According to Lamb, Hair McDaniel, they states marketing planning is a plan involves designing activities relating to marketing objectives and attach with the capability of changing marketing environment. It contains with the issues of product lines, distribution channels, marketing communications and pricing.
The case study (company) I have chosen for this assignment would be Prada, a luxury fashion company. I would hereby explain the elements and importance of a marketing plan to enable Prada enhance competitiveness and successively helps to increase their market share.
Task 1: LO1 - Compile marketing audits
Review changing perspectives in marketing planning
Referring from Winchester et al (1997), marketing plan is an all-purpose tool that enables the management to know everything related the company. It is an indication that shows management what is the flaws of their plan, how to succeed in their goals and redefine the direction in a new market or new product against the competitors. Nonetheless, it shall be responsive that a good marketing plan must contain with the consideration of changing perspectives.
Prada was first introduced by Mario Prada in 1913. It mainly emphasize with high quality leather production on handbags, suitcases, shoes and trunks. However, in 1978, when Miuccia Prada took over the company, they had been struggling against competition of Gucci. From it, Miuccia Prada notices they need to change their perspectives in their marketing plan; they need a new appearance product to beat down Gucci. Therefore, she decided to redesign some of Prada's old favourites with the purpose of remains customer and attract new customer. The Black classic bag sales were successful and help Prada recognised as a symbol of upper class elegance.
By 1990, Prada management noticed that their product range is only suitable for upper class consumer and not middle class customers. From it, they launch a new line product which named "Miu Miu" with the affordable prices to attract middle class customers. They also introduced the Prada Sport line along with men's line and lingerie. Until today, Prada has many different product line with different appearance design while maintaining their high quality standard.
Evaluate an organisation's capability for planning its future marketing activity
Organisational capability defined in terms of its core competence, synergistic effects, strengths, weaknesses and resources and behaviour. It represents a capacity of an organisation to use its strengths to overcome it weaknesses and create an opportunities and face in its external environment.
In this case study, Prada's organisational capabilities are stated below:
Uniqueness and creative under leading of Miuccia Prada
Resources and behaviour
Availability of product
Lack information in its website
Difficulty in acquiring funding as it is a private company
Multi brands stores in worldwide
Recognisable and bright well-known company
Miuccia Prada's uniqueness
Prada has founded in 1913, but yet it still has great potential to go further by increasing and developing its functional areas - in terms of finance, marketing operations, personnel, information and general management.
In the view of finance's prospect, Prada should control usage of funds with a budget and limitation. In marketing's prospect, Prada should increase their brand awareness and understand with the factors would affect marketing capability in price, promotion, place and product which would enhance their sales turnover and maintain the brand loyalty. Besides, Prada should be alert with product waste and loss control and limitations, and ensure there is nothing wrong with the productive system to produce a good quality product.
They also need to update website information to enhance their information management capability. Lastly but not least, Prada have consider the factors which influence their personnel and general management capability.
Examine technique for organisational auditing and for analysing external factors that affect marketing planning
It is essential to understanding customers as it is a keystone of a marketing planning; it comprises with auditing and analysing the internal (organisational) and external (market) environments of the organisation. This involves accumulating appropriate factor at first and then analysing it. The types of relevant factors divided as internal and external which has shown as below.
Company mission and objectives
Existing customers - which includes the customer's satisfactions, dissatisfactions, expectations and relationships.
Company resources - management structure, finance and information technology.
The relationships between staff, partner and capital funders.
PEST which is a short for of Political, Economic, Social and Technological considerations. These factors may impact on organisation's activities.
SWOT which is a short for Strengths, Weaknesses, Opportunities and Threats. It helps to assess company culture and future situation and as well as assess external environment.
Prospective customers, it requires to understand what are their needs, motivations, behaviour, purchasing power and locations.
Market, which includes the awareness of market size, growth, price, distributions, promotion, and product development.
Carry out organisational auditing and analysis of external factors that affect marketing planning in a given situation
Generally, SWOT analysis is common use to carry out an organisational auditing and analysis of external factors. SWOT represents Strengths, Weaknesses, Opportunities and Threats; The aims of SWOT analysis is mainly take advantage of strengths and opportunities the market meanwhile minimise the weaknesses and eliminate the threats.
Skilled and expertise
Quality processes and procedures
Innovative and new product or service.
Strong financial background
Lack of skilled and expertise
Low market share
Poor quality products or services
Poor financial background
Low brand loyalty
Poor distribution network
Innovation and creative idea
A competitor has a new, innovative product or service.
Prada's SWOT analysis has shown as below:
Multi brands stores in worldwide
Miuccia Prada's uniqueness
Availability of product
Lack information in its website
Difficulty in acquiring funding as it is a private company
Global markets growth - China
Digital market - Internet
Capture the younger generation consumers - Miu Miu
Strong competitors around worldwide
Fashionable catwalk copycats with lower price - Zara and H &M
Task 2: LO2 - The main barriers to marketing planning
2.1 Assess the main barriers to marketing planning
A strong marketing strategy and planning is essential and vital component for any organisation. However, sometimes, there are certain barriers of marketing planning. For example,
Lack of motivation of change: If stakeholders are demotivated and do not feel the need to overcome the threats or grab the emerging opportunities, it would be a main barriers to a good marketing plan.
