Your Strategic Partner in Business

MARKETING PLAN
COMPASS

By

Dr. Rishardh
BY Hussain
Managing Director /Management Consultant
Blue Ocean Business Consultancy (Pvt) Ltd
#25. Simon Hewavitharana Road
Colombo 03
Contents
Introduction 1

What is marketing 1

How can Marketing Help your business 2

Strategic Audit 2

Guidance on how to conduct a PESTEL Analysis 6

Porter’s five forces model 8

McKinsey’s 7s model 11

SWOT Analysis 13

Goals and Objectives 15

Goal Setting Compass 18

BCG Matrix 19

Objectives 21

Understand Your Competitor 23

How to make products and services for you 23

Promotional activity 25

Action plan and resources 27

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Marketing Planning Toolkit for Small Businesses

1. Introduction
This marketing plan toolkit has been developed with the goal of providing
necessary support and guidance, whatever your background, business or level
of expertise. It also will equip you with a brief overview of marketing, and
answering some most commonly raised questions.

2. What is marketing?
Marketing is the activity, set of institutions, and processes for creating,
communicating, delivering, and exchanging offerings that have value for
customers, clients, partners, and society at large. (Approved July 2013).

The management process responsible for identifying, anticipating and

satisfying customer requirements profitably.

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Marketing is the corporate philosophy and the central business function of an

organization that creates value for its customers and other stake-holders through
competitive, profitable and sustainable exchange process. (SLIM, 2013)

3. How can marketing help your business?

Effective sales and marketing lies at the heart of successful business growth.
Promotional and advertising campaigns – and deciding on the most
appropriate media and creative execution – can build awareness, generate
leads, acquire new customers and make a business stand out. Market
research can help identify and create new products and markets. Customer
relationship management strategies can help build business from an existing
client base.
Customers don’t buy the products and services. They buy the solutions to
their problems. If your company can understand the customer, it can develop
the products that appeal to them.

Strategic Audit
The strategic audit is a key section of a strategic plan. The need for this audit is
for the company decision makers to understand the market in which the
company operates.

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Figure 1 Business Environment

General environment (Macro Environment)

Give a brief explanation of the company’s General (Macro) Environment

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Internal environment
Give a brief explanation of the company’s Internal Environment

PESTEL Analysis
Give a brief explanation of the PESTEL Model and why it is useful for the
strategic audit

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Table 2 Guidance on how to conduct a PESTEL Analysis

When conducting the PESTEL analysis, factors relevant to the entire industry
should be identified instead of focussing solely on the impact on the specific
company. For example, under political factors, the effects of changes to the tax
policy on the entire industry should be considered instead of discussing how
the company’s activities alone may be disrupted.

During a strategic audit, a broad volume of information regarding the company

will be revealed. However, only the information that is most relevant to the
company needs to be included in the SWOT analysis. So when selecting the
points through the PESTEL model for the SWOT analysis, give a brief, but
accurate, justification for your choices.

For example: The recession poses a severe threat to company sales, as the
product offered is a premium product. Hence this factor should be taken into
consideration when creating the strategic plan.

Political Factors: These factors determine how a government may influence the
economy or a certain industry. For instance, a government may impose a new
tax or duty which causes entire revenue-generating structures of an
organisation to change. Political factors include tax policies, fiscal policy, and
trade tariffs that a government may levy around the fiscal year, and they may
affect the business environment (economic environment) to a great extent.

Economic Factors: These factors are determinants of an economy’s

performance that directly impact a company and have resonating, long-term
effects. For example, a rise in the inflation rate of any economy will affect the
way that companies price their products and services. Adding to that, it will
affect the purchasing power of a consumer and change demand/supply models
for that economy. Economic factors include inflation rate, interest rates,
foreign exchange rates, and economic growth patterns.

Social Factors: These factors show the social environment of the market and
gauge determinants like cultural trends, demographics, and population
analytics. An example of this can be buying trends for Western countries like
the US, where there is higher demand during the holiday season.

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Table 2 Guidance on how to conduct a PESTEL Analysis….

Legal Factors: These include internal and external factors. There are certain
laws that affect the business environment in a certain country, while there are
certain policies that companies maintain for themselves. Legal analysis takes
into account both of these angles and then charts strategies in light of these
considerations.

