What is Marketing Planning?

“4Cs” “4Ps” How We link them

Convenience PlaceWe make the product or service available exactly where and when the customer wants to have it

Customer Solution

Product/

Service bundle

We construct a flexible bundle of product and service that solves problems the customer knows about - and even those he doesn’t

Communication

Promotion

We provide the customer with the information he wants, in the form he wants it and in language that is accessible to him

Cost Price

We provide a total cost of ownership framework – not just list price – that represents real and lasting value for money.

LINKING THE 4Cs TO THE 4Ps

PLANNING RESPONSIBILITY

Planning Level

Strategic Planning

Tactical Planning

Operational Planning

Timescale

3 years

Annually (1 year)

DailyWeeklyMonthly

Responsibility

Board ofDirectors /Senior Managers

SubsidiaryGeneral ManagersMiddle Managers

Line Managers /Supervisors

Remarks

1. Corporate Plan2. Capital Investment Decisions3. Corporate level decisions on production, finance, marketing personnel

1. Develop annual plan to meet corporate objectives2. Prepare budgets to meet annual plan3. Implement and control plan

1. To achieve sales objectives2. To live within budget3. To achieve profit targets

THE PLANNING PROCESS

Internal AuditInternal Audit• Strategic objectives• Self-centred vs. Mkt driven• Competitive advantage• Portfolio analysis• Life cycles

External AuditExternal Audit• Environmental analysis• The market’s challenges• SWOT

Strategy development• Target products and markets• Identified competitive

advantage/positioning• Market approach• selected Mix Strategies

The Marketing PlanThe Marketing Plan

GAP ANALYSIS

Necessary level Necessary level of returnof return

Forecast return forForecast return for unchanged strategyunchanged strategy

Share

hold

er

Share

hold

er

Valu

eV

alu

e

GapGap

1515

1010

55

11 22 33Time (years)Time (years)

WHAT ARE BUDGETS AND FORECASTS?

A forecast is a prediction of revenue or expenditure to be generated or incurred over a future time period

Forecasts are often proposals for discussion and agreement between managers

A budget is an estimate of revenue and expenditure to be generated or incurred over a future time period

Budgets are frameworks for managers to make and take decisions to make the forecasts come true.

Budgets . . .

Act as plans Perform a coordinating role Create a framework for action Provide incentives Enable control and monitoring

The budgeting process in a company . . .

P&L REPORT FORECASTHighlighting Marketing CostsSales 9000000

Cost of goods Sold 4770000

Gross Profit 4230000

Expenses

Rent & Premises Costs 600000

Salaries & Wages 1600000

Misc Supplies & Services 80000

Advertising & PR 320000

Travel & Accommodation 175000

Freight 80000

Taxes 40000

Insurance 40000

Interest 60000

Depreciation 120000

Bad Debt 120000

Total Expenses 3235000

Net Profit 995000

Simple Example

Manufacturing company in which marketing has operational and budget responsibility for logistics and distribution

COST BREAKDOWN BY DEPARTMENT

ExpensesMarketin

gDevelopm

entOperatio

ns Finance HRGen

Mgmt Other Total

Rent & Premises Costs 80000 115000 275000 80000 50000 600,000

Salaries & Wages 735000 132000 333000 125000 50000 2250001,600,00

0

Misc Supplies & Services 30000 8000 22000 10000 5000 5000 80,000

Advertising & PR 320000 0 0 0 0 0 320,000

Travel & Accommodation 157500 7500 5000 5000 175,000

Freight 40000 20000 20000 80,000

Taxes 0 0 0 0 0 0 40000 40,000

Insurance 25000 5000 10000 40,000

Interest 0 60000 60,000

Depreciation 0 120000 120,000

Bad Debt 0 120000 120,000

Totals1,387,50

0 267,500 660,000 215,000 110,000 235,000 360,0003,235,00

0

Plan Period: 1 April 2006 – 31 March 2007

PRODUCT

•New product development•Product management•Product features/benefits•Branding•Packaging•After sales service

PRICING DECISIONS

•Cost based

•Market/competition based

•Product mix based

•Value based

•Incentives and discounting

$

DISTRIBUTION DECISIONS

•Access to markets

•Channel structure

•Channel management

•Retailer image

•Logistics

PROMOTIONAL DECISIONS

• Advertising• Sales Promotions• Events• Publicity and PR• Sales and Selling• Direct Mail

PeoplePeople

PricingPricing

PromotionPromotion

ProductProduct

PlacePlace

PhysicalPhysicalEvidenceEvidence

INTERLINKING OF THE 7Ps

ProcessProcess

Typical Marketing Budget. . . and how we present it in marketing plans

QUARTERLY SALES FORECASTPlan Period: 1 April 2006 – 31 March 2007

Q1 Q2 Q3 Q4 Total

Watering Systems 300000 175000 0 25000 500000

Greenhouses 330000 192500 0 27500 550000

Various Handtools 195000 130000 195000 130000 650000

Garden Chairs 450000 262500 0 37500 750000

Chameleo (New Product) 0 100000 550000 350000

1000000

Various Gardening tools 465000 310000 465000 310000

1550000

Barbeque Grills105000

0 612500 0 87500175000

0

Custom Designed Decking 675000 450000 675000 450000

2250000

Total346500

0  223250

0  188500

0  141750

0  900000

0

It is usually easier to identify patterns when data are displayed graphically

0

200000

400000

600000

800000

1000000

1200000

1400000

A M J J A S O N D J F M

Watering Systems Greenhouses

Various Handtools Garden Chairs Chameleo (New Product)

