Everything you need to know about the elements of marketing planning. Marketing planning involves setting of objectives and making plans for how these objectives can be achieved.
Marketing planning involves deciding the policies, strategies, procedures, programmes, schedules and budget.
Marketing planning, like any planning, is basically simple in concept. In essence, it is a statement of objectives and the means by which one intends to achieve them — in both short-range and long-range planning.
For short- range planning it involves determining goals and means of attainment for the fiscal year immediately ahead.
Some of the elements of marketing planning are as follows:-
1. Objectives 2. Forecasts 3. Policies 4. Procedures 5. Programmes 6. Schedule 7. Budget 8. Product Line 9. Market
10. Sales Forecasting 11. Packaging 12. Pricing 13. Inventory and Distribution 14. Sales and Advertising 15. Customer Services 16. Credits and Collections 17. Competitors Actions.
Elements of Marketing Planning: Product Line, Market, Sales Forecasting, Packaging, Inventory, Distribution and Other Details
Elements of Marketing Planning – 7 Important Elements: Objectives, Forecasts, Policies, Procedures, Programmes, Schedule and Budget
The various elements which are a part of the marketing process are as follows:
Element # 1. Objectives:
This is the most fundamental aspect of the marketing plan. The marketing executive needs to fix the objectives and explain them clearly to his staff and motivate them to achieve these goals.
The objectives should be set keeping in mind the consumer demands in the specific product market, market conditions, sales projections, competition, etc. The marketing targets should be aligned in accordance with the overall goals and objectives of the company.
Element # 2. Forecasts:
Planning is based on forecasts for the future; it is a future oriented activity. Forecasts give an idea about the opportunities that may arise in future and warn about any possible challenges.
Forecasts enable a company to minimise risks and seize the opportunities with the most favourable outcomes. It helps to take the appropriate decisions at the right time. Forecasts are made about future customer demands, availability of raw materials, competitors’ strategies, economic conditions, governmental policies, etc.
Element # 3. Policies:
Policies are the guideline for achieving the set objectives of the firm. They guide the managers, administrators and the subordinates of the company as what is to be done in a particular situation. Policies are the basic principles through which the objectives are attempted to be achieved.
Policies may be of three types:
(i) Basic policies- These guide the top management.
(ii) Common policies- These guide the middle and lower level managers.
(iii) Departmental policies- These are meant to serve as guidelines to departmental heads.
Element # 4. Procedures:
Procedures are laid down to serve as guidelines to carry out the marketing activities. A procedure consists of a sequence of activities that are to be executed in a systematic manner to achieve certain goals. Marketing procedures provide guidance in implementation of proper marketing practices in an orderly way.
Element # 5. Programmes:
A marketing programme is an agenda involving the use of all the elements of marketing mix in order to achieve certain marketing objectives. It is chalked out keeping in view the policies, procedures and targets of the organization. Programmes may be made in connection with aspects of advertising, promotion, pricing, distribution, product design, etc.
Element # 6. Schedule:
A schedule shows the time and period when a particular activity has to be undertaken. It is a plan for performing a work, specifying the order and time allotted for each constituent part.
The schedule specifies the actual time when a marketing project is to be started, the sequence in which activities are to be performed and the time limit within which each activity should be completed so that the overall project is implemented within a prescribed time period.
Element # 7. Budget:
Budget is related to the financial aspect of marketing planning. A marketing budget is the estimation of total cost that will be incurred in the overall marketing process. The expenditures related to advertising, marketing communication, sales promotion, salaries to salespersons, etc. will be accounted for. The estimations are made after conducting market research for greater accuracy. It is important to consider the marketing plan and media used while preparing the budget.
Elements of Marketing Planning – Top 10 Elements: Product Line, Market, Sales Forecasting, Packaging, Pricing, Customer’s Service, Competitor’s Action and a Few Others
A marketing plan must provide for every element of marketing. The key elements are discussed briefly here.
