UNIT 2

MARKETING PLAN

A marketing plan aims to support the strategy for a company and its products/services. Planning is essential
in all organizations and company plans should be documented. Each department in a firm will usually have a
plan detailing what their objectives are and how they plan to achieve them. All plans must support the overall
corporate objectives of the organisation, irrespective of individual department aims.

Nature of Marketing Plan

Marketing managers follow a marketing process to carry out their responsibilities effectively. Working within
the plans set up by the top management product managers come up with a marketing plan for individual
products, lines, brands, channels, or customer groups. Each product level (product line, brand) must develop
a marketing plan for achieving its goals.

A marketing plan is a written document that summarizes what the marketer has learned about the
marketplace and indicates how the firms plan to reach its marketing objectives. It contains tactical guidelines
for the marketing programs and financial allocations over the planning period. It is one of the most important
outputs of the marketing process.

Marketing plans are becoming more customer- and competitor-oriented and better reasoned and more
realistic than in the past. The plans draw more inputs from all the functions and are team-developed.
Marketing executives increasingly see themselves as professional managers first, and specialists second.
Planning is becoming a continuous process to respond to rapidly changing market conditions.

Content and Process of a Marketing Plan & AOSTC

A common method used to write a marketing plan is through the acronym called AOSTC. It simply stands for:
1. Analysis Of your internal and external environment
2. Objectives: Set yourself SMART objectives
3. Strategies: Decide how will you achieve your objectives
4. Tactics: Plan what will you do to achieve your objectives
5. Control: How you will monitor whether you are achieving your objectives.

Analysis

Every good marketing plans needs to analyse the current business situation and ask a simple question, where
is the business now? This involves the business conducting an internal audit and external audit.
An internal audit will look at:
 Past objectives and success rates
 Past marketing mix strategies
 Past budgets
 Past segmentation, targeting and positioning strategies
The internal audit aims to look at what you did in the past, was it successful? If not why not? If it was
successful why was it successful?
The external audit will involve:
 Conducting a PEST analysis, and discussing the impact of this on your strategy
 Researching the industry you operate in. What are the trends within the industry you operate in?
 Competitor analysis. What are your competitors up to?
 A SWOT analysis to help establish your current strengths, opportunities, weaknesses and threats.
Objectives
Set your objectives and decide where you would like to be. Once you have completed your audits you will
know the firm's current position. Use this information to decide what you would like the firm to achieve i.e.
What are your objectives? Where would you like the firm to go? What would you like the firm to become? If
you are unsure about what objectives to set Ansoff's Matrix is a good starting point. This simple model looks
at developing existing products and markets or whether the firm should explore new products and entering
new markets.

Set yourself SMART objectives so that each objective will be clearly defined and achievable. Remember SMART
stands for:

 Specific - Clearly state what you want to achieve

 Measurable - State how you will measure whether you are achieving the objective.

 Achievable - Set yourself attainable/possible objectives.

 Realistic - Can you achieve the objective using your current resources?

 Timed - Set a realistic time scale to achieve the objective.

Strategy

Once you have decided what you would like to achieve you need to decide how you are going to achieve it; this
is known as your strategy. Your strategy will be determined by your objectives, corporate values, time scales
and your marketing environment. If you have a target market/segment you will need to decide your targeting
strategy and positioning strategy. You will also need to think about how the marketing mix can assist you.
What will be your product, price, place or promotion?

Tactics

Whereas strategy is about how you will achieve your objectives, tactics are about what you are actually going
to do. For example if your objective is to increase sales tactics would be things like open up more shops,
recruit more sales staff, do online sales.

Control

This section of the plan will help you monitor if you are achieving your objectives and whether your strategy is
working. If you set yourself targets you can monitor performance against the targets you set. You could also
use benchmarks such as:

 Market share data

 Sales data

 Consumer/customer feedback

 Feedback from staff and

 Feedback from retailers class

Marketing Environment: Macro and Micro Marketing Environment

Marketing environment of a company is composed of the people, institutions, and forces outside marketing
that influence marketing management’s ability to develop and maintain a successful relationship with its
target customers. Constantly watching and adapting to the changing marketing environment is important
because the marketing environment offers both opportunities and threats. For example, alliance with the
supplier and distributor may help an organization to get a competitive edge over its rivals.
On the other hand entry of many competitors poses threat to the organization as some of their customers may
shift to a new seller.

