INTERNATIONAL BUSINESS

Marketing is defined by the American Marketing Association as "the activity, set

of institutions, and processes for creating, communicating, delivering, and
exchanging offerings that have value for customers, clients, partners, and society
at large".[11] The term developed from the original meaning which referred literally
to going to market with goods for sale. From a sales process
engineering perspective, marketing is "a set of processes that are interconnected
and interdependent with other functions of a business aimed at achieving
customer interest and satisfaction".[12]
Philip Kotler defined marketing as "Satisfying needs and wants through an
exchange process".[13] and a decade later defines it as “a social and managerial
process by which individuals and groups obtain what they want and need through
creating, offering and exchanging products of value with others.” [13]
The Chartered Institute of Marketing defines marketing as "the management
process responsible for identifying, anticipating and satisfying customer
requirements profitably".[14] A similar concept is the value-based marketing which
states the role of marketing to contribute to increasing shareholder value.[15] In
this context, marketing can be defined as "the management process that seeks to
maximise returns to shareholders by developing relationships with valued
customers and creating a competitive advantage".[15]
In the past, marketing practice tended to be seen as a creative industry, which
included advertising, distribution and selling. However, because the academic
study of marketing makes extensive use of social
sciences, psychology, sociology, mathematics, economics, anthropology and neur
oscience, the profession is now widely recognized as a science,[16] allowing
numerous universities to offer Master-of-Science (MSc) programs. [17]
The process of marketing is that of bringing a product to market, which includes
these steps: broad market research; market targeting and market segmentation;
determining distribution, pricing and promotion strategies; developing a
communications strategy; budgeting; and visioning long-term market
development goals.[18] Many parts of the marketing process (e.g. product
design, art director, brand management, advertising, inbound
marketing, copywriting etc.) involve use of the creative arts.
The 'marketing concept' proposes that to complete its organizational objectives,
an organization should anticipate the needs and wants of potential consumers
and satisfy them more effectively than its competitors. This concept originated
from Adam Smith's book The Wealth of Nations but would not become widely
used until nearly 200 years later.[19] Marketing and Marketing Concepts are
directly related.
Given the centrality of customer needs, and wants in marketing, a rich
understanding of these concepts is essential:[20]
Needs: Something necessary for people to live a healthy, stable and safe
life. When needs remain unfulfilled, there is a clear adverse outcome: a
dysfunction or death. Needs can be objective and physical, such as the
need for food, water, and shelter; or subjective and psychological, such as
the need to belong to a family or social group and the need for self-esteem.
Wants: Something that is desired, wished for or aspired to. Wants are not
essential for basic survival and are often shaped by culture or peer-groups.
Demands: When needs and wants are backed by the ability to pay, they
have the potential to become economic demands.
Marketing research, conducted for the purpose of new product
development or product improvement, is often concerned with
identifying the consumer's unmet needs.[21] Customer needs are central
to market segmentation which is concerned with dividing markets into
distinct groups of buyers on the basis of "distinct needs, characteristics,
or behaviors who might require separate products or marketing
mixes."[22] Needs-based segmentation (also known as benefit
segmentation) "places the customers' desires at the forefront of how a
company designs and markets products or services." [23] Although needs-
based segmentation is difficult to do in practice, it has been proved to
be one of the most effective ways to segment a market.[24][21] In
addition, a great deal of advertising and promotion is designed to show
how a given product's benefits meet the customer's needs, wants or
expectations in a unique way.[25]
 Marketing Concepts are;

1. Production Concept,
2. Product Concept,
3. Selling Concept,
4. Marketing Concept,
5. Societal Marketing Concept.

Production Concept

The idea of production concept – “Consumers will favor products that are
available and highly affordable”. This concept is one of the oldest Marketing
management orientations that guide sellers.
Companies adopting this orientation run a major risk of focusing too narrowly on
their own operations and losing sight of the real objective.
Most times; the production concept can lead to marketing myopia. Management
focuses on improving production and distribution efficiency.
Although;
in some situations; the production concept is still a useful philosophy.
Product Concept

The product concept holds that the consumers will favor products that offer the
most in quality, performance and innovative features.
Here; under this concept,
Marketing strategies are focused on making continuous product improvements.
Product quality and improvement are important parts of marketing strategies,
sometimes the only part. Targeting only on the company’s products could also
lead to marketing myopia.
For example;
Suppose a company makes the best quality Floppy disk. But a customer does
really need a floppy disk?
She or he needs something that can be used to store the data. It can be achieved
by a USB Flash drive, SD memory cards, portable hard disks, and etc.
So that company should not look to make the best floppy disk. They should focus
to meet the customer’s data storage needs.
Selling Concept

The selling concept holds the idea- “consumers will not buy enough of the firm’s
products unless it undertakes a large-scale selling and promotion effort”.
Here the management focuses on creating sales transactions rather than on
building long-term, profitable customer relationships.
In other words;
The aim is to sell what the company makes rather than making what the market
wants. Such aggressive selling program carries very high risks.
In selling concept the marketer assumes that customers will be coaxed into
buying the product will like it, if they don’t like it, they will possibly forget their
disappointment and buy it again later. This is usually very poor and costly
assumption.
Typically the selling concept is practiced with unsought goods. Unsought goods
are that buyers do not normally think of buying, such as insurance or blood
donations.
These industries must be good at tracking down prospects and selling them on a
product’s benefits.
Marketing Concept

The marketing concept holds- “achieving organizational goals depends on

knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do”.
Here marketing management takes a “customer first” approach.
Under the marketing concept, customer focus and value are the routes to achieve
sales and profits.
The marketing concept is a customer-centered “sense and responds” philosophy.
The job is not to find the right customers for your product but to find the right
products for your customers.
The marketing concept and the selling concepts are two extreme concepts and
totally different from each other.
Difference between Selling Concept and Marketing Concept

No. The Selling Concept The Marketing Concept

1 undertakes a large-scale selling and undertakes activities such as; market
promotion effort research,
2 The Selling Concept is suitable with The Marketing Concept is suitable for
 unsought goods—those that buyers do almost any type of product and
not normally think of buying, such as market.
insurance or blood donations.
3 Focus of the selling concept starts at Focus of the marketing concept starts
the production level. at understanding the market.
4 Any company following selling concept Companies that are following the
undertakes a high-risk marketing concept requires to bare
less risk and uncertainty.
5 The Selling Concept assumes Instead of making an assumption, The
–“customers who are coaxed into marketing concept finds out what
buying the product will like it. Or, if really the consumer requires and acts
they don’t like it, they will possibly accordingly to them.
forget their disappointment and buy it
again later.”
6 The Selling Concept makes poor Marketing concept works on facts
assumptions. gathered by its “market and customer
first” approach.
 
Societal Marketing  Concept

Societal marketing concept questions whether the pure marketing concept

overlooks possible conflicts between consumer short-run wants and consumer
long-run welfare.
The societal marketing concept holds “marketing strategy should deliver value to
customers in a way that maintains or improves both the consumer’s and society’s
well-being”.
It calls for sustainable marketing, socially and environmentally responsible
marketing that meets the present needs of consumers and businesses while also
preserving or enhancing the ability of future generations to meet their needs.
The Societal Marketing Concept puts Human welfare on top before profits and
satisfying the wants.
The global warming panic button is pushed and a revelation is required in the way
we use our resources. So companies are slowly either fully or partially trying to
implement the societal marketing concept.

Marketing and sales are both aimed at increasing revenue. They are so closely intertwined that
people often don’t realize the difference between the two. Indeed, in small organizations, the same
people typically perform both sales and marketing tasks. Nevertheless, marketing is different from sales
and as the organization grows, the roles and responsibilities become more specialized.

Marketing Sales
Definition Marketing is the A sale a transaction
systematic planning, between two
implementation and parties where the
control of business buyer receives
activities to bring goods (tangible or
together buyers and intangible), services
sellers. and/or assets in
exchange for
money.
Approach Broader range of Make customer
activities to sell demand match the
product/service, products the
client relationship company currently
etc.; determine offers.
future needs and has
 Marketing Sales
a strategy in place to
meet those needs for
the long term
relationship.
Focus Overall picture to Fulfill sales
promote, distribute, volume objectives
price
products/services;
fulfill customer's
wants and needs
through products
and/or services the
company can offer.
Process Analysis of market, Usually one to one
distribution channels,
competitive products
and services; Pricing
strategies; Sales
tracking and market
share analysis;
Budget
Scope Market Once a product has
research; Advertising; been created for a
Sales; Public customer need,
relations; Customer persuade the
service and customer to
satisfaction . purchase the
product to fulfill
her needs
Horizon Longer term Short term

Strategy Pull Push

 Marketing Sales
Priority Marketing shows Selling is the
how to reach to the ultimate result of
Customers and build marketing.
long lasting
relationship
Identity Marketing targets the Sales is the strategy
construction of a of meeting needs in
brand identity so that an opportunistic,
it becomes easily individual method,
associated with need driven by human
fulfillment. interaction. There's
no premise of
brand identity,
longevity or
continuity. It's
simply the ability to
meet a need at the
right time.

