There are other reasons to prepare a strategic marketing plan all organisations have a mix of different types of market, which will have a lack of differentiation in products and services, in their different ways most organisations have a mix of products and services that could be classified in a strategic matrix, all organisations have some disaster products, some ‘lowest cost’ product and some ‘niche’ products and some ‘outstanding success’ products. A strategic plan covers a period beyond the next fiscal year. Usually this is between three and five years. The purpose of the marketing plan is to show at least three years in advance what the designed mix is of high or low turnover. A tactical plan covers in quite a lot of detail, which are the actions to be taken, by whom during a short term planning period, this usually for one year or less.
According to McDonald few practising marketers understand the real significance of a strategic marketing plan opposed to a tactical or operational marketing plan. Most managers prefer to sell products they find easiest to sell to those customers who offer the least line of resistance. By developing short term, tactical marketing plans first and then extrapolating them, they merely succeed in extrapolating their own shortcomings.
Strategic marketing plan emphasis on scanning the external environment and it involves all levels of management in the process. As a strategic plan covers a period between three and five years and only when this has been developed and agreed should the one year operational marketing plan be developed.
The first stage on the marketing planning process will be to set up a Mission Statement, or a purpose statement. This is the most difficult aspect of the marketing planning for managers, as it is largely philosophical and qualitative in nature. Many organisations find their different departments and sometimes even different groups in the same department going in different directions because the organisation has not defined the boundaries of the business and the way it wishes to do business. For example one group of directors felt the company should be emphasising technology, while another group felt technology was less important then marketing. With such confusion at the top of the company it is not hard to imagine the chaos further down.
The following should appear in a Mission Statement, role or contribution, business definition which defines the business in terms of the benefits being provided. Also distinctive competences, these are essential skills and capabilities whatever success has been achieved to date and also indication of the future, stating what the firm will do, what the firm might do, and also what the firm will never do.
Step two of the marketing plan would be setting the corporate objectives. Corporate planning usually involves applying business planning to several different units of the business aggregates. However there are five steps in the corporate planning process, the starting point is a statement of corporate financial objectives for the long range planning period for the company, which is usually expressed in the terms of turnover, profit before tax and return on investments. The next step of the corporate objective will be the management audit. This is basically outlining if the area of marketing will be able to reach its targets. The third step would be setting objective and strategies. The fourth steps include producing detailed plans for one year, containing the responsibilities, timing and costs of carrying out the first years objectives and just broad plans for the following year, but these plans can be incorporated in the corporate plan.
One of the main purpose of a corporate plan is to provide a long term vision of what the company is striving to become. The benefits of a corporate plan containing such information will provide a long term stability for a company than plans based on a more intuitive process and containing forecasts which tend to be a little more than extrapolations of previous trends.
The third step of the marketing planning process would be the Marketing Audit. Auditing is mainly based on the financial side of a business and is conducted to a defined set of accounting standards, which are very well documented, easily understood and which therefore lend themselves readily to the auditing process.
Audit is the means by which companies can understand how it relates to the environment in which it operates, it allows a company to assess its own strengths and weaknesses as when they relate to external opportunities and threats. It is a way of helping management to select a position in that environment based on known factors. An audit is a systematic, critical and unbiased review and appraisal of the environment and of the company’s operations.
Therefore a marketing audit is vital because if things start to go wrong in an organisation such as decline in sales, falling margins, loosing market shares, an audit can measure up problems. An audit can be structured in two ways, which can be externally and internally. External audit is concerned with the uncontrollable variables. External audit examines information on the general economy and growth of the company. The internal audits purpose is to assess the organisations resources as they relate to the competitor resources. There are many kinds of audit in marketing planning like management audit, which is a wide area of an internal audit. Which assess it against external audit, the best way of carrying out this audit is conducting out a separate audit of each major management function.
