What is Marketing Plan ?
Marketing plan is a detailed blueprint of marketing objectives, strategies and functions to be carried out in an organization. It is developed by managers for individual lines, products, brands, channels, or customer groups. It is essential for each organization to develop a marketing plan in order to achieve its organizational objectives. Marketing plan serves as an escort for making right decisions at right time. This plan helps to assess planned actions with present day circumstances and acts as a reference for successive marketing plan.
In general, marketing plan is a formal written document which defines the needed actions to be taken so as to accomplish the marketing objectives. The duration of this plan can be one to five years and it should be considered as an essential component of an organizational business strategy.
A marketing plan is essential requirement of a large business organization as well as of small and new enterprises. It is very crucial for those marketers who are in need of funds for establishing new projects or who are willing to expand their existing products or services. An effective marketing plan not only monitors the execution of a plan but also ensures that the funds provided are wisely and effectively utilized.
It is an exhaustive process of analyzing the target market along with its competitive position, applying suitable market strategy, developing a unique product and creating sales of that particular product. A marketing plan also comprises of a marketing budget. It is necessary to determine the overall cost involved in the project as it helps to achieve the desired goals in a pre-defined time period.
Features of Marketing Plan
The following are the features of a marketing plan :
1) Formal and Organized Approach :
Marketing plan is a formal and organized way of planning all the marketing activities like product positioning, price setting, distribution channels etc.
2) Purposeful Activity :
A marketing plan is a purposeful activity for which creative thinking and foresightedness is essential. It involves various activities based on the data and measurement of internal and external environment like basis of market analysis. market projection, consumer behavior analysis and marketing-guided conclusions.
3) Dynamic Process :
Another significant feature of marketing plan is that it is a non-going and future-oriented process. It is designed to stimulate all the activities related to target market and its customer.
4) Positive and Negative Approach :
Planning involves two things, i.e., reducing incorrect actions and exploiting all potential opportunities. Therefore, marketing plan has both the positive and negative elements.
5) Progressive System :
Planning includes advance decision-making about what will be the course of action and how the action will be performed Therefore, it is very essential for a planner to take marketing decisions before implementing it It helps in determining the appropriate course of action.
6) Decision-making Process :
Decision-making is a very essential part of planning. It assists in taking future actions and reduces risk factors in order to achieve the marketing objectives. For example, decisions related to planning a new product positioning. a sequence of buying decisions, sales, product development, advertisement, sales promotion, after-sale-service, etc. influence the marketing program of those products which are available in market and consequently influence. the company's performance as well.
7) Marketing Department Act as a Planner :
Marketing plan is prepared by the marketing department. A number of sub-divisions and sections under the department put forward their proposals and on the basis of these proposals the comprehensive marketing plan of the company is developed and finalized.
Contents of Marketing Plan
In every business organization, each product level must have an effective marketing plan. The marketing plan is considered to be one of the most important outcomes of the marketing process and it consists of following components such as :
Executive Summary
The first component of marketing plan is the executive summary. Executive summary is the first or the last content of the marketing plan, which briefs the major facts, figures, assumptions and purpose of the plan, It defines the primary goals and recommendations of the marketing plan. The summary also includes the budgetary requirements and methods adopted to measure the company's success.
The main aim of executive summary is to help managers and provide standard proposals in a concise manner. If the summary of a business plan is effective, it will motivate the reader to go through the entire document. On the contrary, if the summary is sub-standard, the plan might be disapproved. It can be read under constraint, in case of an internal marketing plan
Situation Analysis
Situation analysis is an outline of all the relevant information related to three key environments, i.e., internal environment, the customer environment and the company's external environment. The issues like availability and positioning of human resources, the age and efficiency of equipment or technology, the accessibility of financial resources and the internal conflicts of the company are looked under company's internal environment.
