Marketing Planning

Objectives To understand the marketing planning process To learn how the marketing plan is structured To estimate market potential, sales potential and sales forecast

Some definitions Marketing Planning: A systematic process that involves assessing marketing opportunities and resources, determining marketing objectives and developing thorough plans for implementation and Controls. Marketing Plan: A document that details requirements for a company’s marketing activity

Issues in Planning Process The speed of the process The amount of the data collected Who does the planning The structure Length of plan Frequency of planning Number of alternative strategies considered Cross-functional acceptance Using the plan as a sales document

The Marketing Plan Define the current business situation Define problems and opportunities facing the business Establish objectives Define the strategies and programs necessary to achieve the objectives Pinpoint responsibility for business centre objectives Establish timetables for achieving objectives Encourage careful and disciplined thinking Establish an outward orientation

Steps in Planning Sequence Collect Data Situation Analysis Develop Objectives, Strategies , Programmes Develop Financial Documents Negotiate Final Plan Measure progress towards Objectives Audit Adapted from Analysis for Marketing Planning D.R. Lehmann and R.S. Winer

Marketing Plan Summary Executive Summary A. Situation Analysis B. Sales Analysis C. Competitor Analysis D. Customer Analysis E. Planning Assumptions F. Forecasts Marketing Objectives Marketing Strategy Marketing Programmes Financial Documents Monitor and Control

Market Potential and Forecasting Market Potential: The total amount of a product that customers will purchase within a specified period of time, a specific level of industry wide marketing activity Sales Potential: is the maximum percentage of market potential that an individual company within an industry can expect to obtain for a specific product or service Sales Forecast: is the amount of a product that the company expects to sell during a specific period at a specified level of marketing activities

Deriving Potential Estimates Data Calculation Result Secondary Data Model/Statistical Model Potential Estimate Past Sales Data Judgement Surveys /Primary Data

An example Calculation of Market Potential Determine the potential buyers of a product (how:judgment, experience, etc); Determine how many individual customers are in the potential groups of buyers Estimate the potential purchasing or usage rate

An example Diapers in the U.S. Who are the potential consumers? Babies 0-2.5 years old less those who are allergic to liner 2. How many are there? 4 million births annually, an annual 1 % mortality rate and 5% allergic incidence or 3,762,000 0-1 years old, 3,724,380 1-2 years old, and 3,687,136 2-3 years old How much can they consume? 0-1 10 diapers per day 1-2 7 diapers per day 2-3 3 diapers per day Market Potential: 0-1 years old 37,620,000 1-2 years old 26,070,660 2-3 years old 5,530,704 Total/day 69,221,364

Sales Forecast Sales Forecast = Market Potential  category  Percent of potential attained in the product category  “our” share of the product category

Sales Forecasting Methods Quantitative Qualitative Expert Judgement Polling of Experts Delphi Procedures Survey Based Moving Average, Exponential Smoothing Times Series Regressions Epidemic Models Regression Models

Marketing Audit Marketing Audit is a systematic examination of the marketing Group’s objectives , strategies, organisation and performance.

Marketing Audit (II) The marketing audit should Describe current activities and results to sales, costs, prices, profits and other performance feedback 2. Gathering Information about customers, competition and environmental developments that may affect the marketing strategy. Exploring opportunities and alternatives for improving the the marketing strategy. Providing an overall database to be used in evaluating the attainment of organisational goals and marketing objectives.

What have we learned What are the critical steps of marketing planning. What is the structure of a marketing plan Making decisions on strategies and tactics, requires a clear understanding of what what might happen (potential) and what you think it might happen (forecast). We explored how the accuracy of this information can be increased