1. Assess the main barriers to marketing planning.
2. Examine how organisations may overcome barriers to marketing planning.
3. Explain why marketing planning is essential in the strategic planning process for an organisation.
4. Examine techniques for new product development.
5. Using a well known company of your choice, justify recommendations for their pricing policy, distribution and communication mix.
6. Explain how factors affecting the effective implementation of the marketing plan have been taken into account.
7. Explain how ethical issues influence marketing planning.
8. Analyse examples of how organisations respond to ethical issues.
9. Analyse examples of consumer ethics and the effect it has on marketing planning.
Marketing planning is the process that helps businesses identify and develop goods and services that will meet the needs of their target market (Baines, et al., 2013). It involved development and implementation of a plan that helps identify, anticipate and satisfy consumer needs such that it makes the business profitable. Marketing planning process focuses on the development of a marketing plan which is a business document that describes existing market position of the organisation and its marketing strategies for a definite period of time (Beamish & Ashford, 2006). It describes the overall marketing objectives of the organisation and defined activities that will be performed to achieve desired objectives.
1. Primary barriers to marketing planning
The prime function of marketing is to identify and create a competitive advantage for the organisation (Blythe, 2013). Marketing planning in very simple words is defined as the logical sequence and series of activities that enable setting marketing objectives and formulating plans that help achieving them (McDonald, 2009). Before analysing the primary barriers to marketing planning it is important to analyse why marketing planning is necessary. Marketing planning helps increasing complexity, turbulence and thus competitiveness. It helps keeping pace with rapid technological changes. It helps organisations identify various sources of competitive advantage, force and organised approach and ensure consistency on relationships (McDonald, 2009). It helps keeping superiors well informed and providing support to non-marketing functions. It helps subordinates in obtaining resources, gaining organisational commitment and defining strategies and objectives.
A number of factors acts as barrier to effective marketing planning namely; confusion between marketing tactics and strategies, keeping marketing functions and operations separate for each other, confusion between marketing concepts and marketing functions, in-depth analysis is missed, needed knowledge and skills are lacking, there is a confusion between output and processes, objectives have not been prioritised, there is no systematic approach to marketing planning, corporate culture is hostile and organisational barriers (Blythe, 2013).
These barriers to effective marketing planning can be put into six broad categories. Cognitive wherein there is lack of enough knowledge about marketing planning, cultural wherein the workplace culture lacks orientation for marketing planning, political wherein leaders and top management of the organisation is afraid of marketing, resources wherein the organisation fails to allocate enough resources to marketing, structural wherein the organisation lacks effective plan for marketing and there is a lack of effective MIS (McDonald, 2009). It is important to ensure that these barriers are tactfully handled in order to achieve desired marketing objectives.
2. Methods of overcoming barriers to marketing planning
Nigel Piercy (2001) opines that the “real strategic problem in marketing is not strategy; it is managing the implementation and change”. Marketing planning process involves development and implementation of a new plans, different approaches and new processes which are all elements of change (Beamish & Ashford, 2006). As marketing planning brings about considerable changes it calls for effective change management to handle and minimise different barriers to effective marketing planning (Hiatt & Creasey, 2003). There are a number of ways by which organisations can overcome barriers to marketing planning and minimise the effects of change.
Need for Strong and Committed Leadership: Effective leadership plays a vital role in marketing planning process (Barker, et al., 2012). They must act as effective communicator, facilitator and motivators in order to ensure that the formulated marketing plan is effectively implemented by minimising the affects of barriers. It is important to ensure that the organisations leaders not only show high level of commitment towards the processes but also do all possible attempts to influence the commitment of their followers. In order to achieve overall high organisational commitment leaders must ensure that a long-term vision has been created, required resources have been effectively allocated, solutions found are promptly implemented and resistance to change is managed reflectively (Brady, 2010). Thus effective leadership with high commitment is essential for successful marketing planning.
