Creating a Marketing Plan An OverviewE x c e r p t

Creating a
Marketing Plan:
An Overview
E x c e r p t e d f r o m
Marketer’s Toolkit:
The 10 Strategies You Need to Succeed
Harvard Business School Press
Boston, Massachusetts
ISBN-10: 1-4221-0256-4
ISBN-13: 978-1-4221-0256-5
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Creating a Marketing Plan
Key Topics Covered in This Chapter
• The purpose of a marketing plan

• Planning the elements of the marketing mix
• Controlling the plan
An Overview
2
“P l a n y o u r w o r k , and work your plan.”That timeless
piece of business philosophy canhelp you succeed in any
number of workplace
activities—including marketing. This chapter explains the
market-
ing plan and its many elements.
From Strategy to Plan
A marketing plan lays out a campaign that aims to fulfill a
company’s
market strategy. At the business unit or product level, the plan
aims
to transform a product or service concept into a successful
offering
that meets the needs of target customers and fulfills the
company’s
expectations for sales, market share, and so forth. The plan
states ex-
actly what the company will do in launching new products and

sup-
porting older ones. It indicates the timing of sales and
promotional
activities, pricing intentions, and distribution efforts. How the
plan
will be controlled and the results measured are also part of the
plan.
Plans are contained in binders and are treated with
confidentiality
lest competitors use their details to deploy counterefforts.
Most plans include the following (for the company or for a
product line):
• An executive summary.
• A table of contents.
• A summary of the current situation. This contains all relevant
data, including SWOT analysis (analysis of strengths, weak-
nesses, opportunities, and competitive threats).
• A focused assessment of the market opportunity. This includes
a statement of target market segments, a customer and needs
assessment, and the competitive challenges faced by the com-
pany and its products (or particular product line).
• Financial and marketing goals. Financial goals are usually ex-

pressed as incremental revenue improvements, and expected
profits at the end of the planning period. Marketing goals are
expressed as unit sales or market share.
• A summary of the company’s marketing strategy. This sum-
mary identifies the target market and indicates how the product
or product line will be positioned, distributed, and priced. It
also enumerates the specific actions that will be taken to
achieve the stated goals. Those actions may include reorganiza-
tion of the sales force, the use of customer rebates, a national
ad campaign, direct mail programs, and so forth.
• A month-to-month marketing budget.
• Forecast month-to-month unit sales and revenues.
• A plan for monitoring and evaluating action plans in progress
and at the end of the plan period.
Note that the appendix contains a helpful marketing plan
template
that you can use to develop a plan that fits your company’s
unique re-
quirements. Check it out.
Implementing Your Plan via
the Marketing Mix
The marketing plan begins with customer targeting, something
we’ll deal with in detail later. After the target customer
segments
have been identified, the plan addresses them through the
marketing
Creating a Marketing Plan 3

mix. The marketing mix—also called the four P’s of
marketing—
includes product, place, price, and promotion (see figure 2-1).
These
represent the tools you will use to pursue your objectives in the
tar-
get market.
(Note: Identifying the target market is an essential part of any
marketing plan. So, too, is position. We discuss these important
top-
ics in chapter 4.)
Product
The product (or service) is the centerpiece of the marketing
mix.
Whether it’s a life insurance policy, a washing machine, or a
broad-
band Internet service, the product is the company’s offer to cus -
tomers. That offer includes physical aspects as well as the less
tangible
elements, such as warranties, option choices, and after-sales
service.
Thus, the product is the entire package you offer to customers.
Marketer’s Toolkit

Price
Product
Promotion
Place
Target
market
F I G U R E 2 - 1
Applying the marketing mix to a target market
4
You can differentiate products physically or through the
services
your company provides in support of the product. Products’
physi-
cal distinctions include the following:
• Form—size, shape, physical structure; for example, aspirin
coating and dosage
• Features—for example, a word processing program’s new text-
editing tool

