Marketing Planning, Orientations and Concepts

INTRODUCTION

Far – reaching changes have been taking place in the Indian economy during the recent past, consequents to the opening up of our economy through globalization and liberalization policies. The flood gates have been through thrown open to allow international competition for manufactured goods and as well as services, making it a question of survival of the fittest in any industry. In the present highly competitive economy, which can be called as Buyer’s market, it is the customer who wields full power. He can make or wreck a company. No wonder that the collective battle cry from sales and marketing people, retailers, wholesalers and advertising wizards alike is now ‘Serve the customer’, or ‘Delight the customer’.

The customer who was considered the ’King’ is now treated almost like ‘God’, emulating the highly successful marketing people of Japan. When consumer expectations become higher and higher, superior market driven strategies or customer driven strategies and their execution in the market are important. Companies have to be fully customer oriented to succeed in the present competitive scenario, and should “Think Customer”, “Live for Customer”, “Smell Customer”, and “Build Customer Relations”.

MARKETING

“Marketing is defined as a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and values with others”. – (PHILIP KOTLER 2007)

THE AMERICAN MARKETING ASSOCIATION defines marketing as “Marketing is a performance of Business activities that directs the flow of goods and services from producer to customer or user”. These traditional definitions have undergone some changes and the new version is given as “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of values with others”. Thus marketing is a communication channel through which the industry and consumers are communicated.

MARKETING PLAN

A marketing plan is a formal statement of a set of business goals, the reason why they are believed attainable, and the plan for reaching goals and the way of reaching to the customer about to their product. Business plans may target changes in perception and branding by the customer, client, tax- payer, or larger community. When managing a business, a business plan, or B-plan, is often confused with the term Marketing Plan. Marketing plans are decision-making tools. There is no fixed content for a marketing plan. Rather the content and format of the marketing plan is determined by the goals and audience. (Deboreh 2010)

A marketing plan represents all aspects of business planning process; declaring vision and strategy alongside sub-plans to cover marketing, finance, operations, human resources as well as a legal plan, when required.

For example, a business plan for a non-profit might discuss the fit between the business plan and the organization’s mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organization’s ability to repay the loan. Venture capitalists are primarily concerned about initial investment, feasibility, and exit valuation. A business plan for a project required equity financing will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation.

Preparing a Marketing plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing among others. “A good Marketing plan can help to make a good business credible, understandable, and attractive to someone who is unfamiliar with the business. Writing a good Marketing plan can’t guarantee success, but it can go long way toward reducing the odds of failure”.

THE MARKETING ORIENTATIONS OR CONCEPTS

The marketing function or activities are conducted by various companies based on six alternative or orientations. They are:

The Production Concept
The Product Concept
The Selling Concept
The Marketing Concept
The Customer Concept
The Societal Marketing Concept

The Production Concept

The production Concept believes that consumers will favor products that are readily available at reasonable prices. Improvement in production and distribution efficiency will be the focus for managements under this concept. When the demand for a product exceeds the supply, manufacturers have too increase production. When the product’s cost is too high, the management has to bring it down to affordable levels. Production concept, though useful in some situations, could result in ‘Marketing Myopia’, according to Theodore Levitt. Companies following this concept focus too narrowly on their own activities and lose sight of the real objective of customer’s need satisfaction.

The Product Concept

The product concept believes that the consumers will favor products that offer the most in quality, performance & innovative features. Continuous improvements in product and quality are essential for companies that follow the product concept. So, this concept may also lead to Marketing Myopia.

The Selling Concept

This concept believes that the consumers will not buy enough of the company’s products unless it undertakes pressure selling tactics and heavy promotion efforts. Buyers are believed to have a buying inertia. This concept is especially used for unsought goods which buyers do not think of buying, like cemetery plots, life insurance, etc.

The Marketing Concept

This concept believes that achieving the company’s objectives depends on understanding the needs & wants of target markets and delivering the desired satisfaction in a better way than what the competitors are doing.

