Lesson 7

Marketing exists to support an organization in achieving its strategic goals for growth, profitability, revenue, awareness, influence, and more. The role of marketing is to identify, satisfy, and retain customers. The marketing plan is the guiding document used by marketing managers and teams to lay out the marketing objectives that marketing efforts focus on and the actions they take to achieve these objectives.

A comprehensive marketing plan paints the big picture of what is happening with an organization internally and externally. After analyzing the marketing environment, the plan recommends strategies and tactics aimed at helping the organization take full advantage of available opportunities and resources to accomplish its goals. When a marketing plan is completed thoughtfully and skillfully, it helps marketers not only present the case for what they recommend to be done, but also create a common vision within the organization about what is happening and how people and resources will come together to achieve that vision.

Different marketers may use a variety of different formats to create a marketing plan, but most marketing plans include common elements.1 The key components of the marketing planning process include the following: 

  • Identifying the marketing mission statement

  • Conducting a situational analysis

  • Defining objectives

  • Developing strategies and tactics

  • Monitoring and controlling

Mission Statement

The first step in the marketing planning process is to state the mission statement of the company and identify how the marketing plan supports the company's mission statement. This can be considered a marketing mission statement.

Remember that a marketing plan is meant to be the guiding document used by marketing managers and teams to identify objectives and plan the tactical implementation of marketing mix tools.1 The mission should clarify what the plan hopes to achieve with marketing efforts.

In other words, think of the marketing mission as a focus on what customers need and want.2

Situational Analysis

Situational analysis helps marketers understand what to do and how to do it. At its most basic level, it is a multidimensional consideration of the controllable (product and organizational capabilities) and uncontrollable (customer, competition, and business environment) that define the current and future state of the market. These factors describe the market environment, how your abilities can deliver value relative to consumer needs, and the likely actions and reactions of your competitors.3 A situation analysis may sometimes be a SWOT analysis, which includes a review of the company's internal strengths and weaknesses and any external opportunities and threats it faces.4 You will learn more about SWOT analysis and other situational analysis tools in the next lesson.

When considering organizational capabilities, marketers assess the relative strengths and weaknesses of the organization and its product offerings. This should be a practical and pragmatic assessment of what the company does and does not do well. It should reflect how it makes investments and allocates resources, mindful of its priorities and stakeholders. For example, a discount retailer such as Dollar General would not describe capabilities for attracting consumers interested in a high-touch shopping experience—that is not what they do well. 

Customer analysis includes consideration of the needs of current and future consumers, as well as their characteristics. Marketers describe which consumer segments are the best fit for the firm's products and services, using broad segmentation criteria. During the customer analysis, it is important to consider which specific targets will be targeted and how the company will position itself for them.5

Situational analysis ultimately helps focus marketing and sales resources more efficiently. It includes research into and analysis of consumer behavior, the results of which inform segmentation, targeting, and positioning. This allows marketers to select the subpopulation of potential customers who are the most attractive and most accessible for targeting.

In this way, an organization can optimize its marketing mix to position its offerings to meet these consumers' needs. This both ensures that consumers' needs are satisfied and helps companies develop products that suit their core consumers, despite changing needs and demands.3

Objectives

Objectives specify measurable outcomes that will be achieved within a particular time frame. Objectives help individuals across the team to understand the goals and determine whether the strategy is effective and the tactics are being well executed. Objectives are used to align expectations and plans, coordinate efforts, measure progress, and hold teams accountable for achieving results.

Companies often have long-term strategies but create objectives based on a quarterly or annual plan. Clear, measurable objectives enable the company to track progress and adjust tactics (and, sometimes, strategies) to improve the chance of success.6 Effective objectives that follow the acronym SMART are specific, measurable, achievable, relevant, and time-bound. SMART objectives answer the following questions:

  • What exactly will you do?

  • How will you know if you have done it?

  • Is it reasonable to expect that you will accomplish it?

  • Is it important to the organization and its mission?

  • By when will you do it?


SMART Format


The use of the SMART format is designed to articulate what is to be achieved. Through SMART achievement, organizations and marketers aim to attain increased business growth, customer value, revenue, internal satisfaction, and any other type of measurable, desired outcome.

SMART is an acronym that represents goals and objectives that are

  • specific— should be detailed and cover everything that will be achieved

  • measurable—should include a strong unit of measurement to determine whether the goal is achieved

  • attainable— should be realistic and be achievable

  • relevant— should be current with the market and organization's demands

  • time-bound— should include a time range that reflects when the goal should be achieved

An example objective written in the SMART format could be:

"Sell 5,000 new running shoes by the product launch date of December 31, 20XX."

This is a SMART objective because it details everything that will be achieved. It also shows that the 5,000 shoes sold are measurable, that number is achievable for a new product, the outcome is relevant because it is about the organization's new product, and it is time-bound with the date of December 31, 20XX.

These are examples of the types of objectives that could be found in a marketing plan:

  • Increase market share for product X by 1% each quarter by launching new advertising by October 31.

  • Execute marketing campaigns to small businesses that identify 1,000 qualified leads by October 31.

  • Increase the average transaction value by 5% by January 1 through email campaigns.

  • Increase the conversion rate at retail stores from 25% to 35% within 12 months and by December 31 using digital signage.

Strategy Development

The next step of the marketing planning process involves developing a strategy. A company might simultaneously execute business strategies to enter a new market, grow market share in an existing market, and improve organizational efficiency. The marketing strategy must identify a plan that will use the marketing function's resources and expertise most effectively to achieve its mission, objectives, and goals.6

To be effective, a marketing strategy must capitalize on the resources at its disposal within the company, but must also take advantage of the market forces that are outside the company. In developing a marketing strategy, marketers use the results of the situation analysis.


