Module 2: The Marketing Planning Process

Cash Cow

A cash cow is a product or business that has high market share and is in a slow-growing industry. It is bringing in more money than is being invested in it, but it does not have much growth potential. The profits from a cash cow can be used to fund high-growth investments, but the cash cow itself warrants low investment.

vision

Desired future position for the organization

marketing mission statement

Explanation of why the marketing plan exists and what problem it hopes to solve In other words, think of the marketing mission as a focus on what customers need and want

Rivalry

For most industries, the intensity of competitive rivalry is the major factor in determining the competitiveness of the industry. This involves how many firms are in the industry and how their competitive dynamics reduce profitability. Airlines have extremely high rivalry, for example.

situation analysis may sometimes be a SWOT analysis, which includes a review of the company's internal strengths and weaknesses and any external opportunities and threats it faces.

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use strategies and tactics to achieve their objectives

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with situational analysis, an organization can optimize its marketing mix to position its offerings to meet these consumers' needs. This both ensures that consumers' needs are satisfied and helps companies develop products that suit their core consumers, despite changing needs and demands

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Situational Analysis:

what controllable and uncontrollable factors impact the organization? what is the potential for competition and profit?

mission statement:

what is the marketing planning purpose?

Strategy Development:

what marketing strategies will lead to the objectives? what tactics support those strategies?

objectives:

what measurable outcomes do you want to achieve?

Benefits of SWOT analysis

SWOT analysis offers two key benefits: (1) It encourages realistic planning, and (2) it improves an organization's ability to forecast future events.

target market

Specific group of customers toward which a firm directs its marketing efforts

Marketing Objectives

Specific, measurable achievements that an organization wants from its marketing activities within a specified time frame

BCG Matrix

analyzes business opportunities according to market growth rate and market share (sometimes called the growth-share matrix)

situational analysis

collection of methods that marketers use to analyze and understand an organization's capabilities, customers, and business environment - Situational analysis helps marketers understand what to do and how to do it.

market share

company's percentage of the total sales in a particular market

Marketing Plan

comprehensive document or blueprint, informed by analysis of the organization, customer, and market environment, that outlines marketing efforts (including objectives, strategies, and tactics) for an identified period

tactical planning

describes what marketing will do or how they will do it to achieve the desired business results and achieve the marketing objectives

external factors

factors an organization may be able to influence, but not control (such as technology innovations, competition, economic trends, and government policies) a company, which can represent opportunities or threats

internal factors

factors controlled by the organization (such as financial resources, product lines, or technical capabilities), which can be either strengths or weaknesses

uncontrollable factors

(external factors) opportunities and threats that are outside of the organization. These are factors that the company may be able to influence—or at least anticipate—but not fully control

controllable factors

(internal factors) Strengths and weaknesses include the resources and capabilities within the organization now. companies have control over internal factors and can objectives and strategies to exploit strengths and address weaknesses.

Threat of new entrants

(or barriers to entry): From the view of the current companies in the market, profitable markets that yield high returns will attract new companies. This results in many new competitors and eventually decreases profitability for all firms in the industry. Unless the entry of new firms can be blocked by those already in the market, the profit rate will trend towards zero, also known as perfect competition. From the perspective of new entrants, high barriers to entry mean that the investment of getting into the industry makes it difficult to compete with current players in the market.

The BCG matrix consists of four quadrants that show high and low market share and high and low growth potential. Each quadrant has a name and specific characteristics.

- Dog - Cash Cow - Question Mark - Star

A sales manager is reviewing the current products in the company's portfolio and sees that one product that has been sold for a decade is now the slowest-selling product in a mature industry. Which Boston Consulting Group (BCG) model category could be used for this product?

- Dog This product is a dog that is exhausted. It is a product with a low market share in a mature industry, the definition of a "dog" item. There is no room for growth, so there is no reason for further investment.

