Marketing plan and marketing strategy

A company may run more than one marketing plan in parallel, particularly when it has diverse operations or several brands that each demand their own plan. The same applies when a business operates across multiple markets or regions. Each market needs its own plan. Regardless of how many plans are running, they should all converge on the same overall commercial objectives.

Despite their importance, many companies, large and small, conduct their marketing in an uncoordinated way, without a professional approach to their markets and audiences. The result is wasted marketing budget and mediocre returns. A marketing plan governs the planning, implementation and evaluation of the many marketing actions a company executes.

To build an effective marketing plan you need a clear understanding of your audiences, a structured approach to reaching them, and actions that build customer loyalty.

Why a marketing plan?

In a monopoly market, where there is no competition, the need for a marketing plan is less pressing, because competition is a defining feature of the commercial environment. The force or threat of competition raises the question of how to be competitive, and how to hold a competitive edge over others in the industry.

For every product or service there are many companies offering similar things, whether large, mid-sized or small. Every business therefore has to read its situation and aim to create and maintain a workable balance between its objectives, its resources, and the market opportunities currently available or emerging. The point of strategic planning is long-term profitability and growth. That is why marketing planning and strategy matter so much: any misstep can threaten a company's livelihood. Conversely, a clear understanding and overview can defend the business against external threats and give it the room to meet the growth and resource targets it has set itself.

The role of marketing plans

Every company needs a marketing plan. It doesn't matter whether the business is small or has thousands of employees spread around the world. Marketing actions drive sales, and without sales we don't generate the revenue we need to keep operating long-term. Despite their importance, many managers don't spend the time or resources required to develop well-considered, well-executed marketing plans. Good managers regularly invest in marketing strategy and actions that build long-term value for the company.

The role of a marketing plan is to define and articulate how the company will market and sell its products or services to consumers. Rather than assuming the product is perfect for everyone, focus is placed on the key audiences most likely to buy. Even small businesses or solo operators who rely almost entirely on word-of-mouth or business that comes through their network need a method to make sure satisfied customers tell others about the business. While that can work as one channel, it's unlikely to sustain or generate long-term growth, so managers need to look at other, more profitable routes too.

Marketing plans and actions matter because they make selling easier. Targeting the right audiences in a structured, well-executed way minimises marketing spend while increasing the odds that successful actions lead to sales. Answering what problem the product solves for the customer, and why they should choose this product over others on the market, lets us identify the situations and opportunities where customers are ready to buy.

The planning process

The process by which a marketing plan comes together is called marketing planning, and it's a complex exercise that requires integrating a number of action plans. It means deciding in the present what we intend to do in the future, which involves not only trying to foresee the consequences of decisions but also predicting conditions, events and other developments that are likely to affect the company's business. Marketing planning is meant to steer the company's marketing actions and resources towards its current marketing objectives: growth, survival, risk reduction, holding the line, profit maximisation, customer service, expansion of activity, image-building and so on.

The marketing plan is the tool that puts those actions into effect (the thing that links the company to its markets), and it sits at the heart of all marketing planning. A marketing plan is a document setting out future actions and outlining how the resources under the company's control will be deployed to reach its marketing objectives. In short, the plan explains in detail what the company is trying to achieve and how its marketing management will use the controllable levers of marketing (product, distribution, pricing and promotion) to get there. It is the central tool for managing and coordinating marketing activity.

Marketing planning, as an essential part of the company's overall planning and strategy, also defines the marketing manager's role and responsibilities: what is to be done, when, and how much resource is allocated to each part of the marketing effort.

Marketing plan vs. marketing strategy

A marketing plan is not the same thing as a marketing strategy. A marketing strategy describes how a company intends to reach particular goals or targets, and might cover, for example, campaigns, channels, marketing collateral and visual identity, tone and voice, audiences and so on. The marketing strategy is the foundation of successful growth in the market, and makes sure that the marketing work is aligned with the company's overall direction.

Marketing strategy follows from the company's own strategy and defines the point of the marketing effort: the offering the company brings to the market, how the product reaches its audiences, and why the marketing actions help the company meet its purpose and stated goals. Only once a marketing strategy is in place can an effective marketing plan be developed.

The marketing plan, in turn, is the execution plan driven by the strategy: the roadmap of tactical marketing actions that help the company hit its marketing targets, describing in as much detail as possible what the company will do, where it will do it, when campaigns will run, and how their results will be measured.