By conducting a regular and systematic environmental analysis, the company can revise and adapt marketing
strategies to cope with the new challenges and opportunities in the marketplace.

The marketing environment is the combination of microenvironment and macro environment.

According to Philip Kotler, “A company’s marketing environment consists of the internal factors & forces,
which affect the company’s ability to develop & maintain successful transactions & relationships with the
company’s target customers”.

According to Pride &Ferrell, “The marketing environment consists of external forces that directly or indirectly
influence an organizations acquisition of inputs and generation of outputs”.

To sum up, the marketing environment is a set of diverse, dynamic and uncontrollable forces that impinge on
an organization’s marketing operations and opportunities.

Macro Environment of Marketing

Macro environment factors which consist of external forces. These external factors influence the company
marketing strategy in a great length.

The external environment factors are uncontrollable and the company finds it hard to tackle with the external
factors.

The macro- environment consists of demographic factors, economic factors, natural forces, technology factors,
political factors, and cultural factors.

Demographic Environment

Demography is the study of human populations in terms of size, destiny, location, age, gender, race,
occupation, and other statistics. This is the very important factors that help the marketer to divide the
population into different market segments and target markets.

Demographic data also helps in preparing geographical marketing plans, age, and sex wise plans.

Economic Environment

Economic Environment is those macro factors that affect the consumer buying power and spending patterns.

It includes the level of income, policies, and nature of an economy, economic resources, trade cycles,
distribution of income and wealth. When the income of a family or country (per capote income) changes it also
change the buying behavior and spending pattern of the family or country.

Natural Environment

Natural environment involves the natural resources that are needed as inputs by marketers or they are
affected by marketing activities. So marketers should be aware of several trends in the natural environment.

Technological Environment

Technological forces are perhaps the most dramatic forces which are changing rapidly. These macro-
environmental forces create a new product, new markets and marketing opportunities for marketers.
Political Environment

It includes government actions, government legislation, public policies, and act which affect the operations of
a company or business.

These forces may affect an organization on a local, regional, national or international level.

So marketers and business management pay close attention to the political forces to judge how government
actions which will affect their company.

Cultural Environment

Cultural factors in heritage, living styles, religion etc. also affects a company marketing strategy. Social
responsibility also becomes the part of marketing and slowly emerged in marketing literature.

Socially responsible marketing is that business firms should take the lead in eliminating socially harmful
products.

Micro Marketing environment

The micro-environment refers to the forces that are close to the company and affect its ability to serve its
customers. It influences the organization directly.

It includes the company itself, its suppliers, marketing intermediaries, customer markets, competitors, and
the public.

The microenvironment consists of five components.

1. The first is the organization’s internal environment—its several departments and management levels—
as it affects marketing management’s decision making.

2. The second component includes the marketing channel firms that cooperate to create value: the
suppliers and marketing intermediaries (middlemen, physical distribution firms, marketing-service
agencies, financial intermediaries).

3. The third component consists of the five types of markets in which the organization can sell: the
consumer, producer, reseller, government, and international markets.

4. The fourth component consists of the competitors facing the organization.

5. The fifth component consists of all the public’s that have an actual or potential interest in or impact
on the organization’s ability to achieve its objectives: financial, media, government, citizen action, and
local, general, and internal publics.

How environmental factors affecting consumer decision process?

Economic factors

Economic factors play an important role in consumer buying behavior decision. It also directly affects the
purchasing power of consumers. If consumers’ purchasing power is weak, they cannot make the decision to
buy goods or services even if they like very much.

But, if they have purchasing power, they can take prompt decision to buy goods or services they like. Income
level, the income of their family members, liquid asset, spending attitude, credit facility etc. are the economic
factors to determine consumers’ buying decision.

Technological factors
Technological forces are perhaps the most dramatic forces which are changing customer habit by introducing
a new product for the customer.

Cultural factors

Culture is crucial when it comes to understanding the needs and behaviors of an individual. Throughout his
existence, an individual will be influenced by his family, his

friends, his cultural environment or society that will “teach” him values, preferences as well as common
behaviors to their own culture and buying behavior.

