1. Chapter 6: Marketing Plan 1 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Creating a Powerful Marketing Plan

2. Chapter 6: Marketing Plan 2 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Building a Guerrilla Marketing Plan Marketing Marketing  The process of creating and delivering desired goods and services to customers.  Involves all of the activities associated with winning and retaining loyal customers. Guerrilla marketing strategies Guerrilla marketing strategies  Unconventional, low-cost creative marketing techniques that allow a small company to wring more bang from its marketing bucks than do larger rivals.

3. Chapter 6: Marketing Plan 3 Copyright 2005 Prentice Hall Inc. A Pearson Education Company A Guerrilla Marketing Plan 1. Pinpoints the specific target markets the company will serve. 2. Determines customer needs and wants through market research. 3. Analyzes a firm's competitive advantages and builds a marketing strategy around them. 4. Creates a marketing mix that meets customer needs and wants.

4. Chapter 6: Marketing Plan 4 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Pinpointing the Target Market One objective of market research is to pinpoint the company's target market, the specific group of customers at whom the company aims its products or services. One objective of market research is to pinpoint the company's target market, the specific group of customers at whom the company aims its products or services. Without a clear image of its target market, a small company tries to reach almost everyone and ends up appealing to almost no one! Without a clear image of its target market, a small company tries to reach almost everyone and ends up appealing to almost no one!

5. Chapter 6: Marketing Plan 5 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Market Research Market research is the vehicle for gathering the information that serves as the foundation for the marketing plan. Market research is the vehicle for gathering the information that serves as the foundation for the marketing plan. Never assume that a market exists for your company’s product or service; prove it! Never assume that a market exists for your company’s product or service; prove it! Market research does not have to be time consuming, complex, or expensive to be useful. Market research does not have to be time consuming, complex, or expensive to be useful.

6. Chapter 6: Marketing Plan 6 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Market Research (continued) How to Conduct Market Research: Define the objective. Define the objective. Collect the data. Collect the data.  Individualized (one-to-one) marketing

7. How to Become an Effective One-to-One Marketer. Identify your best customers, never passing up the opportunity to get their names. Collect information on these customers, linking their identities to their transactions. Calculate the long-term value of customers so you know which ones are most desirable (and most profitable). Successful One-to-One Marketing Know what your customers’ buying cycle is and time your marketing efforts to coincide with it - “just-in-time marketing.” Make sure your company’s product and service quality will astonish your customers. See customer complaints for what they are - a chance to improve your service and quality. Encourage complaints and then fix them! Enhance your products and services by giving customers information about them and how to use them. Source: Adapted from Susan Greco, “The Road to One- to-One Marketing,” Inc., October 1995, pp. 56-66.

8. Chapter 6: Marketing Plan 8 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Market Research (continued) How to Conduct Market Research: Define the problem. Define the problem. Collect the data. Collect the data.  Individualized (one-to-one) marketing  Data mining – See Harrah’s Entertainment n Analyze the data and interpret the results. n Draw conclusions and act.

9. Chapter 6: Marketing Plan 9 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Relationship Marketing (Customer Relationship Management) Involves developing and maintaining long-term relationships with customers so that they will keep coming back to make repeat purchases. Involves developing and maintaining long-term relationships with customers so that they will keep coming back to make repeat purchases. Small companies have an advantage over their larger rivals at relationship marketing. Small companies have an advantage over their larger rivals at relationship marketing. Requires a company to make customer service an all-encompassing part of its culture. Requires a company to make customer service an all-encompassing part of its culture. Customers are part of all major issues the company faces. Customers are part of all major issues the company faces.