Sales vs Marketing Activities

The typical goal of marketing is to generate interest in the product and create
leads or prospects. Marketing activities include:
 consumer research to identify the needs of the customers
 product development – designing innovative products to meet existing or
latent needs
 advertising the products to raise awareness and build the brand.
 pricing products and services to maximize long-term revenue.
 On the other hand, sales activities are focused on converting prospects to
actual paying customers. Sales involves directly interacting with the prospects
to persuade them to purchase the product.
Marketing thus tends to focus on the general population (or, in any case, a
large set of people) whereas sales tends to focus on individuals or a small group
of prospects.

Marketing effectiveness
Marketing effectiveness is the measure of how effective a given marketer's go
to market strategy is toward meeting the goal of maximizing their spending to
achieve positive results in both the short- and long-term. It is also related
to marketing ROI and return on marketing investment (ROMI).
It might be more commercially useful to define marketing effectiveness
more generally as the return on marketing investment against a pre-
determined set of objectives. 

These objectives can be as diverse as creating a defined market position,

increasing online conversions, creating clarity among internal and external
stakeholders about the mission and values of a business, identifying and refining
target personas and even significantly reducing lead volumes in a move from a
transactional to a nurturing lead management strategy.

This latter strategy forms an increasing part of our work as UK and international
businesses want to reduce the operational burden caused by high quantities of
low quality leads. For example, Wall Street English franchises in Russia and
Argentina both saw large, well-planned drops in lead volumes result in significant
increases in signed contracts.
Getting outcomes like these requires careful planning and total alignment
between marketing and sales, which in turn requires a content driven marketing
strategy backed by a consultative approach to sales.

In summary, the key to marketing effectiveness, is:  

1. Being able to set clear, unambiguous objectives (ideally in less than 100
words).

2. Knowing when to act on the basis of ‘sufficient evidence’ without

succumbing to an endless need for research which paralyses action.

3. Knowing how to evaluate feedback from the market and how to act on it.

4. Having the flexibility to change course quickly and decisively if the evidence
tells you to do so.

5. Automating as much of your marketing as possible.

6. Being patient and thinking for the long as well as the short term. Marketing
is about engagement and the greater the level of engagement you get from
target audiences, the more effective your marketing will be. It may be that
many of the prospects you engage will take time to decide when they want
to buy from you. This process can take weeks, months and in some B2B
markets, years.

The fact that prospects who engage with your brand don’t turn into leads
immediately does not mean your marketing is ineffective. On the contrary, it
means your marketing is engaging and nurturing prospects in exactly the way it
should if it's to create long-term value.

So, if you want your marketing to be effective, first look at ALL the ways
marketing can help your business and then engage an agency that knows how to
work with evidence, emotion and complex commercial environments in which
your marketing has to create value.

A new definition for effective marketing

The traditional definition for marketing states that: Marketing is the process of
promoting, selling, and distributing a product or service. But in this world of
complete and total saturation of constant and never ending deluge of promotion
and selling, we feel it’s time for an update. The new definition of Marketing
is...  Identifying the thing(s) that make your company unique, which your
customers would also care about, and then telling that story in as many creative
ways as possible with the resources you have. There are a few important
distinctions in this new definition to point out:
 “unique” While the concept of having a “Unique Selling Proposition” has
been around for decades, it’s amazing how often companies say the same
things as their competitors.  There are simply too many competitors in our
modern economy.  Unless you’re consistently trying to stand apart, you’re
doomed to suffer mediocrity.
 “care”  Not be aware of.  Not buy.  Care.  People need to care about what
you do and what you have to offer or there will be no brand loyalty.
 “telling that story”  We need to look beyond simply doing ads.  People hate
being forced to look at or listen to ads.  But everyone loves a compelling story.
 “as many as possible”  Marketing doesn’t have to be confined to running
ads and producing promotional materials.  Every interaction you have with a
customer is a potential vehicle to tell your story.

Marketing Planning – Meaning

Planning is deciding in advance what to do, how to do it, when to do it and who is
to do it. Planning is simply a rational approach to accomplish an objective. It
bridges the gap from where we are & where we want to go. Planning is the first
management function to be performed in the process of management. It governs
survival, growth and prosperity of any enterprise in a competitive and ever
changing environment.
Planning is an analytical process which covers:
1. Analysis of the situation or environment,

2. Assessment of the future opportunities and threats,

3. Determination of objectives and goals in the light of the future environmental

forces and

4. Selection of the best strategy or the course of action from among the
alternative strategies to achieve the objectives.  
Planning is the first and the foremost function of management. Planning precedes
all the functions. Marketing planning is the starting point of all marketing and
business activities of an enterprise. Because of the dynamism of the environment,
the role of marketing planning has increased a lot.

Many experts today consider marketing planning as synonymous with overall

business planning because the purpose of any business is the successful
management of its markets (marketing resources).

Marketing planning is the process – Marketing planning is a process that consists

of analyzing current situation and information about marketing opportunities,
forecasting and establishing planning premises, selecting target market(s),
determining marketing objectives, designing and developing marketing strategy
or courses of action for achieving these objectives and allocating resources to the
ingredients of marketing effort i.e. marketing mix and developing procedure and
policies.

Every company must look ahead and determine when it wants to go and how to
get there. Its future should not be left to chance. To meet this need, companies
use two systems — a strategic planning system and marketing planning system.
Strategic planning provides the route map for the firm. Strategic planning serves
as the hedge against risk and uncertainty.

Strategic planning is a stream of decisions and actions which lead to effective

strategies and which in term help the firm to achieve its objectives. Strategy is not
something that can be taken out of one’s packet and pushed into the market all of
a sudden. No magic formula exists to prepare for the future.
The requirements are excellent insight to understand changing consumer needs,
clear planning to focus our efforts on meeting those needs, and flexibility,
because change is the only constant. Most important, we must always offer
products of quality and value to the consumers.

Marketing planning is the process of anticipating future events and developing

strategies to achieve organisational objectives. It involves designing activities
relating to marketing objectives. Marketing planning of an organisation is
planning for that organisation’s revenue-generating activities.
It must begin with setting down the corporate plans and should be followed
through with plans for each separate function:
1. The first step in marketing planning process is setting down marketing
objectives and policies.
2. The second step is designing the marketing system. In the marketing system, a
company has to design/define each function with its contribution.
3. The third step is to develop separate objectives, programmes, and strategies of
each function, so that they can be assessed for the target purpose and the broad
objectives. If any function cannot meet its objectives, have to be modified for that
functional area.
4. The fourth step is drawing of detailed plans for each function for a shorter
period, i.e., a quarter, half a year or a year. It will be helpful in defining
responsibilities, timing and costs needed to achieve the short-term objectives.
5. The fifth step is merging the marketing plans into organisational plans.

Marketing Planning – Why is Marketing Planning Essential?

‘It is planning, not gambling, that produces profits and security.’
Organizations operate in increasingly fragmented, complex and fast-changing
markets. Meeting the challenges presented by a highly fluid and competitive
environment normally means experiencing conflicting pressures between
business objectives.
For example:
(i) Enhancing customer service versus increasing profitability.
(ii) Short-term profit versus long-term value creation.
(iii) Maximization of revenue versus minimization of costs.
Marketing planning is an effective aid to management because of its integral role
in identifying and clarifying the priorities for the business. Without a clear
statement of priorities, the company is vulnerable to internal confusion and lost
opportunities.
The following list describes the most common symptoms of a reliance on
traditional sales forecasting and budgeting procedure in the absence of a
marketing planning system:
(i) Lost opportunities for profit
(ii) Meaningless numbers in plans
(iii) Unrealistic objectives
(iv) Lack of actionable market information
(v) Inter-functional strife
(vi) Management frustration
(vii) Proliferation of products and markets
(viii) Wasted promotional expenditure
(ix) Pricing confusion
(x) Growing vulnerability to environmental change
(xi) Loss of control over the business
An effective marketing planning system should offer more than immunity against
these operational problems- it should deliver clearer and more widely understood
objectives and priorities, higher levels of usable market information, improved
inter-functional coordination, less waste and duplication of resources, and greater
overall business control.
A Business Week survey in 1996 indicated that as few as 6 per cent of business
people in the USA would rate their company as excellent at planning for the long-
term future. Could this be because they have not mastered the art of planning, or
because they suffer from a short-sighted business outlook, or because their
organizations contain barriers to marketing planning?

