CHAPTER TWENTY-ONE For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin Developing Innovative Marketing Plans

When we finish this lecture you should Know the content of and differences among strategies, marketing plans, and a marketing program Understand all of the elements of the marketing strategy planning process and the strategy decisions for the four Ps Understand why product classes and typical mixes should be considered when developing a marketing plan Understand ways the marketing strategy and plan are likely to need to change at different stages of the product life cycle.

When we finish this lecture you should Understand the basic forecasting approaches and why they are used to evaluate the profitability of potential strategies Know what is involved in preparing a marketing plan, including estimates of costs and revenues and specification of other time-related details Understand ways firms can become involved in international marketing.

The Development of Marketing Plans (Exhibit 21-1) Strategy Planning, Implementation, and Control (Exhibit 21-1) Blending the marketing mix Writing marketing plans Forecasting the target market potential & sales Putting Together Innovative Marketing Plans

Marketing Planning Process Is More Than Assembling the Four Ps …We’ve become a model for how to do business on the Internet. Everything from being integrated with suppliers to e- commerce to customer support …creating efficiencies that result in business to business at its best. Online.

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Developing Different Marketing Mixes

S.W.O.T. Analysis

Which of the following would a S.W.O.T. analysis classify as an “opportunity” for Microsoft: A.Microsoft has a great deal of cash available for marketing strategies. B.Microsoft develops new patented technology that makes its software run faster. C.European trade regulators consider rulings that would require Microsoft to develop a new version of Windows for its market. D.Emerging markets in Asia and Africa show increased demand for computers and software. E.The company hires an expert in online advertising. Checking your knowledge

Marketing Mix Flows from Target Market Dimensions (Exhibit 21-3)

Marketing Manager Must Blend the Four Ps

Product Life Cycle Guides Planning (Exhibit 21-4)

Forecasting Target Market Potential and Sales We can tell you who your next customer is – right down to the partially hydrogenated canola oil on his poly/cotton undershirt.

So, Predicting Future Behavior Takes Judgment! Two Approaches to Forecasting (Exhibit 21-5) Extending Past Trends Can Miss Turning Points

Bread producer’s estimated sales: $4,700,116 Bread producer’s estimated sales: $4,700,116 Bread producer’s estimated sales: $4,700,116 Bread producer’s estimated sales: $4,700,116 Previous year’s total food sales in Denver, CO: $4,700,116,000 Previous year’s total food sales in Denver, CO: $4,700,116,000 Previous year’s total food sales in Denver, CO: $4,700,116,000 Previous year’s total food sales in Denver, CO: $4,700,116,000 Past share: 1/10% of total retail food sales in target markets – a factor of.001 Past share: 1/10% of total retail food sales in target markets – a factor of.001 Past share: 1/10% of total retail food sales in target markets – a factor of.001 Past share: 1/10% of total retail food sales in target markets – a factor of.001x= The Factor Method Can Use Several Factors! A Bread Producer Example of the Factor Method Forecasting Company Product Sales by Extending Past Behavior

Producers of Business Products Can Use Several Factors Too (Exhibit 21-7)

Leading Series Time Series Indices Other Trend Extension Methods

Estimates from Sales People Estimates from Sales People Estimates from Sales People Estimates from Sales People Jury of Executive Opinion Jury of Executive Opinion Jury of Executive Opinion Jury of Executive Opinion Surveys, Panels, Market Tests Surveys, Panels, Market Tests Key Methods Predicting Future Behavior Calls for More Judgment and Some Opinions

Viktor Potrenko conducted research for his dance studio, VP Dance. There is only one other dance studio currently in town and his research indicated that the market potential was $400,000 for the coming year. From this information we know that: A.His dance studio should have a marketing plan that forecasts $400,000 in sales. B.His dance studio’s sales will be less than $400,000 in the coming year. C.Potrenko has yet to develop his marketing strategy. D.If his studio gets a 40 percent market share, then the other studio will have sales of $600,000 in the coming year. E.None of the above are true. Checking your knowledge

Marketing MixPrice Selling Cost Advertising Cost Total Units Sales Revenue Total Cost Total Profit Analysis of Costs and Sales Can Guide Planning (Exhibit 21-8)

Marketing MixPrice Selling Cost Advertising Cost Total Units Sales Revenue Total Cost Total Profit More “What If?” Questions (Exhibit 21-9)

Types of Demand-Oriented Pricing Key Parts of a Marketing Plan Name of Product- Market Name of Product- Market Special Implementation Special Implementation Customer Analysis Customer Analysis Competitor Analysis Competitor Analysis Company Analysis Company Analysis Marketing Environment Marketing Environment Product Place Promotion Price Marketing Information Needs Marketing Information Needs Forecasts and Timing Forecasts and Timing Control The Marketing Plan Brings All the Details Together

+ Other Marketing Plans Other Marketing Plans Other Marketing Plans Other Marketing Plans + Time- Related Details Time- Related Details Marketing Plan Marketing Plan = Time- Related Details Time- Related Details Marketing Plan Marketing Plan Target Market Target Market + Marketing Mix Marketing Mix = Marketing Strategy Marketing Strategy Target Market Target Market Marketing Mix Marketing Mix Marketing Strategy Marketing Strategy A Firm’s Marketing Program A Firm’s Marketing Program = Companies Plan and Implement Whole Marketing Programs

Lower Levels of Involvement Exporting Licensing Contract manufacturing Management contracting Planning for Involvement in International Marketing

Lower Levels of Involvement Exporting Licensing Contract manufacturing Management contracting Higher Levels of Involvement Joint venturing Wholly owned subsidiaries Multinational corporations Planning for Involvement in International Marketing

Maria Petrino is the marketing manager at Imported Toys, a small online retailer. She has developed a marketing mix for one of the retailer’s prime target groups – grandparents. She has finished laying out the details of who in the firm does what during the next year to attract the grandparents. Maria apparently has created: A.Only a marketing strategy. B.A marketing plan. C.A marketing program. D.Both a marketing strategy and the associated marketing plan. E.All of the above are correct. Checking your knowledge

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin Interactive Exercise: International Marketing

You now Know the content of and differences among strategies, marketing plans, and a marketing program Understand all of the elements of the marketing strategy planning process and the strategy decisions for the four Ps Understand why product classes and typical mixes should be considered when developing a marketing plan Understand ways the marketing strategy and plan are likely to need to change at different stages of the product life cycle.

You now Understand the basic forecasting approaches and why they are used to evaluate the profitability of potential strategies Know what is involved in preparing a marketing plan, including estimates of costs and revenues and specification of other time-related details Understand ways firms can become involved in international marketing.

Key Terms S.W.O.T. analysis Market potential Sales forecast Trend extension Factor method Factor Time series Leading series Indices Jury of executive opinion Spreadsheet analysis Exporting Licensing Contract manufacturing Management contracting Joint venturing Wholly-owned subsidiary Multinational corporations