The American Marketing Association has defined the marketing planning as – “Marketing planning is the work of setting up objectives for marketing activity and of determining and scheduling the steps necessary to achieve such objectives”. Thus, under marketing planning first of all marketing objectives are set-up and then marketing activities like – purchase-sale, product planning and development, advertisement, sales-promotion and scheduled policies and programme to carry out these activities are prepared.
(i) Long-Term Marketing Planning:
It refers to that marketing planning which is done for more than one year. It involves development of basic objectives and strategy to guide future company efforts. These long-run plans provide the framework within which other short-term plans are prepared and implemented. These plans are generally done by the top management. It involves the selecting of marketing research programme, selection of channel of distribution, selection of price policy, selection of media advertising and sales promotion etc.
(ii) Short-Term Marketing Planning:
Planning made for less than one year for marketing activities refers to short-term marketing planning. Generally, these are annual or bi-annual plans of the company. In fact, these short-run plans are not possible in absence of the long run plan. These plans are made to solve problems of recurring nature. Short-term marketing planning is the responsibility of medium level of management.
There are number of factors that affect the marketing planning of an organization.
These factors can be grouped under three categories as:
(i) Internal Factors:
Internal factors are those factors which arise in the organization itself. It includes size of the company, risk bearing capacity of the company; financial resources of the company; organizational structure; availability of experienced marketing personals and channel of distribution etc.
(ii) Industry Factors:
Every firm is a part of total industry. Any change in factors related to industry also affects the organization. Various industrial factors are technological changes in industry; severity of competition in industry and relationship between organization and industry etc.; which affect marketing planning of an organisation.
(iii) Natural Factors:
Certain natural factors like population and its regional distribution; National income and regional distribution; regional development in the country; State of national economy; industrial policy in the country and trade policy of country etc. also effect the marketing planning of an organization.
Marketing planning is concerned with the identification of resources available and allocating these resources to achieve organizational objectives. This task of identification and allocation of resources is not the easy task. Some thinkers state that it is waste of time, energy and money. They argue that as planning is concerned with uncertainty, then how planning can be cent per cent correct. The idea behind this thinking is perhaps the difficulties which arouse during marketing planning.
Some of main difficulties of marketing planning are:
One of the greatest difficulty in marketing planning is the availability of number of alternatives to solve a problem. Every alternative has its own merits and demerits. Moreover, every alternative gives different results. It is very hard to select that alternative which is best for the organization. In this way, diversity of alternatives present difficulties in marketing planning.
2. Rapid Change in Cost:
The cost of producing a product is not fixed; it changes as the time changes. It makes frequent change in price of product, which has direct effect on the demand for the product. It in turn has influence on the objective of marketing planning. Therefore, frequent and rapid changes in cost is also a hurdle in the way of marketing planning.
3. Time Consuming:
Another handle in the way of marketing planning is that, it is time consuming process. Time managers always complain about lack of time, while preparing scientific plan for the organization which requires time cum efforts to analyse and evaluate available time.
4. Difficulties of Marketing Research:
Every marketing planning is based on marketing research about consumer behaviour which is very uncertain especially in India. In fact, in certain cases it is impossible to forecast. In absence of accurate forecasting, marketing research become difficult and unreliable, this in turn makes marketing planning a useless effort.
5. Inadequate Management Ability:
Marketing planning involves the great ability and intelligence of marketing manager and staff. Unfortunately in India, there is lack of trained marketing professionals. Latest study says only 21% of MBA are useful. Thus, lack of inadequate managerial ability is another hurdle in way of marketing planning.
Another difficulty in marketing planning is that it involves huge expenditure because it involves extensive marketing research. It needs lot of time, energy and money and thus, increases the cost of marketing planning. Most of the companies are not in a position to bear these huge expenses and hence, do not go for marketing planning.
7. Frequent Changes in Government Policy:
Frequent change in the government policies is another difficulty in a way of effective marketing planning. In India, especially frequent changes are made by government and its policies. Sometimes, it encourages export at other time restrictions are imposed an export. Rate of taxation changes frequently which affect the price level, which in turn influence the demand and supply position of an organization.
Different companies adopt different organizational structure which suits them. The marketing planning, thus in different organizational structures are different.
