Developing a Marketing Plan by mzg34842


									Developing a Marketing Plan

      MGT 252 Lecture 2
           Today’s Agenda
• Developing a marketing plan
• Environmental factors that influence
  marketing activities
• Prof. Scott Hawkins will come at the end of
  the class to explain the research
  participation pool.
                  Marketer’s tasks

  Look for                             Implement
Opportunities                          Positioning
  Consumer            Segmenting        Product
  Competition         Targeting         Price
  Company             Positioning       Promotion
(Uncontrollable          (STP)          Place
     3Cs)                            (Controllable 4Ps)
      The Management Process

PLANNING                     IMPLEMENTATION            EVALUATION
Analyze situation (3 C’s)    Organize                  Compare
Set goals (STP)              Staff                      performance
Select strategies            Direct                     with goals
 and tactics (4 P’s)

         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
4. Tactic: A means by which a strategy is
   implemented. They generally cover a
   shorter time period than strategies.
                Suzuki Auto
• Mission: Committed to provide “value-packed
• Objective: Triple the sales in North America in 5
• Strategies:
  (i) add product selections;
  (ii) improve consumer confidence about the
• Tactics:
  (i) introduce seven new vehicles;
  (ii) Open Road Promise Warranty
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

 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,
3. Set organizations objectives.
4. Select strategies to achieve these
      Strategic Company Planning
               e.g., Pfizer

1.   Mission: We will become the world's most valued
     company to patients, customers, colleagues, investors,
     business partners, and the communities where we
     work and live.
2.   Organizational Objectives: We dedicate ourselves to
     humanity's quest for longer, healthier, happier lives
     through innovation in pharmaceutical, consumer, and
     animal health products.
3.   Situation Analysis:
4.   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
• Develop growth strategies
                         BCG Growth Share Matrix
                                 Company’s Market Share
                                High               Low
Industry Growth Rate


                                Stars         Question marks


                              Cash cows           Dogs
Product Market Growth Matrix

PRESENT      Market                Product
MARKETS      penetration           development

  NEW        Market
MARKETS      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
4. Select target markets and measure market
5. Design a strategic marketing mix.
               Recall: Marketer’s tasks

    Look for                                           Implement
  Opportunities                                        Positioning
    Consumer                  Segmenting                Product
    Competition               Targeting                 Price
    Company                   Positioning               Promotion
  (Uncontrollable                (STP)                  Place
       3Cs)                                          (Controllable 4Ps)
                        3. Determine positioning
1. Situation analysis   & differential advantage     5. Design the strategic
2. Develop marketing    4. Select target markets &   marketing mix
objectives              measure market demand
          WestJet Facts
• Canada’s #2 airline at 7% market share
  of passenger miles. Air Canada has
• Serve 22 Canadian cities.
• Airplanes were 80.3% full in July 2002
  compared to 82.6% in July 2001.
• Operating revenue is $300 million Jan-
  June 2002. Up 47% from year earlier.
• Only fly domestically.
• Profitable.
• Lower costs than Air Canada.
        1. Situation Analysis
SWOT assessment:
  – Strengths, Weaknesses, Opportunities,

  – 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
   3. Positioning & Differential
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.

   4. Target Markets & Market
Target Markets: Segment your customers,
 and develop strategies for each segment.
Market Demand: How many customers
 total? How many for your company?

           5. Marketing Mix
Price (base, coupons, discounts, etc.)
Product (or service)
Promotion (“marketing communications”)
Placement (“distribution”)

Plus customer service.

     Annual Marketing Planning
1.   Executive Summary (one page)
2.   Situation Analysis (two to three pages)
3.   STP, Objectives
4.   Strategies
5.   Tactics
6.   Evaluation Procedures (one page)
• New SUV
        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.

• One of the world’s largest automakers.
• Has small market share in North America.
          2. Situation Analysis
• Analyze past, present, and future conditions
  based on easily accessible sources.

• Good production facilities.
• Not that well-known in North America, compared
  with other Japanese brands such as Honda,
• The previous generation of XL7 were truck based.
               3. Objectives
•   Specific Annual Objectives: this factor
    increase by x% over y months.
•   Explain why these are good objectives.

1. Sell 4,000 XL7 next year.
                4. Strategies
•   Price, product, promotion, and placement ideas
    for each target market.

