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Marketing Management

Module-1
Lesson # 6
Marketing Plan
Meeting competition, protecting market share and
achieving profits at the business unit level are its
concerns.
The task of marketing planning is to spot the
needs of various segments of consumers in a
given business, translate the needs into suitable
products and make the required profits at the
unit level.
Marketing planning and marketing strategy
accomplish this purpose.
Tasks of Marketing planning
• Tasks involved in marketing planning are:
1. Analysing the marketing environment and
spotting the opportunities and threats;
2. Internal appraisal;
3. Setting the marketing objectives of the unit;
4. Formulating the marketing strategy of the unit;
5. Developing detailed marketing plans and
programs;
6. Formulating the marketing budget.
1. Analysing the marketing environment and
spotting the opportunities and threats
• Firstly, the marketing planner surveys his marketing environment.
The main purpose of this exercise is to find out:

• the favorable and unfavorable factors prevailing/emerging in the


environment; and

• the specific business opportunities available to the business unit


and their relative attractiveness.

• The marketing planner analyses the mega environment as well as


the environment closer to his business unit. The latter includes
the market, the customer, the industry and the competition.

• Through detailed environmental analysis, the marketing planner


develops an Opportunity Threat Profile(O-T). Marketing research
and marketing information system provide much of the input
needed in this regard.
2. Internal appraisal:
• The main tasks in internal appraisal are:

• Assessing the strength and weakness of the business unit:


Aspects to be covered in S-W analysis of a unit are to be assessed in
the following functional areas:
– Marketing
– Finance
– Manufacturing/Operation
– R&D
– Human Resources
– General Factors: image of the unit, its relative priority, etc.

• Assessing the health and status of the different product lines,


products and brands.

• Assessing the competitive advantages available to the unit.


3. Setting the marketing objectives of the unit:
Marketing objectives of a business unit take the cue from
the basic decisions taken at the corporate level regarding
the future of the various businesses of the enterprise. A
multi-business corporation decides the businesses that
should be nurtured and developed, those businesses
that should be merely maintained and the businesses
that have to be phased out.
• The objectives must be clear-cut, time bound and
quantifiable. These include profits, sales volume, market
share, productivity, research and development, and
innovation.
• Clarity is the foremost requisite in setting marketing
objectives. It must make its intentions and desires clear
and precise, definite and measurable.
4. Formulating the marketing strategy of the unit;

• Marketing strategy formulation is the core of


marketing planning. Marketing strategy
realizes the marketing objectives. It is the
strategy that renders a firm distinct from
another and makes its offerings unique
compared to those of its competitors. Again, it
is the strategy that brings home the income
and profits expected of the business.
• Marketing strategy involves mainly the
following steps:
• Selecting a Target Market
• Positioning of the offer.
• Assembling the four Ps of Marketing mix in the best
possible combination.
5. Developing detailed marketing plans
and programs:
Detailed functional plans will emanate from
and be in tune with the marketing
objectives and marketing strategy. The
detailed plans are the instruments with
which the firm translates board room
strategy into a marketplace reality.
6. Formulating the marketing budget.

Like any other budget, marketing budget


lays down all the details of income and
expenditure related to marketing by the
SBU and the surplus generated which
should be in line with the marketing plans.
Marketing Plan
The marketing plan is the central instrument for
directing and coordinating the marketing effort.
The marketing plan operates at two levels:
The Strategic Marketing Plan layout the target
markets, and the value proposition the firm will
offer, based on the analysis of the best market
opportunities.
The Tactical Marketing Plan specifies the
marketing tactics, including product features,
promotion, merchandising, pricing, sales
channels and service.
• Teams develop the marketing plan with inputs
and sign-offs from every important function.
Management then implements these plans at the
appropriate levels of the organization, monitors
results and takes necessary corrective action.

• Some corporations give their business units a lot


of freedom to set their own sales and profit goals
and strategies. Others set goals for their
business units but let them develop their own
strategies. Still others set the goals and
participate in developing individual business unit
strategies.
Corporate Planning Activities
• All corporate headquarters undertake
four planning activities:
• Defining the corporate mission
• Establishing strategic business units
• Assigning resources to each SBU
• Assessing growth opportunities
Defining the corporate mission

Organizations develop mission statements


to share with managers, employees and
customers. A clear thoughtful mission
statement provides employees with a
shared sense of purpose, direction and
opportunity. Mission statements are at
their best when they reflect a vision, an
almost “ impossible dream” that provides a
direction for the company for the next 10
to 20 years.
Defining the corporate mission(contd.)
• Good mission statements have five major
characteristics:

• (1) they focus on a limited number of goals;


• (2) they stress the company’s major policies and values;
they narrow the range of individual discretion so that
employees act consistently on important issues
• (3) They define the major competitive spheres within
which the company will operate.
• (4) They take a long-term view. They should be
enduring; management should change the mission only
when it ceases to be relevant.
• (5) It is as short, memorable and meaningful as possible.
Establishing strategic business units
Large companies manage different types of
businesses, each requiring its own strategy.
This is done through Strategic Business units.
An SBU has three characteristics:
• It is a single business, or a collection of
unrelated businesses, that can be planned
separately from the rest of the company.
• It has its own set of competitors.
• It has a manager responsible for strategic
planning and profit performance.
The purpose of identifying the company’s SBUs is
to develop separate strategies and assign
appropriate funding.
Assigning resources to each SBU
Once it has defined SBUs, management must
decide how to allocate corporate resources to
each.
1970s saw several portfolio planning models
introduced to provide an analytical means for
making investment decisions. In modern times,
such models have fallen out of favour.
More recent methods firms use to make internal
investment decisions are based on shareholder
value analysis, and whether market value of a
company is greater with an SBU or without it
(whether it is sold or spun off).
Assessing growth opportunities
• This includes planning new businesses,
downsizing, and terminating older
businesses.
• If there is a gap between future desired
sales and projected sales, corporate
management will need to develop or
acquire new businesses to fill it.
G r owth

Strategic Planning Gap


io n
Desired ificat
Divers
Sales

at ive G rowth
Integr
Sales (in millions)

Intensive Growth

Current
Portfolio

0 1 2 3 4 5
Time (years)
Assessing Growth Opportunities (contd.)

• Lowest curve represents expected sales, highest curve


desired sales and the gap between the two is the
strategic planning gap which needs to be filled in.
• The first option is to identify opportunities to achieve
further growth within the current businesses (intensive
opportunities) using market-penetration strategy.
• Second is to build or acquire businesses that are related
to current businesses (integrative opportunities) by
market-development strategy and product-dev
elopement strategy.
• Third option is to identify opportunities to add attractive
businesses unrelated to current businesses
(diversification opportunities).
Marketing Plan
A marketing plan is a written document that
summarizes what the marketer has learned
about the marketplace and indicates how the
firm plans to reach its marketing objectives.
It contains tactical guidelines for the marketing
programs and financial allocations over the
planning period. It is one of the most important
outputs of the marketing process.
Most marketing plans cover a one year period.
Most frequently cited shortcomings of current
marketing plans, are lack of realism, insufficient
competitive analysis, and a short-run focus.
Contents of the Marketing Plan
1. Executive summary and Table of Contents.

The marketing plan should open with a brief


summary for senior management of the main
goals and recommendations.

The table of contents outlines the rest of the plan


and all supporting and operational detail.
Contents of the Marketing Plan
2. Situation Analysis: This section presents
relevant background data on sales, costs, the
market, competitors, and the various forces in
the macroenvironment.
How do we define the market, how big it is, and how
fast it is growing?
What are the relevant trends?
What is the product offering and what critical issues
do we face?
Firms will use all this information to carry out a
SWOT analysis.
Contents of the Marketing Plan
3. Marketing Strategy: Here the product manager
defines the mission, marketing and financial
objectives, and groups and needs that the
market offerings are intended to satisfy.
The manager then establishes the product line’s
competitive positioning, which will inform the
“game plan” to accomplish the plan’s objectives.
All this requires inputs from other areas such as
purchasing, manufacturing, sales, finance, and
human resources.
Contents of the Marketing Plan
4. Financial Projections: Financial projections include
a sales forecast,
an expense forecast and
a break-even analysis.
On the Revenue Side, the projections show the
forecasted sales volume, by month and product
category.
On the Expense Side, they show the expected costs of
marketing, broken down into finer categories.
The Break-even Analysis shows how many units the firm
must sell monthly to off-set its monthly fixed costs and
average per unit variable costs.
Contents of the Marketing Plan
5. Implementation Controls:This last section of the
marketing plan outlines the controls for monitoring and
adjusting implementation of the plan.
It spells out the goals and budget for each month and
quarter, so management can review each period’s
results and take corrective action as needed.
Firms must also take a number of different internal and
external measures to assess progress and suggest
possible modifications.
Sometimes, contingency plans are included which
outline steps the management would take in response to
specific environmental developments, such as price wars
or strikes.
(Go through Sample Marketing Plan of MITHILA FOOD
PRODUCTS LTD given on Page-57-58 of Kotler, Keller,
Koshy and Jha)

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