Strategic management in the asia pacific haley

Marketing Plans The Chartered Institute of Marketing/Butterworth-Heinemann Marketing Series is the most comprehensive, widely used and important collection of books in marketing and sales currently available worldwide As the CIM’s official publisher, Butterworth-Heinemann develops, produces and publishes the complete series in association with the CIM We aim to provide definitive marketing books for students and practitioners that promote excellence in marketing education and practice The series titles are written by CIM senior examiners and leading marketing educators for professionals, students and those studying the CIM’s Certificate, Advanced Certificate and Postgraduate Diploma courses Now firmly established, these titles provide practical study support to CIM and other marketing students and to practitioners at all levels Formed in 1911, The Chartered Institute of Marketing is now the largest professional marketing management body in the world with over 60,000 members located worldwide Its primary objectives are focused on the development of awareness and understanding of marketing throughout UK industry and commerce and in the raising of standards of professionalism in the education, training and practice of this key business discipline Books in the series Below-the-line Promotion, John Wilmshurst The CIM Handbook of Export Marketing, Chris Noonan The CIM Handbook of Selling and Sales Strategy, David Jobber The CIM Handbook of Strategic Marketing, Colin Egan and Michael J Thomas CIM Marketing Dictionary (fifth edition), Norman A Hart Copywriting, Moi Ali Creating Powerful Brands (second edition), Leslie de Chernatony and Malcolm McDonald The Creative Marketer, Simon Majaro The Customer Service Planner, Martin Christopher Cybermarketing, Pauline Bickerton, Matthew Bickerton and Upkar Pardesi Cyberstrategy, Pauline Bickerton, Matthew Bickerton and Kate Simpson-Holley The Fundamentals and Practice of Marketing (third edition), John Wilmshurst The Fundamentals of Corporate Communications, Richard Dolphin Innovation in Marketing, Peter Doyle and Susan Bridgewater The Effective Advertiser, Tom Brannan Integrated Marketing Communications, Ian Linton and Kevin Morley International Marketing (third edition), Stanley Paliwoda and Michael Thomas Key Account Management, Malcolm McDonald and Beth Rogers Market-led Strategic Change (second edition), Nigel Piercy The Marketing Book (fourth edition), Michael J Baker Marketing in the Not-for Profit Sector, Margaret Kinnell and Jennifer MacDougall Marketing Logistics, Martin Christopher The Marketing Manual, Michael J Baker The Marketing Planner, Malcolm McDonald Marketing Planning for Services, Malcolm McDonald and Adrian Payne Marketing Plans (fourth edition), Malcolm McDonald Marketing Professional Services, Michael Roe Marketing Research for Managers (second edition), Sunny Crouch and Matthew Housden Marketing Strategy (second edition), Paul Fifield Practice of Advertising (fourth edition), Norman A Hart Practice of Public Relations (fourth edition), Sam Black Profitable Product Management, Richard Collier Relationship Marketing, Martin Christopher, Adrian Payne and David Ballantyne Relationship Marketing for Competitive Advantage, Adrian Payne, Martin Christopher, Moira Clark and Helen Peck Relationship Marketing: Strategy and Implementation, Helen Peck, Adrian Payne, Martin Christopher and Moira Clark Retail Marketing Plans, Malcolm McDonald and Christopher Tideman Royal Mail Guide to Direct Mail for Small Businesses, Brian Thomas Sales Management, Chris Noonan Strategic Marketing Management, Richard Wilson and Colin Gilligan Trade Marketing Strategies, Geoffrey Randall Forthcoming Cases in Market-led Strategic Change, Nigel Piercy Direct Marketing, Brian Thomas Principles of Customer Care and Service Quality, Colin Gilligan and Laurie Young Total Relationship Marketing, Evert Gummesson Services Marketing, Colin Egan Marketing Plans How to Prepare Them How to Use Them Malcolm McDonald MA (Oxon), MSc, PhD, FRSA, FCIM Fourth edition Published in association with the Chartered Institute of Marketing OXFORD AUCKLAND BOSTON JOHANNESBURG MELBOURNE NEW DELHI Butterworth-Heinemann Linacre House, Jordan Hill, Oxford OX2 8DP 225 Wildwood Avenue, Woburn, MA 01801–2041 A division of Reed Educational and Professional Publishing Ltd A member of the Reed Elsevier plc group First published 1984 Reprinted 1984, 1985, 1986, 1987, 1988 Second edition 1989 Reprinted 1990 (twice), 1992, 1993 Third edition 1995 Reprinted 1995, 1996, 1997, 1998 Fourth edition 1999 © Malcolm McDonald 1984, 1989, 1995, 1999 All rights reserved No part of this publication may be reproduced in any material form (including photocopying or storing in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright holder except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London, England W1P 9HE Applications for the copyright holder’s written permission to reproduce any part of this publication should be addressed to the publishers British Library Cataloguing in Publication Data A catalogue record of this book is available from the British Library ISBN 7506 4116 Composition by Genesis Typesetting, Laser Quay, Rochester, Kent Printed and bound in Italy Contents Preface and acknowledgements How to use this book to achieve the best results Learning features An important note to the reader from the author Understanding the marketing process vii xi