The marketing plan section is a useful tool to check the consistency of decisions and to easily anticipate their possible financial consequences. It will help you estimate your revenues, expenditures and contribution for the decision period. The principle is to first estimate the retail unit sales of your brands, and then to use your current decisions – prices, advertising expenditures, commercial team size and allocation, etc. – to calculate all the other figures, from revenues to contribution.
The marketing plan tool is not based on a Markstrat mathematical model. It is a sophisticated spreadsheet that uses the information you provide to make the calculations. Many facets of the environment may change unexpectedly, including consumer needs or competitive actions. Other aspects directly controlled by the firm may not be properly incorporated, or may be overlooked. As a result, if you input highly optimistic (or pessimistic) brand market shares or segment sizes, then the tool will give you highly optimistic (or pessimistic) results.
The marketing plan built-in assistant will guide you through five steps: (1) estimating consumer segment sizes; (2) estimating the shares of your marketed brands in each of these segments; (3) calculating brand sales; (4) calculating brand revenues and contribution; and (5) calculating firm consolidated revenues and profit.
The actual brand contribution and company performance statements for the next period may be quite different from the pro forma projections obtained from the plan. An important role of the marketing plan is to provide a tangible basis to learn over time. The financial statements in the marketing plan (steps 4 & 5) are in the same format as in your annual report. This makes it easy to compare between the anticipated projections and the actual results when they are obtained. A systematic analysis of the sources of variance between the two documents will help you learn both about the market mechanisms and about the planning process. In the long-term, this learning dimension is probably the most important contribution of the marketing planning process.