Framework For Marketing Planning
Gene Anderson (distributed March 2005)
This note outlines the basic steps in the marketing planning process and provides detailed guidance for
conducting a Situation Analysis. The stages of the marketing planning process can be listed as follows:
I. Situation Analysis (5C’s)
A. External
1. Customer Analysis
2. Competitor/Collaborator Analysis
3. Context or PEST Analysis
B. Internal (Company)
1. The Organization’s Goals and Objectives
2. The Organization’s Strengths and Weaknesses
C. Identify Key Problems & Opportunities
1. Perform SWOT Analysis
2. Set Priorities
3. Develop an Overall Assessment
II. Segmentation, Targeting, and Positioning (STP)
A. Identify Relevant Markets and Segments
B. Select Target Markets and Target Segments
C. Develop Positioning Strategy
III. Determine Marketing Mix Alternatives
A.
B.
C.
D.
E.
Product (Goods and/or Services)
Price
Place (Distribution)
Promotion (Advertising and Promotion)
Evaluation of Alternatives
IV. Execution
A. Implement
B. Monitor
C. Control
D. Adapt
The first stage, the Situation Analysis, combines internal analysis of the organization with external
analysis of its customers and the competitive environment. The fundamental questions to be answered
include: What are target buyers needs?; What do we do well?; and What are competitors doing to serve
1
those needs? Careful analysis of the firm’s situation - past, current, and future - provides a foundation
for determining how the firm’s resources can best be deployed in terms of marketing strategy and tactics.
The purpose of the Problems and Opportunities stage is to distill what has been learned from the
situation analysis. The result should be a limited set of key factors that play a role in the decision-athand. To gain a better understanding of the firm’s situation, it is useful to prioritize the factors identified.
A useful approach to doing so is to provide an argument for whether the overall situation is favorable or
unfavorable.
After analyzing the firm’s situation and identifying the key problems and opportunities faced by the firm,
the information for creating an appropriate marketing strategy is in place. By analyzing the organization,
its customers and the competitive environment, there is an increased likelihood of developing superior
marketing strategy and tactics. By understanding what the organization does well, what customers need,
and what competitors are doing - both now and in the future - managers can create the best possible
match between organizational skills and market needs - and to do it better than the competition.
Once the Situation Analysis is complete and the key problems and opportunities have been identified, the
value proposition - what value to offer and to whom - can be developed. Given what has been learned in
the Situation Analysis, the fundamental activities in determining the value proposition are: 1) understand
the needs of buyers in possible target markets; 2) identify segments of buyers with similar needs and/or
responsiveness to marketing strategy and tactics; 3) select one or more segments of buyers to target;
and 4) develop an appropriate positioning strategy.
In conjunction with the development of the value proposition, the means of value delivery - how the
organization will deliver on a given value proposition - must also be determined. It is generally
recommended that you develop several alternative sets of marketing strategy and marketing mix tactics
and then evaluate each one from both a qualitative and quantitative standpoint.
Finally, select one of the alternative plans as the recommended course of action. Careful attention
should be paid to how the plan will be implemented, how progress will be measured and evaluated, and
how the plan might be adapted over time.
The Situation Analysis
In many business situations, decision-makers are confronted with large amounts of data - a considerable
proportion of which is unimportant, irrelevant, or redundant, in terms of addressing the decision-athand. The goal of a Situation Analysis is to improve the signal-to-noise ratio by reducing the data to a
finite number of Problems and Opportunities that should be considered in arriving at a final judgment.
The Situation Analysis provides an organizing framework -- the 5C's of Company, Customers,
Collaborators, Competitors, and Context -- for guiding the process of identifying the set of issues that are
'material' to the decision-at-hand. The 5C's framework ensures that important issues in each domain are
identified and, subsequently, that judgments are more reasonable and better supported than would be
typical using a more ad hoc approach to 'cracking' the case.
In using the Situation Analysis approach, keep in mind that the objective is to identify only those issues
that are 'material' to addressing the problem or opportunity at hand. Hence, not all areas of the Situation
Analysis will need to be considered for every marketing decision encountered. In some cases,
competition may not be an important factor. In other situations, the legal or political environment may
be irrelevant for the decision. In this regard, it is always a good practice to ask 'What is the implication
for the marketing decision I am trying to make?'
In essence, the Situation Analysis framework should be viewed as a 'roadmap' or 'checklist' for marketing
decision-making. Without such a checklist, a decision-maker might easily fail to consider important issues
2
that would affect their final recommendations.