xiii xv The marketing planning process: The main steps 25 The marketing planning process: Removing the myths 67 Completing the marketing audit: The customer and market audit 101 Completing the marketing audit: The product audit 157 Setting marketing objectives and strategies 243 The communication plan: The advertising and sales promotion plans 293 The communication plan: The sales plan 323 The pricing plan 349 10 The distribution plan and customer service plan 379 11 Marketing information, forecasting and organizing for marketing planning 409 12 Implementation issues in marketing planning 475 13 A step-by-step marketing planning system 511 Index 573 This Page Intentionally Left Blank Preface and acknowledgements This is the Fourth Edition of a book which, since its launch in 1984, has helped and encouraged hundreds of thousands of practising managers with the difficult task of marketing planning Many of them have been kind enough to write to me and thank me for the book’s practical, nononsense style and approach to the subject This has encouraged me to update the book to incorporate the findings of my latest research and experience in this difficult domain of marketing This support also encouraged me to strengthen the book considerably by the addition of a chapter which incorporates a step-by-step, ‘this is how you it’ approach to the preparation of marketing plans The result is a book which takes the reader painstakingly through the process of marketing planning, while also providing a detailed means of implementing all the concepts and methodologies outlined I have done this because, in working with companies ranging from world leaders in their fields to small domestic companies, there continues to be much confusion between the process and methods of marketing planning and the actual outputs of this process, i.e the strategic marketing plan and the tactical marketing plan I hope you will find this addition to the book of considerable value I have also expanded the book to incorporate much of the latest thinking in the domain of marketing, without trying to make it a detailed, specialist book on any particular aspect of marketing For example, while there are sections on database marketing, competitive strategies and marketing research, readers would be well advised to turn to specialist books in these subjects for detailed methodologies The purpose of this book is quite simply to explain and demonstrate how to prepare and use a marketing plan It is equally relevant for consumer, service and industrial goods companies, since the process is universal, although I have now included in the CIM series specialist books on marketing planning for retailers and marketing planning for service businesses It is based on my research into the marketing planning practices of industrial, service and retail companies, which has revealed marketing planning as an area of major weakness Almost without exception, companies that thought they were planning were in fact only forecasting and budgeting, and suffered grave operational difficulties as a result The problem, as companies face up to the opportunities and challenges of the viii Preface and acknowledgements new millenium is not that the philosophy of marketing is not believed; rather it is that most companies, particularly industrial goods companies and many service organizations, have difficulty in making it work This is largely because of ignorance about the process of planning their marketing activities, for which little help is provided in the extant body of literature Books or articles often turn out to be about the management of the several elements of the marketing mix rather than about how the process of combining them into a coherent plan can be managed Others treat marketing planning in such a generalized way that it is difficult to distil from them any guidance of operational significance Finally, there are many excellent papers about individual aspects of the marketing planning process The truth is, of course, that the actual process of marketing planning is simple in outline Any book will tell us that it consists of: a situation review; assumptions; objectives; strategies; programmes; and measurement and review What other books not tell us is that there are a number of contextual issues that have to be considered that make marketing planning one of the most baffling of all management problems Here are some of those issues: When should it be done, how often, by whom, and how? Is it different in a large and a small company? Is it different in a diversified and an undiversified company? Is it different in an international and a domestic company? What is the role of the chief executive? What is the role of the planning department? Should marketing planning be top-down or bottom-up? What is the relationship between operational (one year) and strategic (longer term) planning? Since effective marketing planning lies at the heart of a company’s revenue-earning activities, it is not surprising that there is a great demand for a guide which strips away the confusion and mystery surrounding this subject and helps firms to get to grips with it in a practical and downto-earth manner This book explains what marketing is, how the marketing planning process works, how to carry out a marketing audit, how to set marketing objectives and strategies, how to schedule and cost out what has to be done to achieve the objectives, and how to design and implement a simple