Developing and customer-focused and marketing oriented work culture: Marketing concepts focuses on identifying the needs and wants of the target customers in target market and offering products and services that satisfy those needs and wants more efficiently and effectively as compared to competitors (Czinkota & Ronkainen, 2012). In today’s dynamic market place survival and success both depends on the degree to which customer’s needs are being satisfied. In order to make an organisation (Barker, et al., 2012) marketing oriented it is important to ensure that the complete focus is given to customer needs and wants and formulating ways to meet those needs. The five main key facets of marketing orientation are; customer orientation, organisational culture, competitor orientation, long-term profits and integrated functional co-ordination (Beamish & Ashford, 2006). In order to ensure that a customer-focused culture is developed it is important to ensure that innovation is greatly valued, leadership is not seen as a function but an activity, rewards and values are shared, knowledge sharing and learning organisation is developed and employees are empowered.
Develop a supportive and effective marketing structure: It is important to ensure that the marketing structure is effective enough to support the needs of various marketing functions and other operations (Dibb & Simkin, 2007). Marketing functions must not be isolated from operations and must go hand in hand to achieve desired objectives.
Allocation of financial and human resources: It is essential to ensure that financial and human resources are effectively allocated to marketing process in order to achieve desired objectives (Ferrell & Hartline, 2012).
Internal marketing: Internal marketing focuses on the relationship between the organisation and its internal customers that is its employees. Internal marketing programmes must emphasize on bridging the information gap between strategy development team and other employees in order to ensure that directions of the organisation are effectively communicated to all. It helps making the organisation customer-focused and marketing oriented. A successful internal marketing programme breaks down the different barriers to planning and minimising resistance to change. Similar to an external marketing plan it requires creation of a vision, defining goals and objectives, marketing strategy, segmentation, targeting and positioning, defining adequate marketing mix, implementation and regular evaluation to plan improvements. Defining an effective internal marketing plan greatly helps reducing barriers to effective marketing planning.
Measurement and control mechanisms: Organisations must ensure that they have adequate control and measurement mechanisms in place to evaluate the outcomes of marketing planning activities. It helps planning continuous improvement in making strategies thus enhancing its effectiveness and efficiency.
3. Significance of marketing planning in the strategic planning process for an organisation
Strategic planning is a process in which an organisation formulates and implements a plan to achieve desired organisational goals (Abraham, 2012). It helps an organisation define its strategies or directions and allocate available resources in a way that support their strategies (Ansoff, 2007). Strategic planning process starts with the identification and creation of organisation’s mission and objectives, conducting a situation analysis that help formulating strategies, implementing formulated strategies and ensuring continuous control (Blythe, 2013). The primary objective of strategic planning process is to develop overall direction for an organisation and create its shape such that the goods and services offered by the organisation satisfy needs and wants of the target market, thus achieving business objectives.
Marketing planning plays a vital role in strategic planning process because it helps the organisations identify, articulate and satisfy customer needs (Blythe, 2013). Marketing planning helps organisations understand their customers better and identify their needs and wants. Customer today forms the heart of all business strategies and it is important to ensure that all strategies are formulated keeping customers requirements in mind (Blythe, 2013). Marketing planning help in understanding customer buying behaviour that influence their buying decisions. It helps analysing the factors that affect customer activities and preference in the market place. Customer today has dynamic needs which must be satisfied by organisation in order to survive in a highly competitive marketing environment. Marketing planning helps identifying sources that can be used to develop, maintain and retail firm’s competitive advantage (Abraham, 2012).
Marketing planning thus develops the base on which strategic planning process is carried out (Ansoff, 2007). It provides an organisation with complete understanding of their target market so that strategic plans can be formulated to develop products and services that perfectly match and at times exceed customer expectations. Thus, effective marketing planning is the most important aspect for effective strategic planning process. It helps formulating mission, objectives and strategies in a way that complete organisational focus remains on being a customer-oriented organisation.