Demographic factors

Demography is the study of human populations in terms of size, destiny, location, age, gender, race,
occupation, and other statistics. This is very important because these factors directly influence consumer
decision making.

Differences between Macro and Micro Environment of Marketing

Micro and macro refer to economic environments within which marketing takes place.

Though not exactly opposites, broad differences exist between macro marketing and micromarketing.

The differences between macro environments and micro-environments may be relevant to identify in the
following table:

Point of difference Macro environment Micro environment

External environment of an
Meaning Inter environments of an organization.
organization.

Nature Very complex. Less complex to perceive.

Marketer interacts with , the elements Marketer interacts with other functional
Task of the marketer
prevailing outside the organization. areas of the organization.

Factors remain beyond the control of Factors may be controlled to a large

Extent of control
marketers. extent by marketer.

Creates a huge impact on shaping Remains comparatively independent is

Impact
marketing decisions. shaping marketing decisions.

Factors reveal the capabilities of an

Factors may create an opportunity or
organization to exploit the opportunities
Function pose threat to the marketing activities
or to combat the threat through its
of an organization.
marketing activities.

PEST ANALYSIS/ PESTEL ANALYSIS

There are many strategic analysis tools that a firm can use, but some are more common. The most used
detailed analysis of the environment is the PESTLE analysis. This is a bird’s eye view of the business conduct.
Managers and strategy builders use this analysis to find where their market currently. It also helps foresee
where the organization will be in the future. The letters in PESTLE, also called PESTEL, denote the following
things:
 Political factors
 Economic factors
 Social factors
 Technological factors
 Legal factors
 Environmental factor

Often, managers choose to learn about political, economic, social and technological factors only. In that case,
they conduct the PEST analysis. PEST is also an environmental analysis. I will discuss the 6 most
commonly assessed factors in environmental analysis.

P FOR POLITICAL FACTORS

The political factors take the country’s current political situation. It also reads the global political condition’s
effect on the country and business. When conducting this step, ask questions like “What kind of government
leadership is impacting decisions of the firm?” Some political factors that you can study are:

 Government policies
 Taxes laws and tariff
 Stability of government
 Entry mode regulations

E FOR ECONOMIC FACTORS

Economic factors involve all the determinants of the economy and its state. These are factors that can
conclude the direction in which the economy might move. So, businesses analyze this factor based on the
environment. It helps to set up strategies in line with changes. I have listed some determinants you can
assess to know how economic factors are affecting your business below:

 The inflation rate

 The interest rate
 Disposable income of buyers
 Credit accessibility
 Unemployment rates
 The monetary or fiscal policies
 The foreign exchange rate

S FOR SOCIAL FACTORS

Countries vary from each other. Every country has a distinctive mindset. These attitudes have an impact on
the businesses. The social factors might ultimately affect the sales of products and services. Some of the
social factors you should study are:

 The cultural implications

 The gender and connected demographics
 The social lifestyles
 The domestic structures
 Educational levels
 Distribution of Wealth

T FOR TECHNOLOGICAL FACTORS

Technology is advancing continuously. The advancement is greatly influencing businesses. Performing

environmental analysis on these factors will help you stay up to date with the changes. Technology alters
every minute. This is why companies must stay connected all the time. Firms should integrate when needed.
Technological factors will help you know how the consumers react to various trends. Firms can use these
factors for their benefit:

 New discoveries
 Rate of technological obsolescence
 Rate of technological advances
 Innovative technological platforms

L FOR LEGAL FACTORS

Legislative changes take place from time to time. Many of these changes affect the business environment. If a
regulatory body sets up a regulation for industries, for example, that law would impact industries and
business in that economy. So, businesses should also analyze the legal developments in respective
environments. I have mentioned some legal factors you need to be aware of:

 Product regulations
 Employment regulations
 Competitive regulations
 Patent infringements
 Health and safety regulations

E FOR ENVIRONMENTAL FACTORS

The location influences business trades. Changes in climatic changes can affect the trade. The consumer
reactions to particular offering can also be an issue. This most often affects agri-businesses. Some
environmental factors you can study are:

 Geographical location
 The climate and weather
 Waste disposal laws
 Energy consumption regulation
 People’s attitude towards the environment
There are many external factors other than the ones mentioned above. None of these factors are independent.
They rely on each other.