Marketing Planning – Scope: Long Term and Short Term Marketing Planning
The activities of marketing planning are generally divided into two divisions
according to time—(a) Long term Marketing Planning; and (b) Short term or
annual Marketing Planning.

Scope # 1. Long Term Marketing Planning:

Long range planning involves developing the basic objectives and strategy to
guide future company efforts. The long range plan provides the frame work within
which the other plans of the company are prepared.

Long run planning may involve a time horizontal of two or more years, although it
uses even a longer horizon of five to twenty years. Long range planning is done by
the top management with the help of specialised planning authorities.

Philip Kotler has pointed out that while preparing long term marketing plan the
following situations should be considered:
(i) Diagnosis:
The planning process begins with an attempt by the company to size up the
present market situation and the factors responsible for it. In short, diagnosis
consists of where the company stands and why. The size up requires developing
data on absolute levels of company sales and market shares and their receive
trends, by product, territory and other breakdowns.

Supplementary data on marketing costs, plant utilisation, profit levels and other
variables are also required. Plans must be taken to make a careful analysis of the
recent trends instead of being relying simply of impressions.

(ii) Prognosis:
In addition to diagnosing its present position, the company must also estimate
where but is likely to go if present market trend continues. What sales and profits
can the company make in the long period.

A systematic sales and profit prognosis consists of five steps—(a) Projection of

industry sales over the planning period; (b) Forecasts of company sales; (c)
Forecast of company revenues, costs and profits; (d) Forecast of investment; and
(e) Forecast of rate of return on the investment (R.O.I.) Prognosis indicates that if
the company’s future seems to be bright, its present policies should be continued
but if the future is dark and doubtful then the planning needs modification so that
the objectives may be achieved.

(iii) Objectives:
If the prognosis indicates that the company has no future, then the company
should decide upon fresh objectives as to the amount of sales.
(iv) Strategy:
Strategy lays down the broad principles which the company hopes to secure an
advantage over competition attractiveness to buyers and a full exploitation of
company resources.

Marketing strategy might consist of the following tenants:

1. To develop the highest quality product possible.

2. To charge a premium price.

3. To advertise more heavily than competitors.

4. To use salesmen who feel and exhibit a missionary drive.

There may be several alternatives of the strategy. The company should carefully
study these alternatives and choose the best possible alternative strategy under
the circumstances.

The control section of a long range plan should contain performance targets. They
should be checked periodically. In short, control is necessary. If at any stage the
variations are not favourable the underlying causes are discovered and then
changes are introduced to remedy the shortfalls and profits in the changed
circumstances.

(v) Tactics:
Tactics suggest how to use the company’s strategies to achieve its objectives. In
other words tactics are the methods for carrying out the strategies. Philip Kotler
has very interestingly distinguished objectives, strategies, and tactics in the
following words—”The objectives of a company indicate where it wants to be, the
strategy indicates the intended route; the tactical decisions are not primary, they
nevertheless are very important.”

(vi) Control:
The long range plan represents the best vision of management at the time of
planning of a proper set of objectives, strategies and tactics. It is based on a
detailed set of assumptions and expectation whose validity will be revealed only
in the course of time. More often, then not new events will occur that challenge
some of the basic assumptions in the plan.

This means two things- first the plan must include a control section that specifies
the type of monitoring that will go on to check the plan’s effectiveness; second
the company might prepare one or more contingency plans to meet new
challenges.

Scope # 2. Short Term or Annual Marketing Planning:

Each year companies prepare annual plan. In principle, the annual plan is
developed in the context of the company’s long range plan. Short range plan, of
course, is not possible where the company has no long range plan.

A long range plan is necessary if the short range plans are not to be chaotic series
of expedient solution to short run crisis. Sometimes annual plans only reflect over
reactions to previous year’s result and next year’s problems rather than the
progressive implementations of long range plan.

Three different approaches are generally taken to annual planning:

(i) Goal Planning:
Management sets sales and profit goals for the year that if achieved, would satisfy
the shareholders. It is left to goes for whom the goals are set to find ways of
achieving them.

(ii) Optimisation Planning:

Management considers major alternative strategies and their likely impacts on
profits, sales, market shares and future investment opportunities. The
management selects the strategy with the most attractive consequences. This
sort of planning is most logical of the three approaches.

(iii) External Planning:

Management considers continuing its current strategy and estimates the likely
profits and sales it could achieve. If these are satisfactory, they are established as
the company goals.
Marketing Planning – Nature: Divisional, Corporate, Product – Line, Product,
Market, Brand and Functional Plan
As a company’s planning system evolves, there is increasing talk of “marketing
planning and marketing plans.” Unfortunately, no common usage attaches to
these terms. Companies that are highly market oriented sometimes use the term
“marketing plan” synonymously with the overall business plan; perhaps a better
title would be “market-oriented business plan.”

In other companies, “marketing plan” is used to describe the section within the
larger business plan that deals specifically with marketing issues and strategies, in
contrast to the financial and manufacturing sections of the same plan.

In still other companies, it is used to describe a special marketing document of

retaining some marketing goal, such as a successful new-product launch or an
orderly development of a new market.

Because of these varying usages, the term “marketing plan” may not be a useful
as a more specific designation of the particular type of plan being discussed.

(i) Divisional Plan:

The divisional plan is similar to the corporate plan and describes the division’s
plan for growth and profitability. It describes marketing, financial, manufacturing,
and personnel strategies and may use a short, intermediate, or long-run planning
horizon. In some cases, the divisional plan is the sum of all the separate plans
prepared within the division.

(ii) Corporate Plan:

The corporate plan describes the overall business plan for the corporation. It
might be an annual, intermediate, or long-range plan. The corporate plan deals sit
company missions, growth strategies, portfolio decisions, investment decisions,
and current objectives and goals. It does not contain details on the activities of
individual business units.

(iii) Product-Line Plan:

A product-line plan describes objectives, goals, strategies, and tactics for a specific
product line. Each product-line manager prepares this plan.
(iv) Product Plan:
A product plan describes objectives, goals strategies and tactics for a particular
product or product category. Each product manager prepares this plan.

(v) Product/Market Plan:

A product/market plan is a plan for marketing a particular product or product line
or the company is a particular industrial or geographical market. An example
would be a plan by a bank to market its lending services to the real estate
industry.

(vi) Brand Plan:

A brand plan describes objectives, goals, strategies, and tactics for a specific
brand within the product category. Each brand manager prepares a brand plan.

(vii) Market Plan:

A market plan is a plan for developing and serving a particular market. If the
organisation has market manager as well as product managers, the market
managers would prepare these plans.

(viii) Functional Plan:

A functional plan is a plan for one of the major functions, such as marketing,
manufacturing, manpower, finance, or research and development. It also
describes plans for sub functions within a major function; such is, in the case of
marketing, an advertising plan, a sales promotion plan, a sales-force plan, and a
marketing research plan.

Most of these plans have a marketing component. In fact, the marketing

component not only is essential but usually takes priority in the plan’s
development. Planning often starts with the question – How great a sales volume
can be hope to obtain at a profit?

This step is answered by marketing analysis and the development of a marketing

plan. After this plan is approved, the non marketing executives start working on
their manufacturing, financial, and personnel plans to support the marketing plan.
Thus the marketing plan is foundation for the planning of the other activities of
the company.
Marketing Planning – 4 Major Elements: Objectives, Programme, Completion
Schedule and Budgeting
1. Objectives or Goals:
We have a statement of the company’s goals, including a forecast of sales, market
share, and profits and expenses. The primary goal is, of course, increase in profits.
To achieve this, we have a set of specific goals, e.g., a 5% increase of the total
market share or 20% increase in the sales turnover.
2. Programmes:
A programme is the second element of a marketing plan. A programme is an
action plan, a detailed part of the plan. It points out the responsibilities of each
department involved in marketing effort. Each programme is expected to achieve
the set goals within a specified period.
Each department operates and carries out the allotted functions according to the
programme. We have product programme for the development of new products.
We have advertising and sales promotion programme for effective marketing
communication, and physical distribution programme (covering transport,
storage, inventory control and order processing) for assuring best customer
service at the lowest cost as far as possible.
3. Completion Schedule:
We must have a proper schedule or time table for starting and completing the
marketing activities included in the marketing plan. A schedule is a time-bound
action plan. Deadlines are fixed for completing each step or item as per plan. Thus
we can assure progress of a project within stipulated time.
4. Budgeting:
Magnitude of the marketing activities represented by the marketing-mix or
programme depends upon the level of marketing budget or numerised plan. A
budget is a document indicating the amount of resources allotted for a specific
purpose or work in an organisation.
We have a marketing budget indicating the permissible amount of money which
can be spent for financing all marketing activities in order to achieve pre-
determined goals. We have quantity, quality, time and cost standards for
measurement of results.
On the basis of budgeted marketing cost, marketing management can inter
balance the component parts of the marketing mix. On the basis of sales forecast,
we have our marketing budget. Budgeting makes it possible to carry out plans.
Budgeting also serves as a basis of control.

