Strategic Planning in

Marketing
2.1 Developing a Strategic Plan
• Strategy—the plans, actions, objectives, and goals that
outline how the business is going to compete in its chosen
markets given its portfolio of products or services. In
marketing, a portfolio is a collection or listing of all the goods
and services that a company sells to customers.
• Corporate-level strategy covers the entire business in a complex
organization where there are multiple businesses, divisions, or
operating units (sometimes called strategic business units, or SBUs).
• Business-level strategy is the strategic plan created for a single
business or operating unit, and these plans are generally developed
by middle management to support the corporate-level strategy.
2.1 Developing a Strategic Plan
• Corporate-level and business-level strategies lead to the
development of functional strategy, which is the plan to achieve
the corporate- and business-level objectives in functional areas
such as human resources, marketing, and production.

Many organizations have only a single product line, market

focus, or business, so they will require only a business-level
strategy. However, with larger organizations, it can be
important to break the overall business into smaller, more
manageable strategic business units to maintain an overall
focus on the business as a whole and pull the business-level
strategies into a cohesive whole.
2.1 Developing a Strategic Plan
Steps in the Strategic Planning Process
There are many variations of the strategic planning process—almost as many as
there are publications on strategic planning. For our purposes in this textbook,
we’re going to use the five-step process.
2.1 Developing a Strategic Plan
Step One: The Vision Statement: Where Do We See the Business
Going?
The strategic planning process begins with a solid understanding of
what the organization is trying to create—that is, its vision
statement. A vision statement is forward-looking and is intended to
create a mental image of what the organization wants to achieve
in the longer term. Vision statements should be both inspirational and
aspirational.

Step Two: The Mission Statement: Why Does the Business Exist?
The mission statement of an organization sums up in one to three
sentences what the company does, who it serves, and what
differentiates it from its competitors. Whereas the vision statement
provided the destination, the mission
statement provides the guideposts for the business to get there.
2.1 Developing a Strategic Plan
Mission statements serve two purposes. First, a well-written mission
statement helps employees remain focused on the aims of the
business. Second, it encourages them to discover ways of moving
toward increasing their productivity in order to achieve company goals.

Prospective investors also often refer to a company’s mission statement

to see if their values align with those of the company. let’s bring this
definition to life by including a few mission statements from well-known
companies:

Tesla: “To accelerate the advent of sustainable transport by bringing

compelling mass-market electric cars to market as soon as possible
Apple: “To bring the best personal computing products and support to
students, educators, designers, scientists, engineers, businesspersons
and consumers in over 140 countries around the world”
2.1 Developing a Strategic Plan
There are also two types of mission statements: customer oriented
or product oriented. A customer-oriented mission statement
defines the business in terms of how it intends to provide solutions
to customer needs.

Netflix: “To entertain the world”

A product-oriented mission statement, the focus is on the

offering itself rather than the needs of customers.

eBay: “To be the world’s favorite destination for discovering great

value and unique selection”
2.1 Developing a Strategic Plan
Step Three: Perform a Gap Analysis
Simply put, a gap analysis is an internal analysis of the company or
organization to identify and review any inherent deficiencies that may
hinder its ability to meet its goals. A gap analysis determines what
factors in the organization may be causing it to underperform.

A gap analysis answers the following questions:

• Where are we now?
• Where would we like to be?
• What’s stopping us from getting there?

A gap analysis as part of the strategic planning process is a way to

determine where the “soft spots” are and where adjustments need to be
made before setting a course of action.
2.1 Developing a Strategic Plan
There are four steps to completion of a gap analysis.
1. Identify the current state of the business, organization,
or department.
2. Identify where you want to be. Consider your current state
(from Step 1) and where you want to be in a reasonable time
frame.
3. Identify the gaps. Identify how you’re going to bridge that
gap of where you are now and where you want to be. This step
involves figuring out what those gaps are.
4. Devise improvements to close the gaps. It’s time to
determine the proper course of action to close the gap, keeping
in mind the cost of implementation for each solution. Ideas are
easy; it’s the execution of those ideas that becomes
challenging.
2.1 Developing a Strategic Plan
Step Four: Establish Objectives and Goals
Goals and objectives are a critical part of every organization, particularly
in the strategic planning process. When written effectively, these goals
provide a sense of direction and a clearer focus. It’s these goals that
give the organization a target at which it can aim, so to speak.