Overview of the Situation Analysis Framework
ic
om cal
on gi
Ec olo
Ec
Po
Le litic
ga al
l
The basic elements of the Situation Analysis are illustrated below. As suggested by the diagram, the
firm's marketing strategy and marketing mix should create a strong 'fit' between the organization and
each of the external forces affecting it. In assessing the overall situation, it is often useful to categorize
each relationship as either favorable or unfavorable. A strong organization is one that enjoys a favorable
position with respect to each of the external forces -- Customers, Collaborators, Competitors, and
Context.
Suppliers
Collaborators
Potential
Entrants
Value
Competitors
Complements
Company
Te
ch
l
ic
cia ph
So gra
o
m
De
Capital
no
lo
gi
ca
l
Customers
Customers
The purpose of the Customer Analysis stage is to make explicit what you know about the nature of
consumer or customer demand for the product or service under investigation. In particular, we want to
learn:






How decisions are made
Who is involved in making the decision
What information is used
The trade-offs they are willing to make
Where & when they are ready to buy
How the product or service is used
Key areas of analysis to consider include:
3
Market Segmentation


What segments can be identified?
What is their size, growth & potential?
Decision Making Unit (DMU)
 Who is involved?
 Who has power? Who has stake?
 How great is bargaining power?
 What information sources are used and how?
Decision Making Process (DMP)
 How/when/where do buyers search, decide, purchase, transport, store, use, maintain,
dispose, re-buy, etc
 What drives perceived value?
 What are customer acquisition & retention characteristics?
Competitors
For long-run success, marketing strategy and tactics must take into account likely competitive moves &
counter-moves. Afterall, what we do affects what they do which affects what we do … and so on. So,
our strategy and tactics needs to take all players’ subsequent moves into account.
The main goal of competitor analysis is to analyze the nature and extent of the competition - both
current and potential. Key areas of analysis include:
Identification
 Market definition
o Who competes to provide the same benefits?
o Who competes for the same customer resources (money, time, etc)?
 Direct competitors
 Indirect competitors and substitutes
 Potential competitors and entrants
Assessment
 What are the competitors’ positions?
o Goals
o Strategy
o Tactics
o Resources
o Implementation
o Performance
 Who Is Successful Or Unsuccessful? Why?
Prediction
 Anticipate future moves
 Predict expected reactions to our moves
Potential sources of information about competitors and collaborators are listed in Table 1 towards the end
of this document.
Collaborators
4
Increasingly, competition is between networks, rather than individual organizations. Key issues to
consider regarding collaborators include:
Value Chain Position
 What is their position in the value chain?
 What functions/activities do they perform?
Complementary Capabilities
 Who has capabilities that we need?
 Who would benefit from capabilities that we possess?
Compatibility
 Are our goals compatible?
 Can we trust this partner?
Commitment
 What level of commitment is required?
 What structure & systems are needed?
 What do we need to know/learn?
Context
The main purpose of analyzing the business environment is to understand the dynamics of the market
place and what they imply for the decision at hand:
PEST Analysis
 What are the most important PEST factors affecting our business?
o Political/Legal – e.g., NAFTA, WTO, Deregulation
o Economic/Ecological – e.g., Capital and Labor Markets, Asian ‘Flu’, Inflation,
Interest Rates, Resource Sustainability
o Social/Cultural – e.g., Multi-Culturism, Global Diversity
o Technological – e.g., ‘Shadow of Obsolescence’, internet diffusion, life sciences
 How favorable are each of the above factors?
Competitive Forces Analysis
 How favorable are the relevant competitive forces?
o Bargaining power of suppliers
o Bargaining power of buyers
o Bargaining power of collaborators
o Bargaining power of investors
 What is the degree of competitive rivalry?
Scenario Analysis
 Which PEST and competitive forces factors are most likely to change?
 What are the most likely future scenarios?
 Which scenarios are the most favorable? The least?
5
Company
We analyze the organization's objectives, strategy, and capabilities, in order to evaluate the strength of
the current business model and to identify areas for improvement and/or change. Importantly, we want
to understand the implications of how well the organization fits with the critical parts of the external
environment identified in our analysis of the customers, collaborators, competitors, and the PEST.
Important areas of analysis include:
Goals and Objectives
 What business is the firm in? What business should it be in?
 Who are the key stakeholders? What are their needs? What is the relative priority of
these needs?
 What is the organization’s stated mission?
 What are the stated goals and objectives for achieving the firm’s mission and/or
satisfying stakeholders?
 Are these goals measurable? Actionable? Reasonable?
 Are supra-ordinate goals properly linked to subordinate ones?
