STRATEGIC

PLANNING AND
FORECASTING
PLANNING OVERVIEW
Formal Planning
The process by which marketing activities are
identifi ed and decided upon
Identifi es the customer wants and anticipates his
future needs and wants
Sound Planning
Helps the organization to anticipate and make
responsive action to marketing problems and changes
in the business environment
THREE IMPORTANT
PLANNING
STRATEGIES
 THE ANNUAL PLAN

An annual plan is an organizations fi nancial

plan for the fi scal year.
The current marketing situation is identifi ed
and the company sets its goals and objectives
towards the currently prevailing situation in
the marketing environment.
The company sets control mechanism as
bases for performance evaluation.
 THE LONG-RANGE PLAN

Long-range planning (LRP) is a process and

discipline that companies use to determine the
best strategy for succeeding in the markets they
serve and to ensure they have the capabilities
needed to support their strategic objectives.
It covers a period of about fi ve (5) years or
more.
It sets the company direction for a longer period
which shall be updated by the annual plan.
Budgets and targets are set within the fi ve (5)
year level.
 STRATEGIC PLANNING
PROCESS

Strategic planning is the process of

anticipating and developing long-range
objectives and goals.
It is the set of all planning activities that
identifi es its vision and mission, its company
portfolio and attendant strategies.
THE THREE LEVELS
IN STRATEGIC
MARKETING
PLANNING
 STRATEGIC COMPANY
PLANNING
Define the
organizational Four Essential
mission
Steps in
Analyze the
Strategic
marketing solution Company
Planning
Set the
organizational
objectives

Define the suitable

strategies to
achieve the
desired objectives
 STRATEGIC MARKETING
PLANNING
Five Steps in
Marketing
Planning Design a
Select strategic
target marketing
Determine market mix
product and
positionin measure
Develop g and market
specific establishin demand
marketin g
Conduc g differential
t objective advantage
situatio s
n
analysi
 STRATEGIC ANNUAL
PLANNING
Responsibilities of Managers in Annual
Planning
Define the
Develop Develop
annual specific
specific strategies and
target
measurable tactics to
objectives for
and achievable achieve the
accomplishmen
plans plans
ts

Assign
Develop
Prepare annual responsible
evaluation
budgetary personnel to
strategies for
requirements carry out the
implementation
plan
 FACTORS TO
CONSIDER IN
PREPARING ANNUAL
PLANNING
STRATEGIES
 TIPS FOR BETTER RESULTS
1. Analyze Previous Year Performance
The previous year performance must be analyzed in terms
of variances in the allocation of resources and the success
or failure in the implementation of the program objectives.
2. Set Accurate Timelines
The timing in the marketing industry must consider the
celebration of the diff erent holidays such as Christmas, New
Year, fi estas, wedding months, Valentines Day or many
occasions in the local calendar.
3. Develop Distribution Strategies
After analyzing the past marketing campaign, it is important
that the marketing channels and promotional programs be
revised to provide a new twist in the marketing campaign.
4. Create a Workable Financial Budget
Budgeting fi nancial resources for the annual plan takes time
and careful analysis.
 CONTENTS OF THE
ANNUAL MARKETING
PLAN
 EXECUTIVE SUMMARY
The executive summary contains the annual trust of the
program prepared by the higher management as a guide
for junior executives in the preparation of the annual plan.
SITUATION ANALYSIS

Managers of each brand

analysis or strategic
business unit (SBU)
make a detailed
program analysis as to
variances in the
program implementation
together with budgetary
expenditures.
 PROGRAM OBJECTIVES
The program objectives are specifi c and detailed set of
goals that are derived from the annual program objectives
prepared by the top executives.
 PROGRAM STRATEGIES

The strategies in the

annual planning must
indicate the target
market in terms of
the marketing mix.
 PROGRAM TACTICS
Program tactics defer from strategies cover specifi c
activities that are action oriented.
FINANCIAL SCHEDULE

It is a fi nancial program that

defi nes the projected sales
target, expenses to carry
out the sales program, and
the supposed profi table
index that will be generated.
 PROGRAM TIMETABLE

