Introduction:

The marketing planning is a fundamental part of the marketing process. It is conducted

not only at the beginning of the process, but also at a series of points during the

implementation of the plan. The marketing planning considers both internal and external

influences on marketing planning, as well as a review of the plan itself. Here the

marketing planning is used some tools to evaluate marketing performance of an

organization, for example SWOT analysis for the internal environment, as well as the

external environment. Other examples include PEST and Five Forces Analyses, which

focus only on the external environment.

The marketing planning can be viewed as an “umbrella” that covers efforts to assess

customer needs and wants and to understand community patterns. The external

environment is examined on both micro and macro levels, including scanning for

developing trends. In addition to this analysis of the external environment, the marketing

planning also analyzes the internal environment.

The marketing planning has been defined by Phillip Kotler as a comprehensive,

systematic, independent and periodic examination activities and resources in order to

determine problem areas and opportunities and to recommend a plan of action.

According to definition of Phillip Kotler, can be identified some characteristics of

marketing planning.

1.1 review changing perspectives in marketing planning

To review the changing of a marketing planning programme effective, cautious

organization and preplanning is required. Essential organizational, cultural and people

prerequisites, and the anticipated scope of the marketing planning activity need to be

acknowledged as well(Piercy,1992) and leading exemplar of marketing planning

including (Jain, 1990),( Greenley, 1986) concluded that marketing planning requires

management (Lehmann and Winner, 1988). Expectation of senior managers from

marketing planning should be clear and practical, they need to understand that they are

the part of the planning process and all involved managers should have clear and

straight expectations. Even before planning starts, the process must be carefully

planned with the help of logistical and behavioural considerations and this is true for

formalized programmes to reassess target markets as well (Dibb and Simkin, 1996b).

According to (Piercy, 1992) there are three distinct planning dimensions for managing

marketing planning, analytical, behavioural and organizational. Techniques, procedures,

structure, iteration, written plan are the part of analytical dimensions. Behavioural

aspect includes managerial perceptions, participation, strategic assumptions,

motivation, commitment, ownership. And finally Organizational dimensions are,

organizational structure, information, culture, management signals, mission and vision,

norms and values.

This identify that to create effective marketing plans, the correct tools for the task must

be recognized, which helps in analysing problems and opportunities and identify the

required solutions and strategies. This includes primarily a structure which makes

planning comprehensive and manageable, the formal systems and procedures to

organize planning, iteration to facilitate debate and reflection of the dynamic nature of

planning and markets, and a documented plan to summarize conclusions and allow

their communication.

1.2 Evaluate an organisation’s capability for planning its future marketing activity

There are many theories about how to evaluate an organisation’s capability for planning

its future marketing activity. In my opinion, the capability of the company belongs to its

own strength and weakness which can be call the internal environment. In this case of

Loreal Nederland, its capability is resources which the company owns and controls.

They are:

1. Tangible resoures

Financial: from the time it’s establised in 1992, Loreal Group was considered the

largest cosmetics manufacturer in the world with subsidiaries in over 100 countries. The

huge sales of £6.8 billion and net profits were 417 million dollars was recorded in the

year 1992. UK was considered the minor country subsidiaries of Loreal. Therefore, the

company has a strong financial launching pad for marketing campaign in the UK.

Distribution channel: Loreal Company has established a strong distribution channel

with subsidiaries all over the world. The main distributor is retailers who can offer their

own private-label products. The company wants to distribute in as many types of

retailers and outlets as possible. This proves to be effective for Loreal and in UK; it

creates a positive image for retailers.

2. Intangible resourses

Technology: the company always invests heavily in research and development. As

shown in the case study, all the research was centered in France, the headquater of the

company and also the main manufacturers.

Reputation:

In the UK market, people have little knowledge about the Loreal Products in

comparision with other coutries. The line named Plenitude line was segmented in the

mass market, the middle- market with high quality.

The Belle Couleur – a line of permanent hair coloring products had a high reputation in

France for the past 2 decades. It created a strong image in coloring products in France.

