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Planning & Control for Marketing
I’ve got a little list……
Marketing Planning & Control• Where does it fit?• What is it?• Why do it?
A plan• Sets out a route from where you are to where
you want to go• Identifies how you can best arrive at your
destination (quickest, most cheaply etc.)• Identifies the resources you will need and whom
you will depend on, and allocates responsibilities• Identifies possible obstructions on the way• Identifies contingencies if your planned route is
obstructed.• Identifies milestones (targets/ objectives) on the
route which must be achieved if you are to complete your journey.
• Allows for dynamic adjustments
For a (business) plan to be successful
• It must be possible• It must be resourced and the elements
‘owned’• It must have sufficient flexibility to allow for
disruptions and discontinuities• It must have ‘staging posts’ where
progress can be determined.• It must be followed by everyone
The corporate planning cycle
Where strategic objectives are planned-for over a time period longer than the budget cycle, interim milestones need to be set.
Strategic Intent& Group Plan
Strategic Plans- Marketing- HR- Finance- Manufacture- etc.
Detailed action plans- Communications- Price- Sales- Product
Implementation &Measurement
Review and Revision/ Restatement
Expressed as objectives
Expressed as objectives
Expressed as Targets/ objectives
Control
Market Planning:• Creates a shared ‘knowledge infrastructure’ about the
market environment, customers and competitors, including assessment of trends and change.
• Creates a language of customers/ customer needs which can be used throughout the organisation.
• Creates a route map for success, as defined by corporate strategic intent
• Identifies and sets necessary tasks, objectives and targets to follow that route
• Identifies and (should) secure resources to be able to follow that route, on a prioritised basis.
• Closes off unsuitable paths which would lead to wasted resource.
• Informs a multiplicity of tactical plans both within and outside the marketing and sales community.
What do you get with poor/ no Marketing planning?
• ‘Market’ information unavailable or untimely, leading to critical decisions being made in the dark.
• Objectives set which are not achievable or which are in conflict with each other and group strategy
• Missed commercial opportunities• Squandered marketing and sales resources and
waste• Imbalanced (out of date?) portfolio• Brand value depletion• Unnecessary vulnerability to competition/
external events.
Barriers to effective planning and implementation
• Lack of process/ ‘plan for the plan’• Responsibility conflicts• Organisational culture (‘seat of the pants’
management).• Internal conflicts (power politics)• Paralysis by analysis• Prioritisation of resource conflicts• Skills gaps• Systems gaps
Barriers may be overcome by:-• Gaining (real) commitment to the process
(and outcomes) at board level• Ensuring understanding and commitment
at all implementation levels• Focus and prioritisation• Proper planning for ‘the plans’.• Building trust• Understanding and using motivational
levers.
The nine ‘classic’ Marketing Planning steps-
1. Identify Mission statement
2. Understand corporate financial objectives
3. Overview the Market and the operating environment
• Market Audit - Market Dynamics, trends and Segmentation
4. Identify Key Segments and produce SWOT analyses
6. Identify Key issues7. Summarise SWOT
using portfolio matrix8. List assumptions9. Set market objectives
and strategy10. Summarise marketing
resource requirements for planning period as a budget
From McDonald
Leading to the creation of a written plan of (typically):-
• (Executive Summary)• The Market Environment• Market Mission (as subset of
Organisation)• Market Objectives• Market Strategy• Action Programmes• Budgets (income/ expenditure)• Controls and measures.
The ‘Market Plan’ is:-
A written document which describes the market environment and the addressable customers segments within that market and specifies a set of actions, with associated resources to achieve a set of objectives consistent with the market and corporate strategic aims.
But a Marketing Plan is also…
• A set of projects within a programme• A bible• A motivational tool• A budgetary justifier• AND either a document in a drawer OR a
way of life.
Plans are primarily projects
• Plans can be implemented using project management processes.
• What is wanted leads to a description of how it will be delivered.
• Plans thus include assumptions, risks (and response), quality criteria, success criteria, dependencies etc.
• Like all projects, market plans require controls
To ‘control’ is
• To understand what is happening• To know what action needs to be
taken• To take that action (or cause it to be
taken).• To know what effect that action has
actually had.
Control
• ‘The process of the activities of individuals and units monitoring, and taking whatever actions may be necessary to bring performance into line with plans – by adjusting performance or plans themselves..’
CIM
For control to be successful• Information must be relevant, timely
and accurate.• Plans (most) for recovery/ response
must be in place and agreed, and responsibility allocated.