marketing planning system My approach is both logical and practical This view has been confirmed by the hundreds of letters referred to above, and by the fact that this book is now a standard text on many marketing courses in universities, and in-company training programmes around the world This book includes: ᭹ ᭹ Exercises to enable practising managers to translate the theory into practice Mini case studies to exemplify the points being made Preface and acknowledgements ix Computer-based training software is also available, on request, from Butterworth-Heinemann Additionally, a comprehensive Tutors’ Guide is available for those who wish to teach the subject to others This Tutors’ Guide contains lecture plans, overhead transparency masters, case studies, tutors’ discussion points and additional assignments for use by tutors We have taken reasonable steps in writing this book to avoid any kind of prejudice, or sexism Where possible, for example, we have used the expression ‘they’, rather than ‘he’, or ‘she’ On occasions, however, to avoid irritating the reader by unnecessary and convoluted English, we have used the word ‘he’ Please be assured, however, that no deliberate offence is intended Finally, I should like to thank my friends and colleagues for the advice they have given me during the life of this book To the following I am especially grateful: Professor Martin Christopher, Dr Hugh Wilson, John Leppard, Visiting Professor Simon Majaro, Visiting Professor Mike Wilson, Professor Adrian Payne Without their criticisms, suggestions and material this book would not have been possible Malcolm McDonald Cranfield School of Management April 1999 * Further details of the PhD research on which this book is based are available from Professor Malcolm McDonald, Professor of Marketing Strategy, Cranfield School of Management, Cranfield, Bedford, England, MK43 0AL 564 Marketing Plans Form t–1 Net revenue Gross margin Adjustments Marketing costs Administration costs Interest Operating result Other interest and financial costs Result after financial costs Net result t0 t+1 Form Key activity planner Date/activity Jan Feb March April May June July Aug Sept Oct Nov Dec 4 4 4 4 4 4 566 Marketing Plans Section C Headquarters consolidation of several SBU strategic marketing plans The author is frequently asked how several SBU strategic marketing plans should be consolidated by senior headquarters marketing personnel A suggested format for this task is provided below Directional statement Role/contribution – this should be a brief statement about the company’s role or contribution Usually, it will specify a minimum growth rate in turnover and profit, but it could also encapsulate roles such as opportunity seeking service and so on Definition of the business – this statement should describe the needs that the company is fulfilling, or the benefits that it is providing for its markets For example, ‘the provision of information to business to facilitate credit decision making’ Usually, at the corporate level, there will be a number of definitions for its strategic business units It is important that these statements are not too broad so as to be meaningless (e.g ‘communications’ – which could mean satellites or pens) or too narrow (e.g ‘drills’ – which could become obsolete if a better method of fulfilling the need for holes is found) Distinctive competence – all companies should have a distinctive competence It does not have to be unique, but it must be substantial and sustainable Distinctive competence can reside in integrity, specialist skills, technology, distribution strength, international coverage, reputation and so on Indications for future direction – this section should indicate guidelines for future growth For example, does the company wish to expand internationally, or to acquire new skills and resources? The purpose of this section is to indicate the boundaries of future business activities Summary of the main features of the plan Here draw a portfolio matrix indicating the current and proposed relative position of each of the strategic business units Alternatively, this can appear later in the plan Include a few words summarizing growth in turnover, profit, margins, etc Draw a graph indicating simply the total long-term plan At least two lines are necessary – turnover and profit A step-by-step marketing planning system 567 Financial history (past five years) Include a bar chart showing the relevant financial history, but, at the very least, include turnover and profit for the past five years Major changes and events since the previous plan Here, describe briefly major changes and events (such as divesting a subsidiary) which occurred during the previous year Major issues by strategic business unit Market characteristics Here, it might be considered useful to provide a table listing strategic business units, alongside relevant market characteristics For example: SBU1 SBU2 SBU3 SBU4 Market size Market growth Competitive intensity Relative market share etc Competitive characteristics Here, it might be considered useful to list the critical success factors by strategic business unit and rate each unit against major competitors For example: Critical success factors/competitors CSF1 CSF2 CSF3 CSF4 CSF5 Our company Competitor Competitor 568 Marketing Plans Key strategic issues This is an extremely important section, as its purpose is to list (possibly by strategic business unit), what the key issues are that face