Module 2. Consumer behaviour and market intelligence
Lesson 8
MARKET PLANNING
8.1 Introduction
Success or failure of a business organization depends upon market planning. Market planning process is the interface between organization and its market/customers. It consists of following five steps:
1. Searching for business opportunities by market environment scanning.
2. Scanning of internal environment/system.
3. Framing marketing objectives of the business.
4. Developing marketing strategy of the business unit.
5. Establishing detail functional plans and programmes.
8.1.1 Searching for business opportunities by market environment scanning
The market planning process starts with scanning marketing environment so as to identify favourable and unfavourable factors in the environment and thereby identify attractive business opportunities for the organization. At this stage business organization gathers the information on marketing opportunities as well as threats in the environment, it carries out customer sensing, it studies customer reaction towards their products, it tries to find out motives of customer and find out reasons for customer liking for a particular brand, tries to know customers loyalty or association with different brands over a period of time thereby finding the most trustworthy and favourable brands.
Analysis of the competitors is carried out by a suitable framework just like that suggested by porter.
8.1.2 Scanning of internal environment/ system
In this stage, the business organization finds out its own strength and weakness in relation to environment by conducting SWOT analysis.
8.1.3 Framing marketing objectives
While framing the marketing objectives, the information available from the environmental scanning and internal scanning is used i.e. opportunities and threats from the environment, competitive forces, the resources and capabilities of the organization. Marketing objectives of a business organization is also drawn from corporate objectives. The objectives provide a clear guide line for future course of action, thus the objective should be specific, measurable, and achievable, result oriented and time bound. The objectives are to be framed for all products and all functions of the business viz., profit, sales volume, market share, productivity, research and development etc.
8.1.4 Developing marketing strategy of business unit
Marketing strategy is a properly formulated game plan. It consist of two main steps (i) Selecting the target market (ii) Assembling the marketing mix. The different market segment differs in terms of profitability, risk, growth, potential etc. Thus, selection of target market is of crucial importance. Marketing mix is the visible part of the marketing strategy. This aspect is useful for understanding competitors marketing mix strategies.
8.1.5 Establishing detailed functional plans and programmes
Marketing strategy is a overall broad game plan. In order to achieve the results, this game plan is required to be broken down into smaller achievable targets in the form of specific detail functional plans and programmes. The various functional plans with regard to sales forecast, physical distribution, channels, sales force, advertising and sales promotion etc is required to be prepared.
8.2 Requirements to Make Market Planning Successful
8.2.1 Participation
It is necessary to decide and fix responsibilities for developing market planning. Apart from internal staff, if external resources in the form of consultants and market research agencies are to be used, then it should be clearly mentioned.
8.2.2 Scheduling
This refers to the time period of carrying out the planning activity. In today’s competitive global environment, it is necessary to schedule planning activities at shorter intervals instead of annual loans.
The frequency and persons to be reviewed are to be decided.
8.2.3 Monitoring
This relates to establishing continuous monitoring system throughout the plan period for its success. Monitoring involves actions, measurements and controls. It starts with developing action plan. An action plan is core to the marketing process – a constantly evolving document which is cascaded to the relevant people and monitored regularly. Generally, most action plans are relatively short term documents focusing on the coming year, but longer term implications should also be considered. Action planning involves following stepwise activities: (i) Clarify goals, and ensure they are SMART (ii) Link back to objectives and tactics (iii) Set criteria for success (iv) Prioritize (v) Set timings (vi) Assigning responsibility for completion of each action point (vii) Monitor the progress of the plan and review regularly. The final stage of the action plan is the implementation of measurements and controls and reporting results. Many models for monitoring the performance of businesses have emerged, many of which address the needs of key stakeholders and allow them to evaluate the overall success of a company. This models can be used by the companies based upon their need and suitability. One of such approach is balanced score card approach. The balanced scorecard approach is a widely used method of monitoring overall performance and ensuring daily work is focused on the strategic objectives. The scorecard is a "strategic planning and management system which is used to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals". This approach promotes open communication throughout the business and allows tracking of performance throughout the year. Traditionally, financial results have been mostly used by business organizations to track success The scorecard system views the business from four external perspectives (Learning & growth, business process, customer perspective, financial perspective) to gain a more relevant approach to performance metrics.
Reference
http://www.balancedscorecard.org