The Five Step Process Behind Marketing Plan Development

A systematic marketing planning process consists of five logical steps.

The first stage is defining the current situation, reviewing the effectiveness of current activities, and identifying opportunities. This is the ‘analysis’ stage.

The second stage is concerned with defining marketing goals and objectives derived logically from the previous stages of the planning process.

At the third stage, target markets should be selected from the previously developed list of available segments, and once the market has been segmented and a target market identified, the next step in the marketing plan is positioning. Market positioning is ultimately how the consumer perceives the goods or services in a given market, and is used to achieve a sustainable competitive advantage over competitors.

The fourth stage of the marketing plan involves selecting and developing a series of strategies that effectively bring about the required results.

Finally the marketing plan needs to address the resources required to support the strategies, and the measures that are in place to evaluate the effectiveness of the marketing plan.

1. Situation Analysis
The first stage of the marketing plan is defining the current situation. It is essential that each component of the business be reviewed in order to ensure that resources can be allocated efficiently. Several models exist for reviewing effectiveness and identifying opportunities, but those proven by time and practical application across a range of industries include portfolio analysis, SWOT/C (strengths, weaknesses, opportunities, and threats/challenges) analysis, forecasting, competitor analysis, and segmentation analysis.

a) Portfolio Analysis
First became popular in the 1960s, when many organizations sought to improve their profitability by diversifying their activities so that if one or two failed, they would not be so adversely affected. For film commissions, it is important to take stock of exactly what their jurisdiction has to offer for producers. Many commissions now promote their services or their tax breaks as much as their locations or scenery.

Cost, ease of production, skills and facilities are as important as authenticity and overall fit with the script in location selection, and many film commissions lure producers with the offer of skilled industry specialists. As in any industry, a skilled labor force helps: everything from make-up artists to animal-trainers. In Britain, the film and video industries employ over 57,000 people, an increase of 77 percent since 1994. In certain areas, niche labor and expertise can offer a commission particular advantages. The Calgary area in Canada, for example, prides itself on having an ample supply of trained horses, riders, equestrian equipment and western sets to be able to host western films and TV series successfully.

Other film commissions may have a strong portfolio of one specific type of location. Historic federal buildings, for example, are often promoted to producers. Successes in the US include the leasing of the US Post Office Courthouse in Savannah, Georgia, as a location for the motion pictures Midnight in the Garden of Good and Evil and The Legend of Bagger Vance.

b) SWOT or SWOC Analysis

SWOT is an acronym for strengths, weaknesses, opportunities, and threats. A SWOT analysis provides scope for an organization to list all its strengths (those things it does best and its positive product features) and its weaknesses (problems that affect its success). These factors are always focused on the internal workings of the organization.

Strengths for film commissions could be competitive tax incentives, the number of film locations, studios or post-production facilities in the area, or the skills of local personnel. Strengths may also lie in the scenery or certain icons, or it may reflect having a particularly favorable image. Once identified, strengths are the basis of corporate positions and can be promoted to potential customers, enhanced through product augmentation, or developed within a strategic framework.

Weaknesses, ranging from aging products and declining markets, to surly customer contact staff, must also be identified. For film commissions, weaknesses could be such things as not enough crew, or the lack of infrastructure such as hotels or studio space. Once identified, weaknesses may be subject to management action designed to minimize their impact or to remove them where possible. Weaknesses and strengths are often matters of perception rather than fact, and may be recognized only through consumer research.

Opportunities are events that can affect a business, either through its reaction to external forces or through its addressing of its own weaknesses. An example of an opportunity could be a new studio space in your jurisdiction, or programs that support local writers or filmmakers.

