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Chance favors the prepared mind

5. Marketing Planning
There are many applied How to Prepare a Marketing Plan guides that are basically lists of things to
think about that you may find useful to organize your thinking and prepare your mind. 7 Whatever the
approach, they all seem to basically recommend the preparation of the following four planning
documents: market analysis, strategic plan, implementation or action plan and budget statements.

It is recommended that you do not mix up these documents or combine these documents because
they are meant to be undertaken and used in sequence and not in parallel, appearing for the first
time together in a single marketing plan. Marketing planning is often taught as if the goal is to
prepare a single planning document that includes Market Analysis, Strategy Plan, Implementation
plan and Budget documents all together. We suggest the following document preparation process
as an alternative. Its basic premise is that the business development and commercialization of
innovation planning process (i.e., the marketing planning process) should be thought of as
involving four different processes, stages and documents to be disseminated.

Market analysis and intelligence generation and dissemination

The first document is an analysis of how the market is changing. It is variously called a market
analysis, situation analysis or environment analysis. The result of intelligence gathering, it
includes a competitor analysis, a channel analysis, a report on changing consumer preferences,
demand and profitability, and a public policy analysis. The material in this text prepares you to
undertake such analyses.

Some large companies these days simply set up databases and “market insight Blogs” that contain
online running reports on changing buyer demand, global supply chain developments, the latest
information on competition, changing public policy, economic, social and technological trends.
These blogs are available on a restricted basis to all involved in managing a market and its market
segments. Managers, with the help of market researchers, are responsible for keeping the running
analysis in these blogs current and highly informative. Keep it simple, keep it well edited, keep it
very well linked, is best practice in intelligence dissemination.

The key to marketing planning best practice is to set up a network of market tracking observers
along with the use of the marketing supply and demand tracking metrics you will learn about in
mastering metrics. Your management is only as good as your measurement. So is your goal setting
and planning. The next step is also vital. You have to make sense of what your market observers
are observing, many of whom should be in your sales force and supply chain. In short, seek some
consensus as to what is really happening in the market and why it is important.

The summary and presentation rule recommended is that the latest market intelligence analysis
should be no longer than 2-4 pages or about 20 PowerPoint slides. Accompanying the summary
should be instant online access to the full report or the background reports and analyses that can
provide such information as the results of the observational study of Chinese consumers’ future
use of electric cars, or how middle income shoppers are switching to deep discount retailers
…whatever is the hot spot in your market. There may be hundreds of searchable pages of digital
material available to be searched to support the 2-4 page summary document.

7
For example, William A. Cohen, The Marketing Plan, New Jersey: Wiley, 2005.

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Chance favors the prepared mind

We suggest that for security purposes it is better to not produce hard copies of the market
intelligence analysis but rather present it online with links in the report that direct interest to the
full analysis documents, sources of information, company blog, etc. It is not rocket science, but it
is sound organization of information and planning. For very large companies, a quarterly online
market analysis report might be completed, staggered to be available about two weeks before the
company reports to financial analysts.

Managers who show real skill in presenting quarterly reports online that are excellently supported
by documentation and new financial analyses should receive special awards and train others in the
skill. Given the technology induced attention disorders of some modern managers, skill at
informing senior managers and framing the issues for them and the financial analysts can be as
important as the depth of analysis undertaken.

A lot of marketing intelligence dissemination is very perfunctory and superficial. Two studies
undertaken by The Conference Board of Fortune 1000 company marketing planning practices revealed
that less than one in three present an analysis of the latest insights into changing customer preferences
and behavior, competitor behavior and channel behavior. 8 It appears that there are often glaring
omissions of coverage of important market dynamics in marketing mix decision making (that is, in
product development, pricing, distribution, promotion and personal selling and sales management). The
first economist to win a Nobel Prize in behavioral economics, Herbert Simon, came up with the concept
of manager bounded rationality. 9 The thinking and decision making quality of marketing managers is
limited or bounded by their knowledge of the market and their attention capabilities. As they cannot
ever be all-knowing, this means that management’s skill at deploying resources and commercializing
innovation is always imperfect, limited by their understanding of the market and how it is changing.
The best they can do is make what Simon called “satisficing” decisions and avoid making big mistakes
based on what they know. But they cannot make optimal or optimizing decisions.

