30 minutes to write a marketing plan

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30 Minutes to Write a Marketing Plan John Westwood YOURS TO HAVE AND TO HOLD BUT NOT TO COPY The publication you are reading is protected by copyright law This means that the publisher could take you and your employer to court and claim heavy legal damages if you make unauthorised photocopies from these pages Photocopying copyright material without permission is no different from stealing a magazine from a newsagent, only it doesn’t seem like theft The Copyright Licensing Agency (CLA) is an organisation which issues licences to bring photocopying within the law It has designed licensing services to cover all kinds of special needs in business, education and government If you take photocopies from books, magazines and periodicals at work your employer should be licensed with the CLA Make sure you are protected by a photocopying licence The Copyright Licensing Agency Limited, 90 Tottenham Court Road, London, W1P 0LP Tel: 0171 436 5931 Fax: 0171 436 3986 First published in 1997 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA Enquiries concerning reproduction outside those terms should be sent to the publishers at the undermentioned address: Kogan Page Limited 120 Pentonville Road London N1 9JN © John Westwood, 1997 The right of John Westwood to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988 British Library Cataloguing in Publication Data A CIP record for this book is available from the British Library ISBN 7494 2363 Typeset by Saxon Graphics Ltd, Derby Printed in England by Clays Ltd, St Ives plc CONTENTS What is Marketing Planning? What is selling? 6; What is marketing? 6; What is marketing planning? 7; Stages in the preparation of a marketing plan Situation Analysis 10 The marketing audit 10; The marketing environment – market research 11; What is market segmentation? 15; Information checklist 16; How to present the figures 17; SWOT analysis 19 Objectives, Strategies and Action Plans 21 What is a marketing objective? 21; The product portfolio 23; Relative market growth rate and share 23; What is marketing strategy? 28; Action plans 30 Distribution, Promotion and Budgets 32 The distribution plan 32; The advertising and promotions plan 37; Costs and budgets 39; Budgeting for the cost of a marketing plan 42 Writing the Plan 46 Contents list 47; Introduction 47; Executive summary 49; Situation analysis 50; Marketing objectives 54; Marketing strategies 55; Schedule of what, where and how 56; Sales promotion 57; Budgets and the profit and loss account 57; Controls and update procedures 58 Presenting the Plan, Follow-up and Revision Presenting the plan 60; Follow up and revision 62; Conclusion 64 60 The 30 Minutes Series The Kogan Page 30 Minutes Series has been devised to give your confidence a boost when faced with tackling a new skill or challenge for the first time So the next time you’re thrown in at the deep end and want to bring your skills up to scratch or pep up your career prospects, turn to the 30 Minutes Series for help! Titles available are: 30 Minutes Before Your Job Interview 30 Minutes Before a Meeting 30 Minutes Before a Presentation 30 Minutes to Boost Your Communication Skills 30 Minutes to Succeed in Business Writing 30 Minutes to Master the Internet 30 Minutes to Make the Right Decision 30 Minutes to Prepare a Job Application 30 Minutes to Write a Business Plan 30 Minutes to Write a Marketing Plan 30 Minutes to Write a Report 30 Minutes to Write Sales Letters Available from all good booksellers For further information on the series, please contact: Kogan Page, 120 Pentonville Road, London N1 9JN Tel: 0171 278 0433 Fax: 0171 837 6348 WHAT IS MARKETING PLANNING? A company’s management has many important roles It sets objectives, and develops plans, policies, procedures, strategies and tactics It organises and co-ordinates, directs and controls, motivates and communicates Planning is only one of its roles but a vital one: the company’s corporate or business plan guides it forward The marketing plan is an important part of this overall plan The marketing planning process therefore needs to be carried out as part of the company planning and budgeting process The marketing plan sets out the marketing objectives of the company and suggests strategies for achieving them It does not include all the company’s objectives and strategies There will also be production, financial and personnel objectives, none of which can be set in isolation The plan for the company comprises a number of sub-plans including the overall company marketing plan 30 Minutes to Write a Marketing Plan which need to be agreed and co-ordinated into one overall business plan In turn, the marketing plan can be broken down into a number of smaller marketing plans for individual products or areas, which can be prepared as and when needed This practical book includes only as much theory as is necessary to understand the planning process As you make your way through, you will be shown the principles of marketing planning in a way that will make it easy