The Conceptual Framework of Marketing Plan - Research Paper Example

The Conceptual Framework of Marketing Plan Table of Contents The Conceptual Framework of Marketing Plan 1 Table of Contents 1 Introduction 2 The Role and Nature of Marketing Plan 2 Marketing Plan 2 Relationship between Marketing Plan and Business Plan 3 Strategic and Tactic marketing 4 Typical Structure of the Marketing Plan 5 Marketing Plan Elements 6 Marketing Plan Assumptions 9 The two common misconceptions 9 Conclusion 10 References 11 Introduction A marketing plan is a roadmap for the marketing activities and strategic marketing processes of an organization for a specific future time. Firms are attempting to market its products or services to the potential customers giving greater emphasis on strategic marketing and as a result the firm is virtually attempting to gain an advantage over other providers of similar products or services (Carpenter and Sanders, 2009, p. 10). The marketing plan, which is the key input to the business plan, will be able to identify the most promising marketing opportunities and outline how the company can penetrate, capture and survive in the identified markets. A successful marketing plan of a firm elaborates almost all important marketing activities, strategic marketing proceedings, firm’s situational as well as marketing-mix analyses etc. This paper presents the conceptual framework of marketing plan, addressing its major contents such as marketing strategy and tactics, marketing mix elements, situational analysis and so on. This paper explains the roles and nature of marketing plan and describes the marketing plan assumptions as well. The Role and Nature of Marketing Plan Marketing Plan As Kerin, Hartley and Berkowitz (2005,p. 53) defined, a marketing plan is a roadmap for the marketing activities of a firm for a specific future time period. According to Armstrong and Kotler (2005, p. 59), a detailed marketing plan can assess the current marketing situations and outline the marketing objectives, marketing strategies, action programs, budgets and controls. The marketing plan is not just a template that every firms may be able to follow in a similar style, but a strategic tool for analyzing the marketing situations, evaluate the strengths and weaknesses of the firm as well as opportunities and threats, identify the competitors and their market roles and so on. The styles, structures and contents of the marketing plan may vary from firm to firm depending on factors such as target audience and the purpose, the kind and complexity of the firm, the industry and market extent etc (Kerin, Hartley and Berkowitz, 2005, p. 53). As Westwood (2002, p. 6) noted, a marketing plan is similar to a map since it depicts the company related to where it is going and how it is functioning to get there. It is not just a written document, but contains an action plan that help the company identify the best promising business as well as marketing opportunities and outline who it may penetrate and capture the market proposed. Relationship between Marketing Plan and Business Plan A business plan, in contrast, is a roadmap for the entire firm for a specific future period of time. Marketing plan is a detailed plan the comprises of marketing activities and strategies, situational analysis of the firm, financial projections, action plan and control etc, but a business plan is a broader plan since it not only comprises of all these elements but also R&D and business operation etc. More specifically, marketing plan is an integral part of business plan. For most manufactured firms, marketing plan represents 60 to 80 percent of the business plan, both marketing and business plan are almost identical for small businesses. The relationship of business and marketing plan is depicted below: Depending on the size, nature and requirements of the business, business plans may also include break-even analysis, detailed financial projections with profit and loss and final accounts, management and HRM plans etc. Strategic and Tactic marketing A marketing plan will hardly be meaningful unless there is a strategic approach for effective execution of the plans. While executing the plans that are detailed in a marketing plan, both marketing strategy and marketing tactics need to be considered. A marketing strategy denotes the techniques, means and channels that an organization will be able to achieve its goals with, whereas marketing tactic refers to the daily operational decisions that are essential to the overall success of the marketing strategy (Kerin, Hartley and Berkowitz, 2005, p. 48). For any firm, the marketing plan serves as a central technique that helps the firm in directing, coordinating, controlling and evaluating the overall marketing efforts. This marketing plan operates at two levels, namely strategic marketing and tactic marketing. The