Marketing Planning – 7 Most Important Types: Product Mix, Distribution

Channel, Marketing Research, Marketing Organisation, Sales Force, Pricing Plan
and a Few Others
Following marketing sub-plans are prepared for the successful implementation
of marketing programme & strategies:
1. Product Mix Plan:
Product mix determination is very important in industries with complex and
changing technologies. It is an especially effective instrument in market where the
consumer is affluent and has an elaborate system of preference. The decisions
relating to product elimination, dropping, adding or developing are included in it.

2. Distribution Channel Plan:

This sub-plan involves the future course of action with regards to distribution
channels – their number, forms, management and remuneration, etc.

3. Marketing Research Plan:

Marketing research is the gathering, reduction and analysis of market data.
Because it describes and evaluates demand, the behaviour of buyers and
intermediaries, and competition, it allows more rational and efficient decision
making. Research is the key to an optimum allocation of marketing resources.

4. Marketing Organisation Plan:

Considering only physical distribution of goods and products is only half way to
success in marketing efforts. The firm should chalk out a proper plan regarding
the organisation structure of marketing department, communication policies and
procedures, co-ordination of marketing activities to that of other departments of
the firm, etc. Hence, a marketing organisation plan is also to be developed.

5. Sales Force Plan:

The plan signifies the efficiency of salesmen and other personnel engaged in
selling the goods. The decisions relating to hiring and training salesmen,
motivating them, and assignment of sales quotas, determining sales territories,
compensating salesmen and introducing the incentive plans are included in it.
6. Advertising and Sales Promotion Plan:
The sub plan incorporates the selection of advertising media, channels of
distribution, sales promotion techniques, advertising strategies, and tactics, etc.
Thus, this plan is mainly concerned with promotion mix.

7. Pricing Plan:
Pricing is theoretically the single most important instrument of competition in a
market economy. The firms have to consider different pricing policies, strategies,
legal constraints relating to pricing and so on.

Marketing Planning – Importance: To Face Future Uncertainties, Provides Focus

to Marketing Activities, Best Utilization of Opportunities, Better Coordination
and a Few Others
The preparation of a marketing plan is vital for setting the strategies to achieve
the marketing objectives and for monitoring the performance of the marketing
department. It determines the target to be attained and the implementation of
plans to achieve them successfully.

The importance of marketing planning can be summarized as follows:

1. To Face Future Uncertainties:
As the future is always clouded with risk, it is only pertinent that measures are
taken as protection against unforeseen risks. An expert marketing manager makes
marketing forecast on the basis of careful analysis of present circumstances and
trends, and then sets the objectives for the future.
He also takes into account any situation that is likely to arise in the future which
may have an impact on the company’s marketing plans. For example, a marketing
manager may take into consideration the probable entry of new competitors in
the same product line while making plans.
2. Provides Focus to Marketing Activities:
Efficient marketing planning helps in focusing the various activities, programmes
and operations of the department towards the same direction- achieving the
goals of the marketing department in a way that is aligned with the overall
business success.
3. Best Utilization of Opportunities:
The future is not just fraught with risks, but it is also full of viable opportunities.
Marketing planning helps the organization to identify the opportunities that may
arise in future and seize them before the competitors do. Regular monitoring of
the business environment throws light on a number of emerging consumer needs
and wants which can be successfully converted into marketing ideas.
4. Determination of the Right Marketing Mix:
The marketing mix is the combination of the various marketing elements like
product, price, place, promotion, people, physical evidence, etc. which is used by
an organization to influence the demand for its products or services. A good
marketing plan helps to determine the appropriate proportion of the various
aspects of the marketing mix to create the maximum appeal to customers.
5. Better Coordination:
Marketing plans are basically formulated for the marketing department, but they
are aligned with the overall objectives of the company. Therefore it helps to
coordinate the activities of all the departments so that coordination is achieved in
the performance of the marketing department.
6. Satisfaction of the Customer:
The business exists because of the customer and can operate profitably only
through the satisfaction of his wants. Marketing planning entails the study of the
customer wants and directs all marketing efforts towards the satisfaction of these
needs. A marketing plan which is based on extensive consumer research lays the
maximum emphasis on customer satisfaction.

Marketing Planning – Approaches: Profit Impact of Marketing Strategies,

Portfolio Models and Competitive Analysis
Different authors and consultant firms have recommended different approaches
to marketing planning.
Some of the approaches are:
1. Profit Impact of Marketing Strategies (PIMS),
2. Portfolio models, and
3. Competitive analysis.
Approach # 1. Profit Impact of Marketing Strategies (PIMS):
It is one of the path-breaking approaches to strategic planning and competitive
strategy development. The Strategic Planning Institute of the USA sought to
identify the most important variables affecting the profits by launching a study
called Profit Impact of Marketing Strategy (PIMS).
For the purpose, it gathered data from hundreds of business units in a variety of
industries and identified the most important variables associated with the
profitability. Market share is one among the key variables thus identified affecting
profitability.
According to a PIMS report, “The average return on investment (ROI) for business,
with under 10 per cent market share, was almost 9 per cent on the average, a
difference of ten percentage points in market share is accompanied by a
difference of about five points in pretax ROI.”
The PMIS study shows that business with market shares above 40 per cent earn
an average ROI of 30 per cent, or three times that of those with shares under 10
per cent. Market shares can improve their profitability further through increasing
their market share. In many markets, one share point is worth tens of millions of
dollars. For example, in the USA, a one-share- point gain in coffee is worth $ 48
million and in soft drinks $ 120 million.
Approach #2. Portfolio Models:
Another approach to marketing planning is the portfolio approach. A number of
portfolio models have been proposed by researchers and management
consultants.
Some of the portfolio models are briefly discussed as follows:
i. Boston Consulting Group (BCG) Approach:
The Boston Consulting Group, leading management consultant firm in the U.S.,
developed an approach known as the growth share matrix. This model uses the
market rate.
Growth – (vertical axis) as the indicator of the industry’s attractiveness and a
firm’s market share (horizontal axis) as its competitive positive in that industry.
The BCG matrix categorised the firm’s SBUs into four groups, viz., Stars, Cash
Cows, Question marks and Dogs.
Stars – These SBUS are supposed to be fast growing and carry the company’s
future prosperity. As they show a high growth prospect they usually consume the
maximum resources, particularly cash and marketing efforts to maintain their
positions.
Cash Cows – These SBUs earn the highest revenues for the firm. Management
should carefully protect the profitability of these SBUS.
Question marks – These SBUS are low performers compared, to the industry
average. Management has to decide whether by putting in more resources it can
bring these products into the high market share or “star” level or else to withdraw
from those businesses in view of continuous below average performance.
Dogs – These SBUs are performing poorly from the stand point of both the
industry growth rate and the company’s market share position. Therefore, unless
the company is hopeful of turning them into a “high position” on any of the two
axes, they have to be wound up.
The BCG model is based on the premise that a high market share and profitability
are interrelated, because a high market share will mean – (a) greater economies
of scale (b) greater market power vis-a-vis consumers as well as input suppliers,
(c) better quality management, which is generally a characteristic of market
leaders.
ii. General Electric (GE) Model:
The General Electric (GE) model is an improvement over the BCG model. It relates
to market attractiveness to the SBU and firm’s strengths, which will make it
competitive in the marketplace. Factors that determine market attractiveness are
– nature of competition, government policy, Return on Investment (Rol),
technology, market size, rate of market growth and so on.
On the other hand, the strengths of any SBU or firm may lie in R&D, finance,
distribution, market share, product quality, customer service, etc. To measure
these two dimensions, managers must identify the factors underlying each
dimension and find a way to measure them and combine them into an index.
The GE matrix is divided into nine cells, which in turn fall into three zones. The
three cells in the upper-left corner indicate strong SBUs in which the company
should invest or grow. The diagonal cells stretching from the lower left to the
upper right indicate SBUs that are medium.
In overall attractiveness – The Company should pursue selectivity and manage for
earnings in these SBUs. The three cells in the lower-right corner indicate SBUS
that are low in overall attractiveness. The company should give serious thought to
harvesting or divesting these companies.
iii. Arthur D. Little Life Cycle Portfolio Matrix:
This model proposed by Arthur D. Little Inc., a management consulting firm, is
built on the assumption that industries, like products, have life cycles. Every
industry usually passes through four stages.
The characteristics of each stage are as follows:
a. Embryonic industry – Slow growth, changes in technology, vigorous pursuit of
new customers, fragmented and unstable market shares.
b. Growth industry – Rapid growth customers exhibit definite purchase patterns,
rising market shares of leading competitors, rapid pace of technological
developments and negligible barriers to entry.
c. Mature industry – Stable purchase patterns, technology and market shares.
d. Aging industry – Falling demand, a declining number of competitors and a
narrowing product line.
This model further conjectured that firms can occupy one of the six competitive
positions viz., dominant, strong, favourable, tenable, weak and non-viable.
iv. Shell’s Directional Policy Matrix:
This model has two dimensions – the business sector’s profitability prospects and
competitive capability. The profitability dimension has three classifications –
unattractive, average and attractive. The competitive dimension is defined as
weak, average or strong.
The model offers nine possible strategies-
Unattractive:
i. Weak – Disinvest.
ii. Average – Phased withdrawal.
iii. Strong – Cash Generation.
Average:
i. Weak – Phased withdrawal.
ii. Average – Custodial.
iii. Strong – Growth.
Attractive:
i. Weak – Double or quit.
ii. Average –Try Harder.
iii. Strong – Leader.

