Monday, November 2, 2009

Importance of Marketing Planning

A company has to have an overall company mission which defines what the company is all about and what makes it unique. For example, is the firm concerned with selling consumer goods (B2C), weapons, heavy machinery (B2B), etc.? Remember it is important not to suffer from marketing myopia, and this is why a business must be defined in terms of a need that is being satisfied and not an existing product. The mission statement will also define the culture, values, and philosophy of the firm. The mission statement provides direction for a firm so that employees, customers, suppliers, investors, and other stakeholders know what the the organization is about and where it is headed. If done well, it also serves to motivate and inspire employees. A good mission statement considers the needs of all stakeholders and makes it clear that the firm is not only concerned about profit. A large number of papers and books have been written about corporate social responsibility (CSR). More will be said about CSR in later chapters.

Companies then must have objectives that tell the company where it should be heading, i.e., give it further direction. Objectives are often in terms of return on investment (ROI), market share, and/or profit. The next step is to have a strategy.

As you know, developing a marketing strategy involves two steps: (1) selecting a target market and (2) developing the best marketing mix (the 4 P’s) to satisfy this target. Finally, the tactics are much more specific and provide more precise details about such matters as, say: where should I advertise? When should I run the ads? How will I get distribution in certain types of stores? etc. In effect, the tactics describe how to achieve the strategies. Resources that are required to implement the tactics are budgeted.

Companies should analyze and track what their competitors are doing. It is important to know the strengths, weaknesses, objectives, and strategies of the competition.

The marketing plan is an important document used by companies for planning. It is a road map and surveys the business environment, describes problems, threats and opportunities in the industry, contains a marketing strategy, and has financial projections/budgets. Do not confuse a marketing plan with a business plan. A marketing plan is concerned more with strategy whereas a business plan is more concerned with financial information. The primary purpose of a business plan is to raise money from venture capitalists or bankers; the primary purpose of a marketing plan is to provide direction for a company. The marketing plan is an integral part of the business plan.