Multimedia Marketing/Marketing.iso/market/chapter2.5p

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SECTION 2.5  Planning and Control

INSTRUCTIONS We use the words "planning" and "control" many times during our day-
to-day affairs. Just what do these terms mean in marketing?

EXAMPLE

A regional candy producer has decided to enter the national candy
market. This necessitates planning in a number of areas. It will
be necessary to develop plans as to how the company can arrange
for physical distribution of its products on a national scale.
Also, plans are necessary as to how the company can use advertising
to develop consumer awareness in areas of the country where the
product line is unknown. Determinations will have to be made as to
what wholesalers (if any) and what retailers will be included in
the channel of distribution. Price schedules will have to be developed
and refined for specific geographic areas. All of this must be
carefully planned. A slipup in one of the areas may mean that the
effort to expand nationally will fail.

DETAILS

Companies cannot just sit and wait to see what will happen in
upcoming periods. They must try to predict what is likely to
happen and develop ideas as to what actions they will take if
various circumstances occur. Firms that do not plan or plan poorly
must be reactive--they wait and see what happens in their markets
and then try to adapt to these events. Good planners are proactive--
they have positive programs designed to lead them to the achievement
of important goals.

A plan is simply a blueprint for the future. It requires one or
more goals and a set of actions to achieve the goals. Planning
is central to all aspects of life and it is especially important
to marketing.

An important characteristic that distinguishes many successful
businesses from unsuccessful ones is the considerable attention
that the former devote to careful planning. Detailed plans describe
the activities a company will use to accomplish its goals as well
as how funds will be used to implement them.

Good plans specify detailed goals for each marketing activity as
well as the means to attain the goals. A company's strategies
provide very useful guides for goal setting. Beyond just providing
direction, goals should spell out the specific tasks that each
activity should accomplish.

There are ennumerable types of plans. Companies may plan the
introduction of new products, implentation of new advertising
campaigns, creation of rebate programs, dropping of some intermediaries
and replacing them with others, and many other programs. Normally a
given company will have multiple plans in operation at any given time.

PROBLEM 1

Which of the following is an example of a good marketing goal for
a regional candy company that desires to expand to the national
market:

A. To obtain distribution in as many retail outlets as is feasible,
   given that the company sales force is small.
B. To expose thirty percent of the target market to company advertising
   within one year.
C. To maintain prices at competitive levels.
D. To improve the quality of candy that is sold through gift shops.

WORKED

An example of a good marketing goal for a regional candy company that
desires to expand to the national market is to expose thirty
percent of the target market to company advertising within one year.
The plan sets forth a numerical figure to which actual achievement
can be compared and it sets forth a schedule--one year.

One of the hallmarks of a good plan is that it specifies exactly
what a company wants to do, how it will do it, and when it will
do it. This provides action prescriptions for the personnel who
must carry out the plan--it furnishes them with a blueprint as to
what actions are necessary. Many unsuccessful marketers do not
incorporate such detail into their perspectives. Rather, their
plans tend to be vague and even confusing.

A company which sells health and beauty aids to retailers prides
itself in the detailed plans which enable it to provide efficient
and timely distribution of its products. Timetables are set as to
exactly how much of each kind of each product must be shipped
to each retail store, when the products should leave company
distribution warehouses, and when they should arrive at the retail
store. This has enabled the company to develop a distribution system
that is the envy of the industry.

ANSWER  B

INSTRUCTIONS We use the words "planning" and "control" many times during our day-
to-day affairs. Just what do these terms mean in marketing?

EXAMPLE

A regional candy producer has decided to enter the national candy
market. This necessitates planning in a number of areas. It will
be necessary to develop plans as to how the company can arrange
for physical distribution of its products on a national scale.
Also, plans are necessary as to how the company can use advertising
to develop consumer awareness in areas of the country where the
product line is unknown. Determinations will have to be made as to
what wholesalers (if any) and what retailers will be included in
the channel of distribution. Price schedules will have to be developed
and refined for specific geographic areas. All of this must be
carefully planned. A slipup in one of the areas may mean that the
effort to expand nationally will fail.