But before we go further, let’s differentiate between goals and

objectives. Goals are statements of desired outcomes that are
expected to be achieved over a longer period of time, typically three
to five years. They are broad statements of the desired results; they do
not describe the methods that will be utilized in order to achieve
those results.
2.1 Developing a Strategic Plan
On the other hand, objectives are
“action items.” They are specific
targets to be achieved within a
shorter time frame, generally one
year or less, to achieve the stated
goal.

The goals and objectives of an

organization define the key actions
that allow it to execute its chosen
strategy. However, to be effective,
goals and objectives should be
SMART— specific, measurable,
attainable, realistic/relevant, and
time-bound.
2.1 Developing a Strategic Plan
o First, effective goals should be specific. They should be clear
and easy to understand. A specific goal answers questions
like “What needs to be accomplished?
o Second, effective goals should be measurable. Specificity is a
solid start, but quantifying your goals makes it easier to
track progress and see when you’ve achieved your goal.
o Third, effective goals should be attainable. There’s actually
some disagreement as to the name of this third element. Some
marketing experts tout using “ambitious”; others suggest
“achievable” or “actionable.” Establishing goals that aren’t
within reach can turn out to be an exercise in frustration.
2.1 Developing a Strategic Plan
o Fourth, effective goals should be realistic. Once again, there’s
actually some disagreement as to the name of this element; you
may see it shown as “relevant” in other textbooks or articles.
Your goals must represent a substantial objective that you’re
willing and able to work toward, but there should be a
reasonable chance that you can achieve it.
o Finally, effective goals should be time-bound. Every goal should
be grounded by a time frame within which the goal is to be
achieved. Without a deadline, there is little sense of urgency to
work to achieve the goal.
2.2 The Role of Marketing in the
Strategic Planning Process
Explain the Role of Marketing in the Strategic Planning
Process

Marketing in the strategic planning process has several basic but

critical functions:

o First, marketers assist the strategic planning team in executing a

marketing philosophy throughout the strategic planning process.
o Second, marketers assist the organization in gathering and
analyzing information necessary to examine the current situation
(the first step in a gap analysis).
o Third, marketers are responsible for the identification of trends in
the marketing environment and assessing the potential impact of
those trends
2.2 The Role of Marketing in the
Strategic Planning Process
Business Portfolio Definition

As noted above, many businesses have a single product or

business unit. However, larger organizations such as Apple,
Alphabet, General Electric, Meta, and Microsoft often have multiple
diverse business units called strategic business units. Even though
these SBUs report directly to the parent company’s headquarters,
they typically develop their own vision statements, mission
statements, objectives, and goals, and the strategic planning for
these SBUs is performed separately and apart from other SBUs
within the organization. When companies have multiple products
or business units, these comprise the business portfolio—the
total group of product lines, services, and business units that the
company possesses.
2.2 The Role of Marketing in the
Strategic Planning Process
2.2 The Role of Marketing in the
Strategic Planning Process
Analyze and Design the Business Portfolio

When a business entity needs to consider diverse divisions (SBUs)

it should be readily evident why each is a separate division with
separate strategies to compete in its respective
marketplaces.
There are a few tools that can help determine which course of
action is best advised given the current circumstances of the
organization, the marketplace, and other factors. Let’s take a look
at a few of them.
2.2 The Role of Marketing in the
Strategic Planning Process
Boston Consulting Group (BCG) Matrix
The BCG matrix is a model developed by Boston Consulting
Group that can be used to analyze a business’s product lines or
SBUs and make decisions about which to invest in in the future and
which they should try to minimize further investment in or even
eliminate.
The bottom line is that no business has unlimited funds to invest in
its product lines, and the BCG matrix is a useful model in
determining how to allocate money in terms of marketing,
research and development (R&D), etc. to that portfolio.
2.2 The Role of Marketing in the
Strategic Planning Process
Boston Consulting Group (BCG) Matrix
2.2 The Role of Marketing in the
Strategic Planning Process
SWOT Analysis