Examples of internal factors include the following:

- Financial resources - Technical resources and capabilities - Human resources - Product lines

Different marketers may use a variety of different formats to create a marketing plan, but most marketing plans include common elements.1 The key components of the marketing planning process include the following:

- Identifying the marketing mission statement - Conducting a situational analysis - Defining objectives - Developing strategies and tactics - Monitoring and controlling

These are examples of the types of objectives that could be found in a marketing plan:

- Increase market share for product X by 1% each quarter by launching new advertising by October 31. - Increase the average transaction value by 5% by January 1 through email campaigns. - Execute marketing campaigns to small businesses that identify 1,000 qualified leads by October 31.

A business team is revising the document meant to guide the marketing department, managers, and teams as they work to identify the department's objectives and how to reach them. Which document is being revised?

- Marketing plan The marketing plan includes the marketing department's goals, and then the objectives, actions, efforts, and other details needed to meet those goals. It is the guiding document requested in the scenario.

Each of these tools allows marketers to analyze the organization and the external market, but each has its own purpose and focus.

- SWOT analysis, BCG Matrix, and Porter's Five Forces model

A sales manager reviews the current products in the company's portfolio and sees that one product the company began selling for about a year is now showing high market share in a fast-growing industry. Which Boston Consulting Group (BCG) model category could be used for this product?

- Star This product is likely a star selling with a high market share in a fast-growing market, which is the definition of a star.

It is important to differentiate between strategic and tactical planning in the marketing planning process.

- Strategies are what an organization is going to do to achieve its objectives - A marketing strategy is how you will achieve the specified objectives in the marketing plan. - On the other hand, tactical plans are the actions a company implements to affect the controllable elements of the strategy

Examples of external factors include the following:

- Technology innovations and changes - Competition - Economic trends - Government policies and legislation - Legal judgments - Social trends

steps In marketing planning process (detailed)

- The marketing mission statement addresses what customers need and want from the company's products and services - Situational analysis helps marketers understand the controllable and uncontrollable forces that affect the company, including its competition. Various tools can support situational analysis. - Marketing objectives align to organizational objectives and describe the specific results the marketing plan hopes to achieve. - The next step involves developing a marketing strategy for the target market using the four Ps. - In the final step, marketers determine what indicators will help monitor progress on the plan, and they make adjustments if necessary.

Porter's Five Forces consist of the following:

- Threat of new entrants - Threat of substitute products or services - Rivalry - Bargaining power of buyers - Bargaining power of suppliers

SMART objectives answer the following questions:

- What exactly will you do? - How will you know if you have done it? - Is it reasonable to expect that you will accomplish it? - Is it important to the organization and its mission? - By when will you do it?

objectives is informed by..

- a clear understanding of an organization's strengths and weaknesses, the competitive environment, the potential for growth, and the target customer

A manufacturer produces a Bluetooth thermometer for grilling. The product is high-end and priced accordingly. A year after introduction to the market, one of the company's salespeople sees another company's ad for a very similar Bluetooth thermometer at a much lower price. Which of Porter's Five Forces is occurring in relation to this product?

- competitive rivalries The newly-advertised thermometer represents competitive rivalry because a competitor has created a very similar Bluetooth thermometer at a much lower price point.

after identifying the target market, marketers must:

- decide strategies and tactics that best align with and support the marketing objectives - The marketer must evaluate all aspects of the marketing mix and determine which combination of product, price, promotion, and distribution will be most effective

A marketing department is reviewing a recent SWOT analysis and notes entries for economic and social trends. What kind of forces are being reviewed during this process?

- external The forces listed are external to the organization. They may be influenced but are not fully under the organization's control.

A marketing department develops a marketing plan that focuses on departmental goals and the actions the department must take to achieve them. Which component provides this detailed information?

- marketing objective The plan includes the marketing department's goals and then the objectives, actions, efforts, and other details needed to meet those goals.

A marketing manager reviews monthly sales reports, sales forecasts for the upcoming quarter, budgets for advertising campaigns, and product reviews from customers and compares this data against the marketing objectives described in the marketing plan. Which step in the marketing planning process is being reviewed by this manager?

