What is a Marketing Plan?

A marketing plan is a roadmap used by a business organization to execute and track its marketing strategy. In other words, it is a set of specified actions intended to attract potential customers and clients and influence them to buy the product and services of the business organization.

A marketing plan is part of the whole business management process. It includes the 4 Ps of the marketing mix: product, price, place, and promotion.

Marketing plan formation includes detailed market research about:

• Customer preferences, needs and satisfaction
• The status of competitors' products in the market and/or performance of the current product in the market
• The current trends in the market
• And so on

Marketing Plan and Marketing Environment

In order to be successful, every company should have a proper marketing plan to sell their product and services to their target customers. A successful marketing plan should be customer-oriented and developed based on the current marketing environment.

Characteristics of a Marketing Plan

A marketing plan has the following characteristics:

• It is a continuous process and not a one-time activity. As the marketing environment keeps on changing, the marketing department keeps track of emerging trends to form future strategies.
• Today's market is mostly about customer satisfaction, so all marketing plans should be customer-oriented and should focus on the needs and satisfaction of customers. A customer-centric marketing plan is a successful marketing plan.
• Marketing plans are objective-oriented and documented in written form. They should specify the marketing objectives and align with the overall objectives of the business organization.
• Marketing plans are formed based on a specified period. They can be short-term or long-term. Short-term marketing plans are formed for one year or less, while long-term market plans are formed for one year to five years.
• Marketing planning also includes a detailed analysis of the marketing environment. SWOT analyses are used by companies to identify their strengths, weaknesses, opportunities, and threats.
• Marketing plans are formed after taking market conditions into consideration.

Key Elements of a Marketing Plan

A marketing plan consists of seven elements, which are market research, target market, positioning, competitive analysis, market strategy, budget, and metrics.

1. Market Research: The future success of a company's products and services depends on a solid marketing strategy. A marketing strategy is developed through proper market research. Market research gives an edge to the business organization. It includes identifying the company's target customers, their buying habits, market size and market growth, and so on.
   
2. Target Market: The target market or target audience should be decided before any product launch. The company should be clear about to whom they are aiming to offer the product in the market. The target audience should be decided at the time of market planning.
   
3. Positioning: Positioning involves determining the position of your business in the market. What is your brand perception in customers' minds? For example, if your restaurant sells pizza, do customers see you as the place to go for gluten-free or healthy options, or the place to go if you’ve got an appetite for a double cheese pizza? Your business position is how your target audience sees you in the market.
   
4. Competitive analysis: A business should be aware of who its competitors are and how its products and services are different from its competitor's products. Know the price point at which your competitors are selling and what segment of the market they are targeting to reach. Knowing the pros and cons of your competitor's product will help you better position your business and stand out from the competition.
   
5. Marketing strategy: Another important element of a marketing plan is the marketing strategy on which the future growth of the product and services depends. The marketing strategy should include the mission, vision, and objective of the product marketing plan and market segment of the product along with the marketing functions of the company.
   
6. Budget: Maintaining a monthly and quarterly budget helps a business keep track of its return on investment (ROI) and establish a metric that determines whether the business is generating enough return from its marketing efforts. Also, the budget helps in the formation of future market planning and marketing strategy.
   
7. Metrics: Metrics help companies compare the actual marketing performance of the business with the budget through analytics. As pat of a marketing plan, many companies will test the marketing strategy over 30 to 60 days and evaluate the results.

Marketing Environment

The marketing environment refers to the surroundings of a business organization, which includes all the internal and external market forces which drive business activities. The marketing environment is broadly divided into micro and macro environments.

Microenvironment factors are also known as internal factors. They fall within the control of the business organization itself. For instance, the strengths and weaknesses of the business organization are microenvironment factors.

Macro environment factors are also called external forces, which are not in the control of the business organization. For instance, opportunities and threats, economic factors, technological changes, and climate changes are examples of macro environment factors.

Micro/internal marketing environment factors:

1. Suppliers
2. Market intermediaries
3. Customers
4. Competitors
5. Employees and public

Macro/external marketing environment factors:

1. Political environment
2. Economic environment
3. Social and demographic environment
4. Technological environment
5. The legal and regulatory environment
6. Other cultural and environmental factors

Importance and Challenges of the Marketing Environment

Importance

The study of the marketing environment, including external and internal forces, is essential for the future marketing planning of any business. It helps in understanding the needs and preferences of customers and keeps the business up to date on the latest trends in the market. It also helps in knowing about the next move of competitors and their position in the market. Moreover, it helps the business identify all its possible available opportunities and upcoming threats.

Challenges

The limitation of the marketing environment is that it is uncertain. Predicting the future is quite difficult. Business organizations should always be ready for unforeseen threats and challenges. The advancement of technology is another concern for business organizations because technology keeps on changing and gets outdated easily.

Customer satisfaction is one of the biggest concerns for every organization if they want to stay competitive in the market. Many companies do not focus on after-sale services, and this is a major factor that sends a negative message about a company in the market.

Steps in the Marketing Planning Process

1. Identify and analyze the internal and external marketing environment.
2. Decide the suitable marketing assumptions for the target buyers and product offering to the customer.
3. Identify the marketing goals and objectives.
4. Forecast the expected results.
5. Study and research the target market.
6. Profile potential customers or target customers and competitors.
7. Develop the marketing goal supporting strategies.
8. Implement the 5 Ps of the marketing mix, which are product, price, place, promotion, and people.
9. Implement and evaluate the marketing strategy.
10. Control and review the performance.

Types of marketing plans

1. Annual and quarterly plans
2. Paid marketing plans
3. Social-media or influencer marketing plans
4. Content and campaign marketing plans
5. New product marketing plans

Context and Applications

This concept is important in various exams both on the graduates' and postgraduate levels. It is an important part of various professional management courses and professional management training programs such as Masters in Business Administration and Bachelors in Business Administration

A marketing plan is extensively used by companies to promote their products. Every organization makes the majority of its decisions based on its marketing plan.

Practice Problems

1. Which of the following factors is not a part of the marketing plan?

1. Product
2. Price
3. Process
4. Promotion

Answer: c

Explanation: A marketing plan is a part of the whole business process management. It includes the 4 Ps of the marketing mix, which are product, price, place, and promotion. The marketing plan is itself a process.

2. Which of the following is not a characteristic of the marketing plan?

1. Objective-oriented
2. Customer-oriented
3. Continuous process
4. Short-termed

Answer: d

Explanation: Marketing plans are formed for a predefined time period. They can be short term, as well as for a long term period.

3. Which of the following set of factors are micro environment factors that affect the marketing plan and environment?

1. Political and economic
2. Suppliers, customers, and competitors
3. Technological and legal
4. Social and demographic

Answer: b

Explanation: Microenvironment factors are also known as internal factors and they fall within the control of the business organization itself. Suppliers, customers, and competitors are thus microenvironment factors.

4. Which of the following is an important element of the marketing process?

1. Target customers
2. Product and place
3. Promotion
4. Pricing

Answer: a

Explanation: A marketing plan consists of the seven elements, which are market research, target market, positioning, competitive analysis, market strategy, budget, and metrics.

5. Which of the following step is not included in the marketing planning process?

1. Identify and analyze the internal and external marketing environment.
2. Decide the suitable marketing assumptions for the target buyers and product offering to the customer.
3. Identify the marketing goals and objectives.
4. Do not control or overview the performance

Answer: d

Explanation: In the marketing planning process, performances are controlled and reviewed from time to time, and required changes are made.