SWOT is an acronym for a business’s strengths, weaknesses,

opportunities, and threats, and it is a useful aid for zeroing in
on a feasible marketing strategy. Marketers want to identify the
strengths and weaknesses in the organization’s internal
environment as well as the opportunities and threats that exist in
the organization’s external environment.
2.2 The Role of Marketing in the
Strategic Planning Process
SWOT Analysis
2.2 The Role of Marketing in the
Strategic Planning Process
Strategies
When a company focuses on growing its market share in its existing
markets, it is using what’s known as a market penetration strategy.
This approach generally entails significant expenditures in
advertising and other marketing efforts in order to influence
consumers’ brand choice and create a brand reputation for the
company, thereby increasing its market share.
By contrast, a product development strategy involves the creation
of new or improved products in order to drive growth in sales,
revenue, and profit. Although the advertising expenditures involved
with a market penetration strategy may be significant, they often pale
compared to the expenditures involved in a product development
strategy. This is because product development generally requires
significant investment in R&D activities.
2.2 The Role of Marketing in the
Strategic Planning Process
Strategies
A market development strategy involves searching for new market
segments and uses for a company’s products. This strategy can involve
the launch of its existing products into new markets or different
geographical areas. In doing so, the company attempts to capitalize on
the strength of the brand name it has developed in the existing markets
and find new markets in which to compete.
A product diversification strategy is still another tool that companies
can use to improve profitability and increase sales of new products. This
strategy can be utilized at both the business level and the corporate level.
At the business level, marketers would expand into a new segment of an
industry in which the company is already operating. At the corporate level,
let’s consider a dine-in restaurant that adds corporate catering and perhaps
a fleet of food trucks—both businesses outside the scope of its existing
business.
2.2 The Role of Marketing in the
Strategic Planning Process
Strategies
There are three types of diversification techniques
2.2 The Role of Marketing in the
Strategic Planning Process
Strategies

The concept of concentric diversification revolves around the addition

of similar products or services to an existing business.

Conversely, the concept of horizontal diversification involves making

available to existing customers new and perhaps even unrelated products
or services so that you can garner a larger customer base.

Conglomerate diversification involves the development and addition

of new products or services that are significantly unrelated. You’re not
only introducing a new product, you’re introducing a new product that is
completely unrelated to your existing line of business.
2.3 Purpose and Structure of the
Marketing Plan
Purpose and Structure of a Marketing Plan
If you’re a new business seeking funding, the bank will want to
see and understand your marketing plan before parting
with funds. If you have an existing business that you want to
grow, investors will likely go over your marketing plan with a
fine-tooth comb to understand how additional funding will
generate a positive return. Even if you’re not seeking external
funding, you still need a marketing plan to help you establish and
achieve your sales and marketing goals in the most effective
manner. That’s because the marketing plan will set forth the
specific actions that marketing team members need to take in
order to reach target customers, build brand awareness, and
of course, generate increased revenue.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan

Do a quick Internet search on “structure of a marketing plan,” and

you’ll get countless results. To make this even more confusing,
there is little agreement within marketing about the precise
structure of a marketing plan. Some marketing “experts” argue for
10 components, others for 5 or 6 components. For our purposes
our discussion, we’re going to use a 12-element marketing plan
comprising the elements.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 1: Executive Summary

The executive summary of your

marketing plan provides those
who will be reviewing your plan
with a brief overview (usually one
to two pages). It’s going to give
the reader a quick synopsis of
the main parts of the plan—an
overview of what your company
has done, what it plans to do, and
how it plans to do it
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan

The executive summary of your marketing plan should succinctly

cover the main parts of the plan. It should contain information
about the company, brand, products/services, the market itself, and
the overall marketing direction of the company. You’ll write the
executive summary as a series of paragraphs, and each paragraph
will focus on a different section of the marketing plan.
o Introduction. In this paragraph, you’re going to provide the reader
with an explanation of what they can expect, providing the context
for the plan in order to make the subsequent parts of the plan
easier to understand. In the introduction, briefly explain the plan, its
purpose, and the key benefits to potential customers. Remember the
KISS rule— keep it short and simple.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan

