8 Marketing Planning Errors

  1. Confusing data with intelligence: the audit phase of the planning process typically creates a great deal of data; increasingly this is an all-year round problem, however, as digital sources grow exponentially. It is easy to drown in all this Pitfalldata and it is therefore vital to establish effective systems to sieve it to extract relevant information.  The really vital role for the marketer, however, is to identify from the information gathered the key insights, from which appropriate strategies for the brand and the marketing mix can be developed.


  1. Hockey-stick forecasting: a forecast that is almost certainly not based upon a proper understanding of the market is one where a long-term sales decline suddenly turns into an uptick in sales in the forecast for the coming year. Unless this is the result of a detailed examination of the decline, the clear identification of a previously unexploited opportunity and a justified plan for development, the forecast is simply the result of misplaced optimism by a deficient marketer.


  1. Steering by the wake: this is a similar situation to the previous error, but this time the future is seen to simply be an extrapolation of the past. Again, proper justification for the projection of the ongoing trend into the future is entirely acceptable, but a lazy, or specious, continuation of the upward movement will sooner or later lead to missed objectives, inappropriate strategies, misallocation of resources, and growing doubt about the marketer’s competence.


  1. Ignoring the source of projected brand share increases: if it were possible to collect together all the projected brand shares for the coming year from the competing companies in a particular market they would virtually certainly add up to more than 100%. This is usually because the marketers concerned have failed to build robust models of the marketplace which explain why a share increase for one company will result in, or be a result of, a compensating decrease for another player.  Remember, that whilst market share is a zero-sum game, a static (or even declining) share for your brand can still result in growth in a growing market; without a market model, it is impossible to understand these dynamics, however.


  1. Confusing forecasts, tactics and budgets with strategies: some sales forecasts, a few apparently arbitrary activities and a budget for them, does not constitute a strategy. Strategies explain how agreed objectives are to be met, examines possible ways of achieving them, and then set out which proposed elements, how, when and in what quantity, are required for implementation.


  1. Denominator marketing: follows the logic that what is required to increase profits is to reduce costs. Cost control is a necessary element of all managers’ responsibilities, but unique to the marketing and sales functions is the ability to improve the margin by increasing the revenue line as well.  A business fixated on reducing costs will likely have little long-term future, whereas a marketing-led business, exploiting identified market opportunities, will achieve profitable growth rather than shrinking the business.


  1. Downward adjustment of expenditure, but not sales: the typical marketing planning approval process will play out with the Finance Director rejecting the proposed marketing budget, but retaining (or proposing an increase in) the sales revenue line. If the marketer is competent, he/she will have the track record of previous achievement to defend the proposed budget (assuming it has not been overcooked in anticipation of being reduced).  The marketer should deal with an imposed reduction by ring-fencing a higher spend for a test, to be able to demonstrate a year later the scale of the lost opportunity.  Working with colleagues in finance to develop such models will not only increase mutual understanding but make future budget negotiations much smoother.


  1. Sales as the only measure of achievement: there can be an argument sometimes for increasing sales at the expense of margin if it can be demonstrated that the long-term payback is more profitable. Sales, for the most part, are not the key determinant of success, however: in a commercial organization it is profit.  This is why marketers should never make decisions about expenditure on marketing activity without fully understanding the costing structure of the product or service in question (including overhead allocation), and therefore the impact on margin.  Nevertheless, this consultant has come across many instances where marketers/product managers have not had proper access to such critical information.