Marketing Plan
A marketing plan is one of the important parts of a company's plan. The marketing planning process should be carried out as part of the firm's overall planning and budgeting process.
A marketing plan in the narrow sense is a comprehensive document that outlines advertising activities for a certain period. The purpose of the marketing plan is to balance price changes, optimally disperse advertising efforts over time, and purposefully develop sales activity. It includes processes such as market analysis, action programs, budgets, sales forecasts, strategies, and projected financial statements.
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A marketing plan can also be described as a method that helps a business decision on the best use of its resources to achieve corporate goals. It may also contain a complete analysis of the strengths and weaknesses of the company, its organization,, and its products.
The marketing plan shows the step or actions that will be used to achieve the goals of the plan. For example, a marketing plan might include a strategy to increase the market share of a business by fifteen percent. The marketing plan will then lay out the steps that need to be taken to achieve the goal.
Types of Marketing Plan
In traditional planning, plans are usually subdivided according to the period they cover, for example:
- long term plans;
- medium-term plans;
- short term plans.
Elements of Marketing Plan
There are six elements in a marketing plan: situation analysis, goals, strategy, tactics, budget, and control.
- Analysis of the situation. During the analysis, the company examines external factors operating at the macro-level (economic, political and legal, socio-cultural, technological), as well as players or participants in the situation (company, competitors, distributors, and suppliers). The company analyzes strengths, weaknesses, opportunities, and threats. Here it is necessary to move from external factors to internal ones.
- Goals. After the analysis of the situation has identified the best opportunities for the company, these opportunities are ranked, after which the company's goals are formulated and the timing of their achievement is determined. Goals should be set taking into account the interests of all business participants, the reputation of the company, and other significant factors.
- Strategy. Choosing the best course to achieve the goal is the task of strategy. The strategy must be perceived as a goal.
- Tactics. The strategy should be developed by providing details related to marketing tools and specific activities. Responsible persons and deadlines are selected for activities.
- Budget. Planned activities and work are associated with costs that are added to the budget necessary to achieve the company's goals.
- Control. The company should establish a plan review frequency and benchmarks to measure progress towards achieving the goal. If the performance falls short of the planned, the company must revise the goals, strategy, or list of activities to correct the situation.
When preparing a marketing plan, you should also pay attention to the life cycle of a product or service, audience segmentation, positioning, differentiation, including a SWOT analysis, develop a USP (unique selling proposition) for new products and services, and evaluate as a result by calculating ROI (profit for investment).
Significance and areas of application
Significance and areas of application
According to Waldemar Pelz, the most important areas of application and reasons for creating a marketing plan can be summarized as follows:
- Investment: For the introduction of new or improved products or services as well as for investment decisions, considerable financial resources are sometimes required. In these cases, the responsible persons usually have to convince a panel of experts that these investments make sense (profitable) - the invested funds flow back with a certain surplus (profit). In such cases, the marketing plan is the most important basis for discussion for the critical review of assumptions about framework conditions, trends, and the probable buying behavior of potential customers.
- Responsibility: As soon as an employee assumes responsibility for a product, a product group, or a business unit as part of their professional development, they must prove their contribution to the long-term success of the company and show that they can use assets or financial and human resources responsibly. For this, he usually needs a marketing plan.
- Acquisition of qualifications: About two-thirds of all executives in the German economy have a technical or scientific education. Once they want to qualify to take on managerial responsibilities, they need basic business skills, and this includes a marketing plan for applying that knowledge (see also Management Skills ).
- Performance Assessment: Most larger companies are organized around strategic business units. The performance of the responsible employees is usually measured in terms of economic success, and this requires professional planning. The marketing plan is the heart of the business plan. In this context, success means that those responsible not only incur costs but can also generate income.
- Target agreement: The marketing plan or its elements are the basis for target agreements at almost all hierarchical levels (e.g. agreement on marketing targets). The ability of a manager to convert goals into measurable results is one of the most important prerequisites for professional success (see also implementation competence ).
- Starting a business: When starting a business, investors, banks, or funding agencies want to be convinced of the usefulness and chances of success of the business idea. You also need a marketing plan as the core of the business plan ( business plan ).
The structure of a marketing plan and the process of creating it is intended to be summarized in the graphic on the right as an overview.
Building a Marketing Plan
After evaluating the relevant specialist literature, a marketing plan consists of the following components:
- strategic analysis,
- definition of qualitative and quantitative goals,
- Selection of suitable strategies to achieve goals,
- Budgeting of operational implementation with the marketing mix and
- Monitoring of progress, results, and milestones.
At the beginning of the marketing plan, there is usually a summary (management summary) of the five elements. These are explained in more detail below.
Strategic Analysis
The marketing plan starts with strategic analysis. It consists of market, customer, and competition analysis. The market analysis provides information about the market potential (possible future expected demand in units of quantity and value), the market volume (the quantity actually sold at given prices, the market shares of the most important providers, and the forecast for further market growth).
The customer analysis begins with a precise definition of the target groups, their buying habits, needs, and expectations. Customers can be end-users (consumers) or other companies. Important data of the customer analysis are customer satisfaction and loyalty, attitudes, buying motives, and expectations about the type of relationship with the provider.
The competitive analysis is primarily about assessing the most important goals, strengths, and weaknesses of relevant competitors because this is the only way to formulate the competitive advantages to be striven for in the context of strategic planning. It's all about the core question: What do we have to do better to become a preferred provider in the perception of the target group.
