CIM revision cards marketing planning by karen beamish

Understanding Corporate PlanningPlanning is the establishment of objectives and the formulation, evaluation and selection of policies, strategies, tactics and actions required to achieve

Key concepts for revision

Helping you to pass your CIM exam

The CharteredInstitute of Marketing

CIM REVISION CARDS

Marketing Planning

Karen Beamish

AMSTERDAM l BOSTON l HEIDELBERG l LONDON l NEW YORK l OXFORD PARIS l SAN DIEGO l SAN FRANCISCO l SINGAPORE l SYDNEY l TOKYO

First published 2004

Copyrightß 2004, Elsevier Ltd All rights reserved

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TABLE OF CONTENTS

Preface iv

1 Introduction to marketing planning 1

2 The marketing audit 13

3 Marketing planning, implementation and control 23

4 Promotional operations 36

5 Product operations 49

6 Price operations 63

7 Place operations 71

8 Managing marketing relationships 84

9 International marketing 94

10 Industrial, business-to-business FMCG and services marketing 104

11 Not-for-profit, SMEs and virtual marketing 118

Welcome to the CIM Revision Cards from Elsevier/Butterworth-Heinemann We hope you will find these usefulwhen coming to revise for your CIM exam The cards are designed to be used in conjunction with the CIMCoursebooks from Elsevier/Butterworth-Heinemann, and have been written specifically with revision in mind.They also serve as invaluable reviews of the complete modules, perfect for those studying via the assignmentroute

n Learning outcomes at the start of each chapter identify the main points

n Key topics are summarized, helping you commit the information to memory quickly and easily

n Examination and revision tips are provided to give extra guidance when preparing for the exam

n Key diagrams are featured to aid the learning process

n The compact size ensures the cards are easily transportable, so you can revise any time, anywhere

To get the most of your revision cards, try to look over them as frequently as you can when taking your CIMcourse When read alongside the Coursebook they serve as the ideal companion to the main text Good luck –

we wish you every success with your CIM qualification!

INTRODUCTION TO

MARKETING PLANNING

L E A R N I N G O U T C O M E S

Explaining the synergistic planning process –

analysis planning, implementation and control

Listing the components of the marketing plan

Assessing the potential impact of wider

macroenvironmental forces relating to the role

of culture, ethical approach, social

responsibility, legal frameworks and

Understanding corporate planning

What is marketing strategy and the basics of agood marketing strategy?

The role and components of the marketing planand barriers to marketing planning

Unit 1

Understanding Corporate Planning

Planning is the establishment of objectives and

the formulation, evaluation and selection of

policies, strategies, tactics and actions required

to achieve them

n Corporate planning starts at the top of theorganization and impinges upon every aspect andevery division or department of the organization

n Corporate strategy and plans are clearly linked toachieve the mission and vision of the organization

n Each business unit has responsibility for thedevelopment of its own function plans

Understanding Corporate Planning

n The marketing department is often responsible for

the provision and collation of information provided

to support and underpin the corporate planning

process

n In order to succeed in strategy development, it is

essential that all departments work together in an

integrative and innovative way

n Business units that plan in isolation tend to do so

to the detriment of others!

REMEMBER!

-It is important for the purpose of theexamination to demonstrate an overallknowledge of the planning hierarchy and therole of corporate planning You should beable to demonstrate how the role andfunction of marketing underpins thesuccessful development of corporatestrategy and planning!

What is marketing strategy?

Marketing strategy – a strategy indicating the

specific target markets and the types of

competitive advantages that are to be developed

and exploited (Dibb, Simkin, Pride and Ferrell,

2001)

n Providing superior competitive advantage

n Making long-term investments in

organizational relationships

n Aim for 100% customer satisfaction – based

upon capability and motivated staff

n Management and staff commitment and alearning culture, open to change and innovation– with a focus on developing long-lasting andsustainable customer relationships

n Build effective supply chains and ITinfrastructure to deliver superior operatingperformance

The basics of a good marketing strategy

As a strategy marketing seeks to develop effective

responses to changing marketing environments, by

defining market segments, developing and

positioning product offerings for those target

markets – Webster, 1997 (from Hooley, Saunders

and Piercy,1998)

n Strategy development requires synergy across the

whole organization

n In order for the strategy to be successfully

implemented, it is important that there is

long-term commitment to developing long-term

The Marketing Planning Process

Barriers to marketing

n Culture – The existing culture may not be

amenable to marketing plans – culture neither

customer or marketing oriented

n Power and Politics – Organizations are subject

to internal politics, which often result in the

strategic planning process becoming a boardroom

battle

n Analysis not Action – Organizations waste a lot

of time on collecting information, developing

rationales for action, but fail to act!

