance of planning and the planning process,’ Viewed 16 November 2013, . Prahalad, C.K & Ramaswamy, V 2004, The Future of Competition: Co-Creating Unique Value with Customers, Harvard Business Press, Harvard. Richard, M. S & Wilson, M.S 2012, Strategic Marketing Planning, Routledge, New York. Zwick, D, Bonsu, S K & Darmody, A 2008, ‘Putting consumers to work: Co-creation and the new marketing govern-mentality,’ Journal of Consumers Culture, vol. 8, no.2, pp. 163-196. Read More