Developing a Marketing Plan
―A good business model remains essential to every successful organization, whether it’s a new venture or an established player.‖ Joan Magretta
Former editor: Harvard Business Review
Marketer’s tasks
Look for Opportunities
Consumer Competition Company (Uncontrollable 3Cs) Segmenting Targeting Positioning (STP)
Implement Positioning
Product Price Promotion Place (Controllable 4Ps)
The Management Process
PLANNING Analyze situation (3 C’s) Set goals (STP) Select strategies and tactics (4 P’s) IMPLEMENTATION Organize Staff Direct EVALUATION Compare performance with goals
Feedback, so management can adapt future plans and their implementation to the changing environment
Strategic Company Planning
Key Planning Concepts
1. Mission: The statement that indicates the boundaries of an organization’s activities. 2. Objective: A desired outcome. It should be clear, specific, stated in writing, ambitious, realistic, consistent with other objectives and the mission, measurable, and tied to a particular time period. 3. Strategy: A broad plan of action by which an organization intends to reach its objective(s). 4. Tactic: A means by which a strategy is implemented. They generally cover a shorter time period than strategies.
McDonald’s Canada
1. Mission: To provide reasonably priced, clean, and tasty food quickly to customers. 2. Objective: To recapture the #1 position in Canadian restaurant revenue from Tim Horton’s. 3. Strategies: (a) Improve product selection to have healthy alternatives. (b) Increase awareness/accessibility. 4. Tactics: (a) Develop a line of soups. (b) Open up restaurants in non-conventional locations such as subway stations.
Types of Planning
Strategic Company Planning
•Define mission •Set long-range goals
Strategic Marketing Planning
•Goals and strategies for the marketing effort
Annual Marketing Planning
•Short-term plans describing marketing functions IMPLEMENTATION AND EVALUATION
Strategic Company Planning
1. Define the organizational mission. 2. Analyze the situation.
– Situation Analysis: get information about the company & its business environment from accessible sources, e.g. library, employees.
3. Set organizations objectives. 4. Select strategies to achieve these objectives.
Strategic Company Planning
1. 2. 3. 4.
Mission: Situation Analysis: Set Objectives: Select Strategies:
Planning a business portfolio
• Analyze current Strategic Business Units:
smaller planning units within a larger company. • Which SBUs should receive more, less, or no investment?
• Develop growth strategies
BCG Growth Share Matrix
Company’s Market Share High Low
Industry Growth Rate
High
Stars
Question marks
Low
Cash cows
Dogs
Product Market Growth Matrix
PRESENT PRODUCTS NEW PRODUCTS PRESENT MARKETS Product development
Market penetration
NEW MARKETS
Market development
Diversification
The product-market growth matrix depicts the options available in considering markets and products.
Strategic Marketing Planning
1. Conduct situation analysis. 2. Develop marketing objectives. 3. Determine positioning & differential advantage 4. Select target markets and measure market demand. 5. Design a strategic marketing mix.
Recall: Marketer’s tasks
Look for Opportunities
Consumer Competition Company (Uncontrollable 3Cs)
1. Situation analysis 2. Develop marketing objectives
Implement Positioning
Segmenting Targeting Positioning (STP)
3. Determine positioning & differential advantage 4. Select target markets & measure market demand
Product Price Promotion Place (Controllable 4Ps)
5. Design the strategic marketing mix
Imagine we work for:
WestJet Facts
• Canada’s #2 airline at 7% market share of passenger miles. Air Canada has 80%. • Serve 22 Canadian cities. • Airplanes were 80.3% full in July 2002 compared to 82.6% in July 2001. • Operating revenue is $300 million JanJune 2002. Up 47% from year earlier. • Only fly domestically. • Profitable. • Lower costs than Air Canada.
1. Situation Analysis
SWOT assessment:
– Strengths, Weaknesses, Opportunities, Threats WestJet: – Strengths – Weaknesses – Opportunities – Threats
2. Marketing Objectives
Determine a marketing goal. WestJet: 10% share? 50% increase in revenue? 10% decrease in marketing costs? 20% rise in revenue per customer?