Threats/Challenges are those elements, both internal and external, that could have a serious detrimental effect on a business. Fiji, for example, was having difficulty attracting production in 2007 due to a lack of confidence in the country’s security situation. A more common example is another commission with the same basic strengths and offerings as your own film office. This is why it is important to understand what your fellow commissions are doing.

c) Forecasting

Because information is never perfect and the future is always unknown, no one right conclusion can ever be drawn from the evidence gathered in the SWOT process. As a result, forecasting becomes an important stage in the planning process to support a SWOT. Forecasting is based on market research but is oriented towards the future, relying on expectations, vision, judgment, and projections for factors such as revenue trends, consumer profiles, product profiles, price trends, and trends in the external environment. Because the future for film commissions is sometimes subject to volatile, unpredictable factors and competitors’ decisions, the goal of forecasting is not accuracy but careful and continuous assessment of probabilities and options, with a focus on future choices.

d) Competitor Analysis

Information on the number and type of competitors, their relative market shares, the things they do well, and things they do poorly will assist in the planning process. Competitor analysis will also highlight market trends and the level of loyalty of consumers. The market for attracting any form of media production is extremely competitive, and it is important for film commissions to understand whom their main competitors are, and what initiatives they are using to lure production to their regions. Competition exists at a global as well as regional level. For example, the Australian government offers tax concessions to attract overseas film producers to the country in an effort to compete with Canada.

It has been suggested that there are only three generic strategies for dealing with competition: low-cost leadership, differentiation, and focus. Low-cost leadership is the simplest and most effective strategy, but it requires large resources and strong management to sustain. A low-cost leadership strategy is used when a firm sets out to become the low-cost producer in its industry. For a film commission, this strategy could involve offering incentives such as tax breaks in order to be a low-cost leader. For instance, at one point Michigan offered a 40-42% tax rebate on filming and other media productions as well as a 40% wage rebate for all above-the-line workers and 30-40% wage rebate for all below-the-line workers. [Michigan incentives have been restructured, but this is still a valuable example]. Another method commissions use to be low-cost competitors is to reduce the cash outlays of production companies by getting local vendors to reduce their charges for services. This is often referred to as ‘soft incentives’.

Differentiation is a strategy that consists of an innovative technological breakthrough, which can take competitors a long time to imitate. A competitive advantage can be gained by a product that is newer, better, and/or faster. The improvement can be in performance, durability, reliability, or service features. For a film commission this may mean being renowned for having a skilled labor force.

A focus strategy concentrates on designing a good or service to meet the needs of one segment of the market better than the competition does. Queensland, Australia, for example, has positioned itself as a leading destination in the world for film directors seeking a jungle location. Brazil and Africa are very successful in bringing in nature documentaries. Another example is the ability of certain jurisdictions to lure commercial advertising, while other communities are renowned independent film or gaming locations.

All three of these generic strategies are based on the organization’s creation of a unique position for itself, which distinguishes its offerings from those of its competitors by price, product features, or the way in which it serves the needs of a particular segment. This process, known as ‘positioning’, is discussed later in this chapter.

e) Segmentation Analysis

Segmentation analysis refers to the way in which organizations identify and categorize customers into groups defined by similar characteristics and similar needs or desires. The principles of segmentation are based on the premise that a market can be readily divided into segments for the commercial purpose of targeting offerings. The core advantage of segmentation is that customers will be more satisfied with the product because it has been designed with their needs in mind. Their social needs are also satisfied because they will be mixing with people like themselves and avoiding incompatible types. If an organization knows exactly which segments it wishes to reach, it can select the media most likely to be read, heard, or seen by those consumers, thereby spending less on general mass-market advertising. If it knows the lifestyles and attitudes of that group of people and the benefits they are seeking from the product, the advertising message can be made more persuasive.

For many film commissions, the target market is film and television producers, and they may be segmented based on the type of production the commission is trying to attract, or their geographic location (e.g. Hollywood). For example, if a location is best suited to shooting commercials, then resources may be best allocated to targeting advertising agencies, production companies and trade organizations that specialize in commercials. However, there are a number of scouting agencies that specialize on finding suitable locations for producers. Developing relationships with this particular segment may be advantageous, especially for a film commission with limited resources.