A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. It can be for a product or service, a brand, or a product line. It can cover one year (referred to as an annual marketing plan), or cover up to 5 years. This article is about a term used in economics. ... For other uses, see Brand (disambiguation). ... Product lining is the marketing strategy of offering for sale several related products. ...

A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use. This is a summary article that covers many topics related to business plans - their content, how they are used, legal issues, and spoofs of business plans, among others. ... A marketing strategy[1] [2] is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. ...

The marketing planning process

In most organizations, "strategic planning" is an annual process, typically covering just the year ahead. Occasionally, a few organizations may look at a practical plan which stretches three or more years ahead.

To be most effective, the plan has to be formalized, usually in written form, as a formal `marketing plan'. The essence of the process is that it moves from the general to the specific; from the overall objectives of the organization down to the individual action plan for a part of one marketing programme. It is also an interactive process, so that the draft output of each stage is checked to see what impact it has on the earlier stages - and is amended accordingly. An objective or goal is a personal or organizational desired end point in development. ...

Marketing planning aims and objectives

Behind the corporate objectives, which in themselves offer the main context for the marketing plan, will lay the 'corporate mission'; which in turn provides the context for these corporate objectives. This `corporate mission' can be thought of as a definition of what the organization is; of what it does: 'Our business is …'.

This definition should not be too narrow, or it will constrict the development of the organization; a too rigorous concentration on the view that `We are in the business of making meat-scales', as IBM was during the early 1900s, might have limited its subsequent development into other areas. On the other hand, it should not be too wide or it will become meaningless; `We want to make a profit' is not too helpful in developing specific plans.

Abell suggested that the definition should cover three dimensions: 'customer groups' to be served, 'customer needs' to be served, and 'technologies' to be utilized Abell, 'Defining the Business: The Starting Point of Strategic Planning' Thus, the definition of IBM's `corporate mission' in the 1940s might well have been: `We are in the business of handling accounting information [customer need] for the larger US organizations [customer group] by means of punched cards [technology].' Fortunately, as the name itself (International Perhaps the most important factor in successful marketing is the `corporate vision'. Surprisingly, it is largely neglected by marketing textbooks; although not by the popular exponents of corporate strategy - indeed, it was perhaps the main theme of the book by Peters and Waterman, in the form of their `Superordinate Goals' 'In Search of Excellence' said: "Nothing drives progress like the imagination. The idea precedes the deed." 'The Marketing Imagination' If the organization in general, and its chief executive in particular, has a strong vision of where its future lies, then there is a good chance that the organization will achieve a strong position in its markets (and attain that future). This will be not least because its strategies will be consistent; and will be supported by its staff at all levels. In this context, all of IBM's marketing activities were underpinned by its philosophy of `customer service'; a vision originally promoted by the charismatic Watson dynasty. Punched cards (or Hollerith cards, or IBM cards), are pieces of stiff paper that contain digital information represented by the presence or absence of holes in predefined positions. ...

The emphasis at this stage is on obtaining a complete and accurate picture. In a single organization, however, it is likely that only a few aspects will be sufficiently important to have any significant impact on the marketing plan; but all may need to be reviewed to determine just which 'are' the few.

In this context some factors related to the customer, which should be included in the material collected for the audit, may be:

• Who are the customers?

• What are their key characteristics?

• What differentiates them from other members of the population?

• What are their needs and wants?

• What do they expect the `product' to do?

• What are their special requirements and perceptions?

• What do they think of the organization and its products or services?

• What are their attitudes?

• What are their buying intentions?

A `traditional' - albeit product-based - format for a `brand reference book' (or, indeed, a `marketing facts book') was suggested by Godley more than three decades ago:

1. Financial data --Facts for this section will come from management accounting, costing and finance sections.
2. Product data --From production, research and development.
3. Sales and distribution data - Sales, packaging, distribution sections.
4. Advertising, sales promotion, merchandising data - Information from these departments.
5. Market data and miscellany - From market research, who would in most cases act as a source for this information.

His sources of data, however, assume the resources of a very large organization. In most organizations they would be obtained from a much smaller set of people (and not a few of them would be generated by the marketing manager alone). It is apparent that a marketing audit can be a complex process, but the aim is simple: 'it is only to identify those existing (external and internal) factors which will have a significant impact on the future plans of the company'. Management accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions. ... Wikibooks has more about this subject: Marketing Sales promotion is one of the four aspects of promotional mix. ... Market research is the process of systematic gathering, recording and analyzing of data about customers, competitors and the market. ...

