The Marketing Plan
A marketing plan details actions necessary to achieve one or more specified objectives essential to selling a product or service.
Compare the differences between a marketing, strategic and business plan
- Every marketing plan is written and devised for a specific, well defined target audience, such as employees, stakeholders or collaborators.
- An organization’s marketing planning strategy is derived from, and sometimes drives, the overall business strategy.
- A business plan is broad based and incorporates the functions of various departments within an organization such as IT, finance,operations, human resources and marketing.
- planning: the act of formulating of a course of action, or of drawing up plans
- stakeholders: A person or organization with a legitimate and vested interest in a given situation, action or enterprise such as employees, investors or customers.
- Gatekeepers: Upper management responsible for plan review for rule and regulation compliance.
- strategic planning: A blend of shared vision, accountability, stakeholder involvement, tools, skills, enabled behavior, measures and processes.
A marketing plan is a written document that details actions necessary to achieve one or more specified objectives in order to sell a product or service, a brand, a product line, or a corporation as a whole. Marketing plans can range from one to five years in length.
Marketing Plans, Strategic Planning, and Business Plans
People sometimes confuse marketing plans with strategic planning because the two are so tightly intertwined.
There are instances when an organization’s marketing planning process is derived from its overall business strategy. Thus, when top management is devising the firm’s strategic direction or mission, proposed marketing activities are incorporated into the strategy. At other times, a marketing plan is created that drives the company’s strategic planning.
It is important to realize, though, that strategic planning and a marketing plan are two different things.
Probably the easiest way to remember the difference between strategic planning and a marketing plan is to consider their starting points. Strategic planning defines a company’s strategy or direction, and the decision of how to allocate the resources essential to pursuing the strategy. Note that the strategy has not already been determined.
A marketing plan implements a goal and plan of action that has been identified and put into writing.
What about the marketing and business plans?
A marketing plan can be part of an overall business plan. A business plan is broad based and incorporates the functions of various departments within an organization, including IT, finance, operations, human resources and marketing. Though outlined in a marketing plan, these departments are not the focus and are mentioned only in terms of how they will help achieve stated marketing goals.
What Makes a Marketing Plan Effective
An effective marketing plan conveys a sound business strategy that is aimed at a large and varied audience. The plan must be:
- Clear – stating exactly what is to be done in unambiguous terms.
- Quantified – predicting the outcome of each activity so that it is as quantified as possible and its performance can be monitored.
- Focused – avoiding and realistically controlling the proliferation of activities, beyond the numbers.
- Realistic – offering achievable goals and objectives.
- Agreed – having the consensus and commitment of the people who are tasked with implementation and their agreement that the plan’s goals are achievable. The plan is a working document that guides the marketing campaign for a designated length of time and throughout the entire organization. By questioning and monitoring all the plan’s exceptions, the organization captures valuable information that can be incorporated into future marketing plans.
- Actionable – clearly defined objectives and an outlined course of action.
- Succinct -clearly expresses goals and the plans needed to achieve them, cutting down on information clutter the readers may already face.
The Key is a Good Plan
Many different individuals from different business disciplines contribute to the writing of a marketing plan to insure a consistent style and voice the final version is usually written by only one person. This function can be outsourced or executed by an employee of the business. The team consists of the following:
- A person in charge of the marketing effort – a product manager, brand manager, or a product-line manager.
- Members of the management – from various departments within the organization such as IT, marketing, purchasing, the sales force, or operations.
- “Influencers” – taste makers not employed by the organization, who, through their preferences and recommendations, influence the marketing of products or services.
- Gatekeepers – those who review the plan for compliance to industry rules and regulations such as in-house legal departments, corporate counsels, regulatory or licensing specialists.
- Upper Management – those with the final say who have to sign off on the plan and “green light” its implementation. They must endorse the plan.
The Marketing Plan’s Target Audience
Every marketing plan is written and devised with a specific, well defined target audience in mind. Plans usually target:
- Collaborators (external entities); and
Advantages of a Marketing Plan
The marketing plan creates alignment between the organization’s vision and the stakeholders’ understanding of that vision.
Understand the most important aspects and advantages of a marketing plan
- When it comes to developing a marketing plan, the central objective and advantage is in creating alignment and communicating the organizational vision clearly and consistently.
- This comes with a variety of other advantages, such as accumulating critical market research, identifying key target segments, building the brand, and mitigating risks.
