A written marketing plan is the backdrop against which operational decisions are taken. The following should appear in a strategic marketin...
A written marketing plan is the backdrop against which operational decisions are taken. The following should appear in a strategic marketing plan:
It will be obvious from the list above that not only does budget setting become much easier and more realistic, but the resulting budgets are more likely to reflect what the whole company wants to achieve, rather than just one department.
The problem of designing a dynamic system for setting budgets is a major challenge to the marketing and financial directors of all companies. The most satisfactory approach would be for a marketing director to justify all marketing expenditure from a zero base each year against the tasks to be accomplished. If these procedures are followed, a hierarchy of objectives is built in such a way that every item of budgeted expenditure can be related directly back to the initial financial objectives. For example, if sales promotion is a major means of achieving an objective, when a sales promotion item appears in the programme it has a specific purpose that can be related back to a major objective. Thus every item of expenditure is fully accounted for.
Marketing expense can be considered to be all costs that are incurred after the product or offer leaves the ‘factory’, apart from those involved in physical distribution. When it comes to pricing, any form of discounting that reduces the expected gross income – such as promotional or quantity discounts, overrides, sales commission and unpaid invoices – should be given the most careful attention as marketing expenses. The most obvious marketing expenses will occur, however, under the heading of promotion, in the form of advertising, sales salaries and expenses, sales promotion and direct mail costs.
The important point about the measurable effects of marketing activity is that anticipated levels should result from careful analysis of what is required to take the company towards its goals, while the most careful attention should be paid to gathering all items of expenditure under appropriate headings. The healthiest way of treating these issues is through zero-based budgeting.
We have just described the strategic marketing plan and what it should contain. The tactical marketing plan layout and content should be similar, but the detail is much greater, as it is for one year only.
It has been suggested that each manager in the organization should complete an audit and SWOT analysis on his or her own area of responsibility. The only way that this can work in practice is by means of a hierarchy of audits. The principle is simply demonstrated in Figure 2.7. This figure illustrates the principle of auditing at different levels within an organization. The marketing audit format will be universally applicable. It is only the detail that varies from level to level and from company to company within the same group.
Figure 2.8 illustrates the total corporate strategic and planning process. This time, however, a time element is added, and the relationship between strategic planning briefings, long-term corporate plans and short-term operational plans is clarified. It is important to note that there are two ‘open-loop’ points on this figure. These are the key times in the planning process when a subordinate’s views and findings should be subjected to the closest examination by his or her superior. It is by taking these opportunities that marketing planning can be transformed into the critical and creative process it ought to be.
Since in anything but the smallest of undiversified companies it is not possible for top management to set detailed objectives for operating units, it is suggested that at this stage in the planning process strategic guidelines should be issued. One way of doing this is in the form of a strategic planning letter. Another is by means of a personal briefing by the chief executive at ‘kick-off’ meetings. As in the case of the audit, these guidelines would proceed from the broad to the specific, and would become more detailed as they progressed through the company towards
operating units.
These guidelines would be under the headings of financial, human resources and organization, operations and, of course, marketing.
Under marketing, for example, at the highest level in a large group, top management may ask for particular attention to be paid to issues such as the technical impact of microprocessors on electromechanical component equipment, leadership and innovation strategies, vulnerability to attack from the flood of products from developing economies, and so on. At operating company level, it is possible to be more explicit about target markets, product development and the like.
In concluding this section, we must stress that there can be no such thing as an off-the-peg marketing planning system, and anyone who offers one must be viewed with great suspicion. In the end, strategic marketing planning success comes from an endless willingness to learn and to adapt the system to the people and the circumstances of the firm. It also comes from a deep understanding about the nature of marketing planning, which is something that, in the final analysis, cannot be taught.
However, strategic marketing planning demands that the organization recognizes the challenges that face it and their effect on its potential for future success. It must learn to focus on customers and their needs at all times and explore every avenue that may provide it with a differential advantage over its competitors.
- Start with a mission statement.
- Here, include a financial summary that illustrates graphically revenue and profit for the full planning period.
- Now conduct a market overview including a market map: Has the market declined or grown? How does it break down into segments? What is your share of each? Keep it simple. If you do not have the facts, make estimates. Use life cycles, bar charts and pie charts to make it all crystal clear.
- Now identify the key segments and do a SWOT analysis for each one: outline the major external influences and their impact on each segment. List the key factors for success. These should be fewer than five. Give an assessment of the company’s differential strengths and weaknesses compared with those of its competitors. Score yourself and your competitors out of 10 and then multiply each score by a weighting factor for each critical success factor (eg CSF 1 = 60, CSF 2 = 25, CSF 3 = 10, CSF 4 = 5).