Various Gardening tools Barbeque Grills Custom Designed Decking

Product A M J J A S O N D J F M

Watering Systems 50000 125000 125000 75000 50000 50000 0 0 0 0 0 25000

Greenhouses 55000 137500 137500 82500 55000 55000 0 0 0 0 0 27500

Various Handtools 65000 65000 65000 32500 32500 65000 65000 65000 65000 65000 65000 0

Garden Chairs 75000 187500 187500 112500 75000 75000 0 0 0 0 0 37500

Chameleo (New Product) 0 0 0 0 50000 50000 150000 200000 200000 200000 100000 50000

Various Gardening tools 155000 155000 155000 77500 77500 155000 155000 155000 155000 155000 155000 0

Barbeque Grills 175000 437500 437500 262500 175000 175000 0 0 0 0 0 87500

Custom Designed Decking 225000 225000 225000 112500 112500 225000 225000 225000 225000 225000 225000 0

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

AMJ JAS OND JFM Total

Custom Designed Decking

Barbeque Grills

Various Gardening tools

Chameleo (New Product)

Garden Chairs

Various Handtools

Greenhouses

Watering Systems

QUARTERLY SALES FORECASTPlan Period: 1 April 2006 – 31 March 2007

QUARTERLY SALES FORECASTUK and Export

Plan Period: 1 April 2006 – 31 March 2007

Q1 Q2 Q3 Q3 TOTAL

UK 2772000 1786000 1508000 1134000 7200000

Europe 519750 334875 282750 212625 1350000

RoW 173250 111625 94250 70875 450000

Total 3465000   2232500   1885000   1417500   9000000

QUARTERLY SALES FORECASTDomestic

Plan Period: 1 April 2006 – 31 March 2007

UK Sales Q1 Q2 Q3 Q4 Total

North 277200 178600 150800 113400 720000

South 1663200 1071600 904800 680400 4320000

East 554400 357200 301600 226800 1440000

West 277200 178600 150800 113400 720000

Total 2772000   1786000   1508000   1134000 7200000

Expenses A&P Selling

Transpor

t

Packagin

g

Tech

Service

Mktg

Res Total

Rent & Premises Costs 20000 30000 0 0 20000 10000 80,000

Salaries & Wages 50000 480000 50000 25000 90000 40000 735,000

Misc Supplies &

Services 30000 0 0 0 0 0 30,000

Advertising & PR 320000 0 0 0 0 0 320,000

Travel &

Accommodation 7500 70000 35000 30000 15000 157,500

Freight 0 0 40000 0 0 0 40,000

Insurance 0 5000 10000 0 10000 0 25,000

Total Expenses

427,50

0

585,00

0 135,000 25,000 150,000 65,000

1,387,50

0

Full scale marketing department with operational responsibility for sales, showrooms, transportation logistics and technical service and support

Plan Period: 1 April 2006 – 31 March 2007

MARKETING DEPARTMENT BUDGET EXPENSES BREAKDOWN

Breakdown of Advertising Budget Plan Period: 1 April 2006 – 31 March 2007

Medium Total Cost (£)

Press & Journal Advertising

170,000

Point of Sale 50,000

Mail Shots 20,000

Exhibitions 58,500

Web Site 30,000

Channel Support 74,000

PR 25,000

Total 427,500

For each major budget head we break it down into enough detail to enable us to calculate probable cash flow over the year.

Detailed schedules can be put into an appendix with “high level” summaries included in the body of the plan itself.

Extract of Advertising BudgetPress and Journal Advertising

Plan Period: 1 April 2006 – 31 March 2007

Magazine/ Journal No Rate per

insertion

(£)

Total

Cost (£)

A M J J A S O N D J F M

The Handyman 26 1000 26,000 3 3 2 1 2 2 1 2 3 1 2 4

DIY Today 26 1000 26,000 3 3 2 1 2 2 1 2 3 1 2 4

Carpentry Week 52 1250 65,000 6 6 4 2 4 4 2 4 6 2 4 8

Times 50 500 25,000 6 6 4 2 4 4 2 4 6 2 4 6

Independent 50 500 25,000 6 6 4 2 4 4 2 4 6 2 4 6

Homemakers Yearbook 1 3000 3,000 1

Total Cost 170,00

0

Exhibition CostsGLEE, NEC Birmingham

Ideal Home Exhibition, Earls Court London

Expenditure Budget GLEE

16-22 September 2006

Ideal Home

6-15 October 2006

Rental of Stand 7500 10,000

Stand Design & Build 9,000 6,000

Artwork, photographs, panels 3,500 2,500

Stand equipment (carpets,

furniture, cabinets, etc)

2,500 5,000

Accommodation and hospitality 2,500 4,500

Publicity at show 500 5,000

TOTALS 25,500 33,000

Additional details to include would be names and contact details for suppliers, timings and personnel requirements

STRUCTURING THE MARKETING PLAN

1. Executive Summary2. Business Objectives3. Situation Analysis4. Marketing Objectives5. Marketing Strategies6. Financials (including risk)7. Marketing Action Plan8. Monitoring & Control9. Operational Implications10. Appendices

Strateg

i

Strateg

i

cc

Operation

a

Operation

a

ll

BUILD PROCESS

Team Leader prepares 1st Draft Draft circulated to Team Members Team members comment and add text Team Leader writes 2nd Draft 2nd Draft circulated Team Meeting – consensus and adoption Team Leader writes finalised plan Present Plan to Management for sign-off Publish plan to appropriate managers