the company In essence, this really consists of stating the major strengths, weaknesses, opportunities and threats and indicating how they will be either built on, or dealt with Key strategic issues might consist of technology, regulation, competitive moves, institutional changes, and so on Strategic objectives by strategic business unit and key statistics This is a summary of the objectives of each strategic business unit It should obviously be tailored to the specific circumstances of each company However, an example of what might be appropriate follows: Objectives Stategic business unit Market share Now Relative market share Real growth Key statistics Sales per employee + Now + + p.a Now + years years years years Contribution per employee Now etc +5 years SBU1 SBU2 SBU3 SBU4 SBU5 Alternatively, or additionally, put a portfolio matrix indicating the current and proposed relative position of each of the strategic business units Financial goals (next five years) Here, draw a bar chart (or a number of bar charts) showing the relevant financial goals At the very least, show turnover and profit by strategic business unit for the next five years A step-by-step marketing planning system 569 Appendices Include whatever detailed appendices are appropriate Try not to rob the total plan of focus by including too much detail Timetable The major steps and timing for the annual round of strategic and operational planning is described in the following pages The planning process is in two separate stages, which are interrelated to provide a review point prior to the detailed quantification of plans ‘Stage One’ involves the statement of key and critical objectives for the full three-year planning period, to be reviewed prior to the more detailed quantification of the tactical one-year plan in ‘Stage Two’ by 30 November, for subsequent consolidation into the company plans Planning team’s ‘kick-off’ meetings (to be completed by 31 March) At these meetings, the planning team will outline their expectations for the following planning cycle The purpose of the meetings is to give the planning team the opportunity to explain corporate policy, report progress during the previous planning cycle, and to give a broad indication of what is expected from each SBU during the forthcoming cycle The planning team’s review will include an overall appraisal of performance against plan, as well as a variance analysis The briefing will give guidance under some of the following headings (as appropriate) Financial ᭹ Gross margins ᭹ Operating profits ᭹ Debtors ᭹ Creditors ᭹ Cash flow Manpower and organization ᭹ Organization ᭹ Succession ᭹ Training ᭹ Remuneration Export strategy Marketing ᭹ Product development ᭹ Target markets ᭹ Market segments ᭹ Volumes ᭹ Market shares ᭹ Pricing 570 Marketing Plans ᭹ ᭹ ᭹ ᭹ Promotion Market research Quality control Customer service This is an essential meeting prior to the mainstream planning activity which SBUs will subsequently engage in It is the principal means by which it can be ensured that plans not become stale and repetitive due to over-bureaucratization Marketing creativity will be the keynote of this meeting Top-down and bottom-up planning A cornerstone of the marketing planning philosophy is that there should be widespread understanding at all levels in the organization of the key objectives that have to be achieved, and of the key means of achieving them This way, the actions and decisions that are taken by managers will be disciplined by clear objectives that hang logically together as part of a rational, overall purpose The only way this will happen is if the planning system is firmly based on market-centred analysis which emanates from the SBUs themselves Therefore, after the planning team’s ‘kick-off’ meetings, audits should be carried out by all managers in the SBUs down to a level which will be determined by SBU managers Each manager will also SWOT analyses and set tentative three-year objectives and strategies, together with proposed budgets for initial consideration by their superior manager In this way, each superior will be responsible for synthesizing the work of those managers reporting to them Release plan for implementation Consolidation Janu ary ry rua Feb March mber Septe April June y Ma Finalize three year strategic marketing plans July Octobe r Au gu st Prepare tactical (one-year) operational plans and budgets No ve mb er Start Jan ber Decem ‘Stage two’ meetings and presentation ‘Stage One’ meetings Figure 13.14 Strategic and operational planning cycle Planning team’s ‘kick-off’ meetings Marketing audits, gap analyses SWOT analyses, objectives, strategies, budgets (proposed) three years A step-by-step marketing planning system 571 The major steps in the annual planning cycle are listed below and depicted schematically in Figure 13.14 Activity Deadline ᭹ Planning team’s ‘kick-off’ meetings with SBU managers to discuss overall guidelines for the three-year planning period 31 March ᭹ Prepare marketing audits, SWOT analyses, proposed marketing objectives, strategies and budgets (cover the full three-year planning horizon) 31 May ᭹ ‘Stage One’ meetings: presentation to the planning team for review 31 May ᭹ Prepare short-term (one-year) operational plans and budgets, and final three-year SBU managers’ consolidated marketing plans 31 October ᭹ ‘Stage Two’ meetings: presentation to the planning team 31 November ᭹ Final consolidation of the marketing plans 31 December This