Marketing plan: Is it necessary for a firm to evaluate the marketing feasibility of a new

product or service launch?

Estefany, Sánchez

Commonly the average business might have one or two ideas about how to launch a new

product or service. Launching new products or services requires not only perseverance but also

an adequate planning, organization, management and control (Soni, & Cohen, 2004). It is well

known the importance of having a business plan for having a business, but also it is known that a

marketing plan serves as the guiding force behind every action that a firm takes where the desired

result is a successful, sustainable and profitable product or service (Kotler, Keller, Cunningham,

& Sivaramakrishnan, 2012). However, few businesses come with the idea of developing

a marketing plan. Therefore, is a marketing plan necessary for a firm to evaluate the marketing

feasibility of a new product or service launch? As a hypothesis, it can be said that a marketing

plan is necessary when launching a product or service since it helps the firm to arrive to informed

as well as adequate marketing decisions. The purpose of this essay is to analyze if indeed a

marketing plan as essential as necessary when launching a new product or service due to there

exists some firms that think that it does not.

First, the current definitions of a marketing plan will be shown in order to have an

understanding of it. Secondly, the importance of a marketing plan will be presented with an

analytical view of it through the following eight paragraphs. Then, the benefits of a marketing

plan as well as a case that serves as an example of a marketing plan application will be displayed

to have a clear view of how a marketing plan helps a firm to have successful results. Finally, the

conclusion of this essay will be pointed out.

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First of all, what is a marketing plan? According to the American Association of

Marketing [AMA], it is “a document composed of an analysis of the current marketing situation,

opportunities and threats analysis, marketing objectives, marketing strategy, action programs, and

projected or pro-forma income (and other financial) statements. This plan may be the only

statement of the strategic direction of a business, but it is more likely to apply only to a specific

brand or product. In the latter situation, the marketing plan is an implementation device that is

integrated within an overall strategic business plan”. On the other hand, it is what is said to be

part of an overall business plan, but in order to be an excellent plan it should have a solid

marketing strategy, since it is the essential part of any marketing plan. The marketing plan

functions from two points: strategy and tactics (Kotler, 1988). Thus, it can be assured that a

marketing plan is closely related to strategy.

However, developing a successful marketing strategy, look for opportunities to sell

products and services and reach a more efficient way to existing and potential customers are not

easy tasks at all. Many business opportunities end in failure or fail to become real due to it fails to

establish the essential link between innovation and the discovery of an interesting idea with the

expected objectives and resources required. Planning is the way to articulate these issues to

minimize the risk of frustration and, therefore, it is vital to have a clear strategy as well as a

marketing plan. The marketing plan as such is helpful for any kind of companies, specifically for

managers or the company’s leader (Ferrell, Hartline, & Lucas, 2002)

Being that marketing is linked to a changing environment (Rivera & De Garcillán, 2012),

which is continually providing new challenges to companies; it requires that both the tasks to be

performed by the market as the importance attached to each will be different, in a process of

continuous adjustment. That is why the marketing plan seeks to collect the most relevant

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historical information regarding the products, markets, competitors and customers (Cohen, 2005),

where it is analyzed the current situation of the company in relation to competitors and in

different markets.

Moreover, typically, the final stage of any marketing planning process is to establish

targets, meaning quantities and timescales, to monitor the progress (Drummond, & Ensor, 2001).

Once the plan would be implemented and the product or service would be launched, this set of

targets will help the company to know how many of those were accomplished and how many do

not. After that, the firm can evaluate what did they did wrong in the marketing plan and then take

the necessary actions to make it better and as a consequence the launching of the new product or

service will be successful this time.

In addition, when a firm wants to launch a new product or service, obviously it is

expected to have people that buy that product, clients, and to gain clients it has to be

communicate to the public that there is being offer a product or service. As Jain, & Haley (2010)

indicated a marketing plan is about planning how to conduct an effective communication from

the firm to the public and ensuring that they become a client one they know the benefits they can

get whether they buy the product or service.

What it is more, although there is a good number of companies which have defined its

objectives, since it is known that having defined it is essential to the own company survival

(Heracleous, 2003), few of them have not very clear how they think they will achieve those,

meaning the strategies and actions. By making a marketing plan companies are able to establish

those necessary strategies as well as the methodology, tools and marketing techniques, that will

led them to achieve not only its quantitative objectives but also the qualitative ones or at least to

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approach them in a best way (Kotler, 2005). Otherwise, companies will embark on adventures in

which they will not know the final and it will cost them financial and human resources.

Additionally, knowing that the key factors that affect any business model are: (a) the

environment in which a firm operates; (b) competence; (c) client or target audience; (c) product

or service per se; (d) price; (e) distribution; (f) commercialization; (g) promotion and

communication; (h) sales and revenues; (i) costs (Heracleous, 2003); it can be said that these

factors are closely related to the elements that a marketing plan comprises in a much more

detailed way.