Overconfident with problems solution: Overconfident would cause a flawed or inappropriate solution for the problems.
Failure of co-operation between management: Human resources and financial department are not willing to share resources and goals, manifestly the marketing effort will be impaired.
Lack of knowledge and skills: Without proper knowledge and skills may lead to unrealistic plan and ideas.
2.2 Examine how organisations may overcome barriers to marketing planning
Professor McDonald has suggested ten rules to overcome the barriers of the marketing planning, which contains:
Strategy before tactics
Situate marketing within operations
Shared values about marketing
Structure around marketing
Scan the environment thoroughly
Summarize information on SWOT analysis
Skills and knowledge
Systematize the process
Style and culture
Task 3: LO3 - Formulate a marketing plan for a product or service
Marketing plan is an essential document as it includes a company market evaluation, goals, direction and marketing result. Macdonald (1995) introduces a four steps approach for the marketing plan which includes:
Goal Setting: Organisation Mission defined by Mintzberg as "a mission describes the organisation's basic function in society, in terms of the products and services for its customers." Prada's goal is to be leading high end fashion label in worldwide. It comes with a mission that to make Prada products as a piece of art rather than just a brand.
Situational Review - Marketing Audit: PEST or SWOT analysis.
The marketing audit is a process to identify those existing external and internal factor which will influences on marketing planning of the company. The process can be conduct with the SWOT analysis for the internal and external environment or PEST analysis which focuses solely on external environment. In fact, marketing audit helps to clarifies opportunities and threats and allows the stakeholders to make alternations to the marketing plan if needed. I have chosen SWOT as a marketing audit tools for Prada, please refer to 1.4.
Strategy Formulation - Marketing Objectives and Strategies.
Marketing objectives is stated what the company intends to be or to be achieve in the future. Marketing strategy is a process that allows company to concentrate its limited resources to increase sales and achieve and build up sustainable competitive advantage. There are several strategies can be use, for example "ansoff matrix", "bcg matrix", "plc matrix" and "4ps". In this case, I have chosen 4ps for Prada, please refer to 3.4 in details.
Monitoring and Control - Budget and implementation.
In the process of marketing planning, it shall be aware that marketing control is to monitoring the whole process as they proceed with and make an alteration if necessary.
Control includes measurement, monitoring and evaluation. In fact, resources are costly and limited therefore it is essential for a marketer to control a budget and always check with the implementation. The marketer shall always check with the implication by comparing the actual progress and the standard progress.
3.2 Explain why marketing planning is essential in the strategic planning process for an
Marketing plan provide information that enables stakeholders to measure the progress and highlighted the most appropriate marketing strategies. An effective marketing plan helps to increase product sales and enhance company profit margins. There are several advantages of market plan, it contains:
Focus on your target market
Identifies consumers' needs and wants
Determines product demand
Identifies potential customers
Identifies competitor and analyse competitive advantage
A measurement for generating the daily cash operational activities and how to make profit.
Manifestly, a good marketing plan will also benefit an organisation with the analysis of how to achieve the company objectives and capability to create a new opportunities for organisation. Therefore, it is essential in the strategic planning process for an organisation.
3.3 Examine techniques for new product development
New product development (NPD) is a process which designed to develop, test and consider the viability of the new product in the market. It helps to distinguish the growth or survival of the organisation when a new product launch. There are several steps in the NDP process.
It can be obtained from market research by using SWOT analysis.
In this process, unsuitable or unattractive ideas would be abandoning.
Concept development and testing
After the early stage of concept development, it requires to launch a concept testing by asking the prospective customers' feedback.
Market strategy development
It requires identifying which type of marketing strategy should be use.
Converts a product idea into a physical form.
Placing the product on sale and observing its actual performance.
Implementing a marketing plan and full production
In 2006, Prada entered into an agreement with LG Electronics to develop a new product in the market - Luxury design mobile phone. Both companies leveraging their respective skills created "Prada Phone" with a unique, sophisticated and elegant telephone and also the first touch screen phone in the world. It achieved great sales: 1,000,000 as a result.
3.4 Justify recommendations for pricing policy, distribution and communication mix
Distribution mix (Place) represents the way of distribution, the methods of transportation, and also the on-hand inventory level and lastly outlets selection. It is proposed to ensure the customers will able to find the products when they need it and usually customer will be expecting good services on the product sales or after the product sales.
Furthermore, it is importance to consider the following options of the product distribution:
Internet sales - website
Mail order - throughout brochure
Nevertheless, the marketer should still consider the product characteristics, company size, competitors and nature of distributor before decide the final distribution way.