• Proposed actions must be possible.• Actions must be taken effectively and
at the right time.
‘Control’ requires
• Effective and timely measurement
• ….of the RIGHT things• A deliverable course of action• Commitment
Measurement
‘What isn’t measured doesn’t happen’
1. Because there is no incentive2. Because there is no knowledge3. Because there is no ownership
Measurements• Appropriate
– Measure what makes the difference – and define the difference for whom.
• Cost effective– Don’t spend £1 to save 0.50p
• Timely– Available in time for action to be taken.
• Believed– Where actions are called for, the trigger must be
accepted.
‘Control’ is about..
• Delivering what you promised in changing circumstances– Internal – are we doing what we said we
would do?– External – are things (economy, competitors,
customers, technology etc.) acting as we said they would?
Control ProcessAgree Objectives
Set Performance Standards/ outcome criteria
Allocate Ownership
Measure
Evaluate
Correct/ Review
NB – ‘Turnbull’ code in UK allocates responsibility for ‘external’ risk factors
Assumptions, Dependencies, Risk• In a complex world all plans contain
assumptions – about the economy, about customers and competitors, about capabilities
• These need to be documented, agreed, and common as necessary.
• Most plans also have dependencies – ‘a’ happens as long as ‘b’ is achieved.
• These two form risk statements – and risk needs control.
‘Classic’ Performance measures
• Market Share• Growth• Competitive advantage• Competitive position• Sales volumes• Market penetration• Customer satisfaction• Image and awareness
• Profit (EBIT/ EBITDA)• Profitability (Margins)• Shareholder return• Cash flow/ liquidity• Share price• Earnings per Share• Return on net Assets• Return on Capital employed• Return on sales• Cash Value add.
Financial Non- Financial
Key Marketing Measures• Sales (channel) performance• Market Share• Marketing Costs (Value-add)• ‘Share of voice’ (Advertising)• Image and Awareness• Customer retention• Product innovation• Time to Market/ time to first cash
Channel Performance
• Sales revenues against budget• Cost per sale/ channel margins• % conversions (lead to closure)• Time to close• Follow-up and corrections• Lost sales
Market Share
• Share of what (defined) market?– Customer needs– Product type– Geography
• Implicit cost of share (are incremental customers being bought for more than they are worth?)
Marketing Costs
• How much value is the marketing expenditure (people, accommodation, advertising and promotion etc.) creating?
Very difficult to measure
Share of Voice
• If you are advertising, is your expenditure being ‘heard’ over that of others?
Used as a justification for advertising budgets.
Image and Awareness
• Of what – company or Brand?• Fatal combination – bad image, high
awareness!
Customer retention
• Winning a customer costs more than keeping one
• Every existing customer can be a further sales opportunity, with the relationship built-in (i.e. cross-sales).
• Customers are currency.
Product innovation
• New products introduced• %age earnings from products launched in
last x years.• Products withdrawn
Time to Market
• Occupy market space early – gain share (‘First mover’ advantage)
• Bring forward revenues (cash flow)• Earn ‘lost’ revenues. (Every week you
can’t buy a consumable is one week’s consumption lost).
Marketing Planning and Control
Setting and handling Budgets for Marketing
Budgets
A budget is a consolidated statement of the resources required to achieve objectives or to implement planned activities
It is a planning and control tool relevant to all aspects of management activities.
Budget v Forecast
• A forecast proposes what the future might be
• A budget determines what the future will/ must be.
• Forecasts will inform initial planning analysis and may be used in the early stages of budget setting, but strategy and intent sets the budget.
Setting Marketing budgets• Rules of thumb
– Advertising budget set as a %age of overall revenues – industry norm
– Market research budget as a %age of advertising budget• Mechanical build
– Last year +/- a fixed %age– Budget flexes with revenue outturns – the old question – do
salesmen make sales, or sales make salesmen?• Zero based budgeting
– state what you want to do, and how much it will cost – justified against the benefit it will bring.
Budget Control• Control what matters• Understand volatility• Look for cause (price: volume variance, poor
performance, changed circumstances)• Cure the problem, not the symptom• The sitting ducks of discretionary spend –
research, advertising, NPD - easy but not always right solutions.
Dependant Budgets• Some (much) of what needs to be
achieved in a Market Plan will be budgeted for elsewhere in the business.
• Marketing needs to ensure that budgets are aligned, and that budget changes are coordinated.
• This is VERY DIFFICULT in most large businesses.