- A marketing plan is generally developed over time, incorporating various departments, research results, and consumer inputs. As a result, it can contribute significantly to the broader strategy of the organization.
- Successfully capturing these advantages requires, clarity, alignment, reliable data, realistic expectations, and focus.
- alignment: The degree to which involved parties (i.e. stakeholders) understand and agree on something.
Marketing plans help organizations identify key objectives, capture opportunities, avoid threats, and leverage core competencies. Marketing plans provide a basis to set tasks and organize work efforts towards the strategies that should have the greatest impact for the organization.
Marketing Plan Advantages
The biggest advantage of a marketing plan is building a bridge between the vision of the organization and the marketing and sales of products and services. At the strategic (upper management) level, organizations have a mission and vision. This mission and vision must translate from the executive team to all internal and external stakeholders. This is called alignment, or having all stakeholders (along with the organization) on the same page. Marketing plans are particularly useful in aligning the vision with the brand, and ensuring that what is communicated to potential customers is accurate and meaningful to the core target market.
Provides Market Data
Marketing plans are largely research based, at least in the earlier stages of development. In order to build a marketing plan that matches the needs of the market, the organization will invest in accumulating research and data on the behaviors, needs, opportunities, and threats of the external market environment. Useful frameworks to look into for this are the PESTEL framework, SWOT analysis, and Porter’s Five Forces. It is also critical to conduct a competitive analysis in order to understand the organization’s position relative to key competitors.
This requires investment in market research. Market research should be both quantitative and qualitative, matching the capabilities of the organization with the opportunities offered in the market. Building a ‘fit’ between the organization and the market requires understanding both through research.
Helps Brand Building
With a strong research-oriented understanding of the market, and alignment across the organization in terms of vision and mission, the organization can now build a brand that represents the vision while addressing core needs in the market. Through associating the organization’s competitive advantages with a given need in the marketplace, the organization can begin building a brand within a target market(s).
In nearly all contexts, planning is a great tool for avoiding risks. The simplest way to avoid making a mistake is considering all potential options, weighing the opportunity costs, and selecting the option with the lowest risk and/or the highest return (the optimal risk/return ratio). Marketing plans enable the research required to consider the risks and returns of various segments, equipping the organization with the knowledge to mitigate risk and capture opportunities.
However, just making a marketing plan won’t necessarily capture the above advantages. In order for the marketing plan to be effective, certain criteria must be met. Marketing plans are professional documents, usually drafted by mid-upper level marketers. Considering the wide variety of considerations, and the significant impact it will have on strategy, constructing a marketing plan carefully is critical to success. Marketers should focus on accomplishing the following five things when building a marketing plan:
- Clarity – It should be simple, straight-forward and clear to everyone. Avoid unnecessary jargon, leave out details that aren’t necessary, and focus entirely on a small number of high impact objectives.
- Data-oriented – Everyone objective and process being suggested should be financially projected and carefully measured. Expected results should be financially-oriented, and everyone should be aware of these financial objectives.
- Focus – A point in everyone direction is the same as no point at all. This is an important issue, as many organizations will eventually make the mistake of running too many directions at once. To avoid this, the marketing plan should be specific on what should be done, and what shouldn’t.
- Realistic – While it may sound obvious, a common mistake in marketing plan development is setting objectives which are out of reach. The logic for this is that it’s always good to have something more to reach for. However, this creates two problems. The first problem is that individuals pursuing these goals will get demotivated, feeling like they are failing. The second problem is that it creates dissonance between the projected results and the real results.
- Alignment – Alignment is more than a boss telling the employees what to do. Alignment requires agreement among all involved parties. All stakeholders should be on the same page, pursuing the same objectives for the same reasons. Management is about creating agreement, not delegating tasks. As a result, the marketing plan should be developed with input from everyone involved.
Marketing Plan Elements
A marketing plan’s elements may vary based on the organization and its industry, but readers still expect to see certain common elements.
Review the elements of a marketing plan and their relationship to the company operations
- The executive summary gives an overview of the key elements of the marketing plan.
- The situation analysis examines all the aspects that may impact sales of a specific company.
- The goals state what the organization plans to achieve through the implementation of the marketing plan.
- Additional elements of a marketing plan include the: marketing strategy, tactical programs, implementation, budget, controls, and exhibits.
- product line: A product line is the marketing strategy of offering several related products for sale as individual units.
A marketing plan’s elements, length, and focus can vary depending on the company, the industry it is in, and whether the plan is written for:
- one offering
- a product line
- a product portfolio.
