Chapter 9 - The marketing plan

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The operational marketing plan
Strategic planning
Planning procedure and timetable
Monitoring performance

The operational marketing plan

An operational marketing plan serves as a detailed 'road map' for the planning and supervision of all marketing activities for the following year. The plan is therefore concerned with tactics and action. The marketing plan should be made up of a series of sub-plans covering all elements of the marketing mix for each product line.

Marketing sub-plans

Developing an effective marketing plan involves understanding the expectations of the consumer, in order to make decisions about Product, Price, Place and Promotion. Each sub-plan must be prepared to satisfy the expectations of the consumer and to meet the business objectives of the company.

The product plan should cover:

the product range and the number of varieties to be offered;
the key performance factors, e.g. yield, resistance, grain quality;
seed specification in terms of quality and treatments;
new product flow and new variety launch.

The price plan is concerned with:

pricing policy;
commissions/margins in the distribution chain;
dealer discount structure;
short-term pricing tactics, e.g. new variety, stock clearance.

The place plan needs to consider:

the distribution networks that will be used;
intermediate storage and transport arrangements;
sales territories and responsibilities of the representatives;
customer convenience .

The promotion plan must take into account:

packaging type and design, colour, logo and product information;
the advertising and PR campaign;
the promotional material and sales aids;
demonstrations;
coordination with other organizations.

Marketing support plans

In addition to the above, other plans will also have to be made.

The marketing information plan is concerned with:

the internal flow of management information;
market research projects to be undertaken;
customer feedback on product, service and promotions;
competitor review to judge relative marketing performance.

The production plan covers:

seed production volume targets by variety;
the quantity and type of packaging that is required;
the chemicals required for seed treatments;
the packing schedule and dates that stock is required.

The personnel plan needs to consider:

the staffing levels required, both permanent and temporary;
the training that will need to be given to staff and dealers;
an appraisal system, pay scales and bonus structure;
line management organization and responsibilities.

The budget plan needs to cover:

sales targets and costs of all the associated activities;
financial objectives, e.g. gross margin, expenses and profit;
resources required expressed in financial terms;
performance measurement against budget and controls.

Although the marketing department should have some freedom and flexibility to change tactics, once the marketing plan is approved by management, the marketing department should not change objectives or dramatically alter budgets. Any changes in these critical areas can only be made after consultation with, and approval by, senior management. The marketing plan could therefore be viewed as a contract between management and the marketing department.

Strategic planning

Managers are frequently too preoccupied with day-to-day operational problems to become involved in longer term thinking. Indeed, businesses can fail due to the failure of management to consider the future. Organizations can be slow to perceive changes. These may be happening to the cropping pattern, with the introduction of competitive varieties, or to the seed distribution system.

The approach to strategic planning

The starting point is always reviewing the current strategy. The approach to reviewing that strategy has three main elements which pose the three questions that follow.

1. "What is the outlook for the seed industry and the seed market in the future?" This examines those factors, outside the control of the business, which create future uncertainties, for example: a what if the government relaxed import restrictions on seed? b. what if the government removed certain crop subsidies? c. what if the world commodity price for a crop fell by half?
2. "How secure is the company's position in the market?" This provides an analysis of the company's position in relation to current and future competition and is an examination of its strengths and weaknesses versus its main competitors, for example: a. . breeding strength and range of varieties offered for sale; b. seed production capacity and cost of production; c. location and capacity of storage facilities.
3. "What is the future direction of the company's business and how is this going to be achieved?" In answering this question a manager is stating the company's broad business objectives and an understanding of how they will be achieved. An example of this might be "to operate a business selling high-value imported vegetable seeds through retail dealers, based on an exclusive agreement with an international seed company, with a view to achieving a five percent share of the vegetable seed market in five years".

However, such a statement can only be formulated once the market situation has been analysed. Also any future plan has to be considered against existing constraints such as finance, staff competence, competition and trading restrictions.

Planning procedure and timetable

Every organization should have a planning and reporting timetable linked to seasonal activity and the financial year. The activities of the agricultural year may not necessarily coincide with the reporting requirements of the financial year end. As far as possible the planning cycle should fit the seasonal activity of the business.

The following example of a planning procedure (see Figure 12) comes from an international company operating in Pakistan, selling a range of seeds including sunflower, maize, cotton and sorghum, with a financial year ending on 31 December.

Planning tools

There are several techniques which can be used to assist with planning. They include:

Using charts. A chart gives the opportunity to produce a visual plan showing key events and responsibilities over a twelve-month period. Plans from each sector of the business can be compared and peak workloads anticipated better with critical periods monitored more closely.

