Marketing Planning and Forecasting

Distinguish between strategic planning and tactical planning.  

      Planning, the process of anticipating the future and determining the courses of action needed for achieving organizational objectives, is the basis for all strategy decisions. Strategic planning is the broad, all&-encompassing planning that involves determining the organization's primary objectives and adopting courses of action and allocation of resources necessary for achieving them. Tactical planning focuses on the implementation of activities specified in the strategic plan. Tactical plans typically are more short term than strategic plans, focusing on current and near&-term activities that must be executed in order to implement overall strategies. Resource allocation is a common decision area in tactical planning.

Explain how marketing plans differ at various levels in the organization.

      Although all organization managers devote at least some time to planning the relative  proportion of time spent in planning activities and the types of planning vary at different  organizational levels. Top management&-the board of directors, CEO, COO, and functional vice&-presidents (such as the chief marketing officer)&-spend more time engaged in planning than do middle&- and supervisory&-level managers. Top managers are more likely to devote the bulk of their planning activities to long&-range strategic planning. Middle&-level managers (such as the advertising director, regional sales managers, or the marketing research manager) tend to focus on narrower, tactical plans for their departments. Supervisory managers are more likely to engage in developing specific programs designed to meet the goals for their areas of responsibility.

Identify the steps in the marketing planning process.

      The basic steps in the marketing planning process are mission definition, determination of organizational objectives; assessment of organizational resources; evaluation of environmental risks and opportunities; formulation of a marketing strategy; implementation of a marketing strategy through operating plans, and monitoring and adaptation based on feedback.

Describe the concept of SWOT analysis in terms of its four major elements: leverage, problems, constraints, and vulnerability.

      SWOT (an acronym for strengths, weaknesses, opportunities, and threats) analysis is a planning approach that focuses on the relationship between an organization's internal strengths and weaknesses and external opportunities and threats. Leverage exists if an external opportunity coincides with an internal strength. Constraints exist when an organization is unable to take advantage of opportunities because of internal limitations. Problems are the result of an environmental threat against an organizational weakness. Vulnerability involves an external threat to what has been perceived as an internal strength.

Explain how the strategic business unit concept, the market share\market growth matrix, and spreadsheet analysis can be used in marketing planning.

      A number of very large, multiproduct firms use the strategic business unit (SBU) concept to aid in marketing planning. SBUs are divisions composed of key businesses within the firm with specific managers, resources, objectives, and competitors. Grouping company operating divisions into SBUs helps the firm focus on customer needs. Distinct strategies can be set up for each SBU based on the needs of its customer segments and its profit or growth potential. The market share/market growth matrix is a four&-quadrant matrix that plots market share against market growth potential in the industry. Different marketing strategies may be appropriate for each segment of the matrix. The four segments are stars, cash cows, question marks, and dogs.

Identify the major types of forecasting methods.

      Sales forecasting is an important component of both planning and controlling marketing programs. Two basic categories of forecasting techniques exist: Quantitative forecasting utilizes statistical techniques such as trend analysis based on past data, exponential smoothing, and market tests to produce numerical forecasts of future events. Qualitative forecasting uses subjective techniques such as surveys of buyer intentions, salesforce composite, the jury of executive opinion, and the Delphi technique.

Explain the steps in the forecasting process.

            Although sales forecasting varies among individual firms, it is possible to divide the approaches into three general categories. With top&-down forecasting, the firm begins with an environmental forecast of general economic conditions, which the marketer uses to forecast industry sales and then company and individual product sales In bottom&-up (or grass&-roots) forecasting, the firm begins with sales estimates from individual salespersons. These estimates are combined and refined at the divisional, regional, and national levels by sales and marketing managers and then submitted to the national sales manager, at which point one sales estimate is developed for the forthcoming time period. Many firms combine the strengths of top&-down and bottom&-up forecasting to obtain the most realistic forecast possible. Forecasting sales for new goods or services can be especially difficult, since no historical data are available. Marketers of new products may have to base their forecasts on market tests or surveys of buyer intentions, which may not provide an accurate picture of actual purchase behavior. A substitute method in which forecasters carefully analyze the sales of competing products that may be displaced by the new entry is also frequently used.