For example, a technology startup’s marketing plan may not be the same as that of a more established company due to the different environments in which they operate. The technology startup operates in a market that can change at the blink of an eye and its marketing plan may reflect this fact by being less elaborate and more flexible than that of the established company. For example, the startup may not state exactly where it plans to spend its advertising funds. An established consumer goods company, by contrast, may have a media plan for the entire year.
In spite of these differences, there are certain elements that readers expect to find in marketing plans. These elements are the:
- Executive summary
- Situation analysis
- Marketing strategy
- Tactical programs
The Executive Summary gives an overview of the key elements of the marketing plan, with a specific focus on product, pricing, promotion, and placement. It describes the offering the company is making in the marketing plan which also includes people (staff), process (of providing a service ), physical evidence (which makes the service more tangible to potential customers), and philosophy (whereby the product reflects the philosophy of the organization).
Many readers use the executive summary to determine whether the entire plan is worth reading. This is your time to impress. Don’t overlook its importance.
The situation analysis examines all the aspects that may impact sales of a specific company. It looks at both the macro-environmental factors that affect many firms within the environment and the micro-environmental factors that specifically affect the firm.
The purpose of the situation analysis is to indicate the organizational and product position of the company, as well as the overall survival of the business within the environment. Companies must be able to provide a summary of opportunities and problems that may be encountered within the environment to gauge an understanding of their own capabilities within the market.
This element of the marketing plan states what the organization plans to achieve through the implementation of the marketing plan. The goals may be stated in terms of profits or market share, for example.
The goals will flow to the marketing department from upper management.
It’s all good and well to know what needs to be done and the tools you have to accomplish them, but without a strategy explaining how you are going to use these resources to reach your goals, you may find yourself running around in circles and running out of resources before the goals are reached. The strategy that is set forth in the plan must be strong enough to compel investors to put money into the company or project.
The marketing strategy provides the overall picture of how the stated goals are to be met. The tactical program gets down to specifics. It details the day-to-day activities in the major marketing areas that will be performed to fulfill the strategy and achieve the stated goals.
Implementation involves presenting an action plan which lists the specific actions that need to be taken to reach the goal of the marketing plan. It also lists which department or person in the organization is responsible for carrying out the action.
This element of the marketing plan specifies the total resource allocation available for the marketing plan and the potential return on this investment.
How will you know if your plan is a success without some way of measuring its impact? This section of the marketing plan explains how you are going to get that done. Controls also allow you to monitor your activities and make the appropriate adjustments when necessary. The actions of monitoring, evaluating, and measuring all fall under the heading of “controls. ”
Exhibits will appear at the end of your marketing plan and will provide the details that back up what you stated in the main part of your marketing plan.
Purpose of the Marketing Plan
A formal marketing plan provides a clear reference point for activities throughout the planning period.
Identify the purpose and use of creating marketing plans
- Marketing plans are included in business plans, offering data showing investors how the company will grow and what kind return they will get on their investment.
- Marketing plans make the marketing team look at the environment in which they operate.
- Marketing plans can be written to fulfill the requirements of the yearly planning process within the marketing department.
- return on investment: Return on investment (ROI) is one way of considering profits in relation to capital invested.
Failing to plan is planning to fail. — Alan Lakein
You’ve probably heard this expression before, and many successful businessmen will probably tell you the same. Still, what’s the point of creating a formal marketing plan? Exactly what purpose does a marketing plan serve?
In this unit, we are going to answer that question.
Why a Marketing Plan is Essential
A formal marketing plan provides a clear reference point for activities throughout the planning period. However, perhaps the most important benefit of these plans is the planning process itself. This typically offers a unique opportunity, a forum, for information-rich and productively focused discussions between the various managers involved. The plan, together with the associated discussions, then provides an agreed context for their subsequent management activities, even for those not described in the plan itself.
In essence, a marketing plan:
- Makes the marketing team look at their past decisions and understand their results;
- Makes the marketing team look at the environment in which they operate;
- Establishes a future direction that everyone in the organization should both understand and support;
- Helps get funding for future initiatives.
Marketing plans are included in business plans, offering data showing investors how the company will grow and what kind return on investment they will receive.
Thus, marketing plans are written to:
- Fulfill the requirements of the yearly planning process within the marketing department;
- Describe the strategy for a new product or to solve an existing problem;
- Gain funding from outside investors.
Ultimately, marketing plans serve a purpose both inside and outside of the company.