Technological Factors: These factors pertain to innovations in technology that

may affect the operations of the industry and the market, either favourably or
unfavourably. This includes automation, research and development, and the
level of technological awareness that a market possesses.

Environmental Factors: These are the factors that influence or are determined
by the surrounding environment. This aspect of the PESTEL Model is crucial for
certain industries, for example tourism and agriculture. Factors in a business
environmental analysis include, but are not limited to: weather, geographical
location, global changes in climate, and environmental offsets.

Task environment (Micro Environment)

Give a brief explanation of the company’s Task (Micro) Environment

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Porter’s Five Forces Analysis

Give a brief explanation of Porter’s five forces model and why it is useful for
the strategic audit

Figure 2 Porter’s five forces model

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Table 2 - Guidance on how to conduct a PESTEL Analysis using Porter’s Model

Threat of New Entry: High/Low Research into the company to find out whether
the following factors are present in the company’s micro environment. If
present, also state whether the factor increases or reduces the chances of a
new competitor entering the industry. For example:
 Time and cost of entry
The greater the cost and time investment to operate in the industry, the
slighter the chances of a new competitor entering the industry.
 Specialist knowledge
 Economies of scale
 Technology protection

Buyer Power: High/Low Research into the company to find out whether the
following factors are present in the company’s micro environment. If present,
also state whether the factor enhances buyer power or minimises it. For
example:
 Number of customers: The greater the number of customers, the more
powerful the consumer voice is.
 Differences between competitors
 Ability to substitute
 Cost of changing
Threat of Substitution: High/Low Research into the company to find out
whether the following factors are present in the company’s micro
environment. If present, also state whether the factor enhances the threat of
substitution or minimises it. For example:
 Substitute performance If the substitute product/service’s performance
in the industry is weak, the threat of substitution is low as not many
customers seem to prefer the substitute.
 Cost of switching
 Buyer propensity to substitute

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Table 2 - Guidance on how to conduct a PESTEL Analysis using Porter’s Model…

Supplier Power: High/Low Research into the company to find out whether the
following factors are present in the company’s micro environment. If present,
also state whether the factor enhances supplier power or minimises it. For
example:
 Number of suppliers: If the number of suppliers within an industry is
high, the company can easily switch suppliers based on who offers the
lowest cost. Therefore, supplier power will be lower if the number of
suppliers is higher.
 Size of suppliers
 Uniqueness of service
 Your ability to substitute
 Cost of changing

Competitive Rivalry: High/Low Research into the company to find out whether
the following factors are present in the company’s micro environment. If
present, also state whether the factor enhances competitive rivalry or
minimises it. For example:
 Number of competitors: The higher the number of competitors in an
industry, the greater the competitive rivalry there will be in that industry.
 Quality differences
 Other differences
 Switching costs
 Customer loyalty

In conclusion, give a brief yet accurate justification of which factors are the
most vital, and therefore should be included in the SWOT analysis.

Internal environment
Give a brief explanation of the internal environment

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McKinsey’s 7s model
Give a brief explanation of the McKinsey 7S model and why it is useful for the
strategic audit

Figure 3 McKinsey’s 7s model

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Table 3 Guidance on Internal Audit

Strategy: Give a brief description of how the organisation competes in the
marketplace. Cover the following points:
 What is the company’s strategy?
 How does it intend to achieve its objectives?
 How does it deal with competitive pressure?
 How are changes in customer demands dealt with?
 How is strategy adjusted for environmental issues?
Structure: Give a brief description of the company hierarchy and the division of
tasks. Cover the following points:
 How is the company/team divided?
 What is the hierarchy?
 How do the various departments coordinate activities?
 How do the team members organise and align themselves?
 Are decision making and controlling centralised or decentralised? Is this
as it should be, given the team or company’s work?
 Where are the lines of communication, both explicit and implicit?

Systems: Give a brief description of the daily activities and procedures that staff
members engage in:
 What are the main systems on which the organisation is run?
 Consider financial and HR systems as well as communications and
document storage
 Where are the controls and how are they monitored and evaluated?
 Which internal rules and processes do the team use to keep on track?