The quality of their planning, thinking and management is also limited not just by the intelligence
gathered and disseminated (what they know or how well they are briefed), but also by how they
use this knowledge effectively in their decision making. Manager thinking quality, rationality and
insight is bounded by the quality of the tools and methods they use to process information. You
can be confident, however, that a marketing plan that includes a profitability based segmentation
analysis, a market competition analysis, and a supply chain and channel analysis described above
will create a very informative market analysis. A plan whose conclusions are “triangulated,” that is
arrived at independently by several independent experts, is also much more trustworthy. That is
why experts should always be consulted.

Sources of analysis, expertise and intelligence

Secondary data are crucial in undertaking a market analysis. They are information that someone
else has gathered and analyzed. As a result, it is often inexpensive, can be collected quickly, and
comes from multiple sources (thereby reducing the risk of a biased view from a single source).
Internal secondary data include records, information, and reports that already exist within
organizations, such as sales records, financial reports and old market research study reports.

8
The Marketing Plan, New York: The Conference Board, 1980 and The Marketing Plan, New York: The Conference
Board, 1991 are excellent sources of marketing planning best practices. See also, Rebecca J. Slottegraaf and Peter R.
Dickson, “The Paradox of Marketing Planning Capabilities,” Journal of the Academy of Marketing Science, 32
(October), 2004: 371-385.
9
Herbert A. Simon, Models of Bounded Rationality, Cambridge, MA: MIT Press, 1982.

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External secondary data are data that reside outside the firm, such as in business magazines, the
trade press, government reports and consultants’ reports. But whatever the source, these days
external secondary data collection is basically called “Google-it.” (see Web Sources of Secondary
Data below).

Most secondary analysis is used in marketing planning to find and explore opportunities and
recognize environmental constraints in the marketplace. This includes the Economic Environment,
including the business cycle, the state of inflation, price controls, and currency devaluation. The
Technological Environment, particularly the technological infrastructure available for distribution,
and communication is also an important consideration for marketers. The Legal Environment
includes federal, provincial, and local laws and regulations. The Socio-Cultural Environment
includes demographics – observable aspects of a population including income, education, family
structure, ethnic group, age and gender. Another dimension important to marketers is the cultural
factors in various nations around the world and also subcultures within a diverse country like
Canada (such as Asian, East Indian and Caribbean subcultures). Each culture has different
behaviors that create opportunities as well as potential “land mines.” Even countries speaking
essentially the same language can create pitfalls for the marketer. A large airline, several years
ago, installed leather seats in economy class and used the headline “Siéntese en cuero” which
translates in Spanish into “Sit down in leather,” but in many places in Latin America it was
understood in their colloquial Spanish as “Sit down in the nude”!

Calling intelligence experts

Calling and asking for secondary information from a government expert or a staffer at an industry
trade association is a real skill and can be the best money you will ever spend on market research.
The advantage of market or line of trade expert is that they are able to explain the dynamics behind
trends and integrate all the different environments described above into a holistic big picture.
Some best process practices are:

1. Politely introduce yourself, give your name and the name of the person who
recommended that you call, and state the purpose of your call. Do your homework on the
Internet before you make the call, as informed, credible compliments about the expert’s
past work published on the Internet increases the likelihood of help from the expert.

2. Be enthusiastic, courteous and grateful and do not interrupt too much. Become a good
listener and listen rather than preparing yourself for the next question! Be careful if you
try to change the subject as it may discourage the source. Seek clarification if you are
unsure but not too much, as that will indicate a lack of expertise.