The manager must

prepare a time plan
chart or time diagram
on specifi c dates for
its activities.
 EVALUATION PROCEDURE
It is a measuring instrument that will serve as a guide in
the total accomplishment of the program.
 FORECASTING
FUTURE DEMAND
 Demand forecasting is the establishment of
product sales in the future or a period of one
year. It is the basis in the development of
strategic plans. It will serve as a guide in the
preparation of the annual marketing budget
and in allocating material resources in the
production of marketing goods.
DEFINING THE
MARKET
 OLD DEFINITION

It is a physical place where people meet

to sell and buy the product for their
needs and consumption.
The marketing defi nition had enlarged its
connotation to mean the market is a set of all
actual buyers of the product or services.
A market is a set of buyers while the company that
handles the product distribution is a set of sellers.
Market potential is the total sales volume that all
organizations selling a product during the specifi ed
time and place could expect to achieve under the
ideal sales condition. It also refers to the customer
in the market population for the various products
available, while sales potential refers to one
particular brand of product.
Sales potential is the portion of the market share
that the marketing organization expects to
 METHODS OF
FORECASTING
DEMAND
 TOP-DOWN APPROACH
It is the major activity of top management in forecasting
market demand based on the analysis of the total
market condition and analysis.
 BOTTOMS-UP APPROACH
It is the forecasting method wherein the management gets
information directly from sales people who are in touch with
the customers or the dealers and distributors of the product
 Forecasting is the art of estimating future
demands by anticipating what the buyers want
to buy under a given set of situation.
 THREE-STEP PROCEDURE
MARKETING ORGANIZATIONS
USE
Marketing and
This calls for Industrial The company
projecting the carries its product or
countries inflation
Forecasting
brand in the market.
rate which is the Company sales
determinants of Market forecasting
forecast must
pricing strategies. is the art of
Interest rates also
include such factor
determining the as consumer
affect the business peoples needs
condition as spending habits,
industries have to
and wants. income index of the
contend with what All forecast under market and the
they can afford to these conditions amount of savings
spend for their point to what generated for future
production people say about use.
requirements. the product or
Environmental Company Sales
Forecasting service. Forecasting
 DEMAND
FORECASTING
ANALYSIS
 MARKET FACTOR ANALYSIS
Market factor analysis entails determining what these factors
are and measures its relationship to corporate sales activities

Two Important Methods:

a. Direct Derivation Method
It is the translation of market demand by determining the
number of product users using statistical data available.
Managers under this method do not have to know the rudiments
of statistics to understand the forecast data as it simply points
to simple mathematical calculation.
b. Correlation Analysis
It is a statistical refi nement of the direct deviation methods as it
involved analysis of data based on research fi ndings.
It gives a more accurate estimate of the market demand.
 SURVEY OF THE BUYERS
INTENTION
This process involves asking potential customers about
the product that the marketing organization produces at
the price index at a given time.

Three Important Conditions when Survey Results tend

to be Accurate:
a. There are relatively few buyers in the market
b. The buyers are honest with their buying intentions
c. A record exists that shows a consistent relationship
between their actual buying behavior and their
stated intentions
 TEST MARKETING METHOD

This method is used when the marketing

organization is launching a new product or
the innovation of an existing product
The research process will determine the total
market perceptions of its acceptability for
wider population
 POST SALES DATA ANALYSIS

This method is entirely based on the previous

years total sales and the profi t index
generated.
It is the simplest and easiest to apply and
understand.
 SALES FORCE OPINION AND
ITS COMPOSITE INDEX

This is the Bottom-Up Approach where the sales

force provides the information about the
forecast demand for the product.
 EXECUTIVE JUDGMENT AND
EXPERT OPINION

Participative executives may get the opinion of

experts, salesman, dealers, and distributors to
drum up a more reliable sales forecast and
develop marketing strategies to achieve the
sales target.
CHARACTERISTICS
OF POTENTIAL
BUYERS
 INTEREST

It is the state of mind of the potential buyer

who likes to buy the product for his needs
and wants.
Potential market is the set of consumers who
profess some level of interest for a particular
product or service.
INCOME OR MONEY TO BUY

Potential buyers must have the money to buy

the product or service.
 ACCESS OR PLACE OF
DISTRIBUTION

The potential buyer must have access to the

goods or product he wanted.