o Description of Company and Team. In this paragraph, you’re

going to briefly describe your business. Be sure to include a
succinct synopsis of the company’s history, legal structure, and
customer base. You’ll also want to address a broad overview of
sales figures. You will also list the key players involved in the
business, including their positions within the company; their
responsibilities, skills, and experience; and their role in achieving
your marketing goals. This is particularly important if your company
is seeking funding. The purpose of this section is twofold: (1) to
convince lenders and/or investors to provide requested funds, and
(2) to prove that you have the right team on board to capitalize on
the opportunity you have defined.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan

o Description of Market Factors and Trends. In this paragraph,

you will set forth a brief description of the current marketplace
and industry sectors within which you sell your products and/or
services, the primary trends affecting and influencing them, and
the innovations that are currently taking place within the market.
o Description of Products or Services Being Marketed. In this
paragraph, you will describe the key features and benefits of the
new product being introduced in the marketing plan and outline its
unique selling propositions to demonstrate how your company’s
products differ from or are superior to those of your competitors.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan

o Description of Customer Base and Related Marketing

Activities. In this paragraph, you will describe the key aspects of the
target audience for your product and/or service. Where are you going
to find your target customers? How will you reach them in terms of a
promotional strategy? What methods do you intend to use in
distributing your product or service?
o Financial Overview. In this paragraph, you will define the key
financial information related to both the short-term and long-term
marketing activities set forth in the plan. If you are an existing
company, this might be as simple as highlighting sales growth over
the last year and the anticipated marketing budget for the new
product venture.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan

o Summary of Overall Objectives and Strategies. In this final

paragraph, you will briefly describe the plan’s goals and the
strategies the company will employ to achieve those goals.
Remember that this executive summary is your marketing plan’s
“elevator pitch,” so you’ll want to conclude with a couple of
sentences that entice the reader to continue to read your plan.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 2: Mission Statement

o You’ll recall from Section 2.1 that a mission statement is an action

statement that clearly and concisely declares the purpose of the
organization and how it serves its customers. It defines the what, why,
and who of the organization.
o Keep in mind that most mission statements are one to three
sentences, almost never exceeding 150 words. You want to be succinct
in letting people know what you do and who you do it for.
o It should be ambitious but realistic. It should be clear and concise. It
should be focused on what the company does for its customers. Finally,
it should keep employees focused on the organization’s objectives.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 3: SWOT Analysis

o The SWOT analysis, as part of your marketing plan, is crucial in

identifying key internal and external influences in your
company’s current position so that you can take advantage of the
strengths and opportunities, mitigate the threats, and address
your internal weaknesses.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 4: Objectives and Issues

o As noted earlier in this chapter, marketing plan objectives should

be SMART—specific, measurable, actionable, realistic, and time-
bound. Within your marketing plan, these objectives should be
written in such a manner that they communicate precisely what
needs to be achieved and who is responsible for each activity.
o You should also keep in mind that the marketing plan objectives
aren’t limited to just revenue.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 5: Market Segmentation and Target Market

o Essentially, what you will define in this section of the marketing

plan is your target audience and your most likely buyers.
o Market segmentation is the process of dividing a target market into
smaller, more defined categories of people or businesses with
common needs and/or wants who are expected to respond similarly
to a marketing action.
o Ultimately, the purpose of segmenting a market is to highlight the
differences between groups of customers so that you can decide
which group(s) upon which to focus your marketing efforts and
resources—that’s your target market.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 6: Buyer Personas

o The intricacies of buyer personas will also be covered in more detail in a

later chapter, but your takeaway here is that a buyer persona is a
semi-fictional representation of your “ideal customer” that helps you
understand and relate to the audience to which you want to market your
product and/or services.
o Buyer personas help marketers visualize the person to whom the
company is selling so that marketing messages can be fine-tuned.
o Buyer personas aid marketers in bringing the target customer to life in a
way that both inspires marketing strategies and prepares sales teams
for conversations with customers that connect them in a meaningful
way.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 7: Positioning

o Positioning now defines where your product or service fits into

the marketplace and why it is better than your competitors’
products.
o Product positioning is typically illustrated on a perceptual
positioning map that uses two determinant attributes (those
factors customers use in making their purchase decision) on the
vertical and horizontal axes and the marketer places his or her
product offering on the map, along with those of the major
competitors.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 7: Positioning