3. Use a list of questions if you have a number of questions, but try not to make it too obvious
that you are following a list. A lack of structure in your questions can encourage
spontaneous insights, but if you are too unstructured it will confuse both you and the expert.

4. Send a thank-you note or e-mail (you may wish to call again), and offer to return the
favor. Thank-you notes can help your source when it comes to promotions.

5. Try to generate new leads from experts as they almost always know other experts who can
provide invaluable insights.

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Chance favors the prepared mind

The following is a list of useful secondary data Web sites to get you started.

For the U.S. and other international markets

Web Site Information Available

AC Nielsen Television audience, supermarket scanner data
http://www.acnielsen.com
Gartner, Inc e-business market research findings
http://www.gartner.com
Arbitron Radio, Internet and local market audience size
http://www.arbitron.com
Information Resources, Inc, Supermarket scanner data
http://www.infores.com
Dun & Bradstreet 50 million companies in world database
http://www.dnb.com
Stat-USA International trade data
http://www.stat-usa.gov
U.S. Patent Office Trademark and patent information, guidance
http://wwww.uspto.gov
World Trade Organization World trade data
(WTO) http://www.wto.org
International Monetary Fund Economic analysis of global regions, countries
(IMF) http://www.imf.org
U.S. Securities and Exchange Financial data on U.S. public corporations
Commission (SEC)
http://www.sec.gov
U.S. Small Business Features information and links for small business
Administration (SBF) owners
http://www.sba.gov
Federal Trade Commission (FTC) Consumer protection and antitrust law information
http://www.ftc.gov
U.S. Census Bureau Provides U.S. population statistics and trends
http://www.census.gov
American Demographics Demographic trends and business forecasts
http://demographics.com
LexisNexis Articles from business and consumer publications
http://www.lexisnexis.com
Forrester Research Identifies and analyzes emerging trends in
http://www.forester.com technology and their impact on business
Jupiter Research Monitors Web traffic, ranks most popular online
http://www.jupiterresearch.com sites
Gallup Organization Public opinion company that conducts
http://www.gallup.com general and industry specific consumer studies
NFO WorldGroup World’s largest provider of Internet-based research,
http://www.nfow.com leader in customer satisfaction research
Harris Interactive Known for the Harris Poll and its use of online
http://www.harrisblackintl.com polling and research.

Study Questions 2.5

1. How many planning documents are recommended?
a) 1
b) 2
c) 3
d) 4
e) 5

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Chance favors the prepared mind

2. Some large companies which contain running reports on changing buyer

demand, global supply-chain developments and latest information on competition.
a) Undertake market analyses
b) Use market insight blogs
c) Purchase market research
d) Require reports from their sales force

3. Two studies undertaken by The Conference Board of Fortune 1000 company marketing
planning practices revealed that present an analysis of the latest insights into
changing customer preferences and behavior, competitor behavior and channel behavior.
a) Less than two out of three
b) Less than half
c) Less than one in three
d) Less than one in ten

4. A network of market observers is used:

a) To gather intelligence
b) To make sense of market metrics
c) To come to a consensus as to what is happening in the market
d) All of these options are correct

5. Manager thinking quality, rationality and insight is bound by:

a) The quality of the tools and methods they use to process information
b) The market intelligence that is gathered
c) How much managers are paid
d) A and B

6. Which of the following is not internal secondary data:

a) A satisfaction survey of customers
b) Financial reports
c) Old market research studies
d) Sales records

7. Which of the following is not an environment in a market analysis:

a) Economic Environment
b) Technological Environment
c) Legal Environment
d) Psychological Environment

8. Which of the following is not a best practice in calling experts:

a) Credible compliments about their past published work
b) Be a good listener and do not interrupt too much
c) Do not use a list of questions; it is too obvious you are undertaking
a survey
d) Ask for leads to other experts

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