The PEST step is often used as a planning term for the external audit. The letters stand for political, economical, sociological and technological, however other theorist might encounter it elsewhere from time to time. A market audit should be the company’s last resource to define a company’s problem, or to be looked at by an independent body from time to time to ensure the company is on the right lines. Audits are usually carried out by line managers of their own area of responsibility.
However it is essential to concentrate on analysis that determine which trends and developments will actually effect the company. One useful way of doing this is to form a number of strengths, weaknesses, opportunities and threats. This type of analysis is usually known as the SWOT analysis. A SWOT analysis is a summary under the headings internal strengths and weaknesses as they relate to external opportunities and threats. SWOT analysis contains just a few paragraphs of commentary focusing on the key factors only. They high light internal differential strengths and weaknesses, competitors and key external opportunities and threats. They should also be interesting to read and give great emphasis on creative analysis. Carrying out audits in a regular and in a thorough structured manner will go a long way towards giving a company a knowledge of business, trends in the market and where value is added by competitors, as the basis of setting objectives and strengths.
Referring to the preparation of the marketing plan the fifth step would be assumptions. Assumptions need to be made first before the planning process can proceed. Examples of assumptions might be ‘price competitions will force prise levels down by 10 per cent across the board or a new product field introduced by major competitors before the end of second quarter. Therefore assumptions should be few in numbers. The next step of the marketing planning is the objectives and strategies. These are the key steps in the whole process. An objective is what you want to achieve and a strategy is how you plan to achieve those objectives. There are objectives and strategies in all levels of marketing, for example there can be advertising objectives and pricing objectives.
However it is important to remember that in marketing objectives is that they are about products and markets only. Marketing objectives are more about existing and new products in the existing markets and new products and existing products in a new market. Marketing strategies are concerned with the four P’s. Which are product, place, price and promotion. Product will classify in the area of design, branding, positioning and packaging etc.
Price would be the product groups in the marketing segments. Place would concern policies for customer service levels and promotion will fall into the category of advertising and public relations etc. At this stage of the marketing plan it is essential to estimate the expected results and identify alternative plans and mixes, this would be the seventh stage in the marketing plan. For instance to test out the objectives and strategies, in the terms of market share, sales, costs and profit.
In a strategic marketing plan, those kinds of strategies would normally be costed out, this would then become the ninth step on the strategic marketing plan and become the budget. There would be a detailed marketing budget for the first and also over the period of three years. By budgeting the plan would become much more realistic and become more related to what the company would like to achieve. It is a challenge for manager and directors to design a system of budgeting. The most easiest way to design a system would be starting from zero base, as then a hierarchy of objectives is built up so that every item of budgeting expenditure can be related directly, back to initial corporate financial objectives.
The plan determines where the company is now, where it wants to go and how to get there. It therefore should be the back drop against which all organisational decisions are made, as business becomes increasingly complex and competition increases, that is the reason being for why a marketing plan is vital.
However many companies appear to be bad at determining strategies for matching what the firm is good at with properly researched market-centred opportunities. Most companies plan, using a combination of forecasting and budgeting systems. These tend to project current business into the future, which can work if the future is going to be the same as the present or the past. As a result of using such systems problems can occur. For instance lost opportunities for profit, over pricing products as confusion might occur, and like loss of control over business also unrealistic objectives. Introducing a marketing planning will not necessary mean that it will become successful, as many other factors can occur. For example companies who are in high growth markets often don’t plan, they are just dragged along by momentum. Also if the company’s culture and management style are not supportive of marketing planning, then no improvements will occur. And also if the business is highly competitive, no improvements will be seen, however the company might fare much worse without a marketing plan.
Common implementation problems of a marketing planning could be lack of a plan for planning, weak support from management, lack of resources, lack of information and also it could occur due to too much detail and being too far ahead. In today’s increasingly competitive markets, there is a growing realization that success in the future will only come from meticulous planning and market preparation.
Therefore having a marketing plan is useful as it is better to weigh up the costs of planning against the costs of not planning.
