W8 Case Discussion
Principles of Marketing 4.0
Jeff Tanner and Mary Anne Raymond
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CHAPTER 16
The Marketing Plan
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MARKETING PLAN
The marketing plan should communicate:
Realistic expectations to top management.
Marketing-related responsibilities to those individuals who have marketing related responsibilities and how they should execute those responsibilities.
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LEARNING OBJECTIVE
Identify the people responsible for creating marketing plans in organizations.
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MARKETING PLANNING ROLES
Teams of marketing specialists are involved.
Many companies create marketing plans at the divisional level.
The chief marketing officer is responsible for preparing the plan.
Marketing professionals and other staff members work as teams to prepare the plan.
Marketing analysts are part of the CMO staff.
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KEY TAKEAWAYS
The CMO of a business unit is likely to be responsible for the creation of its marketing plan.
However, the CMO is generally assisted by marketing professionals and other staff members, who often work on marketing planning teams as needed.
Marketing analysts, however, are permanent members of the CMO’s staff.
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LEARNING OBJECTIVES
Understand the functions of the marketing plan.
Write a marketing plan.
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MARKETING PLAN CRITERIA
Identify customers’ needs.
Evaluate whether the organization can meet those needs in some way that allows for profitable exchanges with customers to occur.
Develop a mission statement, strategy, and organization centered on those needs.
Create offerings that are the result of meticulous market research.
Form operations and supply chains that advance the successful delivery of those offerings.
Pursue advertising, promotional, and public relations campaigns that lead to continued successful exchanges between the company and its customers.
Engage in meaningful communications with customers.
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MARKETING PLAN OUTLINE
The Executive Summary:
Should provide all of the information your company’s executives need to make a decision without reading the rest of the plan.
Include a brief description of the market, the product to be offered, the strategy behind the plan, and the budget.
The Business Challenge:
Brief rationale for why the company should invest.
How does marketing plan further the mission?
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THE MARKET
The market section of the plan should describe customers, competitors, other collaborative organizations, and the state of the market.
Describe who will purchase the offering and why they will.
Discuss the existing market conditions that will benefit or challenge the plan.
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CUSTOMERS
Break the market into customer segments and describe each segment completely:
Who is the targeted market?
Why will the target buy the offerings?
What is their buying process?
Which of their needs does the offering meet?
Include in the discussion the market share and sales goals for each segment.
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COMPANY ANALYSIS
SWOT: Strengths, weaknesses, opportunities and threats.
Strengths and weaknesses are internal to the company.
Opportunities and threats are external to the company.
Factors that make for a better SWOT analysis:
Honesty: A good SWOT analysis is honest.
Broad: The analysis has to capture trends.
Long term: Consider multiple time frames.
Multiple perspectives: A good SWOT should consider the perspective and involve people from all areas of the firm.
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COLLABORATORS
Actual or potential partners needed for plan success.
Organizations in the value chain, either upstream or downstream.
Partners that are necessary to co-create value.
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COMPETITORS
Marketing plans are likely to spark retaliation from one or more competitors.
Identify competitors and be honest about both their strengths and weaknesses.
Include in this section of the plan how quickly competitors will retaliate and what the nature of that retaliation will be.
Include a competitive analysis, financial statements, and all information publicly available about them.
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BUSINESS CLIMATE
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POLITICAL
ECONOMIC
SOCIAL AND CULTURAL
TECHNOLOGICAL
ENVIRONMENTAL
THE STRATEGY
Create an argument as to why others should invest in your strategy.
Include a value proposition to explain the benefits for the customer.
Include a discussion of alternative strategies that were considered and discarded.
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THE OFFERING
Include details on the offering, including:
Features
Benefits
Pricing options
Discuss different options in detail, as well as which market segments will respond to each option.
Some like to include sales goals in this section while others prefer to include goals in the budget section.
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THE COMMUNICATION PLAN
Include how the offering will be launched.
Specify how customer communications will be conducted.
What mechanisms will be used to gather feedback?
How will the offering be promoted to customers?
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DISTRIBUTION
Answer questions about how the offering will be sold:
Who will sell it?
Who will ship it?
Who pays for shipping?
How will it be shipped?
Who will service and support it with services such as:
Research
Credit
Handling
Specify what inventory will need to be maintained to meet customer expectations:
Where will those inventories be kept?
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BUDGET
Covers all of the resources.
Covers the investment required.
Marketing funds needed.
Includes inventory costs.
Costs to provide customer support services.
Forecasts the product’s sales and profits.
Projections should include timelines.
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A MARKETING PLAN TIMELINE
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CONCLUSION
Repeat the highlights.
Summarize the target market.
Describe the product.
Discuss the communication plan.
Reasons why this plan is the best choice.
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KEY TAKEAWAYS
A marketing plan’s executive summary should include a brief summary of the market, the product to be offered, the strategy behind the plan, and the budget, as well as any other important information. In this section of the plan, the planner describes the offering and a brief rationale for why the company should invest in it.