DETAILS

Plans spell out specific actions that the company should undertake
in each activity, along with a timetable for accomplishing them.
They indicate what activities will be performed, who is responsible
for them, when they should be accomplished, how they will be
performed, and where they will be carried out. Lack of detail in
any of these areas is likely to result in actions by marketing
personnel that are not in accord with company objectives and not
coordinated with the activities of other divisions of the company.

If company personnel are confused as to what action to take in a
given instance, they can refer to the plans for guidance. The
plans should be articulated in such a way that they are meaningful
to company personnel--they leave nothing to guesswork.

There is considerable merit in committing important plans to  writing.
This provides a permanant record of what can be done that is available
to any manager who needs this information. Further, requiring that
plans be written forces managers to be specific and to think through
the planning process carefully. Managers know that their written
plans are open to the scrutiny of others.

Implementation of the plan is often more successful if those who
will be responsible for carrying it out are involved in its
development. Managers who helped produce a plan are likely to be
motivated to see it work. Also, if they have participated in the
planning process they are familiar with it and do not need instruction
as to  the makeup of the plan.

PROBLEM 2

A furniture producer is developing plans for expanding its product
line to include dinette sets. Which of the following is not a
necessary requisite of the plan:

A. Who is responsible for each activity.
B. When each activity should be performed.
C. Where each activity should be carried out.
D. Why each activity should be carried out.

WORKED
A furniture producer is developing plans for expanding its product
line to include dinette sets. The plan should provide for who is
responsible for each activity, when each activity should be performed,
and where each activity should be carried out.

Effective plans do not necessarily have to specify why each activity
is to be carried out. Such detail is unnecessary and may unduly
complicate the planning process. It is necessary to spell out the
other details of the plan, however, if company operations are to be
coordinated.

If the regional candy producer wants to  expand its product line,
management should specify details of media
advertising (how many and what kind of TV ads to sponsor),
sales force activities (the amount of time which each sales
representative will spend in developing a certain number of new
accounts) and other related marketing actions. Management should
coordinate all actions so that they complement each other in
an integrated effort centering on profitably servicing the selected
target market.

ANSWER  D

INSTRUCTIONS We use the words "planning" and "control" many times during our day-
to-day affairs. Just what do these terms mean in marketing?

EXAMPLE

A regional candy producer has decided to enter the national candy
market. This necessitates planning in a number of areas. It will
be necessary to develop plans as to how the company can arrange
for physical distribution of its products on a national scale.
Also, plans are necessary as to how the company can use advertising
to develop consumer awareness in areas of the country where the
product line is unknown. Determinations will have to be made as to
what wholesalers (if any) and what retailers will be included in
the channel of distribution. Price schedules will have to be developed
and refined for specific geographic areas. All of this must be
carefully planned. A slipup in one of the areas may mean that the
effort to expand nationally will fail.

DETAILS

Changes in technology, competitor actions, consumer needs, and
environmental conditions are among the many factors affecting
performance and opportunity. Consequently, a firm's initial plans
often do not result in achievement of its goals. To combat falling
off the intended mark, management must periodically engage in
controlling and revising company activities--often as important as
the initial planning itself.

A company's overall objectives and goals, along with specific
marketing goals, serve as a basis for controlling ongoing efforts.
They represent guidelines against which management can compare actual
performance. In turn, significant variances from planned results
signal the need to evaluate problem areas.

For example, if a five percent growth in annual sales is a
marketing goal, the firm  should  determine whether or
not a problem exists if sales are stagnant during the first
quarter. Perhaps the goal was unrealistic, possibly the marketing
activities were inappropriate, or the firm's overall strategy
may need revision due to faulty design or recent environmental
changes. With proper control measures, however, the company
can develop revised programs before it is too late to keep
operations on track.

Many companies have "contingency plans"--backup plans that can be
put into motion if the original plans turn out to be ineffective
or unrealistic. A firm might expect that industry sales will
increase and have a product introduction plan that is based upon
that assumption. It might have a different product introduction
plan that could be put into effect if industry sales are
disappointing.

