What is a Marketing Plan?
A Marketing Plan is a report that outlines your marketing strategy for the coming year, quarter, or month. Typically, a marketing plan will include these elements:
- An overview of your business’s marketing and advertising goals
- A description of your business’s current marketing position
- A timeline of when tasks within your strategy will be completed
- Key performance indicators you will be tracking
- A description of your business’s target market and customer needs
Essential Contents of a Marketing Plan
Every marketing plan has to fit the needs and situation. Even so, there are standard components you just can’t do without. A marketing plan should always have a situation analysis, marketing strategy, sales forecast, and expense budget.
- Situation Analysis: Normally, this will include a market analysis, a SWOT analysis (strengths, weaknesses, opportunities, and threats), and a competitive analysis. The market analysis will include a market forecast, segmentation, customer information, and market needs analysis.
- Marketing Strategy: This should include at least a mission statement, objectives, and focused strategy, including market segment focus and product positioning.
- Sales Forecast: This would include enough detail to track sales month by month and follow up on plan vs. actual analysis. Normally a plan will also include specific sales by product, by region or market segment, channels, manager responsibilities, and other elements. The forecast alone is a bare minimum.
- Expense Budget: This ought to include enough detail to track expenses month by month and follow up on plan vs. actual analysis. Normally a plan will also include specific sales tactics, programs, management responsibilities, promotion, and other elements. The expense budget is a bare minimum.
Components of a Complete Marketing Plan
There are six components to developing a complete marketing plan-- business objectives, marketing priorities, marketing goals, marketing strategy, key actions, and dependencies and risks.
- Business Objectives: Simply put, business objectives are the quantifiable targets that the company wants to hit in the coming year. For example, the goal may be to double revenue by the next fiscal year or to maintain growth in the Mid-Market segment while expanding to Enterprise and achieving 15% growth. These objectives relate to the company as a whole and are targets that marketing must keep in mind during all stages of planning and execution. If Marketing actions are not aligned with business objectives, the team creates a lot of activity with minimal impact.
- Marketing Priorities: Once the business objectives are established, Marketing has to decide where and how it can make an impact. In this section of planning, the marketing leadership team will outline which efforts to prioritize and which it cannot support. The team must be in tune with its capabilities and not take on more than it can reliably handle. If too many projects are taken on at once, resources will spread too thin and leave the team unable to make a measurable impact on any of the business objectives.
- Marketing Goals: Marketing goals are an expansion of marketing priorities that quantifiably define what marketing will do to support the greater business objectives. Goal Metrics, which should connect to business targets, will fall into four categories: Impact, Output, Activity, and Readiness. Impact is the effect on business goals, output is the result of actions, activity is the number of actions taken, and readiness is how prepared the team is to perform.
- Marketing Strategy: Marketing strategy is the approach and continued efforts the marketing team will take to achieve its goals. The strategy revolves around how the team plans to hit its goals while keeping marketing priorities in mind and remaining aligned with the business objectives. Sirius Decisions, Inc. defines six strategic routes marketers can take to hit their goals. Innovate, grow, retain, harvest, pause, and exit, ranging on a scale from high to low, risk and investment. Strategy is an important part of the marketing planning process that often gets overlooked by marketers who are eager to take action. However, actions without strategy create an atmosphere where marketers are all working independently, segmented from each other, and the greater business objectives.
- Key Actions: Key actions refer to the specific efforts marketers will take to execute on strategy. However, it cannot simply be a list of tactics; it must provide details on how each execution will impact the greater business objectives. Additionally, marketing efforts from the past may no longer benefit the new strategy, so in this section of planning, marketers must decide which actions to stop doing, which actions to expand on, and which new actions should add to the plan.
- Dependencies and Risks: Dependencies and risks are a part of every marketing plan. However, outlining potential risks from the start allows marketers to better plan and adapt to changes or shortcomings that could happen throughout the year. In every marketing planning strategy, dependencies and risks must be taken into account. Obviously, marketing actions depend on receiving the funding to execute, so budget tends to be the biggest dependency. Still, there are many other risks and dependencies that need to be acknowledged within this section of planning.
