Simple Planning Process
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1 Ibrahim Sameer
2 Strategic Planning A simple view of planning can be remembered through the acronym MOST: Mission the business we are in Objectives what we need to accomplish Strategies in general terms how are we going to do it? Tactics in specific terms how are we going to do it?
3 Simple Planning Process
4 Simple Planning Process (cont ) Planning can be confusing because of the many words and titles used in its description. In particular, confusion arises over the meaning of strategy and its use in the terms corporate strategy and functional strategy. It is useful to clarify these terms: Planning is the process of decision-making that relates to the future. The term can be used at all levels in company decision-making.
5 Simple Planning Process (cont ) Corporate planning refers to decision-making at the highest levels of management. It is sometimes referred to as strategic planning or long-range planning. It is not concerned with forecasting sales or marketing mix strategies. Corporate planning asks: What business are we really in? ; What are our basic objectives? ; Are our markets growing or declining? ; Do new technologies threaten our products? After analysis, strategic plans can be drawn up from the answers to such questions.
6 Simple Planning Process (cont ) Operational or functional planning is the process that develops the corporate or strategic plan. A strategic corporate objective may be to enter a new market and achieve x per cent market share with y per cent return on investment within two years. Operational planning will indicate how this should be best achieved
7 Simple Planning Process (cont ) The word strategy can be used at an operational level (product, price or advertising strategy) because it describes medium- to long-term actions. Tactics are actions that bring about modifications to operational plans (e.g. a price change or an increase in advertising necessitated by unexpected competitive action). They are essentially short-term in nature.
8 Simple Planning Process (cont ) Objectives should be SMART Specific, Measurable, Achievable, Realistic and Time related
9 Planning Hierarchy
10 Boston Consulting Group (BCG) Matrix
11 Boston Consulting Group (BCG) Matrix (Cont ) Stars are SBUs that have a promising future. Significant investments of cash are necessary to develop their full potential. If managed correctly, they will develop into a valuable source of revenue as the market evolves.
12 Boston Consulting Group (BCG) Matrix (Cont ) Cash cows have achieved a high market share in a mature market. They deserve the company s fullest attention because the cash they generate can be invested in newer market areas with high growth potential.
13 Boston Consulting Group (BCG) Matrix (Cont ) Question marks (or problem children or wildcats) pose a problem for management. Whilst market growth prospects are good, question mark SBUs have a low relative market share. If they are to be moved to the left (i.e. increase relative market share) substantial investment may be required. Based on marketing information, management must decide whether such investment could be better employed supporting other SBUs.
14 Boston Consulting Group (BCG) Matrix (Cont ) Dogs show no growth potential and their relative market share is low. Although they may not necessarily be a drain on the company s resources, they are unable to make a positive contribution to profits.
15 Ansoff Matrix
16 Ansoff Matrix (cont )
17 Procedure for Marketing Plan
18 Procedure for Marketing Plan (cont ) Analysis Marketing research provides a picture of the market and profiles of potential consumers. Information is needed on competitive activity, distribution, prices and products. Potential consumers should be asked where they buy, how they buy and what they consider to be problems with current supplies/suppliers. In particular, we need to know market size.
19 Procedure for Marketing Plan (cont ) Analysis Marketing research provides a picture of the market and profiles of potential consumers. Information is needed on competitive activity, distribution, prices and products. Potential consumers should be asked where they buy, how they buy and what they consider to be problems with current supplies/suppliers. In particular, we need to know market size.
20 Procedure for Marketing Plan (cont ) Setting Objectives Based on marketing research/analysis and knowledge of internal capabilities, the company must decide on objectives, i.e. the market position the company will seek. The objectives of a marketing plan must be realistic, attainable and specific so that they can be easily communicated throughout the company.
21 Procedure for Marketing Plan (cont ) Forecasting The location of forecasting as a stage in the marketing plan varies according to the type of product (new or existing) and the objectives that have been set (marketing based, e.g. increasing brand awareness, or financially based, e.g. reducing costs or increasing sales).
22 Procedure for Marketing Plan (cont ) Budgeting Once the company has forecast sales, it can allocate resources on anticipated revenue. Marketing objectives can influence resource allocation. Procter & Gamble is known for achieving high market-share through aggressive advertising. The option to inject funds into marketing is important when, for example, the company wishes to transform a question mark SBU into a star.
23 Procedure for Marketing Plan (cont ) Organizing This is a vital element of the marketing plan. Extra responsibilities are often given to employees without consideration of how this will affect their performance. Similarly, personnel are sometimes misplaced in terms of experience and expertise. The company must consider relationships between departments that might be overstaffed, while others might be under pressure.
24 Procedure for Marketing Plan (cont ) Target Selection This involves defining market segments to be approached. It might be that a demographically based segmentation strategy is appropriate, or perhaps behavioural variables such as benefits sought or usage rate might be better.
25 Procedure for Marketing Plan (cont ) Marketing Mix When the first five planning stages have been executed, specific marketing strategies can be developed. Each segment should have its own marketing mix developed within the framework of financial and company resources.
26 Procedure for Marketing Plan (cont ) Control The effectiveness of a marketing mix strategy must be monitored and after a period of time, evaluated and reviewed. This is the control process that considers: 1. Goals and objectives only have value when translated into action. 2. Planning is not an end in itself, but a means to an end; the end is the provision of customer satisfaction by a means which provides the company with a profit. 3. Only if it makes profits, can a company s customers be served and employment maintained.
27 Q & A
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