n Resources – After years of downsizing, andincreased efficiency drives, many organizationsfind themselves short of the necessary resourcesfor implementing plans

n Skills – Skills are closely linked with resources –one of the key components of marketing success

is highly skilled and creative individuals Marketingpersonnel are often the casualty of downsizing andnow organizations struggle to achieve marketingeffectiveness

Adapted from Drummond, Ensor and Ashford(2003)

Corporate Social Responsibility (CSR) and

Ethics

Corporate Social Responsibility relates to actions

which are above and beyond that required by law

(McWilliams and Siegel, 2001)

The accepted wisdom on the value of CSR

is to:

• Meet responsibilities

• Put something back

• Manage impacts upon society

• Improves reputation

• Meet Government expectations

Raising the profile of CSR with stakeholdersincludes:

Consultations, newsletters, annual reports, open days,AGMs, press releases, events, word- of- mouthMarketing ethics – moral principles that defineright and wrong behaviour in marketing:

n Ethics relates to moral evaluations of decisionsand actions as right or wrong on the basis ofcommonly accepted principles

n Marketing ethics are moral principles that defineright and wrong behaviour in marketing

n If society judges an activity or activities of anorganization as wrong, or unethical, it is based on

a sense of justice of right and wrong and basedupon conviction

n Not all unethical activities are illegal

Ethical Decision Making – 3 individual

factors

n Moral philosophies – principles or rules that

individuals use to decide on what is right or

wrong

n Utilitarianism – a moral philosophy

con-cerned with maximizing the greatest good for

the greatest number of people

n Ethical Formalization – a rule-oriented

philosophy that focuses on the intentions

associated with particular behaviour and on the

rights of the individual

Implications of Marketing Ethics for the Marketing Mix

Product

n Meeting safety standards

n Removing dangerous componentsPrice

n Consideration of what is given for a fair price

n Prevention of monopolistic powerPromotion

n Ensuring advertising standards are upheld

Hints and Tips

n Read through Unit 1 of the Marketing Planning

Coursebook – Beamish and Ashford – these

revision tips relate closely to it

n The Marketing Planning examination is not just

about knowledge, i.e how much do you know –

but about being able to apply a range of concepts

and theories in the context of an organization

n You need to show the examiner that you can ‘do

marketing’ – not just know about it!

n Introduce different theories to underpin your

answers

n Use as many process models as possible to help

you remember key concepts

n Challenge theories where you think they may not

be appropriate or where you think they could bedisproven

n Use examples to support your answers whereappropriate – e.g Egg, easyJet, Starbucks

n Answer the question asked!

n Break down the different components of thequestions to ensure that you address all of theissues

n Have a go at as many past exam questions aspossible

n Go to www.cimvirtualinstitute.com andwww.marketingonline.co.uk for additional supportand guidance

THE MARKETING AUDIT

L E A R N I N G O U T C O M E S

Explain the constituents of the

macroenvironmental and microenvironmental

marketing audit

Assess the external marketing environment for

an organization through PESTEL

Assess the internal marketing environment for

an organization through an internal audit

Critically appraise the process and techniques

used for auditing the marketing environment

Explain the role of marketing information and

research in conducting and analyzing the

marketing audit

K E Y R E V I S I O N P O I N T S

How to undertake a macroaudit

The imperatives of the microaudit and how toanalyze it

The role of SWOT

The importance of marketing information to themarketing audit process

Syllabus Reference: 2.1–2.5

Unit 2

Environmental Scanning

Environmental scanning is the process of actually

collecting the information in order that the

organization can understand relevant information in

relation to external forces and drivers within the

market place

Step 1 – Scanning the Environment

Continually scan the environment so that early

changes can be identified and acted upon

Step 2 – Monitoring

When change has been identified, the pace of change

must be monitored, so implications of the change are

understood, opportunities and threats identified

Step 3 – ForecastingForecasting change is difficult, but the informationobtained as a result or monitoring should be used tomeasure the intensity of change

Step 4 – AssessmentAssess the impact of political change on meetingcustomer requirements and examine whatopportunities change could present

Assessing the Marketing Environment

Marketing intelligence – Looking at change,

potential, competitors and associated marketing

activities

Technical intelligence – This is vital given the

rapid evolution in today’s technologies

Political/economic intelligence – Looking at

political and economic shifts within the external

environment

Mergers/acquisitions intelligence – In the era ofever-larger mergers and acquisitions betweenbanks, IT organizations and communicationnetworks, it is essential to assess the broaderimpact

