Principles of Marketing

Grade Level: Grade 11

SLA No. 6-8: Strategic and Marketing Planning

Subject Code/Number: ABM04
Subject Title: Principles of Marketing
Teacher: Lorelie Buitrago

VIII. Introduction

Hello everyone! Why do we need to plan out our work? Isn’t it easier to just do what seems most
important today, then move on to what seems to be the next most important task, and so on and so on?
Raise your hand if you do this even when you are being organized and following a plan. I know I do. We
all do – it’s in our nature. But, if we plan well and succeed, we can follow that original plan and replicate
it on future projects to realize even greater successes. So, let us see how it helps.

E. Learning Competency

1. Distinguish between strategic and marketing planning in terms of objectives and processes.
2. Analyze the elements of macro- and micro-environment and their influence to marketing
planning

F. Learning Outcomes

7. Conduct marketing research, interpret market buying behavior on product or service, and
8. Identify the product or service target market

IX. Learning Content

What do I need to know? To answer this, you have to read the given text completely with joy, as you
explore how figures of speech really work when you create something.

Strategic planning is a broad process that can address the entire business, or a portion of the business
such as marketing. Marketing strategies derive from strategic plans.

Purpose of Strategic Planning

Strategic planning is a systematic process that helps you set an ambition for your business' future and
determine how best to achieve it. Its primary purpose is to connect three key areas:

• your mission - defining your business' purpose

• your vision - describing what you want to achieve
• your plan - outlining how you want to achieve your ultimate goals

Strategic planning is different to business planning. It requires stepping back from your day-to-day
operations and articulating where your business is heading, by setting long-term goals, objectives and
priorities for the future.
Principles of Marketing
Grade Level: Grade 11

What is the Strategic Planning Process?

Strategic planning is the process of documenting and establishing a direction of your small business—
by assessing both where you are and where you’re going. The strategic plan gives you a place to record
your mission, vision, and values, as well as your long-term goals and the action plans, you’ll use to reach
them. A well-written strategic plan can play a pivotal role in your small business’s growth and success
because it tells you and your employees how best to respond to opportunities and challenges.

1. Determine your strategic position

This preparation phase sets the stage for all work going forward. You need to know where you are to
determine where you need to go and how you will get there. Get the right stakeholders involved from the
start, considering both internal and external sources. Identify key strategic issues by talking with
executives at your company, pulling in customer insights, and collecting industry and market data to get
a clear picture of your position in the market and in the minds of your customers.

As a framework for your initial analysis, use a SWOT diagram. With input from executives, customers, and
external market data, you can quickly categorize your findings as Strengths, Weaknesses, Opportunities,
and Threats (SWOT) to clarify your current position.

An alternative to a SWOT is PEST analysis. Standing for Political, Economic, Socio-cultural, and
Technological, PEST is a strategic tool used to clarify threats and opportunities for your business.
Principles of Marketing
Grade Level: Grade 11

2. Prioritize your Objectives

Once you have identified your current position in the market, it is time to determine objectives that will
help you achieve your goals. Your objectives should be in line with your company mission and vision.

Prioritize your objectives by asking important questions such as:

• Which of these initiatives will have the greatest impact when it comes to achieving our company
mission/vision and improving our position in the market?
• What types of impact are most important (e.g. customer acquisition vs. revenue)?
• How will the competition react?
• Which initiatives are most urgent?
• What will we need to do to accomplish our goals?
• How will we measure our progress and determine whether we achieved our goals?
• Objectives should be distinct and measurable to help you reach your long-term strategic goals
and initiatives outlined in step one. Potential objectives can be updating website content,
improving email open rates, and new leads in the pipeline.

SMART goals are useful to determine a timeline and identify the resources needed to achieve the goals,
as well as key performance indicators (KPIs) to make your success measurable.