10. Chapter 6: Marketing Plan 10 Copyright 2005 Prentice Hall Inc. A Pearson Education Company The Relationship Marketing Process Connect&Collect Conduct detailed customer intelligence to pinpoint most valuable customers and to learn all you can about them, including their lifetime value (LTV) to the company. Make contact with most valuable customers and begin building a customer database using data mining and data warehousing techniques. Learn from your customers by encouraging feedback from them; develop a thorough customer profile and constantly refine it. Based on what you have learned, contact customers with an offer designed for them. Make customers feel special and valued. If you have done everything else correctly, this step is relatively easy. Superb customer service is the best way to retain your most valuable customers. Learn Analyze BuildRelationships Sell,Service, and Satisfy

11. Chapter 6: Marketing Plan 11 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Steps in CRM Collect meaningful information on existing customers and compile it in a database. Collect meaningful information on existing customers and compile it in a database. Mine the database to identify the company’s best and most profitable customers and their buying habits. Mine the database to identify the company’s best and most profitable customers and their buying habits. Use the information to establish lasting relationships with these customers. Use the information to establish lasting relationships with these customers. Attract more customers who fit the profile of the company’s best customers. Attract more customers who fit the profile of the company’s best customers.

12. Chapter 6: Marketing Plan 12 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Four Levels of Customer Sensitivity Level 1: Customer Awareness. Prevailing attitude: “There’s a customer out there.” Managers and employees know little about their customers and view them only in the most general terms. No one really understands the benefit of close customer relationships. Level 2: Customer Sensitivity. A wall stands between the company and its customers. Employees know a little about their customers but don’t share this information with others in the company. The company does not solicit feedback from customers. Level 3: Customer Alignment. Managers and employees understand the customers’ central role in the business. They spend considerable time talking about and with customers, and they seek feedback through surveys, focus groups, customer visits, and other techniques. Level 4: Customer Partnership. The company has embraced a customer service attitude as an all-encompassing part of its culture. Customers are part of all major decisions. Employees throughout the company routinely use data mining reports to identify the best customers and to serve them better. The focus is on building lasting relationships with the company’s best customers.

13. Chapter 6: Marketing Plan 13 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Guerrilla Marketing Strategies Find a niche and fill it. Find a niche and fill it. Don’t just sell; entertain. Don’t just sell; entertain. Strive to be unique. Strive to be unique. Create an identity for your business. Create an identity for your business. Connect with customers on an emotional level. Connect with customers on an emotional level.

14. Chapter 6: Marketing Plan 14 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Focus on the customer. Focus on the customer. Devotion to quality. Devotion to quality. Attention to convenience. Attention to convenience. Concentration on innovation. Concentration on innovation. Dedication to service and customer satisfaction. Dedication to service and customer satisfaction. Emphasis on speed. Emphasis on speed. Guerrilla Marketing Strategies (continued)

15. Chapter 6: Marketing Plan 15 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Focus on the Customer 67% of customers who stop patronizing a business do so because an indifferent employee treated them poorly. 67% of customers who stop patronizing a business do so because an indifferent employee treated them poorly. 96% of dissatisfied customers never complain about rude or discourteous service, but... 96% of dissatisfied customers never complain about rude or discourteous service, but...  91% will not buy from that business again.  100% will tell their “horror stories” to at least nine other people.  13% of those unhappy customers will tell their stories to at least 20 other people.

16. Chapter 6: Marketing Plan 16 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Focus on the Customer (continued) Treating customers indifferently or poorly costs the average company from 15% to 30% of gross sales! Treating customers indifferently or poorly costs the average company from 15% to 30% of gross sales! Replacing lost customers is expensive; it costs five times as much to attract a new customer as it does to sell to an existing one! Replacing lost customers is expensive; it costs five times as much to attract a new customer as it does to sell to an existing one! About 70% of a company’s sales come from existing customers. About 70% of a company’s sales come from existing customers. Because 20% of a typical company’s customers account for about 80% of its sales, no business can afford to alienate its best and most profitable customers and survive! Because 20% of a typical company’s customers account for about 80% of its sales, no business can afford to alienate its best and most profitable customers and survive!

17. Chapter 6: Marketing Plan 17 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Focus on the Customer (continued) Companies that are successful at retaining their customers constantly ask themselves (and their customers) four questions: 1. What are we doing right? 2. How can we do that even better? 3. What have we done wrong? 4. What can we do in the future?