Marketing Planning – Components

Let us now consider in more detail the key components of marketing planning-
the preparation, the people, the plan and the process.
Preparing to Plan:
Preparation is an important part of the marketing planning process. Organizations
that do not dedicate the time and resources necessary for planning can pay a
heavy price. Inadequate preparation invites mistakes and careless thinking, and
can allow important decisions to be made on the basis of insufficient or unreliable
information.
The typical planning cycle is 12 months and, generally speaking, major market
research projects should be commissioned in the first half of the planning cycle
and plans and programmes should be formulated in the latter half of the planning
cycle.
When preparing to plan, it is important to be clear which type of planning you are
engaged in- strategic or tactical planning. The strategic marketing plan reflects
what managers perceive to be their market position and competitive advantage,
what objectives they want to achieve and how they intend to achieve them
(strategies), and what resources they envisage will be required and at what
consequence (budget).
Tactical marketing plans are the detailed scheduling and costing out of the
specific actions necessary to deliver the first phase of the strategic plan. Tactical
plans should never be developed before strategic plans.
Who should be Involved?
The people who are going to use the plan should be involved in the planning
process, as should those within the organization who can contribute knowledge
or information to the plan. However, everyone need not attend every planning
meeting.
A planning manager should be appointed to manage the virtual planning team,
indicating who should be at which meetings and assigning whatever tasks need to
be undertaken between meetings. It is also the planning manager’s responsibility
to establish clear communications and to ensure proper completion of the plan.
Criteria of a Good Marketing Plan:
The measure of a good marketing plan is not its 100 per cent accuracy in
predicting the future. If you could foretell what is going to happen, you would not
need to plan. The role of the marketing plan is to capture the essentials of the
planning process and distil them down into a comprehensive working document.
A good marketing plan should contain the following items:
1. Mission statement
2. Financial summary
3. Market overview (a brief summary of the marketing audit)
4. SWOT
5. Assumptions
6. Marketing objectives and strategies
7. Programmes, with forecasts and budgets
The written marketing plan is the background against which operational decisions
are taken on an ongoing basis and thus it should not include too much detail. To
be usable, the marketing plan has to be well-written and short. As Malcolm
McDonald says- ‘If it’s quicker to weigh it than to count the pages, it’s not a good
marketing plan!’
The marketing plan is central to the company’s relationship management and
revenue-generating activities, and from it flow all other corporate activities, such
as the timing of the cash flow and the size and character of the labour force.
The marketing plan can be distributed to all those whom it involves directly or for
whom it will have a significant impact. The distribution list should include the key
account (or segment) director and manager, as well as each member of the key
account (or segment) team.
Criteria of an Effective Marketing Planning Process:
The success of the marketing planning process is determined by more than simply
the production of a marketing plan. An effective planning process will yield a
usable plan and, in so doing, will additionally identify insufficient or unreliable
information, promote clarity of thinking within the team and recommend
methods for better team working.
The achievement of these criteria requires patient determination. Organizations
usually take two to three years to install a planning process fully so if your plan is
about 60 per cent of the way there in Year 1 and 80-90 per cent completed in
Year 2, you are on track.
International Planning:
An international market audit poses the following additional considerations:
1. The product itself- Standardization and Adaptation.
2. Packaging and labeling- Protection/ security, Promotional/distribution
channels, Cultural factors, Package size, Language, Legal or regulatory
requirements.
3. Brands and trademarks- Global or national, Legal requirements and ownership
issues, Cultural factors.
4. Warranty and service- International customers, Safety, Quality control
standards, Usage, Promotion, Service networks
Some famous examples of not-so-successful international marketing initiatives
include:
(i) The Mexican bread and cakes brand, Bimbo, has an image problem in the USA.
(ii) The Rolls-Royce Silver Mist (‘mist’ means ‘manure’ in German).
(iii) The export of bacon flavoured crisps to Saudi Arabia (the entire planeload was
incinerated at the side of the runway in Jeddah despite the manufacturer’s
protests that the product contained no pork).
(iv) The Scandinavian vacuum cleaner manufacturer, Electrolux, ran a US
advertising campaign with the slogan- ‘Nothing sucks like an Electrolux’.
Careful international marketing has much to offer, and not only in terms of
increased sales. The successful international company is constantly on the lookout
for synergy and cost savings. Economies of scale can be found in production,
product R&D and new technologies.
Planning for Key Accounts:
Key account management is a complex task. It often involves cross-functional
teams and international planning issues, and can engender internal confusion
over priorities where specially tailored products or services are required. When
planning for key accounts, it is therefore useful to treat a key account as a
segment (or several segments) in its own right and to prepare a separate sub-plan
for each key account.
The purpose of the key account plan is to show how the supplying organization
intends to build and strengthen its relationship with its key accounts.
The plan should therefore address the following issues:
1. The key account’s decision-making unit and purchasing process.
2. The key account’s objectives and drivers.
3. The market audit from the key account’s point of view (the customer’s market
background competitive position).
4. Opportunities and threats to the key account’s business as well as to the
relationship between the supplier and the key account.
The strengths and weaknesses analysis should be based on the key account’s CSFs
while the strategies should deal with people and process issues as well as the 4Ps
(product, price, place and promotion). It can still be appropriate to use the Ansoff
Matrix (‘new markets’ become ‘new parts of key account’) and the DPM (‘market
attractiveness’ becomes ‘customer sub-segment attractiveness’).
The other significant difference between key account planning and other forms of
marketing planning is that key account planning may be a joint process in which
both supplier and customer take part.
IT in Planning:
Various software packages are now available which assist with elements of
marketing planning. These range from simple matrix generators to complex
segmentation packages. There are even programs that will write your marketing
plan for you (based on the data you supply, of course!).
The advantages of using planning software can be considerable.
Benefits include the following points:
1. Guidance:
On-screen prompts and access to ‘Help’ pages guide the user through the
planning process, ensuring that it is thoroughly and correctly completed.
2. Standardization:
The adoption of specific programs across large organizations or international
divisions provides consistency and supports consolidation. Site licenses and
network versions may be purchased to allow planners in different locations to
work on the same plan simultaneously.
3. Presentation:
Professional applications usually incorporate a choice of visual aids such as charts
and tables to enhance clarity and interest value. Attractive graphics can help
make essential points about segments or competitive positions.
4. Contingency Planning:
Planning software is easier to manipulate than traditional ‘paper and pencil’
methods, affording a time and energy saving facility, especially in ‘what if’ type
exercises.
The following three examples of marketing software output illustrate the diversity
and flexibility of IT features. The first example, based on the experience of a
German engineering company, is a CSF bar chart for a product- market segment
that has been produced using the weighting and scoring system.
It is clear from Figure 15.7 that Top Widget surpasses its competitors on quality,
shares similar product range and service levels, but performs least well overall
because its prices are perceived to be less attractive.
The second example is -the result of segmentation exercises using two different
types of software. The following data shows the output from a cluster analysis of
Europe-wide customer research data in a metal industry. Cluster 1 represents a
group of customers for whom reliability of delivery and price are vital while
cluster 2 represents a group of customers who are more interested in security of
supply and consistent quality.