o Once you’ve developed the map, you’ll have a clearer idea of where your
product or service stands in relation to the competition. The questions to
address in your marketing plan might include the following:
Do consumer attitudes toward your product or service match what you
want them to think about it?
Do consumer attitudes toward your competitors’ products or services
match what you perceive?
Who are the competitors that consumers perceive as offering products
or services that are close to yours?
Are there holes or gaps in the map, indicating the potential for new
offerings?
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 8: Current Marketing Situation

o This section of your marketing plan should provide the reader

with a clear description of the current state of the marketplace,
including your target market and the competitive environment.
o It should include a synopsis of the research into and analysis of
your target market, your competitors, challenges in the
marketplace, and the company’s competitive differentiators.
Some of the key items to address in the plan are as follows:
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 8: Current Marketing Situation

Some of the key items to address in the plan are as follows:

o Market Description. This isn’t intended to be a comprehensive list, but this
section should address things like statistics about the size of your target
market; whether it is growing, shrinking, or staying the same; if it is changing;
and why.
o Product Review. The product review section of your marketing plan
summarizes the main features of your company’s products, including
information about sales, price, and gross margins.
o Competitive Analysis. This section should include a discussion of your top
competitors and how they fare in the marketplace vis-à-vis your company’s
products and/or services. This typically involves researching major competitors
to glean insights into their products or services, sales, marketing tactics,
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 9: Marketing Strategy

o This section of the marketing plan essentially sets forth the broad
marketing strategy or game plan for achieving the objectives
previously set forth in the plan. It should consist of specific
strategies for target markets, positioning, the marketing mix (i.e.,
product, price, place, and promotion), and anticipated marketing
expenditure levels.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 9: Marketing Strategy

o Product Strategy. This is the “road map” that you’ll use to

develop your product(s) or features(s), including all tasks needed
to achieve the objectives set forth in the marketing plan. The
product strategy essentially outlines how the product(s) or
service(s) will benefit the business, what problem it will
solve, and the impact that it will make on customers and
the business. It’s only when this strategy has been set forth in
straightforward terms that it can act as a baseline upon which
you can measure success before, during, and after production
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 9: Marketing Strategy

o Pricing Strategy. Pricing is one of the key components of any marketing plan.
Not only will it determine how much revenue (profit) you will earn, but it will
also play a key role in positioning your product in the minds of consumers. The
“right” pricing strategy is one that conveys the message you want to get across
to your target market in terms of quality and features vis-à-vis the
competition because price is often what is used to determine the perceived (not
actual) quality of the product or service. Some of the factors you’ll want to
consider in developing this section of your marketing plan are
◦ setting a price that sends the right message in terms of quality and value
in the minds of your target market,
◦ setting a price that supports your promotion strategy (to be covered
below), and
◦ setting a price that maximizes profit
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 9: Marketing Strategy

o Promotion Strategy. Your promotion strategy sets forth the

tactics you intend to implement in your marketing plan to increase
demand for your product(s) or service(s). List the methods you will
use to gain awareness and interest in your product from those in your
target audience. Methods of reaching potential consumers abound—
company websites, social media networks, trade shows, and radio/
television/website advertising. You’ll want to list the advantages and
disadvantages of each method and indicate why and how much it will
cost to employ the method(s) you have selected.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 9: Marketing Strategy

o Distribution Strategy. Your distribution strategy describes how

customers in your target market will purchase from you.
Will they buy directly from your website, from a storefront, or
through distributors or retailers? What are the costs involved in
this type of distribution, and why do you believe your distribution
strategy will enable you to get the right product into the hands of
the right consumer at the right time?
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 10: Action Plan

o The marketing strategies outlined in the section above should

now be translated into specific action programs that indicate
what is to be done, when it is to be done, by whom it will be
done, and the cost involved. The action program should list when
activities will be started, reviewed, and completed.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 10: Action Plan

o The marketing strategies outlined in the section above should

now be translated into specific action programs that indicate
what is to be done, when it is to be done, by whom it will be
done, and the cost involved. The action program should list when
activities will be started, reviewed, and completed.
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 11: Budgeting Concerns