Marketing Plan Model Guide
- Executive Summary: The Executive Summary, one of the most frequently read components of a marketing plan, is a synopsis of the marketing plan. While it does not provide detailed information, it does present an overview of the plan so readers can identify key issues pertaining to their roles in the planning and implementation processes. Although this is the first section in a marketing plan, it is usually written last.
- Environmental Analysis: The Environmental Analysis presents information regarding the organization’s current situation with respect to the marketing environment, the current target market(s), and the firm’s current marketing objectives and performance.
- Marketing Environment: This section of the environmental analysis considers relevant external environmental forces such as competitive, economic, political, legal and regulatory, technological, and sociocultural forces
- Target Market: The analysis of current target markets assesses demographic, geographic, psychographic, and product usage characteristics of the target markets. It also assesses the current needs of each of the firm’s target markets, anticipated changes in those needs, and how well the organization’s current products meet those needs.
- Current Marketing Objectives and Performance: A company must set marketing objectives, measure performance against those objectives, and then take corrective action if needed.
- SWOT Analysis: The primary objective of a SWOT analysis is to help organizations develop a full awareness of all the factors involved in making a business decision.
- Strengths are competitive advantages or core competencies that give the organization an advantage in meeting the needs of its customers.
- Weaknesses are limitations a firm has in developing or implementing a marketing strategy.
- Opportunities are favorable conditions in the environment that could yield rewards for an organization if acted on properly.
- Threats are conditions or barriers that may prevent the organization from reaching its objectives.
- During the development of a marketing plan, marketers attempt to match internal strengths to external opportunities. In addition, they try to convert internal weaknesses into strengths and external threats into opportunities.
- Marketing Objective: The development of marketing objectives is based on environmental analysis, SWOT analysis, the firm’s overall corporate objectives, and the organization’s resources. For each objective, this section should answer the question, “What is the specific and measurable outcome and time frame for completing this objective?”
- Marketing Strategies
- Target Market: The marketing plan clearly specifies and describes the target market(s) toward which the organization will aim its marketing efforts. The difference between this section and the earlier section covering target markets is that the earlier section deals with present target markets, whereas this section looks at future target markets.
- Marketing Mix: Though the marketing mix section in this plan is abbreviated, this component should provide considerable details regarding each element of the marketing mix: product, price, distribution, and promotion.
- Marketing Implementation
- Marketing Organization: This section of the marketing plan details how the firm will be organized—by functions, products, regions, or types of customers—to implement its marketing strategies. It also indicates where decision-making authority will rest within the marketing unit.
- Activities, Responsibility, and Timetables for Completion: This component of the marketing plan outlines the specific activities required to implement the marketing plan, who is responsible for performing these activities, and when these activities should be accomplished based on a specified schedule.
- Evaluation and Control: This section details how the results of the marketing plan will be measured and evaluated. The control portion of this section includes the types of actions the firm can take to reduce the differences between the planned and the actual performance.
Marketing Planning Aims and Objectives
Though it's not clear, behind the corporate objectives, which in themselves offer the main context for the marketing plan, will lie the "corporate mission," which in turn provides the context for these corporate objectives. In a sales-oriented organization, the marketing planning function designs incentive pay plans not only to motivate and reward frontline staff fairly but also to align marketing activities with the corporate mission. The marketing plan basically aims to make the business provide the solution with the awareness of the expected customers. This "corporate mission" can be thought of as a definition of what the organization is or what it does: "Our business is ...". This definition should not be too narrow, or it will constrict the development of the organization; a too rigorous concentration on the view that "We are in the business of making meat-scales," as IBM was during the early 1900s, might have limited its subsequent development into other areas. On the other hand, it should not be too wide, or it will become meaningless; "We want to make a profit" is not too helpful in developing specific plans. Jacob Zimmerem suggested that the definition should cover three dimensions: "customer groups" to be served, "customer needs" to be served, and "technologies" to be used. Thus, the definition of IBM's "corporate mission" in the 1940s might well have been: "We are in the business of handling accounting information [customer need] for the larger US organizations [customer group] by means of punched cards [technology]." Perhaps the most important factor in successful marketing is the "corporate vision." Surprisingly, it is largely neglected by marketing textbooks, although not by the popular exponents of corporate strategy — indeed, it was perhaps the main theme of the book by Peters and Waterman, in the form of their "Superordinate Goals." "In Search of Excellence" said: "Nothing drives progress like the imagination. The idea precedes the deed." If the organization in general, and its chief executive in particular, has a strong vision of where its future lies, then there is a good chance that the organization will achieve a strong position in its markets (and attain that future). This will be not the least because its strategies will be consistent and will be supported by its staff at all levels. In this context, all of IBM's marketing activities were underpinned by its philosophy of "customer service," a vision originally promoted by the charismatic Watson dynasty. The emphasis at this stage is on obtaining a complete and accurate picture.