18. Chapter 6: Marketing Plan 18 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Devotion to Quality Quality-more than just a slogan on the company bulletin board. Quality-more than just a slogan on the company bulletin board. World-class companies treat quality as a strategic objective, an integral part of the company culture. World-class companies treat quality as a strategic objective, an integral part of the company culture. This is the philosophy of Total Quality Management (TQM). This is the philosophy of Total Quality Management (TQM).  Quality in the product or service itself.  Quality in every aspect of the business and its relationship with the customer.  Continuous improvement in quality.

19. Chapter 6: Marketing Plan 19 Copyright 2005 Prentice Hall Inc. A Pearson Education Company How Do Americans Define Quality in a Product? Reliability (average time between breakdowns) Reliability (average time between breakdowns) Durability (how long an item lasts) Durability (how long an item lasts) Ease of use Ease of use Known or trusted brand name Known or trusted brand name Low price Low price Quality

20. Chapter 6: Marketing Plan 20 Copyright 2005 Prentice Hall Inc. A Pearson Education Company How Do Americans Define Quality in a Service? Tangibles (equipment, facilities, people) Tangibles (equipment, facilities, people) Reliability (doing what you say you will do) Reliability (doing what you say you will do) Responsiveness (promptness in helping customers) Responsiveness (promptness in helping customers) Assurance and empathy (conveying a caring attitude) Assurance and empathy (conveying a caring attitude) Quality

21. Chapter 6: Marketing Plan 21 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Attention to Convenience Is your business conveniently located near customers? Is your business conveniently located near customers? Are your business hours suitable to your customers? Are your business hours suitable to your customers? Would customers appreciate pickup and delivery services? Would customers appreciate pickup and delivery services? Do you make it easy for customers to buy on credit or with credit cards? Do you make it easy for customers to buy on credit or with credit cards?

22. Chapter 6: Marketing Plan 22 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Attention to Convenience (continued) Are your employees trained to handle business transactions quickly, efficiently, and politely? Are your employees trained to handle business transactions quickly, efficiently, and politely? Does your company offer “extras” that would make customers’ visits easier? Does your company offer “extras” that would make customers’ visits easier? Can you adapt existing products to make them more convenient for customers? Can you adapt existing products to make them more convenient for customers? Does your company handle telephone calls quickly and efficiently? Does your company handle telephone calls quickly and efficiently?

23. Chapter 6: Marketing Plan 23 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Concentration on Innovation Innovation Innovation  The key to future success.  One of the greatest strengths of entrepreneurs. It shows up in the new products, techniques, and unusual approaches they introduce. Entrepreneurs often create new products and services by focusing their efforts on one area and by using their size and flexibility to their advantage. Entrepreneurs often create new products and services by focusing their efforts on one area and by using their size and flexibility to their advantage.

24. Chapter 6: Marketing Plan 24 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Dedication to Service Listen to customers. Listen to customers. Define “superior service.” Define “superior service.” Set standards and measure performance. Set standards and measure performance. Examine your company’s service cycle. Examine your company’s service cycle. Hire the right employees. Hire the right employees. Train employees to deliver superior service. Train employees to deliver superior service. Goal: to achieve customer astonishment!

25. Chapter 6: Marketing Plan 25 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Dedication to Service Empower employees to offer superior service. Empower employees to offer superior service. Use technology to provide improved service. Use technology to provide improved service. Reward superior service. Reward superior service. Get top managers’ support. Get top managers’ support. View customer service as an investment, not an expense. View customer service as an investment, not an expense. Goal: to achieve customer astonishment! (continued)

26. Chapter 6: Marketing Plan 26 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Emphasis on Speed Use principles of time compression management (TCM): Use principles of time compression management (TCM):  Speed new products to market.  Shorten customer response time in manufacturing and delivery.  Reduce the administrative time required to fill an order. Study: Most businesses waste 85 to 99% of the time required to produce products or services! Study: Most businesses waste 85 to 99% of the time required to produce products or services!