Preparing an effective and detailed situation analysis is considered as the most difficult task while preparing a marketing plan. The information used for situation analysis can be gathered internally by applying company's marketing information system or can be done externally through primary or secondary marketing research. The company faces challenges while doing situation analysis because it requires only useful relevant and detailed information. Therefore, the collection of irrelevant information must be avoided.
SWOT Analysis
The acronym SWOT refers to - Strengths, Weaknesses, Opportunities and Threats. This is an influential technique determining the strengths, weaknesses, opportunities and threats of the company. It is also known as market assessment. Strengths and weaknesses are internal factors which can be constructive or destructive like assets, skills or resources that a company possesses in comparison to its rivals. They can be evaluated by using external or internal bench-marking.
Opportunities and threats are considered as external factors which are again constructive and destructive in nature. A company does not have any control over these factors. They take place either due to the competitive dynamics of the market or due to demographic, economic, political, technical, social, legal or cultural factors.
Marketing Strategy
This component of marketing plan summarizes the strategies to attain the marketing objectives of the organization. Under this, the product manager determines the mission, goals and marketing as well as financial objectives. The target market its customers and their requirements which are to be fulfilled are also defined by the manager. Therefore, the manager creates competitive positioning of product line, which determines the strategy to attain the goals of a marketing plan.
For proper implementation of all these activities, several inputs like purchasing, sales, manufacturing, finance and human resources are also involved. The marketer must be specific about the branding and positioning (customer strategy) to be applied in marketing strategy. Hence, in a broader view, marketing strategy is all about managing relationships with customers and establishing an edge over its rival companies.
Financials/Financial Projections
Financial projections are the future assumptions which are different from the past accounting facts and figures. The main goal of financial projections is to realize revenues and profits for business. considering the assumptions based on potential costs, market size, prices, etc. It also helps the managers to formulate ratio analysis which assists them in making economic and financial judgments concerning the business potential such as growth patterns, return on investment, return on equity, required investment, financing methods etc.
The financial projections made are very flexible in nature. Therefore, it is advisable to develop projections by using spread sheets. This approach begins with the assumptions table, which clearly specifies all the assumptions that are supposed to be used in the projections, i.e., sales, prices, production costs, marketing costs, equity, interest rate on long term debt, equipment productivity, number of employees in specific areas, wages, marketing, etc.
Control/Marketing Control
The last component of the marketing plan explains the technique of analyzing and controlling the outcomes of the marketing program. The marketing control involves establishing performance standards, assessing actual performance by comparing it with these standards and taking corrective action (if needed, to reduce the difference between the actual and desired performance).
The performance standards may be based on increasing sales volume, market allocation, or profitability. It might also include the advertising standards such as brand recognition, etc. Irrespective and their of the selected standard, all performance standards are supposed to be consented before implementing them in the plan.
The financial assessment of the marketing plan is a vital part of evaluation and control. Financial projections are based on the estimates of costs, sales and revenues. In fact, budgetary considerations play a pivotal role in finding out other alternate strategies. Therefore, it is essential to keep a regular check on the financial certainties.
Steps in Preparing Marketing Plan
While preparing a marketing plan, lot of time and effort is involved. It is a misconception that the marketing plan is just about media and advertising rather it is much more than this. The steps involved in preparing a marketing plan or Preparation and Evaluation of a Product Level Marketing Plan are as follows :
1) Define the Marketing Goals and Objectives :
First of all, there must be proper synchronization between the marketing goals and objectives. business goals and objectives as well as personal goals and objectives. If an organization wants to be an industry leader, then for this a considerable marketing budget is essential, which involves large spending advertisements. The marketing goals and objectives must clearly state that the organization aims to be a market leader and for this purpose huge budget is required. Finally, this helps the organization to focus on the aim of marketing plan.
2) Outline the Image :
The corporate's image affects the number and type of consumers of an organization Hence, the organization must ensure that the corporate image is suitable for the place and people.
3) Decide on the Key Selling Features :
Preparing a marketing plan becomes an easy task when the organization's key selling features are already determined. The key selling features of a product may consist of a low pricing strategy, a suitable location, better distribution system or maybe the company's goodwill and reputation. These can be few factors on the basis of which a customer may buy the products and/or services.