In UK, after market research was carried out with trial test and using, the number of

“certainly buyer” increases from 18% (price unaware) to 26% (price aware) and to 29%

after using product. We can assume that Belle Couleur can get high reputation in the

future.

For each product line, Synergie skin care and Bell Couleur have their own image:

Synergie skin care line was known as “The alliance of science and nature to prolong the

youth of your skin”, this slogan naturally matches with the aging population in UK (from

25 and older groups).

Bell Couleur was advertised “natural colors, cover all gray” – go with the traditional use

of UK to cover gray hair.

3. Human resources

The thorough researches were carried out in UK market:

The market for Skin care market for the Synergie skin care line was placed and the

market for Hair Coloring, all about the competition and the customer behavior was

recorded by specific number.

1.3 Examine techniques for organizational auditing and for analyzing external

factors that affect marketing planning.

According to Philip Kotler, marketing audit was defined as a systematic, periodic and a

comprehensive procedure of checking out the marketing activities of a concern. In other

words, marketing audit is a process in which internal and external factors were taken

into account for making the marketing plan and reviewing the plan itself. Thus, there are

some techniques used in marketing audit. They are SWOT analysis – often used to

analyze the organizational capability and the external factors, the PEST and Five forces

analysis – used for analyzing the external factors only.

In this case of Loreal Company marketing campaign in UK market, three tools can be

used as follow:

1. SWOT analysis:

Swot analysis considered the strength, weakness, opportunities and threats in Loreal

Company case.

- Strength and weakness are internal capability, which we had considered above.

In the case given, they show the company background, the product concept, and the

distribution channels of the Loreal in UK.

- About the opportunities and the threats, they give us report about the current

market for 2 product lines: the Skin care market and the hair coloring market, the

research on the UK market, consumer behavior for both product lines.

2. PEST

PEST stands for “Political, Environmental, Social and Technological analysis”

In this case, Loreal Group is a multinational company with subsidiaries all over the world

for a long time. UK is one among them.

- Political was not mentioned in the report.

- Environmental factors: they are understanding about the climate in UK and the

habits for using skin care and hair coloring there. The environment factors also include

the analysis of competitors.

In the skin care market in UK, Synergie has numerous competitors. There are three

segmentations: lower end, middle and Upper end. In each segmentation, there are

some competitors such as Ponds, Nivea Visage, and Oil of Olaz (Procter and

Gamble) .ect. All the competitors are divided by price range and positioning in the

market.

In the hair coloring market, the hair salon was taken as indirect competitors. The

different distribution channels also affect the buying intension.

- Social factors: they are the consumer behavior, health consciousness, age

distribution, income. In this case, we can see the statistics: almost 50% of the 5 million

UK women between age of 15 and 65 used traditional skin care products. The UK tend

to be loyal to their current brands and the UK women show their interest in products

with “natural” ingredients. These are some examples in which the social factors are

considered.

- Technological factor: they include the R&D activity, the innovation, and the

lifecycle of a product. As shown in the case study, L’Oreal Group spends much on

research and development and strengthens its product life cycle by introducing them to

a new subsidiary. Belle Couleur has been successfully marketed in France for two

decades, and now, it is cosiderer to enter a new market: UK.

-

3. Five Forces analysis

According to the Five forces analysis theory, there are 5 threats from the external

environment. They are:

- Threats of substitute products: through the research on UK market and

Competitors, they can evaluate the threat of substitute products in both skin care market

and hair coloring market and the trends in the consumer behavior.

- Threats of new entrants: Synergie and Belle Couleur have been successful

launched in France. However, in UK market, they are the new products. So the analysis

of new entrants in skin care market about a product that targeted at skin types such as

sensitive, greasy, or dry can be the new entrants in the market.

- Rivalry among competitors: there are many competitors in the UK market, and

the two product lines Synery and Belle Couleur were shown in rank with current

competitors.

- The bargaining power of customers: the change in the buying habits

- The bargaining power of suppliers: Loreal Group is also the manufacturer so we

needn’t to worry about the power of suppliers in this case.