o The action plans outlined in the section above should enable you to
make a supporting marketing budget that is essentially a projected
profit-and-loss (P&L) statement. If you’ve previously taken an
accounting course, you’ll know that a P&L statement summarizes
the revenues, costs, and expenses incurred during a specified
period.
o On the revenue side, this statement should indicate that forecasted
number of units to be sold during the period outlined in the
marketing plan and the average net price for revenues. On the
expense side, this statement should indicate the cost of production,
physical distribution, and marketing expenditures
2.3 Purpose and Structure of the
Marketing Plan
Structure of a Marketing Plan
Section 12: Controls to Monitor Progress

o Controls is the last section of the marketing plan. This section will
outline the control methods that will be utilized to monitor the
action programs outlined in the plan.
o The reason you’ll want to monitor these metrics during the time
period of the marketing plan is to see where things may have
fallen outside the desired range, at which time you’ll want to dig
into the details, perform an analysis of the root cause of the
problem(s), and adjust get back on track.
2.4 Marketing Plan Progress Using
Metrics
Marketing Metrics Explained

o There can be a lot of moving parts when running even a modest-

sized organization. It is often helpful to focus on key measurable
(quantifiable) values or variables that marketers aim to achieve
within a specified period of time—known as marketing metrics. In
the same way that a doctor measures height, weight,
temperature, blood pressure, etc. to assess the health of a
patient, a marketer uses marketing metrics to measure
marketing performance.
2.4 Marketing Plan Progress Using
Metrics
Key Performance Indicators (KPIs) Explained

o Metrics tell us what is happening at any point in time without context as

to why it is happening. The way the marketer gets to the marketing
metrics that yield the information that’s needed is by identifying and
maintaining a focus on the data that counts—the business’s key
performance indicators (KPIs).
o Although the terms metrics and KPIs are often used interchangeably,
there is a subtle and very important difference. Metrics measure the
performance of a particular process; KPIs are directly tied to business
objectives and have targets and specific time frames for achieving those
targets. In a nutshell, think about KPIs as being a “scorecard” for
company health.
o Marketers typically establish goals and objectives related to KPIs,
because it’s an easy way to track progress
2.4 Marketing Plan Progress Using
Metrics
Key Performance Indicators (KPIs) Explained

https://www.datapad.io/blog/kpis-vs-metrics
2.4 Marketing Plan Progress Using
Metrics
Examples of Business Objective KPIs

o There is a multitude of KPIs that marketers can choose to

manage business objectives. The actual KPIs that are selected
depend on the nature of the process, the type of information
available, and the team. The important concept is to identify
the “key” indicators that drive success.
o Instead of trying to develop information from a laundry list of 300
KPIs, it’s preferable to identify a handful of the most useful KPIs
that allow for the effective management of information.
o Let’s take a look at a few that you may wish to consider,
2.4 Marketing Plan Progress Using
Metrics
Examples of Business Objective KPIs

o Total Sales Revenue. Sales and revenue growth is a KPI that is

used to determine whether sales and revenue are increasing or
decreasing over a specified period.

As a general rule, the metric would be used to suggest revenue

growth over a year time span. However, for companies whose
revenue is affected by seasonality (such as companies that
produce snow blowers or bathing suits), it may make more sense
to measure growth in revenue on a monthly or seasonal basis, as
compared to the previous season
2.4 Marketing Plan Progress Using
Metrics
o New/Incremental Sales Revenue. Marketers are also keenly
interested in understanding how many new versus how many
repeat customers a business has.
The bottom line is that it’s typically more expensive to acquire
initial sales than repeat sales, and repeat customers
(referrals) can serve as a powerful source of new
customers. Accordingly, if the majority of sales are from return
customers, that may point to a sign of weakness in a promotional
program or other marketing activity.
o Profitability. Gross margin as a percentage of sales is one of the
most closely watched KPIs at most organizations.
2.4 Marketing Plan Progress Using
Metrics
o Gross margin is the percentage of sales revenue that the
company can convert into gross profit, and it’s generally a good
measure of how efficiently the company generates gross profit
from sales of products or services.
o It stands to reason that if the gross margin of a product is
negative, it’s going to be difficult to make money atany level of
sales. Thus, the higher the gross margin, all other elements being
equal, the less sales are required to break even.
2.4 Marketing Plan Progress Using
Metrics
Examples of Sales/Revenue Generation KPIs