In broad category these structures can be:
a. Product oriented organization.
b. Customer oriented organization.
c. Market oriented organization.
d. Function oriented organization.
a. Product Oriented Organization:
Under product oriented marketing organization, marketing plans for each product is made separately. In these organizations plan for each product is set separately and then detail programme for achieving these targets are made. In such planning amount to be spent on advertising, sales promotion, product development, market research etc. are fixed for each product. In same way decisions are taken separately for each product regarding its distribution and marketing etc.
b. Customer Oriented Organization:
This type of organization is based on the different characteristics of customers. Separate marketing plans are prepared for each class of customers. The objectives and goals of the organization are set keeping in view the characteristics of each class of customers and decisions regarding advertising, sales promotion, pricing, distribution etc. are made accordingly.
c. Market Oriented Organization:
These are those organizations in which different target for different regions are fixed and programmes are prepared to achieve these objectives or targets. In this type of organization decision regarding advertising, sales promotion, distribution channels and pricing etc. are made keeping in view the nature and intensity of competition in each region.
d. Function Oriented Organization:
Under this type of organization marketing planning is based on the functions. In this organization whole marketing department is divided into different functions or activities like – marketing research, product planning and development, advertising and sales promotion; and physical distribution etc. There is separate head in each department, who makes plan for each department.
Process of Marketing Planning:
Philip Kotler, has pointed out that while preparing marketing plan the following situation should be considered:
The planning process begins with an attempt by the organization to size up the present market situation and the factors responsible for it. In simple words, diagnosis consists of where the company stands and why. The size up requires developing data on absolute levels of company’s sales; market share and their recent trends, by-products etc. Certain supplement data like – marketing cost, plant utilization; profit level etc. are also required for diagnosis.
Only diagnosis of present position is not sufficient for good marketing planning. The company must also estimate where it likely to go if present market trend continues. What sales and profit it makes in long- run. Prognosis helps in indicating future of the company i.e. bright or dark. If it seems to be bright, the present policy should be continued, but if future is dark, the planning needs modification so as to achieve objectives set.
If the prognoses indicate that there is no possibility of future sales and profit for company, then the company should decide upon fresh objectives so as to maintain sales and profit in future.
Strategy lays down the broad principle by which company secures an advantage over its rivals or attracts buyers and fully exploits its resources.
The marketing strategy may be:
(a) To develop highest quality product.
(b) To charge a premium price.
(c) To advertise more than competitor etc.
There may be several alternative strategies available to the company. The company must carefully analyse these strategies and choose the best one under the circumstances.
How to use the company’s strategies to achieve the objectives is done by tactics. In other words, tactics are the methods for carrying out the strategies.
Control is the essential part of the marketing planning. Without control it is not possible to know whether objectives are going to be achieved or not. Often new events occurs that challenge some of the basic assumptions in plan. The control helps in countering these challenges. Through control variations are discovered and new changes are made in plan to remedy the shortfall if any.
Importance of Marketing Planning:
1. To Offset Future Uncertainties:
Future is always uncertain. It may impose Marketing Planning challenges for the organization. An organization can face these challenges effectively and uncertainties efficiently by use of marketing planning. A careful analysis of present situation and trend helps the organization to set future objectives and goal more correctly. Thus, by means of Helpful in preparing strategies and programme for future, marketing planning helps in offering future control uncertainties.
2. Economy in Operation:
Marketing planning also helps in achieving maximum results with minimum efforts and with maximum utilization of human and physical utilization of organization resources. Thus, it brings economy in various functional areas of organization like production, sales, purchase, financing etc.
3. Helps in Co-Ordination:
Marketing planning helps in coordinating different activities of different departments. Planning co-ordinates activities of different departments in such a way that overall objectives and goal of the organization are achieved.
4. Helps in Control:
Planning and controlling are two sides of a coin. They cannot be used separately. The standards are set and then actual performance is measured to find out whether the standards are achieved or not. Any unfavourable variation is removed in next plan. Hence, planning is very useful for control.
5. Consumer’s Satisfaction:
Every organization wants to achieve its objective by satisfying its customers. Under marketing planning, actual needs and wants of customer are studied properly and then after the products are developed. Thus, it helps in satisfaction of consumers by channelizing marketing activities in proper way.
6. Helps in Achieving Organizational Objectives:
Marketing planning by means of setting standards and evaluating performance increases organizational efficiency, which in turn helps an organization to achieve its objectives.