Marketing planning

Key Terms Product Life Cycle Marketing Budget Test marketing Sales forecasting

Marketing Planning Develop tactics to support the marketing strategy Sets targets Develops different elements of the mix Allocates funds to different activities Decides on a time schedule

Advantages and Disadvantages of marketing planning ADVANTAGES Sets out in detail what it wants to achieve Managers can review firms progress by comparing actual outcomes with planned outcomes It forces managers to think ahead and consider what might happen Provides direction DISADVANTAGES The plan may become out of date with changes to the market Can take up a lot of time and delay vital decision making

Evaluation of the plan Is it realistic? Does it help achieve the strategy? Is it affordable? Does it fit with the firms strengths?

Sales Budget A target level of sales for a product (actual or market share) – SALES BUDGET Size is dependent on: –Past sales of the product –Expenditure budget –Market conditions –Objectives and strategy

Expenditure Budget A target level of expenditure a firm sets to achieve its marketing objectives – EXPENDITURE BUDGET Size depends on: –The firms overall financial position –The firms marketing objectives and strategy –The amount the firm expects to receive back –Competition

Sales forecasting This sets out targets for overall sales for products and is a goal for the firm to achieve It influences other decisions: –Production schedule –Cash flow forecast –Human resources decisions

Producing a Sales Forecast It may be based on historical / back data The firm can use market research to try and identify likely future trends It may be based on the firms best guess Nature of the forecast depends on nature of the firms product and the market situation

Problems with forecasts Customer-buying behaviour suddenly changes Original market research was poor The experts got it wrong

Reliability of Forecasts Forecasts are most likely to be correct when: –Trend has been extrapolated and market conditions continued as before –Test market is used and represents entire population –Forecast is made by experts –Firm is forecasting in the near future