business / marketing minor marketing fundamentals m21439 session 2: marketing planning &...

Business / Marketing Minor

Marketing FundamentalsM21439

Session 2:

Marketing Planning & Auditing

Key Concepts

• Definition of marketing planning

• Contents of a marketing plan

• Definition of a marketing audit

• Dimensions of a marketing audit

Definition of a Marketing Planning

“Marketing planning can be defined as the

planned application of marketing resources to

achieve marketing objectives.”

McDonald,M. (1999)

Strategic Marketing Plan

A strategic marketing plan is a plan which

covers a period beyond the next fiscal year.

Usually this is for between three and five

years.

Source: McDonald,M.(1999) Marketing Plans 4th ed, UK:Butterworth Heinemann, p.31

Tactical Marketing Plan

A tactical marketing plan covers in quite a lot

of detail the actions to be taken, by whom,

during a short term planning period.

This is usually for one year or less.

Question:

Do all organisations formally plan their marketing activities?

If not, why not?

Start of Marketing Planning

Marketing planning should start with an

analysis of the potential market.

Porter’s Five Forces (1985) model provides a

useful tool for analysing the overall

attractiveness of the market.

Source: Doyle,P.(2002) Marketing Management and Strategy 3rd ed, Harlow:Prentice Hall, p.404

Porter (1985) Five Competitive Forces That Determine Industry Profitability Model

POTENTIALENTRANTS

BUYERS

SUBSTITUTES

SUPPLIERS

INDUSTRY COMPETITORS

Threat of new entrants

Bargaining power of buyers

ThreatOf substituteProducts orservices

Bargaining power of suppliers

Rivalry among existing firms

Source: Porter, M.E. (1985) Competitive Advantage: Sustaining and Creating Superior Performance New York:Free Press p.5

Evolution of Strategy & Management SystemsCharacteristics Financial

PlanningLong Range Planning

Strategic Planning Strategic Market Management

Management Focus

Budgets and control

Anticipate market growth

Respond to environmental changes

Capitalise on strategic windows

Assumptions Long-run stability

Past trends to continue

New trends and discontinues are predictable

Many changes will be sudden and unpredictable

Objective Meet the budget

Predict the future Think strategically Create opportunities through change

Planning Process

Annual 5 years, annual revisions

Annual revisions Real time

When Popular Until late 1950s

1960s 1970s After 1980s

Source: Doyle,P.(2002) Marketing Management and Strategy 3rd ed, Harlow:Prentice Hall, p.97

Question:

Why do you think organisations have changed their strategy &

management systems?

Do you know of any organisational examples?

Factors Influencing Company Marketing Strategy

Targetcustomers

Place Product

Promotion Price

Marketing planning system

Marketing organisation andimplementation

Mar

ketin

g co

ntro

l sys

tem

Marketing information system

Competitors Publics

Marketing intermediaries

Suppliers

Political/LegalEnvironment

Demographic / Economic Environment

Technological /PhysicalEnvironment

Social / Cultural Environment

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.88.

The marketing planning cycle

Source: Dibb,S, Simkin, Pride, Ferrell (2001) Marketing: Concepts & Strategies 4th ed, USA:Houghton Mifflin

Contents of a Marketing Plan1. Executive Summary &

Table of ContentsPresents a brief overview of the proposed plan.

2. Current Marketing Situation

Presents relevant background data on sales, costs, profits, the market, competitors, distribution and the macroenvironment.

3. Opportunity & Issue Analysis

Identifies the main opportunities/threats, strengths/weaknesses and issues facing the product line.

4. Objectives Defines the plan’s financial and marketing goals in terms of sales volume, market share and profit.

5. Marketing Strategy Presents the broad marketing approach that will be used to achieve the plan’s objectives.

6. Action Programs Presents the special marketing programs designed to achieve the business objectives.

7. Projected Profit-&-Loss Statement

Forecasts the plan’s expected financial outcomes.

8. Controls Indicates how the plan will be monitored.

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.89.