Another segmentation program also uses cluster analysis but in addition produces
the results as a bar chart. Market research by a South African insurance company
indicated a number of different segments.
One segment prefers to buy from a well-known company, preferably a company
that is personally recommended. The insurance company labeled this segment
‘Security Seekers’. A different segment was primarily interested in price and was
called ‘Economy’.
Using this information, the insurance company was able to develop two different
marketing propositions. It targeted the Security Seekers with an advertising
campaign emphasizing its history and track record, and introducing ‘recommend a
friend’ incentives. The Economy segment was targeted with a new ‘no frills’
product and direct mailings were used to communicate the value-for-money
message.
A word of warning- marketing software is a decision support tool, not a decision
substitute. In the words of one experienced planner – The problem is not
“garbage in, garbage out”; it’s when you start to believe the garbage because it
comes out of a computer. We call this “garbage in, gospel out.”

Marketing Planning – System: Product-Oriented, Customer-Oriented, Market-

Oriented, Function-Oriented Organization
An organization is a mechanism through which a managerial philosophy is
translated into action. As the philosophy changes, organizational goals are revised
and basic changes made in the organizational operations. The marketing planning
system in various organizations may be focused on different aspects of marketing.
Any company would adopt the system most suitable to it. On the whole,
marketing planning systems may be: product oriented, consumer oriented,
market oriented or function oriented.
1. Product-Oriented Marketing Organization:
The marketing planning is made for each product separately in such an
organization. Targets are determined for each product and detailed programmes
are chalked out to achieve these targets and goals. The expenditures related to
advertising, sales promotion, product development, marketing research, etc. are
fixed individually for each product.
Each product is taken as a separate entity when it comes to distribution and
marketing also. Big conglomerates like Unilever, Proctor and Gamble, Tata Sons,
etc. have separate marketing plans for each product category (home care
products, food items, personal care, electronics, etc.).
2. Customer-Oriented Marketing Organization:
In such kinds of organizations, separate marketing planning is prepared for each
class of customers. Marketing organization is centred on the characteristics and
needs of different types of customers. The objectives and goals are fixed in
accordance with the features of each customer category.
For example, cosmetics companies like Gamier, Emami, Lakme, Ponds, etc. tailor
their advertisements and marketing communication to specifically target a
particular group of customers—fairness creams for men, fairness creams for
women, anti-wrinkle products for older women, protection against pimples for
teenagers, etc.
3. Market-Oriented Marketing Organization:
It refers to an organization which is regionally based. Different targets are fixed
for different regions and plans are made according to the unique characteristics of
the particular regions. Separate territory-wise budgets are prepared keeping in
view the nature and intensity of competition in each region.
A company may offer its goods at a lower rate while attempting to enter a new
market or may change certain product characteristics while catering to a
particular geographical territory.
For example, global restaurant chains like McDonald’s, KFC and Pizza Hut change
the ingredients of their food preparations according to the preferences and
customs of the region they operate in, like providing vegetarian versions of
traditionally non-vegetarian recipes in a country like India where many people
avoid meat.
4. Function-Oriented Marketing Organization:
The consolidated marketing plans are prepared on the basis of several other
smaller plans such as product mix plan, sales-force plan, advertising and sales
promotion plan, distribution plan, pricing plan, market research plan and
marketing organization plan, etc. First the individual plans for each function of
marketing are to be made and the final plan will be an integration of all the
functional plans.