Page Intentionally Left Blank Index Accountancy, 352–6 ACORN (A Classification of Residential Neighbourhoods), 122, 151 Added value, 163, 258 Administrative role of planners, 493 Advertising, 11–12 media, 316–17 objectives, 302–4, 312, 314–16 plan, 300–5, 312, 318 Ansoff matrix 249–51, see also Gap analysis Applications (software programs), 429 Appropriation budgets, 491 Assumptions, 49, 286–8, 489 overall in strategic marketing plan, 535–6, 550 Asynchronous communication, 443 Autonomy crisis, 450 Availability, product, 387–9, 398 Barriers to marketing planning, 514 ‘Ten S’ approach to overcoming, 514–19 Benefit analysis, 127, 140–2 Benefit package analysis, 214–17 Benefit segmentation, 126, 160–1 Bipolar maps, 165–6 Boston Consulting Group, 182–4, 353–4 Boston matrix, 184–91, 213, 224–6 developments, 188–91 principles, 229–32 weaknesses, 187–8 see also Directional policy matrix Bottom-up planning, 570 Brand, 162–72 components, 165–8 corporate, 168–9 global vs local, 170–2 successful and unsuccessful, 164–5 Brand functionality, 166–8 Brand personality, 166–8 Brand positioning, 165–6 Brand strategy, 165 Break-even analysis, 359–60 British motorcycle industry, 353–4 British Telecom, 420 Budget, 51–2, 491 Budgeting, 70–1, 556 Bureaucracy crisis, 451 Business definition, 42, 566 Business directions, 251, 284–5, 531 Business environment, 6–7, 17, 44, 45 Business Process Redesign (BPR), 457–8 Business strengths/position, 194, 197–200, 202–3 Business success, 5–6 Buying process, 296–9, see also Customers Campaign management, 432 Capabilities, company, 4–5, 17 Casey, Donald, 172 Cash discount, 362 Centralization, 453–4, 464 Channel discounts, 361–3, 369, see also Distribution Chief executive, 484 role, 491–2 weak support, 80–2 Collaborative evolution, 451, 461 Commodity slide, 163–4 Communication, communications mix, 296–300, 312 distribution mix, 384, 405–6 forms of, 295–6 objectives, 300 see also Advertising; Personal selling; Sales promotion Company benefits, 140 Company capabilities, 4–5, 17 Competition, 44, 45 and pricing, 358–9, 373 Competitive advantage: gaining through value-in-use, 363–4 and unique segmentation schemes, 421–2 Competitive characteristics, 567 Competitive position classifications, 530 Competitive pricing, 368, 370–1 Competitive strategies 254–60 Competitor analysis, 6, 284–5 strategic marketing plan, 530–1, 548 Consolidation of several SBU marketing plans, 566–9 appendices, 569 directional statement, 566 financial goals, 568 financial history, 567 major changes and events, 567 major issues by SBU, 567–8 competitive characteristics, 567 key strategic issues, 568 market characteristics, 567 strategic objectives by SBU, 568 summary of main features, 566 574 Index Consumer attitudes, 374 Consumer markets, 13–14 segmentation, 149–55, 423 Consumer panels, 415–16 Consumers, 104–5, 133 final users, 113–15 Contact history information, 431 Contingency plan 556, 557–8, 563 Control crisis, 450–1 Co-ordinated evolution, 451, 460–1 Core product, 162 Corporate branding, 169 Corporate culture, 459–61, 519 Corporate objectives, 271, 372 financial, 37–8 and marketing objectives, 245–9 Corporate planning, 34–9, 88–9, 494–9 Corporate strategies, 37, 247 Cost-plus pricing, 352–6, 359, 360, 367 Costs: cost-differentiation matrix, 29–30, 256–9 Internet, 443 pricing and, 359–61 summary, 557, 562 Creative evolution, 449, 459 Crises, 449–52 Critical success factors (CSFs), 133, 137–8, 528–9 Culture, corporate, 459–61, 519 Customer analysis form, 299 Customer asset management, 432 Customer reference table, 428–9 Customer retention, 390–1 Customer service, 11, 387–92, 398 audit, 402–3 package, 391–2, 403–5 Customers, 104–5, 133 analysis of attributes, 121–2 analysis of behaviour, 125–6 analysis of purchases, 122–5 audit, 143–55 internal customer data, 424–5, 426–7, 428–9 MIS: data, 431 functions, 431–2 wants, 7–9, 12–13 see also Market segmentation Data fusion, 426–7 Data mining, 434 Data modelling, 429 Data warehousing, 433–4 Database, 429, 540 Database marketing, 425–7 Decentralization, 452–3, 464 Definition of the business, 42, 566 Delegated evolution, 450, 460 Delegation of planning to a planner, 89–90 Demographic characteristics, 147–50 Depth interviews, 415 Desk research, 416 Detail, 85–6 Differential benefits, 127, 140–1, 373 Differentiation, product, 29–30, 256–9 Diffusion of innovation, 176–80, 212, 304–5 Direct mailing, 432 Directed evolution, 450, 459–60 Directional policy matrix (DPM), 189–91, 213, 251 analysis team, 193 case histories, 203–9 case study, 232–40 creating a product portfolio, 191–203 marketing objectives and strategies, 538–9 portfolio summary, 201–3 preparation, 193 process, 194–201 steps in producing, 193–4 strategic marketing plan, 532–5, 549 what should be plotted, 192–3 Directional statement, 566 Directions, business, 251, 284–5, 531 Directive role of planners, 492 Discounts, 361–3, 369, 374–5 Distinctive competences, 37, 189, 566 Distribution, 9, 381–408 audit, 394–5 channels, 385–7, 397, 399–400 evaluation criteria, 387, 401 and pricing, 361–3, 369, 373 integrated distribution management, 393–6 mix, 383–4, 397 physical distribution, 381–4, 397, 405–7 planning, 392–3, 395, 398 see also Customer service Diversification, 4, 249–51, 264–7 Diversity of operations, 478–9, 480–5 Driving forces 505, 507–8 Ecological strategy model, 35 Economic environment, 6–7, 17, 44, 45 Economies of scale, 182 80/20 rule (Pareto effect), 109–11 Electronic commerce, 432 Emotional appeal, 167 Enter, 