It is clear that the basic material to be input to the marketing audit should be comprehensive. Accordingly, the best approach is to accumulate this material continuously, as and when it becomes available; since this avoids the otherwise heavy workload involved in collecting it as part of the regular, typically annual, planning process itself - when time is usually at a premium. Even so, the first task of this `annual' process should be to check that the material held in the current `facts book' or `facts files' actually 'is' comprehensive and accurate, and can form a sound basis for the marketing audit itself.

The structure of the facts book will be designed to match the specific needs of the organization, but one simple format - suggested by Malcolm McDonald - may be applicable in many cases. This splits the material into three groups:

1. 'Review of the marketing environment'. A study of the organization's markets, customers, competitors and the overall economic, political, cultural and technical environment; covering developing trends, as well as the current situation.
2. 'Review of the detailed marketing activity'. A study of the company's marketing mix; in terms of the 7 Ps - (see below)
3. 'Review of the marketing system'. A study of the marketing organization, marketing research systems and the current marketing objectives and strategies.

The last of these is too frequently ignored. The marketing system itself needs to be regularly questioned, because the validity of the whole marketing plan is reliant upon the accuracy of the input from this system, and `garbage in, garbage out' applies with a vengeance. The marketing mix is generally accepted as the use and specification of the 4 Ps describing the strategic position of a product in the marketplace. ... Consumer research redirects here. ...

• 'Portfolio planning'. In addition, the coordinated planning of the individual products and services can contribute towards the balanced portfolio.

• '80:20 rule'. To achieve the maximum impact, the marketing plan must be clear, concise and simple. It needs to concentrate on the 20 per cent of products or services, and on the 20 per cent of customers, which will account for 80 per cent of the volume and 80 per cent of the `profit'.

• '7 Ps': Product, Place, Price and Promotion, Physical Environment, People, Process. The 7 Ps can sometimes divert attention from the customer, but the framework they offer can be very useful in building the action plans.

It is only at this stage (of deciding the marketing objectives) that the active part of the marketing planning process begins'.

This next stage in marketing planning is indeed the key to the whole marketing process. The marketing objectives state just where the company intends to be; at some specific time in the future. James Quinn succinctly defined objectives in general as: "Goals (or objectives) state 'what' is to be achieved and 'when' results are to be accomplished, but they do not state 'how' the results are to be achieved".^[1]

They typically relate to what products (or services) will be where in what markets (and must be realistically based on customer behaviour in those markets). They are essentially about the match between those 'products' and 'markets'. Objectives for pricing, distribution, advertising and so on are at a lower level, and should not be confused with marketing objectives. They are part of the marketing strategy needed to achieve marketing objectives.

To be most effective, objectives should be capable of measurement and therefore 'quantifiable'. This measurement may be in terms of sales volume, money value, market share, percentage penetration of distribution outlets and so on. An example of such a measurable marketing objective might be `to enter the market with product Y and capture 10 per cent of the market by value within one year'. As it is quantified it can, within limits, be unequivocally monitored; and corrective action taken as necessary. Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company. ... A corrective action is a change implemented to address a weakness identified in a management system. ...

The marketing objectives must usually be based, above all, on the organization's financial objectives; converting these financial measurements into the related marketing measurements.

He went on to explain his view of the role of `policies', with which strategy is most often confused: "Policies are rules or guidelines that express the 'limits' within which action should occur.

Simplifying somewhat, marketing strategies can be seen as the means, or `game plan', by which marketing objectives will be achieved and, in the framework that we have chosen to use, are generally concerned with the 7 Ps. Examples are:

Price- The amount of money needed to buy products

Product- The actual product

Promotion (advertising)- Getting the product known

Placement- Where the product is located

People- Represent the business

Physical environment- The ambience, mood, or tone of the environment

Process- How do people obtain your product

In principle, these strategies describe how the objectives will be achieved. The 7 Ps are a useful framework for deciding how the company's resources will be manipulated (strategically) to achieve the objectives. It should be noted, however, that they are not the only framework, and may divert attention from the real issues. The focus of the strategies must be the objectives to be achieved - not the process of planning itself. Only if it fits the needs of these objectives should you choose, as we have done, to use the framework of the 7 Ps.

