Marketing Strategies …and the Marketing Plan

Marketing Strategies A strategy is the method selected to carry out a carefully devised plan of action in order to achieve a specific goal.

Marketing Strategies Marketing strategy outlines how the company will carry out the marketing plan, which consists of the company’s marketing goals and the marketing mix formula for achieving them.

Marketing Plan Begins with section that states the marketing goals of the business. Introducing a new product or service Gain interest in a cause Promote an idea Next, the plan describes the target markets and lists as many competitors as possible

Marketing Plan Research section is next, with a plan for gathering and analyzing information that will support or alter the initial marketing goals. Based on the research and initial marketing goals, the plan should next make clear statements about how the product will be positioned in the marketplace. There needs to be a rationale for these positioning statements and describe the methods that are needed to differentiate the product in the market.

Marketing Plan The plan should include a section on the pricing strategy. Rationale for setting the price Discussion of value equation Distribution section is next Explains existing channels of distribution Plans for future distribution to the consumer and the logistics involved

Marketing Plan Promotional proposal Provides a rationale for the creation of the advertising message Selection of media that will be used to convey the message Outlines for various promotional activities End with sales forecast based on the marketing plan and a description of how marketers will monitor the plan’s success

Marketing Plan Once the goals of the marketing department have been established, marketers will develop strategies for carrying them out. Brand Strategies Distribution Strategies

Brand Strategies The primary goal of any brand strategy is to communicate the value of a product or service to the consumer.

Brand Strategies Value: the difference between the perceived cost of the product and the perceived satisfaction derived from the product. Costs: Monetary. Also, time spend finding the product, setting it up, plus personal costs (prestige, status, appearance, reputation, etc.)

Brand Strategies The consumer’s decision to pay these costs depends entirely upon the expectations associated with the brand. Brand strategies develop and communicate the benefits of the brand, minimize the costs and encourage the consumer to set up a positive value equation.

Brand Strategies Value Equation: adds together the benefits of a product (real and imagined), and subtracts the costs. If the costs outweigh the benefits, then the trip will have negative value and consumers will not purchase it. They will only purchase if it has positive value – benefits outweigh the costs.

Brand Strategies Marketers strive to either add benefits to the product, or reduce the costs associated with it. Adding new flavours, ‘green’ packaging, enhanced personal status Lower prices, low risk, more convenient distribution Every marketing campaign creates a value equation in some way.

Example: Adam & Tara’s trip to Barbados Benefits Value Cost Pleasure: Great food, warm weather, lots of do, escape from Canadian winter blahs. 6 Monetary costs: $4000. They are saving to buy a house. The trip would take up over 10% of their savings 10 Prestige: pictures to show friends, dinner party conversation, tans 3 Safety: Neither feels that air travel is safe. Tara wants to know more about the health care situation in Barbados, in case of emergency. Adventure: Adam has never flown before; both would like to learn scuba diving; a new place is exciting. Timing: Both work. Adam is off during March break, but Tara would have to negotiate time off with her employer. 5 Romance: have only been married a few years and would like a second honeymoon 4 Complexity: Neither have travelled outside of Canada. Need passports and knowledge about how to plan a trip like this. 2

Value Equation: Adam & Tara’s Trip The value equation for them would look like this: Total benefits (19) – Total Costs (23) = -4 Value equation has a negative result. Therefore they are not likely to go to Barbados.

Value Equation: Adam & Tara’s Trip One of the goals of the marketing plan for a tour company, the Barbados Hotel Association or the Government of Barbados Department of Tourism, would be to increase the benefits and/or decrease the costs of a Barbados vacation to creative positive value for consumers like Adam and Tara.

Value Equation: Adam & Tara’s Trip Barbados Hotel Association Sponsored shows and concerts featuring famous celebrities – pleasure benefit increases by 2 points Tour Company Tour package to eliminate the complexity of vacation planning. Government Advertise the excellent health care facilities and reduce the safety costs by 3 points.

Value Equation: Adam & Tara’s Trip Now, the value equation is: Total benefits (21) – Total costs (20) = +1

Brand Strategy A brand strategy attempts to position the product or service Marketers try to create a value equation for the product in the consumer’s mind. Packaging, brand names, slogans, trademarks to develop a positive and identifiable brand image for each product or service. Brand image is communicated to the consumer through advertising and promotional activities.

Distribution Strategies Focus on the best way to deliver a product or service to the target market. It can push the product or service to the consumer It can pull or attract the customer to the product or service or, It can use a combination push/pull strategy

Push The push strategy sells the product to retailers, importers or wholesalers, and not to end use consumers. If the product is out there where consumers can see it, they will buy it.

Push Push strategy requires the marketer to focus all of the promotional activities on the distributor (often the retailer) Buying incentives such as promotional discounts, prizes, display features and product-knowledge seminars encourage the store to carry the product.

Pull The pull strategy attempts to increase consumer demand directly, rather than rely on retailers to sell the product to the customer. Manufacturers and importers try to convince consumers that they need their product, and that they should look for it by name when they go shopping.

Pull This strategy requires a major advertising and promotional effort. Because it is so obvious, many people believe this is the most important or useful marketing strategy. However, this is not always the case.

Combination The pull strategy is difficult to use alone. It requires distribution partners to fulfill the demand created by the manufacturer. The pull strategy needs to combine with the push strategy to optimize effectivness; however, the push strategy can stand alone.