framework for marketing planning

7/29/2019 Framework for Marketing Planning

1/16

Framework For Marketing PlanningGene Anderson (distributed March 2005)

This note outlines the basic steps in the marketing planning process and provides detailed guidance forconducting a Situation Analysis. The stages of the marketing planning process can be listed as follows:

I. Situation Analysis (5Cs)

A. External1. Customer Analysis

2. Competitor/Collaborator Analysis

3. Context or PEST Analysis

B. Internal (Company)1. The Organizations Goals and Objectives2. The Organizations Strengths and Weaknesses

C. Identify Key Problems & Opportunities1. Perform SWOT Analysis2. Set Priorities3. Develop an Overall Assessment

II. Segmentation, Targeting, and Positioning (STP)

A. Identify Relevant Markets and SegmentsB. Select Target Markets and Target SegmentsC. Develop Positioning Strategy

III. Determine Marketing Mix Alternatives

A. Product (Goods and/or Services)B. PriceC. Place (Distribution)D. Promotion (Advertising and Promotion)

E. Evaluation of Alternatives

IV. ExecutionA. ImplementB. MonitorC. Control

D. AdaptThe first stage, the Situation Analysis, combines internal analysis of the organization with externalanalysis of its customers and the competitive environment. The fundamental questions to be answeredinclude: What are target buyers needs?; What do we do well?; and What are competitors doing to serve

1


2/16

those needs? Careful analysis of the firms situation - past, current, and future - provides a foundation

for determining how the firms resources can best be deployed in terms of marketing strategy and tactics.

The purpose of the Problems and Opportunities stage is to distill what has been learned from thesituation analysis. The result should be a limited set of key factors that play a role in the decision-at-hand. To gain a better understanding of the firms situation, it is useful to prioritize the factors identified.A useful approach to doing so is to provide an argument for whether the overall situation is favorable or

unfavorable.

After analyzing the firms situation and identifying the key problems and opportunities faced by the firm,the information for creating an appropriate marketing strategy is in place. By analyzing the organization,its customers and the competitive environment, there is an increased likelihood of developing superior

marketing strategy and tactics. By understanding what the organization does well, what customers need,and what competitors are doing - both now and in the future - managers can create the best possiblematch between organizational skills and market needs - and to do it better than the competition.

Once the Situation Analysis is complete and the key problems and opportunities have been identified, thevalue proposition- what value to offer and to whom - can be developed. Given what has been learned in

the Situation Analysis, the fundamental activities in determining the value proposition are: 1) understandthe needs of buyers in possible target markets; 2) identify segments of buyers with similar needs and/or

responsiveness to marketing strategy and tactics; 3) select one or more segments of buyers to target;and 4) develop an appropriate positioning strategy.

In conjunction with the development of the value proposition, the means ofvalue delivery- how the

organization will deliver on a given value proposition - must also be determined. It is generallyrecommended that you develop several alternative sets of marketing strategy and marketing mix tacticsand then evaluate each one from both a qualitative and quantitative standpoint.

Finally, select one of the alternative plans as the recommended course of action. Careful attention

should be paid to how the plan will be implemented, how progress will be measured and evaluated, andhow the plan might be adapted over time.

The Situation Analysis

In many business situations, decision-makers are confronted with large amounts of data - a considerableproportion of which is unimportant, irrelevant, or redundant, in terms of addressing the decision-at-

hand. The goal of a Situation Analysis is to improve the signal-to-noise ratio by reducing the data to afinite number of Problems and Opportunities that should be considered in arriving at a final judgment.

The Situation Analysis provides an organizing framework -- the 5C's of Company, Customers,Collaborators, Competitors, and Context -- for guiding the process of identifying the set of issues that are'material' to the decision-at-hand. The 5C's framework ensures that important issues in each domain areidentified and, subsequently, that judgments are more reasonable and better supported than would betypical using a more ad hoc approach to 'cracking' the case.

In using the Situation Analysis approach, keep in mind that the objective is to identify only those issues

that are 'material' to addressing the problem or opportunity at hand. Hence, not all areas of the SituationAnalysis will need to be considered for every marketing decision encountered. In some cases,

competition may not be an important factor. In other situations, the legal or political environment maybe irrelevant for the decision. In this regard, it is always a good practice to ask 'What is the implicationfor the marketing decision I am trying to make?'

In essence, the Situation Analysis framework should be viewed as a 'roadmap' or 'checklist' for marketingdecision-making. Without such a checklist, a decision-maker might easily fail to consider important issues

2


3/16

that would affect their final recommendations.

