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Marketing Planning for "Smaller" Businesses - Need or Nuisance?

By: Neville Pokroy

Neville is President of Stantech Marketing, a marketing firm specializing in strategic marketing planning and the development and execution of marketing strategies and plans. Neville's business background includes retail and consumer goods marketing, as well as consulting with entrepreneurial businesses in areas as diverse as computer software, management consulting, financial services, industrial wholesaling, legal and recruitment.
Neville holds a Bachelors degree in Accounting and Marketing and a Postgraduate degree in Marketing. He is currently VP of Marketing for the Association of Independent Consultants and can be reached at (905) 709-1207. His website address is www.stantechmarketing.com.

Introduction

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:

  1. A review of the company's environment - their markets and market segments, customers, competitors and macroenvironment (including the economy, legislative issues, social issues, technology etc)
  2. A review of the company itself - including a SWOT analysis, objectives, strategies, programs, implementation abilities and organizational composition
  3. A review of the company's marketing activities - including their products and services, pricing, promotion, distribution, market research etc

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.


Who should participate in the planning process?

All areas of the business should be represented in the strategic review to ensure that no information is excluded. In most instances, the senior management group that drives the company's goals and objectives should be involved, plus any other people who represent specific areas of importance within the company.

While this group may not have all the answers immediately, there should be sufficient opportunity during the process for individuals or dedicated teams to undertake additional research and then provide feedback to the group.


What outcomes can I expect? Will there be an immediate benefit to my business?

The most significant immediate outcome you can expect is that all the members of the team will depart from this process with a newly found, common understanding of the business and a recognition of the challenges that each team member faces. Such team building has incredible value since the team members can now see issues through someone else's eyes.

In terms of the business, marketing should not, in itself, be seen as a saviour to a business' challenges. Marketing will facilitate decisions and enable plans to be put in place. Only once these plans are implemented will any real benefits accrue. Some benefits may be short term while others could be long term. At the end of the day, specific measurement should be put in place in order to measure success or failure. And remember the business can learn as much from failure as it does from success - and the ongoing measurement will enable the company to take corrective action should it be desirable.


Couldn't I do this on my own?

Absolutely, provided you have the knowledge, skills, time and process. This is where large corporations have the advantage over the "smaller" players. They have the manpower and the breath of expertise. And this advantage will remain until the "smaller" players do something about it. The opportunity is available to those that wish to take advantage of it.


What kind of help is available to me?

Many marketing consultants can assist companies to undertake this comprehensive strategic marketing planning process. Make sure however that they have experience in strategic marketing planning, and don't only do marketing execution activities such as marketing research, promotions, advertising, design etc.

A consideration should also be who can help with the execution. Many companies find it easier to plan than to execute, and very often this becomes the Achilles Heel of the plan. Find an organization that can do both the planning and the execution with you so that people in your organization can get on with what they do best - running the business.


© Copyright, 2001, Neville Pokroy

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The author assumes full responsibility for the contents of this article and retains all of its property rights. MarcommWise publishes it here with the permission of the author. MarcomWise assumes no responsibility for the article's contents.

 

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