A "traditional" — albeit product-based — format for a "brand reference book" (or, indeed, a "marketing facts book") was suggested by Godley more than three decades ago:
- Financial data—Facts for this section will come from management accounting, costing, and finance sections.
- Product data—From production, research, and development.
- Sales and distribution data — Sales, packaging, and distribution sections.
- Advertising, sales promotion, merchandising data — Information from these departments.
- Market data and miscellany — From market research, who would, in most cases, act as a source for this information? His sources of data, however, assume the resources of a very large organization. In most organizations, they would be obtained from a much smaller set of people (and not a few of them would be generated by the marketing manager alone).
A marketing audit can be a complex process. Still, the aim is simple: "It is only to identify those existing (external and internal) factors which will have a significant impact on the future plans of the company." It is clear that the basic material to be input into the marketing audit should be comprehensive. Accordingly, the best approach is to accumulate this material continuously, as and when it becomes available since this avoids the otherwise heavy workload involved in collecting it as part of the regular, typically annual, planning process itself — when time is usually at a premium. Even so, the first task of this annual process should be to check that the material held in the current facts book or facts files actually is comprehensive and accurate and can form a sound basis for the marketing audit itself. The structure of the facts book will be designed to match the specific needs of the organization. Still, one simple format — suggested by Malcolm McDonald — may be applicable in many cases. This splits the material into three groups:
- Review of the marketing environment. A study of the organization's markets, customers, competitors, and the overall economic, political, cultural, and technical environment, covering developing trends, as well as the current situation.
- Review of the detailed marketing activity. A study of the company's marketing mix; in terms of the 7 Ps - (see below)
- Review of the marketing system. A study of the marketing organization, marketing research systems, and the current marketing objectives and strategies. The last of these is too frequently ignored. The marketing system itself needs to be regularly questioned because the validity of the whole marketing plan relies upon the accuracy of the input from this system, and `garbage in, garbage out' applies with a vengeance.
- Portfolio planning. In addition, the coordinated planning of the individual products and services can contribute towards a balanced portfolio.
- 80:20 rule. To achieve the maximum impact, the marketing plan must be clear, concise, and simple. It needs to concentrate on the 20 percent of products or services and on the 20 percent of customers, which will account for 80 percent of the volume and 80 percent of the profit.
- 7 Ps: Product, Place, Price and Promotion, Physical Environment, People, Process. The 7 Ps can sometimes divert attention from the customer, but the framework they offer can be very useful in building action plans.
It is only at this stage (of deciding the marketing objectives) that the active part of the marketing planning process begins. This next stage in marketing planning is indeed the key to the whole marketing process.