3. Develop a plan
Now it's time to create a strategic plan to successfully reach your goals. This step requires determining
the tactics necessary to attain your objectives and designating a timeline and clear communication of
responsibilities. Strategy mapping is an effective tool to visualize your entire plan. Working from the top-
down, strategy maps make it simple to view business processes and identify gaps for improvement.
Be prepared to use your values, mission statement, and established priorities to say “no” to initiatives
that won’t enhance your long-term strategic position.
Principles of Marketing
Grade Level: Grade 11

Example of Strategy Map

4. Execute and Manage the Plan

Once you have the plan, you’re ready to implement it. First, communicate the plan to the organization by
sharing relevant documentation. Then, the actual work begins. Turn your broader strategy into a concrete
plan by mapping your processes. Use KPI dashboards to clearly communicate team responsibilities. This
granular approach illustrates the completion process and ownership for each step of the way. Set up
regular reviews with individual contributors and their superiors and determine check-in points to make
sure you’re on track.

5. Review and Revise the Plan

The final stage of the plan—to review and revise—gives you an opportunity to reevaluate your priorities
and course-correct based on past successes or failures. Track your progress using balanced scorecards to
provide a comprehensive understanding of your business's performance and execute strategic goals. Over
time you may find that your mission and vision need to change — an annual evaluation is a good time to
consider those changes, prepare a new plan, and implement again.
Principles of Marketing
Grade Level: Grade 11

Example:

Where Do Strategic Plans Go Wrong?

Strategic plans also can go wrong if the goals and objectives you set are unrealistic. Every business owner
wants to see their business grow and succeed, but if you set an overly ambitious growth rate, it could
discourage you and your employees. A successful strategic plan requires commitment. Your entire team
needs to be focused on the business and carrying out the strategic plan. If the strategic plan isn’t being
used regularly or as the foundation of the business, you and your employees can lose sight of the
company’s direction and goals.

The top three reasons strategy implementation fails:

• Poor Communication
• Lack of Leadership
• Using wrong measures
Principles of Marketing
Grade Level: Grade 11

Strategic Planning Objectives

1. A clear and compelling vision for the future – Our Strategic Ambitions. Whether we are
rethinking our entire long-range strategy or addressing a single emerging and strategic issue,
we must ask how this new plan will change the grand scheme of things. Will it accelerate our
progress? Will it change our vision, and if so, how? To what extent will it affect our strategic
goals, priorities, and organization?
2. An outline or “roadmap” for achieving our goals – How we will achieve our goals. Once the
objectives are defined, the “how” must be determined. A concrete set of prioritized
initiatives, are needed to focus and guide your organization toward its strategic objectives
and the accomplishment of its overarching vision

Importance Strategic Planning

1. Financial Benefits
Firms that make strategic plans have better sales, lower costs, higher EPS (earnings per share) and higher
profits. Firms have financial benefits if they make strategic plans.

2. Guide to Organizational Activities

Strategic planning guides members towards organizational goals. It unifies organizational activities and
efforts towards the long-terms goals. It guides members to become what they want to become and do
what they want to do.

3. Competitive Advantage
In the world of globalization, firms which have competitive advantage (capacity to deal with competitive
forces) capture the market and excel in financial performance. This is possible if they foresee the future;
future can be predicted through strategic planning. It enables managers to anticipate problems before
they arise and solve them before they become worse.

4. Minimizes Risk
Strategic planning provides information to assess risk and frame strategies to minimize risk and invest in
safe business opportunities. Chances of making mistakes and choosing wrong objectives and strategies,
thus, get reduced.

5. Beneficial for Companies with Long Gestation Gap

The time gap between investment decisions and income generation from those investments is called
gestation period. During this period, changes in technological or political forces can disrupt
implementation of decisions and plans may, therefore, fail. Strategic planning discounts future and
enables managers to face threats and opportunities.

6. Promotes Motivation and Innovation

Strategic planning involves managers at top levels. They are not only committed to objectives and
strategies but also think of new ideas for implementation of strategies. This promotes motivation and
innovation.

7. Optimum Utilization of Resources

Strategic planning makes best use of resources to achieve maximum output.
Principles of Marketing
Grade Level: Grade 11

Marketing Planning

Market planning is the process of organizing and defining the marketing aims of a company and gathering
strategies and tactics to achieve them. A solid marketing plan should consist of the company’s value
proposition, information regarding its target market or customers, a comparative positioning of its
competitors in the market, promotion strategies, distribution channels, and budget allocated for the plan.
All relevant teams in the organization should refer to the marketing plan.

The activities of marketing planning are generally divided into two divisions according to time—(a) Long
term Marketing Planning; and (b) Short term or annual Marketing Planning.