• Product: Improves its size, style, and comfort
• Price: Maintain low prices.
• Promotion: Use word-of-mouth, warranty.
• Placement: Makes it easier for customer to buy
                     5. Tactics
• Specific action plans for each strategy.
• Who, how, and when.

• Product: Car-based, improved MPG, introduces three
  trims, 2WD/4WD, 5 seats/7 seats, bigger than highlander!
• Price: Keep current prices the same.
• Promotion: 7 years, 100,000miles powertrain
  warranty; post customers’ review on their website;
  graduate incentives; leverage other Japanese’s
• Placement: Add more dealers.
      6. Evaluation Procedures
• How evaluate success? How compare
  performance to goals?
• Evaluate periodically throughout the year.

• What is final market share? Make sure defined
• Were sales cannibalized? It might hurt its
  compact SUV Grand Vitara.
• Monitor sales periodically.
              Term Project
• Not point form, but in short, to-the-point,
  sections and paragraphs.
• It does matter that you can write clearly and
• 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
• 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
• Canadian Media Directors’ Council. Media
  Digest 2001-2002
• Many, many, many others
   The External Environment
• macro forces are factors over which the
  company has no short-term control
• micro forces operate at the firm level
• the external macroenvironment affects
  different firms in different ways
• the better we understand the changing
  marketing environment and its effects, the
  better we can develop effective marketing
Figure 2-1 Relationship-Insensitive
  External Environmental Forces
      Demographic Change
• most obvious change is the aging population;
  impact of seniors, boomers and their kids
• smaller families; more single-person households
• smaller, non-traditional households
• more part-time workers,dual-income households
• changing patterns of immigration; ethnic mix
      Economic Conditions
• consider the effect on consumers and on
  businesses of:
   – recession (business cycle)
   – changes in interest rates
   – inflation
   – unemployment
• how are consumers likely to respond?
• they often shop around more; store and brand
  loyalty suffer when consumers are uncertain
  about the future.
• competition takes place at three levels:
   – directly at the brand or store level
   – at the level of substitute
   – other demands upon our buying power
• Could be from international (e.g.
    Social and Cultural Forces
• lifestyles, values and beliefs
• greater emphasis on quality of life
• immigration brings changing values
• rapidly changing gender roles
• different attitudes toward physical activity,
  exercise, and diet among certain
• increased emphasis on service quality and
• launches entirely new industries, such as
  multimedia, digital communications and
  electronic commerce
• alters or virtually destroys existing
  industries, such as the effect of e-mail on
  regular mail and even fax
• stimulates other markets and industries,
  such as Internet shopping has expanded
  the credit card industry
   Political and Legal Forces
• government and laws affect marketing at
  many levels
• legislation often has implications for
  marketing; some more direct than others
• many industries are directly affected by
  legislation; packaging, labeling, advertising
   Controllable Environmental
• The company’s market, its suppliers, and other
  businesses involved in distribution channels
• external to the firm, but part of its marketing
  system because of its close relationship
• these can be influenced by the firm to greater or
  lesser degrees; they are not entirely
• these forces may be considered relationship-
  sensitive, as it is of considerable importance for
  the firm to establish solid relationships with
  these partners in its success
Figure 2-2 Relationship-Sensitive
 External Environmental Forces
   The Market Environment
• the environment in which the firm operates; but
  more than customers
• its market; the people or organizations whose
  wants and needs the firm intends to satisfy – its
  customers or consumers
  – Their purchasing power and expectation.
• its suppliers; the other firms upon whom the
  firm relies to provide quality products and
  services so that it can serve its customers
• marketing intermediaries; other firms that
  represent the channel of distribution for the
  firm’s products and services
  – E.g. dealers, wholesalers and retailers.
  Internal Environmental Forces
• internal factors influence the firm’s
  marketing strategies, programs and
  activities, and have the potential to affect
  customer satisfaction
• R&D – competitive advantage
• Production facilities – affect quality
• Financial – affect promotional budget
• Human resources – affect services
• Location – accessibility
• Marketing needs to carefully planned and
• This takes place on three levels
  – Strategic Company Planning
  – Strategic Marketing Planning
  – Annual Marketing Planning
• Environment for Strategy and Planning

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