The marketing plan provides the strategic objectives and actions to be undertaken to successfully market the goods and services offered by the firm. An understanding of the written plan of marketing objectives and initiatives, a plan of execution, and a schedule of timely reviews of the execution tactics and results will be demonstrated.
Completing this unit should take you approximately 3 hours.
Read this overview of the marketing plan and planning process. Note that the marketing plan is part of the firm's strategic plan. Large firms often staff a Chief Marketing Officer (CMO), who sets the strategy for the firm. Small and medium size businesses may have a Vice President of Marketing, or a Marketing Manager. Regardless of the organization's size, the development of the marketing plan usually involves several individuals, as it is a key component of the organizational strategic plan.
In Unit 2, we discussed the external environment and the environmental scanning process. This video lecture reviews the external environment, which must be done before writing the marketing plan.
In addition to the macro-environmental forces which affect marketing plans, marketers must carefully consider the industry and competitive environment. The firms that can affect the marketer more directly are the rival firms, supplier firms, customers, firms that offer substitutes, and new entrants into the industry.
Michael Porter best describes the industry and competitive environment. In this video, Porter describes the Five Forces model he developed to better inform management and marketers to develop sustainable strategies within their firms.
Marketing objectives must be SMART: Specific, Measurable, Achievable, Realistic and Time Bound. Therefore, using the SMART acronym provides marketers a guideline to set and write down effective marketing objectives. For example, writing an objective that sets a sales target of a 10% increase is inadequate, because it is not time bound. The objective must further say that the 10% increase must be achieved within the next fiscal year.
This video by a graduate student in marketing explains the use of SMART objectives and the relevance to marketing strategy.
The marketing plan is an important part of the organization's strategic plan. It fundamentally leads the direction of the organization's strategic plan. For example, the firm, whether for-profit or not-for-profit, needs to know how much money it will be working with over the next year. Marketing is responsible for providing these revenue estimates.
The starting point for determining revenue is customer retention. Is the likely retention of customers 60%, 80%, or 90% from the previous year? This is fundamental to determining how much business and revenue will come into the organization. Maintaining satisfied customers is far less expensive than finding new customers, so the customer retention estimate also determines how much work will be required by marketing for the new year to develop new customers.
The components of the marketing plan consist of a review of the external environment and adapting the marketing mix (the 4 Ps) to changes or recent trends within the external environment. Marketers have no control over the external environment and therefore can only change or adapt the strategic marketing plan through changes in the management of the marketing mix.
The product, target market, and positioning of your product or service offering must be strategically planned and decided upon before marketing actions are undertaken.
This video describes the factors that must be considered while developing a product strategy. Note that the author provides additional resources for understanding product strategy.
This video discusses segmentation and developing target markets by providing some practical examples.
We previously discussed various segmentation methods that are used to develop target markets. The segmentation methods are used specifically to determine what customers exist in the target market for the firm's offering. Marketers do not want to spend resources promoting their products to consumers who likely do not want to buy them. Therefore, marketers must focus on the likely buyers of the target market and expend their resources on targeted customers.
This video describes brand positioning, which is similar to product positioning.
Positioning is important to marketers due to competing products in the market. Marketers must be able to answer the question, "Why should I buy your product instead of the competitor's product"? So, the marketer must "position" the product against the competing products and clarify how and why the product is different to the consumer.
Be aware that positioning can apply to a product, brand, or company. The point is to stand out from the competing products, brands, and companies and make sure the consumer understands how your offering is different and how it meets the customer's needs.
We covered pricing in Unit 7. We know from that unit that several strategies and methods are used to price goods and services. Marketers must determine the most effective pricing strategy for their specific good or service.
Industry norms often determine pricing, and pricing methods are usually set according to the rivalry among competing firms. For example, real estate purchases and rentals are often negotiable, so a buyer does not expect to pay the asking price. On the other hand, consumers who buy toothpaste will not attempt to negotiate the price at the checkout counter. So, marketers must pay close attention to the prices of competitive offerings within their competitive industry environment.
This video gives seven different pricing strategies that marketers can use. This video targets small businesses and covers fixed and variable costs, margins, and pricing terminology. Note that the difference between variable costs and price is correctly referred to as margin, gross margin, or contribution margin. Profit is not earned by the firm until all fixed costs and variable costs are covered, as we discussed in our break-even analysis in Unit 7.
Marketers have various promotional methods and media available to promote their products. These various avenues come at different costs and variable results. For example, direct mail promotion is rather inexpensive, but marketers may only expect a 2% response rate at best.
On the other hand, TV advertising during the Super Bowl costs about $5.6 million for a 30-second commercial. This airing cost does not account for the additional cost of producing the ad. Unlike measuring the response rates for direct mail promotions, attempting to measure sales results from a TV ad is not feasible. Marketers, therefore, attempt to gain brand recognition through a marketing term called "brand lift" resulting from an expensive TV ad viewed by 100 million viewers. Therefore, an increase in brand recognition from a TV ad generally can lead to an increase in brand sales, but this is a process that occurs over time. Regardless of the promotional method, marketers expect a return on investment (ROI) in sales response.
Although we often think of promotion as "advertising", as effective marketers, we must consider promotion as a broader concept with other factors. Sales and selling, trade shows, educational seminars, end-of-aisle retail store placements, and so on are all examples of the broad mix of promotion.
Read this review of the promotional methods used by marketers. Marketers must consider several ways to deliver their promotional messages to their target markets.
We reviewed distribution and distribution strategy in Unit 6. We know that distribution and selected distribution channels vary according to our offerings and industry-established practices. Therefore, a Boeing aircraft and a shipment of commodity goods like soybeans are distributed to the customer in different ways.
The marketer must therefore decide on what channels of distribution and logistical functions are required to satisfy the customer's needs and are within the budgetary constraints of the marketer.
This video from Business Week describes Costco's distribution strategy. Here is an example of a firm that must rely on high volume and high efficiency, to satisfy the targeted consumers' need for low prices.
Developing and writing a marketing plan sets the direction of the marketing activity of the firm and channels the human, capital, and technological resources to execute the plan. So, it is one thing to say what you are going to do, and then another matter in doing it, or simply executing the plan.
This text explores production differentiation strategies and the performance measures that will evaluate results. In addition to determining whether or not an approach was successful, measuring outcomes can provide insight into changes that might be needed going forward. Watch the video that is included in this resource for a look at how a carpet company addressed the issue of sustainability in the industry.
This text explores the different metrics that can enable a company to understand the effectiveness of its marketing efforts across all media outlets and platforms. As you will see, it is important to conduct these measurements throughout a campaign to make changes immediately rather than waiting until it is too late to revise a strategy.
This is an example of a template on how to write a marketing plan. Students can locate numerous examples of marketing plans on the internet; and, as marketing plans vary according to the offerings, the industry, and other factors, there is no one best way to write a marketing plan.
This review video is an excellent way to review what you've learned so far and is presented by one of the professors who created the course.
Watch this as you work through the unit and prepare to take the final exam.
We also recommend that you review this Study Guide before taking the Unit 8 Assessment.
Take this assessment to see how well you understood this unit.