The "marketing objectives" state just where the company intends to be at some specific time in the future. James Quinn succinctly defined objectives in general as Goals (or objectives) state what is to be achieved and when results are to be accomplished, but they do not state "how" the results are to be achieved. They typically relate to what products (or services) will be where in what markets (and must be realistically based on customer behavior in those markets). They are essentially about the match between those "products" and "markets." Objectives for pricing, distribution, advertising, and so on are at a lower level and should not be confused with marketing objectives. They are part of the marketing strategy needed to achieve marketing objectives. To be most effective, objectives should be capable of measurement and, therefore, "quantifiable." This measurement may be in terms of sales volume, money value, market share, percentage penetration of distribution outlets, and so on. An example of a measurable marketing objective might be "to enter the market with product Y and capture 10 percent of the market by value within one year." As it is quantified, it can, within limits, be unequivocally monitored and corrective action taken as necessary. The marketing objectives must usually be based, above all, on the organization's financial objectives, converting these financial measurements into related marketing measurements. He went on to explain his view of the role of "policies," with which strategy is most often confused: "Policies are rules or guidelines that express the 'limits' within which action should occur. "Simplifying somewhat, marketing strategies can be seen as the means, or "game plan," by which marketing objectives will be achieved and, in the framework that appears here, are generally concerned with the 8 P's. Examples are:
- Price — The amount of money needed to buy products
- Product — The actual product
- Promotion (advertising)- Getting the product known
- Placement — Where the product is sold
- People — Represent the business
- Physical environment — The ambiance, mood, or tone of the environment
- Process — The Value-added services that differentiate the product from the competition (e.g., after-sales service, warranties)
- Packaging — How the product will be protected
In principle, these strategies describe how the objectives will be achieved. The 7 Ps are a useful framework for deciding how a company's resources will be manipulated (strategically) to achieve its objectives. However, the 7 Ps are not the only framework and may divert attention from other real issues. The focus of a business's strategies must be the objectives of the business— not the process of planning itself. If the 7 Ps fit the business's strategies, then the 7 Ps may be an acceptable framework for that business. The strategy statement can take the form of a purely verbal description of the strategic options which have been chosen. Alternatively, and perhaps more positively, it might include a structured list of the major options chosen. One aspect of strategy which is often overlooked is that of "timing." The timing of each element of the strategy is critical. Taking the right action at the wrong time can sometimes be almost as bad as taking the wrong action at the right time. Timing is, therefore, an essential part of any plan; and should normally appear as a schedule of planned activities. Having completed this crucial stage of the planning process, to re-check the feasibility of objectives and strategies in terms of the market share, sales, costs, profits, and so on, which these demand in practice. As in the rest of the marketing discipline, employ judgment, experience, market research, or anything else that helps conclusions be seen from all possible angles. At this stage, overall marketing strategies will need to be developed into detailed plans and programs. Although these detailed plans may cover each of the 7 Ps (marketing mix), the focus will vary depending on the organization's specific strategies. A product-oriented company will focus its plans for the 7 Ps around each of its products. A market or geographically-oriented company will concentrate on each market or geographical area. Each will base its plans upon the detailed needs of its customers and on the strategies chosen to satisfy these needs. Brochures and Websites are used effectively. Again, the most important element is the detailed plans, which spell out exactly what programs and individual activities will carry at the period of the plan (usually over the next year). Without these activities, the plan cannot be monitored. These plans must therefore be:
- Clear - They should be an unambiguous statement of 'exactly' what is to be done.
- Quantified - The predicted outcome of each activity should be, as far as possible, quantified so that its performance can be monitored.
- Focused - The temptation to proliferate activities beyond the numbers which can be realistically controlled should be avoided. The 80:20 Rule applies in this context too.
- Realistic - They should be achievable.
- Agreed - Those who are to implement them should be committed to them and agree that they are achievable. The resulting plans should become a working document that will guide the campaigns taking place throughout the organization over the period of the plan. If the marketing plan is to work, every exception to it (throughout the year) must be questioned; and the lessons learned to be incorporated in the next year.
Executing a Marketing Plan
A marketing plan can be adjusted at any point based on the results from the metrics. Suppose digital ads are performing better than expected, for example. In that case, the budget for a campaign can be adjusted to fund a higher-performing platform, or the company can initiate a new budget. The challenge for marketing leaders is to ensure that every platform has sufficient time to show results. Digital marketing shows results in near real-time, whereas TV ads require rotation to realize any level of market penetration. In the traditional marketing mix model, a marketing plan would fall under the category of "promotion," which is one of the four Ps, a term coined by Neil Borden to describe the marketing mix of product, price, promotion, and place.