The strategy statement can take the form of a purely verbal description of the strategic options which have been chosen. Alternatively, and perhaps more positively, it might include a structured list of the major options chosen.

One aspect of strategy which is often overlooked is that of 'timing'. Exactly when it is the best time for each element of the strategy to be implemented is often critical. Taking the right action at the wrong time can sometimes be almost as bad as taking the wrong action at the right time. Timing is, therefore, an essential part of any plan; and should normally appear as a schedule of planned activities.

Having completed this crucial stage of the planning process, you will need to re-check the feasibility of your objectives and strategies in terms of the market share, sales, costs, profits and so on which these demand in practice. As in the rest of the marketing discipline, you will need to employ judgement, experience, market research or anything else which helps you to look at your conclusions from all possible angles.

Detailed plans and programmes

At this stage, you will need to develop your overall marketing strategies into detailed plans and programmes. Although these detailed plans may cover each of the 7 Ps, the focus will vary, depending upon your organization's specific strategies. A product-oriented company will focus its plans for the 7 Ps around each of its products. A market or geographically oriented company will concentrate on each market or geographical area. Each will base its plans upon the detailed needs of its customers, and on the strategies chosen to satisfy these needs.

Again, the most important element is, indeed, that of the detailed plans; which spell out exactly what programmes and individual activities will take place over the period of the plan (usually over the next year). Without these specified - and preferably quantified - activities the plan cannot be monitored, even in terms of success in meeting its objectives.

It is these programmes and activities which will then constitute the `marketing' of the organization over the period. As a result, these detailed marketing programmes are the most important, practical outcome of the whole planning process. These plans should therefore be:

• Clear - They should be an unambiguous statement of 'exactly' what is to be done.

• Quantified - The predicted outcome of each activity should be, as far as possible, quantified; so that its performance can be monitored.

• Focused - The temptation to proliferate activities beyond the numbers which can be realistically controlled should be avoided. The 80:20 Rule applies in this context too.

• Realistic - They should be achievable.

• Agreed - Those who are to implement them should be committed to them, and agree that they are achievable.

The resulting plans should become a working document which will guide the campaigns taking place throughout the organization over the period of the plan. If the marketing plan is to work, every exception to it (throughout the year) must be questioned; and the lessons learned, to be incorporated in the next year's plan. For other uses of the word pareto, see Pareto. ...

Content of the marketing plan

A marketing plan for a small business typically includes Small Business Administration Description of competitors, including the level of demand for the product or service and the strengths and weaknesses of competitors

1. Description of the product or service, including special features
2. Marketing budget, including the advertising and promotional plan
3. Description of the business location, including advantages and disadvantages for marketing
4. Pricing strategy
5. Market Segmentation

For the rental car company, see Budget Rent a Car. ...

Medium-sized and large organizations

The main contents of a marketing plan are:^{[citation needed]}

1. Executive Summary
2. Situational Analysis
3. Opportunities / Issue Analysis - SWOT Analysis
4. Objectives
5. Strategy
6. Action Programme (the operational marketing plan itself for the period under review)
7. Financial Forecast
8. Controls

In detail, a complete marketing plan typically includes:^{[citation needed]} SWOT Analysis, is a strategic planning tool used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. ...

