MARKETING PLAN

DR. MEHE Z. RAHMAN(ZBR)

NORTH SOUTH UNIVERSITY

 Developing the marketing plan

Reference
Entrepreneurship: Robert D. Hishrich, Michael
P. Peters and Dean A. Shepherd
Tata McGraw Hill Edicuation Private Limited
PP. 218-248
 Learning objectives

• To understand the relevance of industry and competitive

analysis to the market planning process.
• To describe the role of marketing research in determining
marketing strategy for the marketing plan.
• To illustrate an effective and feasible procedure for the
entrepreneur to follow in engaging in a market research
study.
• To define the steps in preparing the marketing plan.
• To explain the marketing system and its key components.
 Understanding the Marketing Plan

• Marketing plan - A written statement of

marketing objectives, strategies, and activities
to be followed in business plan.
• It is designed to provide answers to three basic
questions:
– Where have we been?
– Where do we want to go (in the short term)?
– How do we get there?
•A Marketing Plan is at the core of directing and
coordinating all marketing efforts within a firm.
•It usually operates at two levels, strategic and tactical:
strategic to identify the overall market play and tactical
to execute on the marketing plan.
•A Marketing Plan does not need to be long or
expensive to put together. If it is carefully researched,
thoughtfully considered, and evaluated, it will help
your firm achieve its goals.
 Characteristics of a Marketing Plan

• A marketing plan should:

– Provide a strategy.
– Be based on facts/assumptions.
– Describe an organization for implementation.
– Provide for short-term and long-term continuity.
– Be simple and short.
– Be flexible.
– Specify criteria for control.
 A Good Marketing Plan
• A good Marketing Plan details what you want to accomplish
and helps you meet your objectives.
• A Marketing Plan should:
– Explain (from an internal perspective) the impact and
results of past marketing decisions.
– Explain the external market in which the business is
competing.
– Set goals and provide direction for future marketing
efforts.
– Set clear, realistic, and measurable targets.
– Include deadlines for meeting those targets.
– Provide a budget for all marketing activities.
– Specify accountability and measures for all activities.
Developing a Marketing Plan 7
 Industry Analysis
• It provides sufficient knowledge of the
environment that can affect marketing strategy
decision making.
• Information can be gathered through secondary
sources and market research.
• The entrepreneur can begin to understand
competitors’ strengths and weaknesses;
provides insight into how to position products
or services.
Industry Analysis (cont.)

• Competitor Analysis
– Document current strategies of primary
competitors.
– Information can be utilized to formulate the market
positioning strategy.
– This analysis provides a solid basis for marketing
decision making.
 Marketing Research for the New Venture

• Step One: Defining the Purpose or Objectives

– Make a list of the information that will be needed to
prepare the marketing plan.
• Step Two: Gathering Data from Secondary
Sources
– Secondary sources can include trade magazines,
newspaper articles, libraries, government agencies,
the Internet, and commercial data.
Marketing Research for the New
Venture (cont.)
• Step Three: Gathering Information from
Primary Sources
– Data collection procedures - Observation,
networking, interviewing, focus groups, and
experimentation.
– Data collection instrument - Questionnaire.
Marketing Research for the New
Venture (cont.)
• Step Four: Analyzing and Interpreting the
Results
– Results can be tabulated by hand or on a computer.
– Evaluated and interpreted should be based on
research objectives.
– Cross-tabulated data can provide more focused
results.
 Outline for a marketing plan
• Situation analysis
• Background of venture
• Strengths and weaknesses of venture
• Market opportunities and threats
Figure 8.1- The Marketing System
 The Marketing Mix
• A combination of product, price, promotion, and
distribution and other marketing activities needed to meet
marketing objectives.
Variable Critical Decisions
Quality of components or materials, style, features, options, brand name,
Product
packaging, sizes, service availability, and warranties.
Quality image, list price, quantity, discounts, allowances for quick
Price
payment, credit terms, and payment period.
Use of wholesalers and/or retailers, type of wholesalers or retailers, how
Channels of
many, length of channel, geographic coverage, inventory, and
distribution
transportation.
Media alternatives, message, media budget, role of personal selling, sales
Promotion promotion (displays, coupons, etc.), and media interest in publicity.
 Steps in Preparing the Marketing Plan