Position
 Marketing Strategy
o Target segment
o Positioning
 Marketing Mix
o Product/Service
o Place
o Promotion
o Pricing
 Resources
 Implementation
Performance
 What metrics is the organization using to gauge performance?
o Effectiveness
o Efficiency
o Supra-ordinate
o Subordinate
 How effectively is the organization performing with respect to its stated goals?
 How efficiently is the organization achieving this level of performance?
6
TABLE 1
Sources of Information About Competitors
Public
What competitors say about themselves
What others say about them
Advertising
Promotional materials
Press releases
Speeches
Books
Articles
Personnel changes
Want ads
Customer communications
Books
Articles
Case studies
Consultants
Newspaper reporters
Environmental groups
Consumer groups
Unions
Recruiting firms
Manuals
Technical papers
Licenses
Trade Profession
Patents
Courses
Seminars
Suppliers/vendors
Trade press
Industry study
Customers
Subcontractors
Consultants
Government
Lawsuits
Security and Exchange Commission reports
Antitrust
FTC filings
State and federal agencies
Applications and permit filings
National plans
Patent filings
Government programs
Investors
Annual meetings
Annual reports
Prospectuses
Stock and bond issues
Security analyst reports
Industry studies
Credit reports
7
Customer Analysis Worksheet
What Are the Relevant Segments?
What Are Their Needs, Perceptions, and Behaviors?
Segment 1
DMU (Decision Making Unit)
DMP (Decision Making Process)
Perceived Value Drivers
Acquisition & Retention
Size, Growth & Potential
8
Segment 2
Segment 3
Segment 4
Competitor Analysis Worksheet
What Is the Relative Strength of Competitors’ Positions –
Both Now and In the Future?
Competitor A
Direct, Indirect or Potential?
Performance
Success Factors
Goals & Objectives
Strategies & Tactics
Strengths & Weaknesses
Anticipated Moves/Reactions
9
Competitor B
Our Company
Context Analysis Worksheet
How Favorable Is the Market Context? Why?
Importance
Favorability
(e.g., Allocate 100pts)
(e.g., 1=Low, 5=High)
Political/Legal Environment
Economic/Ecological Environment
Social/Demographic Environment
Technological Environment
Supplier Power
Threat of Entry
Capital
Complements
Overall Favorability
10
Implications
Company Analysis Worksheet
How Favorable Is the Fit Between the Company and
Customers, Competitors, and the PEST?
Fit w/
Customers
Goals & Objectives
Performance
Success Factors
Strategy & Tactics
Capabilities
Organization
Implementation
11
Fit w/
Competitors
Fit w/
Context
SWOT Analysis Worksheet
Is the Overall Situation Favorable or Unfavorable? Why?
Strength, Weakness,
Opportunity, or Threat
Importance
(e.g., Allocate 100pts)
Overall Favorability
(Weighted Average)
12
Favorability
(e.g., 1=Low, 5=High)
Generation of Alternatives Worksheet
For Each Possible Target Market Alternative, What Is Our Best
Marketing Strategy Given Market Forces (Especially SWOT)?
Fit w/
Company
Fit w/
Customers
Objective
Target Segment(s)
Positioning
Product
Place
Promotion
Price
13
Fit w/
Competition
Fit w/
Context
Evaluation of Alternatives Worksheet
For Each Possible Alternative Marketing Program, How Favorable
Is the Fit With Market Forces (Especially SWOT)?
Importance
(e.g., Allocate 100pts)
Fit w/ Customers
Fit w/ Competition
Fit w/ Context
Fit w/ Company
Overall
14
Alternative I
Alternative II
BIBLIOGRAPHY
Bernhardt, Kenneth L. and Thomas C. Kinnear (1991), Cases In Marketing Management, 5th edition,
Boston, MA: Irwin.
Kotler, Philip (1999), Marketing Management: Analysis, Planning, Implementation, and Control , 10th
edition, Englewood Cliffs, NJ: Prentice-Hall.
Kotler, Philip, William Gregor and William Rogers (1977), “The Marketing Audit Comes of Age,” Sloan
Management Review, 18:2, 25-43.
Lilien, Gary, Philip Kotler and Sridhar Moorthy (1992), Marketing Models, Englewood Cliffs, NJ: PrenticeHall.
Lehmann, Donald R. and Russell S. Winer (1994), Analysis for Marketing Planning, 3rd edition,
Englewood Cliffs, NJ: Prentice-Hall.
Nayak, P. Ranganath, Erica Drazen, and George Kastner (1992), “The High-Performance Business:
Accelerating Performance Improvement,” Prism, 1st Quarter 1992, p. 1-20.
15