1. Title page
2. Executive Summary
3. Current Situation - Macroenvironment
   • economy
   • legal
   • government
   • technology
   • ecological
   • sociocultural
   • supply chain
4. Current Situation - Market Analysis
   • market definition
   • market size
   • market segmentation
   • industry structure and strategic groupings
   • Porter 5 forces analysis
   • competition and market share
   • competitors' strengths and weaknesses
   • market trends
5. Current Situation - Consumer Analysis ^[2]
   • nature of the buying decision
   • participants
   • demographics
   • psychographics
   • buyer motivation and expectations
   • loyalty segments
6. Current Situation - Internal
   • company resources
     • financial
     • people
     • time
     • skills
   • objectives
     • mission statement and vision statement
     • corporate objectives
     • financial objective
     • marketing objectives
     • long term objectives
     • description of the basic business philosophy
   • corporate culture
7. Summary of Situation Analysis
   • external threats
   • external opportunities
   • internal strengths
   • internal weaknesses
   • Critical success factors in the industry
   • our sustainable competitive advantage
8. Marketing research
   • information requirements
   • research methodology
   • research results
9. Marketing Strategy - Product
   • product mix
   • product strengths and weaknesses
     • perceptual mapping
   • product life cycle management and new product development
   • Brand name, brand image, and brand equity
   • the augmented product
   • product portfolio analysis
     • B.C.G. Analysis
     • contribution margin analysis
     • G.E. Multi Factoral analysis
     • Quality Function Deployment
10. Marketing Strategy ^[3] - segmented marketing actions and market share objectives
    • by product,
    • by customer segment,
    • by geographical market,
    • by distribution channel.
11. Marketing Strategy - Price
    • pricing objectives
    • pricing method (eg.: cost plus, demand based, or competitor indexing)
    • pricing strategy (eg.: skimming, or penetration)
    • discounts and allowances
    • price elasticity and customer sensitivity
    • price zoning
    • break even analysis at various prices
12. Marketing Strategy - promotion
    • promotional goals
    • promotional mix
    • advertising reach, frequency, flights, theme, and media
    • sales force requirements, techniques, and management
    • sales promotion
    • publicity and public relations
    • electronic promotion (eg.: Web, or telephone)
    • word of mouth marketing (buzz)
    • viral marketing
13. Marketing Strategy - Distribution
    • geographical coverage
    • distribution channels
    • physical distribution and logistics
    • electronic distribution
14. Implementation
    • personnel requirements
      • assign responsibilities
      • give incentives
      • training on selling methods
    • financial requirements
    • management information systems requirements
    • month-by-month agenda
      • PERT or critical path analysis
    • monitoring results and benchmarks
    • adjustment mechanism
    • contingencies (What if's)
15. Financial Summary
    • assumptions
    • pro-forma monthly income statement
    • contribution margin analysis
    • breakeven analysis
    • Monte Carlo method
    • ISI: Internet Strategic Intelligence
16. Scenarios
    • Prediction of Future Scenarios
    • Plan of Action for each Scenario
17. Appendix
    • pictures and specifications of the new product
    • results from research already completed

For a company to gain or maintain a sustainable competitive advantage, it must be ever vigilant, watching for changes in the business environment. ... Industry or market research is the acquisition of corporate intelligence on a broad range of issues including: Macroenvironment economy government legal technology ecological sociocultural Market Analysis and Competitor analysis market definition market size market segmentation industry structure and strategic groupings Porter 5 forces analysis supply chain competition and market share... A Market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. ... Porters 5 forces analysis is a framework for industry analysis and business strategy development developed by Michael E. Porter in 1979 of Harvard Business School. ... only joking Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. ... Demographics refers to selected population characteristics as used in government, marketing or opinion research, or the demographic profiles used in such research. ... Critical Success Factor (CSF) is a business term for an element which is necessary for an organization or project to achieve its mission. ... Companies that compete by selling similar products (or even substitutes) to the same group of customers constitute an industry. ... Consumer research redirects here. ... Product lining is the marketing strategy of offering for sale several related products. ... Perceptual mapping is a graphics technique used by marketers that attempts to visually display the perceptions of customers or potential customers. ... This article is about managing the life of a product in the market. ... In business and engineering, new product development (NPD) is the term used to describe the complete process of bringing a new product or service to market. ... For other uses, see Brand (disambiguation). ... This article is about the marketing concept. ... In commerce, a product is a good economics and accounting good or service which can be bought and sold. ... B.C.G. analysis is a technique used in brand marketing, product management, and strategic management to help a company decide what products to add to its product portfolio. ... Contribution margin analysis is a technique used in brand marketing and product management to help a company decide what product(s) to add to its product portfolio. ... G.E. multi factoral analysis is a technique used in brand marketing and product management to help a company decide what product(s) to add to its product portfolio. ... Quality function deployment (QFD) is a technique for product or service development, brand marketing, and product management. ... A Market segment is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. ... Market share, in strategic management and marketing, is the percentage or proportion of the total available market or market segment that is being serviced by a company. ... This article does not cite any references or sources. ... Pricing objectives or goals give direction to the whole pricing process. ... Discounts and allowances are modifications to the basic price. ... In economics and business studies, the price elasticity of demand (PED) is an elasticity that measures the nature and percentage of the relationship between changes in quantity demanded of a good and changes in its price. ... Geographical pricing, in marketing, is the practice of modifying a basic list price based on the geographical location of the buyer. ... The break even point for a product is the point where total revenue received equals total costs associated with the sale of the product (TR=TC). ... Wikibooks has more about this subject: Marketing Scale model of a Wheaties cereal box at a pep rally Promotion is one of the four key aspects of the marketing mix. ... Advertising, Public Relations, Sales Promotion, and Personal Selling are all aspects of the Promotional Mix. ... // Advert redirects here. ... Sales are the activities involved in providing products or services in return for money or other compensation. ... Wikibooks has more about this subject: Marketing Sales promotion is one of the four aspects of promotional mix. ... Wikibooks has more about this subject: Marketing Look up publicity in Wiktionary, the free dictionary. ... For the Arrested Development episode, see Public Relations (Arrested Development episode). ... E-marketing is a type of marketing that can be defined as achieving objectives through the use of electronic communications technology such as Internet, e-mail, Ebooks, database, and mobile phone. ... Wikibooks has more about this subject: Marketing Direct marketing is a discipline within marketing that involves contacting individual customers (business-to-business or consumer) directly and obtaining their responses and transactions for the purpose of developing and prolonging mutually profitable customer relationships. ... Word-of-mouth marketing is a term used in the marketing and advertising industry to describe activities that companies undertake to generate personal recommendations as well as referrals for brand names, products and services. ... Viral marketing and viral advertising refer to marketing techniques that use pre-existing social networks to produce increases in brand awareness, through self-replicating viral processes, analogous to the spread of pathological and computer viruses. ... Wikibooks [[wikibooks:|]] has more about this subject: Marketing Distribution (or placement) is one of the four aspects of marketing. ... In economics, an incentive in anything that provides a motive for a particular course of action — that counts as a reason for preferring one choice to the alternatives. ... Management Information Systems (MIS), sometimes referred to as Information Management and Systems, is the discipline covering the application of people, technologies, and procedures — collectively called information systems — to solving business problems. ... PERT network chart for a seven-month project with five milestones (10 through 50) and six activities (A through F). ... In project management, path analysis (also known as critical path analysis) is a technique to analyse events. ... Contribution margin analysis is a technique used in brand marketing and product management to help a company decide what product(s) to add to its product portfolio. ... In the field of financial mathematics, many problems, for instance the problem of finding the arbitrage-free value of a particular derivative, boil down to the computation of a particular integral. ...

