The Nature and Contents of a Marketing Plan

Working within the plans set by the levels above them, marketing managers come up with a marketing plan for individual products, lines, brands, channels, or customer groups. A marketing plan is a written docu­ment that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives.45 It contains tactical guidelines for the marketing programs and financial allocations over the planning period.46

A marketing plan is one of the most important outputs of the marketing process. It provides direction and focus for a brand, product, or company. It informs and motivates key constituents inside and outside an organization about its marketing goals and how these can be achieved. Nonprofit organizations use marketing plans to guide their fund-raising and outreach efforts, and government agencies use them to build public awareness of nutrition and stimulate tourism.

More limited in scope than a business plan, the marketing plan documents how the organization will achieve its strategic objectives through specific marketing strategies and tactics, with the customer as the starting point. It is also linked to the plans of other departments. Suppose a marketing plan calls for selling 200,000 units annually. The production department must gear up to make that many units, finance must arrange funding to cover the expenses, human resources must be ready to hire and train staff, and so on. Without the appropriate level of orga­nizational support and resources, no marketing plan can succeed.

The most frequently cited shortcomings of current marketing plans, according to marketing executives, are lack of realism, insufficient competitive analysis, and a short-run focus. (See “Marketing Memo: Marketing Plan Criteria” for questions to ask in developing marketing plans.)

Most marketing plans cover one year in anywhere from 5 to 50 pages. Smaller businesses may create shorter or less formal marketing plans; corporations generally require highly structured documents. Every part of the plan must be described in considerable detail. Some companies post their marketing plan on an internal Web site so everyone can consult it and collaborate on changes. A marketing plan usually contains the following sections.

  • Executive summary and table of contents.
  • Situation analysis.This section presents relevant background data on sales, costs, the market, competi­tors, and the macroenvironment. How do we define the market, how big is it, and how fast is it growing? What are the relevant trends and critical issues? Firms will use all this information to carry out a SWOT analysis.
  • Marketing strategy. Here the marketing manager defines the mission, marketing and financial objectives, and needs the market offering is intended to satisfy as well as its competitive positioning. All this requires inputs from other areas, such as purchasing, manufacturing, sales, finance, and human resources.
  • Marketing tactics. Here the marketing manager outlines the marketing activities that will be undertaken to execute the marketing strategy.
    • The product or service offering section describes the key attributes and benefits that will appeal to target customers.
    • The pricing section specifies the general price range and how it might vary across different types of cus­tomers or channels, including any incentive or discount plans.
    • The channel section outlines the different forms of distribution, such as direct or indirect.
    • The communications section usually offers high-level guidance about the general message and media strategy. Firms will often develop a separate communication plan to provide the detail necessary for agencies and other media partners to effectively design the communication program.
  • Financial projections. Financial projections include a sales forecast, an expense forecast, and a break-even analysis. On the revenue side is forecasted sales volume by month and product category, and on the expense side the expected costs of marketing, broken down into finer categories. The break-even analysis estimates how many units the firm must sell monthly (or how many years it will take) to offset its monthly fixed costs and average per-unit variable costs.

A more complex method of estimating profit is risk analysis. Here we obtain three estimates ( optimistic, pessimistic, and most likely) for each uncertain variable affecting profitability, under an assumed marketing environment and marketing strategy for the planning period. The computer simulates possible outcomes and computes a distribution showing the range of possible rates of returns and their probabilities.

  • Implementation controls.The last section outlines the controls for monitoring and adjusting implementa­tion of the plan. Typically, it spells out the goals and budget for each month or quarter so management can review each period’s results and take corrective action as needed.

1. MARKETING MEMO Marketing Plan Criteria

Here are some questions to ask in evaluating a marketing plan.

  1. Is the plan simple and succinct? Is it easy to understand and act on? Does it communicate its content clearly and practically? Is it not unnecessarily long?
  2. Is the plan complete? Does it include all the necessary elements? Does it have the right breadth and depth? Achieving the right balance between completeness and lots of detail and simplicity and clear focus is often the key to a well-constructed marketing plan.
  3. Is the plan specific? Are its objectives concrete and measurable? Does it provide a clear course of action? Does it include specific activities, each with specific dates of completion, specific persons responsible, and specific budgets?
  4. Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Has a frank and honest self-critique been conducted to raise possible concerns and objections?

Sources: Adapted from Tim Berry and Doug Wilson, On Target: The Book on Marketing Plans, 2nd ed. (Eugene, OR: Palo Alto Software, 2000); Alexander Chernev, The Marketing Plan Handbook (Chicago, IL: Cerebellum Press, 2011); authors’ experiences.

2. THE ROLE OF RESEARCH

Marketers need up-to-date information about the environment, the competition, and the selected market seg­ments. Often, analysis of internal data is the starting point for assessing the current marketing situation, supple­mented by marketing intelligence and research investigating the overall market, the competition, key issues, threats, and opportunities. As the plan is put into effect, marketers use research to measure progress toward objectives and identify areas for improvement.

Finally, marketing research helps marketers learn more about their customers’ requirements, expectations, perceptions, satisfaction, and loyalty. Thus, the marketing plan should outline what marketing research will be conducted and when, as well as how the findings will be applied.

3. THE ROLE OF RELATIONSHIPS

Although the marketing plan shows how the company will establish and maintain profitable customer relation­ships, it also affects both internal and external relationships. First, it influences how marketing staff work with

each other and with other departments to deliver value and satisfy customers. Second, it affects how the com­pany works with suppliers, distributors, and partners to achieve the plan’s objectives. Third, it influences the company’s dealings with other stakeholders, including government regulators, the media, and the community at large.

4. FROM MARKETING PLAN TO MARKETING ACTION

Marketers start planning well in advance of the implementation date to allow time for marketing research, analy­sis, management review, and coordination between departments. As each action program begins, they monitor ongoing results, investigate any deviation from plans, and take corrective steps as needed. Some prepare contin­gency plans; marketers must be ready to update and adapt marketing plans at any time.

The marketing plan typically outlines budgets, schedules, and marketing metrics for monitoring and evaluat­ing results. With budgets, marketers can compare planned and actual expenditures for a given period. Schedules show when tasks were supposed to be completed and when they actually were. Marketing metrics track actual outcomes of marketing programs to see whether the company is moving forward toward its objectives, as we’ll discuss in Chapter 4.

Source: Kotler Philip T., Keller Kevin Lane (2015), Marketing Management, Pearson; 15th Edition.

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