4. Techniques for new product development-300
New product development is a marketing strategy that involves developing new products or making considerable improvements of existing products so that they appear new, these products are then offered to existing or new target markets (Mascitelli, 2007). Leadership, organisational structure and team building are the three elements that are essential for quick and efficient introduction of new products (Varley, 2006). New product development strategies and techniques can be divided into five broad categories namely; Product development diversification strategy wherein an organisation thinks beyond its existing business and develops a completely new product for a new market owing to high saturation of their existing market (Mascitelli, 2007). Product modification strategy involves modifying the existing products that are offered to existing markets with an aim to capture new users (Mascitelli, 2007). Revolutionary product development involves creating products for which there was no prior real need (Mascitelli, 2007). Benchmarking the process involves choosing a specific strategy for careful new product development (Mascitelli, 2007). Consumers’ front and centre involves selecting a specific strategy while ensuring consumer remains the front and centre and is involved in the process from beginning to end (Mascitelli, 2007).
New Product development is a seven steps process as shown in figure below;
Fig.1. Source: Czinkota & Ronkainen (2012)
The process starts with generation of ideas which are screened and evaluated to select a specific idea. Business analysis is performed to analyse the availability of finances and other resources that are to be allocated for the new product development. Once the analysis is complete comes the atual process of development. Test marketing startegies are then implemented on the new product and once the output is evaluated starts the actuall process of commercialisation.
Brainstorming and Bracket are two commonly used techniques used in the new product development (Varley, 2006). Understanding customer priorities is the most important step in new product development and brainstorming and bracket are the two techniques that help in better understanding of customer needs. When the customer priorities increase in number and complexity, organisations need to cut through the clutter and identify what the customer truly want by using bracket technique.
5. Recommendations for pricing policy, distribution and communication mix for McDonald’s
McDonald’s Corporation started in year 1940 as a barbecue restaurant today is recognised as world’s largest chain of hamburger fast food restaurants (McDonald's, 2015). The company has around 35,000 outlets in 119 countries where they serve 68 million customers every day. In order to meet the needs of the health conscious section of the consumer market the company is looking forward to launch of a new product ‘McWheat’ which will use buns made of wheat flour instead of all purpose flour. The pricing policy, distribution and communication mix for McWheat is shown below:
Pricing policy: It is a policy that helps an organisation define prices for its products and services based mainly on marketing research and competitor analysis (Baines, et al., 2013). McDonalds offers a cost advantage to its customers. It offers products at a very low price that are unmatched by competitors. This pricing policy helps McDonalds in attracting lower and middle class individuals. It uses bundling strategy like happy meal, combo meal and family meal to increase total sales of products and services. For its new product McWheat McDonalds can charge a bit higher than the products that use all purpose flour owing to the associated health benefits of wheat flour bun.
Distribution: It is essential to ensure that the offered products are available to customers at right time, right place and in right manner (Brady, 2010). Distribution of a product is not only concerned with the distribution locations and physical points of the product but also with the management of processes that are involved in bringing the products to end customers. McDonald’s products are offered through their own outlets or franchisee outlets only. Their outlets are evenly distributed throughout the cities they are located it. Drive through and drive in options is provided to further make product availability easier for customers. There new product McWheat will be available in their outlets and franchisee outlet as all other products.
Communication Mix: The marketing communication mix is the mix of marketing techniques used by an organisation to achieve its marketing objectives (Dibb & Simkin, 2007). Some of these techniques are advertising, sales promotion, personal selling, direct marketing and public relations. McDonalds is recognised worldwide for its unique communication mix. They make huge investment in marketing techniques like advertising on TVs, radios, social media etc, sales promotions, public relations and personal selling. McWheat will be promoted as a health food options through various marketing channels and techniques.
6. Factors affecting the effective implementation of the marketing plan
Factors affecting the effective implementation of the marketing plan can be categorised under two broad categories namely; internal factors and external factors. Effective leadership, organisational structure and team building are the three main internal factors that affect implementation of marketing plan (McDonald, 2009).