After selected a distribution way for the product, it should be concentrate with the product price. Price policy would directly affects the product sales, how much profit or loss company gain, to whom it is sold and what types of services should be attach. There are no fixed rules for setting the right place for a new product however it should always take into account the product design cost, the distribution, the promotional and the labour cost. The only recommendation in pricing strategy is to be sensitive, sensitive with the production cost, marketing cost.
Once a product decided to launch in the market, it requires promotional activities to attract buyers, to gain awareness and spreading out the product information. The communication mix includes advertising, personal selling, public relations, online promotion, sales promotion and also direct marketing. Nonetheless, for each type of promotional tool, it comes with own strengths and weakness and bring different along different effect to the product. Therefore, it is essential for the marketer to analyse which type of promotional tool would be most benefit to the product.
PRADA's Marketing Mix
PRADA line produces high end clothes and accessories for men and women, fragrances, cosmetics and children's clothes.
PRADA - sub line - Miu Miu is the products with affordable price and targeted young generation.
PRADA - sub line - Line Rossa is the PRADA's sport collection.
250 PRADA stores in 65 countries
Headquarters located in Milan
Prada also sold their products in:
PRADA has many product line with different price levels:
Purses & leather goods: £200 - £3000
Shoes: £100 - £500
Fragrance: £40 - £100
Magazines Ads: Ads are featured in Elle and Vogue.
Fashion shows: held around the world and it has become the most persuasive marketing tools in fashion industry.
3.5 Explain how factors affecting the effective implementation of the marketing plan have been taken into account
In order to maximize profits and minimize risks in a business, the only reliable way is to tailor a suitable marketing plan with the particular needs meanwhile using available marketing tools and information to enhance the flexibility. However, it is remarkable that there are few factors should be concern with as there would affect the effective implementation of the marketing plan or even impair the whole picture. The factors would affect the progress have listed down below:
Management not supportive: With the assumption of the director of the company do not agree with the element of the marketing plan and decided not to support it, manifestly, the marketing plan would not be suffice as a pathway to the success.
Budget limitation (Financially) - Without sufficient financial support, the marketing team might not able to complete an appropriate market research.
Illegality: If a marketing plan is against with the law or regulation, it might lead a legal action to the organisation.
As the factors mentioned above will affect the effective implementation of the marketing plan, it may concluded as it is essential to taken factors would impair the marketing plan into account in order to draft out a good marketing plan.
Task 4: LO4 - Ethical issues in marketing
4.1 Explain how ethical issues influence marketing planning
Ethics carrying principles of right conduct that shape the decisions people or organisations make. Practicing ethics in marketing has deliberately addresses the standards of fairness, moral principles and wrongs in the organisation. The main purpose of marketing ethics is to stop anyone to do any deceive or take advantage from unethical activities.
Once our economic system has successfully fulfilled consumer's wants and needs, there would be a concern on organisations adhering to ethical values rather than simply providing products or services. The reason of being so, that is due to firstly, when an organisation has behaves ethically, manifestly its customers would develop positive attitudes about its products, services and the company itself. With unethical issues in a business, it may lead to bad publicity and reputation, customers' dissatisfaction, lost the business opportunity and consumers' trust and also a legal action between consumer and organisation.
In short, unethical marketing practices would directly influence a good marketing process and affect marketing plan. Hence, most of organisation has trained to be sensitive with customer's needs and opinions in order to maintain this long-term interest in their business. Moreover, social responsibilities are subjected to marketing practices to protect consumer rights, avoid unfair trading and stimulate trade in a wide range.
4.2 Analyse examples of how organisations respond to ethical issues
Adler and Bird (1987) and Stead (1990) suggested few strategies to enhance ethical behaviour and avoid unethical behaviour in organisations. They suggested that, firstly, top managerial should encourage ethical consciousness to their subordinates by providing support and care upon ethical practices. Secondly, it is recommended that top managerial level should focus on the institutionalization of ethical norms and practices that are incorporated into all organizational levels.
Besides, organisations should provide an ethical training to strengthen and gain their employees' personal ethical framework to ensure that it practice employees' self-discipline and capable to make an ethical decisions in a difficult circumstances. Meanwhile, organisations should be avoiding these unethical issues happen in their institution:
Product: Misleading product information, lack quality control and deliberately produce poor quality product, unfit product description.
Price: Expensive price with a poor quality product
Place: Different product price in different location
Distribution: Control the product supply and increase the product selling price when out of stock.
4.3 Analyse examples of consumer ethics and the effect it has on marketing planning
Mintel (1994) explain "ethical consumer" as a consumers who considered environmental issues, animal issues and ethical issues, including oppressive regimes and armament when shopping. In order to proceed with a good marketing plan, the organisation shall take consumer's right into account. As being immoral in product sales and product purchase, it may cause bad attitude or situation. For example, if customer purchasing product which is illegal or against the law, obviously the organisation would not consider about customer's right for the sales. It would directly affect to the market itself and unethical behaviour will be spreading around.