Things that SMEs should know about the Marketing Plan

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Things that SMEs should know about the Marketing Plan

Marketing Plan Appraisal Blog

Being a small business representative myself, I entirely share the concerns and fears of SMEs’ owners related to the issues in strategic planning. One is always up against the clock, while lacking human and technological resources to plan effectively, let alone lacking the knowledge of where to start.  Ample research demonstrates that step-by-step strategic planning is as helpful to the small business as it is to the global corporation, and here is some hints on how to create your own strategic marketing plan (which, by the way, would already be a big part of your overall business planning process).

As a document, the marketing plan describes both the marketing strategy and the tactics used to achieve your goals. Being tightly connected to the overall strategy of the organization, the marketing strategy starts with the company’s mission and is present in all parts of the strategic-planning process, including implementation of the product or service to the market and receiving feedback (Kotler et al., 2013, p. 45)

The marketing strategic planning is divided into three parts where the first part corresponds to the market ‘intelligence’ including the description of target market, measuring its main characteristics such as size, behaviour and structure; the forecast of estimated market share, sales and possible profits; and, the formulation of product positioning relatively to its competitors (Kotler et al., 2013, p.541). This is a time of ‘establishing the goals and objectives’ (Luke 2013). A thorough analysis at this stage is important from both a marketing and sales perspective, as the projections for growth and profits are set up at this moment by marketers based on expectations of sales growth. As much as marketing might be projecting certain amounts, the sales force, who are in the end responsible for ‘closing transactions after marketing begins the process’ (Arthur, 2017), might not be committed to the delivery due to high expectations set up by the sales plan.  

The second part of marketing strategic planning would be concerned with establishing the price for the product or service, choosing the way of distribution, as well as setting up the budget for the year (Kotler et al., 2013, p. 541). At this stage, it is important to create the plan of promotional activities (if there are any) as they very often represent the biggest part of the marketing budget, which, in turn, is based on the amount of annual revenue. There are many opinions on how much financing should be provided to cover the marketing activities, but depending on the stage of development of the organization and its financial situation, it is reasonable to expect this number to be somewhere between 1.2 to 5.3 percent of a company’s annual revenue (AngieHerbers.com as cited by Luke, 2013).

The third part of the planning process should consider the long-term plans of the company regarding their prospective product or service. This analysis would allow the company to make estimations of the future growth of the market-share and revenue, but most importantly would prepare the business for the possible ‘unexpected’ situations such as toughening competition, the need of further improvement or modernization of the product, changes in the budget, etc. (Kotler et al., 2013, p.45). This third part of marketing strategic planning is similar to the general business strategy and corresponds to ‘Horizon 2-3’ (medium-long and long-term planning) (Johnson, 2015).

Just like any other plan, the ‘must-have’ parts of this document would include establishing the goals, setting up the strategies and the tactics (it is important for marketers to remember that marketing is not only about ‘what to do’, but most importantly about ‘how to do it’ (Lane, 2000) or how to get there), creating the budget and the schedule that would allow the managers to better measure the results and receive feedback.

The marketing plan is not a static document, and the correct structure would enable the company to quickly adjust to the changing market environment as well as improve the chances to establish a competitive advantage. Everything may start with the setting up the right goals as the structured analysis would show the weak points and would force the company to concentrate their efforts in this area(s). For example, to increase the revenue (financial goal), as an additional, supplemental objective the company may choose to create the brand awareness. In this case, the managers will have to research the market, evaluate the competition, and complete the benchmarking of the companies in similar situations. Such measures will help the organization to be aware of challenges and develop strategies and tactics to set up the right path to obtaining a competitive advantage.

 

References:

Arthur, L. (2017) ‘The relationship between sales and marketing’ Bizfluent.com September 26, 2017. Available at https://bit.ly/2HidBR9   

Duermyer, R. (2017) ‘Steps to create a marketing plan. The what, why and how of a marketing plan’. TheBalance.com   July 2, 2017. Available at https://bit.ly/2qyGhLX   

Johnson, S. (2015) ‘How to master the 3 horizons of product strategy’ Aha!Blog September 24, 2015. Available at https://bit.ly/2EMINCo 

Kotler, P. & Keller, K., Sivaramakrishnan, S., Cunningham, P.H. (2013) Marketing management. 14th ed. New York, New York: Pearson, Chapter 12, pp. 305-329, Chapter 20, pp.525-550, Chapter 2, pp. 31-60.

Lane, S. & Clewes, D. (2000) ‘The implementation of marketing planning: a case study in gaining commitment at 3M (UK) Abrasives’, Journal of Strategic Marketing, 8 (3), pp.225-239.

Luke, K. (2013) ‘5 steps to a new marketing plan’, Journal of Financial Planning, 26 (12), pp. 20-21.

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