strategic marketing plan describes the target market and the value proposition that the marketer ha proposed to offer its customers. The tactical marketing plan lays out tactics in relation to product features, promotion, merchandising, sales, distribution channels, service and so on (Kotler and Keller, 2006, p. 43). Marketing plan must be able to outline both marketing strategy and marketing tactics. Marketing strategy involves specific strategies that the organization aims for targeted markets, positioning, the marketing mix and marketing expenditure levels etc. A well detailed marketing plan would explain how each strategy responds to the opportunities and threats and other critical issues (Armstrong and Kotler, 2005, p. 59). Typical Structure of the Marketing Plan A marketing plan indicates how the firm plans to reach its marketing objectives. Marketing objectives vary from firm to firm and therefore the contents in a marketing plan also very from firm to firm, although the structure will be of identical in structure. Ferrell and Hartline (2010, p. 42) outlined the basic structure of the market plan. As they illustrated, a marketing plan should contain 1) Executive summary, 2) situation analysis, 3) SWOT analysis, 4) Marketing goals and objectives, 5) marketing strategy, 6) Marketing implementation and 7) Evaluation and Control. Almost all the firms follow this structure, but with difference in the sub-titles and detailed contents with reference to the marketing situations and marketing objectives of each firm. Marketing Plan Elements Buttell (2009, p. 7) identified very basic three steps that a marketer needs to take in to account while preparing the marketing plan. They are, defining the market niche and audience, targeting internal as well as external audiences and considering the market channels. These are also critically important steps to be considered while designing and preparing the elements. Lamb, Hair and McDaniel (2007, p. 37) illustrated the elements of a marketing plan as shown in the figure above. The major elements are business mission statement, situation or SWOT analysis, marketing objectives, marketing strategy, implementation, evaluation and control. But Armstrong and Kotler (2005, p. 60) included executive summary, action program and budget analysis apart from the above mentioned elements and moreover they considered opportunity and threats analysis different from situation analysis. Though there can be differences in the structure provided by various literatures and experts, the basic components such as situation analysis, objectives, market strategy analysis, implementation and action plan etc are found to be common elements. All these elements are briefly explained below: Executive Summary: This is the first section of the plan, given as an introduction to the plan, that presents a brief summary of the major goals and recommendations of the plan for the purpose of management’s review. Situation Analysis: The situation analysis is the first and foremost important section in a marketing plan that describes the current business environment, by addressing what the company, where does it go and how does it reach the destination (Green and Williams, 1996, p. 56). This section thus details the targeted market and company’s position in the industry with valid information about product performance, competition etc. Situational Analysis includes: 1- Market Description: This section defines the market, major segments, targeted customers, their needs and wants and factors in the market that may affect customers’ purchasing decision etc. It may also include detailed illustration of company’s STP strategy. 2- Product review: This section details the sales, price, gross margin of the major products or services the firm markets, 3- Competition Review: This section identifies main competitors and assesses their market positions, their targeted customers, their strategies for improving product quality, pricing and distribution etc. 4- Review of Distribution: This section evaluates recent sales trends and other developments in distribution and supply chain system (Armstrong and Kotler, 2005, p. 60). SWOT analysis: SWOT and PESTEL analyses are always found to play highly important roles in almost all analysis and reviews of marketing and other forces. SWOT analyses, for instance, assesses the internal and external environment of the business and therefore it can be used for reviewing each and every elements included in the situation analysis. As Lamb (2011, p. 25) noted, a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is an important outcomes of the situational analysis in a marketing plan, and is an important means to summarize company’s internal strengths and weaknesses and external opportunities and threats. Marketing Objectives: This section states the marketing objectives of the company