One of the most important metrics for any organization concerns

sales/revenue. Let’s look at some of the KPIs that can be helpful to marketers.

o Average Revenue per Customer (ARPC) This KPI measures the amount of
money that a company expects to generate from an individual customer, and
it’s a relatively simple calculation: total revenue divided by the number of
customers. Where this KPI comes in handy is that it assists the marketer in
identifying trends among different time periods and segments of customers.
A low ARPC score can point to several reasons: you’re not targeting the right
customer, or perhaps your product offering is priced too low. So marketers
need to determine how to extract more revenue from the product—whether
through different value add-on products or perhaps by targeting a more
valuable customer base.
2.4 Marketing Plan Progress Using
Metrics
Examples of Sales/Revenue Generation KPIs

o New Customer Acquisition. Customer acquisition refers to bringing

in new customers. It’s the action of bringing customers down the
“marketing funnel” from brand awareness to the purchase decision.
Closely related to this KPI is customer acquisition cost (CAC)—in other
words, the total cost of acquiring those customers, which is calculated
by adding up the cost of sales and marketing efforts and then divided
by the number of new customers acquired during a specific period.
o Customer Retention Rates. he KPI for customer retention rates
measures the percentage of customers in the current period who
have purchased in the past. This KPI is particularly powerful when the
product or service is subscription based, or requires a regular
recurring purchase
2.4 Marketing Plan Progress Using
Metrics
Examples Market Share KPIs

Of course, it’s important to track the sales/revenue KPIs mentioned above,

but they don’t tell the whole story. It’s also important to track how the
organization is faring in the marketplace compared to its competitors. So,
let’s examine some market share KPIs that can paint a broader picture for
marketers.
o Market Share in Category. A company’s market share in category
(sometimes known as category share) is its sales as a percentage of all
products in a category that the company sells. It is calculated by dividing
the company’s sales by the total sales in a category. For most companies,
market share is an important KPI because it easily translates into positive
or negative performance. For example, increases in market share
typically indicate that a company is doing more business, whereas
declining market share suggests an undesirable outcome
2.4 Marketing Plan Progress Using
Metrics
Examples Market Share KPIs

o Relative Market Share. Relative market share indexes a firm’s

or brand’s market share against that of its leading competitor. It’s
more complicated that industry market share because it
compares your organization to your rivals rather than to the
industry.

To get an even more in-depth picture, you can do the same for the
smaller competitors in the market. This process would give you a
slightly different perspective on market share growth.
2.4 Marketing Plan Progress Using
Metrics
Examples of Customer Support KPIs

In a perfect world, companies would have products with zero defects

and the same number of customer issues with those products.
However, we all know we don’t live in a perfect world, and zero
defects and zero customer issues simply aren’t a realistic expectation.
There will be customer issues, and the key to retaining loyal clients is
identifying and resolving those issues quickly. So let’s look at some
customer support KPIs that matter to marketers.
o Customer satisfaction score. (also known as CSAT) is the primary
metric used to measure customer satisfaction. One way to measure
CSAT is by sending out a customer satisfaction survey asking
customers to rate their satisfaction on a scale of 1 to 5, with 1 being
very unsatisfied and 5 being very satisfied.
2.4 Marketing Plan Progress Using
Metrics
Examples of Customer Support KPIs

It is computed by adding up the number of “satisfied” responses divided by

the total number of responses. We do not add the neutral responses as it
can either be a satisfied or an unsatisfied response.
o Customer Resolution Rate. As we pointed out above, no matter how
carefully you’ve planned and no matter how well you’ve trained your
staff, things will inevitably go wrong with customers at some point. That’s
the harsh reality of dealing with customers. However, most (or at least
many) customers will forgive a mistake if the organization acts quickly to
resolve the problem to the best of its ability. Once again, the calculation
for this KPI is relatively uncomplicated. To calculate customer resolution
rate, subtract the number of unresolved cases from the total number of
cases, and then divide the sum by the total number of cases. The fewer
unresolved cases, the higher your customer resolution rate.
2.4 Marketing Plan Progress Using
Metrics
Examples of Customer Support KPIs