The market section of the plan should describe a firm’s customers, competitors, any other organizations with which it will collaborate, and the climate of the market.
The strategy section details the tactics the organization will use to develop, market, and sell the offering. When readers complete the strategy section, they should conclude that the proposed strategy is the best one available.
The budget section of the marketing plan covers all the resources, such as new personnel, new equipment, new locations, and so forth, needed to successfully launch the product, as well as details about the product’s costs and sales forecasts.
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LEARNING OBJECTIVES
List steps in the forecasting process.
Identify types of forecasting methods, and their advantages and disadvantages.
Discuss the methods used to improve the accuracy of forecasts.
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FORECASTING FACTORS
Accuracy is important when it comes to forecasts because:
Overestimating demand increases inventory costs.
Underestimating leads to lost sales and profits.
Forecasting is a complex process and depends on:
How much the product will cost
How competitors will react
The forecast must change as factors change.
Market potential: The expected industry-wide sales of a product in a particular category for a set time period.
Sales potential:
The maximum revenue a company expects to generate from a product.
The number of units the company expects to sell.
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FORECASTING METHODS
Judgment techniques: Include customer surveys, expert opinions and estimates by salespeople.
Sales force composite: a forecast based on sales estimates for a certain period of time gathered by the salespeople in a firm.
Executive opinion: the best guess estimate of the executives of a company.
Expert opinion: the estimate of an expert, usually one outside of the company.
Time Series Techniques: Examining sales patterns in the past to predict future sales.
Trend analysis: Estimating future sales based on data from past sales.
Correlational analysis: Estimates sales based on the trends of other variables.
Response models: Based on how customers have responded in the past to marketing strategies.
Market test: An experiment in launching a new offering in a limited market in order to gain real-world knowledge of how the market will react to the product.
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BUILDING BETTER FORECASTS
Commit to accuracy
Pick the right method(s) for your business and decision
Use multiple methods
Use many variables
Use scenario-based forecasts
Track actual results and adjust
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KEY TAKEAWAYS
A forecast is an educated guess, or estimate, of sales in the future. Accuracy is important because so many other decisions a firm must make depend on the forecasts.
When a company forecasts sales, it has to consider market potential and sales potential.
Many methods of forecasting exist, including:
Expert opinion
Channel and customer surveys
Sales force composites
Time series data
Test markets
Better forecasts can be obtained by using multiple methods, forecasting for various scenarios, and tracking actual data (including sales) and adjusting future forecasts accordingly.
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LEARNING OBJECTIVES
Apply marketing planning processes to ongoing business settings.
Identify the role of the marketing audit.
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ONGOING MARKETING PLANNING AND EVALUATION
Marketing plans are created frequently.
The key to a successful ongoing marketing strategy is twofold:
Causality: The relationship between two variables whereby one variable is a direct consequence of the other.
Control: The degree to which you can separate the effects of a variable on a consequence.
Managerial control: Ability to manipulate variables, such as how a marketing plan is implemented.
Statistical control: Mathematically removing the influence of a variable on an outcome so as to isolate the cause of a problem.
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THE MARKETING AUDIT
Used as an examination of all of the company’s marketing activities.
Fidelity: The degree to which plan is being implemented.
A SNAPSHOT OF THE STATE OF A COMPANY’S MARKETING STRATEGIES AS THEY ARE ACTUALLY IMPLEMENTED
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TOP TEN FACTORS TO ASSESS IN AN AUDIT
Key factors that impacted the business for good or for bad during the past year.
Customer satisfaction scores and the number and type of customer complaints.
The satisfaction levels of distributors, retailers, and other value chain members.
The marketing knowledge, attitudes, and satisfaction of all executives involved in the marketing function.
The extent to which the marketing program was marketed internally and “bought into” by top managers and non-marketing executives.
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TOP TEN FACTORS TO ASSESS IN AN AUDIT
Did the offering meet the customer’s needs as expected, and was the offering’s competitive advantage defensible?
The performance of the organization’s advertising, promotion, sales, marketing, and research programs with an emphasis on their return on the money invested in them.
Whether the marketing plan achieved its stated financial and non-financial goals.
Whether the individual elements’ marketing plans achieved their stated financial and non-financial goals.
The current value of the brand and customer equity for each brand in the product portfolio.
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KEY TAKEAWAYS
The key to a successful ongoing marketing strategy is twofold: understanding causality and good marketing plan execution.
Drawing the wrong conclusions about causality, or what actually causes a change in a company’s sales performance, can lead to disastrous results. That’s why companies investigate the causes by gathering market feedback and conducting market research.
Another tool that can be used to research a change in a company’s sales performance is a marketing audit.
A marketing audit is an examination or a snapshot of the state of a company’s marketing strategies as they are actually implemented.
Complete and partial audits can be done internally or by a consulting firm in order to find areas for improvement.
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