251, 284, 531 Environment, marketing, 6–7, 17, 44, 45 European single market, 170–1 Existing markets, 423 Exit, 251, 285, 531 Experience effect, 182 Experimentation, 415 External audit, 43, 44, 45 External market data, 422–4, 426–7, 428–9 Facilities, 383–4, 405 Field and tab methods, 419 Final users, 113–15 Financial goals, 568 Financial history, 567 Financial projections: summary of, 526–7, 543 for three years, 540, 555 Financial ratios, 558, 564 Financial services, 441–2 Financial trusts, 454 Flexibility in revising analyses, 419–20 Force field analysis, 506–8 Forecasting, 200–1, 444–7, 463, 472–3 sales, 70–1 Formalization, 482–4 Functionality, brand, 166–8 Gap analysis, 260–4, 271, 274–9 strategic marketing plan, 527, 544–5 Generic mission statement, 36 Generic strategies matrix, 29–30, 256–9 Geodemographics, 152–3 Geographic segmentation, 150, 152 Global brands, 169–72 Government policy, 6, 44, 45 Growth rate, 195 Harvest, 251, 285, 531 Hierarchy: of audits, 494–9 of objectives, 247–9, 337, 356–7, 556 Ignorance, 70–6, 91 Impersonal communications, 295–6 Implementation issues, 475–509 diversity of operations, 478–9, 480–5 hierarchy of audits, 494–9 marketing planning cycle, 493 planning horizons, 493–4, 501 role of chief executive, 491–2 role of planning department, 492–3 size of operations, 478–9, 479–80 summary of marketing planning process, 485–91 Improve, 251, 284, 531 In-house market research, 419–22 Independence of location, 440–1 Individualization, 439, 440–1 Industrial markets, 13–14 buying process, 296–8 sales promotion, 308 segmentation, 147–9, 424 Industry restructuring, 441–2 Influencers, 115 Information, see Marketing information Index 575 Information-gathering techniques, 414–16, 470–1 Information technology, 422 see also Internet; Marketing information system Innovation, diffusion of, 176–80, 212, 304–5 Integrated distribution management, 393–6 Integration, 437–8 Intelligence, 413, 441 Interactivity, 438–9, 443 Interfaces, 429 Internal audit, 43, 44, 46 Internal customer data, 424–5, 426–7, 428–9 Internet, 436–44 independence of location, 440–1 industry restructuring, 441–2 individualization, 439, 440–1 integration, 437–8 intelligence, 441 interactivity, 438–9, 443 I’s model, 437–42 Interpretative strategy model, 35 Inventory, 384, 405 ‘Invest’ products, 203, 538 Key account planning, 54–6 position in strategic marketing planning, 55–6 Key activity planner, 558, 565 Key strategic issues, 568 Knowledge, 516–17 Lanchester’s Square Law, 259–60 Leadership crisis, 449–50 Leverage points, 119–20 Life cycle, product, see Product life cycle Life phases, organizational, 448–59 collaborative evolution, 451, 461 co-ordinated evolution, 451, 460–1 corporate culture and marketing planning process, 459–61 creative evolution, 449, 459 delegated evolution, 450, 460 directed evolution, 450, 459–60 Line management, 47–8 lack of support, 82–4 Local brands, 169–72 Location, independence of, 440–1 Logical incremental strategy model, 38 Macro forecasting, 445–6 Maintain, 251, 284, 531 ‘Maintain’ products, 203, 539 Management audit, 37 place of marketing audit in, 43–7 Management information and control, 433–4 Market: characteristics, 567 definition, 106–9, 134–6 external audit, 44, 45 new and existing markets, 423 overview, 527, 546 Market attractiveness, 190–1, 194–6, 202–3 Market audit, 138–9 Market extension, 249–51, 264–7 Market growth, 183–4 Market leverage points, 119–20 Market managers, 456–7 Market mapping, 112–20 Market maturity, 177, 220 Market penetration, 249–51, 364–7 Market positioning, 435 Market research, 412–13, 419 Market segment gross profits, 540, 552 Market segment sales values, 540, 551 Market segmentation, 9, 111–32, 133–4 analysis of purchases, 122–5 benefit analysis, 127, 140–2 case histories, 128–31 clustering process, 127–8 consumer markets, 150–6, 423 customer attributes, 121–2 customer behaviour, 125–6 criteria, 111–12 data, 418–22, 432–3 collection, 418–19 external agencies vs internal resources, 419 flexibility in revising analyses, 419–20 sources and segmentation variables, 423–4 unique segmentation schemes, 421–2 industrial markets, 147–9, 424 market mapping, 112–20 standard approaches, 147–55 vital in marketing planning, 131–2 Market share, 106–9, 133, 175–6 importance, 254–6 unit costs and, 182–4 Market size, accessible, 195 Marketing, 1–23 concept, 3, 17 confusion about, 10–12 function, 3, 514 industrial, consumer and service, 13–14 role in business, 5–6 Marketing activities, summary of, 557, 562 Marketing audit, 42–8, 271, 487–8, 515 checklist, 279–82 data, 422–7 external data sources, 422–4 internal data sources, 424–5 reconciling internal and external sources, 425–7 form of, 43 line managers and, 47–8 in marketing planning system, 522–5 need for, 43 place in management audit, 43–7 timing, 47 Marketing channels, see Distribution Marketing department: necessity for, 15–16 and sales force, 455, 514 Marketing environment, 6–7, 17, 44, 45 Marketing information, 9, 412–44, 463, 485 and forecasting, 412–16 information-gathering techniques, 414–16, 470–1 Internet, 436–44 organizing to develop sound plans, 416–29 software systems, 430–6 using successfully, 427–9 Marketing information system, 425–36, 463, 465–9 customer/product level data, 431 customer/product level functions, 431–2 data at market/product group level, 432–3 management information and control, 433–4 marketing analysis, 434–5 plan documentation, 436 reconciling internal and external data, 425–7 strategy