Marketing Planning for "Smaller" Businesses - Need or Nuisance?By: Neville Pokroy
Marketing planning is one critical factor that differentiates large corporate businesses from "smaller" businesses. It is one way for the corporations to retain a competitive advantage. But is it something that can be faced by "smaller" businesses, and overcome?
What can really be done in the face of overwhelming odds, in many cases? Simply put, plenty. "Smaller" businesses often give up in the face of these odds, because they feel they cannot market as aggressively as the corporations. While this is true, there is nothing to stop these companies from marketing "smarter".
That's what sets the leaders apart. Understanding that one doesn't need to run a business in exactly the same way as your competitor. Adjust what you do to maximize your opportunity. But use all the ammunition you have - don't leave anything behind.
So where do you start?
Does everyone know what Marketing is?
Experience has shown that marketing is one of the most misunderstood pieces of the business puzzle, particularly to businesses that don't have a marketing focus. While one can scour the textbooks for a clear and unequivocal definition of marketing (each expert seems to have their own angle), the best definition for our purpose is a practical one.
It goes as follows:
Marketing is the thinking part of selling - deciding what products to sell at what price, with what channels of distribution and how to promote them. It is a planning, positioning function.
This should be differentiated from selling which can be defined as:
Selling is a producing, doing function. It involves carrying out the plans and providing information on how well the plans work or do not work in the marketplace; this in turn could require that a new marketing (strategic) decision be made.
With marketing clearly being a strategic function, planning is obviously a key component.
Marketing Planning Defined
What then is Marketing planning? Marketing planning can be defined as the development of a plan of action for the marketing side of the business, which can incorporate both the long term goals of the company as well as the short term goals. The planning for the longer term (more than 1 year) can be called Strategic Marketing Planning, while the planning for the short term can be called Tactical Marketing Planning.
Definition of "smaller" businesses
Before getting too deep into planning, we should define clearly what we mean by "smaller" businesses. Simplistically, we could define this group by revenue, or numbers of employees or both. However, what we are really looking for are companies that do not have full-time marketing departments, regardless of their size, as well as companies who have a limited focus on marketing. This definition could include a fast growing technology company with 10 employees, currently generating $1 million revenue, as well as an engineering concern with 150 employees, generating $40 million revenues. As long as the marketing focus is not clearly defined, then it can be defined as a "smaller" business from a marketing perspective.
Can I do Tactical Marketing Planning instead of Strategic Marketing Planning?
The simple answer is yes. However, ask yourself this question: Is that the right decision to make? In order to help you make the right decision, you will need to ensure that your tactical marketing plan achieves your company's objectives (assuming the company has objectives).
The real issue then is: Do you manage your business with a view to the long term, or do you only manage it day to day. If it is the former, then you should be doing long term planning. If it is the latter, then a short-term plan is probably acceptable (but be careful that you don't end up moving in a direction that could be contrary to the market).
Can a business survive without planning?
Anything is possible. But it's unlikely that "no planning", or at best "short-term planning", will maximize the potential and returns of the company. It is almost inconceivable for a successful company to be managed without a view on where the owner or senior management would like to take the company over the next few years. And more importantly, what impact the competition, technology or the general business environment will have on business in the forthcoming years.
What good business doesn't have a multi-year plan, or at very least, financial projections for a period of a year or more?
Marketing planning is an integral part of overall strategic planning, and as such becomes part of the overall planning process. Can a business survive without marketing planning? Probably. Can the business thrive without marketing planning? The jury is still out on that question.
How different will my planning be vs. another kind of business?
The type of business will have a significant impact on how strategic marketing planning is done. For example, a fast growing high tech computer company will not have the same goals and objectives as a slower growing retailer or consumer goods company. Consequently, the strategic or longer-term plans will be very different. And so will the shorter term plans.
Each company should set the tone for what suits their needs and what meets their objectives. While there may be templates for strategic planning processes, there certainly are no templates for the specific plans that flow from the process. They should be unique to ensure the company's differentiation in the market.
What is the ideal planning horizon?
There isn't one. The company should set a horizon that meets the needs of the business and fits with the culture of the organization. At the end of the day, if it makes logical sense to the employees, it will be easier to sell.
But having a planning horizon is important because it provides the framework for setting goals and objectives which in turn, become the drivers of the plan.
A reasonable horizon for the average company is 2-3 years for the long term, and 6 - 18 months for the short term. Flexibility should however be retained via ongoing evaluation of the short term strategy on a six monthly basis (maybe even 3-monthly in faster moving industries), which will facilitate a revision of the strategy if so required. Remember that plans are only fixed to the point that they require change.
Strategic marketing planning - an approach
The objective of a Strategic Marketing Planning process is to develop a longer term plan for the company, which includes a set of marketing objectives, a marketing strategy and a short term marketing action plan and budget.
The process should include the following steps:
All of the above provides a backdrop to the
development of the company's long term goals,
objectives and plans, as well as the specific
shorter term strategies and action plans
which require development.
© Copyright, 2001, Neville Pokroy
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