- Make a brief statement about the key issues that have to be addressed inthe planning period.
- Summarize the SWOTs using a portfolio matrix in order to illustrate the important relationships between your key products and markets.
- List your assumptions.
- Set objectives and strategies.
- Summarize your resource requirements for the planning period in the form of a budget.
It will be obvious from the list above that not only does budget setting become much easier and more realistic, but the resulting budgets are more likely to reflect what the whole company wants to achieve, rather than just one department.
The problem of designing a dynamic system for setting budgets is a major challenge to the marketing and financial directors of all companies. The most satisfactory approach would be for a marketing director to justify all marketing expenditure from a zero base each year against the tasks to be accomplished. If these procedures are followed, a hierarchy of objectives is built in such a way that every item of budgeted expenditure can be related directly back to the initial financial objectives. For example, if sales promotion is a major means of achieving an objective, when a sales promotion item appears in the programme it has a specific purpose that can be related back to a major objective. Thus every item of expenditure is fully accounted for.
Marketing expense can be considered to be all costs that are incurred after the product or offer leaves the ‘factory’, apart from those involved in physical distribution. When it comes to pricing, any form of discounting that reduces the expected gross income – such as promotional or quantity discounts, overrides, sales commission and unpaid invoices – should be given the most careful attention as marketing expenses. The most obvious marketing expenses will occur, however, under the heading of promotion, in the form of advertising, sales salaries and expenses, sales promotion and direct mail costs.
The important point about the measurable effects of marketing activity is that anticipated levels should result from careful analysis of what is required to take the company towards its goals, while the most careful attention should be paid to gathering all items of expenditure under appropriate headings. The healthiest way of treating these issues is through zero-based budgeting.
We have just described the strategic marketing plan and what it should contain. The tactical marketing plan layout and content should be similar, but the detail is much greater, as it is for one year only.
How the marketing planning process works
As a basic principle, strategic marketing planning should take place as near to the marketplace as possible in the first instance, but such plans should then be reviewed at higher levels within an organization to see what issues may have been overlooked.It has been suggested that each manager in the organization should complete an audit and SWOT analysis on his or her own area of responsibility. The only way that this can work in practice is by means of a hierarchy of audits. The principle is simply demonstrated in Figure 2.7. This figure illustrates the principle of auditing at different levels within an organization. The marketing audit format will be universally applicable. It is only the detail that varies from level to level and from company to company within the same group.
Figure 2.8 illustrates the total corporate strategic and planning process. This time, however, a time element is added, and the relationship between strategic planning briefings, long-term corporate plans and short-term operational plans is clarified. It is important to note that there are two ‘open-loop’ points on this figure. These are the key times in the planning process when a subordinate’s views and findings should be subjected to the closest examination by his or her superior. It is by taking these opportunities that marketing planning can be transformed into the critical and creative process it ought to be.
Since in anything but the smallest of undiversified companies it is not possible for top management to set detailed objectives for operating units, it is suggested that at this stage in the planning process strategic guidelines should be issued. One way of doing this is in the form of a strategic planning letter. Another is by means of a personal briefing by the chief executive at ‘kick-off’ meetings. As in the case of the audit, these guidelines would proceed from the broad to the specific, and would become more detailed as they progressed through the company towards
operating units.
These guidelines would be under the headings of financial, human resources and organization, operations and, of course, marketing.
Under marketing, for example, at the highest level in a large group, top management may ask for particular attention to be paid to issues such as the technical impact of microprocessors on electromechanical component equipment, leadership and innovation strategies, vulnerability to attack from the flood of products from developing economies, and so on. At operating company level, it is possible to be more explicit about target markets, product development and the like.
In concluding this section, we must stress that there can be no such thing as an off-the-peg marketing planning system, and anyone who offers one must be viewed with great suspicion. In the end, strategic marketing planning success comes from an endless willingness to learn and to adapt the system to the people and the circumstances of the firm. It also comes from a deep understanding about the nature of marketing planning, which is something that, in the final analysis, cannot be taught.
However, strategic marketing planning demands that the organization recognizes the challenges that face it and their effect on its potential for future success. It must learn to focus on customers and their needs at all times and explore every avenue that may provide it with a differential advantage over its competitors.
Guidelines for effective marketing planning
Although innovation remains a major ingredient in commercial success, there are nevertheless other challenges that companies must overcome if they wish to become competitive marketers. While their impact may vary from company to company, challenges such as the pace of change, the maturity of markets and the implications of globalization need to be given serious consideration. Some of the more obvious challenges are shown in Table 2.3.
To overcome these challenges the following guidelines are recommended to help the marketer to focus on effective marketing strategies.
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