A marketing plan should be preceded by conducting a marketing audit which reviews the effectiveness of the business’s Marketing Mix.
This review is mainly looking at characteristics of the market, the product portfolio and the intensity of competition in the sector and the industry.
After the marketing audit is completed, the marketing manager will start working on preparing a marketing plan. Let’s take a look at its basic elements.
Questions of a marketing plan
In preparing a marketing plan, the marketing executives are likely to move through the following stages:
Q: Where is the business now?
A: This is an assessment of the business’s present position. The marketing management conducts a market audit (also called a situational analysis) to examine internal factors controllable by the firm by grouping its current strengths and weaknesses. Then, they examine external factors which influence the firm by creating future opportunities or threats.
Q: Where is the business aiming to be in the future?
A: Using the results from the marketing audit, the marketing managers will set SMART marketing objectives for the business, such as increasing sales by targeting new customers, entering new markets abroad, gaining greater market share in the domestic market, etc. Marketing objectives, as well as corporate objectives, need to be SMART: Specific Measurable, Agreed, Realistic and Time-specific.
Q: How will the business achieve its marketing objectives?
A: The business develops marketing strategies outlining how it will deliver day-to-day on the objectives. These are the firm’s operational plans. If the focus is on increasing market share, then the firm should be maintaining its loyal customers and gaining new customers from the competitors. In essence, marketing strategies are the detail behind the 4 Ps of Marketing Mix.
Q: What are the revenues and costs generated in pursuit of its marketing objectives?
A: The firm will need to set detailed budgets showing a breakdown of expected sales revenue and costs. The breakdown is usually prepared for each product, each market or each marketing activity.
Q: How will the marketing process be controlled?
A: The marketing management will develop control mechanisms to measure marketing performance against forecast budgets and whether or not the firm achieved its marketing objectives, e.g. how much did the market share increase. The firm will conduct periodic marketing audits to ensure it is meeting the changing needs and wants of its customers. If necessary, marketing objectives may need to be revised in order to meet changing market conditions.
Elements of a marketing plan
Based on the detailed marketing audit, marketing managers are able to produce a solid marketing plan. The basic elements of a marketing plan include:
1. Business analysis
Background information about the business. This part of the marketing plan provides introduction of the purpose and mission statement of the business. It is especially important, if the audience for the plan is not familiar with the company. For example, potential financial investors or lenders will have necessary information to understand the purpose of the marketing plan whether it is for setting up a new business or launching of a new product.
Marketing objectives. Setting SMART marketing objectives is important for the future to know where the business is going.
Marketing strategies. In order to achieve marketing objectives, marketing strategies need to be set. Here, marketing managers will be looking at appropriate segmentation, targeting and positioning of the firm and its products.
Marketing tactics. Setting and application of the Marketing Mix will out marketing strategies into practice to achieve marketing objectives.
Control. Benchmarks and budgets will be used to monitor performance against pre-set marketing objectives.
2. The market
Assessing features and characteristics of the market. Also, the strengths and weaknesses of all competitors in the market. Methods of market research to be used to identify target markets should be highlighted.
It is also common to include A SWOT Analysis and A STEEPLE Analysis in a marketing plan. These help the firm assess the internal and external factors affecting the business and its marketing objectives.
Also, the expected market share or forecasted sales revenue within a specified time frame.
3. The product
The marketing manager needs to outline the Marketing Mix, e.g. the product design, channels of distribution to be used, promotional strategies chosen and anticipated prices. The anticipated difficulties and strategies to deal with these problems should also be mentioned.
4. Budgets
A marketing budget mainly contains marketing expenditures in order to achieve the plan’s marketing objectives.
As all marketing decisions have financial implications, the marketing plan must include details of how much money is needed to put the marketing strategy and tactics into effect. The marketing expenditure will be compared with the expected sales.
A marketing plan must always include the marketing budget.
5. Resources
Factors influencing a marketing plan
A marketing audit will help to identify both internal factors and external factors which are likely to influence the marketing plan.
A. Internal factors influencing the marketing plan:
- Marketing Mix. Is the Marketing Mix effective? Does it help to achieve all marketing objectives?
- People. What type of workers are involved in devising and implementing marketing plans?
- Finance. How much money is needed to carry out the marketing plan? While firms can set ambitious marketing goals, unless finance is available to fund those plans, such goals are unlikely to be achieved. Does the business have enough funds to achieve marketing objectives?
- Production processes. Can the business produce the product(s) it wants to sell?