1. Long Term Marketing Planning

Long range planning involves developing the basic objectives and strategy to guide future company
efforts. The long-range plan provides the frame work within which the other plans of the company are
prepared. Long run planning may involve a time horizontal of two or more years, although it uses even a
longer horizon of five to twenty years. Long range planning is done by the top management with the help
of specialized planning authorities.

2. Short Term or Annual Marketing Planning

Each year companies prepare annual plan. In principle, the annual plan is developed in the context of the
company’s long-range plan. Short range plan, of course, is not possible where the company has no long-
range plan. A long-range plan is necessary if the short-range plans are not to be chaotic series of expedient
solution to short run crisis. Sometimes annual plans only reflect over reactions to previous year’s result
and next year’s problems rather than the progressive implementations of long-range plan.

Three different approaches are generally taken to annual planning:

• Goal Planning
Management sets sales and profit goals for the year that if achieved, would satisfy the
shareholders. It is left to goes for whom the goals are set to find ways of achieving them.

• Optimization Planning
Management considers major alternative strategies and their likely impacts on profits, sales,
market shares and future investment opportunities. The management selects the strategy with
the most attractive consequences. This sort of planning is most logical of the three approaches.

• External Planning
Management considers continuing its current strategy and estimates the likely profits and sales it
could achieve. If these are satisfactory, they are established as the company goals.
Principles of Marketing
Grade Level: Grade 11

Marketing Planning Process

1. Scanning the marketing environment.

First, a firm scans its marketing environment.

The purpose is to find out:

• The favorable and unfavorable factors prevailing in the environment and
• The specific business opportunities available to the business unit and their relative attractiveness.
Study of marketing environment analysis helps to locate marketing opportunities and discover
unsatisfied consumer demand. It also undertakes customer sensing, reactions of the customer to
its products and tries to locate the causes of the customers patronage of a particular brand and
who remain closest to the customer, and why.

2. Internal scanning
Internal scanning is the process of assessing the firm’s strength and weaknesses and identifying
its core competencies and competitive advantages. While environmental scanning may help to
identify the various possible opportunities in areas of interest to the firm, the firm obviously
cannot tap all the identified opportunities. It has to be selective and decide on the opportunities
it has to tap and the business it has to pursue. It also has to build defenses against impending
problems.

3. Setting Marketing Objectives

The very purpose of setting objectives is to provide clear cut direction to the business regarding
its future course of action. Objectives are set in all the key areas of marketing such as sales
volume, market share, market standing, innovation, productivity, profit etc.

Examples:
1. The distribution costs per unit of the product will be reduced by 10% in the current financial
year.
2. Market share of the product will be increased by 10% during the next financial year.
3. The sales volume of the product will be increased by 15% during the coming financial year.

4. Formulating Marketing Strategy

Marketing strategy formulation is the core of marketing planning. Marketing strategy is a set of
objectives, policies and rules that guide over time marketing efforts of the concern. Stated in
simple terms, marketing strategy is the complete and unbeatable plan designed specifically for
attaining the marketing objectives of the firm, the marketing objectives indicate what the firm
wants to achieve, and the marketing strategy provides the design for achieving them.
Principles of Marketing
Grade Level: Grade 11

5. Developing Functional Plans

Once the marketing strategy is formulated, the next step is elaborating the marketing strategy into
detailed plans and programs. The detailed functional plans will emanate from and be in tune with the
marketing objectives and marketing strategy of the firm. Even the best marketing strategy may turn out
to be a failure in the marketplace, if the detailed functional plans are drawn up in a haphazard manner. A
plan may have to be developed for each marketing function.

Example:
Principles of Marketing
Grade Level: Grade 11

Seven Most Important Types of Marketing Planning

1. Product Mix Plan

Product mix determination is very important in industries with complex and changing technologies. It is
an especially effective instrument in market where the consumer is affluent and has an elaborate system
of preference. The decisions relating to product elimination, dropping, adding or developing are included
in it.

2. Distribution Channel Plan

This sub-plan involves the future course of action with regards to distribution channels – their number,
forms, management and remuneration, etc.

3. Marketing Research Plan

Marketing research is the gathering, reduction and analysis of market data. Because it describes and
evaluates demand, the behavior of buyers and intermediaries, and competition, it allows more rational
and efficient decision making. Research is the key to an optimum allocation of marketing resources.

