MARKET PLANNING

Market planning is the formulation of a marketing strategy for an organization to determine

the product(s) and services the company provides, how to serve it to the market, what the
product contributes to the firm and how resources should be allocated across the product(s).
This also involves deciding on the strategies that will assist the organization in attaining its
overall objectives.

There are two sections to Market Planning.

- Corporate Strategy

- Product-mix Strategy
Corporate Strategy: - This strategy of market planning defines which product(s) the
company offers and which target markets to serve. There are various factors that influence
this strategy.

• Environmental Problems and opportunities.

• Mission and Objectives e.g. Profitability, Volume (Market share), Stability (annual
sales volume), Non financial (improved corporate image).

• Organizational resources and competencies e.g. Research and Development

capabilities, financial resources, Company reputation, Sales force and control of the
supplies.

These are all related to the marketing strategy. In market planning there are basic strategies of
corporate strategy: -

• Growth Strategy: -

Current markets

The factors that determine this strategy has to do with Market Penetration of
the core business, Product development of new products for existing markets
and Integration which can be vertical, horizontal, forward or backward.

New Markets

The factors are Market development for an existing product, Diversification

into new product markets and Strategic alliances between companies to share
resources and increase sales.

• Consolidation Strategy: -
 Retrenchment: - This is a forced layoff or human resources to cut down expenses
and increase financial resources.

Pruning: - This is integrated with the product. Product pruning is the discontinuation
of a product or brand as a reaction to lacking demand and unsatisfying monetary
profits. Product pruning allows the management to devote its resources to its finest
product(s) or brands.

Divestment:-This is the reduction of investments on product(s) or brand to focus on

other product(s) in the business.

Product Mix Strategy: - This market planning strategy determines what each product should
contribute to the organization and how resources should be allocated across product(s). This
strategy defines the relevant market for the product(s).

• Product form: - The level of the product e.g. Sales of Microsoft Office, Microsoft
Office Home and Student, Microsoft Office Professional, Microsoft Office Home and
Business.

• Product class: - The product group or range created to appeal to the same need but
target different markets e.g. Office Software.

• Generic Need: - Possible utility drawn by customers from a product which is a strong
definition of the market being served. A good way to determine this is to ask the
question (What business are we in?) e.g. Software Applications.

A separate plan is normally developed for each major product(s) the organization produces.
Market planning summarizes the marketing strategies and tactics that will be used to achieve
specified objectives. The plan outlines the responsibilities of the marketing executives and
how much time and money it costs to implement.

Coviello, N., Milley, R., Marcolin, B. 2001, ‘Understanding IT-enabled interactivity in

contemporary marketing’, Journal of Interactive Marketing, Vol. 15, No.4, pp.18-33.
Pulendran, S., Speed, R. & Widing II, R.E. 2003, ‘Marketing planning, market orientation
and business performance’, European Journal of Marketing, Vol. 37 No. 3/4, pp. 476-497,
Available at: - http:// www.emeraldinsight.com/0309-056 6.htm.