End Year Planning Cycle is Upon Us
As the year ends when we evaluate our performance and make plans for the coming one. In this regard, it is necessary to look at the process of strategic marketing planning and the foundations it is based on.
I focus on strategic planning because it is the process that allows the company to make objective driven plans and follow up on them through monitoring and evaluation. In a fast-changing marketing environment, plans need to be dynamic.
A plan that does not include verifiable indicators and tools to monitor them is a product of fiction. Remember the sayings that whatever gets measured gets done and that the road to hell is paved with good intentions. Our good and great intentions need to be documented and executed.
Revisiting the business case
The business case, its narrative and accompanying business model are the fundamental tools of strategic planning. There should be total clarity on the purpose of the business’ existence in terms of the need it is fulfilling in the market.
Furthermore, the business should fulfil that need better than competition and at a profit. In writing a strategic business, there is need to assess whether your business case is still valid. There is no need to proceed further if this is not so.
The business case if wobbly can be strengthened by coming up with new product offerings that can satiate the market’s changing needs while giving competitors a run for their money. The key phrase to remember is the unique selling proposition.
You should be clear on what distinguishes your product from that of competitors and makes it the best option in meeting the customer’s need. Most importantly, you need to put yourself in the customer’s shoes and ask yourself whether you would as well choose your product to meet the need given available alternatives.
While you may not always be up to the task in matching the competition, you should adopt the Kaizen principles of continuous improvement. Your good enough is nothing without the concurrence of consumers.
Foundations of a strategic marketing plan
The key foundations include market segmentation, market targeting and brand positioning. These are the key decisions that should be made before any objectives, strategies and plans are conceptualized.
The essence of market segmentation is that you may not be in a position to serve the market in its entirety. There is therefore a need to divide the markets into various segments based on their characteristics. There are many basis by which segmentation can be done including: client type (corporate versus retail), geographical (regional, national and local), income (low income, middle income and high income), age (children, teenagers, youth, middle aged and elderly).
Once you create the segments, you then assess your capacity and determine the segments to serve. The segments to be served are the target market.
This is fundamental because it has impact on many of the marketing strategies and decisions. For instance, you cannot claim to target the high-income segment then establish your business in River Road or claim to be targeting the low-income earners and set up shop in Karen.
All the 4Ps (product, price, place and promotion) decisions are based on the target market. Any failure to synchronize the strategies with the target market will almost certainly be catastrophic.
Brand positioning is about perceptions. What imagery does your product conjure in the minds of the consumers? For instance, colgate toothpaste is positioned based on “strong teeth” while close up is positioned on “fresh breath”. This is a decision you need to make early because it will affect your marketing strategies. If you position yourself as a premium brand, you cannot go about charging low prices or engaging in price-based competition.
Assumptions underlying marketing objectives
Strategic marketing planning is driven by objectives. The major concern is the basis of arriving at them. Do the underpinning assumptions made make sense? Has a thorough analysis of the marketing environment been conducted?
When we talk of objectives conforming to the SMART principle i.e. specific, measureable, attainable, realistic and time bound this is not a useless business jargon. If you make an objective such as “To grow the sales revenue by 20% in 2017”, you need to justify its components. For it to be deemed realistic, then it must be based on facts including internal ones such as historical trends and external ones such as projected GDP growth rates.
Marketing objectives are the basis upon which strategies and action plans are crafted. They are also the building blocks of the monitoring and evaluation framework.
Crafting winning marketing strategies
A strategy in simple words is a stated consistent way of doing things aimed at achieving set objectives. Strategies introduce stability to the business decision-making process. One of the greatest frustration I have experienced as a consultant is when clients fail to peg their decisions on stated strategies.
Lack of concrete strategies make the management vulnerable to playing catch-up with competition and making decisions borne of panic. If your strategy is to offer products at low prices ( price based competition), you cannot raise them in reaction to competition. Your option would be to look at your cost structure and cut excess fat so that you can maintain the low price strategy.
Strategies are often tampered with tactical manoeuvres. However, tactics should never replace strategies.
Winning marketing strategies are those that are properly aligned with the needs of the target market. A marketing strategy cannot be detached from the target market since it is derived from its characteristics.
Developing practical action plans
Once the objectives and strategies are in place, the next issue is execution. A plan delineates what is to be done, who will do it, when it will be done, how much it will cost and how the results will be reported.
That is why the marketing plan needs a marketing operations plan including an organisation structure for the marketing function. This structure should include the qualifications and requirements of the people who will be implementing the plans. Plans are just as good as those who are charged with executing them.
In addition, they should be well resourced in terms of finances. Each activity that needs to be undertaken should have a budget line.
Sometimes, people come up with budgets, which are not based on activities. Every shilling in the budget should be accounted for. Cost overruns can arise but budgeting should be evidence driven.
Planning is a very critical function in any business. In marketing, when we have sales targets, they need to be broken down until we have individuals directly responsible for achieving them.
If your objective is to attain sales of Kshs 100 million in a year, then you need to allocate this to targeted market segments. For instance, 30% could be through corporate sales and 70% from retail ones.
Thereafter you need to allocate the targets to individuals. For instance, if you have three staff members in the corporate department which needs to generate Kshs 30 million during the year, then this target should be split among the staff in corporate sales. It can be equally split or there can be variations depending on the capacity of the salespeople. It would not make sense to give a new and inexperienced salesperson the same targets as a veteran.
Monitoring and evaluation framework
The strategic marketing plan is monitored on a regular basis to ensure that the indicators are being met. Any deviation of the indicators from the targets should trigger remedial actions. There is need to diagnose the reasons why the targets were not realised.
If the reasons are external and less controllable, then you need to adapt to them. If the causes are internal, you need to make the necessary changes to arrest the situation.
Monitoring and evaluation is effectively conducted through tools such as a monitoring and evaluation framework and an elaborate reporting system. This can be through the marketing information system if the firm has one or even by using a simple spreadsheet.
The Micro, Small and Medium Enterprises (MSMEs) survey recently released by Kenya National Bureau of Statistics revealed that a significant number of MSMEs do not advertise or market their products. Among the licensed businesses, micro (58.3 per cent), small (35.6 per cent) and medium (33.5 per cent) sized establishments did not market/advertise their products. For unlicensed businesses, 83.6 per cent did not advertise while 10.2 per cent depended on the quality of products and clientele satisfaction.
The above situation does not augur well for a sector that employs an overwhelming majority of our people. As the year comes to an end, we should start planning in a systematic manner. It would be pointless to start planning when a new year has already begun. The time is now!
The Writer is an entrepreneurship, management and marketing consultant
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