4) Check the Products :
The marketing plan also contains product details of the company. Whether the products are compatible for the company's image or not? If the company has a premium pricing strategy then it needs to pay attention to the quality being made and also the services associated with the product.
5) Decide on a Pricing Strategy :
Pricing is an important marketing tool and it holds a great relevance in case of selling of a product. The pricing strategy involves evaluation of the product's costs, competitor's pricing, market demand and elasticity of pricing.
6) Analyses why Customers Buy the Product :
In marketing, it is vital for the company to recognize the purchasing rationale of a customer. For example, if a company is selling luxury products like Mercedes Benz, the major factor behind customer's purchase would be the reputation and prestige of the company. Similarly, if the company is selling deodorants then the underlying motive of customer would be the fear of body odour.
7) Set out a Customer Profile :
A comprehensive study of a particular customer is important. Market segmentation can be helpful in defining the customer's profile. If the customers' needs are defined clearly and broadly then it becomes easy and convenient to prepare a promotional plan.
8) Define the Selling Place :
The location for setting up a sales unit or a retail store is very crucial for a company. If the product is sold from a single location then the choice of the location is initially a difficult task, but once done, the selling location gets fixed. On the other hand, if the product s sold from several locations, then the continuous evaluation of these locations has to be carried out for their smooth functioning.
9) Develop a Marketing Budget :
A marketing plan also requires funds for its marketing activities. The marketer must ensure that sufficient amount of funds are allocated for achieving the defined marketing goals and objectives. While preparing a budget, it must be kept in mind that the company may have limited resources and it will require funds to promote other activities related to the marketing domain.
10) State the Strengths and Weaknesses of the Business :
Identification of company's strengths and weaknesses is very important. The strengths of the company can be used for promotional activities while corrective measures can be adopted by the company to overcome its weaknesses.
11) Review and Choose an Appropriate Promotional Method :
Under the marketing plan, the promotional methods are also determined and selected. The marketers must keep in mind that the methods selected must reach the target market at lowest price. Some of the promotional mix used is newspapers, television, magazines, etc. If the budget of marketing plan is inadequate to apply such methods then one may rely on measures like publicity, business cards, posters, flyers and word of mouth sales. they can attach their product with established or popular product as a complimentary free gift, which nowadays is becoming very common practice.
12) Create the Advertising and Make certain that it fits the Business Image:
The advertisements made must complement the business image and also fulfill the customer requirements. Therefore, it is advisable to discuss the ads with the family, friends, colleagues, advisors, etc., who can give their opinions on whether the ads are delivering the company's message effectively or not. This will enable the marketer to correct the flaws in the ad.
13) Implement the Plan :
After developing the entire marketing plan, marketer must check it once or twice thoroughly. All the plans must sound logical, realistic and compatible in relation to marketing goals and objectives. Only then, the plan should be implemented. However, it is a continuous process and changes are a part t of the plan. A constant analysis of each step is necessary. As a result, this will help the company to remain aware of the current trends and customers' needs.
14) Monitoring Progress of Marketing Actions :
The marketing actions of the company can be viewed by constantly monitoring the plan. This activity of monitoring may include sales data of product, territory, sales representative and outlet. The monitoring of marketing plan is based on the pre-defined goals and objectives. This helps the marketer to identify the weaknesses of the plan and provide prospects to revise or re-define the marketing actions.
Importance of Marketing Plan
The marketing plan is central to all the other plans in the organization. Hence, marketing plan is preferred first over other plans based on its importance, such as :
1) Overall Direction :
The marketing team has the authority to shift and place the product in . different directions which best serves the interests of the company. The marketing plan contains the overall direction for a product or set of products of the company. The overall direction is also called the mission of the organization. Thus, the marketing plan provides a broad mission to the organization, i.e., developing the most innovative and unique product for its potential customers. Once the marketing plan is prepared, the organization looks into other, plans like operations and production.