• Performance quality—the level at which the product’s primary
characteristics function
• Conformance quality—the degree to which all the units of the
product perform equally
• Durability—the product’s expected operating life under
natural
or stressful conditions
• Reliability—the probability that the product won’t
malfunction
or fail
• Repairability—the ease with which the product can be fixed if
it malfunctions
• Style—the product’s look and feel
• Design—the way all the foregoing qualities work together (it’s
easy to use, looks nice, and lasts a long time)
You can also differentiate your product by service distinctions
that set it apart. Service distinctions include the following:
• Ordering ease—how easy it is for customers to buy the
product
• Delivery—how quickly and accurately the product is delivered
• Installation—how well the work is done to make the product
usable in its intended location
• Customer training—whether your company offers to train cus-
tomers in using the product

Creating a Marketing Plan 5
• Customer consulting—whether your company offers advice or
research services to buyers
• Maintenance and repair—how well your company helps cus-
tomers keep the product in good working order
The actual design of the product or service should be guided by
a deep understanding of what customers need, want, and are
willing
to pay for, as determined by market understanding and research.
Place
Place refers to the point of sale and the distribution of the
product or
service. Place may be a retail store, a national distributor
network, an
e-commerce Web site, or a direct mail catalog. Offering the
product
where and when customers want it is one of the most critical
aspects
of any marketing plan.
Witness the success of Amazon.com and Dell. Amazon.com
made books and other items handily available to customers
24/7, and

in a place that many found convenient—an Internet Web site. At
a
time when the book-buying public had to make time-consuming
trips to a bricks-and-mortar bookstore and browse through
thousands
of on-shelf products, Amazon.com offered a less time-
consuming al-
ternative and far greater product selection. True, Amazon.com
cus-
tomers missed out on the pleasures of traditional bookstore
browsing
and had only limited opportunities to thumb through prospective
pur-
chases. But Amazon.com’s “place” gave them something
bookstores
didn’t provide: customer reviews and ratings.
Dell’s is another story of “place” success. Its strategic decision
to
sell directly to customers gave it a leg up on competitors in the
battle
for personal computer sales. While rivals followed the
traditional ap-
proach of distributing through retail stores and dealers, Dell
skipped
the middleman. Selling direct allowed Dell to do the following:
• Capture customer information that would otherwise be missed
through other forms of distribution
Marketer’s Toolkit6

• Practice made-to-order manufacturing, another differentiating
factor in a product class where competing products are very
similar
• Make its product available 24/7
Few companies use a single place for transacting business with
customers. Many have market channels through which they meet
cus-
tomers; the more numerous and effective these channels are, the
greater the opportunities to make sales. The publisher of this
book,
for example, will take advantage of several channels, as shown
in fig-
ure 2-2. It will use a sales force to obtain shelf space in retail
book-
stores and will sell through Amazon.com. The sales force will
also
sell some copies to book wholesalers, which in turn will supply
in-
dependent bookstores. Specialized employees of the publisher
will
pursue direct bulk sales with corporations and with book clubs.
Meanwhile, a foreign rights specialist in the publisher’s
marketing
department will attempt to sell translation rights for the book to
non-English-language publishers around the world. The
publisher
will also use its e-commerce Web site to sell directly to final
cus-
tomers, avoiding the middlemen and the discounts they extract.

Publisher Sales force
E-commerce
Web site
Amazon.com
Book chains
Independent bookstores
Wholesalers
Foreign publishers, book clubs,
and corporate sales
Individual customers
F I G U R E 2 - 2
Many paths to the customer
7
There are many paths to customers. A market-driven company
takes as many of them as it can reasonably handle without