formation, 435–6 successful use of information, 427–9 Marketing mix, 3, 9, 485 marketing strategies and, 268–9 product life cycle and, 173–5 Marketing objectives, 49–50, 200, 272, 356–7, 489–90, 530 and corporate objectives, 245–9 one-year marketing plan, 557, 559, 561 by SBU in consolidated plan, 568 sequencing, 517 setting, 249–53, 288–92 guidelines, 290–2, 539–40 strategic marketing plan, 536–40, 554 sub-objectives, 557, 561 Marketing orientation, 16, 17, 18–20 Marketing planning, 25–100 barriers to, 514 ‘Ten S’ approach to overcoming, 514–19 benefits, 57 and corporate planning, 34–9, 88–9, 494–9 cycle, 493 defining, 27–8 essential nature of, 28–31, 513–14 horizons, 36, 493–4, 501 576 Index Marketing planning – continued ignorance and operational problems, 70–6, 91 naivety, 77–9 position of key account planning, 54–6 principles of, 501 process, 39–56, 76, 485–91 alternative plans, 50 assumptions, 49, 489 budget, 51–2, 491 and corporate culture, 459–61 corporate objectives, 36–8 estimate of expected results, 50 first year detailed implementation programme, 52 marketing audit, 42–8, 487–8 marketing objectives, 49–50, 489–90 marketing strategies, 49–50, 490 mission statement, 39–42 programmes, 491 questionnaire, 58–63 SWOT analyses, 48, 488–9 written marketing plans, 491 purpose of, 513 role of chief executive, 491–2 role of planning department, 492–3 strategic, see Strategic marketing plan tactical, see Operational marketing planning Marketing planning systems, 517, 519–71 basis of, 521–2 consolidated plan, 556–9 design and implementation problems, 79–90, 92 confusion over planning terms, 84 delegation to planners, 89–90 failure to integrate corporate and marketing planning, 88–9 lack of line management support, 82–4 lack of a plan for planning, 82 numbers instead of written objectives and strategies, 84–5 once-a-year ritual, 86–7 over-planning, 85–6 separation of operational and strategic planning, 87–8 weak support from executive, 80–2 designing, 503–8 implementing, 508–9 marketing audit, 522–5 one-year marketing plan, 556–65 planning cycle, 569–71 planning team’s ‘kick-off’ meetings, 569–70 strategic marketing plan, 514, 519, 520–55 timetable, 569–71 Marketing research, 412–16, 463 expenditure, 413–14 forms of, 414–16, 470–1 and market research, 412–13 see also Marketing information Marketing strategies, 49–50, 200, 249, 272–3, 292, 490, 530 Internet and, 436–44 setting, 267–70, 538–9 strategic marketing plan, 536–40, 554 Matrix organization, 456, 457, 458 Micro forecasting, 445–6 Mission statement, 34–7, 525, 541 Mitchell, Alan, 15 Modelling, 434–5 Motivation of sales force 334–5, 345–7 Naivety, 77–9 Neighbourhoods, classification of, 154–5 New markets, 423 New product development, 249–51, 264–7 Non-reactive marketing research, 414, 415–16 Numbers, 72–3, 84–5 Objectives, 520 advertising, 302–4, 312, 314–16 corporate, 39–40, 245–9, 271, 372 distribution, 394 hierarchy of, 247–9, 337, 356–7, 556 marketing, see Marketing objectives numbers in lieu of written, 84–5 problems in setting, 71–2 and product portfolio, 356–7 sales force, 331–2, 340, 343 individual, 335–6 sales promotion, 313 Once-a-year ritual, 86–7 Operating result, 558, 564 Operational marketing planning, 54, 514, 520 one-year marketing plan, 556–65 contingency plan, 557–8, 556, 563 documentation, 559–65 format, 557–8 guidelines for completion, 556–8 key activity planner, 558, 565 operating result and financial ratios, 558, 564 overall objectives, 557, 559 overall strategies, 557, 560 sub-objectives, strategies and tactics, 557, 561 summary of marketing activities and costs, 557, 562 in planning cycle, 499, 569–71 and strategic planning, 31–4, 53–4, 87–8, 498–9 Operational problems, 70–6, 91 Opinion leaders, 178, 305 Organizations, 447–59 barriers, 463–4 corporate culture and marketing planning, 459–61 issues in marketing planning, 97–100 life phases, see Life phases, organizational structure, 452–9, 464, 473–4, 515 Over-planning, 85–6 Pareto effect, 109–11 Penetration policy, 364–7 Performance: sales force, 345, 346 summary of SBUs, 526, 542 Personal communications, 295–6 Personal selling, 325–9 importance, 325–7, 339 role, 327–9, 339, 341–3 see also Sales force Personality, brand, 167–9 Physical distribution, 381–4, 397, 405–7 Place, 9, 268–9, 273, 485, see also Distribution; Marketing mix Plan documentation software, 436 Plan for planning, lack of, 82 Planners, 89–90 Planning cycle, 53–4, 493, 499, 569–71 key account planning in, 54–6 Planning department, 492–3 Planning horizons, 36, 493–4, 501 Planning model of strategy formation, 35 Planning paradox, 501 Planning team: ‘kick-off’ meetings, 569–70 Planning terms, confusion over, 84 Policy, government, 6, 44, 45 Political strategy model, 38 Porter, Michael, 29, 254, 256 Portfolio, product, see Product portfolio Portfolio management, 209–10 Positioning: brand, 165–6 market, 435 portfolio, 435 product, 358, 369, 372, 435 Potential competition, 358–9, 373 Price reductions, 354, 355, 361–3, 369, 374–5 Pricing/price, 9, 349–78, 485 and accountancy, 352–6 competition, 358–9, 373 competitive advantage through value-in-use, 363–4 costs and, 359–61 Index 577 distribution channels and, 361–3, 369, 373 factors affecting, 369 marketing strategies and, 268–9, 273 objectives and product portfolio, 356–7 preparation of pricing plan, 364–7 product life cycle and, 357, 368, 372 product positioning, 358 Privacy, 443–4 Product development, 249–51, 264–7 Product groups, 423–3 analysis, 540, 553 