The Customer Concept

Many companies are today moving beyond the marketing concept to the customer concept. These companies shape separate offers, services and messages to individual customers, based on their individual preferences. They hope to achieve profitable growth through capturing a larger share of each customer’s expenditures by building high customer’s loyalty and focusing on customer’s life time value.

EXAMPLE: Barbie Dolls, Levi Strauss jeans, Dell Computers.

The Societal Marketing Concept

This concept believes that organizations should determine the needs, wants and interests of target markets. It should then deliver superior value to the customers in a way that maintains or improves the consumer’s and the society’s well being.

Society (Human welfare, environment)

Consumers (Needs, wants and Company (Sales volume, profits

Satisfaction) and growth)

MARKETING PLANNING PROCESS

The marketing Planning process consists of the following activities:

Analysing market opportunities
Selecting target markets
Developing the marketing mix
Managing the marketing efforts.

At the center of the process stand the consumers. The objective is to build a strong and profitable customer relationship.

The first step is market segmentation, targeting and positioning, to customers the company should serve and how. This process identifies the total market, and then divides it into smaller segments.
The next step is to design a marketing mix consisting of factors under its control like :

I. Product

II. Place

III. Price

IV. Promotion

For identifying best marketing mix combination and to put into action, the company engages in the activities like:

I. Marketing analysis
II. Planning
III. Implementation
IV. Control activities

With the help of these, the company watches & adopt to the actors and forces in the marketing environment around it.

Fig. The Marketing Planning Process

1, 2, 3,4 DENOTES:

1Marketing Intermediaries 3 Market planning

2 Marketing Control 4 Competitors

DEVELOPMENT OF MARKETING MIX

The marketing manager is a mixer of ingredients, according to JAMES CULLITON, a noted Marketing expert, who coined the expression,” Marketing Mix”

“The marketing mix is the set of controllable, tactical, marketing tools that the firm blends to produce the response it wants in the target market”

– (PHILIP KOTLER 2007)

The marketing mix consists of the variables such as:

Product
Price
Place
Promotion

These are well known as the Four P’s of Marketing as classified by McCarthy and this figure below gives clear description about the variables of marketing mix and its various tools.

Place stands for the goods and services offered by a company to the target market, to satisfy needs and wants.
Price refers to money value that the consumers have to pay to buy for the product or services.
Promotion refers to the activities of Advertising, personal selling, sales promotion, public relations and communicating products benefits and attributes to target customers to persuade them to purchase.
Place stands for physical distribution activities through which the products moves from the industry to the customers.

To be successful, the marketing programmes have to blend the 4 variables into an ideal integrated action plan aimed at achieving the corporate objective. While the 4 P’s concepts relates to the sellers perspective of the market.

The other P’s which are included as 7 P’s of marketing are:

Packaging
Positioning
People

Packaging is the fifth element of the marketing mix, which refers to the outer physical coverage of the product or the way in which your product is appearing outside.

Positioning refers to the present position of our product among the consumers. “How they think about our companyWhat position does the concern have in the marketWhat is the customer’s perception towards our product in the market?” these questions should be answered in the case of positioning of a product in the market.

People refers to both inside and outside people, the former refers to the employees of the industry and the later refers to the customers of our products and services, where they are considered as the important resources of marketing our goods and services.

The 7 P’s are a useful framework for deciding how the company’s resources will be manipulated (strategically) to achieve the objectives. However, they are not the only framework, and may divert attention from the real issues. The focus of the strategies must be the objectives to be achieved – not process of planning itself. Only if it fits the needs of these objectives should you choose, as we have done, to use the framework of the 7 P’s. (Jackie 2010)

The strategy statement can take the form of a purely verbal description of the strategic options which have been chosen.

Thus these are the various tools and variables described under the marketing mix.

THE MARKETING AND SALES PLANNING PROCESS

Marketing process can be realized by the marketing mix in step 4. The last step in the process is the marketing controlling. In most organizations, “strategic planning” is an annual process, typically covering just the year ahead. Occasionally, a few organizations may look at a practical plan which stretches three or more years ahead. To be most effective, the plan has to be formalized, usually in written form, as a formal “marketing plan”.