Measurement of Progress

The final stage of any marketing planning process is to establish targets (or standards) so that progress can be monitored. Accordingly, it is important to put both quantities and timescales into the marketing objectives (for example, to capture 20 per cent by value of the market within two years) and into the corresponding strategies.

Changes in the environment mean that the forecasts often have to be changed. Along with these, the related plans may well also need to be changed. Continuous monitoring of performance, against predetermined targets, represents a most important aspect of this. However, perhaps even more important is the enforced discipline of a regular formal review. Again, as with forecasts, in many cases the best (most realistic) planning cycle will revolve around a quarterly review. Best of all, at least in terms of the quantifiable aspects of the plans, if not the wealth of backing detail, is probably a quarterly rolling review - planning one full year ahead each new quarter. Of course, this does absorb more planning resource; but it also ensures that the plans embody the latest information, and - with attention focused on them so regularly - forces both the plans and their implementation to be realistic.

Plans only have validity if they are actually used to control the progress of a company: their success lies in their implementation, not in the writing'.

Performance analysis

The most important elements of marketing performance, which are normally tracked, are:

Sales analysis

Most organizations track their sales results; or, in non-profit organizations for example, the number of clients. The more sophisticated track them in terms of 'sales variance' - the deviation from the target figures - which allows a more immediate picture of deviations to become evident.. `Micro- analysis', which is a nicely pseudo-scientific term for the normal management process of investigating detailed problems, then investigates the individual elements (individual products, sales territories, customers and so on) which are failing to meet targets.

Market share analysis

Relatively few organizations, however, track market share. In some circumstances this may well be a much more important measure.. Sales may still be increasing, in an expanding market, while share is actually decreasing - boding ill for future sales when the market eventually starts to drop. Where such market share is tracked, there may be a number of aspects which will be followed:

• overall market share
• segment share - that in the specific, targeted segment
• relative share -in relation to the market leaders
• annual fluctuation rate of market share

Expense analysis

The key ratio to watch in this area is usually the `marketing expense to sales ratio'; although this may be broken down into other elements (advertising to sales, sales administration to sales, and so on).

