Component of Marketing Plan Essay

INTRODUCTION Marketing plan is the central instrument for directing and coordinating the marketing effort. The marketing plan operates at two levels: strategic and tactical. The strategic marketing plan lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities. The tactical marketing plan specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service. Marketing plan is a written document that summarizes what the marketer has learned about the market place and indicates how the firm plans to reach its marketing objectives. It contains tactical guidelines for the marketing programs and financial allocation over the planning period. It is one of the most important outputs of the marketing process. Marketing plans are becoming more customer and competitor oriented and better reasoned and more realistic than in the past. Marketing planning is becoming a continuous proces s to respond to rapidly changing market conditions. What is a Marketing Plan? A marketing plan provides direction for your marketing activities. Marketing plans need not be long or cost a lot to put together. Think of it as a road map, with detailed directions on how to get to your destination. Sure there may be a few bumps in the road, perhaps a diversion or two, but if the marketing plan is carefully researched, thoughtfully considered and evaluated, it will help the organization achieve its goals. The marketing plan details what you want to accomplish with your marketing strategy and helps you meet your objectives. The marketing plan: †¢ Allows the organization to look internally in order to fully understand the impact and results of past marketing decisions. †¢ Allows the organization to look externally in order to fully understand the market in which it chooses to compete. †¢ Sets future goals and provides direction for future marketing efforts that everyone in the organization should †¢Understand and support. †¢ Is a key component in obtaining funding to pursue new initiatives? Components of a Marketing Plan A marketing plan consists of following components: 1. Executive Summary 2. Situation Analysis 3. SWOT Analysis 4. Marketing Goals and Objectives 5. Marketing Strategies 6. Budget 7. Marketing audit 8. Evaluation and Control Executive Summary The executive summary is the first part of the marketing plan, but should be written after all other parts are completed. It is a brief overview of the entire plan and covers only the main points. It is useful to people you approach with your plan, such as investors, who may want to read a synthesized version to determine if they are interested in it before taking the time to read it in depth. The executive summary is also useful internally, as it helps to remind you and your employees of the organization’s desired marketing goals and how to achieve them. Situation Analysis The situation analysis helps you to determine where your organization presently stands. It should examine what’s going on outside of the organization, what’s happening with consumers, and how the business is functioning internally. External Analysis What changes are taking place in your city, county, state, country and around the world that could potentially impact your business? Some things to investigate are: †¢ Changes in political positions and legislation at the local, state, and national level. †¢ Changes in technology †¢ Trends in society’s values and habits †¢ Identify competitors and list their characteristics †¢ Economic conditions Customer Analysis Before developing a marketing plan it’s important to find out what consumers want and how they make purchase decisions. This may require some marketing research. Think about these factors: †¢ Current and potential customers †¢ Trends in consumer buying habits †¢ Why do consumers purchase this product or service? †¢ Why do others not purchase this product or service? Internal Analysis Knowing the state of the organization and its resources helps to determine where it is strong and what areas need attention. Include the following in the marketing plan: †¢ Current state of financial and human resources †¢ Anticipated state of financial and human resources †¢ Your business’s performance in relation to competitors The 5 C’s of Marketing can be summarized as: Company – The product time line, experience in the market, etc. Collaborators (or Partners) – Distributors, suppliers, and alliances. These are any companies that you work with on a day to day basis to help your company run. Customers – This is your market. Ask yourself what benefits they are looking for. What motivates them in the purchase process? Where the customer does actually purchases your product? How the product is purchased (impulse buys, internet, etc)? Understand the quantity a customer will purchase and even trends in consumer tastes. Competitors – Both your actual and potential competitors and those that directly or indirectly compete with you. Understand their products, positioning, market shares, strengths and weaknesses. Climate (or Environment) – These are governmental policies and regulations that affect the market. It is also the economic environment around your company; which is the business cycle, inflation rate, interest rates, and other macroeconomic issues. Society’s trends and fashions are found in the â€Å"climate.