Module-6-Market Planning

Marketing Planning: Meaning,Concepts, Steps involved in Marketing planning, Marketing

Audit- Meaning, Feature, Various components of Marketing Audit Marketing Strategy-
Analysis of Industry and Competition, Strategic Planning Process.

Market Planning:
Meaning:
A marketing plan is a comprehensive document or blueprint that outlines a company's
advertising and marketing efforts for the coming year. It describes business activities involved
in accomplishing specific marketing objectives within a set time frame.

Definition:
"Marketing Planning is the process of developing marketing plan incorporating overall
marketing objectives, strategies, and programs of actions designed to achieve these objectives."

Steps Involved in Market planning:

The marketing planning process involves both the development of objectives and specifications
for how they will be accomplished. There are five basic steps in the process in this process.

1. Determination of Organizational Objective

The basic objectives, or goals, of the organization are the starting point for marketing planning.
They serve as the foundation from which marketing objectives and plans are built. These
objectives provide direction for all phases of the organization and serve as standards in
evaluating performance. Soundly conceived goals should be S.M.A.R.T – specific, measurable,
attainable, realistic and time-specific.

2. Assessing Organizational Resources

Planning strategies are influenced by a number of factors both within and outside the
organization. Organizational resources include capabilities in production, marketing, finance,
technology, and personnel. By evaluating these resources, organizations can pinpoint their
strengths and weaknesses. Strengths help organizations set objectives, develop plans for meeting
objectives, and take advantage of marketing opportunities. Resource weaknesses, on the other
hand, may inhibit an organization from taking advantage of marketing opportunities.

3. Evaluating Risks and Opportunities

Environmental factors – competitive, political, legal, economic, technological and social – also
influence marketing opportunities. The emergence of new technologies or innovations may open
new opportunities for under-marketed products. The marketing environment may also pose
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threats to marketing opportunities. For example, a new genetically engineered drug may be
developed with the potential to become a $1 billion-a-year product. But a government agency
may delay requests to market the drug due to regulations.

4. Marketing Strategy

The net result of opportunity analysis is the formulation of marketing objectives designed to
achieve overall organizational objectives and develop a marketing plan. The marketing planning
effort must be directed toward establishing marketing strategies that are resource efficient,
flexible, and adaptable. The marketing strategy is the overall company program for selecting a
particular target market and then satisfying consumers in that segment.

5. Implementing and Monitoring Marketing Plans

The overall strategic marketing plan serves as the basis for a series of operating plans necessary
to move the organization toward accomplishment of its objectives. At every step of the
marketing planning process, marketing managers use feedback to monitor and adapt strategies
when actual performance fails to match expectations.

Marketing Audit:

A marketing audit is a comprehensive, systematic, independent and periodic evaluation of a

company's marketing assets. It is a effective tool in reviewing the competence of a marketing
strategy, analyzing the objectives, policies and strategies of the company's marketing department
as well as the manner and the means employed in attaining these goals.

The marketing audit is a fundamental part of the marketing planning process. It is conducted
not only at the beginning of the process, but also at a series of points during the implementation
of the plan. The marketing audit considers both internal and external influences on marketing
planning, as well as a review of the plan itself.

Features of Market Audit:

1. It should be comprehensive and broad in focus covering the entire marketing

environment of the company.
2. It should be an objective exercise and independent of the managers directly involved in
making the marketing decisions.
3. It should be a systematic and orderly sequence of diagnostic steps as compared to an
unstructured and random investigation.
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4. It should be carried out periodically. The marketing audit should be undertaken on a

regular basis and not only when major problems arise.

Various components of Market Audit:

i. Marketing Environment Audit.

ii. Marketing Strategy Audit.

iii. Marketing Organization Audit.

v. Marketing Systems Audit

v. Marketing Productivity Audit and

vi. Marketing Function Audit.

Market Strategy:

An organization's strategy combines all of its marketing goals into one comprehensive plan. A
good marketing strategy should be drawn from market research and focus on the product mix
in order to achieve the maximum profit and sustain the business. The marketing strategy is the
foundation of a marketing plan.

A marketing strategy is a process or model to allow a company or organization to focus limited

resources on the best opportunities to increase sales and thereby achieve a sustainable
competitive advantage.