27. Chapter 6: Marketing Plan 27 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Emphasis on Speed (continued) Re-engineer the process rather than try to do the same thing - only faster. Re-engineer the process rather than try to do the same thing - only faster. Create cross-functional teams of workers and empower them to attack and solve problems. Create cross-functional teams of workers and empower them to attack and solve problems. Set aggressive goals for production and stick to the schedule. Set aggressive goals for production and stick to the schedule.

28. Chapter 6: Marketing Plan 28 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Emphasis on Speed (continued) Rethink the supply chain. Rethink the supply chain. Instill speed in the company culture. Instill speed in the company culture. Use technology to find shortcuts wherever possible. Use technology to find shortcuts wherever possible. Put the Internet to work for you. Put the Internet to work for you.

29. Chapter 6: Marketing Plan 29 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Benefits of Marketing on the World Wide Web Even the smallest companies can market their products and services around the globe. Even the smallest companies can market their products and services around the globe. SBA study: 67% of small businesses that established Web sites said their sites brought in new customers. SBA study: 67% of small businesses that established Web sites said their sites brought in new customers. The Web can be the “Great Equalizer” in a small company’s marketing program. The Web can be the “Great Equalizer” in a small company’s marketing program.

30. Chapter 6: Marketing Plan 30 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Benefits of Marketing on the World Wide Web (continued) Only 24% of small companies with Web sites actually generate revenues from online sales. Only 24% of small companies with Web sites actually generate revenues from online sales. Although small companies make about 50% of U.S. retail sales, they account for just 6% of online sales. Although small companies make about 50% of U.S. retail sales, they account for just 6% of online sales. Web customers are demographically attractive: They are young, educated, and wealthy. Web customers are demographically attractive: They are young, educated, and wealthy.  Average household income = $52,300  39% have college degrees

32. Chapter 6: Marketing Plan 32 Copyright 2005 Prentice Hall Inc. A Pearson Education Company The Marketing Mix Product Product Place Place Price Price Promotion Promotion $

33. Chapter 6: Marketing Plan 33 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Stages in the Product Life Cycle Introductory stage Introductory stage High Costs

34. Chapter 6: Marketing Plan 34 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Stages in the Product Life Cycle Introductory stage Introductory stage Growth and acceptance stage Growth and acceptance stage High Costs High Costs High Costs Sales Climb

35. Chapter 6: Marketing Plan 35 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Stages in the Product Life Cycle Introductory stage Introductory stage Growth and acceptance stage Growth and acceptance stage Maturity and competition stage Maturity and competition stage High Costs Sales Climb Profits Peak High Costs Sales Climb Profits Peak

36. Chapter 6: Marketing Plan 36 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Stages in the Product Life Cycle Introductory stage Introductory stage Growth and acceptance stage Growth and acceptance stage Maturity and competition stage Maturity and competition stage Market saturation stage Market saturation stage High Costs Sales Climb Profits Peak Sales Peak High Costs Sales Clim b Profits Peak Sales Peak

37. Chapter 6: Marketing Plan 37 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Stages in the Product Life Cycle Introductory stage Introductory stage Growth and acceptance stage Growth and acceptance stage Maturity and competition stage Maturity and competition stage Market saturation stage Market saturation stage Product decline stage Product decline stage High Costs Sales Climb Profits Peak Profits Peak Sales Peak Sales & Profits Fall Sales & Profits Fall

38. Chapter 6: Marketing Plan 38 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Channels of Distribution Consumer Goods Manufacturer Consumer Retailer Consumer Manufacturer Retailer Consumer Wholesaler Manufacturer Retailer Consumer Wholesaler

39. Chapter 6: Marketing Plan 39 Copyright 2005 Prentice Hall Inc. A Pearson Education Company Channels of Distribution Industrial Goods Manufacturer Industrial User Manufacturer Wholesaler Industrial User