1.4 Carry out organizational auditing and analysis of external factors that affect

marketing planning in a given situation:

In this case of Loreal Group, I will use the SWOT analysis to build up the marketing plan

for the two line product in UK:

1. Strength:

- Strong financial support from the Loreal group

- Wide range of distribution channels from manufacturers to retailers.

- Reputation in market place

- Products are naturally suitable for customer needs

2. Weakness

- The skin care market is positioned in Middle class. There are no products in the

high market class.

- The hair coloring market: undefined market with other competitors. For Belle

Couleur, buying intentions increased after the price was given but decreased after

actual use. So there is a problem in the relation between the price and the quality of

product.

- The product line Belle Couleur has not adaptable to the change of the customer

behavior: while the customers’ trend is semi permanent hair coloring, Belle Couleur is

the line of permanent hair coloring. The remain market share is left for the other

competitors.

3. Opportunities

- In the UK market, the increasing number of UK women working outside of the

home. And as a result, women have more disposal income and the spendings for

cosmetics and toiletries increase.

4. Threats

- In the late 1980s, 40% of the UK poplulation was under 23 year olds and this age

group is the main user of cosmetics and toiletries. However, the population was aging

and the older groups are increasing. This can be threats to the cosmetics and toiletries

in future.

- Threats of the new entrants to the market in UK. There are many market

segmentations in both product lines that can be entranced by other competitors. They

may be the product from natural ingredients which is totally satisfied the mass market

consumers and the Skin care line was replaced.

From the SWOT analysis above, the auditor can decide what strategy should be

considered. Those maybe use the strength to take the opportunity by launching totally

new products that best match with the UK market or company can minimize the

weaknesses and avoid threats by focusing on one line product and make a strong

marketing campaign.

2.1 assess the main barriers to marketing planning

Many managers think that' doing things right' (implementation) is as important, or even

more important, than doing the right things' (strategy). Because many surprises occur�

during the implementation of marketing plans, the marketing department must engage

in constant marketing control. Source: Kotler, P. (1996).

Control involves measurement, evaluation, and monitoring. Resources are scarce and

costly so it is important to control marketing plans. Control involves setting standards.

The marketing manager will than compare actual progress against the standards.

Corrective action (if any) is then taken. If corrective action is taken, an investigation will

also need to be undertaken to establish precisely why the difference occurred.

Communication channels within Loreal Group Company were blurred and there was

virtually no business or marketing planning. The company was poorly structures. The

company's formal organisation structure plays an important role in implementing

marketing strategy.

Loreal Group has no planning culture. To be successfully implemented the firms

marketing strategies must fit with its company culture. Company culture is a system of

values and beliefs shared by people in an organisation. Marketing strategies that do not

fit the company's style and culture will be difficult to implement. Source: Kotler, P.

(1993).

These are some other issues that may make implementation plan difficult:

· Information inadequacy

· It is important if staff in business implement plan - to involve the whole

organisation, to involve people don't dictate to them

· Price cost problems�

· Marketing orientation to make it more market oriented�

2.2 examine how organisations may overcome barriers to marketing planning

There are following steps having considerate to overcome the barrier of the marketing

planning:

· Market share analysis

· Sales analysis

· Quality controls,

· Budgets

· Ratio analysis

· Marketing research

· Marketing information systems (MkIS)

· Feedback from customers satisfaction surveys

· Cash flow statements

· Customer Relationship Management (CRM) systems

· Sales per thousand customers, per factory, by segment

· Location of buyers and potential buyers

· Activities of competitors to aspects of your plan

· Distributor support

· Performance of any promotional activities.

· Market reaction/acceptance to pricing polices

· Service levels

· And many other methods of monitoring and measurement.

3.1 write a marketing plan for a product or a service

The Marketing Plan for a product and service is a highly detailed, heavily researched

and, hopefully, well written report that many inside and possibly outside the organization

will evaluate. Essential elements the Marketing Plan:

* forces the marketing personnel to look internally in order to fully understand the

results of past marketing decisions.

* forces the marketing personnel to look externally in order to fully understand the

market in which they operate.

* sets future goals and provides direction for future marketing efforts that everyone

within the organization should understand and support.

* is a key component in obtaining funding to pursue new initiatives.

