Implementation, Monitoring, and Controlling (HSC SSCE Business Studies): Revision Notes

Implementation, Monitoring, and Controlling

Introduction

A marketing plan remains just a document until it is actively put into practice. Implementation is the process of putting marketing strategies into operation. This stage involves making daily, weekly, and monthly decisions to ensure the plan works effectively in real business conditions.

While earlier stages of the marketing plan focused on what needs to be done and why it needs to be done, the implementation stage addresses the how, where, and when of execution. This makes implementation a crucial part of the marketing process, as even the best-designed plan will fail without proper execution.

Implementing the marketing plan

Key questions for effective implementation

To implement a marketing plan successfully, businesses must answer several fundamental questions:

• Integration: Is the plan fully integrated with all other sections of the business?
• Structure: How should the business be structured and organised to support the plan?
• Communication: Have effective lines of communication been established between the marketing department and all other departments?
• Personnel: Who are the best people for the various tasks needed to implement the plan?
• Motivation: Are the marketing personnel motivated and focused on achieving the marketing objectives?
• Awareness: Are all other employees familiar with the marketing objectives and marketing strategies?

Challenges in implementation

The implementation stage presents significant challenges. Unforeseen situations may arise that threaten the success of the entire marketing plan. This unpredictability means businesses must remain flexible and responsive while maintaining focus on their core objectives.

Monitoring and controlling

Monitoring performance

Once implemented, the marketing plan must be carefully monitored. Monitoring means checking and observing the actual progress of the marketing plan against what was planned. This process requires marketing department personnel, as well as other employees, to gather information and report on important changes, problems, or opportunities that arise during the plan's operation.

Controlling the plan

Controlling involves comparing planned performance against actual performance and taking corrective action to ensure objectives are attained. To control effectively, marketing managers must constantly ask two questions:

1. What does the business want the marketing plan to achieve (what are the objectives)?
2. Are these objectives being achieved?

The controlling cycle

The controlling process follows a four-step cycle:

1. Establish marketing objectives: Define what the business wants to achieve
2. Monitor performance: Track what is actually happening
3. Evaluate performance: Assess whether results are good or bad, and identify why they are occurring
4. Take corrective action: Decide what should be done to address any problems

Key performance indicators (KPIs)

The first step in controlling requires establishing a Key Performance Indicator (KPI) – a forecast level of performance against which actual performance can be compared.

By establishing KPIs and comparing them with actual performance, marketing managers can evaluate how effective the marketing plan is proving to be.

Developing a financial forecast

Purpose of financial forecasting

When evaluating alternative marketing strategies, businesses must develop a financial forecast that details the costs and revenues for each strategy. By measuring sales potential and revenue forecasts (benefits) for each strategy and comparing these with anticipated expenditures (costs), businesses can determine the most appropriate allocation of marketing resources using cost-benefit analysis.

Two-step forecasting process

Step 1: Cost estimate

The business must calculate how much the marketing plan is expected to cost. Marketing plan costs can be divided into four major components:

• Market research
• Product development
• Promotion (including advertising and packaging)
• Distribution

Marketing costs are relatively easier to forecast because these activities are largely controlled by the business.

Step 2: Revenue estimate

The business must predict how much revenue (sales) the marketing plan is expected to generate. Revenue forecasting is based on two major components:

• How much consumers are expected to buy and at what price
• What sales staff predict they will sell

As time passes, actual revenue can be compared with forecast revenue data to determine the effectiveness of the marketing strategy.

Comparing actual and planned results

Performance indicators are the means by which a business measures its performance and evaluates the degree to which it is achieving its objectives. Three key performance indicators are used to measure marketing plan success:

Sales analysis

Sales analysis uses sales data to evaluate a business's current performance and the effectiveness of a marketing strategy. The more detailed the breakdown of sales figures, the clearer the picture becomes.

Sales analysis involves calculating:

Difference:

$\text{Difference} = \text{Actual sales} - \text{Sales quota}$

Percentage change:

$\% \text{ change} = \frac{\text{Difference}}{\text{Sales quota}} \times 100$

Strengths and weaknesses:

Modern computerised sales systems make collection, storage, retrieval, and analysis of sales data much easier. Businesses can prepare reports showing daily, weekly, monthly, quarterly, and yearly sales; product line sales; credit versus cash sales; individual sales representative performance; and company division results.

Market share analysis

Market share can be analysed just as sales can. By undertaking market share analysis, a business evaluates its marketing strategies compared with those of competitors. This evaluation reveals whether changes in total sales (increases or decreases) resulted from the business's marketing strategies or from uncontrollable external factors.

Marketing return on investment (ROI)

While sales and market share analyses provide useful information, they don't present the complete picture. This requires analysing the marketing costs involved with each strategy.

Marketing ROI measures how much revenue a marketing campaign generates compared to the cost of running that campaign. It shows the impact of marketing strategies on revenue growth, provides a holistic view of marketing efforts, and allows businesses to justify marketing spend and budget for future initiatives.

The marketing ROI formula:

$\text{Marketing ROI} = \frac{(\text{Sales Growth} - \text{Marketing Cost})}{\text{Marketing Cost}} \times 100$

By comparing the costs of specific marketing activities with results achieved, marketing managers can assess the effectiveness of each activity. This evaluation helps decide how best to allocate marketing resources in the future.

Revising the marketing strategy

Once sales, market share, and profitability analyses have been completed, the business can assess which objectives are being met and which are not. Based on this information, the marketing plan can be revised (modified). Revision is equally as important as all other steps in creating successful marketing strategies.

Changes in the marketing mix

Because the marketing plan operates in a dynamic business environment, the marketing mix requires constant revision. Potential changes include:

Product modifications

No product is perfect. Businesses that continually upgrade their products maintain a competitive advantage. Even successful products can be improved based on customer feedback and technological advances.

Price modifications

Prices fluctuate due to various reasons including cost changes, competitor actions, and market conditions. Therefore, the price component of the marketing mix needs revision in response to changes in the external business environment.

Promotion modifications

Promotion costs are typically high when a new product is first launched. During later stages of the product's life cycle, promotion costs may stabilise and even fall during the decline stage. Promotion strategies must change over time, corresponding to the product's life cycle stage.

Place modifications

As a product's success increases, distribution channels need expansion to cater for the growing market. New overseas markets may be explored, while old markets may decrease due to demographic changes. With the development of electronic communications, new distribution channels such as the internet may be utilised.

New product development

The product life cycle demonstrates that all products have a limited lifespan, typically between five to ten years. Therefore, if a business wants to achieve long-term growth, it must continually introduce new products.

Product deletion

To maintain an effective product mix, businesses must eliminate some product lines. This is called product deletion – the elimination of some lines of products.

Outdated products may create an unfavourable image, and this negativity may affect other products sold by the business. Most businesses find it difficult to delete a product, especially if it has been successful for a long time. However, when a product reaches the decline stage, a decision must eventually be made to either delete or redevelop the product.

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