Chapter 15 The Marketing Plan

Copyright © Houghton Mifflin Company15-2 Overview Relationship marketing The marketing plan Product/service promotion Online marketing

Copyright © Houghton Mifflin Company15-3 Relationship Marketing

Copyright © Houghton Mifflin Company15-4 Identifying and Rewarding the Best Customers Calculate lifetime customer value: Present value of future purchases + Referrals – Maintenance Reward your best customers –Frequency programs –Just-in-time marketing –Complaint marketing

Copyright © Houghton Mifflin Company15-5 Preparing the Marketing Plan Define your approach to the market based on understanding customers’ needs Make a list of the marketing options Think like a customer: imagine the business from the customer’s point of view

Copyright © Houghton Mifflin Company15-6 Preparing the Marketing Plan (cont.) Study the competition: What makes them successful or unsuccessful? Analyze the options and rank them –Whether they meet customers’ needs –Whether they fit in the entrepreneur’s budget

Copyright © Houghton Mifflin Company15-7 The One-Paragraph Marketing Plan Purpose: What will the plan accomplish? Benefits: How will the product/service help the customer or satisfy a need? Target market: Who is the primary buyer? The market niche: Where do you fit in the industry or market? Differentiation?

Copyright © Houghton Mifflin Company15-8 The One-Paragraph Marketing Plan (cont.) Marketing tactics: What tools will you use? Company’s identity: How will customers see the company? Budget: How much money is allocated to the marketing plan?

Copyright © Houghton Mifflin Company15-9 Marketing Plan Outline One-paragraph marketing plan Key marketing issues that will affect the success of the company It contains launch objectives for the campaign Milestones Strategic alliances Metrics to measure effectiveness Strategic alignment: goals and tactics

Copyright © Houghton Mifflin Company15-10 Strategies for Pricing What are you trying to accomplish? –Increase sales –Increase market share –Maximize cash flow –Maximize profit –Set up entry barriers to competition –Define an image –Control demand

Copyright © Houghton Mifflin Company15-11 Types of Pricing Cost-based: cost + operating costs + profit Demand-based: what are customers willing to pay? Competition-based: priced in line with competitors Psychological pricing: $12.99 – bargain Distribution channel: consider number of intermediaries Extrapolating from other industries

Copyright © Houghton Mifflin Company15-12 Promotion-Guerrilla Marketing Take advantage of free publicity –What’s your compelling story? –Get customer testimonials Give your product away if –You will see this customer again –The cost is low, margins high –Customers need to try the product to decide –You can provide samples at a large event

Copyright © Houghton Mifflin Company15-13 Advertising Print Media –Newspapers for broad coverage in a geographic area, low cost –Magazines to target a particular interest –Yellow pages for broad reach, but expensive –Signs encourage impulse buying

Copyright © Houghton Mifflin Company15-14 Advertising (cont.) Direct marketing: mail, mail order, coupons, telemarketing, TV shopping networks –Success depends on the mailing list Broadcast media –Radio for local or regional advertising –Television to target an interest group on cable TV

Copyright © Houghton Mifflin Company15-15 Personal Selling Do your homework before you try to sell Build credibility with the customer before you sell Position yourself as a solution provider Grab the customer’s interest immediately

Copyright © Houghton Mifflin Company15-16 Personal Selling (cont.) Let the customer use the product Don’t waste the customer’s time; get to the point quickly If the customer says no, gently ask why and offer to let him/her talk to current customers

Copyright © Houghton Mifflin Company15-17 Trade Shows and Exhibits Rent booth space and design the site well Hire professionals to distribute information or to get people to the booth Have knowledgeable, personable people in the booth Offer something free Follow up with letters to anyone leaving a business card

Copyright © Houghton Mifflin Company15-18 Online Marketing Your marketing strategy should be anticipated, personal, and relevant Consider viral marketing –Analogous to word-of-mouth Affiliate programs –Strategic partnerships with companies that offer complementary products and services

Copyright © Houghton Mifflin Company15-19 Why Customers Use the Internet It’s convenient: no crowds, traffic, or parking issues It’s easy to compare prices They have immediate access to a greater variety of stores around the globe They often pay less online It’s entertaining

Copyright © Houghton Mifflin Company15-20 Why Customers Don’t Use the Internet The time lag between purchasing and receiving Cannot test or try on the product Can be risky dealing with a retailer you don’t know Privacy issues Opportunity: solve these problems

Copyright © Houghton Mifflin Company15-21 Take-Aways List what students took away from the discussion in real time