Shared values: Give a brief description of the company’s core values that are
evidenced in the corporate culture and general work ethic:
 What are the core values?
 What is the corporate/team culture?
 How strong are these values?
 What are the fundamental values that the company/team was built on?

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Table 3 Guidance on Internal Audit………

Style: Give a brief description of the style of leadership adopted in the

company:
 How participative is the management/leadership style?
 How effective is that leadership?
 Do employees/team members tend to be competitive or cooperative?
 Are there real teams functioning within the organisation, or are they just
nominal groups?
Staff: Give a brief description of the company employees and their general
capabilities. Cover the following points:
 Which positions or specialisations are represented within the team?
 Which positions need to be filled?
 Are there gaps in required competencies?
Skills: Give a brief description of the actual skills and competencies of the
employees working for the company. Cover the following points:
 What are the strongest skills represented within the company/team?
 Are there any skills gaps?
 What is the company/team known for doing well?
 Do the current employees/team members have the ability to do the job?
How are skills monitored and assessed?

SWOT Analysis

SWOT analysis is a tool for auditing an organization and its environment. It is the
first stage of planning and helps marketers to focus on key issues. SWOT stands
for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses
are internal factors. Opportunities and threats are external factors. A strength is
a positive internal factor. A weakness is a negative internal factor. An opportunity
is a positive external factor. A threat is a negative external factor.

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Give a brief explanation on the SWOT analysis and why it is useful for the
strategic audit.

Fill in the SWOT diagram below with key information uncovered through the
PESTEL analysis, Porters five forces analysis and the McKinsey’s 7S analysis.

Simple rules.

 Be realistic about the strengths and weaknesses of your

organization.
 It should distinguish between where your organization is today, and
where it could be in the future.
 It should always be specific. Avoid grey areas.
 Always apply the tool in relation to your competition i.e. better than
or worse than your competition.
 Keep your audit short and simple. Avoid complexity and over
analysis
 It is subjective.

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4. Goals and Objectives

The goal of your business and overall vision should be the key statement that
drive your business towards the desired future.
For example what type of business are you and where do you want to be in
three years time?
Basically the goals and objectives are milestones you are planning achieve in
the course of your business journey in time to come.
All your businesses exist in a dynamic business environment. When thinking
about your goals you may want to consider the factors that might affect your
business now and in the future. The table below provides some suggestions.
With the advent of the internet, there are now many sources of information
on your competitors and your environment. You may also be surprised how
much business information is available from your nearest city library. And

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remember, government reports are a good source of competitive information

and can be found at
i. www.cbsl.gov.lk;
ii. www.statistics.gov.lk;
iii. ww.srilankabusiness.com;
iv. www.customs.gov.lk;
v. www.nationalchamber.lk and
vi. www.chamber.lk

Write your Vision here

Write your Mission Statement

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List your values and define them

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The following Table may help you think about your goals.
Table 1 – Goal Setting Compass.
Your Business and Its Environment
 What marketing information do you have, e.g. total market size growth and trends?

 What information do you have on your customers?

 What information do you have on your sales and what does this tell you?

 Products/services: What products/services are you selling, what is

their market position, who are their competitors?

 Price: How do you price your product/service? Do you discount? How

does this compare to your competitors?

 Place: Where and how are you currently selling your products/services?

 Promotion: What types of promotional activities are you currently carrying

out? How do you assess this? Are you getting results?

If you are a Service Industry you may want to also consider:

 People: Customer care and quality – are you actively promoting a culture
of service within our company? Are you recruiting the right people in the
first place? Are you providing them with the tools to do the job?

 Processes: Can your team deliver a consistent level of service to all

customers at all times? Do you have written procedures in place to ensure
consistency of service?

 Physical evidence: What message does the appearance of your premises

or your people send out to your customers? Would your staff benefit from
a uniform? If customers' visit your premises, is there a unique feature
about the building or location you can exploit? Alternatively can you create
a brand image using distinctive décor?

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BCG Matrix

The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed
to help with long-term strategic planning, to help a business consider growth
opportunities by reviewing its portfolio of products to decide where to invest, to
discontinue or develop products. It's also known as the Growth/Share Matrix.

The Matrix is divided into 4 quadrants derived on market growth and relative
market share, as shown in the diagram below.

 1. Dogs: These are products with low growth or market share.

 2. Question marks or Problem Child: Products in high growth markets with

low market share.