o Customer Resolution Time. Closely related to the customer

resolution rate is customer resolution time because most
customers expect immediate assistance. The longer it takes to
resolve a customer issue, the less satisfied a customer will be.
There are a couple of ways to calculate this. First, you could
measure average resolution time by taking the sum of all case
resolution durations and then dividing by the total number of
customer cases. Alternatively, you could measure the first
response time. This is the average time it takes from the time a
customer reaches out for assistance and the length of time it
takes for a customer service representative to respond
2.5 Ethical Issues in Developing a
Marketing Strategy
The Importance of Ethical Marketing

o Marketing ethics are essentially the moral guidelines that allow

companies to scrutinize their marketing strategies and actions. It
means that a marketer has an obligation to ensure that all
marketing activities adhere to core ethical principles, such as
integrity and honesty—both internally and externally.
As we’ll see below, ethical marketing is a crucial factor in an
organization’s overall growth over time, and it produces many
benefits.
• Customer Loyalty. Every company wants customers who keep
coming back to buy their products and services. Companies have
learned over time that, with the adoption of common-sense ethics in
marketing, they can more easily earn the trust of consumers.
2.5 Ethical Issues in Developing a
Marketing Strategy
The Importance of Ethical Marketing

• Improved Credibility. Look beyond customers when

considering this factor and think in terms of the respect and
credibility an ethical company earns with its investors,
competitors, and other parties.
• Brand Enhancement. Consumers, competitors, investors, and
others have begun to look beyond product features and pursue
brands that consider the three Ps of sustainability—people, planet,
and profits.
2.5 Ethical Issues in Developing a
Marketing Strategy
The Importance of Ethical Marketing

Corporate social responsibility (CSR) is the concept that a

company should integrate social and environmental concerns into
its business operations and practice. The bottom line is that CSR is
more than just a buzzword for these generational cohorts. To make
an impact, companies need to use their resources to show—not
just tell—these younger generations how business enterprises
are making an impact through authenticity and
transparency
2.5 Ethical Issues in Developing a
Marketing Strategy
Key Ethical Considerations in Strategic Planning

It’s no secret that the primary goal of marketers is to increase

growth by creating and maintaining customers. However,
sometimes pursuing that growth to satisfy shareholder goals to the
exclusion of other groups (like customers) has led to high-profile
ethical dilemmas. Let’s consider a few:

*E-Cigarettes. Should e-cigarette manufacturers sell customers

what they crave, or should they tailor their offerings based on
what health experts say? Who gets to make that choice? Does the
decision fall to the consumer, the producer, a public watchdog
group, or the federal government?
2.5 Ethical Issues in Developing a
Marketing Strategy
Key Ethical Considerations in Strategic Planning

*During the first decade of the new millennium, Toyota vehicles

experienced problems with unintended, uncontrolled acceleration
that prompted over 6,200 complaints to the National 89 deaths
over the next five years Early on, Toyota blamed driver error. Later,
it issued recalls to address floor mats that pinned down
accelerators in some cases. But the company hid a flawed gas
pedal design and lied to regulators, Congress, and the public for
years about the sudden acceleration problem, ultimately leading to
a fine of $1.2 billion by the Justice Department, which contended
that Toyota’s efforts to conceal the problem and protect its
“corporate image” led to a series of preventable fatalities.
2.5 Ethical Issues in Developing a
Marketing Strategy
Organizational and Individual Values

When considering organizational and individual values, the

marketer needs to ask (and answer candidly) the following
questions:

• Does the organization’s mission reflect current activities that

are focused on the triple bottom line?
• Does the organization’s vision statement lead to outcomes
that contain elements of social good?
2.5 Ethical Issues in Developing a
Marketing Strategy
Organizational and Individual Values

• Do the organization’s values reflect respect for one another, the

community, and the environment?
• Are those values authentic, and do members of the organization
live by them daily?
• Has the organization included goals and objectives that refer
specifically to elements of social good?

These questions can help inform the organization’s activities as it

works through the strategic planning process. Thoughtful analysis and
design at this stage can build strong organizations that not only deliver
profits but also produce positive social outcomes for all parties.
Thank You