for you to put together any type of marketing plan Increasingly, sales and marketing personnel are having to put together individual plans for a product or area very quickly This book is designed with this in mind You will find that adopting and following the formal structure of the plan (shown later) will make it easier for you to order your thoughts and the facts logically It will be easier for: ᔢ people to follow your arguments and to see how you reached your conclusions ᔢ you to present a professional-looking and complete document, even from a relatively small amount of information What is selling? Selling is a straightforward concept which involves persuading a customer to buy a product It brings in ‘today’s orders’ However, it is only one aspect of the marketing process What is marketing? The dictionary definition of marketing is: ‘the provision of goods or services to meet consumers’ needs’ In other words, marketing involves finding out what the customer What is Marketing Planning? wants, matching a company’s products to meet those requirements and, in the process making a profit for the company Successful marketing means having the right product available in the right place at the right time and making sure that the customer is aware of it Unlike selling, it aims to bring in ‘tomorrow’s orders’ Bringing together the abilities of the company and the requirements of the customer occurs in the ‘real world’; the ‘marketing environment’, which is not controlled by individuals or companies, is constantly changing and must be monitored continuously Marketing therefore means considering: ᔢ The abilities of the company ᔢ The requirements of the customer ᔢ The marketing environment The abilities of the company can be managed by its marketing department They can control the four main elements of a company’s operation, often called ‘the marketing mix’ The marketing mix, or the four Ps relate to: ᔢ The product sold (Product) ᔢ The pricing policy (Price) ᔢ How the product is promoted (Promotion) ᔢ Methods of distribution (Place) These are four controllable variables which allow a company to come up with a policy which is profitable and satisfies its customers What is marketing planning? The term marketing planning is used to describe the methods of applying marketing resources to achieve marketing objectives It is used to segment markets, identify market 30 Minutes to Write a Marketing Plan position, forecast market size, and plan viable market share within each market segment The marketing planning process involves: ᔢ Carrying out marketing research within and outside the company ᔢ Looking at the company’s strengths and weaknesses ᔢ Making assumptions ᔢ Forecasting ᔢ Setting marketing objectives ᔢ Generating marketing strategies ᔢ Defining programmes ᔢ Setting budgets ᔢ Reviewing the results and revising the objectives, strategies or programmes Marketing planning will: ᔢ Make better use of company resources to identify marketing opportunities ᔢ Encourage team spirit and company identity ᔢ Help the company to move towards achieving its goals Marketing planning is a continuous process, so the plan will need to be reviewed and updated as it is implemented Stages in the preparation of a marketing plan The stages in the preparation of a marketing plan are shown in Figure 1.1 What is Marketing Planning? Set corporate objectives Carry out external marketing research Carry out internal marketing research Carry out SWOT analysis Make assumptions Set marketing objectives and estimate expected results Generate marketing strategies/action plans Define programmes including advertising/promotions plan Set budgets Write plan Communicate plan Use control system Review and update Figure 1.1 The marketing planning process Writing the Plan ᔢ Interest rates will not increase by more than per cent over the next three years ᔢ The present import restraint level of 10 per cent of the market share is respected by the Japanese Sales In this section you should include historical sales going back three years, together with sales forecasts for the next three years Unless you state otherwise, it will be assumed that the years shown in your forecast are calendar years Use invoiced sales rather than order intake figures as the basis of the plan, because other departments in the company, such as production and finance, can only operate on sales figures You will, however, need to include order intake figures in your plan as well, because these will be the order budgets that the sales department will work to More detail would normally be included with regard to the next 12 months’ sales forecast, since this will become the annual budget for the product or area covered by the plan You would normally only include the sales projection for the entire area and related products A more detailed breakdown into individual products and sub-areas would be included under key products, key sales areas or in the appendix to the plan The format for setting out this information follows the guidelines given in Chapter An example is shown in Figure 5.2 (overleaf) Strategic markets