 3. Stars: Products in high growth markets with high market share.

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 4. Cash cows: Products in low growth markets with high market share

How to use the BCG Matrix?

To look at each of these quadrants, here are some tips:

 Dogs: The usual marketing advice is to remove any dogs from your product
portfolio as they are a drain on resources.

However, some can generate ongoing revenue with little cost.

For example, in the automotive sector, when a car line ends, there is still a
need for spare parts. As SAAB ceased trading and producing new cars, a
whole business has emerged providing SAAB parts.

 Question marks: Named this, as it’s not known if they will become a star or
drop into the dog quadrant. These products often require significant
investment to push them into the star quadrant. The challenge is that a lot of
investment may be required to get a return. For example, Rovio, creators of
the very successful Angry Birds game has developed many other games you
may not have heard of. Computer games companies often develop hundreds
of games before gaining one successful game. It’s not always easy to spot the
future star and this can result in potentially wasted funds.

 Stars: Can be the market leader though require ongoing investment to

sustain. They generate more ROI than other product categories.

 Cash cows: ‘Milk these products as much as possible without killing the cow!.
Often mature, well established products. The company Procter & Gamble
which manufactures Pampers nappies to Lynx deodorants has often been
described as a ‘cash cow company’.

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Objectives

Your objectives should be a statement of what Cash Cow Action

you want to achieve and need to be SMART
(smart, measurable, achievable, realistic and
time bound). They need to be quantitative (i.e.
List customers List actions
expressed where possible in terms of values, by revenue
volumes and market shares), and need to cover
the period of the plan, e.g. sell 400 units in the Rising Star Action

next twelve months. List customers List actions

by revenue

Your objective may relate to sales volume or Question Mark Action

market share. You may wish to generate List customers List actions
 More volume from Existing Customer by revenue

 New business from new customer Dog Action

 Obtaining revenue from different List customers List actions
channel such as internet or mail order by revenue

Understanding your customers and building relationships

Understanding your customers is crucial as you need to satisfy existing customers

and seek new ones.

The easy way to do this is to divide them into groups. For example; service,
product, location, volume or revenue

The example below is based on revenue and is a useful way of categorizing your
customers and the actions required. It is also easy to share this simple format
with your team so everyone is focused on the key issues.

Start by thinking about your customers and looking at your sales records. Consider
how they buy, when, in what volume and to what value.

Who do you consider as your top customers (Cash Cows?)

Who are regular customers but have the potential to buy more (Rising Stars)

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Who are the customers who make a spot purchase but you don’t know why
(Question Mark)
Who are the customers that buy on an irregular basis but want that extra bit of
service or reduced volume for no extra cost? (Dogs)

Once you have identified your customers it is then important to discuss the
actions required for each group to maximize profit or grow new business and to
utilize your resources effectively. You may want to consider the following.
 Are your customers in this market satisfied or are they looking
for a change?
 Can you offer them something which really meets their needs?
 Will you generate enough business in this group to survive?
 Alternatively, is there too much business? Will you overreach
yourself?
 How will competitors react?

Once you fully understand what your customers want, you can start to build a
relationship with them that is based on properly satisfying their needs. It is
important that you ensure that your message is communicated effectively.
Understanding your competitors
The best way of ‘beating your competitors’ and providing your company with an
added advantage is to learn more about them and understand where they are
strong and where they are weak. You can then compare this information with
your own view of your company and look for opportunities where your product
service can provide an additional benefits.
You may want to consider the following:
i. How completive is your market?
ii. Who are your major competitors, how big are they, what is their market
share?
iii. What type of the reputation do your competitors have?
iv. What are your competitors likely to be doing?
v. Are they are new players entering your market place?
vi. Is there a threat of new substitute?
vii. Do your customer or suppliers have bargaining power?
viii. How do your competitors distribute their products, what are their
production capabilities?
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ix. What is their marketing like?

x. What are their key strengths and weaknesses?

How to make products and services for you

You may want to consider your Strengths and Weaknesses in terms of your
products or services as this will also help you think about your Opportunities and
Threats. (SWOT)
It is not always easy to assess the strengths and weaknesses of your own business
objectively, so you may wish to get someone else close to you or the business to
help you.