Product life cycle, 172–6, 211 diffusion of innovation, 176–80 life-cycle analysis, 218–21 and pricing, 357, 368, 372 and product management, 209–10 Product management, 9, 11, 157–241 importance of brand, 162–72 product life cycles and, 209–10 relevance to marketing audit, 210 Product managers, 456–7 Product portfolio, 180–2, 212 Boston Matrix, 184–91 DPM approach, 191–203 MIS and, 435 objectives and, 356–7 portfolio management, 209–10 portfolio summary, 201–3, 532–5, 549 and pricing, 372 setting marketing objectives and strategies, 538–9 unit costs and market share, 182–4 Product surround, 161–2 Productivity, sales force, 333 Products, 485 analysis of purchases, 122–5 availability, 387–9, 398 differentiation, 29–30, 256–9 elimination from range, 360–1 marketing strategies and, 268–9, 272 MIS: data, 431 functions, 431–2 mix of, 29–31 nature of, 159–62, 211 positioning, 358, 369, 372, 435 Profit potential, 195–6 ‘Profit’ products, 203, 539 Profitability, 8, 30–1, 72, 183 customer retention and, 390–1 pricing and, 353–4, 356 Programmes, 491 Promotion, 9, 485 marketing strategies and, 268–9, 273 see also Advertising; Marketing mix; Sales force; Sales promotion Promotional discount, 362 Psychographics, 149, 153–6 Purchases, analysis of, 122–5, see also Buying process Purpose statement, 39–42 Qualitative forecasting, 446–7 Qualitative objectives, 332 Quantitative forecasting, 446–7 Quantitative objectives, 331–2 Quantity discount, 362 Questionnaires, 414–15 Rational appeal, 167 Reactive marketing research, 414–15 Red-tape crisis, 451 Requisite marketing planning, 90–1, 494–8 Research and development, 12–13 Restraining forces, 504–5, 507–8 Restructuring, industry, 441–2 Retail audits, 415–16 Retention of customers, 390–1 Revlon, Charles, 107 Risk, 413 Rogers, Everett, 176–8 Running reference file, 525 Sales/selling, 10, 11, 323–47 personal 325–9, 339, 341–3 plan, 335–8 Sales force, 325–7, 329–35 automation, 431–2 improving productivity, 333 managing 334–5, 340, 343–7 marketing department and, 455, 514 objectives, 331–2, 340, 343 individual, 335–6 role, 331–2, 340 size of, 329–31, 339–40 workload, 329–31 see also Personal selling Sales forecasting, 70–1 Sales promotion, 305–11, 318–21 checklist for promotional instruction, 310–11 industrial products, 308 kinds of, 306–7 objectives, 313 plan, 309–10, 313, 320–1 in practice, 306 strategic role, 307–8 Security, 443–4 ‘Selective’ products, 203, 539 Senior managers, critical intervention, 484 Sensual appeal, 167 Sequencing objectives, 517 Services marketing, 13–14, 160–1 Shared values, 515 I’s model, 437–42 Size of operations, 478–9, 479–80 Skills, 516–17 Skimming policy, 364–7 Socio-economic groups, 121–2, 150 Sodium tri-poly phosphate (STPP), 129–30 Standard benefits, 140 Standard Industrial Classification (SIC), 122, 148 Strategic business units (SBUs), 191–2, 458–9 consolidation of several SBU strategic marketing plans, 566–9 mission statement, 525 summary of performance, 526, 542 see also Strategic marketing plan Strategic guidelines, 496–7 Strategic marketing plan, 514, 519, 520–55 contents, 52–3, 56, 525–40 financial projections for three years, 540, 555 market overview, 527, 546 marketing objectives and strategies, 536–40, 554 overall assumptions, 535–6, 550 portfolio summary, 532–5, 549 SBU mission statement, 525, 541 summary of financial projections, 526–7, 543 summary of SBU’s performance, 526, 542 SWOT analyses, 528–31, 547–8 documentation, 541–55 and operational planning, 31–4, 53–4, 87–8, 498–9 in planning cycle, 53–4, 569–71 understanding the variables, 260–4 Strategic planning models, 37–8 Strategies, 520 brand strategy, 165 competitive, 254–60 corporate, 39, 40, 247 marketing, see Marketing strategies MIS and strategy formation, 435–6 numbers in lieu of written, 84–5 operational marketing plan, 557, 560, 561 sales promotion, 307–8 Structure, organizational, 452–9, 464, 473–4, 515 Sub-objectives, 557, 561 Success, business, 5–6 Supportive role of planners, 492–3 Surveys, 414–15 SWOT analyses, 48, 271, 282–3, 285–6, 488–9, 516 guidelines for completing, 528–31 assumptions, objectives and strategies, 530, 547 competitor analysis, 530–1, 548 key issues, 529 opportunities and threats, 529 strengths and weaknesses, 528–9 summary of, 532–5, 549 578 Index Systematization, 517, see also Marketing planning systems Tactical planning, see Operational marketing planning Tactics/actions, 557, 561 Task-related budgeting, 556 Technological change, 6–7 Telemarketing, 432 Timetable, planning, 508–9, 569–71 Top-down planning, 570 Top management, weak support from, 80–2 Trade discount, 361 Training, 345 Transaction data, 431 Transport, 384, 405 Uncertainty, 413 Unique segmentation schemes, 421–2 Unit costs, 182–4 Unitization, 384, 406 Value-in-use, 363–4 Values, shared, 515 Visionary leadership model, 38 Woofe, Alan, 172 Workload, salesperson’s, 329–31 Zero-based budgeting, 51–2 ... further into the task of explaining the role and the nature of marketing The role of marketing in business What causes success in the long run, by which we mean a continuous growth in earnings... about the management of the several elements of the marketing mix rather than about how the process of combining them into a coherent plan can be managed Others treat marketing planning in such... and in the raising of standards of professionalism in the education, training and practice of this key business discipline Books in the series Below -the- line Promotion, John Wilmshurst The CIM