Supply chain intelligence – Ascertaining theposition of the supply chain in terms of supplies,raw materials, available resources, etc

PESTEL – Marketing Audit Model

Key issues for political analysis include:

n Increases in taxation, reducing disposable income

n Employment law/Health and safety and

environ-mental protection

n Foreign trade agreements and stability of political

systems

Economic

Key issues for economic analysis include:

n Inflation and interest rates

n Income levels and resources

n GDP/GNP

n Employment levels

n Exchange rates and spending patterns

Social

Key issues for social analysis include:

n Demography, society and culture

n Key issues for environmental analysis include:

n World trends on waste, emissions, CSR

Legal

Key issues for legal analysis include:

n Monopolies and mergers

n Competitive activities, unfair trading

n Consumer legislation/trade descriptions

Analysis of the Microenvironment

The key components of microenvironment

n Production – capacity and variety

The analysis is categorized as follows:

The internal audit

A full audit of a broad range of internal factors should

be considered – try and remember at least three

factors under each of the following headings:

1 Managerial factors including:

Corporate image

Speed or response to changing conditions

Flexibility of the organization

Ability to attract highly creative personnel

Aggressive in meeting the competition

2 Competitive factors including:

Product strengths

Market share

Customer loyalty and satisfaction

High barriers to market entry

3 Financial factors including:

Access to capacity when requiredLiquidity

Degree of financial leverageAbility to compete on priceStability of costs

4 Technical factors including:

Technical and manufacturing skillsValue added to the productEconomies of scaleLevel of coordination and integration

š

Remember to grade these points on the basis

of 1–5 — 1 being weak and 5 being strong.This helps to prioritize competitive attack andcontinuous improvement

Porters Five Forces – Competitive Analysis

SWOT Analysis

The role of marketing information in the

planning process

It is important to identify the type of information that is

required by the marketing environment in order to

understand the challenges it presents to the

successful implementation of the marketing plan

The Marketing Environment

PEST Factors

The Competition

Market share, pricing vs cost, quality

The ProductAnalysis of users, industrial vs consumercustomer response, switching behaviour

Marketing MixChannels of distribution, relative pricing, logisticsand networks, promotional mix

Firm-specific historical dataSales trends, contribution margins, marketing mixused and customer/market responses

Hints and Tips

n The marketing environment is an inherent part of

the marketing planning process and will always be

assessed in the marketing planning examination,

often as part of the Part A, the mini-case study,

and also in part B

n Ensure that you are comfortable with the key

models used in the marketing audit at this level,

including: PESTEL, SWOT, Porters Five Forces

n The marketing environment is all about collecting

and analyzing information, therefore ensure that

you are familiar with the types of information

collected and the purpose of the MKIS system and

the role it plays in the storage and support of the

marketing environment

n Ensure you are able to apply these areas It is notknowledge regurgitation, it is about being able toexplain, undertake an assessment of a

situation and critically appraise variousaspects of the marketing environment inorder to make effective marketing decisions

n Have a go at as many past exam questions aspossible

n Go to www.cimvirtualinstitute.com andwww.marketingonline.co.uk for additional supportand guidance

MARKETING PLANNING,

IMPLEMENTATION

AND CONTROL

L E A R N I N G O U T C O M E S

Evaluate the relationship between corporate

objectives, business objectives and marketing

Explain the concept of the planning gap and its

impact upon operational decisions

Determine segmentation, targeting and positioning

within the plan

Determine and evaluate marketing budgets for mix

decisions included in the marketing plan

Describe methods for evaluating and controlling the

marketing plan

Explain the role of strategy development in relation to

developing marketing share and growth

K E Y R E V I S I O N P O I N T S

The relationship between corporate objectives, business objectives and marketing

The planning gap and strategy development

The role of strategy development in relation to developing market share and growth

Approaches to segmentation, targeting and positioning and approaches to budgeting for mix decisions

Developing, evaluating and controlling the marketing plan

Syllabus Reference: 2.10

Unit 3

Distinguishing between corporate, business and marketing objectives

Corporate objectives

Generally expressed in financial terms, for

example ‘to increase profitability by 25% by

June 2005’

Business objectives

Business objectives are generally function and

operation and need to be defined for the survival

of the organization For example ‘To increase

highly skilled elements of workforce by 10% by

December 2005’

Marketing objectivesMarketing objectives are about products andmarketing only! For example ‘To increase sales ofexisting products into new markets by December2005’

Gap Analysis

A gap analysis is used to assist the organization with its strategy development process and in simple terms isdesigned to illustrate ‘where we are now’ and ‘where do we want to be in the future’