causing
conflicts between channels.
What aspects of “place” does your company use in its marketing
plans? Are these the most optimal for satisfying customers and
pro-
ducing the sales and profits you seek, or are you simply
following an
old, unexamined blueprint for putting your product or service in
front of customers? Think about it. Place is often taken for
granted,
but it makes a huge impact on marketing performance.
Price
Price is what a buyer must give up in exchange for your product
or
service. Pricing in a competitive environment is both critical
and
challenging. If you set the price too low, you’ll increase unit
sales at
the expense of profits. If you set it too high, some of your
customers
will walk into the waiting arms of competitors. Price decisions
in-
clude price point, list price, discounts, payment period, and so
on.
In free and competitive markets, pricing is the linchpin of most
transactions. When a customer who wants a product perceives
that
its value is worth the asking price, a transaction will take place,
bar-
ring other choices. Thus, moving the price higher or lower
regulates
the quantity of units sold. This point has implications for the

prod-
uct life cycle. You can price much more aggressively when your
product is perceived as new, unique, and without strong
substitutes,
but you must often reduce your price as substitutes and
competitors
appear in the maturity stage of the cycle.
Generally, your flexibility in pricing is a function of the
unique-
ness of your product or service (see figure 2-3). This is because
cus-
tomers have difficulty in assessing the value of more unique
offerings,
such as a custom-built guitar or a fully restored 1962 MG sports
car.
There are few if any comparables, making valuation difficult.
The
exact opposite is true among commodity products, such as
heating
oil and electrical wiring. In these cases, sellers have little
flexibility. If
they price their offering higher than the going rate, sales will
plum-
met. If they drop the price, sales will temporarily increase but
will

level off as competitors drop their prices—confounding the
prof-
itability of all sellers.
Some sellers successfully maintain a high price by surrounding
their very ordinary products with an aura of uniqueness, quality,
or
exoticism. This approach is commonplace in, for example, the
cos-
metics industry.
Wherever you price your product or service, that price is an im-
portant element of the marketing mix and will have an impact
on
your results. You can price for any of the following objectives:
to in-
crease unit sales, profits, or market share; to undermine a
competi-
tor; or to keep competitors from entering your turf. Successful
companies design their new products with specific price targets
in
mind. (Note: For more details on pricing, refer to chapter 9).
Promotion
Promotion, the fourth element in the marketing mix, is the most
dif-
ficult one to describe. It is all the communicative activities you
use
to ensure that customers know about your offerings, have a
favorable
Uniqueness

F
le
xi
b
ili
ty
Custom-built home
Tract housing
Low High
Low
High
F I G U R E 2 - 3
Pricing flexibility and product uniqueness
9
impression of them, and actually make a transaction. These
activities

include advertising, catalogs, contests, public relations, and
personal
selling. Within these categories we have TV, radio, and print
ads,
billboards, product placements in movies, sponsorship of public
TV
and radio channels, two-for-one dinner specials, customer
loyalty
programs, telemarketing, direct mail sales, and door-to-door
solici-
tations. And on and on.
The many faces of promotion are too numerous to cover in a
book of this size. Suffice it to say that, along with market
research,
promotion provides the critical communication link between
your
company and the customers you aim to serve.
Controlling Plan Implementation
Even when you’re prepared with a cohesive plan, adequate re-
sources, and all the right skills, you are bound to encounter
surprises
during implementation of your marketing plan. That’s because
busi-
ness, like life, rarely plays out according to plan. Here are a few
ex-
amples of the many surprises your firm may experience:
• Customer demand is lower than what your market research led
you to believe.
• Consumers use your product in ways you never intended.
• A previously invisible competitor blindsides you with a daz-

zling new offering.
• The cost of an ad campaign is higher than you estimated.
Constant monitoring and control of the firm’s marketing activ-
ities can help your company respond effectively to these kinds
of un-
expected events. Table 2-1 shows four types of marketing
controls
and explains who’s responsible, why you might select a
particular
form of control, and how you might implement these control
mea-
sures. Note that many items in the “How to control” column are
quantitative metrics: expense-to-sales ratio, product territory
prof-
itability, and so forth. Metrics are like the gauges on an aircraft
con-
trol panel, indicating where you are and showing key parameters
of
operating performance.
Depending on your role, you may find yourself responsible for
one or more of these activities. Or others in your company may
need your help in gathering the required information to conduct

