The Strategic Marketing Planning Process
A marketing plan is a map that guides an organization from Point A (its current state) to Point B (its desired state). That guidance comes from the marketing planning process, which answers four questions: (Click each section below to expand it.)
1. Where are you now? (the situation analysis)
To chart the best course of action, a marketer must know from where it is that he/she will begin the journey. Marketing planning begins with a detailed analysis of the marketing environment. This assessment of an organization’s current state, called a situation analysis, answers the question, "Where are we now?"
Steps in Analysis:
1. Summarize the internal marketing environment—that is, your organization’s
- philosophies that might influence its choice of marketing strategies
- recent and current performance
- products and services
- available resources
2. Describe features of the external marketing environment that might affect the success of your organization. That is, describe important issues relating to:
- current customers
- distributors and suppliers
- the economic climate
- the regulatory climate
- the political climate, and any other external factor that might impact the success of your organization
- environmental issues or considerations
3. Summarize key marketplace trends that might affect your organization’s success in the marketplace.
4. Forecast market demand under normal conditions (i.e., assuming no major changes in the marketing environment or marketing strategies). Also forecast market demand given expected changes in the marketing environment or marketing strategies.
5. Based on your analysis of the marketing environment, describe characteristics of your organization that may help or hinder its ability to compete successfully in the marketplace. Your organization’s strengths suggest strategy implications. Its weaknesses suggest where your organization must make investments.
6. Based on the analysis of the marketing environment, describe the major opportunities and threats facing your organization—that is, things outside of the organization’s direct control that may affect its success in the marketplace. An opportunity is a market that is growing, profitable, or vulnerable. The best opportunities are those that match the strengths of the organization, giving the enterprise a competitive advantage.
2. Where do you want to be? (Your marketing goals and objectives)
The situation analysis should have revealed to you some of the strengths and weaknesses of your business and the opportunities and threats facing you in the marketplace. With that insight about your organization and its market environment, you are now ready to set goals and objectives for the coming year.
A marketing goal is your organization’s aim, its desired destination. It is the answer to the question, "Where do we want to be?" Your goal may be to increase revenue or profits. It may be to capture a larger share of the market. Or, something else.
Marketing objectives are the specific, measurable results that must occur if the goal is to be met. Marketing objectives are designed to correct a weakness, minimize a threat, take advantage of a strength, or exploit an opportunity in the market. Examples of objectives include changes in revenue, profit, growth, market share, or market penetration. Your objectives might be to affect levels of consumer awareness, knowledge, or inquires.
3. What is the best route to get there? (Your strategies)
Now you must transform everything you have learned about your organization, consumers, competitors, and the macro environment into strategies that will help you achieve your goal. Marketing strategies explain how the plan’s objectives will be met. They describe the best route that your organization can take to get from Point A (your current state) to Point B (your desired state).§ For any marketing plan, strategy development follows a step-by-step process. The four steps include:
- Target Market. Because markets are large and varied, and competition is keen, no organization can serve all customers equally well. The optimal strategy in a competitive market is to concentrate on particular types of customers—market segments—that (1) you have an edge in serving and (2) present an attractive opportunity for your organization
- Marketing Expenditure Level. Marketing strategy also calls for deciding how much your organization must invest if it is to meet its goals. Most established businesses spend 15-25 percent of gross sales on marketing. For start-ups, the marketing expenditure level in the short term will likely exceed expected sales revenue. A good rule of thumb is that expenditures during introduction should be twice the rate currently spent by competitors who have shares equal to the organization’s objective.
- Brand Positioning, By Market. The next step is to decide on a position for the product—that is the positive idea that you want strongly associated with your name. "Your In Good Hands" (Allstate). "Das Auto" (Volkswagen). "More Savings, More Doing" (Home Depot), "The Ultimate Driving Machine" (BMW). The most effective positions have three traits. First, they are very simple—one to seven words. Second, they convey that your offering provides a highly desired consumer benefit. Third, they convey how your offering is different from those of competitors.
- Marketing Mix, By Market. A marketing mix is the blend of "tools" that your organization will use to achieve its objectives with a particular target market. The tools, popularly known as "The Four Ps," include product, price, place (distribution), and promotion. The tools of the marketing mix are interdependent and must be balanced. For example, your price depends on your product, and affects the promotional options available to you. The elements of your marketing mix must be integrated so that they work with, not against, one another.
Your marketing mix includes:
- Product Strategy. How can you change the tangible and intangible features of your product in a way that will enhance your competitive advantage in the marketplace? Will you change the number or variety of your products? What product improvements will you make to provide more benefits to consumers? If you have more than one target market, develop product strategies for each.
- Price Strategy. What are your pricing objectives (e.g., maximizing profits, maximizing revenue, or capturing market share)? What price range will support your sales and profit objectives? What price range will support your product, distribution and promotional strategies? If you have more than one target market, do they require different price strategies?
- Distribution Strategy. How will you deliver programs and services to customers in the coming year (i.e., directly, through intermediaries, or both)? What is your rationale for that decision? If you have more than one target audience you may need more than one distribution strategy.
- Promotional Strategy. What are your promotional objectives? Given what you know about your organization and the nature of the market, how will you formulate your promotional mix so that it is cost-effective? What are your objectives and strategies for publicity, sales promotions, personal selling, and advertising? What is your reasoning for each of your promotional strategies?
4. What do you need for the trip? (Your tactics)
Tactics describe in detail the specific activities and expenditures that must occur if the organization is to reach its marketing objectives. Tactics represent the "who, what, when, and how much of the marketing plan." They are tasks that are assigned to specific individuals, with specific due dates. A tactical (or action) plan is your "to do list" for the trip you will take from Point A (your current state) to Point B (your desired state).
Your action plan can be summarized on a computer spreadsheet as an annual calendar. The spreadsheet columns list the weeks or months of the year, and the rows list the tasks, responsibilities and due dates. A spread sheet format provides a way to visualize the scope of work and to easily adjust plans as new problems or opportunities arise during the year.
To find out more about our products and services, click here or call us today at (651) 315-7588.