- monitoring and control Monitoring and control is the last step in this process and would involve these tasks.

Marketing control involves a number of decisions—

- one is simply deciding which function to monitor. Some organizations monitor their entire marketing program while others choose to monitor only a part of it, such as their sales force or advertising program. - A second set of decisions concerns the establishment of performance standards—for example, market share, profitability, or sales. - A third set of decisions concerns how to collect information for making comparisons between actual performance and standards. - Finally, to the extent that discrepancies exist between actual and planned performance, adjustments in the marketing program or the strategic plan must be made.

A firm is planning to launch a new product. They also have adopted a vision for how they will achieve their objectives. What type of planning is being used by this firm?

- strategic A marketing strategy is a vision for how you will achieve the specified objectives in the marketing plan. This firm has developed a vision for how they will achieve the objectives

differences between strategic marketing and tactical marketing

- strategic marketing is the problem you're trying to solve for your customer, an explanation of how your service solves that problem. basically a summary of your point to differentiation. - tactical marketing is how you're going to communicate that point to differentiate to your customer or to your prospective customers. the tactical channels you're going to use to spread the word. (ex: social media, website, marketing printing collateral, etc.) that goes into a separate plan.

A company's leadership decides to increase product sales by signing an agreement with a celebrity to execute an influencer social media campaign. What type of planning is being used by this company?

- tactical Tactical planning defines specific activities to reach a goal. In this scenario, the company leadership has identified that its goal is to increase product sales and has chosen to achieve this through tactical implementation of an influencer social media campaign.

A firm has determined that they want to use social media influencers and search engine-paid ads to meet a sales objective. What type of planning is being used by this firm?

- tactical Tactical planning includes the actions a company implements to affect the controllable elements of the strategy; the tactics in this example are to use social media influencers and search engine-paid ads.

A firm is launching a new product and has developed a plan outlining specific activities and allocation of resources needed to implement that plan over a given period of time. What type of planning is being used by this firm?

- tactical Tactical plans specify the activities and allocation of resources (people, equipment, and money) needed to implement the strategic plan over a given period, which is what the firm in this example has developed.

five key steps to the marketing planning process:

1. mission statement 2. situational analysis 3. objectives 4. strategy development 5. monitoring and control

EX of strategic and tactical marketing

1. objective: to increase market share by 5% in 12 months. 2. strategies: dispute products direct to consumers through an online website. 3. tactics: Contract with a fulfillment center to manage shipments - another example - 1. to increase average transaction value by $5.00 this month 2. offer online promotions for specific purchase quantitiesn 3. Program code in the system to activate attractive deals to customers' online carts at a certain threshold

Dog

A product or business with low market share in a mature industry is a dog. There is no room for growth, which suggests that no new funds should be invested in it.

Question Mark

A question mark is a product or business that has low market share currently, but is in a growing industry. This case is trickier: The product or business is consuming financing and creating a low rate of return for now, but its direction is unclear. A question mark has the potential to become either a star or a dog, so close monitoring is needed to determine its growth potential.

SWOT analysis

A situation analysis is often referred to by the acronym SWOT, which stands for strengths, weaknesses, opportunities, and threats. Essentially, a SWOT analysis is an examination of the internal and external factors that impact the organization and its strategies. The internal factors are strengths and weaknesses; the external factors are opportunities and threats

Star

A star has high market share in a fast-growing industry. This kind of product or business is poised to bring a strong return on the funds invested. It also has the potential to become a cash cow at the end of the product life cycle, which can fund future investments.

SWOT analysis

Analysis of the internal, controllable factors (strengths and weaknesses) and external, uncontrollable factors (opportunities and threats) that influence an organization

marketing planning process

steps an organization goes through to create a marketing plan (includes analysis of the organization, customer, and market environment) with specific objectives, strategies, and tactics for the marketing effort

organizational capabilities

Combinations of skills, processes, human abilities, and competencies that are unique to an organization

Customer analysis includes consideration of the needs of current and future consumers, as well as their characteristics.