The essence of the process is that it moves from the general to the specific, from the vision to the mission to the goals to the corporate objectives of the organization, then down to the individual action plans for each part of the marketing program. It is also an interactive process, so that the draft output of each stage is cheeked to see what impact it has on the earlier stages, and is amended.

TARGET MARKETING

To define a target market for your business plan, you should research the potential buying audience for your product. This could range from millions of people if you are starting an online business, to a few thousand individuals if you are opening a retail store in a small town. If you are catering to the consumer market, narrow your potential customer base to a defined demographic group. By doing so, your business will not only be more attractive to investors, but you will have a much easier time compiling sales and marketing plan.

Study your product or service and determine the most likely consumer. Define the age range, gender, marital status, and income level of the individual most likely to be your customer. Explain the motivations for purchasing your product or service. Is it a necessity or luxuryWhat value does this product bringIt’s best not to assume or guess. Use surveys, questionnaires, or secondary research to gather your demographic data.

Once you have defined the target market:
Explain the purchase habits of this demographic group.
Show how your company will impact those purchase habits.
Explain the motivation behind this demographic group and how you will help them meet their needs.
Project future changes in this market.
Indicate how you will meet their changing needs.

Base your future projections on research and details from your findings. Make projection based on past buying habits, the average purchase amount, and other factors, such as your ability to make the products or services available. The more you know about this target market, the more confidence you will have in your sales projections.

The same need to identify your target audience (business-to-consumer market) will also hold true if you are serving a business market (business-to-business market). You need to determine which companies will benefit from your products or services. Will you meet the needs of a specific industry or several industriesLarge or small businessesPublic or privately owned businessesDefine exactly the types of businesses that will buy our product or services and target them through your marketing efforts. Determine how you will reach your target market, i.e. online, by referral, by cold-calling. For more about learning about the customer you intend to pursue, read Use Demographics to Understand Your Target Market.

Another way to look at target market is to consider how you are positioning your company and your products. Read “What’s Your Position in the Market?” to get the basics of this important but tricky concept.

MARKETING PLANNING AIMS AND OBJECTIVES

Behind the corporate objective, which in themselves offer the main context for the marketing plan, will lay the “corporate mission”, which in turn provides the context for these corporate objectives. In a sales-oriented organization, the marketing planning function designs incentive pay plans to not only motivate and reward frontline staff fairly but also to align marketing activities with corporate mission.

This “corporate mission” can be thought of as a definition of what the organization is, of what it does: “our business is …” This definition should not be too narrow, or it will constrict the development of the organization; a too rigorous concentration on the view that “we are in the business of making meat-scales,” as IBM was during the early 1900s, might have limited its subsequent development into other areas. On the other hand, it should not be too wide or it will become meaningless: “we want to make a profit” is not too helpful in developing specific plans.

Abell suggested that the definition should cover three dimensions: “customer groups” to be served, “customer needs” to be served, and “technologies” to be utilized. Thus, the definition of IBM’s “corporate mission” in the 1940s might well have been: “We are in the business of handling accounting information [customer need] for the larger US organizations [customer group] by means of punched cards [technology]”. (Karunakaran 2010)

Perhaps the most important factor in successful marketing is the “corporate vision.” Surprisingly, it is largely neglected by marketing textbooks, although not by the popular exponents of corporate strategy-indeed, it was perhaps the main theme of the book by peters and waterman, in the form of their “Super ordinate Goals”. “in search of Excellence” said: “Nothing drives progress like the imagination. The idea precedes the deed.” if the organization in general, and its chief executive in particular, has a strong vision of where its future lies, then there is an good chance that the organization will achieve a strong position in its markets (and attain that future). This will be not least because its strategies will be consistent and will be supported by its staff at all levels.

