ENTR 452 Chapter 8: The Marketing Plan

UNDERSTANDING THE MARKETING PLAN Written statement of marketing objectives, strategies, and activities Provides answers to three basic questions Where have we been? Where do we want to go (in the short term)? How do we get there?

STEPS FOR A MARKET RESEARCH STUDY Define the purpose or objectives Gather data from secondary sources Gather information from primary sources Analyze and interpret the results You should be analyzing the industry and the competition.

PRIMARY RESEARCH - Customer surveys and questionnaires - Focus groups - Daily transactions (company records) - Suggestion boxes/systems - Contacting suppliers about trends - Customer advisory panel - Surveying customers that have not purchased recently

SECONDARY RESEARCH - Internet - Business directories/Direct-mail lists - Demographic information (census data) - Government forecasts - Market research conducted by other organizations - Magazine and journal articles - Local data (Chamber of Commerce, City Hall)

FOUR OBJECTIVES OF A MARKETING PLAN 1. Should determine customer needs and wants through market research. 2. Should pinpoint the specific target market the company will serve. 3. Should analyze the firm’s competitive advantages and build a marketing strategy around them. 4. Should help create a marketing mix (4 P’s) that meets customer needs and wants.

PRODUCT What is it? Stage of development (product life cycle) Features Quality Packaging Branding Guarantees Assortment

PLACE Location Methods/channels of distribution “Middlemen” Storage Transportation

PRICE List price Credit terms Discounts Selection and allowances Consider cost structure, market acceptance, and desired image Alternative pricing strategies (skimming, exploiting the experience curve, meeting the market price, achieving maximum market penetration, “low ball” strategy).

PROMOTION Promotion blend - Advertising - Media - Copy/Press Releases - Timing Personal selling - Training - Motivation Publicity/Buzz

STEPS IN PREPARING THE MARKETING PLAN 1. Defining the business situation Situation analysis: Describes past and present business achievements of new venture After the start of venture, information should relate to: Present market conditions Performance of the company’s goods and services Future opportunities or prospects

STEPS IN PREPARING THE MARKETING PLAN 2. Defining the target market/opportunities and threats Target market: Specific group of potential customers toward which the venture aims its marketing plan Market segmentation: Dividing a market into definable and measurable groups for purposes of targeting marketing strategy Identify strengths and weaknesses in the target market

STEPS IN PREPARING THE MARKETING PLAN 3. Establishing goals and objectives Marketing goals and objectives: Statements of level of performance desired by new venture Respond to the question, “Where do we want to go?” Organizational goals should: Represent key areas Be limited in number (between six and eight)

STEPS IN PREPARING THE MARKETING PLAN 4. Defining marketing strategy and action programs Marketing strategy and action plan Specific activities outlined to meet the venture’s business plan goals and objectives Product or service Describe the product or service

STEPS IN PREPARING THE MARKETING PLAN Pricing - Three important elements include Costs Margins or markups Competition Distribution Evaluate the choice of distribution channel Promotion Identify the medium to inform potential consumers about the products

STEPS IN PREPARING THE MARKETING PLAN 5. Marketing strategy: Consumer versus business-to-business markets Business-to-business markets - Selling products or services to another business Consumer markets - Sales to households for personal consumption

STEPS IN PREPARING THE MARKETING PLAN 6. Budgeting the marketing strategy Identifying costs to meet desired goals and objectives 7. Implementation of market plan 8. Monitoring the progress of marketing actions Tracking results of the marketing effort Preparing for contingencies

STEPS IN PREPARING THE MARKETING PLAN 9. Understand weaknesses in market planning Poor analysis of the market and competitive strategy Unrealistic goals and objectives Poor implementation of the outlined plan actions Unforeseen hazards like weather or war

(from other industries) 5-FORCES MODEL Substitute Products (from other industries) Buyers Suppliers of Key Inputs Potential New Entrants Rivalry Among Competing Firms 19

WHY SOME MKTG PLANS FAIL Lack of a real plan Lack of adequate situation analysis Unrealistic goals Unanticipated competitive moves, product deficiencies and acts of God