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Questions and Answers
What type of system is control oriented and looks at today's performance based on variances from budgets?
What is the main purpose of break-even analysis?
What is a characteristic of fixed costs?
What is the primary focus of external constituents, such as investors?
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What is the term for the amount of money left over after accounting for variable costs that goes toward covering fixed costs?
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What type of system is useful for looking at historical financial results?
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What is an example of a fixed cost?
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What is the purpose of analyzing variances from budgets?
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Which of the following is NOT a type of cost?
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What is the term for costs that vary from time to time?
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Study Notes
Marketing Planning
- Marketing plans are an essential function for marketers, focusing on a product or product lines, and improving coordination and performance.
- A marketing plan can be divided into two parts: situation analysis and objective strategy programs.
Types of Marketing Plans
- Retailing typically has short planning cycles due to seasonality and fashion trends.
- Industrial firms and firms manufacturing consumer durable products often have annual marketing plans.
- Automobiles have longer planning cycles due to longer product development lead times.
Hierarchy of Planning
- Strategic planning occurs at the corporate, group, or strategic business unit levels and has a long-term nature (3-5 years or more).
- Marketing planning takes place at the business center level and has specific objectives (e.g., market share) and strategies (e.g., pursuing small business segments).
Objectives of Planning
- Define the current situation facing the product and how it was achieved.
- Identify problems and opportunities facing the business.
- Define strategies and programs necessary to achieve objectives.
- Pinpoint responsibility for achieving product objectives.
- Encourage careful and disciplined thinking.
- Establish a customer-competitor orientation.
Frequent Mistakes in the Planning Process
- Speed of the process: too slow or too fast.
- Amount of data collected: insufficient or too much.
- Who does the planning: delegated to professional planners or line managers.
- Structure: too formal or too loose.
- Length of the plan: too long or too short.
- Frequency of planning: too frequent or too infrequent.
- Number of courses of action considered: too few or too many.
- Who sees the plan: limited to marketing department or shared with other departments.
- Not using the plan as a sales document.
Situation Analysis
- Presents relevant background data on sales, cost, market, competitors, and macro-environment.
- Defines market size, growth rate, and relevant trends.
- Conducts SWOT analysis to develop sound marketing strategies.
Marketing Objectives and Strategy
- Statement of marketing objectives: defines where the product wants to go.
- Marketing strategy: defines how to achieve objectives, including mission, marketing and financial objectives, and competitive positioning.
Supporting Marketing Programs
- Decisions on pricing, channel of distribution, customer service programs, advertising, and other marketing programs.
- Implements marketing strategies.
Financial Projections
- Sales forecast: predicts sales volume by month and product category.
- Expense forecast: predicts marketing expenses broken down into finer categories.
- Break-even analysis: shows how many units must be sold to offset monthly fixed costs and average per-unit variable costs.
Implementation Controls
- Outlines controls for monitoring and adjusting the implementation of the plan.
- Spells out goals and budget for each month or quarter.
Financial Analysis
- Product managers need to be knowledgeable about financial dimensions of their jobs.
- Financial analysis is essential for understanding the financial implications of decisions.
- Contribution-oriented system: focuses on the amount of money left over after accounting for variable costs that contribute to covering fixed costs.
Break-Even Analysis
- Refers to the level of sales at which the company breaks even.
- Managers often focus on the break-even level of sales to determine how far estimates could be before the company begins to lose money.
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Description
Learn about the importance of marketing plans, which are typically annual and focus on a product or product lines, and how they improve coordination and performance. Discover the two general parts of a marketing plan: situation analysis and objective strategy programs.