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Marketing is a critical determinant of an organization's overall success. Without a marketing strategy, it is hard for an organization to survive in the ever-competitive contemporary business environment. Marketing is the communication of a company with its customers aimed at raising the awareness of an organization's products and it profile in the customers’ minds. For a marketing strategy to succeed, it is imperative for a company to have a marketing plan in place. This paper aims at defining a marketing plan, discussing the key components of a marketing plan as well as its importance to an organization.
Marketing Plan Definition
A marketing plan is a document formulated by an organization’s marketing department to communicate the marketing strategy for an organization's offerings. A marketing plan has several purposes. These include influencing executives', suppliers, distributors, and other stakeholders of an organization so that they could have the vision the successful implementation of the plan (Tanner & Raymond, 2013).
Components of a Marketing Plan
Since a marketing plan serves to steer the direction of all other departments in an organization, it is important for a marketing plan to be well outlined. To achieve it, the plan is divided into several components, with an executive summary being one of them. According to Tanner and Raymond (2013), an executive summary is a statement written not in a technical language and meant to encapsulate the purpose for writing the marketing plan. The executive summary is written on the very first page of a marketing plan, and it should be brief. A company's executives would want a short overview of what the market plan will contain (Tanner & Raymond, 2013). The executive summary should summarize the marketing plan so that within a short span of time, one could comprehend the marketing plan. Therefore, the business' executive should be in a position to make a sound decision based on the executive summary alone if the rest of the document is not available.
Apart from an executive summary, another crucial component of a marketing plan is the business challenge. Under this element, one is bound to answer why the marketing plan is of importance to an organization (Tanner & Raymond, 2013). The planner should be in a position to explain the offering and the reasons why someone should invest in this project. Since a marketing plan is supposed to be a persuasive document, the planner should be able to persuade the corporate executives, fellow employees, and even stakeholders of why the plan will be crucial and why they should invest their time and resources in the offering. Therefore, it is important while preparing a marketing plan that they answer the question of why the marketing plan is critical to an organization's success.
Another important part of a marketing plan is the market. The market section offers the information on the current competitors, business environment, and even the customer base for an organization's product. A market research is imperative so that reliable data could be acquired. Under the market component, an organization's customers are analyzed. Thus, such factors as the company's customers, their buying processes, and the needs the pertinent offering will help them satisfy are considered (Jain & Haley, 2009). Furthermore, an analysis of the business's strengths and weaknesses is conducted, answering such questions as how customers perceive the company's products, how it will achieve a competitive advantage, and why the company is well positioned to utilize the opportunity outlined in the business plan.
In addition, an organization’s potential partners are analyzed. An organization can work with these partners to achieve the plan's objectives. The organization's competitors are also analyzed; the key steps that they might take in response to the marketing plan are examined. The marketing plan also analyzes the current macro and micro business environment (Westwood, 2013).
A strategy is also a key component that must be included in a well-written marketing plan. The strategy section outlines the steps an entity will take to develop a market and even sell the pertinent offering. Here, the planner outlines compellingly what he intends to do, at the same time giving stakeholders a reason to work together to make the offering a success. One of the items that the strategy should address is the offering that includes the unique features and benefits that the offering will have. Such factors as pricing, after-sale product support, and the introduction of the offering should be addressed under the offerings segment (McDonald, 1989).
Additionally, the strategy segment should outline the offerings communication plan. This includes how the business will introduce a product into the market, and it will inform the existing customers of the new offering. According to Jain and Haley (2009), the communication plan should cover the advertising, sales, and event strategies that will be applied to sell the product. Under the strategy section, the marketing plan answers the distribution question. The strategy outlines how and where the goods will be distributed or sold, who will service and support the product, and even who will ship the product. In addition, the stock levels of the offering that an organization should maintain are addressed to avoid any shortages once the product is launched (Jain & Haley, 2009).
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A marketing plan would not be convincing without the budgeting component. In most cases, the introduction of a new product requires the investment of new resources. There might be a need for the additional staff, additional equipment, or even production facilities that are located in different locations. The redeployment of existing resources to a new location for the introduction of a new offer would also accrue additional costs to an organization. Under budgeting, the costs associated with the development, manufacture, and launch of a new product on the market are outlined. Additionally, the costs that an organizations will incur to maintain an optimum inventory level are stated in the budgeting component (Westwood, 2013). Furthermore, the costs that will be incurred in supporting the customers on the products usage are estimated. An allowance for the costs incurred for goods or services that might be rejected by consumers, destroyed during transportation, or returned by customers should be estimated as well.
More to say, the budget segment of a marketing plan contains the projected sales and profits after the introduction of the new product. For example, the costs that will be involved in maintaining a sales team, marketing, and promoting an offering are factored. Additionally, the budget addresses timelines - when the costs stated will be accrued and when the profits will be realized. Timelines of how the product sales will grow are also projected under the budgeting segment.
A conclusion is the last component of a marketing plan. It usually summarizes the key concepts and ideas contained in the marketing plan as well as the key elements of the plan, such as the offering, strategy, and budget. A marketing plan is meant to be a compelling tool; thus, the conclusion of the marketing plan should be very convincing (Westwood, 2013).
Importance of a Marketing Plan to a Business
A marketing plan is necessary for an organization to be able to grow in the contemporary business environment. A marketing plan enables an entity's executives to make investment decisions. Without a marketing plan, a company's management would make blind decisions on whether they should invest in a new product or service. Therefore, the executives take advantage of the forecasts contained in the marketing plan to make their budgeting decisions. Thus, the marketing plan affects the decisions the management makes concerning the procurement, manufacturing, finance, and even production departments (Tanner & Raymond, 2013).
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Tanner and Raymond (2013) further assert that an organization's sales department relies on the information contained in a marketing plan to be able to plan their activities. They can design their sales strategy based on the contents of the marketing plan. For example, through the forecasts contained in a marketing plan, they determine by how many people they can increase their sales force.
Furthermore, other stakeholders such as the adverting agencies employed by an organization usually rely on the contents of a marketing plan to develop promotional materials for a new offering. In addition, potential suppliers and distributors often use the marketing strategy to plan the stock levels of the new product that they will make. They also use the forecasts to analyze if the new offering will have returns (Tanner & Raymond, 2013).
Therefore, a marketing plan is an imperative document in the day-to-day running of a business and it usually determines the profitability of a company’s new offerings. For it to be comprehensive and persuasive, it should contain an executive summary, business challenge, market analysis, strategy, budget, and a conclusion. A marketing plan enables a business to make investment and management decisions soundly. In addition, stakeholders rely on the contents of a marketing plan to make their business decisions regarding a company’s new offering. Suppliers and distributors, for example, use the marketing plan to plan their inventory levels, cash flow requirements, and logistics with regard to an expected new product from a business.