Using marketing briefs. These are a series of documents created by the marketing department which help to give both a complete and individual plan for each seed variety. The format should allow for individual sections to be monitored, reviewed and revised, if necessary, thus forming the cornerstone for marketing, sales and production decisions. Suggested headings for these briefs are given in Figure 13.

Monitoring performance

Management Information Systems (MIS)

The receipt of an order for a bag of seed initiates a chain reaction which results in that bag of seed reaching the farmer. This not only involves physical action, such as transport, but also administrative action, such as creating a dispatch note, updating stock records, sending out an

Figure 12 A strategic planning example from Pakistan

The planning cycle begins with a Strategic Business Review in late August-early September following the "Kharif' planting season after the July rains. This is a formalized review in three stages covering all aspects of the business and involving all business managers. The previous season's activity will be reviewed and sales targets agreed for the coming two season's on a three-year rolling basis.

  Attendance Topics reviewed
Review 1 regional management area sales managers sales, distributor and variety performance; marketing mix; competitors' activities.

This meeting is a review of the previous sales season, which started in November/December with farm calls, through the active selling season of January/March and subsequent harvest for maize/sunflower. It also allows for a review of the sorghum selling period and sales of cotton during July/ August.

Review 2 regional management sales manager performance;
decisions on distributor mix;
sales support activity;
planning of strategy and budgets;
planning for seed production.


This second review takes the findings from the first meeting and considers action plans for the next year, making key decisions on marketing, distributors, sales support and seed production.

Review 3 key regional and
national management
review and agree proposals from
the second review;
emphasis on financial
implications costs, revenue and
trading margins;
review longer term strategic
and business development plans
over 3 to 5 years.

Figure 13 Suggested headings for marketing briefs

Objectives

1. Written statement of campaign objectives
2. Market size details

seed market
crop market

3. Sales volume targets*
4. Seed production (local and imports)*
5. Market share targets*
6. Pricing details
7. Income statement*

income
margin %
gross margin

8. Distribution channels
9. Marketing position
10. Key competing varieties
11 . Packaging
12. Package size, type
13. Seed specifications
14. Labelling

Promotion
1. Farmers' needs
2. Product benefits
3. Product weaknesses
4. Competing varieties
5. Promotional budget*
6. Promotional requirements

target group
media
timing
promotional items

* data should be provided for three years and should include previous and current years invoice, payment collection and credit control. Each of these administrative actions will produce manual or computer records containing information which, when analysed and presented in a form that is useful to management, can be used for planning, monitoring and control of the activities of the organization.

The marketing plan forms the basis of monitoring as it details the marketing activities and objectives which can be compared with actual results and progress. Regular updates and forecasts should be made for each reporting period against the budget. This process starts with the salesman who first talks to the dealers and farmers and reassesses the sales potential, then talks to the sales manager who collates the information and updates the forecasts.

Such information helps a manager analyse sales performance, target the sales and promotion effort, evaluate distribution channels and dealer performance and follow up late payments where credit is given. Clearly, no manager can cope with having copies of all invoices sent to him so there needs to be a system, either manual or computer based, which does the analysis and presents a report in a form which can be readily understood.

This can be illustrated by imagining a situation that is likely to arise with a company which is distributing seeds throughout several regions. During the sales season the stock of a particular variety, which has been heavily promoted, has been moved out of the central warehouse to locations around the country. Sales have not been consistent throughout each region with some locations having sold out and not able to satisfy the demand while others are still holding stock. The sowing period is short so it is imperative that the sales manager receives information about the progress of sales in the different regions on a daily basis. Action can then be taken to move stocks between locations and make an additional effort where sales are slow.

Information systems

The efficient production of reports depends on sound data collection and handling systems. Computers have become an essential tool but the extent to which information systems are computerized will obviously depend on the size and capacity of the seed company. What is important is that any system should be well designed and based on a complete understanding of the real, not assumed or apparent, needs of individual managers. A Management Information System essentially consists of three phases, inputting the data, processing it and producing the output (see Figure 14). Input data required fore management information system together with the resulting output reports are shown in Figure 15.

Example of an invoice

Figure 14 The three phases of a management information system

Figure 15 Data required for a management information system

Input data can be either internal data or external data:

1. Internal data are stock records, invoices and payroll records.
2. External data are information gathered on competitors. a market survey conducted to evaluate how effective a promotion campaign has been and government agricultural statistics.

Output data is used for planning reports and operational reports:

1 . Planning reports are not required on a regular basis. Some form of data handling system will be needed to produce the highly summarized information as and when required.
2. Operational reports are produced to assist the marketing or sales manager to control the day-to-day sales campaign, e.g. stock reports by product line and location, sales reports by product line and region. Decisions may have to be taken as a result of comparing the actual situation to the plan or budget. Information for such decisions is usually based on internal data and is usually required on a predetermined routine basis, e.g. weekly stock and sales reports.


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