1. Fuqua School of Business
Marketing Planning
Professor Carl Mela
BA 460 Product Management
Fuqua School of Business
Brand Management System
On Building A Brand
Managing Across Brands

2. Agenda
Marketing Planning
PharmaSim

3. The Purpose of Planning
“Planning is everything, plans are nothing.”
General Eisenhower
Planning is to a large extent the job of making things happen that would not otherwise occur.

4. Obstacles to Planning Good Forecasting Time Lack of Process
Lack of Management Commitment

5. Responsibility for Planning
Source: Conference Board

6. Responsibility for Approving Plans
Source: Conference Board

7. Planning Horizon
Source: Conference Board

8. Top Down v. Bottom Up Bottom Up Top Down
Closer to implementation, motivated by control, better forecasts
Top Down
More vision at the top, more coordination

9. Planning Process Set Deadlines / Initiate Process Gather Data
Analyze Data / Situation Assessment
Make Plans & Forecasts
Refine Plan
Management Approval
Disseminate, Monitor & Control

10. Consider Company Goals
Assess Situation
Consider Company Goals
Set Measurable Objectives
Develop Strategies, Action Plans,
Responsibility Assignments, and Due Dates
Evaluate Programs Against Objectives
Attainable
Unattainable
Draft Marketing Plan
Compare Programs to Resources
Feasible
Infeasible
Submit Plan for Approval
Approved
Not Approved Go
Source: Conference Board

11. The Marketing Plan Where are we now? Where do we want to be?
How do we get there?

12. Marketing Plan Executive Summary Situation Analysis
Marketing Objectives
Strategy and Tactics
Monitors and Controls
Financial Documents

13. Situation Analysis Review of Status and Future Outlook
Not just data, but implications
Brevity, prioritization of information
Diagnostic, not descriptive
Contains:
Category Analysis and Forecast Trends
Sales Analysis
3 C Analysis
Planning Assumptions
Summary (Problems and Opportunities)

14. Objectives
“If you don’t know where you want to go, any road will take you there”
Precise, with dates and numbers
Sales, profits, share, etc.
Measurable and achievable
Subsequent strategy and tactics must demonstrate compliance with objectives

15. Strategy and Tactics
Strategy is means to accomplish goal, e.g., awareness goal will be met by advertising
Tactics pertains to the implementation, e.g., media schedule, agency, message, etc.
how to, by whom, by when, with what resources

16. Monitors and Controls
74% of consumer product firms have explicit sales promotion tactics
Only 36% monitor
69% of industrial firms have explicit sales tactics
Only 46 % monitor
Only 1 in 4 firms has a contingency plan
Both good and bad events (e.g., competitor merges or leaves)
What ifs and appropriate trigger points
Source: Conference Board

17. PharmaSim Goal: Provide context for plan
20% plan, 5% performance
Assignment detailed on website
Goal: More experience in decision making
More brand oriented than Markstrat
More promotion and advertising decisions, less production
Play against pc, not classmates

18. PharmaSim Overview of Market 250MM Persons (1% Growth /Year)
2% GNP Growth
Moderate Inflation
80% of Population Suffers from Colds
OTC Market is $2BB Growth 4% / Yr
Manufacturer Sales = $1.5BB
Five companies
Capacity adjusts automatically to demand

19. PharmaSim Market Competition Four Trade (not Consumer) Categories
Four competitors (B, C, D, and E)
Four Trade (not Consumer) Categories
Cold, nasal, cough, and allergy
Brands Have Five Attributes
Symptoms relieved, side effects, form (capsule, liquid, spray), duration of relief, and price

20. PharmaSim Market

21. PharmaSim Consumers Buying behavior varies with Buying process
Illness/symptom (cold, cough, allergy), age, and usage occasion (day or night, work or home)
Thus, can segment by illness, age, or usage
Note: mfg. sales study (pre-defined category)  consumer survey (usage)
Buying process
Awareness  Purchase Intention  In Store Attractiveness  Purchase Usage Satisfaction  Repurchase

22. PharmaSim Channel
Through Wholesale or Direct to:

23. PharmaSim Decisions Pricing Salesforce Size MSRP Trade
<250 Units, <2500 Units, >2500 Units
Wholesale
Salesforce Size
Direct (By Channel)
Indirect (Wholesale, Merchandisers - Retail Sales Support, Detailers for M.D.’s)

24. PharmaSim Decisions Advertising Targeting Message
Segments (By Age and Usage)
Agency
Budget
Message
Message (primary demand, benefits, competitive comparison, or reminder message)
Benefits (e.g., aches, congestion, etc.)

25. PharmaSim Decisions Trade Promotions Consumer and Trade
Allowances (% of MSRP by channel)
Co-op Ads (total $ and which channels)
Consumer and Trade
POP ($ and which channels)
Trial Size ($)
Coupons ($ and face value)

26. PharmaSim Decisions Product Reformulation - before decision 2
Line extension - before decision 4
New product - before decision 5
Your own product - before decision 8

27. PharmaSim Tips Please review tips on website (link from syllabus)
Read pages 5-66 carefully. E.g., buried on page 66 is the statement that FC continue when product is dropped. Important, but easily missed. Other examples abound.

28. Other PharmaSim Tips Think analytically Sales = Share * Market Size
Share = f (marketing $ and quality, value/price, synergies among marketing activities, fit with segments selected, positioning relative to competition)
Size = f(population, needs, available product benefits, industry marketing $ and quality, product life cycle)

29. More Tips Marketing $ can interact Deals more effective with ads
Stockpiling is possible
Understand the role of channel and how to motivate
Think about the ramifications of your strategies
A leading brand (Allround) should never run comparison ads against a niche brand (Coughcure)
Line extensions do not need the same marketing $ as new brands
Allocate marketing $ to area with highest returns
Key opportunity is chance to introduce new product into a market with a real need (e.g., Allright Allergy).
Shift resources to new product

30. One Last Tip
Cost dynamics, margin management, value based pricing, and capacity utilization are essential to profitability.

31. Marketing Plan Assignment
The assignment is detailed on the website and linked to the syllabus.
First move of Pharmasim should take 2 hours. Then, about 1 hour + for the remaining 7 moves for a total of 10 hours. Harvard runs 10 moves in 24 hours period.

32. Marketing Plan Assignment
Three parts (4 pages & Exhibits)
Situation analysis
Marketing program and financials
Executive summary, contingencies, and post-mortem
3 reports = 20% , performance = 5%
Please turn in copy of diskette and administrator report with the first two parts
Note: marketing planning (although not handed in) should occur each period of PharmaSim!

33. Marketing Plan Assignment
Marketing plans represents 20-30% of what you will do.
Daily product management is the other 70-80%.
This Assignment aligns with both.

34. Summary Marketing Plan PharmaSim is Vehicle for Plan Executive Summary
Situation Analysis
Marketing Objectives
Strategy and Tactics
Monitors and Controls
Financial Documents
PharmaSim is Vehicle for Plan