The Marketing Plan is generally undertaken for one of the following reasons:

1. Needed as part of the yearly planning process within the marketing functional area.

2. Needed for a specialized strategy to introduce something new, such as new

product planning, entering new markets, or trying a new strategy to fix an existing

problem.

3. Is a component within an overall business plan, such as a new business proposal

to the financial community.

There are many ways to develop and format a marketing plan. The approach taken here

is to present a 6-Part plan that includes:

1. Purpose and Mission

2. Situational Analysis

3. Marketing Strategy and Objectives

4. Tactical Programs

5. Budgets, Performance Analysis and Implementation

6. Additional Consideration

3.2 explain why marketing planning is essential in the strategic planning process for an organisation

Businesses operate in hostile and increasingly complex environment. The ability of a

business to achieve profitable sales is impacted by dozens of environmental factors,

many of which are inter-connected. Marketing planning process makes sense to try to

bring some order to this chaos by understanding the commercial environment and

bringing some strategic planning process sense to the process of marketing products

and services.

A marketing plan is essential to business. It can help to:

• Identify sources of competitive advantage

• Gain commitment to a strategy

• Get resources needed to invest in and build the business

• Inform stakeholders in the business

• Set objectives and strategies

• Measure performance

3.3 examine techniques for new product development

For the new product development it has to be considered the following techniques:

• 1. Idea Generation: Systematic search for new product ideas.

• 2. Idea Screening: to spot good ideas & drop poor ones.

• 3. Concept Development & Testing: Detailed version of the new product idea in meaningful consumer terms and testing it.

• 4. Marketing Strategy: Developing an initial marketing strategy for the new product based on the product concept.

• 5. Business Analysis: Projections of sales, costs & profits for a new product to find whether it matches the company objectives.

• 6.Product Development: Developing the product concept into a physical product to test the viability of the new product idea.

• 7. Test marketing: New product & marketing program are tested in more real like conditions.

• 8. Commercialization: Launching the new product into the market.

3.4 justify recommendations for pricing policy, distribution and communication mix

Pricing policies

Loreal Group can adopt a number of pricing strategies. The pricing strategies are based

much on what objectives the company has set itself to achieve.

1. Penetration pricing- Is where this organization sets a low price to increase sales

and market share.

2. Skimming pricing- Loreal organization sets an initial high price and then slowly

lowers the price to make the product available to a wider market. The objective is to

skim profits of the market layer by layer.

3. Competition pricing- Setting a price in comparison with competitors.

4. Product Line Pricing- Pricing different products within the same product range at

different price points. An example would be a video manufacturer offering different video

recorders with different features at different prices. The greater the features and the

benefit obtained the greater the consumer will pay. This form of price discrimination

assists the company in maximizing turnover and profits.

5. Bundle Pricing- The organization bundles a group of products at a reduced price.

6. Psychological pricing- The seller here will consider the psychology of price and

the positioning of price within the market place.

7. Premium pricing- The price set is high to reflect the exclusiveness of the product.

An example of products using this strategy would be Loreal products.

Distribution

Loreal Group must distribute the service to the user at the right place at the right time.

Efficient and effective distribution is important if this organization is to meet its overall

marketing objectives. If organization underestimates the demand, customers cannot

purchase products because its profits will be affected.

Two types of channel of distribution methods are available.

1. Indirect distribution involves distributing service by the use of an intermediary.

2. Direct distribution involves distributing direct from a manufacturer to the

consumer e.g. for example Loreal products. Clearly direct distribution gives a

manufacturer complete control over their product.

Communication mix stimulated business growth in UK by challenging many of the

conventional practices in product design, distribution, sales, advertising and pricing.

Communications sought to reduce the cost to the consumer, thus focusing on a market

driven by volume. Loreal Group managers saw that communications would be much

valued by the poorer sections of society if it could be used to create opportunities and

offered at affordable prices. Thus it targeted a section of society which was unexplored

by the other players of the market.