PROBLEM 3

A paper manufacturer is in the process of setting up control procedures
in its marketing department. To which of the following would management
compare actual performance, as a means of control.

A. The sales force should increase the number of its new accounts
   by three percent.
B. Advertising expenses have risen by twenty percent.
C. The company introduced 26 new products last year.
D. Competitors prices are predicted to fall during the winter.

WORKED
A paper manufacturer is in the process of setting up control procedures
in its marketing department. Management could control the goal: The
sales force should increase the number of its new accounts by three
percent" to actual performance.

Control means contrasting actual performance against something. In
the case of marketing, the "something" usually consists of objectives
and goals. This underscores the importance of having well-conceived
objectives and goals. Earlier it was stated that objectives and goals
are important components of the planning process. Now we see that they
are also essential for control.

A large manufacturer of shower massage devices has instilled a system
where objectives and goals are developed annually and revised on a
quarterly basis. Actual performance is compared with the objectives
and goals each quarter and variations from planned effort are red
tagged for investigation. In many cases these variations alert
management of the need for changes in the marketing mix, often for
changes on the part of the sales force, such as calling on accounts
more frequently or adjusting sales messages to meet competitors'
actions. The company marketing manager is of the opinion that this
system of control is essential if the enterprise is to stay competitive
in this market.

ANSWER A

INSTRUCTIONS We use the words "planning" and "control" many times during our day-
to-day affairs. Just what do these terms mean in marketing?

EXAMPLE

A regional candy producer has decided to enter the national candy
market. This necessitates planning in a number of areas. It will
be necessary to develop plans as to how the company can arrange
for physical distribution of its products on a national scale.
Also, plans are necessary as to how the company can use advertising
to develop consumer awareness in areas of the country where the
product line is unknown. Determinations will have to be made as to
what wholesalers (if any) and what retailers will be included in
the channel of distribution. Price schedules will have to be developed
and refined for specific geographic areas. All of this must be
carefully planned. A slipup in one of the areas may mean that the
effort to expand nationally will fail.

DETAILS

Plans are often developed in light of what is expected in the future.
Companies moniter the environment, look for trends, and try to plan
for them. A major environmental trend that is now taking hold, for
example, is the "graying"--growing older--of the population. This
will affect virtually every industry--from prescription drugs to
furniture and clothing.

As people grow older, most develop arthritis. Some companies set
their plans accordingly. Some pain-killers, notably aspirin, are useful
in dispelling inflamation of the joints that accompany this disease.
Other pain-killers do not. However, some of the producers of the latter
are now preparing plans for introducing anti-inflamatory ingredients
in their offerings in the future. They realize that this is needed,
in order to remain competitive.

Many of the more successful companies study environmental trends
and formulate plans that are based upon these trends. Some
examples of these environmental phenomena are:

1. Concern about the quality of drinking water--promoting the sale
   of bottled water and other natural beverages.
2. Concern about crime--promoting the sale of ennumerable security
   devices and systems.
3. Concern about animal species--bird feeding is one of the leading
   leisure activities in the United States today.
4. Focus on spiritual values--promoting the sale of religious music
   and symbols such as jewelry crosses for necklaces.
5. Desire to assert oneself--promoting the sale of such items as
   cigars and bumper stickers.

These are only examples. A glance at any daily newspaper will reveal
many others.

PROBLEM 4

A department store chain management team is attempting to plan for
the graying of the population. A plan which might prove to be very
useful, in this regard is to:

A. Offer more outdoor furniture.
B. Offer more fashionable merchandise.
C. Be more liberal in granting credit.
D. Advertise the fashion appeal of the store.

WORKED

A department store management team is attempting to plan for the
graying of the population. A plan which might prove to be very useful,
in this regard, is to offer more outdoor furniture. Older persons tend
to spend a great deal of time relaxing and working in their homes.
While they do travel, they are highly home oriented. Many enjoy
spending time in their back yards, sitting around the pool, barbequing,
playing horseshoes, or some other activity. Most are not prime prospects
for fashionable merchandise--they prefer comfort over style. Many do
not like the idea of incurring much debt, so would not be attracted by
liberal credit.

ANSWER  A