Formulation of Marketing Strategy

n Daily marketing activity is the key task

n Information and problems are structured, internaland repetitive

n Advertising is an example of a tactical marketingactivity

Ansoff Matrix

Stages in marketing segmentation

process

n Identify the possible segments within the

market – this will consist of individuals or

organizations with similar needs or preferences

n Gather information on those market segments

identified – to do this the segments need to be

accessible

n Evaluate the attractiveness of different

segments — they need to be large enough to be

viable

n Ascertain the competitive position within each

of the target segments

n Develop variations on product/service

specifications to meet the needs of individual

segments

n Design the appropriate communications mix

to meet the target market demands

Targeting as a marketing activity

Options for deciding on target marketing include:

n Organizations should concentrate on making one

product for one market and having one marketing

plan – i.e.mass marketing

n The organization could concentrate its efforts

on one market but have a number of different

versions of each product –differentiated

marketing

n Concentrating efforts on a small and carefully

chosen segment –focus market

Six components of target marketing

1 Customer needs – wants and expectations

2 Product market – size and structure

3 Brand strength and market share

4 Company capability

5 Competitive rivalry

6 Economies of scale – production and marketing

Positioning as a Marketing Activity

Steps in establishing a positioning plan

n Identify all segments within the market

n Decide which segments are most suitable

n Ensure the organization understands customer

requirements

n Develop product or service that specifically

meets the target audience needs

n Identify benefits, usage, user category,

Remember positioning alternatives

n Distinctive

n Fill the gaps

n Repositioning

Developing the Marketing Plan

Key headings of the marketing plan:

n Executive Summary

Key issues, current position, potential

overview of the outcome

n Corporate Strategy

Corporate mission/vision and corporate

goals and objectives

n Macro/micro Analysis

Market assessment, market trends,

competitor analysis and SWOT

n Marketing Objectives

Financial objectives

Marketing objectives

n Marketing StrategySegmentation, targeting and positioningMarketing strategy, marketing programmeMarketing mix

n ImplementationKey tasks, resources, budgets, contingencyplans

n Monitoring and ControlBasis of the plan and assumptions made,key critical success factors, benchmarking/forecasts/costs/revenue

Key Ingredients for Successful Implementation of the Plan

Marketing Budgets

n Bottom-up budgeting – is where the budgeting

process is fed and developed within the

organization and where the activities happen

n Negotiated budgeting – is where the process of

budget allocation is by negotiation

n Objectives and task approach – is where the

budget is allocated specifically on the necessity to

achieve output, i.e achievable objectives

n Incremental budgeting – is where the budget is

based upon an incremental rise on budgetary

expenditure per year, in line with predicted growth

in the forthcoming year

n Percentage of sales method – is where the

budget is allocated based on a percentage of sales

from the previous year

n Competitive parity – is where the budget is set,based on spending the same percentage ascompetitors within the same industry

n Judgemental methods – this is where budgetsare developed, based upon the judgement ofmanagers most directly involved in the future ofthe business

REMEMBER

-You must be able to describe a budgetaryprocess and evaluate it in context of a givenscenario!

The Control Process

Monitoring and control contains four key activities:

1 Development or adjustment of marketing

objectives in line with internal and external drivers

affecting performance

2 Setting of performance standards, i.e key

measures such as quality, production, sales

3 Evaluating performance, i.e identifying

performance indicators and measures and

analyzing findings

4 Corrective action, i.e revised forecasts or sales

targets, increasing advertising, etc

Methods for controlling the marketing plan:

1 Measuring income/expenditure budgets– performance

2 Performance appraisal evaluation – i.e staff

Hints and Tips

n Ensure you are clear on the differences between

corporate, business and marketing objectives and

strategies

n You may be required to develop an outline

marketing plan stating marketing objectives,

out-line strategy statements and a detailed tactical

marketing mix

n Remember marketing objectives must be SMART –

this is essential

n You are expected to understand the importance of

segmentation and the different segmentation

options available to you, including linking them to

targeting and positioning

n Part A of the exam paper, which is the mini-casestudy, tested different aspects of the marketingplanning process

n The senior examiner for the subject hassuggested that this will be an ongoing themethroughout all exam papers, therefore ensure youare comfortable with it

n When undertaking a tactical marketing plan,ensure you include the 7 Ps of the marketing mix,not just the 4 Ps

n Do not just describe budgeting, but be prepared

to select an appropriate budgetary process for

a given scenario Be able to evaluate effectively

n Go to www.cimvirtualinstitute.com andwww.marketingonline.co.uk for additional supportand guidance