3. Positioning & Differential Advantage
Positioning refers to a product’s image in relation to directly competitive products. Differential Advantage refers to any feature of an organization or brand perceived by customers to be desirable and different from those of the competition. WestJet?
4. Target Markets & Market Demand
Target Markets: Segment your customers, and develop strategies for each segment. Market Demand: How many customers total? How many for your company? WestJet?
5. Marketing Mix
Price (base, coupons, discounts, etc.) Product (or service) Promotion (―marketing communications‖) Placement (―distribution‖) Plus customer service. WestJet?
Annual Marketing Planning
1. 2. 3. 4. 5. 6. Executive Summary (one page) Situation Analysis (two to three pages) STP, Objectives Strategies Tactics Evaluation Procedures (one page)
Example McDonalds
1. Executive Summary
• Thrust of the plan • Intended for executives who need an overview, but won’t be doing the nitty-gritty. • Summarize the next seven sections.
McDonalds • The #1 fast food chain in the world. • Growth slowing in core product.
2. Situation Analysis
• Analyze past, present, and future conditions based on easily accessible sources. • SWOT • Ensure human resource constraints described. • Much of this section is in the Strategic Marketing Plan.
McDonalds • #1 fast food chain in the world, but slipping. • Competition from local and healthier alternatives. • Restaurants in 120 countries. • Demand for beef worldwide falling due to Mad Cow.
3. Objectives
•
•
Specific Annual Objectives: this factor increase by x% over y months. Explain why these are good objectives.
McDonalds
1. Increase worldwide fast food market share by 5%. 2. Maintain worldwide restaurant market share. 3. Maintain per-store sales while expanding. 4. Increase profits 10%.
4. Strategies
• Price, product, promotion, and placement ideas for each target market.
McDonalds • Product: New healthy alternatives—helps both market share objectives. Likely hurts short run profits. • Price: Maintain low prices with daily specials. • Promotion: Use sweepstakes and advertising to encourage consumption of health alternatives. • Placement: Expand into areas that do not cannibalize current sales. Should help profits and maintain per-store sales.
5. Tactics
• Specific action plans for each strategy. • Who, how, and when.
McDonalds • Product: Add salads and soups to McDonald’s menu. Buy healthier chains and expand them (Boston Market). • Price: Keep current prices the same. Price healthy alternatives at a slight premium. • Promotion: Give extra Monopoly pieces to people who try the healthy alternatives. Advertise new chains heavily. • Placement: Open more Boston Markets and Chipotle Grills and fewer McDonald’s.
6. Evaluation Procedures
• How evaluate success? How compare performance to goals? • Evaluate periodically throughout the year. McDonalds • What is final market share? Make sure defined market. • Were sales cannibalized? Measure by change in same-store sales in those near new restaurants versus others. • Did profits rise?
Term Project
• Not point form, but in short, to-the-point, sections and paragraphs. • It does matter that you can write clearly and effectively. • Choose your group and your topic soon. • See me before starting the final project. • Choose any product you want, and be creative. But keep in mind that both creativity and actual marketability matter. • You need concrete evidence and details.
Term Project
• Use outside sources for secondary market research and for ideas • You may choose to do some primary market research: a questionnaire, focus group, or casual interviews with friends about the project. • Quote all sources except the text and lectures. Use the ideas from the text and lectures though!
Good sources include:
• The Wall Street Journal, The Globe and Mail and other newspapers • Business Week and other magazines • Statistics Canada • Harvard Business Review • Sloan Management Review • Library books on marketing or your product • Financial Post. Canadian Demographics 2002 • Canadian Media Directors’ Council. Media Digest 2001-2002 • Many, many, many others
Summary
• Marketing needs to carefully planned and managed. • This takes place on three levels
– Strategic Company Planning – Strategic Marketing Planning – Annual Marketing Planning
Next Class
Understanding the Customer