In this section you should include historical information and forecasts for the company’s sales in key industry sectors, which can be presented in two ways: by (i) showing the percentage of company sales into each market; or (ii) 51 30 Minutes to Write a Marketing Plan The Equipment Manufacturing Company Sales figures (historical and forecast) Sales area: UK Year 19X3 Filters 200 Valves 1400 Components 300 19X4 450 1200 350 19X5 600 1000 400 19X6 750 1060 450 forecast 19X7 900 1151 525 19X8 1050 1287 600 Total 2000 2000 2260 2576 2937 1900 Figure 5.2: Sales projection for UK (all values in £k) by showing the percentage share of individual markets that the company believes it has Only include your key markets; ideally, this should be between three and six industries, because if you limit yourself to one, you will be very vulnerable to changes or fluctuations within that industry This type of information can be presented either in tabular or graphic form Figure 5.3 shows an example in graphic form It would be helpful to include some background notes on the key industries Key products This section lists your key products and details technological and commercial factors relating to them This would include the results of the SWOT analysis on your products and those of your competitors The information could be presented in a similar format to the data on strategic markets, or it could be included in a product portfolio matrix An example of a product portfolio matrix was shown in Figure 3.3 52 Writing the Plan Company strategic markets 19×5 Other 29% Chem/Petrochem 36% Food 8% Paper 12% Water 15% Company strategic markets 19×8 Other 25% Chem/Petrochem 33% Food 7% Paper 12% Water 23% Figure 5.3: Graphic representation of strategic markets Key sales areas This information is presented in the same way as that on strategic markets, but is given in relation to geographical areas rather than industry sectors The information can be presented in tabular or graphic form In the narrative of your plan you should include relevant information on the size of each key market, growth rates, your position in each market now and your projected 53 30 Minutes to Write a Marketing Plan The Equipment Manufacturing Company Sales figures (historical and forecast) Sales area: UK Product: Ball valves Year South Midlands North Wales Scotland/NI 19X3 295 485 525 45 50 19X4 250 415 420 55 60 19X5 230 360 300 60 50 19X6 240 370 325 65 70 forecast 19X7 250 390 351 70 90 19X8 260 420 422 75 110 Total UK 1400 1200 1000 1070 1151 1287 Figure 5.4: Representation of key sales areas future position, as well as comments which may relate to your distributor, agent or other methods of distribution Marketing objectives This is a list of the objectives to be achieved, quantified in terms of order intake, sales turnover, market share and profit In the written plan list your key objectives only Examples of a company’s objectives for its UK plan are given below: ᔢ To increase UK sales by 10 per cent per year in real terms for the next three years ᔢ To double ball valve sales to the water industry within three years ᔢ To increase sales of packages to 50 units within three years ᔢ To double market share for filters in the water industry by 19X8 ᔢ To double distributor sales in Scotland and NI by 19X8 ᔢ To increase overall gross margins from 39 to 43 per cent by 19X8 54 Writing the Plan Marketing strategies Indicate whether you are adopting defensive, developing or attacking strategies – or a mixture of different types The individual strategies should then be divided up under the headings of the four main elements of the marketing mix: ᔢ Strategies relating to products ᔢ Strategies relating to pricing ᔢ Strategies relating to advertising/promotion ᔢ Strategies relating to distribution There may be some overlap between the individual categories, but this does not matter so long as all of the strategies are listed The example below includes a mixture of developing and attacking strategies Products ᔢ Package products (ball valves with filters) ᔢ Design new ball valve ᔢ Design replacement for Type S filter Pricing ᔢ Discount policy for Type S filters will be progressively withdrawn ᔢ Penetration policy will be adopted with packages as this will help us to sell more valves ᔢ Penetration policy will be adopted on Type K filters since these generate a large proportion of replacement cartridges Promotion ᔢ Change sales force organisation ᔢ Restructure sales management ᔢ Increase advertising 55 30 Minutes to Write a Marketing Plan ᔢ Use mail shots ᔢ Increase exhibition coverage Distribution ᔢ Change distribution ᔢ Increase own sales coverage Schedule of what, where and how This is the master schedule showing the programme for the implementation of the action plans Each action plan should be listed either in the master schedule or in a subschedule for the functions of product, pricing, promotion or distribution These schedules indicate to each department and to each member of staff their responsibilities and the timetable for carrying them out They should take the form of bar charts An