Marketing Planning – Implementation with Key Elements

Most plans fail at this point Either the plan cannot be easily implemented or they
fail due to the indifference of those who are supposed to implement it Therefore,
everyone involved should be apprised and committed to ensure the successful
accomplishment of the plan.
Challenges to the implementation of Marketing Plans are twofold:
i. External factors – Changes in the external macro and micro-environment will
threaten the implementation of plans. A change may require a modification or
even necessitate complete change.
ii. Internal factors – The marketing department is only one of the many in a
company hence in reality it has to compete with other departments for limited
resources. To deliver value the marketing department has to depend on other
departments.
Common Problems in implementing strategic marketing plans can be identified
as follows:
i. Lack of Support from the CEO and Other Top Management:
The strategic marketing plan is a marketing manager’s initiative and without
support from the top other functional managers wouldn’t either.
ii. Lack of Internal Marketing Plans:
In reality a marketing plan has to be first marketed inside the office before it can
be implemented outside. If a marketing plan does not get the commitment of all
the people inside the organisation it cannot be successfully implemented.
For example the marketing division of a Courier service, with difficulty, under
severe competition, broke into serve the far-east sector of a large buying house in
the garment industry. Every evening a courier would be sent to pick up the
shipments. One evening and after about one week of service, the head of the
buying office happened to be present at the point where the courier takes over
the package.
On this fateful evening the Courier came in as usual and took over the package,
which was beautifully packed; without any consideration the Courier folded it into
two crushing the beautiful packing simply to load it into the courier bag. To cut a
long story short that was the end of the business for the courier company.
No matter how much of assurance the Sales and Marketing people would have
given the customer, the foolish act of the courier ruined it for them. Alternatively,
if the Courier was trained through an internal marketing planning process this
would not have happened. So, marketing the Marketing Plan is of great
importance, where many of us lack.
ii. Lack of Line Management Support:
Operational managers for many good reasons may not be willing to extend
complete support, therefore, special attention and effort to address those issues
and to canvass their support is essential for proper implementation of the plan.
iii. Confusion over Planning Terms:
Some managers may use academic planning terminology that some line managers
may resent. Therefore, to avoid these misgivings separate meetings with relevant
line managers independently or collectively should be held to explain the plan
and to canvas support for it.
iv. Too much of Detail:
Too much of paper work and resultantly piles of paper work can be most boring
for anybody. Therefore, main issues should be addressed cutting unnecessary
detail when communicating the plan and implementing them thereafter.
v. Once a Year Ritual:
Planning must not be brought down to the level of being treated as an once a
year ritual, then the danger of them being filed away till the next year will arise.
Planning must be integrated as an integral part of a manager’s job and as a
continuous process of good corporate management.
vi. Separation of Operational Planning from Marketing Plans:
This is also seen, as a problem where managers become operational oriented and
lose Marketing concerns, strategic thinking and the longer-term needs.
Influencing marketing orientation will be a necessary input to retain
management’s interest in marketing planning and its implementation.
vii. Integrating Marketing Planning:
Marketing planning must be integrated into the corporate planning system and be
considered in relation to the plans of finance, production and operations,
research and development, logistics, personnel and so forth.
viii. Delegation of Planning to a Planner:
This is also a threat in that when the entire planning process is delegated to a
specific planner and those who were not involved will handle implementation
with indifference. Therefore, it may be wise to involve die respective managers at
all possible stages of the planning process.
Effective leadership from the CEO downwards must be ensured for the proper
implementation of the Marketing Plan; therefore challenges and problems must
be of concern to all.
Key Elements of Implementation:
The key elements of the implementation program can be classified into the
following activities:
1. Leadership:
Senior Management cannot leave it to the middle and junior level managers to
implement the plans.
i. They must take the ultimate responsibility to implement the plan with the
support of the others.
ii. They need to be committed to the strategic plan, as their juniors would usually
be involved in short-term issues.
iii. Allocating responsibility to relevant managers and empowering them with
authority to implement the plan is very important.
iv. Establishing check points are also key considerations for proper
implementation –
a. Meeting present and future deadlines
b. Any targets that could be missed
c. Availability of resources to deliver value
d. Assurance of continuous supply.
In implementing a Marketing Plan it is a must that the Head of Marketing takes
over and provides the necessary leadership. It is the marketer who has to
motivate the rest, just as much as he would do with those outside the
organisation to buy its value propositions.
There are charismatic leaders those who can lead by the strength of their own
personality and there are also transformational leaders with charisma who are
able to create new vision for the organisation, gain acceptance and implement
them through change. The following is what Fredrick Forsyth wrote about Emeka
Odimegwu Ojukwu — a great Nigerian leader, in his book titled Emeka.
“There are many, and I have met a few, who could administer, govern, and even
rule. But to lead, really to lead a whole people, takes something more: and it is
not learned in school or from books. It takes not to be judged by fine clothes, big
cars, and money in the bank or the shouting of slogans. It is not just the capacity
to start a crowd cheering – a demagogue on a street corner can do that.
Leadership takes more. It involves the possession of a series of qualities that are
possessed and seen to be possessed, and which make others prepared to follow
the one who owns them”.
“Some years ago I addressed my thoughts to what these qualities should be and
came up with the following. Strength without brutality, courage without
recklessness, honesty without priggishness, intelligence without pedantry,
humour without frivolity and compassion without sentimentality.
Then I looked at the list and realised there was something more, something
missing. Call it the X factor. It may be presence, or charisma, the ability to
dominate other men by sheer personality, or the capacity simply to inspire.
Winston Churchill had it, Charles De Gaulle had it, John Kennedy had it and David
Ben Gurion, the father of Israel, had it. But I never knew an African who had it Till
Emeka”.
Today increasing attention is being made to the need of the visionary leader who
could transform the business to greater heights.
2. Internal Marketing:
Before a business markets any value proposition to external customers it must do
so to the internal customers. Internal Marketing is the process of implementing a
marketing programme in the internal environment so that employees are seen as
customers and are persuaded to buy into and support management ideas and
planned processes. The value propositions of a business must also be marketed to
its internal market if relevant. If a business is making industrial products a typical
employee of a business will have no need for it. On the contrary if they were into
FMCG or SMCG it may be relevant.
The first thing that the business should market is the Vision of the company, so
that its vision will be very clear to all employees. Similarly, the Mission of the
company must be communicated and must made be very clear. The vision and
mission must be recallable and memorable. These cannot be achieved without an
internal marketing programme.
In designing the internal marketing programme the following factors have to be
considered:
i. Internal Marketing Objectives and Strategy:
The purpose of the internal marketing programme is to achieve goals & objectives
of external marketing that will have a suitable strategy. Some research may be
needed to assess the implication of the external marketing programme for the
internal customers or employees.
ii. Segmenting the Internal Market:
By identifying, supporters of a proposed strategy, influential opponents and how
the business can win them over, non-involved supporters and as to how their
support can be increased and how non-involved opponents can be convinced, a
valuable segmentation could be made.
iii. Develop an Internal Marketing Mix Product:
It could be a plan or change the business wants to implement. Price – the plan
may have costs and benefits to staff. Shifting an office may result in an
undesirable longer journey to some. Increased sales quotas may affect the Sales
personnel’s commission earnings. Place— distribution of the plan or the process
of bringing the plan and the internal customer together where timing must be
addressed carefully. Promotion— effective communication with the internal
market must be ensured so that the message is clear and well understood and
support extended.
iv. Important Skills Needed in Implementing the Internal Marketing Plan:
It is the marketing department that must communicate with the others inside
who control other key functions and resources such as – production, finance,
research & development and those who are concerned with other stakeholders.
Nike, the world leader in sports shoes, sometime back did not have a
manufacturing facility but outsourced its products. They outsourced a large
volume of its requirements from a town called Pusan in Korea.
To the Koreans, Nike was a very large customer and dependent on them so the
Koreans decided to ask for a higher price from Nike. To Nike, Koreans were
important stakeholders but the request for a higher price had an unpleasant
impact in the relationship and eventually Nike had pulled out of Korea and set up
elsewhere. Pusan thus became a ghost town overnight. To the Koreans, Nike was
an internal customer and perhaps a good internal marketing plan with the
following skills which would have averted such action and saved a number of
people from being unemployed.
v. Negotiation:
A negotiation takes place when two parties with different objectives agree on a
mutually agreeable outcome. Negotiations are the nucleus of a relationship with
those outside, like outsourcers for example, on price and delivery but is also
relevant to those inside. Negotiations with labour unions, other units etc., is an
important aspect of internal marketing. Had the Koreans done it right they would
not have been in that precarious predicament.
vi. Persuasion:
Marketers must be committed to persuade all other units, heads of departments,
and all concerned about its external plan and get their support and concurrence.
vii. Co-Operation:
People in organisations have their own goals and ambitions, competition among
departments and internal people. The success of any plan is to get the
cooperation of all of them to implement it. A motivated internal people are a
result of effective internal marketing, which is absolutely necessary for the
implementation of the Marketing Plan.
3. Project Management:
Implementation of a marketing plan must take the route of project management
to achieve success lest even the best of all plans will remain as plans. A project
can be defined as an undertaking that has a beginning and an end and is carried
out to meet established goals within cost, schedules and quality objectives.
4. Examples of Projects:
i. Management – Holding of an important national conference, conducting a
major trade exhibition etc.
ii. Marketing – Setting up a new distribution network, implementing a
promotional campaign etc.
Earlier seven different types of Marketing Plans were observed:
a. Marketing plan for Products
b. Marketing plan for Brands
c. Marketing plan for New Products
d. Marketing plan for Categories
e. Marketing plan for Segments
f. Marketing plan for Customers
g. Marketing plan for Regions & Countries.
For example, in the case of a launch of a new product the task of producing the
marketing communications, which includes press, radio, journals, TV and point of
purchase material are all a project that has to be accomplished. To establish
stockists round the country and to set-up the distribution network and providing
the logistics needs is also a project.
The setting up of a supply chain for all materials needed to produce the new
product is also a project. The plan is a direction as to how it should be
accomplished and a project is doing what has to be accomplished in the plan over
its planning period, project management gives life to the plan.
5. Objectives of Project Management:
i. Quality – End result should conform to what the project was intended to do.
ii. Budget – Project must be completed within permitted costs and budget.
iii. Time schedule – Project must be carried out and accomplished within the time
frame in which it was planned to be carried out.
6. The Project Manager:
In the case of the foregoing example of finding stockists round the country and
setting up the distribution network the Project Manager will be the National Sales
Manager and supported by Regional & Provincial Sales Managers, District Sales
Managers and even Sales Representatives.
7. The Role of the Project Manager:
The project manager has the resources of staff, money and time, which have to
be coordinated and a project manager’s principal duties could be described as
follows –
i. Project Planning:
Developing project targets, with quality, budget and time Dividing the project into
activities so that they can be delegated to team members to implement.
ii. Delegation & Team Building:
An important aspect is to delegate the divided activities to individuals and their
teams. For example, the National Sales Manager will delegate the appointment of
stockists to the various Regional Managers who in turn will delegate to provincial
Managers and they in turn will delegate to District Sales Managers who may even
involve the Sales Representative.
iii. Coordination & Communication:
The Project Manager must be responsible to report to superiors and have a
constant dialogue with those below to ensure they are correctly briefed and
apprised.
iv. Monitoring & Control:
It is the responsibility of the Project Manager to ensure that work is going on
smoothly and that any problem that may arise is taken care of with the least
delay.
v. Resolving Problems:
Even in the best of plans unforeseen problems may arise as we deal with the
external macro and micro-environment of which we have no control. In such
events the Project manager may seek counsel from his superiors, handle them
himself or delegate responsibility to a team member to resolve it
vi. Quality Control:
The Project Manager must ensure that throughout the implementation of the
project that quality is maintained. Often there is the tendency to meet time
schedules and compromise on quality, which must be avoided. The top
management must provide leadership to ensure quality is maintained and
employees at all levels must be made to understand the importance of quality
through internal marketing and ensure quality is maintained at all times. Quality
ensures profitable markets and profitable markets ensure job security.
8. Project Planning Tools:
i. Schedule of Activities – This will ensure that each job is performed as and when
scheduled. It will minimise the constraints on resources and performance.
ii. Estimate of Time – The time duration for each sub-unit of work, earliest work
must be started in each unit and the latest it must be started.
iii. Gantt Charts – An easy plan for a project is made on a bar line chart or Gantt
chart. It can be used as a progress control chart with the lower section of each bar
being completed as the activity is undertaken.
9. Managing Change:
The fundamental aspect of any business is to ensure that it manages the velocity
of change external to it internally by responding and acting. To prepare a business
for the future it must keep abreast with the influences of the macro and micro-
environment, which would result in the need to effect, change internally. A
business must adapt and modify to survive in a changing environment, upon
which it has no control. The external environment offers the organisation threats
as well as opportunities. The business must respond with internal change to meet
them and maximise on its strengths and mitigate weaknesses.
10. Aspects of Change:
i. The Environment – There could be changes effected by competitors, customers’
buying behaviour, changes in the law of the land, societal changes like
unemployment or an aging population, attitudes and economic changes like
inflation or even boom, the latter may need very different thinking and strategy.
ii. Product and Service Portfolio – They are provided according to the needs of the
market and with a constant response to competition and changes in technology.
iii. How Products are made and Services are provided – It is important to respond
to the legal needs when manufacturing products and providing services. Pollution
control in a factory and hygiene in a restaurant are areas that may need change,
for the general welfare of humans.
iv. Corporate Relations – Maintaining leadership, employee relationship, provides
training and continuing professional development needs constant adjustment in
corporate relations.
v. Organisational Structure – Changes by having new divisions, SBUs,
centralisation or decentralisation are some aspects of adjusting organisational
structure.
11. Questioning the Effectiveness of Change:
i. Influence of Change on Marketing Goals and Objectives – Has change
contributed to marketing goals and objectives of the Plan?
ii. Success of Change in Meeting Marketing Goals and Objectives – Can change
solve problems?
iii. Response of Internal People – Can change initiate better customer care, team
spirit, attention to detail, output, performance and commitment?