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monitoring and control

Monitor and control is a process of measuring performance and taking corrective action to assure that the business is on track to meet its goals.

Effective objectives that follow the acronym SMART are specific, measurable, achievable, relevant, and time-bound.

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Bargaining power of buyers

The bargaining power of customers is the ability of customers to put a company under pressure, which also affects the customer's sensitivity to price changes. If the supply greatly outstrips the demand, the buyers have more power than the suppliers.

Threat of substitute products or services

The existence of different products that fulfill the same need increases the likelihood that customers will switch to alternatives. This should not be confused with competitors' similar products. For example, with transportation, General Motors (GM) would view city subways as a substitute to someone buying a new car.

Today, the process for implementing, measuring, and adjusting marketing tactics is much faster and more quantitative than it has ever been. example:

The same store launches a promotional campaign on Facebook. It will gain much more visibility into who sees the ad and whether the ad is effective. It can track who clicks on the ad, who buys after clicking, how often they come back, and what they buy in the future.

While competitors' strategies and tactics are external to the company, the company's position relative to the competitors is something that can be controlled

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how to compete a five forces analysis ​

To complete a Five Forces analysis, it is often best to build a grid on a piece of paper and label each section. In analyzing the five factors, it is useful to rate each category as an external risk factor (i.e., low, medium, or high). Ideal industries will have low threats from each of these forces (i.e., low buy power, low rivalry, low risk of new entrants, etc.). Filling in each section to develop a view of the industry can help managers determine if the industry is truly competitive, a monopoly, or an oligopoly. An important question to ask is, "What will make a company able to compete in this environment?"

The BCG matrix considers two different aspects of a business unit or product:

What is the current market share?What is the market's growth potential?

Bargaining power of suppliers

When there are few substitutes, suppliers of raw materials, components, labor, and services (such as expertise) to an organization can be a source of power over the organization. Suppliers can refuse to work with the company or charge excessively high prices for unique resources. Similar to power of buyers, this bargaining power relies on scarcity and basic economics of supply and demand

monitoring & control:

how will progress be measured and assessed? how will adjustments be made, if necessary?

implementation

is the tactics used to execute the strategy. It might include such things as determining when to promote the product, getting the product to the consumer, and setting a commission rate for salespeople

During a meeting, a marketing department describes the sales goals for the year, the target markets selected, and the actions the department will undertake to reach these goals. Which portion of the marketing planning process was discussed during this meeting?

marketing strategy This meeting focused on the marketing strategy. This strategy determines how a marketing mix (product, price, place, and promotion) should be used to achieve the marketing objectives.

Porter's Five Forces model

planning tool which provides a model for how to identify and analyze the competitive forces that shape a company's environment and influence profitability

BCG Matrix

planning tool which uses a quadrant to map the strategic position of a business brand based on the brand's market share and the market's growth potential

strategies:

plans of action or game plans designed to meet certain objectives

comprehensive marketing plan paints the big picture of what is happening with an organization internally and externally.

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tactics:

the actions taken to implement a strategy that drives toward a particular objective

marketing plan that takes into account...

the company's objectives, the market situation, profitability and competition, and the needs and wants of target customers

A company might simultaneously execute business strategies to enter a new market, grow market share in an existing market, and improve organizational efficiency. The marketing strategy must identify a plan that will use the marketing function's resources and expertise most effectively to achieve its mission, objectives, and goals. (strategy development)

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According to the logic of the BCG matrix, as an industry grows, all investments become cows or dogs. The intent of the matrix is to help companies make good portfolio management decisions

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By conducting a situation analysis, the company is more likely to consider both of these factors in its planning. By considering threats and worst-case scenarios during the planning process, organizations can take steps to avoid them or minimize the impact if they occur.

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In an effort to ensure that performance goes according to plan, marketing managers establish controls that help them evaluate results and identify needed modifications. Surprises occur, but marketing managers who have established sound control procedures can react to unexpected results quickly and effectively.