example of a master schedule is shown in Figure 5.5 Master schedule Area: UK Year: 19X6 Month 10 11 12 Responsibility Action plan Dept Person Restructure Mail shot Advertising Exhibitions Pricing Distribution Market analysis Product design Executive Marketing Marketing Marketing Sales Marketing Marketing Engineering RLT AJK AJK AJK EGM AJK AJK TRG Figure 5.5: Example of a master schedule 56 Writing the Plan Detailed action plans should not be included in the main body of the marketing plan, but could be included in an appendix Sales promotion Under this heading you should detail your advertising and promotions plan This includes your personnel requirements as well as the costs of advertising and sales promotion Define the mix of distribution channels that you will be using and the structure of your sales organisation, including any changes that you intend to make as part of your plan Include a list of existing and additional sales personnel as well as an organisation chart for the sales department The charts can be in an appendix to the main plan Include the details and costs of your advertising and sales promotion campaigns A detailed advertising and promotions schedule for the next 12 months should be in an appendix Budgets and the profit and loss account The total cost of implementing the plan is the minimum information that needs to be included It should confirm that the return in increased contribution and profit justifies the expenditure in the action plans and the advertising and promotion plan The budgeted extra costs will have an effect on the company profit and loss account The additional sales projected by the plan and the extra costs involved must be presented in the written plan in a way that shows the extra contribution that the plan will make to company profits The figures should be presented as shown in Figure 4.8 They can also be presented as a complete profit and loss account for the area and products of the plan: see the example shown in Figure 5.6 (overleaf) 57 30 Minutes to Write a Marketing Plan 19X6 £k Invoiced sales Cost of sales Gross profit 2260 1356 904 19X7 £k 2576 1507 1069 19X8 £k 2937 1674 1263 Sales & marketing costs Salaries Recruitment Travel/entertaining Car costs Advertising Exhibitions Literature Sundry items 239.8 9.1 37.9 20.4 21.3 38.3 15.3 10.3 249.4 3.2 39.4 21.2 22.2 11.0 36.0 10.7 259.4 3.4 41.0 22.0 23.0 26.4 31.7 11.1 Total sales costs Administration costs Data processing costs Distribution costs Total operating expenses 392.4 159.0 32.0 60.0 643.4 393.1 166.4 33.3 65.0 657.8 418.0 174.1 34.6 70.0 696.7 Operating profit 260.6 411.2 566.3 Figure 5.6: Example of a profit and loss account Controls and update procedures It is important to have a suitable monitoring and control system to measure performance in achieving the objectives of the marketing plan and to recommend corrective action where necessary This monitoring and control system should be included in the written plan The control process involves: ᔢ Establishing standards: these should take into account budgeted sales and costs and the time-scales for the implementation of the action plans 58 Writing the Plan ᔢ Measuring performance: this means comparing actual performance against the standards ᔢ Proposing measures to correct deviations from the standard and detailing corrective procedures to be implemented if the variation from standard exceeds certain limits These limits should be defined in the written plan The control system will affect the people who are responsible for implementing the plan rather than the schedules and costs themselves It should be easy to operate and allow reasonable variations from the standards before coming into action A marketing plan is not set in stone As you implement it you will find that economic conditions may change, certain strategies may not be as effective as you thought and there may be delays in the implementation of some action plans Because of this, an update procedure should be included in the written plan This may simply state ’This plan is to be revised every 12 months’ Certainly, all marketing plans should be updated on an annual basis 59 30 Minutes to Write a Marketing Plan 60 PRESENTING THE PLAN, FOLLOW UP AND REVISION Once the plan is complete, it must be communicated to those who must agree to its implementation and to those who will actually implement it A marketing plan is a sensitive and confidential document that would be of considerable interest to competitors Personnel move on and take information with them Copies should therefore only be given to personnel who really need them, to senior executives and to the heads of departments Presenting the plan Presentation of the plan needs to be even more clear and concise than the written document itself You may only have an hour – or even less – to present a plan that has taken many months to prepare 60 Presenting the Plan, Follow-up and Revision Nowadays, everyone uses overhead presentations, but some types of presentation package make a greater impact than others I favour the use of the Microsoft Office software package with