• Defining the Business Situation

– Situation analysis - Describes past and present
business achievements of new venture.
– In case of a new venture, information should relate to
how and why the product or service was developed.
– After a new venture has started up information
should relate to:
• Present market conditions.
• Performance of the company’s goods and services.
• Future opportunities or prospects.
Steps in Preparing the Marketing
Plan (cont.)
• Defining the Target Market/ Opportunities and
Threats
– The target market is specific group of potential
customers toward which the venture aims its
marketing plan.
– Market segmentation - Dividing a market into
definable and measurable groups for purposes of
targeting marketing strategy.
Steps in Preparing the Marketing
Plan (cont.)
– Process of segmenting and targeting customers
• Decide on general market or industry to pursue.
• Divide market into smaller groups based on:
– Characteristics of the customer – Geographic, demographic, and
psychographic.
– Buying situation – Desired benefits, usage, buying conditions,
and awareness of buying intention.
• Select segment or segments to target.
• Develop a marketing plan integrating product, price,
distribution, and promotion.
– Consider the strengths and weaknesses in the target
market.
Steps in Preparing the Marketing
Plan (cont.)
• Establishing Goals and Objectives
– These are statements of level of performance desired
by new venture.
– Realistic and specific marketing goals and objectives
respond to the question: “Where do we want to go?”.
– Not all goals are quantifiable.
– Limit the number of goals or objectives to between
six and eight.
– Goals should represent key areas to ensure marketing
success.
Steps in Preparing the Marketing
Plan (cont.)
• Defining Marketing Strategy and Action Programs
– Product or service
• May consider more than the physical characteristics.
• Involves packaging, brand name, price, warranty, image,
service, delivery time, features, style, and even the Web site.
– Pricing
• Costs - Material costs, labor costs, cost of goods from
suppliers, labor and overhead expenses, etc.
• Margins or markups - Expected to cover overhead costs and
some profit.
• Competition.
Steps in Preparing the Marketing
Plan (cont.)
– Distribution
• Provides utility to the consumer.
• Must also be consistent with other marketing mix
variables.
– Promotion
• To inform potential consumers about the product’s
availability or to educate the consumer.
• Methods include print, radio, or television advertising,
Internet, direct mail, trade magazines, or newspapers.
• The entrepreneur should considering both costs and
effectiveness of the medium in meeting the market
objectives.
Table 8.8 - Major Considerations in Channel
Selection
Steps in Preparing the Marketing
Plan (cont.)
• Marketing Strategy: Consumer versus Business-
to-Business Markets
– Business-to-business markets involves selling of
products or services to another business.
• Usually aims at selling a large volume in one transaction.
• Involves a more direct channel of distribution.
• Use trade magazine advertising, direct sales, and trade
shows.
– Consumer markets involve sales to households for
personal consumption.
Steps in Preparing the Marketing
Plan (cont.)
• Budgeting and Implementation
– Budgeting
• Costs should be reasonably clear.
• Assumptions, if necessary, should be clearly stated.
• Useful in preparing the financial plan.
– Implementation
• The plan is meant to be a commitment by the
entrepreneur to a specific strategy.
• Entrepreneur should ensure coordination and
implementation of the plan.
Steps in Preparing the Marketing
Plan (cont.)
• Monitoring the Progress of Marketing Actions
– Involves tracking results of the marketing effort.
– Entrepreneur should prepare for contingencies.
– Minor adjustments in the plan are normal;
significant changes indicate a poorly prepared plan.
– Weaknesses in market planning may be due to:
• Poor analysis of the market and competitive strategy.
• Unrealistic goals and objectives.
• Poor implementation of the outlined plan actions.
• Unforeseen hazards like weather or war.
 The 10 Elements of a Good
Marketing Plan
A good Marketing Plan includes these 10 elements:
1. Describe Business
2. Conduct a Situation Analysis
3. Define Customer
4. Strategize Market Entry
5. Forecast Sales or Demand Measurement
6. Define Marketing Budget
7. Integrate Marketing Communication
8. Identify Sales Channels
9. Track Marketing Activities
10. Evaluate Progress
Developing a Marketing Plan 26
 1. Describe Business
• Small business owners often describe themselves by their
product or services; however, business must be viewed as a
customer-satisfying process, not goods-producing.
• Describe business in detail and clearly identify goals and
objectives.
• Answer the following questions:
– What is your product or service?
– How will your product benefit the customer?
– What is different about the product your business is
offering?
– Is it a new business, a takeover, or an expansion?
– Why will your business be profitable?
– What are the growth opportunities?
– What is your geographic marketing area?

Developing a Marketing Plan 27

 2. Conduct a Situation
Analysis
 A situation analysis details the context for your
marketing efforts by considering internal and Strengths Weaknesses
external factors that could influence your
marketing strategy.
 This section of the plan could include a SWOT
analysis to summarize your Strengths, Opportunities Threats
Weaknesses, Opportunities and Threats.
– Strengths: assets or a resources that can be used to improve your business’
competitive position.
– Weaknesses: resources or capabilities that may cause your business to have a
less competitive position.
– Opportunities: situations or conditions arising from a business’ strengths, or
set of positive externalities.
– Threats: problems that focus on your weaknesses and which can create a
potentially negative situation.
Developing a Marketing Plan 28
 3. Define Customers
Defining your market does not need to be a difficult process. You do not need a
huge market base, but you need to be realistic and your market needs to be
well-defined.
– Who are your competitors, and who do they target?
– Who is your perfect customer and client base?
– What is your current customer base (in terms of age, sex, income, and
geographic location)?
– What habits do your customers and potential customers share? Where do they
shop, what do they read, watch, listen to?
– What prospective customers are you currently not reaching? How can you reach
them?
– What qualities do your customers value most about your product or service? Do
they value selection, convenience, service, reliability, availability, or affordability?
– What qualities about your product or service do you need to improve? How can
they be adjusted to serve your customers better?