(i) The Product Line:
First and most important is the line of products and services to be offered for sale. Product lines rarely are static. Products are growing and declining at differentiating rates. They produce varying rates of profit. Decisions must be made to drop products and add new products, and timing in doing so is important.
The marketing plan begins with a listing of each product in the line and each new product to be introduced in the coming year. A marketing plan should be prepared for each product, although the marketing manager may find that similar products can be grouped together for planning purposes.
As a rule, however, no two products require exactly the same treatment. The essence of marketing planning is knowing the sales and profit potential of each product and then thinking through the actions that will maximise sales and profits for the line as a whole.
A listing should be made for each product’s advantages and disadvantages and customer benefits compared with those of competitors. In selling we feature the advantages and benefits of our product, but in planning it is essential that we also face up to any product weaknesses.
New products to the introduced require special treatment and special planning. The marketing manager must make sufficient effort to ensure their successful introduction without neglecting the ‘bread-and-butter’ items already in the line.
(ii) The Market:
The essence of maximising short-range profits lies in the sales emphasis to be place on the most profitable products, consistent with the market potential for each and the costs of selling and distributing each.
The second key element of a marketing plan, therefore, is the market for the product line. As experienced marketing people know, all markets are segmented, and different products have different appeals to different segments.
Congeography, income, sex, age, family size, marital status, education, social class, ethnic origin, and many other categories, depending on the factors that influence demand and buying motives for each product or service. Industrial markets can be classified by type, location, potential usage by customer, and the markets served by the industrial user.
Knowledge of market segment by potential, by the acceptance of the company’s brand, by competitors’ standings, and by the costs required to penetrate each market segment- becomes the basis for intelligent marketing planning.
Every company and product we have ever dealt with was strong in some market segments and weak in others. Whether to concentrate marketing funds on the strong areas or to build up the weaker areas is always a difficult and intriguing question of the marketing manager.
(iii) Sales Forecasting:
Accurate sales forecasting is an essential business function if customers are to receive good service and if manufacturing and inventory costs are to be kept as low as possible. We have heard sales managers say that forecasting sales is pointless because there are too many unforeseen variables.
Our answer is that someone in the business has to do it. If no one else does, then the manufacturing department must do it. But the marketing department is in the best position to forecast even though the task may be difficult.
The important thing to remember is that sales forecasting should be continuous and not performed just once a year for once a quarter. Revisions should be circulated to departments concerned as soon as conditions indicate that a change in forecast is necessary.
(iv) Packaging:
In certain types of consumer goods, packaging is as important as, if not more important than, the product itself. In companies handling goods of this type the marketing manager must concern himself with planning for packaging. Packaging has long since increased to be merely a protection for the product.
In self- service marketing, particularly, the package is the prime sales tool. Timing on package changes is as important as timing for new product introductions. The marketing plan, therefore, should cover the types of package changes to be made, and it should specify the timing of the changes.
(v) Pricing:
Pricing is perhaps the most difficult aspect of marketing, yet it has a major impact on profits. It is the weakest link in many companies’ marketing planning.
Pricing decisions are affected by production and marketing costs, product differences, brand standing, demand curves, substitute products and materials, and competitors’ prices. Marketing managers normally are aware of the need to be competitive in their pricing. We have found, however, that some marketing managers are not aware of – or do not take full advantage of – two facts that can increase profits when applied to pricing.
The first fact is that there is no one price that will capture all the market. Different market segments react differently to price. This is because one segment is better able or more willing to pay a higher price for the same product than another segment, or it is because the brand image differs by different market segments, or both.
Industrial market segments also react differently to price. Different types of industrial buyers will pay different prices for the same product; depending on how carefully they shop the market, how important the industrial material is to the cost of their own product, or how important they consider service or the quality reputation of the supplier.
The second fact is that there is one price that will produce more profit than any other. Income equals price times number of units sold; normally, the lower the price the more the units of sale. There is one price that will produce maximum income.
Maximum income, however, does not necessarily mean maximum profits. To maximise profits, therefore, income at various levels must be considered along with the cost of production and the cost of sales at each level of unit volume.
