The area of marketing planning involves forging a plan for a firm’s marketing activities. A marketing plan can also pertain to a specific product, as well as to an organisation’s overall marketing strategy. Generally speaking, an organisation’s marketing planning process is derived from its overall business strategy. Thus, when top management are devising the firm’s strategic direction or mission, the intended marketing activities are incorporated into this plan. Within the overall strategic marketing plan, the marketing planning process contains the following stages:
- Mission statement
- Corporate objectives – These are the broad-based objectives resulting from the firm’s mission statement.
- Marketing audit – a marketing audit is an audit of all marketing processes within a firm. It’s purpose is to highlight which areas require improvement, and which ones require modification, prior to the establishment of the marketing plan.
- SWOT analysis
- Assumptions arising from the marketing audit and SWOT analysis
- Marketing objectives derived from the assumptions
- An estimation of the expected results of the objectives
- Identification of alternative plans or mixes
- Budgeting for the marketing plan
- A first-year implementation program
There are several levels of marketing objectives within an organization. As stated previously, the senior management of a firm would formulate a general business strategy for a firm. However, this general business strategy would be interpreted and implemented in different contexts throughout the firm.
- Corporate
- Corporate marketing objectives are typically broad-based in nature, and pertain to the general vision of the firm in the short, medium or long-term. As an example, if one pictures a group of companies (or a conglomerate), top management may state that sales for the group should increase by 25% over a ten year period.
- Strategic business unit
- An SBU is an autonomous entity within a firm, which produces a unique product/service. It could be a single product, a product line, or a subsidiary of a larger group of companies. The SBU would embrace the corporate strategy, and attune it to its own particular industry. For instance, an SBU may partake in the sports goods industry. It thus would ascertain how it would attain additional sales of sports goods, in order to satisfy the overall business strategy.
- Functional
- The functional level relates to departments within the SBUs, such as marketing, finance, HR, production, etc. The functional level would adopt the SBU’s strategy and determine how to accomplish the SBU’s own objectives in its market. To use the example of the sports goods industry again, the marketing department would draw up marketing plans, strategies and communications to help the SBU achieve its marketing aims.
[edit] New Product Development (NPD)
NPD relates to, as the label denotes, the development of a new to market product. The stages of the process are so:
- Idea Generation
- Idea Screening
- Concept Development
- Business Analysis
- Market Testing
- Commercialisation
Given the resources placed in the development of a product, a firm must gauge the economic viability of a good, coupled with the viability of the notion of the good, prior to releasing it onto the market.new
[edit] Product Life Cycle
The Product Life Cycle[17] or PLC is a tool used by marketing managers to gauge the progress of a product, especially relating to sales or revenue accrued over time. The PLC is based on a few key assumptions, including that a given product would possess an introduction, growth, maturity and decline stage. Furthermore it is assumed that no product lasts perpetually on the market. Last but not least a firm must employ differing strategies, according to where a product is on the PLC.
- Introduction
- In this stage, a product is launched onto the market. To stimulate growth of sales/revenue, use of advertising may be high, in order to heighten awareness of the product in question.
- Growth
- The product’s sales/revenue is increasing, which may stimulate more marketing communications to sustain sales. More entrants enter into the market, to reap the apparent high profits that the industry is producing.
- Maturity
- A product’s sales start to level off, and an increasing number of entrants to a market produce price falls for the product. Firms may utilise sales promotions to raise sales.
- Decline
- Demand for a good begins to taper off, and the firm may opt to discontinue manufacture of the product. This is so, if revenue for the product comes from efficiency savings in production, over actual sales of a good/service. However, if a product services a niche market, or is complementary to another product, it may continue manufacture of the product, despite a low level of sales/revenue being accrued.
[edit] Marketing strategy
The field of marketing strategy encompasses the strategy involved in the management of a given product.
A given firm may hold numerous products in the marketplace, spanning numerous and sometimes wholly unrelated industries. Accordingly, a plan is required in order to manage effectively such products. Such decisions consist of the following decisions:
- Should we (,i.e. the firm) enter a market/industry?
- Should we increase funding for our product(s)?
- Should we maintain funding for our product(s)?
- Should we divest or cease production of our product(s)?
Evidently, a company needs to weigh up and ascertain how to utilise effectively its finite resources. As an example, a start-up car manufacturing firm would face little success, should it attempt to rival immediately Toyota, Ford, Nissan or any other large global car maker. Moreover, a product may be reaching the end of its life-cycle. Thus, the issue of divest, or a ceasing of production may be made. With regard to the aforesaid questions, each scenario requires a unique marketing strategy to be employed. Below are listed some prominent marketing strategy models, which seek to propose means to answer the preceding questions.
[edit] Ansoff Matrix
The Ansoff Matrix was devised by Igor Ansoff, a Russian-born American pioneer of strategic planning[18].
Ansoff proposed his Matrix, as a means of identifying how a firm should market its product in differing scenarios. The labels are listed below:
- X-axis
- Existing markets
- Existing products
- Y-axis
- New markets
- New products
Four quadrants can then be determined, which are:
- Market penetration
- Diversification
- Market development
- Product Development
Each aforesaid category provides a unique marketing scenario, in which Ansoff denoted a given strategy.