Marketing Planning – Benefits

Formalized marketing is an institutionalized process designed to work out and
write down in advance the particular competitive stance that the company plans
to take. This system will ensure that the company’s hopes for the future are, and
remain, realistic, relevant and widely understood.
In one study, 90 per cent of the industrial goods companies involved did not, by
their own admission, produce anything approximating to an integrated,
coordinated and internally consistent plan for their marketing activities.
Significantly, this majority included a substantial number of companies with highly
formalized procedures for marketing planning. Marketing planning procedures
are most valuable when they culminate in a marketing plan.
Companies find that formalized marketing planning produces the following
benefits:
1. Coordination of the activities of many individuals whose actions are
interrelated over time.
2. Identification of expected developments.
3. Preparedness to meet changes when they occur.
4. Minimization of non-rational responses to the unexpected.
5. Better communication among executives.
6. Minimization of conflict among individuals that might result in a subordination
of the goals of the company to those of the individual.

Marketing Planning – Barriers

As a rule, formalized marketing planning results in greater profitability and
stability in the long term and also helps to reduce friction and operational
difficulties within the organization. When marketing planning fails, it is generally
because companies place too much emphasis on the procedures and the resulting
paperwork, rather than on generating information useful to and consumable by,
management.
Also, when companies relegate marketing planning to a junior planner or
outsource the task, it invariably founders for the simple reason that planning for
line management cannot be delegated to a third party. The real role of the
planner should be to help those responsible for implementation to plan.
Failure to recognize this simple fact can be disastrous. Equally, planning failures
often result from companies trying to do too much, too quickly, and without
training staff in the use of procedures.
Barriers to implementing marketing planning may include:
(i) Weak support from chief executive and top management.
(ii) Lack of a plan for planning.
(iii) Lack of line management support (including hostility, lack of skills, lack of
information, lack of resources, inadequate organizational structure).
(iv) Confusion over planning terms.
(v) Numbers in lieu of written objectives and strategies.
(vi) Too much detail, too far ahead.
(vii) Once-a-year ritual.
(viii) Separation of operational planning from strategic planning.
(ix) Failure to integrate marketing planning into a total corporate planning system.
(x) Delegation of planning to a planner.
If some or all of these barriers are an issue in your organization, you may find it
necessary to combine the introduction of the planning process with a number of
training sessions. It is essential to get buy-in from the top, early on in the process.
MARKET POTENTIAL

The estimated maximum total sales revenue of all suppliers of a product in a

market during a certain period.
Market potential is the entire size of the market for a product at a specific time. It
represents the upper limits of the market for a product. Market potential is
usually measured either by sales value or sales volume. For example, the market
potential for ten speed bicycles may be worth $5,000,000 in sales each year. On
the other hand, the market potential for motorcycles may be 500,000 units each
year, which is a measure of sales volume rather than sales value. Keep in mind
that market potential is just a snapshot in time. It's a fluid number that changes
with the economic environment. For example, rising and falling interest rates will
affect the demand for products that are typically financed, like cars and houses.

Market potential is the valuation of the sales revenue from all the supplying
channels in a market. Market potential is the population that is interested in the
product/ service that is being made or offered by an organization. In other words,
market potential is the potential money making capability of a firm if it capitalizes
all advantages and everything goes its way.
Importance of Market Potential
It is very important for a new business to know and determine the market
potential of the product of service being offered. If the market potential is very
low then there is no point spending a lot of money on the product. One of the
most important aspects of market potential is the amount of business a product
can generate in future as compared to today. Companies can also evaluate
the market share of companies in the market. The most relevant question is the
target market growing for the offering. Market potential helps business plan
better and launch their products and services with better preparation. Depending
upon the overall market potential, companies can identify the sales potential, or
the amount of sales they would be doing in that identified market.
Determination of Market Potential
It is a subset of the total population, where market potential is the population, all
of whom can be potential consumers of the product or service. Market potential
is the maximum population which would be interested in the product / service,
and gives a good insight on the growth possibility as well.
Total market potential can be calculated in terms of units or money.
Factors for calculating Market Potential
There are various factors which are important for knowing the actual market
potential:
1. Total Size of the Market : This means the total value of customers or clients for
the particular offering. higher the number better it is.
2. Return on Investment : This would mean is the market profitable to invest in? A
market which would give a good return on the costs incurred would only lead to
good business today as well as in future.
3. Growth Rate of the Market : A target market may be good today in terms of
size and ROI but is it going to be rising in future as well? Hence the growth rate
and trends are very important for determining the market potential

4. Category Competition : How many and how big are the competitors for our
product/service?
5. Entry Barriers : Are there any real barriers to entry into the existing market?
e.g. Very high licence cost can be an issue
6. Political Environment : In international markets, the political environment
forms a very important factor in determining the market potential.
7. Internal Environment : Overall the market potential may be very good but the
question arises that are we strong enough to compete in the market with suitable
offering, cost, competition.
Hence, this concludes the definition of Market Potential along with its overview.

Seven Elements of the Domestic Marketing Environment

1. Cultural and Social Elements
Cultural and social norms are important marketing environment factors because
they influence the type of customers you target, the range of products you can
offer, and the way you communicate with the market. Cultural and social
influences shape a customer’s preferences and ways of doing business, so it is
important to understand and respond to the factors. Certain colors, for example,
have positive or negative significance for different cultural groups, so your
products and packaging must reflect those preferences.
2. Political and Regulatory Issues
Your marketing strategy must take account of the domestic political and
regulatory environment. Politicians and regulators may wish to impose
restrictions on certain industries to protect consumers, for example. They may
take action to reduce trade barriers and increase global competition, potentially
opening up your existing market to new competitors. Your products must comply
with any health, safety and other type of legislation that relates to your industry.
3. Current Economic Conditions
Prevailing economic conditions in the country are among the most important
elements of marketing environment because they have a direct impact on your
marketing program. During a recession, for example, consumers and businesses
have less to spend, reducing demand for many types of products and services.
Products that offer high value for the price will have a greater appeal during
difficult economic conditions. Economic prosperity provides a better environment
for marketing luxury goods or higher-priced versions of your product range.
4. Assessing the Competition
The level of competition in your marketplace influences your marketing strategy
and tactics. If you face strong competition in one sector, you can try to increase
your share by improving the price or performance of your products. Through
advertising and public relations – two components of an integrated marketing
campaign – you can announce these improvements to potential customers.
Alternatively, you may find it easier to withdraw from a highly-competitive sector
and focus on other sectors where you have a stronger competitive advantage,
either due to less competition or to different needs and desires of consumers in
that sector.
5. Range of Pertinent Media
The media infrastructure in the domestic market determines your options for
communicating with customers and prospects. Depending on your product and
your target audience, you may benefit from a wide choice of magazines and
newspapers; television and radio stations; and digital options such as internet
websites and social media. The increasing diversity of media will enable you to
select the media that reach the greatest number of prospects at the lowest cost.
6. Logistics Elements of Marketing Environment
Marketing and logistics work hand-in-hand. When your marketing encourages
customers to buy your products, you need to get them to your customers in a
reasonable amount of time. If you don't, their overall customer experience will
suffer and they may not purchase from you again.
To reach your domestic customers in a timely manner, you need a well-developed
logistics infrastructure. A strong network of retailers or distributors is important if
you market your products through indirect channels. If you market your products
throughout the country, a national logistics infrastructure of warehouses,
distributors and transport operators will help you to access your market easily.
7. Ever-Changing Technology
The technology infrastructure influences the domestic marketing environment in
a number of ways. It can provide an important communication channel, enabling
you to market your products through a website or via email. If you supply digital
products or services, you can use the Internet to distribute them. Technological
advances over the past decade resulted in the explosion of social media, which
advertisers are increasingly using as an additional way to reach current and
potential customers.