The highest profit may result from a high price and low-unit sales, or from something in between these two extremes. It is only by costing various approaches in advance that one can pick the best from a profit standpoint. Market tests may be necessary to check out one’s assumptions.
The marketing manager who is concerned merely with meeting competitors’ prices or with increasing share of market or with getting a fixed mark-up over cost will fail to maximise income.
One marketing manager we know were so concerned with lowering prices and increasing share of market that he changed the company’s quality image, lost some of the more profitable segments of the market, increased the company’s investment in production facilities to meet higher unit sales, but failed to improve the company’s profits.
(vi) Inventory and Distribution:
Finished-goods inventories and physical distribution may or may not be under the control of the marketing manager. His plans, nevertheless, must take these two important marketing elements into consideration. The old-time sales-oriented manager was concerned only with having sufficient inventory at the time and place it was needed to fill orders promptly.
The profit-oriented marketing manager, on the other hand, knows that inventories and distribution are important costs, and he is concerned with balancing these costs against customer service requirements. He may even find it more profitable to forgo some business than to require high-cost inventory and distribution practices to meet certain customers’ needs.
As in pricing, the problem is to find the combination that will maximise profits. Not only is this a marketing problem, but it is also a production and financial problem. From a cost standpoint the production manager must consider the savings from long production runs compared with the cost of carrying larger inventories versus higher costs of short production runs compared with lower investment in inventory.
Some companies with high shipment costs, such as steel and flour, and those in which the costs of materials or production are high compared with marketing costs, such as petroleum and automobiles, have found it wise to put the control of inventories and distribution under one executive who is responsible to neither the marketing manager nor the production manager.
Irrespective of the company’s organisational arrangement, a good marketing plan will include requirements for finished-goods inventories by time and place and will include plans forgetting the product to the ultimate purchaser.
Operations research, or systems analysis, teams have made some of their greatest contributions in the areas of inventory and distribution. Operations research techniques, with the assistance of electronic computers, provide for the testing of a large number of alternative arrangements to find those that are most productive.
If inventory and transportation costs are significant in his company, the marketing manager should encourage their analysis by outside consultants or by the company’s own operations research people, if it has them.
(vii) Sales and Advertising:
Historical, sales and advertising have been planned better than some of the other elements mentioned heretofore. This is because marketing managers usually have had more experience in these areas and because some degree of planning is essential to the preparation of budgets.
Advertising agencies submit plant to clients and must know sales plant in order to coordinate their advertising recommendations.
Presidents and boards of directors call on the marketing manager during the year for reports of sales and for his plans during the balance of the budget period. We have found, however, that written company plans, even for sales and advertising, are the exception rather than the rule.
For those consumer goods companies that must build consumer demand by advertising, the advertising segment is the most important part of the marketing plan. For those industrial companies that rely primarily on personal selling to move their product, the sales plan is of paramount importance.
Most companies use personal selling, advertising, and sales promotion, however, and require careful coordination of all three in their planning in order to maximise profitable income.
The sales plan should not only cover sales activities, but should also include provisions for salesmen and sales supervisory training, improvement in territory layout, organisation, and staffing.
(viii) Customer Service:
Few, if any, products can be sold and then forgotten. To the very least, policies and plans must be established for processing orders and for adjusting damaged merchandise or products that do not fulfill warranty requirements.
If salesmen are to perform these services, instructions for handling and time for doing so must be provided. Some companies set up customer service departments to specialise in the handling of order, complaints, exchanges, and refunds.
Services to dealers are often required for the proper handling, display, and repair of products. For mechanical products, particularly, repair of products. For mechanical products, particularly, repair and maintenance training must be given to dealers, or company repair stations must be provided.
Technical service is required for many types of industrial products, both from a sales and usage stand point. Salesmen may be trained to perform thee technical services. If this is not practical, technical service departments may be needed, or the services of the research and engineering departments may be required.
In a day and age when product and price differentiation is narrowing, service often becomes the predominant factor in a decision to buy. Every marketing plan should provide for good and timely handling of service requirements.