the Powerpoint presentation programme Powerpoint is extremely powerful and, if used properly, can make a tremendous impression The slides are prepared on a PC and the presentation can then be made from the PC or the slides printed off on to overhead transparencies The package itself is in colour – so use it! If you prepare the presentation on overhead transparencies they can be printed in colour Powerpoint really comes into its own if you make the presentation from a PC, and this can be done in a number of ways: ᔢ You can use a PC with a reasonably large screen ᔢ You can connect a laptop to a larger PC screen ᔢ You can use an ‘overlay’ projector on top of an overhead projector (This requires a powerful overhead projector with a strong light) ᔢ You can also use a special ‘projector’ which can be connected to a PC You should use large font sizes on your slides, use a large screen and make the presentation in a room that can be properly darkened to ensure that everyone can see the presentation and read all the slides Your presentation will look more professional if you prepare a template with your company name and logo on it By using Powerpoint you can prepare slides from scratch, or import files from Word or Excel These can be text, tables or graphics Powerpoint also includes a full range of graphic images called ‘Clipart’, such as maps of countries and continents, images of computers, and even little cartoon people The use of some of these items in the right places will brighten up any presentation But not 61 30 Minutes to Write a Marketing Plan overdo it! Other techniques that can be used include bringing in bullet points one by one on a slide to avoid your audience trying to read the whole slide at once instead of listening to your presentation Some examples of presentation slides are shown in Figures 6.1, 6.2 and 6.3 Marketing plan 19 × KEY OBJECTIVES ᔢ Increase UK sales by 10% per year ᔢ Double ball valve sales to water industry ᔢ Increase package sales to 50 per year ᔢ Double filter market share in water industry ᔢ Double distributor sales in Scotland/NI ᔢ Increase gross margins from 39 to 43% EMC Ltd Figure 6.1: Objectives Follow-up and revision After presentation, the plan must be implemented The schedules and action plans will be followed and the results become apparent The control and update procedures will allow progress to be monitored and any necessary changes to be made Most companies use their marketing plans as a basis for the annual budgeting process And so the iterative process 62 Marketing plan 19 × VALVE SALES BY AREA 19×5 Scotland/NI 19×4 19×3 Wales North Midlands South 100 200 300 400 500 600 Sales (£K) EMC Ltd Figure 6.2: Valve sales by area Marketing plan 19 × NEW SALES STRUCTURES GENERAL SALES MANAGER Product/ Field sales manager Distributor Sales manager sales manager (water industry) Sales engineers Sales engineers Distributors EMC Ltd Figure 6.3: New sales structure 63 30 Minutes to Write a Marketing Plan continues: from marketing plan to budget, from budget to update/revision of marketing plan, and on to the next budget This procedure can be simplified if you set up basic formats for both your marketing plans and budgets on your PC The plan itself can be set up as a blank format on Word, with blank spreadsheets in Excel If you lay it out with numbered pages, you can impose the discipline on your colleagues so that a common company standard is used for marketing plans, budgets and their presentation This will also make it easier for those with less training or experience in marketing planning than you to prepare the plans that are necessary for their part of the business The biggest advantage of a common format is that any individual plan can easily be incorporated into the overall company marketing plan, and sets of figures can be added together in interlinked spreadsheets Conclusion This book is a quick guide to marketing planning If you follow the procedures shown, it will make your company’s marketing planning easier and more professional in the future Practice makes better, but not perfect, and each time the marketing planning process is followed through, the results will improve With the best planning in the world, markets are still affected by forces outside your control: but with a proper marketing plan and an understanding of the marketing planning process, you can adapt to the changing conditions of the competitive world in which we live 64 ... Writing 30 Minutes to Master the Internet 30 Minutes to Make the Right Decision 30 Minutes to Prepare a Job Application 30 Minutes to Write a Business Plan 30 Minutes to Write a Marketing Plan 30 Minutes. .. sales Internal market research As well as external market research, your company has a wealth of data that is invaluable in the preparation of a marketing plan There is likely to be so much data... which can be set in isolation The plan for the company comprises a number of sub-plans including the overall company marketing plan 30 Minutes to Write a Marketing Plan which need to be agreed and
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