In this context, all of IBM’s marketing activities were underpinned by its philosophy of “customer service,” a vision originally promoted by the charismatic Watson dynasty. The emphasis at this stage is on obtaining a complete and accurate picture.

A “traditional” – albeit product-based-format for a “brand reference book” (or, indeed, a “marketing facts book”) was suggested by Godley more than three decades ago:
Financial data-facts for this section will come from management accounting, costing and finance sections.
Product data-form production, research and development.
Sales and distribution data-sales, packaging, distribution sections.
Advertising, sales promotion, merchandising data-information from these departments.

Market data and miscellany-form market research, who would in most cases act as a source for this information. His sources of data, however, assume the resources of a very large organization. In most organizations they would be obtained from a much smaller set of people (and not a few of them would be generated by the marketing manager alone).

It is apparent that a marketing audit can be a complex process, but the aim is simple: “it is only to identify those existing (external and internal) factors which will have a significant impact on the future plans of the company.” It is clear that the basic material to be input to the marketing audit should be comprehensive.

Accordingly, the best approach is to accumulate this material continuously, as and when it becomes available; since this avoids the otherwise heavy workload involved in collecting it as part of the regular, typically annual, planning process itself-when time is usually at a premium. Even so, the first task of this annual process should be to check that the material held in the current facts book or facts files actually is comprehensive and accurate, and can form a sound basis for the marketing audit itself.

MARKETING PROGRAMS

Marketing programs are the most important, practical outcome of the whole planning process. These plans must therefore be:

Clear – They should be an unambiguous statement of ‘exactly’ what is to be done.
Quantified – The predicted outcome of each activity should be, as far as possible, quantified, so that its performance can be monitored.
Focused – The temptation to proliferate activities beyond the numbers which can be realistically controlled should be avoided. The 80:20 Rule applies in this context too.
Realistic – They should be achievable.
Agreed – Those who are to implement them should be committed to them, and agree that they are achievable. The resulting plans should become a working document which will guide the campaigns taking place throughout the organization over the period of the plan. If the marketing plan is to work, every exception to it (throughout the year) must be questioned; and the lessons learnt, to be incorporated in the next year’s planning.

A marketing plan for a small business typically includes Small Business Administration Description of competitors, including the level of demand for the product or service and the strengths and weaknesses of competitors.

Description of the product or service, including special features.
Marketing budget, including the advertising and promotional plan
Description of the business location, including advantages and disadvantages for marketing
Pricing strategy
Market segmentation
Operational plan

Operational plans are an important element of writing a business plan and they notify business assessors for how business owners are going to release product/services into the market. That’s why operational plans are also a very important part of writing a marketing plan. In simple words, operational plans help to understand ways for business reviewers, by which products are set to pass the production phase heading toward the targeted customers and these plans must be in the business plan outline. Operational plans are a usual phenomenon in a how to write a business plan, but they outline crucial answers basic questions as such:

What are the daily activities of a business
What is the raw material sources used
How will the company or business use vendors and suppliers
What are the labours requirements
Who is the product supplier

Operational plans need to ascertain the activities and finances for almost every section of the firm or business for the next 1 or 3 years. Operational plans also connect with intended plans and the activities that the business may deliver to its customer base.

Good operational plans ought to include:

Apparent target areas
Preferred results
A procedure to supervise growth execution schedules
Employment and resource requirements
Quality levels
Finally, activities which a firm or business may deliver to its targeted customers.

REFERENCES:

Deboreh (2010) International journal of Market research, “ Agenda Development for marketing research” vol 52, pp 339 – 362.

Luan (june 2010) journal of marketing research, “Forecasting marketing mix responsiveness for new product” vol 47, pp 444 – 457.

Karunakaran (2010) “Marketing Management” The Himalaya publishing house 1st edition pp256

philip kotler (2007) “Marketing Management” Analysis, planning, implementation and control 9th edition prentice hall, New jersey

Baker, M., J.,Hart, S. (2007) the Marketing Book, (5TH edn.), Butterworth- Heinemann,UK.