External factors affecting implementation of marketing plan are; changes in demographics of the target market, existing and predicted economic conditions, prosperity, size and growth potential of the target market, market potential depicting strengths and weaknesses of prime competitors, market share and factors that can change it and current customer composition that depicts their age, education, buying capacity, occupation, income level, interest etc..
It is important to ensure that organisations take into account both internal and external factors when implementing their marketing plan
7. Influence of ethical issues on marketing planning
The study of a behaviour being right or wrong is called ethics (Fisher & Lovell, 2006). Marketing ethics focuses on the studying right and wrong behaviour involved in the formulation and implementation of marketing tactics and strategies. In today’s competitive marketplace ethics is concerned as important aspect in creating positive public image, maintaining customer relations and achieving desired marketing goals (Keen, 2012). Marketing has been criticised for performing number of unethical activities that have adverse effects on the society, resulted in environmental damage, and exposed children to advertisements that did not match their maturity levels, created unnecessary wants, made exaggerated product claims and resulted in selling of products that were not safe.
Ethics is not only important to develop and retain a positive brand image but it also affects the marketing mix and the entire marketing planning process (Fisher & Lovell, 2006). It is important to ensure that products developed meet the needs of the customers in a legal and ethical manner. There should not be false display for benefits covering for harmful effects. Pricing strategies must be formulated in an ethical manner ensuring that prices do not far exceed the associated benefits delivered by the product (Keen, 2012). Gifts and incentives demanded by distributors and transports is an important ethical issue involved in distribution of goods and services that affects marketing planning. It is important to ensure that promotional messages meet ethical and legal standards. They should not make false claim and analyse its affects on the audience. Thus, ethical issues have a considerable impact on marketing planning.
8. Examples of how organisations respond to ethical issues
In order to respond to the ethical issues organisations ensure that their planning process takes into account environmental and social issues. About 5000 organisations in year 2010 published their corporate social responsibility reports. Starbucks is recognised as one of the ‘world’s most ethical organisation’. Starbucks respond to ethical issues by ensuring 100% of their coffee is sourced ethically. They support farmers by offering farmer loans of around $20 million (Starbucks, 2015). McDonalds has always faced ethical criticism related to selling of unhealthy and fatty foods adding to the world’s obesity problem. McDonalds respond to these issues by improving and increasing nutritionally balanced menu options, offering salads and enhancing customer access to nutrition education and information. McDonalds in year 2013 packed its products in packages that carried QR codes that help consumers can choose from informed dieting choices.
9. Analysis of examples of consumer ethics and how they affect marketing planning
Consumer ethics or ethical consumerism emphasizes on purchasing goods that are produced ethically and impose no harm on the society and environment (Czinkota & Ronkainen, 2012). Some example of ethical consumerism is buying free-range eggs, boycotting products that were produced by child labour and demanding a stop on the production of goods that use animal skins. Consumer ethics has huge impact on marketing planning and help organisations ensure that their products and services are developed and marketed in most ethical manner.
An excellent example of consumer ethics is the rapid decline in consumption of soft drinks worldwide owing to various unhealthy side effects associated with their consumption. This decline has greatly affected revenues of companies like Coca-Cola and PepsiCo forcing them to provide healthier options to their consumers (Brady, 2010). With an increase in health education and awareness consumer today are becoming more health conscious and are changing their preference to healthier food products. Owing to this change in consumer perception Companies like McDonalds, Burger King and Dominos are forced to reframe their marketing strategies and tactics (Keen, 2012). In year 2012 in response to a boycott represented in the US campaign for Safe Cosmetics Johnson & Johnson had to reformulate its products in order to remove a formaldehyde-releasing preservative (Keen, 2012). These are some examples of consumer ethics and how they impact marketing planning.
Effective Marketing planning is essential for the development and implementation of the marketing plan that documents activities to be performed in order to achieve desired marketing objectives. Effective marketing planning enable organisational identify resources that help them develop, maintain and retain competitive advantage. Marketing planning plays a vital role in strategic planning process helping organisations formulate strategies and not only meet but exceed customer expectations.
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