2) Marketing Goals :
The marketing plan also ascertains organizational goals and targets, in order to measure the overall growth. In general, marketing goals can be measured in terms of revenues, profits, target market share or return on investments. For this purpose, the goals should be realistic and quantitative in nature. These goals also form the basis of the financial and organizational plans.
3) Business Environment :
The success of organizational efforts is influenced by the analysis of factors in the business environment, which is also a part of the marketing plan. These environmental factors can be positive or negative. The positive factors are called "opportunities", which may include emerging markets or growing economies. The negative factors are known as 'threats' like changing consumer tastes and preferences or new entrants. The marketing plan also examines the internal strengths and weaknesses of the organization and evaluates how well the organization can cope with the threats and make use of the opportunities.
4) Target and Tactics :
The marketing plan also defines the target markets and tactics used to attract, the consumers. The largest market is described in terms of personal characteristics like age, income, occupation and lifestyles. The tactical tools used by the organization involve product, price, promotion and place (or distribution). Moreover, to attain the pre-defined target, human resource plan is also essential.
Elements of Marketing Plan
Marketing plan aims to increase managerial effectiveness. Planning is a formal and systematic process which evaluates various alternatives that are available to the organization. For this purpose, a fixed procedure should be followed by the marketer. This procedure must involve some essential requirements of developing marketing plan which are as follows :
1) Well-Defined Objectives :
In a marketing plan. the objectives should be well-defined and clear. The marketing objectives must be logical and rational in nature. This will ensure the smooth functioning of the marketing plan and will provide a sense of direction to the marketing effort. It also facilitates coordination and control activities in the organization.
2) Creation of Suitable Organizational Systems :
The marketing manager should constantly try to create an environment in the organization which is conducive to the marketing plan. All the obstacles related to marketing plan must be removed and employees at all levels must be encouraged to plan the activities in the light of company's goals and objectives. It should boost the participation of the workers as well.
3) Involvement of Top Management :
In order to be successful, the marketing plan must be designed by the top management. For the development of a long-term strategic plan, top level involvement is utmost important. Based on this plan, departmental of sub-departmental level planning is carried out by the middle and supervisory management.
4) Wider Participation :
If the long-term marketing plan is undertaken by the top management then it is the responsibility of the lower-level managers to give it an actual form. A marketing plan can be effective when the managers are allowed to design a plan based on their areas of expertise. The subordinates can also participate in the planning process in the following ways :
- Management by objectives (MBO), where the managers and workers together can establish common goals at each level of activity.
- Development of planning committees at all levels, which may help in providing planning information, encourage the workers to participate by making suggestions in respect of planning and the making of plans.
- In-depth budgeting, in which each unit prepares its own performance budget, is sent to the superiors for integrating it in the complete budget.
5) Effective Communication of Planning Information:
The organization should have a vibrant communication network which effectively disseminates information to all the employees of the organization. The information involves availability of resources, organizational policies, strategies etc.
6) Integration of Long-term and Short-term Plans :
The organization's short-term plans should be in synchronization with the long-term plans. There should be proper integration between the two, rather than being independent.
7) Flexibility :
Marketing plans should be flexible in nature so as to revise and alter the plan in respect with new developments. These changes may include unplanned events or unforeseen factors. For this purpose, an organization must have a contingency plan or strategy prepared in advance. These changes can be accomplished through proper communication, effective selling ideas and aggressive leadership.
8) Cost-Benefit Analysis :
Cost-benefit analysis. should be undertaken to ensure that the benefits of marketing plan are more than the costs involved. This can be done by instituting effective communication, measurable objectives, appropriate decision-making and creation of derived plans to counter changes in the environment.
9) Proper Forecasting :
Forecasting of future events is a very important part of a marketing plan. Marketers need to evaluate the changes made in the environment which are largely affected by the political, economic, social. technological and international forces.