MKTG380 Ch. 2 Business, Strategic, and Direct Marketing Planning

Planning
– plans need to be reviewed, updated and modified constantly to ensure that they are accurate and working

– blueprints for taking an organization, business unit, or brand into the future

– lays out a set of long-term objectives and provides guidelines for establishing short-term goals that need to be achieved along the way (benchmarks)

– provides a baseline that managers can use to focus resources on the highest priority issues that they face to run a business effectively and achieve the best results

– enables a company to brutally evaluate themselves and optimize their “uniqueness”

*Today, plans are repeatedly being reviewed and modified far more frequently as internal and external factors change*

Example of planning failure
Pets.com and there sock puppet dog

*No company can be all things to everyone*

Planning techniques depend on stage of company
(1) Start up companies
(2) Established companies
(1) start up company – planning technique
Start up companies need business knowledge and expertise from senior management or company founders
(2) Established company – planning technique
– optimize the experience of both senior and middle level management and empower individual departments to submit their recommendations
– Senior management may veto
market planning process
the mechanism by which many organizations analyze their markets, assess the impact of trends, and design a strategy to meet current and near-term needs of their customers
3 Key Strategic Questions
(1) Where should we focus our greatest effort and why? – helps a company focus on strategies that garner the greatest reward

(2) What do we bring to the table? – puts the focus on internal capabilities and strengths of an organization

(3) Do our core capabilities suit our position? – helps companies focus on capabilities that provide long-term opportunities

Strategic Business Plan
written to help attract outside investors and financing
– can help crystallize a fledgling organization’s business model, market niche, organizational structure, and cash needs
– help reduce the risks associated with starting a business by including alternatives, a series of “what ifs” for the companies future

Investors want the plan to:
(1) describe the key concepts of the business
(2) establish that there is a market for the products and services the company sells
(3) outline the organizational structure of the business
(4) include financial projections that show the company’s expected sales growth over a three-year period

Elements of a business plan
(1) Introduction
(2) Executive Summary
(3) Mission and Vision Statements
(4) Market Analysis
(5) Customer Analysis
(6) Business Description
(7) Organization and Management
(8) Integrated Marketing and sales plan
(9) Funding request
(10) Financial projections
(11) Appendix
(1) Introduction – elements of a business plan
describes in no more than page why the plan is being written, its intended audience, and sets out the plan’s business objectives and purpose as well as the business concept
(2) Executive Summary – elements of a business plan
includes mission statement; the start date of the business; founders names and functions; number of employees; location of headquarters and any branch offices; description/size of facilities; the products/services category; current investors; bank name(s); growth summary and plan; financial highlights; market potential; and summary of a management’s plan
(3) Mission and Vision Statements – elements of a business plan
set forth the central purpose of the business and its planned activities
(4) market analysis – elements of a business plan
details the companies strengths, weaknesses, opportunities and threats (SWOT)
(5) customer analysis – elements of a business plan
explains who buys the product/service, how many potential buyers there are, how much they typically spend for this product/service, and where buyers can be found
– identifies whether multiple buyers, decision makers, and buying authorities are involved
(6) business description – elements of a business plan
describes what business the organization is in and includes information about trends in its industry
(7) Organization and management – elements of a business plan
details the anticipated organizational structure, staffing needs, and job descriptions of top management of the organization as well as triggers for adding additional staff and management.
(8) Integrated Marketing and Sales plan – elements of a business plan
detailed summary of the marketing plan explains the methods of selling and channels of distribution, along with the rationale for the proposed mix of advertising, direct marketing, Internet, promotion, public relations, and events
(9) Funding request – elements of a business plan
details the funding requirements, potential sources of funds, likely terms, and projected return on investment (ROI)
(10) Financial Projections – elements of a business plan
detailed accounting of how much money is needs, when it is needed, and when investors can expect a return on investment, usually in the form of a balance sheet and income statement (P&L) for the current period as well as for the future
– includes a detailed cash-flow projection showing:
(1) cash in
(2) cash out
(3) timing
(11) Appendix – elements of a business plan
contain information referred to in the text of the business plan, such as research reports, tables, detailed market or sales projections, analyses, and exhibits
5 key questions investors want answered regarding a business plan
(1) is this a valid business?
(2) is the business “unique” enough to succeed?
(3) Is the management team competent enough to pull it off?
(4) How have other potential investors responded to this plan?
*(5) How and when will they recoup their investment?*
Strategic plan
– a blueprint of short- and long-term activities, strategies, and work plans, developed after considering external market forces

– an ongoing business process that enables an organization to make decisions about its vision and mission

– unite the organization with one focus

– customer-centric: look at what customers do–not just what they say–in determining their needs

(1) mission statement – strategic plan
– describe why an organization exists and what it hopes to achieve going forward

– articulates the essence of an organization’s nature, its values, and its business

– answers what does the business really do and what does it hope to do?

– what makes the organization, business or brand unique?

(2) vision statement – strategic plan
– paints a picture of an organization’s eyes through the eyes of that organization’s leader or senior management team

– must be consistent with the company’s mission statement

– must be strategically sound -it must gain widespread support within an organization to become real and translate into behavior (business must “walk the walk” not just “talk the talk”)

Multi-Channel Direct Marketing Plan
*roadmap for a companies marketing plans*

– estimates the value of prospects, customers and segments of the market to determine the right investment strategies for each group

– sets measurable goals and objectives

– indicates how the organization will compete

Elements of the multichannel direct marketing plan
(1) introduction
(2) Executive summary
(3) Situation analysis
(4) opportunity and issue analysis (uses SWOT results)
(5) goals and objectives
(6) marketing strategy
(7) tactics
(8) budgets