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EMBA-SEM I Question And Answers

Marketing Management

Q. 4. Explain the procedure in Marketing Planning.

Ans. :

Market-oriented strategic planning is the managerial process of developing and maintaining a feasible balance between the organization’s objectives, skills, and resources and its changing market opportunities. Strategic planning aims at shaping the company’s business and products to yield target profit and growth.

The Marketing Manager plays a vital role in strategic planning process. He defines the business mission, analyses the environmental, competitive, and business situation, and finally develops objectives, goals and strategies.

The planning procedures that happen at various levels are as below:

1. Corporate strategic planning: These are plans made by the corporate head quarters to guide the entire enterprise.
2. Division planning: It covers the making of decisions on the amount of resources to be allocated to each division.
3. Business unit strategic plan: Each business unit devises a strategic plan to carry that business unit into a profitable venture.
4. Product marketing plan: Each product line or brand within a business unit develops a marketing plan for achieving its objectives in the market.

The strategic-planning, implementation, and control process can be summarised as follows:

Planning Process

Corporate and division strategic planning :

The corporate establishes the framework within which divisions and business units prepare their plans. This is done by defining the mission, policy, strategy and goals of the company. The corporate head quarters undertakes four planning activities:

1. Defining the corporate mission: Every company has a mission or purpose and a well-worked-out mission statement, encourages and motivates the employees with a shared sense of purpose, direction and opportunity.
2. Establishing strategic business units (SBUs): The company has to establish strategic business units on the basis of the following three dimensions: customer groups, customer needs and technology.
3. Assigning resources to each SBUs: The senior management studies the company’s portfolio and classifies its business by profit potential. After the company’s strategic business units are identified, appropriate funding is assigned to each unit.
4. Planning new businesses and downsizing older business: New businesses can be of the following types – intensive growth opportunities (to achieve further growth within the company), integrative growth opportunities (to build or acquire businesses related to the company’s current business) or diversification growth opportunities (adding new businesses that is totally unrelated to the company’s current business).

Business strategic planning :

This occurs in the following steps:

1. The unit defines its specific mission.
2. It performs overall evaluation of company’s strengths, weaknesses, opportunities, and threats (SWOT analysis)
3. It develops specific goals based on the SWOT analysis;
4. It develops a strategy to achieve the goal.
5. It develops detailed supporting programs to help in the strategy.
6. It implements the clear strategy and well-planned supporting programs.
7. It keeps a track of the new developments and results and controls the strategy accordingly.

Product marketing planning:

Each product level (product line, brand) must develop a marketing plan for achieving its goals. A marketing oriented company attaches great significance to gathering information on which plans are based. Their activities centre around– customer needs and satisfaction.

The Marketing Manager deals with the following questions:

1. Who are our customers?
2. What do they buy?
3. How do they consider value?
4. When do they buy?

ELEMENTS OF MARKETING PLANNING

The planning role of the marketing management comprises the determination of marketing objectives together with a choice of strategies and tactics to achieve these objectives and a time scale for their implementation and achievement. For obtaining this, the marketing plan must comprise of the following:

1. Executive summary and table of contents: The marketing plan should comprise of a brief summary of the plan’s main goals and recommendations. This should be followed by a table of contents.
2. Current marketing situation: This should contain relevant background data on sales, costs, profits, market, competitors, distribution, and the macro environment.
3. Opportunity and issue analysis: This requires the Product Manager to identify the major opportunities/ threats, strengths/weakness, and issues facing the product line.
4. Objectives: After the Product Manager has summarized the issues the financial plan and the marketing objective are set.
5. Marketing strategy: The Product Manager outlines the broad marketing programs to accomplish the plan’s objectives. In determining the strategy, the Product Manager talks with the purchasing and manufacturing people to determine whether they will be capable of meeting the target volume levels set.
6. Action programs: It devises special marketing programs to achieve the business objectives. It must be dealing with the following questions: What should be done? Who should do it? How much will it cost?
7. Projected profit-and-loss statement: This is essential to forecast the plan’s expected financial outcomes. On the revenue side, this budget shows the forecasted sales volume in units and average prices. On the expenses side, it shows the cost of production, physical distribution and marketing. The difference between revenues and sales is the projected profit.
8. Controls: The final section of the marketing plan outlines the controls for monitoring the plan. This deals with reviewing the results of goals and budgets set for each month or quarter. Some control sections include contingency plans which outline the steps the management takes to respond to specific adverse developments like strikes etc.

MARKETING MIX AND MARKETING PLANNING

All the elements of marketing mix (the 4Ps) are arrived upon and implemented in the broad framework of a marketing plan. The marketing plan, like any other planning process, is an interactive process and is done on a continual basis of constant monitoring, redefinition, adaptation, and re-evaluation of objectives and strategies.

The concept of the Product Life Cycle (PLC) is briefly introduced to understand how the components of the marketing mix change during different phases of the life cycle of the product. The PLC of a product involves with the stages corresponding to the life phases of infancy, growth, maturity and decline. The belief is that sales are low during the introductory stage, rapidly rising during the growth stage, reach the peak during maturity stage and start declining during the final stage. Different products will take different spans of time to pass through the cycle of introduction, growth, maturity and decline. The marketer should seek and identify the stage in the life cycle from the conditions in the market. For this, it is recommended to try and foresee the next stage and work back to establish the current stage.

Elements of Marketing Mix

The table below describes different elements of marketing mix for coping with the different PLC stages

Stage in PLC	Product	Pricing	Promotion	Distribution
(1) Introduction	Resolve product deficiencies	Highest	Create awareness of product’s potential, stimulate primary demand	Selective Distribution
(2) Growth	Focus on product quality, variation of Product introduction, Product adjustments for further brand differentiation	High	Selective advertising of the brand. Heavy advertising to create image	Extended Coverage
(3) Maturity	Simplify product-line	Moderate	Build and maintain image. Facilitate sales promotion	Seek close dealer Relationships
(4) Decline	Seek new product users.	Low	Primary demand may be created again	Selective

Role of Advertising in the Marketing Mix

Since there exists only few firms which directly compete with each other in the same market, each of them desires to increase their share by increasing demand through advertising rather than reducing prices. This approach is preferred because the firm can achieve a competitive edge in advertising because it has a very wide reach and establishes an image that cannot be obtained otherwise.

Role of Price in Marketing Mix

Pricing decision is carefully coordinated with decisions on product, promotion and distribution on the basis of the target market strategy. This is so because the chosen target market gives overall direction in determining marketing mix. Competitors are more likely to react to a lowering of price than to an increase in advertising expenditure because such a lowering is highly visible and is often associated with the onset of cut throat competition.