these assessments. Whichever part of the control process you’re
in-
volved in, you can feel proud about contributing to a key stage
in
your firm’s marketing campaign.
Summing Up
• A marketing plan states exactly what the company will do in
launching new products and supporting older ones. It indi-
cates the timing of its sales and promotional activities, pricing
TA B L E 2 - 1
Controlling your marketing plan
Who is Why this
Type of control responsible? control type? How to control
Annual plan Top and middle To assess whether Analyze sales,
market
managers planned results have share, marketing
been achieved expense-to-sales ratio
Profitability Marketing To see where the Measure profitability
controllers company is making by product, territory,
and losing money customer, segment,
channel, order size;
measure ROI
Efficiency Line and staff To improve the Measure efficiency of
managers; spending and impact sales force, advertise-

marketing of marketing ments, sales promo-
controllers dollars tions, distribution
Strategy Top managers, To ask whether the Review marketing
marketing company is pursuing effectiveness and
auditors the best market, company’s social and
product, and channel ethical responsibilities
opportunities
Source: Harvard ManageMentor® on Marketing Essentials,
adapted with permission.
11
intentions, and distribution efforts. How the plan will be con-
trolled and the results measured are also part of the plan.
• A marketing plan is based on customer targeting and the ele-
ments of the marketing mix: product (or service), place, price,
and promotion (the four P’s).
• Product is the company’s offer to customers. It includes the
physical aspects of the offer as well as intangible elements,
such
as warranties.
• Place refers to the point of sale and the distribution of the

product or service. Place may be a retail store, a national dis -
tributor network, an e-commerce Web site, a direct mail cata-
log, or something else.
• Price is what a buyer must give up in exchange for the seller’s
product. In free and competitive markets it is a regulator of
customer demand. Generally, sellers have greater flexibility in
pricing when their offer is unique; they have less flexibility as
their offers become commodity-like.
• Promotion describes the many communicative activities used
to
ensure that customers know about the company’s offerings,
have
a favorable impression of them, and actually make a transaction.
Notes
Chapter 2
1. Carl von Clausewitz, On War, volume 1 (London: Kegan
Paul,
1911), 177.
2. Edward Mead Earle, ed., Makers of Modern Strategy (Prince-
ton, NJ: Princeton University Press, 1943).

3. Michael E. Porter, Competitive Strategy (New York: Free
Press,
1985), xxiv.
4. Michael E. Porter, “What Is Strategy?” Harvard Business Re-
view, November–December 1996, 61–78.
13
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Article Notes The Metrics that Marketers Muddle-
359053/Marina Hamagaki_504182_assignsubmission… 1/3
Article Notes 3
Bendle, N. T., & Bagga, C. K. (2016). The metrics that
marketers muddle. MIT Sloan Management
Review, 57(3), 73-82.
Despite their widely acknowledged importance, some popular
marketing metrics are regularly misunderstood and
misused. One major reason for marketing’s diminishing role is
the difficulty of meaning its impact: The value marketers
generate is often difficult to quantify. The main goals of this
article are to understand how these marketing metrics are
used and understood and to develop ideas to help marketers
unmuddle their metrics. The authors conducted surveys
from managers from all functions across the business-to-
business and business-to-consumer industries.
5 Best Known Marketing Metrics:
- Market share
- Net Promoter Score (NPS)
- The Value of a ‘Like’
- Consumer Lifetime Value (CLV)
- Return on Investment (ROI)
Market Share

Market share is a popular marketing metric. One reason for why
manager value market share is that research
from the 1970s suggested a link between market share and ROI;
however, the linkage may be less clear: the
studies have found it is often correlational rather than causal.
The survey found that there were two ways
managers used market share: as an ultimate objective or as an
intermediate measure of success. Increasing
market share is not a meaningful ultimate objective for
maximizing shareholder value and stakeholder
management: If the aim is to maximize the returns to
shareholders, increased market share offers no benefits
unless it eventually generates profits. In some markets, bigger
can be better; however, economies of scale do not
automatically apply all markets.
Unmuddling Market Share:
The authors suggest a simple set of rules for the appropriate use
of the market share metric:
- Managers should not consider market share as the ultimate
objective or as a proxy for absolute size.
- Managers should evaluate it from the competitors’ and
consumers’ point of view. If an increase in market
share is not going to get positive feedback from competitors and
consumers, then an increase in market share
will not lead to a productive result.
- Managers should analyze whether market share drives
profitability in your industry. Companies with
superior products tend to have high market share and high
profitability because product superiority causes both.