The marketing strategy defines how the marketing mix (product, price, place, and promotion) can best be used to achieve marketing objectives. At its centerpiece is the target customer. Often organizations get so absorbed in their own strategies, initiatives, and products and forget to focus on the target customer. While the corporate strategy may have elements that focus on internal operations or seek to influence external forces, each component of the marketing strategy should focus on the target customer.4


Having identified the target market, marketers must decide which strategies and tactics will best align with and support the marketing objectives. The marketer must evaluate all aspects of the marketing mix and determine which combination of product, price, promotion, and distribution will be most effective.

Decisions about the marketing-mix variables are interrelated. Each of the marketing-mix variables must be coordinated with the other elements of the marketing program. Consider, for a moment, a situation in which a firm has two product alternatives (deluxe and economy), two price alternatives ($6 and $3), two promotion alternatives (advertising and coupons), and two distribution alternatives (department stores and specialty stores). Taken together, the firm has a total of 16 possible marketing-mix combinations. Naturally, some of them will be incompatible, such as the "deluxe" product and low price combination. The problem is magnified by the existence of competitors. The organization must find the right combination of product, price, promotion, and distribution so it can gain a differential advantage over its competitors.

Southwest Airlines Develops a Product and Pricing Strategy


Think about this example: Southwest Airlines created a company strategy to expand its target market to include business travelers. One of its objectives was to grow revenue and market share to achieve specific targets by expanding into the business traveler market.

Which marketing strategies are needed to support such a corporate strategy? To answer that, Southwest had to investigate the four Ps:

  • Does it need new products that appeal to business travelers? (Product)

  • Are business travelers willing to pay a higher price point? (Price)

  • How will it communicate their offerings to business travelers? (Promotion)

  • How do business travelers book their travel? Are new distribution points needed? (Place)

These questions about the four Ps align with Southwest's corporate strategy and objectives, but they are also connected to questions about the target customer:Who are the business travelers and how do they define value? The optimal marketing strategy will need to include a deep understanding of the target customer and specify how it offers unique value to that customer.

Southwest accomplished this through its product and pricing strategies. For its product strategy, the airline created a series of programs that offer time savings and convenience for business travelers, who value those benefits above price. To deliver on its pricing strategy, Southwest created add-on services that provide business travelers with time savings and convenience at a total price that is higher than what leisure travelers pay for no-frills services, but is at or slightly below competitors' prices for business fares. In each case, the marketing strategy supports the corporate strategy, focuses on providing unique value to the target customer, and incorporates the elements of the marketing mix that can be leveraged to deliver that value.7

Once the marketing strategy has been defined, marketers determine how to implement the strategy. Implementation is the tactics used to execute the strategy. It might include such things as determining when to promote the product, getting the product to the consumer, and setting a commission rate for salespeople.3 Tactical planning describes what marketing will do or how they will do it to achieve the desired business results and achieve the marketing objectives.

Monitoring and Control

Monitoring and control is the final step of the marketing planning process. Here, the plan is implemented. Marketers track progress toward the stated objectives, measuring performance so adjustments can be made, if necessary. Robust monitoring and control systems help organizations react and adjust to uncontrollable variables such as changes to the business environment or a competitor's activity. Marketing management often makes use of various organizational control systems, such as sales forecasts, sales force management systems, and customer relationship management tools.8

The implementation process emphasizes the timely completion of tasks. Often marketing organizations have a project or program planning function that tracks the tasks that will be completed, the individual or team that will complete the tasks, the budget spent, and the results achieved. If the organization manages each element of the plan carefully, it can intervene if progress is falling behind, rather than waiting until it affects the objectives or strategy.

Today, the process for implementing, measuring, and adjusting marketing tactics is much faster and more quantitative than it has ever been. Take the following comparison: 

  • A store decides to promote by hanging a billboard on the freeway near the exit ramp to the store. The billboard company can provide estimates on the number of cars that will pass the billboard, but how many people will actually look at the billboard? How many will be within the target market? How many will take the exit? How many will continue driving but remember and come back to the store at a later date? It is almost impossible to answer any of these questions with certainty.

  • The same store launches a promotional campaign on Facebook. It will gain much more visibility into who sees the ad and whether the ad is effective. It can track who clicks on the ad, who buys after clicking, how often they come back, and what they buy in the future.

Developments like this have improved marketing tactics immensely by making it easier to measure impact and make adjustments that can be used a day, hours, or even minutes later.9

No marketing program is planned and implemented perfectly. Marketing managers will tell you that they experience many surprises during the course of their activities. In an effort to ensure that performance goes according to plan, marketing managers establish controls that help them evaluate results and identify needed modifications. Surprises occur, but marketing managers who have established sound control procedures can react to unexpected results quickly and effectively.

Marketing control involves a number of decisions—one is simply deciding which function to monitor. Some organizations monitor their entire marketing program while others choose to monitor only a part of it, such as their sales force or advertising program. A second set of decisions concerns the establishment of performance standards—for example, market share, profitability, or sales. A third set of decisions concerns how to collect information for making comparisons between actual performance and standards. Finally, to the extent that discrepancies exist between actual and planned performance, adjustments in the marketing program or the strategic plan must be made.

Once a plan is put into action, marketers must still gather information on the effectiveness of the plan's implementation. Information on sales, profits, consumer reactions, and competitor reactions must be collected and analyzed so marketers can identify new problems and opportunities.10