A marketing plan documents and maps out the key elements of a company's marketing strategy, which flows from the company's long-term strategic plan. Components of a marketing plan include an analysis of the company's strengths, weaknesses, opportunities and threat, also known as a SWOT analysis; market segmentation; and strategies to drive sales and profit growth in each of these segments. SWOT is an important foundational element of the marketing plan.
SWOT -- the internal strengths and weaknesses, along with the external opportunities and threats -- offers guidance for the marketing plan. Management can evaluate how to leverage the strengths to take advantage of opportunities and protect the company against threats. It also can take measures to remedy the weaknesses and prevent competitors from using them as opportunities. SWOT analysis synthesises the information for managers to make informed decisions on marketing and advertising strategies.
A marketing plan starts with an analysis of the company, customers, competitors, external partners and the overall economy. The company's strengths may include its financial position and cash balance, product quality and brand recognition. Its weaknesses may include an inability to attract qualified candidates due to tightness in the labour market. Its market opportunities may lie in foreign markets with emerging and growing middle classes. It may also find opportunities in local markets indirectly by taking advantage of financial difficulties faced by some of its smaller competitors. However, entry of new competitors and emerging new technological innovations may represent threats because they can alter customer buying habits. External partners, such as suppliers and regulatory agencies, and the overall economic environment must also be evaluated for potential threats and opportunities.
The division of a market into groups based on demographic and other factors is known as market segmentation. This allows advertising messages to be targeted specifically to maximise the sales opportunities in each segment. Using the SWOT analysis results, a company will know where the best opportunities are, including niche areas or specific demographic groups that might be underserved by its competitors. Similarly, it also will know potential weaknesses in its own product offerings that might be exploited by its competitors to gain market share and take steps to correct them.
The four "P's" of a marketing strategy are product, price, promotion and place (distribution channels). Once again, SWOT analysis forms the basis of strategic choices. For example, product decisions are based on the market opportunities, the company's own internal research and development and manufacturing strengths, the availability of adequate financial resources, and the brand recognition. Pricing considerations include sales volume sensitivity to price changes and the impact of discounts and flexible payment terms. The strengths and weaknesses of the distribution channel are important considerations; also important to the marketing plan are the type and mix of channels -- for example, retail or direct -- and the transportation and warehousing logistics. Promotion considerations include designing advertising campaigns based on a brand's strengths -- for example, value and quality -- and the timing of media buys.
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