B. External factors influencing the marketing plan:
- Social. Trends and cultures that change will affect the market. Changes in the society such as trends, fashions and cultures can have consequences for marketing planning.
- Technological. Changes in technology can affect marketing plans in a variety of ways such as changes in costs, changes in the number of products available for sale, etc.
- Economic. A wide range of economic factors may affect a business’s marketing plans such as economic cycles, interest rates, unemployment rates, etc.
- Ecological. Environmental factors are paying an increasing role in the operation of businesses.
- Political. What type of regulations are placed on products needed for production? There is an increasing amount of legislation and regulation these days that may affect the marketing plans of a business.
- Legal. Can the firm’s product be legally sold in a country?
- Ethical. Is the business planning to produce and sell any unethical products?
Guidelines for a preliminary marketing plan
The marketing plan should reflect the most effective means of marketing your product in a country market.
Information gathered during the marketing audit serves as the basis for developing a marketing plan for your product or brand in a target market. The problems and opportunities that surfaced in the preceding steps should be overcome or exploited to produce maximum sales and profits.
1. The marketing plan
A. Marketing objectives
- Target market(s)
- Expected sales and sales revenue
- Profit expectations
- Market penetration and market coverage
B. Product adaptation or modification. Using the product component model as your guide, indicate how your product can be adapted for the market.
- Core component
- Packaging component
- Support services component
C. Promotion Mix
- Advertising: objectives, media mix, message, costs
- Sales promotions
- Personal selling
- Other promotional methods
D. Distribution. From origin to destination.
- Port selection: origin port, destination port
- Mode selection: railroads, air carriers, ocean carriers, motor carriers
- Packaging: marking and labeling regulations, containerization, costs of materials
- Documentation required: bill of lading, dock receipt, air bill, commercial invoice, pro-forma invoice, shipper’s export declaration, statement of origin, special documentation
- Insurance claims
- Freight forwarder: If your company does not have a transportation or traffic management department, then consider using a freight forwarder.
E. Channels of distribution. This section presents details about the specific types of distribution in your marketing plan.
- Retailers:
- Type and number of retail stores
- Retail markups for products in each type of retail store
- Methods of operation for each type (cash or trade credit)
- Scale of operation for each type (small, medium or large)
- Wholesale middlemen:
- Type and number of wholesale middlemen
- Markup for class of products by each type
- Methods of operation for each type (cash or trade credit)
- Scale of operation (small, medium or large)
- Import and export agents
- Warehousing: type, location
F. Price determination
- Cost of the shipment of goods
- Transportation costs
- Handling expenses: insurance costs, customs duties, import TAXes and Value Added TAX, wholesale and retail markups and discounts, retail price, Gross Profit Margin (GPM) and Net Profit Margin (NPM)
G. Terms of sale
H. Methods of payment
2. Financial statements and budgets
A. Marketing budget. Budgets, expected profits and losses as well as additional resources necessary to implement the proposed plan should also presented:
- Product Costs
- Promotion Costs
- Selling expenses
- Distribution expenses
- Other costs
B. Annual Profit and Loss Statement (P&L)
3. Resource requirements
A. Finances
B. Personnel
C. Production capacity
4. Executive summary
A one-page summary of major points of the marketing plan should be prepared after completing the research for this report. Executive summary should be placed at the front of the report.
5. Sources of information
The intricacies of international operations and the complexity of the environment within which the international marketer must operate create an extraordinary demand for information.
When operating in foreign markets, the need for thorough information as a substitute for uninformed opinion is equally as important as it is in domestic marketing. Sources of information need to be developed to answer marketing questions.
6. Appendix
Benefits of marketing plans
Marketing planning ensures that a business takes its time to plan, analyze and reflect upon marketing activities taking a holistic view.
A marketing plan coordinates the various aspects of marketing between different business functions making sure that everyone is going in the same direction. This can improve employee morale and motivation. Marketing plans also make sure that scarce resources are used appropriately where they are most needed.
Problems with marketing plans
Marketing plans often ignore customers’ needs and wants by concentrating upon other less important issues such as product development or trying to outcompete other businesses.
With many businesses organized into different departments, each department is focusing on its own needs instead of striving towards the success of the whole firm.
Marketing plans also often fail to set SMART marketing objectives that often leads into the objectives not being met.
To summarize, a marketing plan is a formal document prepared by the marketing department which outlines the firm’s marketing objectives and the marketing strategies to be used to achieve these objectives.
Successful marketers always plan their marketing activities carefully rather than adopt an uncoordinated approach.
