How to develop an effective marketing plan

What is planning?
Planning (also called forethought) is the process of thinking about and organising the activities required to achieve a desired goal. Planning involves the creation and maintenance of a plan. As such, planning is a fundamental property of intelligent behavior. This thought process is essential to the creation and refinement of a plan, or integration of it with other plans; that is, it combines forecasting of developments with the preparation of scenarios of how to react to them. An important, albeit often ignored aspect of planning, is the relationship it holds with forecasting. Forecasting can be described as predicting what the future will look like, whereas planning predicts what the future should look like. The counterpart to planning is spontaneous order.

It is important to remember that organisations of today create their future unless organisations like Goldman Sachs, Lehman Brothers and the like indulge in criminal activity to create economic recession.
What is a marketing plan?
A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use. Please note that ‘Strategy’ is not a ‘Plan’. A strategy is the best path to a destination leveraging on time, cost, effort & convenience. The destination is the result of a plan. During the seminars I address both locally and internationally, I find that several managers have got these two critically important factors mixed up.
Marketing planning process
A marketing plan is a plan which outlines a company’s overall marketing efforts. Marketing process can be realised by the marketing mix . The last step in the process is the marketing controlling.
The marketing plan can function from two points: strategy and tactics (P. Kotler, K.L. Keller). In most organisations, “strategic planning” is an annual process, typically covering just the year ahead. Occasionally, a few organisations may look at a practical plan which stretches three or more years ahead.
To be most effective, the plan has to be formalised, usually in written form, as a formal “marketing plan.” The essence of the process is that it moves from the general to the specific, from the vision to the mission to the goals to the corporate objectives of the organisation, then down to the individual action plans for each part of the marketing program. It is also an interactive process, so that the draft output of each stage is checked to see what impact it has on the earlier stages, and is amended.
1. Where are we now? Situational analysis
Situation analysis is a method managers use to analyse both the internal and external environments of an organisation in order to understand the firm’s own capabilities, customers and business environment. As described by the American Marketing Association, a situation analysis is “the systematic collection and study of past and present data to identify trends, forces, and conditions with the potential to influence the performance of the business and the choice of appropriate strategies.”The situation analysis consists of several methods of analysis: The 5Cs Analysis, SWOT analysis and Porter five forces analysis. A Marketing Plan is created to guide businesses on how to communicate the benefits of their products to the needs of potential customer. The situation analysis is the second step in the marketing plan and is a critical step in establishing a long term relationship with customers.
SWOT analysis (alternately SWOT Matrix) is a strategic planning method used to evaluate the Strengths, Weaknesses/Limitations, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. The technique is credited to Albert Humphrey, who led a convention at the Stanford Research Institute (now SRI International) in the 1960s and 1970s using data from Fortune 500 companies.
Setting the objective should be done after the SWOT analysis has been performed. This would allow achievable goals or objectives to be set for the organisation.

•  Opportunities: external chances to improve performance (e.g. make greater profits) in the environment
• Strengths: characteristics of the business, or project team that give it an advantage over others
• Weaknesses (or Limitations): are characteristics that place the team at a disadvantage relative to others
• Threats: external elements in the environment that could cause trouble for the business or project

2. Where are we going?
Marketing objectives define what you want to accomplish through your marketing activities. There are several important factors to consider when establishing effective marketing objectives.
SMART approach
When setting objectives it is very important to ensure that your objectives are; specific, measurable, achievable, realistic and time specific, or SMART for short. The “SMART” approach allows you to effectively manage your marketing activities and importantly be able to determine how successful they have been and whether they have delivered the particular benefits sought.
The “SMART” approach is explained to illustrate how you address each area:

• Realistic – Do you have sufficient employees and resources to achieve the objectives you have set; if you don’t then they are likely to be unrealistic? the objective is realistic as the marketing resources are in place to conduct the segmenting and targeting exercise and access to the extra stock required
• Measurable – Can you quantify each objective, i.e. can you use a unit of measure such as market share in percentage or rupees or other to provide a way to check your level of success? current market share is 20%, will set a target of 30% market share, meaning we need an extra 10%, market share amounts can be established based by monitoring the overall value of sales in terms of rupees.
• Specific – Are your objectives stated in a way that is precise about what you are hoping to achieve? need to understand the latest preferences of customers in the identified segments and appropriately target each stationary item such as pens, exercise books, rulers, and calculators to maximise sales volumes
• Achievable – Are your objectives reasonable in terms of what you can actually achieve or are you setting your sights too high? Ensuring technical competency and commitment of all personnel involved in the development and implementation of strategy. This can range from having an experienced and knowledgeable marketing team to capable sales staff. Access to funding is also necessary for the acquisition of extra stock to fulfill increased demand.
• Time specific – When are you hoping to achieve these objectives, you need to define a timing plan with target timing for each specific objective? the increase in market share is to be achieved within 12 months, a regular progress update will be taken every month to track level of success