† The technological environment is creating new ways of satisfying needs (i.e. using technology to enhance the demand for existing products). SWOT Analysis Conducting a SWOT (strengths, weaknesses, opportunities, threats) analysis is essential in assessing the company’s position and serves as a guide to developing marketing plans. Benefits of a SWOT Analysis A SWOT analysis provides a fairly simple, low-cost way of assessing the company’s position. It presents information that is important in developing business and marketing plans, as well as setting organizational goals and objectives. It tells you where the company currently sits, and where it needs to go in the future. [pic] When conducting your SWOT analysis, you should: †¢ Examine your company’s strengths, weaknesses, opportunities, and threats from a customers’ perspective. If you’re having trouble viewing issues that way, ask customers what they think or conduct surveys. †¢ Separate internal issues from external issues. The company’s strengths and weaknesses are internal; opportunities and threats are external. The key test to differentiate the two environments is to ask, â€Å"Would this issue exist if the firm did not exist?† If the answer is yes, the issue should be classified as external. Some things to consider about your company when determining your strengths and weaknesses are: †¢ Size and financial resources †¢ Scale and cost economies †¢ Customer Perceptions You will probably have to do some research on your competitors, your industry, and the environment in order to complete the opportunities and threats portion of your SWOT analysis. Here are some topics to consider: †¢ Trends in the competitive environment †¢ Trends in the technological environment †¢ Trends in the sociocultural environment Once you’ve finished a SWOT analysis for your company, include the resulting strategy in your business and marketing plans. Some key actions to take include: Transform strengths into capabilities by matching them with opportunities in the environment. Example Strength: The company has a very efficient order fulfillment and distribution process Opportunity: There is an unfulfilled need for the company’s product in other countries Capability: The company is capable of distributing its products worldwide †¢ Convert weaknesses into strengths by investing strategically in key areas. Example Weakness: Employees are not familiar with the latest technology in the company’s industry Investment: The employer sends employees to classes, workshops, and conferences Strength: Employees now have inside information on cutting edge technology relevant to the industry †¢ Weaknesses that cannot be converted into strengths become limitations. Example Weakness: A start-up company that has a tight distribution budget and no connections in the industry may have difficulty getting shelf space in stores Meaning to consumers: Consumers may not be able to find the company’s products Minimization: Allow consumers to purchase products through other channels, such as a web site or mail order catalog. Marketing Goals and Objectives After determining your company’s strengths, weaknesses, opportunities, and threats, you’ll have a better idea of what marketing goals and objectives should be set. Goals are the overall accomplishments that you’d like to make and objectives are benchmarks to meeting those goals. You might say that goals are more qualitative and objectives are more quantitative. For example: Marketing Goal: Increase awareness of Product X Corresponding Objectives: Increase last year’s direct mail distribution by 20% this year; develop a web site for Product X by June 1st; participate in five trade shows by the end of the year. Goals must be realistic and consistent with the firm’s mission. Objectives must be measurable and time-specific. You may also want to include the person responsible and the budget required for each objective. Marketing Strategies In this section, you’ll define your primary, secondary, and tertiary target markets and their purchasing characteristics. Next, discuss the marketing mix elements (product, price, distribution, and promotion) as they relate to your product or service. Some questions you may want to answer for each target market include: Product †¢ What are the features and benefits of your product? †¢ What is your competitive advantage? †¢ How will you position and differentiate your product? †¢ What complementary products are available? †¢ What customer services are available? Price †¢ What are the costs associated with the product or service? †¢ What will your pricing strategy be? †¢ Will you give discounts? Distribution †¢ Who are your suppliers and intermediaries? †¢ How will you make the product or service conveniently available to consumers? †¢ What partnerships can be developed to distribute the product? Promotion †¢ Where will you advertise? †¢ What public relations activities will be involved? †¢ If you will be involved in personal selling, what is your sales strategy? †¢ What types of promotions will you run? †¢ What sponsorship opportunities are available? Setting the Promotion Mix When deciding how to properly utilize the marketing communications mix to meet your marketing objectives, it is important to consider the relative strengths and weaknesses of each component of the mix. Further, you must always define your total budget first (generally defined in the Marketing and/or Business Plan) and then decide upon the best way to leverage the different elements of the mix to