during the marketing plan period of time. Marketing Strategy: This section illustrates the broad marketing logics and marketing variables such as target market, positioning, marketing mix strategy etc. Marketing Mix: This section should depict the overall marketing mix strategy, by illustrating the four marketing mix elements such as product, Price, Place and Promotion. This should answer what kind, size or type of product or service the firm intends to market, what price it intends to charge, what distribution techniques it may depend and what methods it may use for promoting the product or brand etc. Implementation and Control: This section evaluates the overall marketing plan and controls the plan by taking measures to overcome the issues identified. Marketing Plan Assumptions While preparing and designing a marketing plan for a firm, each and every section in the plan may be related to certain marketing assumptions, because, as Westwood (2005, p. 52) described, all marketing plans are based on a set of assumptions. These assumptions decide what can be and what cannot be achieved. Some of the assumptions, for instance, are given below: The market-growth rate, is the market is expanding and there is possibility of market recession. Interest rates, likely to increase or decrease. government plans and legislations; are there government plans or legislations that may impact on the marketing plan. Employment and recruitment, how easier or difficult to recruit and retail efficient people, Exchange rate, what effects do exchange rates on the business or imports etc. The two common misconceptions Though there can be many assumptions that may influence marketing plan, many marketers fail to build effective marketing plan since they misunderstand what marketing is. One of the major misconceptions of the marketing is that marketing is all about advertising (McDonald and Keegan, 2002, p. 10). People often advertise extensively without proper target-marketing analysis and waste their efforts with no further improvements in the marketing outcomes. Another main misconception is related to the confusion of marketing with sales. Some firms believe that marketing is the new term for what was previously meant by sales. They also believe that marketing improvement is all about sales-growth (McDonald, Payne and Frow, 2011, p. 9). Firms with this sort of misconception may not really recognize the importance of customers’ specific as well as general requirements for particular products or service and their concerns about some measures such as quality, freshness, standard, convenience, accountability, ethical and so on. Conclusion This paper has presented a brief research on the conceptual framework of marketing plan based on literatures and theories of marketing. Marketing plan is a roadmap that outlines the marketing objectives of the company and the ways it may take to achieve that objectives. It can be considered to be a component of business plan because business plan, apart from the marketing plan-components, include R&D and operations and detailed financial projections. The major components of a marketing plan are executive summary, situation analysis or SWOT analysis, marketing objectives, marketing strategy, budget and control. Situation analysis gives an environmental scan about the market, whereas marketing objectives outlines the goals pertinent to marketing activities. This paper identified the most common tow misconceptions in marketing and are to be considered while preparing the marketing plan: the are the beliefs that marketing is all about advertising and marketing is all about sales-growth. References Armstrong, G and Kotler, P 2005, Marketing: An Introduction, Seventh Edition, Prentice-Hall, Pearson Education, Inc. Buttell, A.E, 2009, 4 Steps to an effective marketing plan, Practice Management Solutions, EBSCO database Carpenter M A and Sanders W G, 2009, Strategic Management: A Dynamic Perspective Concepts and Cases, Second Edition, Prentice Hall, Pearson Education Inc Ferrell, O.C and Hartline, M, 2010, Marketing Strategy, Fifth edition, Cengage Learning Green,G and Williams J, 1996, Marketing: Mastering Your Small Business, Dearborn Trade Publishing Kotler, P and Keller, K.L, Marketing Management, Twelfth Edition, Prentice-Hall, Pearson Education, Inc. Lamb, C.W, 2011, Marketing, Fifth edition, Cengage Learning Lamb, C.W, Hair, J.F and McDaniel, C, 2007, Marketing, Ninth Edition, Cengage Learning McDonald, M and Keegan, W.J, 2002, Marketing Plans That Work, Second edition, Elsevier McDonald, M, Payne, A and Frow, P, 2011, Marketing Plans for Services: A Complete Guide, Third edition, John Wiley and Sons Westwood, J, 2002, The Marketing Plan: A Step-by-step Guide, Illustrated Third edition, Kogan Page Publishers Westwood, J 2005, Marketing Plan Workbook, Illustrated edition, Kogan Page Publishers Read More