Financial Analysis

The `bottom line' of marketing activities should at least in theory, be the net profit (for all except non-profit organizations, where the comparable emphasis may be on remaining within budgeted costs). There are a number of separate performance figures and key ratios which need to be tracked:

• gross contribution<>net profit
• gross profit<>return on investment
• net contribution<>profit on sales

There can be considerable benefit in comparing these figures with those achieved by other organizations (especially those in the same industry); using, for instance, the figures which can be obtained (in the UK) from `The Centre for Interfirm Comparison'. The most sophisticated use of this approach, however, is typically by those making use of PIMS (Profit Impact of Management Strategies), initiated by the General Electric Company and then developed by Harvard Business School, but now run by the Strategic Planning Institute.

The above performance analyses concentrate on the quantitative measures which are directly related to short-term performance. But there are a number of indirect measures, essentially tracking customer attitudes, which can also indicate the organization's performance in terms of its longer-term marketing strengths and may accordingly be even more important indicators. Some useful measures are:

• market research - including customer panels (which are used to track changes over time)
• lost business - the orders which were lost because, for example, the stock was not available or the product did not meet the customer's exact requirements
• customer complaints - how many customers complain about the products or services, or the organization itself, and about what

Use of Marketing Plans

A formal, written marketing plan is essential; in that it provides an unambiguous reference point for activities throughout the planning period. However, perhaps the most important benefit of these plans is the planning process itself. This typically offers a unique opportunity, a forum, for `information-rich' and productively focused discussions between the various managers involved. The plan, together with the associated discussions, then provides an agreed context for their subsequent management activities, even for those not described in the plan itself.

Budgets as Managerial Tools

The classic quantification of a marketing plan appears in the form of budgets. Because these are so rigorously quantified, they are particularly important. They should, thus, represent an unequivocal projection of actions and expected results. What is more, they should be capable of being monitored accurately; and, indeed, performance against budget is the main (regular) management review process.

The purpose of a marketing budget is, thus, to pull together all the revenues and costs involved in marketing into one comprehensive document. It is a managerial tool that balances what is needed to be spent against what can be afforded, and helps make choices about priorities. It is then used in monitoring performance in practice.

The marketing budget is usually the most powerful tool by which you think through the relationship between desired results and available means. Its starting point should be the marketing strategies and plans, which have already been formulated in the marketing plan itself; although, in practice, the two will run in parallel and will interact. At the very least, the rigorous, highly quantified, budgets may cause a rethink of some of the more optimistic elements of the plans.

Approaches to budgeting

Many budgets are based on history. They are the equivalent of `time-series' forecasting. It is assumed that next year's budgets should follow some trend that is discernible over recent history. Other alternatives are based on a simple `percentage of sales' or on `what the competitors are doing'.

However, there are many other alternatives - Ven:

• Affordable - This may be the most common approach to budgeting. Someone, typically the managing director on behalf of the board, decides what is a `reasonable' promotional budget; what can be afforded. This figure is most often based on historical spending. This approach assumes that promotion is a cost; and sometimes is seen as an avoidable cost.
• Percentage of revenue - This is a variation of `affordable', but at least it forges a link with sales volume, in that the budget will be set at a certain percentage of revenue, and thus follows trends in sales. However, it does imply that promotion is a result of sales, rather than the other way round.

Both of these methods are seen by many managements to be `realistic', in that they reflect the reality of the business strategies as those managements see it. On the other hand, neither makes any allowance for change. They do not allow for the development to meet emerging market opportunities and, at the other end of the scale, they continue to pour money into a dying product or service (the `dog').

• Competitive parity - In this case, the organization relates its budgets to what the competitors are doing: for example, it matches their budgets, or beats them, or spends a proportion of what the brand leader is spending. On the other hand, it assumes that the competitors know best; in which case, the service or product can expect to be nothing more than a follower.
• Zero-based budgeting - In essence, this approach takes the objectives, as set out in the marketing plan, together with the resulting planned activities and then costs them out. Differences between marketing and business plans.

References

1. ^ J. B. Quinn, 'Strategies for Change: Logical Incrementalism' (Richard D. Irwin, 1980)
2. ^ Quick MBA Marketing plan based on consumer and competitor analyses
3. ^ Marketing plan basics Table of marketing targets, actions, means and results

• H. A. Simon, Rational decision making in business organisations, 'American Economic Review'
• J. Pfeffer and G. R. Salancik, 'The External Control of Organizations'

See also

• business plan
• marketing
• marketing management
• plan
• strategic management
• strategic marketing agencies listing