Overview of the Situation Analysis Framework

The basic elements of the Situation Analysis are illustrated below. As suggested by the diagram, thefirm's marketing strategy and marketing mix should create a strong 'fit' between the organization and

each of the external forces affecting it. In assessing the overall situation, it is often useful to categorizeeach relationship as either favorable or unfavorable. A strong organization is one that enjoys a favorableposition with respect to each of the external forces -- Customers, Collaborators, Competitors, and

Context.

Politica

l

Legal

Economic

Ecological

Tech

nologica

l

Social

Demographic

Co

mp

etito

rsC

ol l

ab

ora

tor

s

Company

Customers

Value

Suppliers

Complements

Capital

Potential

Entrants

Customers

The purpose of the Customer Analysis stage is to make explicit what you know about the nature ofconsumer or customer demand for the product or service under investigation. In particular, we want to

learn: How decisions are made

Who is involved in making the decision

What information is used

The trade-offs they are willing to make

Where & when they are ready to buy

How the product or service is used

Key areas of analysis to consider include:

3


4/16

Market Segmentation

What segments can be identified?

What is their size, growth & potential?

Decision Making Unit (DMU)

Who is involved?

Who has power? Who has stake?

How great is bargaining power?

What information sources are used and how?

Decision Making Process (DMP)

How/when/where do buyers search, decide, purchase, transport, store, use, maintain,dispose, re-buy, etc

What drives perceived value?

What are customer acquisition & retention characteristics?

Competitors

For long-run success, marketing strategy and tactics must take into account likely competitive moves &counter-moves. Afterall, what we do affects what they do which affects what we do and so on. So,our strategy and tactics needs to take all players subsequent moves into account.

The main goal of competitor analysis is to analyze the nature and extent of the competition - bothcurrent and potential. Key areas of analysis include:

Identification

Market definitiono Who competes to provide the same benefits?

o Who competes for the same customer resources (money, time, etc)?

Direct competitors Indirect competitors and substitutes

Potential competitors and entrants

Assessment

What are the competitors positions?o Goals

o Strategy

o Tactics

o Resources

o Implementation

o Performance

Who Is Successful Or Unsuccessful? Why?

Prediction

Anticipate future moves

Predict expected reactions to our moves

Potential sources of information about competitors and collaborators are listed in Table 1 towards the endof this document.

4


5/16

Collaborators

Increasingly, competition is between networks, rather than individual organizations. Key issues toconsider regarding collaborators include:

Value Chain Position

What is their position in the value chain? What functions/activities do they perform?

Complementary Capabilities

Who has capabilities that we need?

Who would benefit from capabilities that we possess?

Compatibility

Are our goals compatible?

Can we trust this partner?

Commitment What level of commitment is required?

What structure & systems are needed?

What do we need to know/learn?

Context

The main purpose of analyzing the business environment is to understand the dynamics of the market

place and what they imply for the decision at hand:

PEST Analysis

What are the most important PEST factors affecting our business?

o Political/Legal e.g., NAFTA, WTO, Deregulation

o Economic/Ecological e.g., Capital and Labor Markets, Asian Flu, Inflation,

Interest Rates, Resource Sustainabilityo Social/Cultural e.g., Multi-Culturism, Global Diversity

o Technological e.g., Shadow of Obsolescence, internet diffusion, life sciences

How favorable are each of the above factors?

Competitive Forces Analysis

How favorable are the relevant competitive forces?o Bargaining power of suppliers

o Bargaining power of buyers

o Bargaining power of collaborators

o Bargaining power of investors

What is the degree of competitive rivalry?

Scenario Analysis

Which PEST and competitive forces factors are most likely to change?

What are the most likely future scenarios?

Which scenarios are the most favorable? The least?

5


6/16

6


7/16

Company

We analyze the organization's objectives, strategy, and capabilities, in order to evaluate the strength of

the current business model and to identify areas for improvement and/or change. Importantly, we wantto understand the implications of how well the organization fits with the critical parts of the external

environment identified in our analysis of the customers, collaborators, competitors, and the PEST.

Important areas of analysis include:

Goals and Objectives

What business is the firm in? What business should it be in?

Who are the key stakeholders? What are their needs? What is the relative priority of

these needs?

What is the organizations stated mission?

What are the stated goals and objectives for achieving the firms mission and/or

satisfying stakeholders?

Are these goals measurable? Actionable? Reasonable?

Are supra-ordinate goals properly linked to subordinate ones?