(ix) Credits and Collections:
No sale is complete until it is paid for, and few sales are made that do not involve the extension of credit terms somewhere in the distribution pattern.
In some companies, credits and collections are handled by the finance department, in some by the marketing department, and in others by dot departments. Credit is a sales tool, irrespective of which department handles it. Frequently it represents a significant cost of doing business, although it may actually be a profit-making activity where credit is furnished at interest terms that exceed the cost of capital.
The marketing manager, working with the chief financial officer, must plan for credit terms that are competitive yet take into consideration the costs of capital and the chances of loss from customers who may become unable to pay their bills.
In a well-established and well-run company that sells to adequately financed customers, collections are usually handled by mail on a routine basis. There are always exceptions, however, and policies must be established as to whether the sales department will be required to collect trouble some accounts.
Whether or not the sales department is assigned responsibility for collecting past-due accounts, the manner in which such collections are handled can affect future business. Many customers have been lost because of the way they were treated by a supplier when they were temporarily short of funds.
Planning in advance for the best way to handle credits and collections can help to maximise sales and profits.
(x) Competitors’ Actions:
One of the weaknesses in marketing planning is the failure to anticipate the actions of competitors and the counteractions that must be taken to combat them. Some marketing plans we have seen read as though the plans were to be executed in a static environment.
Marketing is not static. It moves with the suspense and excitement of battle. We have our strategy and tactics, but our competitors have theirs also. Each move by one side creates a counter move by the other. The principle difference between war and marketing is that in marketing there is no shooting and there are usually several, rather than two, opposing forces, all competing for one prize – the customer’s order.
Marketing can also be compared to sports, where each offensive move produced a defensive counter move and where the winner either is stronger or is smarter in taking advantage of his opponents’ weaknesses.
Elements of Marketing Planning – 7 Major Elements: Objectives, Strategies, Policies, Procedures, Programme, Schedule and Budget
Marketing planning involves setting of objectives and making plans for how these objectives can be achieved. It involves deciding the policies, strategies, procedures, programmes, schedules and budget.
The marketing planning has the following elements:
Element # 1. Objectives:
Objectives are the ends which an organisation wants to achieve through various means. It is the responsibility of the marketing executive(s) not only to set objectives but also to explain them very clearly to the other members of the organisation. Objectives should be clearly stated.
Element # 2. Strategies:
A strategy is a gamemanship or an administrative course of action designed to achieve success. It provides direction for the deployment of resources to new environmental opportunities and threats Strategies are very much external environment related as a change in environment asks for change in strategy.
Element # 3. Policies:
Policies are the guidelines for achieving the set objectives of the firm. The policies guide the manager and subordinates of the company as what is to be done. Policies guide the internal environment of the organisation. Policies can be verbal, written or implied and they are more rigid than strategies.
Element # 4. Procedures:
Procedures serve as guidelines to the actual marketing activity. A procedure is a chronological sequence of steps to be undertaken to enforce a policy and to maintain an objective. It lays down the specific manner in which a particular activity is to be performed.
Element # 5. Programme:
A programme is a concrete scheme of action designed to accomplish a given task. A well-conceived programme covers all actions needed to achieve a specific goal and it shows who does what and when. It specifies the steps to be taken, resources to be used, time limits for each step and assignment of tasks. All planning activities culminate in drawing up a programme for action. In other words, programme is the end product of the planning process.
Element # 6. Schedule:
A schedule specifies time limits within which activities are to be completed. Scheduling is the process of establishing a time sequence for the work to be done. In the field of marketing, when advertising and sales promotion programmes have to be applied, schedule shows the actual time of starting a particular programme with a view to achieve the overall objectives of the firm.
Element # 7. Budget:
A budget is a statement of expected results expressed in numerical terms for a definite period of time in the future. Budget indicates the financial aspect of the marketing operations. Budget serves as means of coordination and control. Budget serves as standard of measuring, actual performance. Different budgets may be prepared for each marketing activity.