The Marketing Plan

1. Management or Executive Summary

2. Marketing Objectives

3. Product/Market Background

4. Marketing Analysis

5. Marketing Strategies

6. Statement of Expected Sales Forecasts

& Results

Source: Dibb,S, Simkin, Pride, Ferrell (2001) Marketing: Concepts & Strategies 4th ed, USA:Houghton Mifflin,p.696

The Marketing Plan – cont.

7. Marketing Programmes for

Implementation

8. Control & Evaluation: Monitoring of

Performance

9. Financial Implications/Required Budget

10. Operational Considerations

11. Appendices

Source: Dibb,S, Simkin, Pride, Ferrell (2001) Marketing: Concepts & Strategies 4th ed, USA:Houghton Mifflin, p.696

Question:

How long should it take to devise a marketing plan?

… is there a right answer?

Marketing Audit

“A marketing audit is a comprehensive,

systematic, independent and periodic

examination of a company’s – or business

unit’s – marketing environment, objectives,

strategies and activities with a view to

determining problem areas and opportunities

and recommending a plan of action to

improve the company’s marketing

performance.”

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.708.

Marketing Audit

The broadest control advice of the marketing plan is

the marketing audit – a thorough, systematic, periodic

evaluation of the goals, strategies, structure and

performance of the marketing organisation.

Source: Lamb,C.W.,Hair.J.F. & McDaniel,C.(2003) Marketing 7th ed, Canada:Thomson South Western, p.44

Question:

How does a marketing plan differ from a marketing audit – do you

need both?

Dimensions of a Marketing AuditPART 1 - Marketing Environment Forces

- Task Environment

PART 2 - Marketing Strategy Audit

PART 3 - Marketing Organisation Audit

PART 4 - Marketing Systems Audit

PART 5 - Marketing Productivity Audit

PART 6 - Marketing Function Audit

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, pp.710-712

Part 1: Marketing Environment Forces

a. Economic

b. Technological

c. Political/Legal/Regulatory

d. Societal/Green

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, p.710

Part 1: Task Environment

a. Markets

b. Customers

c. Competitors

d. Distribution & Dealers

e. Suppliers

f. Facilitators & Marketing Organisations

g. Publics

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, p.710

Part 2: Marketing Strategy Audit

a. Business Mission

b. Marketing Objectives & Goals

c. Strategy

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, p.711

Part 3: Marketing Organisation Audit

a. Formal Structure

b. Functional Efficiency

c. Interface Efficiency

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, p.711

Part 4: Marketing Systems Audit

a. Marketing Information System

b. Marketing Planning System

c. Marketing Control System

d. New Product Development System

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, p.711

Part 5: Marketing Productivity Audit

a. Profitability Analysis

b. Cost Effective Analysis

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, p.712

Part 6: Marketing Function Audit

a. Products and Services

b. Price

c. Distribution

d. Promotional Mix

e. Salesforce

Source: Dibb.S, Simkin.L, Pride.W.M. & Ferrel.O.C. (2001) Marketing: Concepts and Strategies 4th European ed, USA:Houghton Mifflin, p.712

Marketing Audit – Four Characteristics

1. Comprehensive

2. Systematic

3. Independent

4. Periodic

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.708.

Marketing Audit - Comprehensive

Covers all of the major marketing activities of a

business – not just a few trouble spots.

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.708.

Marketing Audit - Systematic

Orderly examination of the macro & micro

environments, mkting objectives & strategies,

mkting systems and specific activities.

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.708.

Marketing Audit - Independent

Can be conducted in six ways:

1. Self-audit

2. Audit from across

3. Audit from above

4. Company auditing office

5. Company task force

6. Outsider

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.708.

Marketing Audit - Periodic

Typically only initiated after sales have turned

down but can prevent companies from being

thrown into crisis.

Companies should conduct a marketing audit

periodically.

Source: Kotler,P.(2000) Marketing Management Millennium edition, USA:Prentice Hall International, p.709.

Question:

One of assessments asks you to undertake a marketing audit – how

will you go about it?

What organisational information can you access?