You might consider the following

i. Distinctive product or
company strengths
ii. Financial resources
iii. Range and level of service
iv. Client base
v. Price/fee structure
vi. Distributors
vii. Promotion and selling

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SWOT Analysis
Strengths Weaknesses

Opportunities Threats

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Promotional activity

No matter how wonderful your product, no matter how unique your service, the
world is unlikely to beat a path to your door unprompted. You need to carry out
promotional activity to attract the right sort of business, in the right quantity, at
the right time and to distinguish you from the competition.

Promotion is not just about advertising your business, nor is it just about selling.
It's about pulling together a range of techniques, in the most cost-effective way
you can, to initiate, increase and maintain awareness of what you offer to your
customers. You need to move your customers from total lack of awareness
through to the point at which they actually buy and buy again.

There are four key elements to consider:

Public Relations: Good PR will generate understanding and positive interest in

your business. It will wet potential customers' appetite for more information,
prompt enquiries, re- establish dormant contracts and reinforces your image
with existing customers.

PR is a long-term process, to do with developing an image and a reputation with

your customers and the market as a whole. Often this image is created by
cumulative effect, based on the quality of your printed materials, your staff, and
the willingness of your customers to broadcast their good experiences. You can
however devise strategies to focus your approach, aimed at enhancing your
reputation with people whose opinion you value.

You must remember however, that PR cannot be used to guarantee results as you
have no direct control over what is reported, how or when.

Advertising: Advertising is an almost universal tool. You can use it to gain your
customers' attention, attract customers' interest, create desire for your product
and service and then prompt them to buy.

There are many ways you can advertise your business, but it can be very
expensive for the Small Business so requires a financial commitment.

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Advertisements can be placed in local and national press, in magazines,

and on the internet. You can also create ads for poster sites, radio, cinema
and TV. Advertising can be as simple as dropping leaflets through doors in
your local town, or placing posters in shop windows. You can use direct
mail to carry out a mail shot to potential customers, existing customers or
lapsed customers.

The message you want to send – this should be simple and consistent
throughout your activities. Businesses often find impact can be
significantly improved by repeating campaigns or running the same
campaign in different media, eg posters and leaflet drops.

Packaging: You are probably familiar with the use of packaging to protect
your product, help distribute your product and sometimes, to meet
regulations. You can, however, use it as a tool to differentiate a product,
either visually or in terms of the convenience it offers to the consumer.
Packaging design is an inherent part of the brand identity of a product.

Personal Selling: The most expensive and the most effective form of
promotion is personal selling. Even if your business does not have a sales
force you will have found yourself selling at some time – whether you were
selling your idea to the bank or encouraging a shop to stock your product.
You need to consider what is the best way to gain access to existing
customers or attract new customers.

For example, PR or Direct Mail may help generate leads. You also need to
remember to sell the benefits of your product or service not just the
product. If you employ a sales team are they split geographically, or would
it be better to have them focusing on different products or different
market areas? Should you have someone focusing on new business only,
or managing key accounts?

Direct Marketing: This is often two way communication, developing a

relationship between supplier and customer. Response is carefully
measured in an attempt to take the waste out of marketing and should
be part of your long-term strategy. Activity through virtually any media
can be classed as direct marketing, including telemarketing. For most
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small business, direct mail is the type of direct marketing activity carried

Out most commonly. Leaflets are sent through the post, with the aims of eliciting
a response – be it purchase, trial loyalty, relationship building, or one of many
other objectives. E-mail is now a commonly used form of direct marketing

Action plan and resources

Simply committing your ideas and plans for your business down onto paper gives
you a framework and allows you to organize your ideas and make the best use of
your resources.

You can write a comprehensive business or marketing plan, and indeed you will
need to if you are require funds from a bank or other financial institute, but in
reality a simple action plan will assist you in developing your business.

The important thing to remember is that the plan has to be sufficiently thorough,
and to have enough detail to act as a useful tool. You need to be pragmatic, and
accept that if the information you need is not available, then you simply cannot
include it.

Producing an action plan will also help you consider what resources, in terms of
people or what funds are available, and what you can realistically achieve.

To Find out more

Contact Dr. Rishardh on 077 6997991 or email:
rishardh@blueobc.com

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