4. Marketing Organization Plan

Considering only physical distribution of goods and products is only half way to success in marketing
efforts. The firm should chalk out a proper plan regarding the organization structure of marketing
department, communication policies and procedures, co-ordination of marketing activities to that of
other departments of the firm, etc. Hence, a marketing organization plan is also to be developed.

5. Sales Force Plan

The plan signifies the efficiency of salesmen and other personnel engaged in selling the goods. The
decisions relating to hiring and training salesmen, motivating them, and assignment of sales quotas,
determining sales territories, compensating salesmen and introducing the incentive plans are included in
it.

6. Advertising and Sales Promotion Plan

The sub plan incorporates the selection of advertising media, channels of distribution, sales promotion
techniques, advertising strategies, and tactics, etc. Thus, this plan is mainly concerned with promotion
mix.

7. Pricing Plan
Pricing is theoretically the single most important instrument of competition in a market economy. The
firms have to consider different pricing policies, strategies, legal constraints relating to pricing and so on.

Importance of Marketing Planning

a. To Face Future Uncertainties

b. Provides Focus to Marketing Activities
c. Best Utilization of Opportunities
d. Determination of the Right Marketing Mix
e. Better Coordination
f. Satisfaction of the Customer
Principles of Marketing
Grade Level: Grade 11

Benefits of Strategic Marketing Planning

The process of creating a plan facilitates a common understanding among all stakeholders in an
organization. The plan informs management decisions, the behavior of the employees towards
institutional goals, and also the response among current and potential clients. The plan also is subjected
to changes over a period of time to meet changing demands.

A sound marketing plan allows a corporate entity to grow its market share which results in more revenue
and profits. As a firm expands, it can enjoy large economies of scale and thus fewer operational costs.
Overall, the strategic marketing planning process connects the production engine to consumption.

Top Market Planning Concepts

Although there are a number of marketing planning concepts to be considered, mentioned below are a
few important aspects that should be included:

1. Market Segmentation and Target Markets

Market segmentation involves assessing the whole population that could be potential customers
of your product and then segmenting them based on varying criteria. Some examples of aspects
to filter for are purchase behavior, psychographics, age, and average income. After the market’s
been segmented, the company must choose the group that it believes its product can best serve
and is within the budget to advertise to. This segment then forms your target market. It is
generally recommended for businesses to have one target market and then a few secondary ones
if they see fit.

Example:
A company that sells colored contacts may have a primary target market of makeup
artists in the film and theater industry. However, they may find that there is significant revenue
to be found in entering more mainstream channels and marketing to women in their twenties
who wish to experiment with new eye colors on special occasions. They would then spend the
majority of their resources marketing to their primary target market, but also allocate some
marketing budget to the latter segment for additional revenue.

2. Budget
Budgeting may be the most important term in marketing planning when it comes to execution.
Often, in order to secure funds from top management or banks, sufficient proof of your
advertising plan’s success is needed. It requires accurate forecasting of returns generated by
individual advertising expenditures. It is important that returns are not overestimated to avoid
spending too much and running out of money early on.

3. Marketing Mix
The marketing mix is a combination of elements that influence customers to purchase a product.
The marketing mix includes four main factors: Product, Price, Place, and Promotion. Product
refers to either the tangible good that your business offers or the intangible good, referring to
services. Key decisions made under this umbrella are branding, product design, package and
labeling details, warranties, and more.
Principles of Marketing
Grade Level: Grade 11

4. Customer Relationship Management (CRM)

Customer relationship management is a key factor in maintaining loyalty after a company has
achieved a sustainable number of customers. There are numerous software solutions on the
market to handle CRM for a company. For small businesses, however, keeping such activities in-
house may be recommended to keep the company lean. Things such as offering warranties and
return policies can help keep customers satisfied and let them know that the company cares about
their use of the product post-purchase.

X. Self-Learning Activities

1. Design a short-term marketing plan of your chosen business using one of the seven types of
marketing plan. Follow the marketing process we have discuss.

XI. REFERENCES
https://venngage.com/blog/marketing-
plan/#:~:text=A%20marketing%20plan%20is%20a,your%20business's%20current%20market
ing%20position.

https://www.smartsheet.com/strategic-marketing-processes-and-planning