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Marketing Basics - Kotler Philip

Marketing planning

The strategic plan of the company determines which industries it will be engaged in, and sets out the objectives of these industries. Now for each of them to develop their own detailed plans. If the production includes several assortment groups, several products, brands and markets, a separate plan should be developed for each of these items. That is why we are faced with production plans, product release plans, branded product release plans and market activity plans. We will designate all these plans with one term - “marketing plan”. Let us dwell on the main sections of marketing plans and on the successive stages of developing a marketing budget.

Marketing Plan Sections

What does a regular marketing plan look like? We will discuss mainly plans for the production of ordinary or branded goods. The production plan for a regular or branded product should include the following sections: a summary of benchmarks, an account of the current marketing situation, a list of dangers and opportunities, a list of tasks and problems, marketing strategies, action programs, budgets and the procedure for monitoring the implementation of the intended (see Fig. 87).

Marketing Plan Components

Fig. 87. Components of a marketing plan

SUMMARY OF CONTROL INDICATORS. At the very beginning of the plan should be a brief summary of the main goals and recommendations, which will be discussed in the plan. Here is an example:

1983 marketing plan designed to ensure a significant increase in sales and profits of the company compared to the previous year, the sales target is set at $ 80 million, which equals the planned increase of 20%. This growth seems achievable due to the improving economic and competitive environment, as well as the situation with the distribution of goods. The projected amount of current profit is $ 8 million, which is 25% higher than last year. These goals should be achieved with a budget of $ 1.6 million allocated for sales promotion, which is 2% of the planned sales. The advertising budget is $ 2.4 million, which is 3% of the planned sales amount. (The rest of the summary provides other indicators.)

Benchmarking helps top management quickly understand the focus of the plan. A summary of the plan should be placed behind the summary.

CURRENT MARKETING SITUATION. The first main section of the plan describes the nature of the target market and the position of the company in this market. The compiler of the plan describes the market in terms of its size, main segments, customer needs and specific environmental factors, makes an overview of the main products, lists competitors and indicates the distribution channel.

HAZARDS AND OPPORTUNITIES. This section makes managers look at the future and present the dangers and opportunities that may arise in front of the product. The goal of all of this is to make management anticipate important events that can greatly affect the firm. Managers should list the greatest possible number of dangers and opportunities that they can imagine. Suppose the manager of a tobacco company has the following list:

1. The head physician of the United States appeals to Congress with a request to pass a law requiring that the front of each pack of cigarettes contain an image of a skull and crossbones and a warning: “According to science, daily smoking shortens life by an average of 7 years.”

2. The number of public places where smoking is prohibited at all or separate rooms for smokers and non-smokers is constantly growing.

3. A new harmful insect attacks the crops of tobacco, and if no ways to control it are found, in the future, one can probably expect a decrease in yield and a large increase in prices.

4. The laboratory of the company is on the verge of opening, which will turn the salad into harmless tobacco. If successful, tobacco will appear that delivers satisfaction and is not harmful to health.

5. Cigarette consumption is growing rapidly in foreign markets, especially in developing countries.

6. A number of groups insist on the legalization of marijuana, i.e. on its free cultivation and sale.

Each of these provisions has certain implications for the cigarette manufacturer. The first three can be considered dangers. We define danger as follows:

Danger - a complication arising from an adverse trend or a specific event, which - in the absence of targeted marketing efforts - can lead to undermining the survivability of the product or its death.
The last three provisions can be considered the marketing capabilities of the company. We define the marketing opportunity as follows:

Marketing opportunity - an attractive direction of marketing efforts, in which a particular company can achieve a competitive advantage.

The manager must assess the likelihood of each hazard and every opportunity and their consequences for the firm.

TASKS AND CHALLENGES. Having studied the hazards and opportunities associated with the product, the manager is able to set goals and outline the circle of problems that arise in this case. Tasks should be formulated in the form of goals that the company seeks to achieve during the period of the plan. For example, a manager wants to achieve a 15% market share, 20% profit before sales of income tax, and 25% profit before tax on invested capital. Suppose that the current share of the company is only 10%. Immediately a key problem arises, namely: how can you increase market share? The manager will probably want to consider all the main problems associated with attempts to such an increase.

MARKETING STRATEGY. In this section of the plan, the manager sets forth a broad marketing approach (the so-called game plan) to solving the tasks. We define a marketing strategy as follows:

Marketing strategy - a rational, logical construction, guided by which the organizational unit expects to solve its marketing problems. It includes specific strategies for target markets, marketing mix and the level of marketing costs.

Target Markets. The marketing strategy should accurately name the market segments on which the company will focus its main efforts. These segments differ in terms of preference, response and profitability. The company will act very reasonably, concentrating its efforts and energy on the segments that it can serve best from a competitive point of view. For each of the selected target segments, you need to develop a separate marketing strategy.

Marketing mix. The manager should outline specific strategies for such elements of the marketing mix as new products, local sales organization, advertising, sales promotion, prices and distribution of goods. Each strategy needs to be substantiated in terms of how it takes into account the dangers, opportunities and key issues outlined in the previous sections of the plan.

The level of marketing costs. At the same time, the manager must accurately indicate the size of the marketing budget necessary to implement all of the previously described strategies. The manager knows that a higher budget is likely to provide higher sales, but he needs to develop a budget that provides the highest profitability.

PROGRAM OF ACTION. Marketing strategies need to be turned into concrete action programs that provide answers to the following questions: 1) what will be done? 2) when will this be done? 3) who will do it? 4) how much will it cost? For example, a manager may want to increase sales promotion by making it a key strategy to gain market share. For this, it will be necessary to develop an action plan for sales promotion listing the preferential offers and the terms of their actions, participating in specialized exhibitions, arranging new expositions at points of sale, etc. During the year, as new problems arise and new opportunities appear in the action plans make adjustments.

BUDGETS. The action plan allows the manager to develop an appropriate budget, which, in essence, is a forecast of profit and loss. In the “Receipts” column, a forecast is given regarding the number and average net price of the commodity units to be sold. In the column "Costs" indicates the costs of production, distribution and marketing. Their difference gives the sum of the expected profit. Top management reviews the proposed budget and approves or amends it. Once approved, the budget serves as the basis for the procurement of materials, the development of production schedules, the planning of labor requirements and marketing activities.

CONTROL PROCEDURE. The last section of the plan sets out the procedure for monitoring the progress of all that is planned. Typically, goals and budget allocations are given by month or quarter. This means that top management can evaluate the results achieved within each individual period of time, and identify the production that failed to achieve their targets. The managers of these industries will need to provide explanations and indicate what measures they are going to take to correct the situation.