2011 – Planning and Trends

This is the first in a series of posts about planning for 2011.

Many years ago, when I worked for GE’s Audio Electronics Products Department, planning was a major part of a Product Manager’s work.  The planning started about this time of the year and was focused on the “5 Year Plan” that every GE Product Department had to submit.  Primary emphasis was given to the first year of the 5 year plan, as that became the basis for the “Annual Plan” which was submitted in the fall, and then went through several iterations.  Most companies today follow a similar, but probably not so detailed process.  And remember this was before PCs and laptops; Excel spread sheets and the Internet.

The first step was to identify trends, ranging from macro to micro.  On the macro side, what was the economy doing, what was the forecast, was it an election year (this did make a difference!), what was the exchange rate and what was the arbitrage spread, etc. etc. The objective was to lay a foundation and correlation, as we had access to historical industry information that grossly correlated with some of major economic indicators.

This was then followed up by more detailed demographic information.  Who was buying which products, why, were any products or combination of products surging ahead of the others, to whom and why?  For example, small ‘transistor” radios were popular with teenagers.

Next came a competitive review.  What was the status of the competition, were there new competitors, new competitive winning products, new distribution channels, etc.?

Following this was an internal examination of our products.  Which ones were winners, which were losers, which had the highest profit margin, lowest, etc.?

Critical to this planning was the early identification of trends that would impact our business.  Connecting the “dots” became a mixture of art and science, as what we were selling was purchased out of disposable income.  But, even if that went down, the products were great gift items, with peaks around Christmas, Father’s Day, Graduation, etc.

The same process that allowed GE’s AEPD to succeed is applicable today to both consumer and B2B companies.  As the CMO going into your 2011 planning cycle, you should be asking and finding the answer to these questions:

  • How strong a correlation exists between the purchase decision for your product(s) and the economy?  Note that if there is no correlation, your messaging better be focused on providing a high degree of pleasure (for consumer goods) or cost savings/ROI (B2B).
  • Who makes the decision to buy your product(s) and has there been any change?  Has a self-purchase migrated to a family purchase; has a committee replaced a purchasing agent?
  • Has there been any change in the way the buyers of your product(s) learn about them?  How effective has your promotional mix been?  Should it remain the same, or change?  (This is where an evaluation of social media comes in.)
  • Has there been any change in sales in your current product line, i.e., price erosion on Product XXX, higher volume on the lowest cost, minimal featured product, or user demand shifting to s a particular “must have” feature?
  • What changes have occurred regarding your competition?  Have any increased their market share?  Have any gone out of business?  Are there new (or indications of new) models and/or features being introduced?  Do any of the competitors appear to have locked up a specific segment, vertical market, or distribution channel?
  • What is the status of your products and product development?  Should you be planning new launches or cost improvements?  What features/functions will continue your differentiation, which ones need to be added to remain competitive? Is this doable in the next 6 months?

An example of the outcome of this type of planning was the decision one year to cost-reduce the highest volume cash cow product (400K+ units), rather than replace it with a new one, knowing that the market was shifting to a different format.

Now is the time to begin asking and answering these questions.  For most companies, what is going to happen in June is set and done.  The third quarter revolves around September, and for Marketing, doing this type of planning and analysis in September usually conflicts with the tactical need to make the quarter.  Where you don’t want to be is sitting around a table in the first week of October asking, “Well, we have visibility into 2010, what are we going to do next year?

Have you begun your planning process yet?  Can you identify the major macro and micro trends in your industry that impact your company?

Related:

https://firealarmmarketing.com/2010/04/01/2010-the-first-milestone/

https://firealarmmarketing.com/2009/10/29/guide-for-the-cmo-in-planning-2010/

https://firealarmmarketing.com/2009/10/22/the-only-metric-to-use-in-2010-planning/

RHM  6/17/2010

3 comments to 2011 – Planning and Trends

  • Jim Matorin

    Bob:

    With the steps you laid out, inevitably the old S.W.O.T. analysis comes out of the CMO’s bag of tools. One thing I am now going to look at in addition given the current economy is doing a similiar analysis (S.W.O.T.) for each key competitor.

    Jimmy

  • Lavada Palomar

    I really like your blog and i really appreciate the excellent quality content you are posting here for free for your online readers. Can you tell us which blog platform you are using?

  • Robert Mannal

    Thanks, we are using WordPress.

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