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Market share is the percentage of a market (defined in terms of units sold or revenue) accounted for by a specific product or entity. Companies track market share data closely.

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Market-growth potential is more difficult to quantify. It generally includes analysis of similar markets, as well as analysis of the underlying drivers for marketing growth. It is an estimation of what the future value of a market will be.

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Marketing exists to support an organization in achieving its strategic goals for growth, profitability, revenue, awareness, influence, and more.

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Marketing management often makes use of various organizational control systems, such as sales forecasts, sales force management systems, and customer relationship management tools

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Monitoring and control is the final step of the marketing planning process.Here, the plan is implemented

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Objectives are used to align expectations and plans, coordinate efforts, measure progress, and hold teams accountable for achieving results.

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Objectives help individuals across the team to understand the goals and determine whether the strategy is effective and the tactics are being well executed.

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Objectives specify measurable outcomes that will be achieved within a particular time frame

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Often organizations get so absorbed in their own strategies, initiatives, and products and forget to focus on the target customer. While the corporate strategy may have elements that focus on internal operations or seek to influence external forces, each component of the marketing strategy should focus on the target customer

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Often, the Five Forces are mapped against a SWOT analysis to develop a corporate strategy.

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Once the marketing strategy has been defined, marketers determine how to implement the strategy.

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Porter's Five Forces model is a tool for analyzing the competitiveness of a market. Companies use the Five Forces model to identify opportunities or evaluate decisions in the context of the environment

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Situational analysis ultimately helps focus marketing and sales resources more efficiently. It includes research into and analysis of consumer behavior, the results of which inform segmentation, targeting, and positioning. This allows marketers to select the subpopulation of potential customers who are the most attractive and most accessible for targeting.

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Strategic planning and tactical planning serve different purposes in the marketing planning process.

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Strategic planning outlines the vision or direction for how the marketing department will achieve its objectives. Tactical planning identifies the key actions marketers will implement to affect controllable elements of the strategy (e.g., offering a specific promotion on free shipping to increase the average transaction value on a company's website).

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Tactical planning addresses how an organization will execute the strategic plan. In the marketing planning process, it is the key actions marketers will take to follow the strategy for a product, market, or organization.

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Tactical plans specify the activities and allocation of resources (e.g., people, equipment, money) needed to implement the strategic plan over a given period

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Tactics include specific actions, such as coupons, television commercials, banner ads, and social media posts, used to execute the strategy.

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The BCG matrix maps companies and products on a grid based on their market share and potential market growth. It helps identify where an organization should invest in marketing to be profitable

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The BCG matrix maps market share and market-growth potential onto a grid with four quadrants. It helps companies estimate the future potential and value of a market to determine where to invest in marketing.

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The implementation process emphasizes the timely completion of tasks. Often marketing organizations have a project or program planning function that tracks the tasks that will be completed, the individual or team that will complete the tasks, the budget spent, and the results achieved

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The marketing plan is the guiding document used by marketing managers and teams to lay out the marketing objectives that marketing efforts focus on and the actions they take to achieve these objectives.

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The marketing planning process allows marketers to create a plan for how to execute a strategy aligned to key objectives. A marketing plan helps give direction to a company's marketing efforts.

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The marketing strategy aligns to objectives and considers the outputs of the situation analysis and focuses on the needs of the target customer

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The marketing strategy defines how the marketing mix (product, price, place, and promotion) can best be used to achieve marketing objectives. At its centerpiece is the target customer.

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To be effective, a marketing strategy must capitalize on the resources at its disposal within the company, but must also take advantage of the market forces that are outside the company

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When considering organizational capabilities, marketers assess the relative strengths and weaknesses of the organization and its product offerings. This should be a practical and pragmatic assessment of what the company does and does not do well. It should reflect how it makes investments and allocates resources, mindful of its priorities and stakeholders

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role of marketing is to identify, satisfy, and retain customers

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