Then, according to Larimer (2010) a marketing plan shows not only the market potential

and the company’s which is making it, in that specific market; but also it defines the objectives

and goals that are wanted to be achieved, the strategies and policies, the exact programming of

resources that will be used, times, amounts, functional and operational responsibilities; the

establishment of budgets and sales forecasts, as well as methods and systems for monitoring,

evaluation and control of business action and the marketing function of the company. All of

which are thought to evaluate the feasibility of the new product or service that the company

desired to launch since it points out what are the company’s strengths and weaknesses to diminish

the latter and enhance the former; it proposes economic scenarios of expenditures, revenues and

profits which is a key part in the decision-making process of any company, because any of them

want to waste resources and money in something that will not even return them their investment.

Furthermore, a marketing plan has marketing research as part of its structure.

Nevertheless, marketing research is not only about develop a questionnaire and apply it to your

thought target customers, nor just make a focus group and let people talk about your product or

service, those are only instruments. The fundamental part of marketing research is to process the

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information that you gather when applying those instruments as well as analyze the data,

comments and results, and therefore, understand who your potential customer is?, what do they

want and need?, how many people will buy your product? how do they behave with products or

services like yours, are they fully satisfied with existing products?, what are the key elements that

they value the most of your product, how much they are willing to pay for it so you can put a

price within their expectations, and so on (Kotler, Lane, Cámara, & Mollá, 2006). This will give

a firm a foundation of how came with the adequate decisions. Hence, companies that are not

aware of this, they just will launch a product based on another people research and interpretation,

or will just launch the product without any marketing research instead only based on its intuition,

“field experience”, trends, but nothing with the enough support to even think that the product or

service launch will be successful and sustainable.

It is also worth mentioning that a marketing plan has several benefits that supports the

importance of it to evaluate the feasibility of a new product or service launch. Here are the most

important ones: (a) denote the business growth path; (b) it serves as a guidance and analytic

element of the deviations to take immediately corrective actions; (c) encourages the participation

and cooperative work; (d) set deadlines, schedule, programs and responsibilities; and (e) set out

the systems and control methods which helps to the drive and collaborative support of the entire

firm (Hiebing, & Cooper, 2005).

On the one hand, a marketing plan serves as a guidance for the company that is launching

a new product or service since: (a) it translates the organizational objectives in the 4Ps (for

products) or 7Ps (for services) objectives; (b) it specifies the actions in those 4Ps or 7Ps so as to

achieve the established objectives; (c) economically assess the expected results and it also

prepares contingency plans (Luther, 2001). On the other hand, it has both strategic benefits and

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operational. (a) strategic benefits: directs the strategic decisions’ impact, being that it helps to

confirm whether it was defined correctly the existing and potential competitors as well as the

strategies to face them; reduces the advertising and employees control’s costs, meaning that it

helps to gain a strong positioning in both side internally and externally; (b) operational benefits:

coordinates the job of marketing and other areas; serves as a tool that aids in the organization

endeavors planning due to the marketing actions requires production, finance, accountability and

systems inputs to support the commercialization process. (Kotler, Amstrong, Saunders, & Wong,

2000).

Moreover, as an example to have a clear view of how a marketing plan is beneficial for a

firm when launching a product or service Coomasaru, Day & Lee (1996) developed a case study

in the form of a marketing plan, which focused on the proposed launch of a new product,

Lemonhead, into the existing alcoholic lemon drink market. After developing de whole plan, they

came to a number of conclusions regarding what they did. Through the marketing plan, firstly,

the firm could identify that there was a genuine demand for the launch of Lemonhead into the

existing alcoholic lemon drink market. Secondly, using the information gathered from their

empirical research, they were able to produce a product that satisfies that need. Then, the firm’s

strategy for launch and growth was based on their target market's requirements and a more long-

term view and after initial entry into the market, they gained the second position within six

months and realistically challenged the brand leader within 12 months later of the launch. All of

this was possible due to they were consistently satisfying the needs, previously identified in the

marketing plan research, of their consumer among all elements of the marketing mix. Therefore,

their goals had been achieved and they realized that they could even go beyond the leader.

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To conclude, as it has been shown throughout the development of this essay, having a

marketing plan is necessary for any firm to evaluate the marketing feasibility of a new product or

service launch, since such a plan approaches the key factors that affect any business model in a

very detailed way that at the end allows the company to arrive to informed and adequate

marketing decisions, such as what and how many will be the distribution and communication

channels, what type of advertising strategy will need the firm (pull or push), what specific

features does the product or service require to satisfy the customer’s needs, among other key

decisions; to have a successfully product or service launch so there is not any waste, needless

duplication or irrelevant noise that can actually serve to distract your customer instead of drive

them to you.

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References

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