3.5 explain how factors affecting the effective implementation of the marketing plan have been taken into account

The following factors have considered for the effective implementation of marketing plan

a. Demographic environment factor

• UK market is the biggest market in the world, people who are living in UK prefer

to use single device to communicate, information store and exchange. Therefore, UK

market will be Loreal first geographic target area.

b. Economic factor

• Income distribution: The economy of the United Kingdom is the largest national

economy in the world. Over the past three decades, the rich have grown richer, the

middle class has shrunk and the poor have remained poor. From 1973 t0 1999, earning

for U.K households in the top 5% of the income distribution grew 65%, compared with -

growth of 11% for the middle one of households during the same period. This affluent

people able to buy expensive goods and working class people having more carefully,

shopping discount stores and factory outlet malls, and selecting less-expensive store

bands. This is a good opportunities for Loreal Group for focusing on Loreal’s market

target. (Maketing management- Phillip Kotler , Kevin Lane Keller, 2009)

c. Technological factor

Technological is one of the most dramatically forces shaping people’s lives. In the

competative market, this is probably the most important factor in effecting companies

development of their marketing strategy as they must always keep up to date with every

changes within the market. Therefore, in order to be successful in this market, Loeral

need to focus on the following points:

• Accelerating pace of change

• Unlimited opportunities for innovation

• Varying Research &Development budgets

4.1 explain how ethical issues influence marketing planning

Business ethical issue has been an increasing concern among Loreal companies, at

least since the 1990s. Major corporations increasingly fear the damage to their image

associated with press revelations of unethical practices. Marketers have been among

the fastest to perceive the market's preference for ethical issues companies, often

moving faster to take advantage of this shift in consumer taste. This results in the

expropriation of ethics itself as a selling point or a component of a corporate image.

* The cosmetic Shop is an example of a company which marketed itself and its entire

product range solely on an ethical message.

* Loreal group is an example of a strategy used to make a company appear ethical

when its unethical practices continue.

* Liberation marketing is another strategy whereby a product can masquerade behind

an image that appeals to a range of values, including ethical values related to lifestyle

and anti-consumerism.

4.2 analyse examples of how organisations respond to ethical issues

Business Ethics is the moral principles of the right and wrong things that an organisation

can do. Loreal’s mission of “unbeatable price” to its customers have reduced its prices,

which is causing UK cosmetic products to become very close to becoming bankrupt,

due to the price reduction. This shows that Loreal doesn’t have care and a strong

relationship for/with their suppliers. Loreal are doing this because they want to attract

more customers to buy their products, so they reduce their prices to do this.

There Loeral is also a concern of Environmental damage such as the demand of Palm

oil. This is making natural forests into wildlife deserted places. In 2004 was known as

the worst offenders of the social and Environmental issues, which gave them a really

bad reputation. They say that they care about the environment, but they don’t realise

the damage they are doing to the natural forests. This is because many customers tend

to buy Palm oil and other facial products, because of this Loreal have a high demand for

this specific product, which means they have to raise their stakes.

4.3 analyse examples of consumer ethics and the effect it has on marketing

planning

There can be many consumer ethical issues in marketing that could be considered

among them some are as follows:

Pricing issues: when a product is being priced the competitors price also needs to be

considered in order that its not too high or low when compared to that of competitor. An

organisation needs to keep its price reasonable in order that it can be bought easily by a

normal customer rather than causing him/her problem to buy that single product.

Product issue: it is of vital importance that the organisations product doesn’t harm the

customer in any way and also that the product is healthy enough for the customer. The

organisation should put in, in the product what it promised to and what is written on its

packaging rather than cheating customers by promising them a higher quality and

providing a lower one.

Promotional issues: promotion is the process through which the organisation make ‘s its

product known to the target audience. Though organisation uses different

advertisements and promotional activities in order to promote its product but the main

thing that needs to be considered is that when promoting its product through any sort of

communication the organisation should be loyal top its customers about the facts of the

product. It is even important that the promotional activities that the organisation chooses

doesn’t humiliate or disturb the customers in any manner.

Distribution: it is of vital importance that the organisation pays equal importance in terms

of distribution when it comes to the matter of distribution to the different regions and

different people. It should maintain a fair distribution practice in order that it doesn’t

harm the distribution function of any of its competitor in a wrong manner.

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