3. How are we going to get there? Marketing strategies
Marketing strategy is a process that can allow an organisation to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. Marketing strategy includes all basic and long-term activities in the field of marketing that deal with the analysis of the strategic initial situation of a company and the formulation, evaluation and selection of market-oriented strategies and therefore contribute to the goals of the company and its marketing objectives
Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives. Plans and objectives are generally tested for measurable results. Commonly, marketing strategies are developed as multi-year plans, with a tactical plan detailing specific actions to be accomplished in the current year. Time horizons covered by the marketing plan vary by company, by industry, and by nation, however, time horizons are becoming shorter as the speed of change in the environment increases. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned.
Marketing strategy involves careful scanning of the internal and external environments. Internal environmental factors include the marketing mix, plus performance analysis and strategic constraints. External environmental factors include customer analysis, competitor analysis, target market analysis, as well as evaluation of any elements of the technological, economic, cultural or political/legal environment likely to impact success.
A key component of marketing strategy is often to keep marketing in line with a company’s overarching mission statement. Once a thorough environmental scan is complete, a strategic plan can be constructed to identify business alternatives, establish challenging goals, determine the optimal marketing mix to attain these goals, and detail implementation. A final step in developing a marketing strategy is to create a plan to monitor progress and a set of contingencies if problems arise in the implementation of the plan.
4. How can we ensure arrival? Monitor final results
The final stage of the action plan is the implementation of measurements and controls and reporting results. Many models for monitoring the performance of businesses have emerged, many of which address the needs of key stakeholders and allow them to evaluate the overall success of a company. The balanced scorecard approach is a widely used method of monitoring overall performance and ensuring daily work is focused on the strategic objectives.
The scorecard is a “strategic planning and management system… which is used to align business activities to the vision and strategy of the organisation, improve internal and external communications, and monitor organisation performance against strategic goals”. This approach encourages open communication throughout the business and allows tracking of performance throughout the year.
Traditionally, businesses have tracked success based on just one measure – financial results. However the scorecard system views the business from four external perspectives to gain a more relevant approach to performance metrics.

• Customer perspective – usually measured in terms of time, quality, performance and cost
• Learning and growth – how you are innovating and improving to meet your goals
• Business process – how critical processes are measuring up
• Financial perspective – financial performance from the stakeholder point of view

Each element is tracked using four items which are listed individually:

• Targets – specific quantifiable targets
•    Objectives – as identified in stage 2 of the marketing planning process
• Measures – how will success be measured?
• Initiatives – how to make the targets more readily achievable

Advantages and disadvantages of a marketing plan

Business advantages

•  identifies new and/or potential customers
• identifies competitors and analyses your product’s or firm’s competitive advantage
• aids in design of products that fulfil consumers needs
• identifies needs and wants of consumers
• determines demand for product
• outlines measures for generating the cash for daily operation, to repay debts and to turn a profit
• identifies new product areas
• allows for test to see if strategies are giving the desired results

Business disadvantages

• creates unrealistic financial projections if information is interpreted incorrectly
• identifies weaknesses in your business skills
• leads to faulty marketing decisions based on improperly analysed data
• identifies weaknesses in your overall business plan

(Nalin Jayasuriya is the Managing Director & CEO, McQuire Rens & Jones (Pvt) Ltd. He has held regional responsibilities of two multinational companies, of which one, Smithkline Beecham International, was a Fortune 500 company before merging to become GSK. He carries out consultancy assignments and management training in Dubai, India, Maldives, Singapore, Malaysia, Indonesia and Bangladesh. Nalin has been Consultant to assignments in the CEB, Airport and Aviation Services and setting up the PUCSL. He is a much sought-after Business Consultant and Corporate Management Trainer in Sri Lanka. He has won special commendation from the UN Headquarters in New York for his record speed in re-profiling and re-structuring the UNDP. He has lead consultancy assignments for the World Bank and the ADB. Nalin is an executive coach to top teams of several multinational and blue chip companies. He is non-Executive Director on the Boards of Entrust Securities Plc and Eswaran Brothers Exports Ltd.)