The results of competitive analysis can be presented in a so-called strengths and weaknesses profile. A widely used tool for this is the SWOT-Analyse.
Objective
The goal requires certain key figures. Typical goals are, for example, sales growth, market share, or returns (financial goals). These key figures are so-called lagging indicators. The problem with this: If, for example, sales are already falling, countermeasures are hardly possible and usually require great human and financial efforts.
The principle is that today's sales are the result of decisions (or omissions) made three to five years ago. In other words: what has been strategically missed can usually no longer be surgically healed. Therefore, in recent years, the focus has shifted to key figures that can serve as leading indicators.
Examples of such early indicators are customer satisfaction, ability to innovate, Customer orientation of the organization, commitment, and satisfaction of employees, acquisition of new customers, or image of the company (market and customer-related goals).
When setting goals, the so-called SMART principle is particularly important: S stands for specific, M for measurable, A for attainable, R for realistic, and T for time-bound. Goals should therefore be specific, measurable, achievable, ambitious, and time-related. Consequently, the marketing plan contains short- and long-term as well as qualitative and quantitative goals.
All goals must be coordinated and should not contradict each other if possible. When setting goals, the so-called SMART principle is particularly important: S stands for specific, M for measurable, A for attainable, R for realistic, and T for time-bound. Goals should therefore be specific, measurable, achievable, ambitious, and time-related. Consequently, the marketing plan contains short- and long-term as well as qualitative and quantitative goals. All goals must be coordinated and should not contradict each other if possible. When setting goals, the so-called SMART principle is particularly important: S stands for specific, M for measurable, A for attainable, R for realistic, and T for time-bound. Goals should therefore be specific, measurable, achievable, ambitious, and time-related. Consequently, the marketing plan contains short- and long-term as well as qualitative and quantitative goals. All goals must be coordinated and should not contradict each other if possible.
Strategy Choice
A strategy can be defined as a bundle of measures that seem suitable to get from A (actual state) to B (target state), i.e. to achieve goals. Strategies can essentially be divided into four groups: competitive, positioning, portfolio, and innovation strategies.
Competitive strategies answer the question: How can those responsible for the marketing plan achieve a competitive advantage? According to Robert S. Kaplan and David Norton, a distinction is made between three main sources of competitive advantages: superior (attractive) products, superior (efficient) processes, and superior customer relationships (loyalty and trust).
Based on the model by Michael Porter competitive advantages can be gained by focusing on quality and service ( differentiation ), having a price advantage ( cost leadership ), or by specializing in market niches. Through a positioning strategy, a company designs its offer in such a way that it occupies a special, valuable, and differentiated place in the minds of the target customers.
Portfolio strategies ( portfolio analysis ) should help to plan the product range in such a way that the company has as many high-yield products as possible in growing, attractive markets.
Strategy implementation with the marketing mix
The implementation of the strategy usually requires extensive human and financial resources. These are planned as part of the marketing budget. The central question here is how to divide the marketing budget between the marketing instruments and what contribution these instruments (product, price, communication, and distribution policy) should make to the efficient achievement of goals.
A key task of product and pricing policy is to determine the price-performance ratio in such a way that it appears attractive to customers. The task of the communication policy is to inform customers about the offer and to persuade them to buy.
In the marketing plan, you must therefore determine which means of communication (e.g. advertising, Personal selling, public relations, sales promotion, or direct marketing ) in whichever combination is most suitable. The financial resources must be planned accordingly.
Success control
The marketing plan ends with a review of success (progress and profitability), primarily in three areas. On the one hand, you have to check regularly to what extent the marketing instruments are making the expected contribution to the implementation of the goals. This is the only way to take corrective action.
On the other hand, the success of the people involved (who implement the marketing plan) must be monitored about their contribution to the success of the marketing plan. This is the only way to develop the personal skills of the affected specialists and executives and to use them efficiently according to their strengths.
In the case of possible sanctions, the principle applies that these should only come into play if the people involved are not carefully prepared for deviations from the plan that are unavoidable in business, especially since it is not possible to predict the future (principle of forward-looking planning).
In the third area, key figures on the profitability of products, markets, segments, customers, sales channels, etc. must be defined so that opportunities for improvement and the need for adjustment can be derived at an early stage (a basic requirement for corporate management).
Types of Strategies
There are general strategies for specific markets:
— expansion of existing markets;
- penetration into new markets;
— maintaining the level of sales in existing markets;
— concentration of efforts on a smaller number of markets;
- withdrawal from the market.
Activity examples
- Promotions to stimulate retail demand;
- Direct sales to customers in showrooms;
- Sampling;
- Merchandising and negotiations with retailers;
- Efficiently built supply chain to partners;
- Packaging design to encourage purchase;
- Wide distribution network.
Marketing goals
Marketing goals are usually aligned with the broader goals of the company. For example, a new company looking to grow its business will typically have a marketing plan that emphasizes a strategy to grow its customer base. Of particular importance for the company are plans for market research and assortment renewal, a plan for advertising activity and organization of public relations (PR), and plans for sales promotion and sales.
Benefits
The marketing plan is a unique opportunity for a productive discussion between employees and leaders of the organization. This ensures good communication within the company. The marketing plan also allows the marketing team to examine their past decisions and understand their results to better prepare for the future. It also allows the marketing team to observe and study the competitive environment in which they operate.