The marketing plan, then, is the guide that spells out the specific actions a company will take, while the marketing strategy describes the underlying reasons for how the marketing work will help the company reach its goals.

Marketing plan vs. sales plan

There is a fundamental difference between a sales plan and a marketing plan, and it sits mainly in their purpose and scope. A sales plan is a precise, focused approach to generating revenue by selling products and services to potential buyers, describing the methods, techniques and goals that drive sales, and including the metrics used to track and evaluate progress. A sales plan is essential for every business and acts as the roadmap for revenue growth.

A marketing plan, by contrast, is the broader strategy aimed at building and maintaining commercial relationships with consumers. That includes identifying audiences, understanding their needs, preferences and buying decisions, and developing actions that reach and engage them. It might cover advertising and other promotional work, public relations and a range of other marketing activities. The ultimate aim of a marketing plan is still to drive sales and revenue, but it takes a more holistic view that accounts for the wider picture of the company's relationship with its customers.

Although sales and marketing plans both play a key role in a company's success, they need to be developed as separate documents. Sales plans focus on specific actions and targets for selling products and services, while marketing plans provide the broader strategy that builds long-term relationships with buyers.

Goal-setting matters in both cases, and the point of it is to draw clear lines for the business and its activity. Companies set themselves goals across every key part of the marketing work (sales numbers, market share, market position, product development, profit, margin and so on), always with the company and the targets that matter most at the time in mind. Goals also have to be set with a view to where the market stands, and they need to be realistic and in tune with the conditions and opportunities actually available.

Marketing plan vs. business plan

Both a business plan and a marketing plan are important parts of running any company. These tools don't just help companies organise themselves. They also support performance assessment against the chosen metrics and indicate whether the company is on track to meet the goals set in those plans.

While the marketing plan is a central component of any business plan, the business plan covers a range of other elements that have to do directly with operations and are not specifically defined as marketing. A business plan gives an overview of the company: people, operations, locations, marketing and the financials. More often than not, a business plan is used in conversations with investors or lenders interested in the viability of the business, showing where the company stands and the opportunities ahead. These are very operations-focused documents.

A marketing plan is more about the actions intended to meet a company's goals and targets, pointing at the opportunities and other developments unfolding in the market and competitive environment. At their core, business plans are more strategy-led, guided by the company's vision ("Who are we and why do we exist?"), while marketing plans are more tactical and action-led ("How are we going to do this?"). The two are nonetheless highly dependent on each other and have to be in sync.

Time horizon

A typical marketing plan covers 12 months at a time and is refreshed annually, but longer-term plans, usually running to three or five years, are needed too.

Long-term marketing plans put less weight on individual actions or campaigns and more on long-term goals, with short-term plans acting as stepping stones towards them. A long-term plan might, for example, set out an ambition to reach a particular market position in terms of share, or to become the dominant player in a given market, something that would be unrealistic to achieve through short-term tactics alone. A long-term plan can also include moves into new markets, changes to the product or service offering, expansion of the target audience, broader operations and so on. These are all matters that 12-month plans struggle to handle until it comes time to turn them into concrete marketing actions.

Short-term plans are then used for marketing actions in the near future, near enough that the actions can be set out and executed in detail, down to which channels to use and what creative needs to be produced for publication. Typically a short-term plan covers 12 months or less, sometimes only for a particular season, the summer or Christmas trading period, for example. Most marketing plans run from January to December, with the work usually carried out over the autumn but rarely later than October each year, because the output of the marketing plan feeds directly into the company's budget and how funds are allocated across departments. Some companies use a fiscal year running March to February so that the Christmas trading season and January sales fall within the same operating year, though there can be other reasons too, such as year-end reporting and so on.

Either way, short-term plans need to stay agile and companies have to be ready to revisit and adjust them regularly. Markets are dynamic and always bring some change to the competitive environment: new offerings, new competitors, fewer competitors, shifts in market sentiment and so on. Even with a short-term plan in place, it still needs to be reviewed regularly and adjusted where necessary. Those changes can equally be welcome or unwelcome, but if something needs to change there's no use sticking to a plan drawn up 12 months earlier. That's why it's common to map out particular scenarios with prepared responses if one of them comes to pass. This discipline has grown in importance over time as markets become more and more dynamic, and with them the need to adapt at the same pace.