This means that the two metrics are correlated, BUT it does not
necessarily mean that increasing market share
will increase profits.
Net Promoter Score (NPS)
This metric is used to measure customer loyalty to a firm.
Companies among diverse industries have embraced
NPS as a way to monitor their customer service operations
while NPS also has been seen as a system that allows
managers to use the scores to shape managerial actions.
One of the advantages of NPS is its simplicity: It is easy for
managers and employees to understand the goal of
having more promoters and fewer detractors. However, there are
weaknesses: E.g., in the net promoter literature,
a customer’s worth to Apple has been described as the
customer’s spending, ignoring the costs associated with
serving the customer. It is also easy to imagine how to increase
the net promoter score (such as making
customers happier) while destroying even to-line growth (by
slashing prices). Another problem with NPS as a
metric is the classification system: The boundaries between
scores of 6 and 7 (detractors and passives) and 8 and
9 (passive and promoters) seem somewhat arbitrary and
culturally specific.
Unmuddling NPS:

The value of NPS depends on whether a manager sees it as a
metric or as a system. The authors suggest that the
NPS metric cannot change the marketing performance.
However, they advise using this metric as a part of a
system employed in evaluating the performance which might
lead to a cultural shift within the organization.
The Value of a ‘Like’
This metric is used for measuring the social media capital of the
company. New approaches are being developed
all the time and they have the potential to aid understanding of
how social media creates value. It is measured as
the difference between the average value of customers
endorsing the company and the average value of the
customers who are not endorsing the company. The majority of
managers link between their social media
spending the value of a ‘like’. However, it does not mean that
the cause of the differences in users’ value is
attributable to a company’s social media strategy. And the
reason that social media strategy shouldn’t be seen as
the driver of value difference between fans and nonfans is
because customers who are social media fans will
differ from nonfans for reasons unrelated to the company’s
social media strategy.
Unmuddling the Value of a ‘Like’:
This difference between two groups of consumers does not
suggest an effect of online marketing activity or lack
thereof. It should be investigated thoroughly by the managers. If
the management is using the revenue to
measure customer value, then this marketing metric does not
give a good estimate. However, if the company

does want to understand the impact of social media marketing,
they should use randomized control experiments
to derive causal answers.
Consumer Lifetime Value (CLV)
Consumer lifetime value (CLV), which is the present value of
cash flows from a customer relationship, can help
managers in decision making related to investment in
developing customer relationships, as it is used to measure
the value of the current customer base. If the management is
using the customer value in their decision-making
process, then CLV is a useful tool for them.
Unmuddling CLV:
The authors suggest that CLV calculations should not include
the customer acquisition cost and the estimated
CLV should be compared to the estimated acquisition cost to
derive conclusions. The bigger the difference
between the estimated CLV and the estimated acquisition cost,
the better the acquisition campaign.
Return on Investment (ROI)
Return on investment is a popular and potentially important
metric allowing for the comparison of disparate
investments. A critical requirement for calculating ROI is

knowing the net profit generated by a specific
investment decision. According to the authors, there is
confusion within management over the use of ROI.
However, as ROI is understood across disciplines, it is a
powerful metric to communicate across the
organization.
Unmuddling ROI:
The authors advise that if a manager is assessing the financial
return on an investment, then ROI is an
appropriate metric and can be calculated by dividing the
incremental profits by the investments. Agribusiness
marketing managers who are passionate about establishing the
credibility of the value created through marketing
should be thorough in their use of metrics. Most importantly,
they should be able to understand the metric, its use
and what it represents.

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