Strategic Planning Process:

Strategic planning is an organization's process of defining its strategy, or direction, and making
decisions on allocating its resources to pursue this strategy. It may also extend to control
mechanisms for guiding the implementation of the strategy.
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The Strategic Planning Process

Mission &
Objectives

Environmental
Scanning

Strategy
Formulation

Strategy
Implementation

Evaluation
& Control

Mission and Objectives

The mission statement describes the company's business vision, including the unchanging values
and purpose of the firm and forward-looking visionary goals that guide the pursuit of future
opportunities.
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Guided by the business vision, the firm's leaders can define measurable financial and strategic
objectives. Financial objectives involve measures such as sales targets and earnings growth.
Strategic objectives are related to the firm's business position, and may include measures such
as market share and reputation.

Environmental Scan

The environmental scan includes the following components:

 Internal analysis of the firm

 Analysis of the firm's industry (task environment)
 External macro environment (PEST analysis)

The internal analysis can identify the firm's strengths and weaknesses and the external analysis
reveals opportunities and threats. A profile of the strengths, weaknesses, opportunities, and
threats is generated by means of a SWOT analysis

An industry analysis can be performed using a framework developed by Michael Porter known
as Porter's five forces. This framework evaluates entry barriers, suppliers, customers, substitute
products, and industry rivalry.

Strategy Formulation

Given the information from the environmental scan, the firm should match its strengths to the
opportunities that it has identified, while addressing its weaknesses and external threats.

To attain superior profitability, the firm seeks to develop a competitive advantage over its rivals.
A competitive advantage can be based on cost or differentiation. Michael Porter identified three
industry-independent generic strategies from which the firm can choose.

Strategy Implementation

The selected strategy is implemented by means of programs, budgets, and procedures.

Implementation involves organization of the firm's resources and motivation of the staff to
achieve objectives.

The way in which the strategy is implemented can have a significant impact on whether it will be
successful. In a large company, those who implement the strategy likely will be different people
from those who formulated it. For this reason, care must be taken to communicate the strategy
and the reasoning behind it. Otherwise, the implementation might not succeed if the strategy is
misunderstood or if lower-level managers resist its implementation because they do not
understand why the particular strategy was selected.
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Evaluation & Control

The implementation of the strategy must be monitored and adjustments made as needed.

Evaluation and control consists of the following steps:

1. Define parameters to be measured

2. Define target values for those parameters
3. Perform measurements
4. Compare measured results to the pre-defined standard
5. Make necessary changes

Marketing Strategy –Analysis of Industry and Competition:

Industry analysis—also known as Porter’s Five Forces Analysis—is a very useful tool for
business strategists. It is based on the observation that profit margins vary between industries,
which can be explained by the structure of an industry.

The Five Forces primary purpose is to determine the attractiveness of an industry. However, the
analysis also provides a starting point for formulating strategy and understanding the competitive
landscape in which a company operates.

Porter’s Five Forces Analysis:

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The framework for the Five Forces Analysis consists of these competitive forces:
 Industry rivalry (degree of competition among existing firms)—intense
competition leads to reduced profit potential for companies in the same industry
 Threat of substitutes (products or services)—availability of substitute products will
limit your ability to raise prices
 Bargaining power of buyers—powerful buyers have a significant impact on prices
 Bargaining power of suppliers—powerful suppliers can demand premium prices
and limit your profit
 Barriers to entry (threat of new entrants)—act as a deterrent against new
competitors

Industry analysis and competition

Competition within an industry is grounded in its underlying economic structure. It goes beyond
the behaviour of current competitors.
The state of competition in an industry depends upon five basic competitive forces. The
collective strength of these forces determines profit potential in the industry. Profit potential is
measured in terms of long-term return on invested capital. Different industries have different
profit potential—just as the collective strength of the five forces differs between industries.

Industry analysis as a tool to develop competitive strategy

Industry analysis enables a company to develop a competitive strategy that best defends against
the competitive forces or influences them in its favour. The key to developing a competitive
strategy is to understand the sources of the competitive forces. By developing an understanding
of these competitive forces, the company can:

 Highlight the company’s critical strengths and weaknesses (SWOT analysis)

 Animate its position in the industry
 Clarify areas where strategic changes will result in the greatest payoffs
 Emphasize areas where industry trends indicate the greatest significance as either
opportunities or threats