Developing a Marketing Plan 29

 4. Strategize Market Entry
Once you have identified what is unique about your business
and who your target buyers are, focus on your competition:
– Identify your direct competitors and learn what they
do.
– Sharpen your decisions about the best business
category and market segment in which to compete.

Developing a Marketing Plan 30

 5. Forecast Sales or Demand
Measurement
• Sales forecasting provides the basis for comparison over a
period of time.
• Market demand is the total volume that could be bought by a
defined customer group in, a defined geographical area, in a
defined time period, and under a defined marketing program.
• You should:
– Correctly identify and estimate current demand by
considering total market potential, market share, and
expected sales.
– Estimate future demand by considering past sales
patterns, consumer trends, and overall market projections.

Developing a Marketing Plan 31

 6. Define Marketing Budget
• Marketing budgets, especially in small and mid-sized
businesses, are often arbitrarily set as either x% of planned
revenue or y% over the prior year's marketing budget.
• Use targeted budgeting to more intelligently set your budget
based on company objectives.

Developing a Marketing Plan 32

 6. Define Marketing Budget
Answer the following questions:
– What previous marketing methods have been most effective?
– What are your costs compared to sales?
– What is your cost per customer?
– What marketing methods will you use to attract new customers?
– What percentage of profits can you allocate to your marketing
campaign?
– What marketing tools (i.e. - newspapers, magazines, Internet, direct
mail, telemarketing, event sponsorships) can you implement within
your budget?
– What methods are you using to test your marketing ideas?
– What methods are you using to measure results of your marketing
campaign?

Developing a Marketing Plan 33

 7. Integrate Marketing
Communication
• Integrate marketing communication to A COLLABORATIVE
consolidate marketing tools, approaches, and APPROACH
resources within a company to maximize impact
and gain edge over the competition.
• Build on a "Marketing Mix“ and include the
following:
– 4P’s: Product, Price, Promotion, and Place
– Marketing & Advertising
• Internet
• Events
• Direct
• Database
– Public Relations

Developing a Marketing Plan 34

 8. Identify Sales Channels
• Part of the challenge of marketing is figuring out which distribution method
to use for your business.
• Include all relevant distribution channels:
– Retail: Stores selling to final consumer buyers (one store, or a chain of stores).
– Wholesale: An intermediary distribution channel that usually sells to retail stores.
– Direct mail: Generally catalog merchants that sell directly to consumers.
– Telemarketing: Merchants selling directly to consumer buyers at retail via
phones.
– Cyber-Marketing: Merchants selling directly to consumer buyers at retail prices,
or business-to-business products and services at wholesale prices via computer
networks.
– Sales force: Salaried employees of a company or independent commissioned
representatives who usually sell products for more than one company.

Developing a Marketing Plan 35

 9. Track Marketing Activities
• Tracking helps monitor the effectiveness of each marketing activity and is
especially helpful with your overall program evaluation.
• Include procedures for tracking each type of marketing activity you are using.
• Some examples are:
– Display advertising: With traditional consumer publications, tracking can be done
through the use of different phone numbers, special offers (specific to that
advertisement or publication), or reference to a specific department.
– Internet marketing: Usually, this is easily tracked by monitoring web traffic.
– Trade shows: A trade show’s effectiveness can be tracked by collecting the right
information at the show and following up on it.
– Database: Before your Marketing Plan is kicked off, make sure you have the
database structure in place to record this information.
• The tabulated results and customer information is very valuable information.

Developing a Marketing Plan 36

 10. Evaluate Progress
• Identify how you will measure your success and in what ways
your objectives have been met. Then, use these metrics to
determine the success of your marketing efforts.
• Answer the following questions:
– Did we reach our goals?
– Was the marketing campaign successful?
– Were we able to determine Return on Investment (ROI)?
– Did our efforts result in conversion? In other words, were
we able to convert an inquirer to a visitor, a visitor to a
customer?
– Can we utilize our database to survey, capture additional
information, or establish a more comprehensive customer
relationship program?

Developing a Marketing Plan 37

 Key Takeaways from This Module

• Every business has marketing challenges and opportunities.

• A Marketing Plan:
– Allows you to analyze your current situation, describe your
business, and define your customer base.
– Helps you to strategize your market entry, identify your
sales channels, and integrate your marketing
communications for maximum efficiency.
– Gives you a means of evaluating your progress.

Developing a Marketing Plan 38