Position

Marketing Strategy

o Target segment

o Positioning

Marketing Mix

o Product/Service

o Place

o Promotion

o Pricing

Resources

Implementation

Performance

What metrics is the organization using to gauge performance?o Effectiveness

o Efficiency

o Supra-ordinate

o Subordinate

How effectively is the organization performing with respect to its stated goals?

How efficiently is the organization achieving this level of performance?

7


8/16

TABLE 1

Sources of Information About Competitors

What competitors say about themselves What others say about them

Public

AdvertisingPromotional materials

Press releasesSpeechesBooksArticlesPersonnel changesWant ads

Customer communications

BooksArticles

Case studiesConsultantsNewspaper reportersEnvironmental groupsConsumer groupsUnions

Recruiting firms

Trade Profession

Manuals

Technical papersLicensesPatents

CoursesSeminars

Suppliers/vendors

Trade pressIndustry studyCustomers

SubcontractorsConsultants

Government

Security and Exchange Commission reports

FTC filings

Applications and permit filingsPatent filings

LawsuitsAntitrustState and federal agencies

National plansGovernment programs

Investors

Annual meetingsAnnual reports

ProspectusesStock and bond issues

Security analyst reportsIndustry studies

Credit reports

8


9/16

Customer Analysis Worksheet

What Are the Relevant Segments?What Are Their Needs, Perceptions, and Behaviors?

9

Size, Growth & Potential

Acquisition & Retention

Perceived Value Drivers

DMP (Decision Making Process)

DMU (Decision Making Unit)

Segment 4Segment 3Segment 2Segment 1


10/16

Competitor Analysis Worksheet

What Is the Relative Strength of Competitors Positions Both Now and In the Future?

10

Anticipated Moves/Reactions

Strengths & Weaknesses

Strategies & Tactics

Goals & Objectives

Success Factors

Performance

Direct, Indirect or Potential?

Our CompanyCompetitor BCompetitor A


11/16

Context Analysis Worksheet

How Favorable Is the Market Context? Why?

11

Favorability(e.g., 1=Low, 5=High)

Overall Favorability

Complements

Capital

Threat of Entry

Supplier Power

Technological Environment

Social/Demographic Environment

Economic/Ecological Environment

Political/Legal Environment

ImplicationsImportance(e.g., Allocate 100pts)


12/16

Company Analysis Worksheet

How Favorable Is the Fit Between the Company andCustomers, Competitors, and the PEST?

12

Implementation

Organization

Capabilities

Strategy & Tactics

Success Factors

Performance

Goals & Objectives

Fit w/

Context

Fit w/

Competitors

Fit w/

Customers


13/16

SWOT Analysis Worksheet

Is the Overall Situation Favorable or Unfavorable? Why?

Strength, Weakness,Opportunity, or Threat

Importance(e.g., Allocate 100pts)

Favorability(e.g., 1=Low, 5=High)

Overall Favorability(Weighted Average)

13


14/16

Generation of Alternatives Worksheet

For Each Possible Target Market Alternative, What Is Our BestMarketing Strategy Given Market Forces (Especially SWOT)?

14

Fit w/Competition

Price

Promotion

Place

Product

Positioning

Target Segment(s)

Objective

Fit w/ContextFit w/CustomersFit w/Company


15/16

Evaluation of Alternatives Worksheet

For Each Possible Alternative Marketing Program, How FavorableIs the Fit With Market Forces (Especially SWOT)?

15

Overall

Fit w/ Company

Fit w/ Context

Fit w/ Competition

Fit w/ Customers

Alternative IIAlternative IImportance(e.g., Allocate 100pts)


16/16

Bernhardt, Kenneth L. and Thomas C. Kinnear (1991), Cases In Marketing Management, 5th edition,Boston, MA: Irwin.

Kotler, Philip (1999), Marketing Management: Analysis, Planning, Implementation, and Control, 10th

edition, Englewood Cliffs, NJ: Prentice-Hall.

Kotler, Philip, William Gregor and William Rogers (1977), The Marketing Audit Comes of Age,SloanManagement Review, 18:2, 25-43.

Lilien, Gary, Philip Kotler and Sridhar Moorthy (1992), Marketing Models, Englewood Cliffs, NJ: Prentice-Hall.

Lehmann, Donald R. and Russell S. Winer (1994),Analysis for Marketing Planning, 3rd edition,Englewood Cliffs, NJ: Prentice-Hall.

Nayak, P. Ranganath, Erica Drazen, and George Kastner (1992), The High-Performance Business:Accelerating Performance Improvement,Prism, 1st Quarter 1992, p. 1-20.

16

framework for marketing planning

Documents