maximize the return on your investment. You will balance the various parts of the mix to not only create an integrated approach to your marketing communications but you must also devote enough resources for each component to be successful. Here are some things to keep in mind: [pic]Reaches large, geographically dispersed audiences, often with high frequency; Low cost per exposure, though overall costs are high; Consumers perceive advertised goods as more legitimate; Dramatizes company/brand; Builds brand image; may stimulate short-term sales; Impersonal, one-way communication; Expensive [pic]Most effective tool for building buyers’ preferences, convictions, and actions; Personal interaction allows for feedback and adjustments; Relationship-oriented; Buyers are more attentive; Sales force represents a long-term commitment; Most expensive of the promotional tools [pic]May be targeted at the trade or ultimate consumer; Makes use of a variety of formats: premiums, coupons, contests, etc.; Attracts attention, offers strong purchase incentives, dramatizes offers, boosts sagging sales; Stimulates quick response; Short-lived; Not effective at building long-term brand preferences [pic]Highly credible; Very believable; Many forms: news stories, news features, events and sponsorships, etc.; Reaches many prospects missed via other forms of promotion; Dramatizes company or product; Often the most under used element in the promotional mix; Relatively inexpensive (certainly not ‘free’ as many people think–there are costs involved) [pic]Many forms: Telephone marketing, direct mail, online marketing, etc.; Four distinctive characteristics: Nonpublic, Immediate, Customized, Interactive; Well-suited to highly-targeted marketing efforts Budget: †¢ The goal of your marketing budget is to control your expenses and project your revenues. †¢ It also assists in the coordination of your marketing activities within your organization. †¢ A realistic budget establishes a standard of performance for your actions, and communicates those standards to others responsible for implementing your marketing strategy. †¢ A well-designed budget is also a tool to keep you on target and indicate when there is needed modification of your marketing plan, especially if something goes really right or very wrong. Budgeting Approaches Where do you get budget numbers? How do you set a budget and organize it? What are some standard ways to measure your budget? There are several approaches you can take to create your budget. Examples of these approaches may include basing your budget on: †¢ Percent of projected gross sales. †¢ Percent of past gross sales. †¢ Per unit sales. †¢ Seasonal allocation. †¢ Projected cash flow. Select a budget methodology that will work best for your business. You may want to make this choice based on how you track your sales and revenues, or based on industry standards. Marketing Audit The Marketing Audit is committed to improving strategic decision making when companies are faced with specific business challenges. Our market research studies provide clarity and insight, often on the most important questions faced by top executives, corporate managers, and strategy professionals. Here are 10 of 25 key dimensions a marketing audit should assess: 1. Key factors that impacted the business for good or for bad during the past year. Including an evaluation of marketing â€Å"surprises†Ã¢â‚¬â€the unanticipated competitive actions or changes in the marketing climate that affected the performance of the marketing programs. 2. The extent to which each decision in the marketing plan—e.g. targeting, positioning, pricing, advertising, etc.—was made after evaluating many alternatives in terms of profit-related criteria. 3. Marketing knowledge, attitudes, and satisfaction of all executives involved in the marketing function. 4. The extent to which the marketing program was marketed internally and bought into by top management and non-marketing executives. 5. Customer, distributor, vendor, and intermediary satisfaction based on research among key target groups. 6. The performance of advertising, promotion, sales force, and marketing research programs in terms of ROI. 7. The performance of non-traditional programs, particularly digital offerings, in terms of ROI. 8. Whether the marketing plan achieved its stated financial and non-financial goals and objectives. 9. Which aspects of the plan that failed to meet objectives with specific recommendations for improving next year’s performance. 10. The current value of brand and customer equity for each brand in the product portfolio. Evaluation and Control Many business owners forget the importance of evaluating their marketing plan. This is extremely important, because it serves as a guideline for what to do or not to do in the next marketing planning period. It is also ensures that the plan will be implemented properly. Some questions to be answered include: How will employees be evaluated and compensated for their work? †¢ How can communication between employees be improved? †¢ Do the employees share the firm’s values? †¢ Is management committed to the implementation of the marketing plan? †¢ What can be done if the product or service does not meet performance standards? †¢ What corrections can be made if the pricing, distribution, and promotion strategies do not accomplish the marketing goals and objectives? †¢ How will marketing activities be evaluated?