Market Planning

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					S-400                           MARKET PLANNING                               Page 1 of 11
Market Planning

Marketing Strategy defines where the client is now, where they want to be, and how to get there.

Overview (Program Areas)

Market Planning and Strategic Planning are at least as equal in importance. In Market Planning,
we will work with the clients in the following areas: (Product as described below means goods
and services) What comprises the market for their products. Why people buy the product.
Competitive analysis. Achieving a competitive advantage. Review the competition's strengths
and weaknesses. Developing market tactics. Positioning and marketing strategies Developing
the marketing plan

       *      The market niche

       *      Mass marketing, etc.

       *      Sales Techniques (retail, telephone, direct mail, wholesale, etc.)

       *      Distribution channel analysis

       *      Market feedback

We are providing a comprehensive program for our clients. The clients will see immediate
changes and benefits that no other program offers.

Standard Procedures (Market Planning)

Some procedures that will quickly help your client to market their product for fast growth are:

*      Who/What is the market?
*      What will determine the pricing (value-added)?
*      How do I price the product?
*      Competitive Analysis.
*      Development of a competitive advantage.
*      Setting market tactics and strategies.
*      Finding the market niche.

*      Distribution channel analysis

*      Market testing your product for feedback.

In the bullet point titled Competitive Analysis above, the procedures and accompanying forms
may provide:

 Product comparisons

 Packaging comparisons

 Order, shipment, and delivery time factors
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 Personal sales coverage, by market

 Sales support

 Advertising and promotional activities

 Pricing (by units, lots, wholesale, retail, etc.)

These are general procedural areas for you to get your client started. In combination with the
videos, and training and discussion sessions, these standard procedures are to be used by the
client for reference, training and re-training. Your client may need only a few of the listed
procedures or may need more. You will need to review what the client ultimately needs and
provide them with the proper procedures.

You will also need to help the client forecast Sales, determine Overhead, Breakeven, and

If there is no other reason for business planning it can be blamed on the need to communicate.
All of the managers in a business are part of the planning process or some part of the
management is not being informed. Some part is left out. What would happen if the Purchasing
Department or the Warehouse Department were not part of the planning process? Would the
business' plans take into account resources required for inventories, which meet the service
requirements that are part of the tactics to be employed to obtain a competitive edge? If a new
product-line were selected as a means of entering a market, but the warehouse does not know
how much space will be required or what storage conditions must be considered for the new
products, will the product introduction be as successful as predicted?

Business plans are translated into a financial statement format and operations are compared to
this format. Along with statistical reports, the Revenue and Expense statement is the most
succinct means of comparing how well plans are being carried-out.
Financial statements are tailored to the operating needs of the business and each profit-center or
service department is reported separately and compared to the plan for that segment.
Management's effectiveness may be measured and plans modified as necessary.

Basic to the planning process is the revenue forecast and advertising, sales service and personal
sales budgets.

An analysis of most recent past period’s revenues is preliminary to forecasting future revenues.
Among the questions to be answered are:

        a.     What quantity of each product was sold?

        b.     Who bought each product by type, kind, style, color, etc.? (products are by
               individual customer)

        c.     What price was charged for each category in b. above?

        d.     What products were sold by market segment? The markets are different for each
               type of business:
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              1.      New housing, rehab housing, commercial buildings, etc.

              2.      Original equipment manufacturers, replacement market, etc.

              3.      Standard metropolitan trading areas

              4.      Retail or wholesale

        e.    How much was sold by each sales function?

              1.      Company sales force

              2.      Manufacturers representatives

              3.      Over-the-counter sales

              4.      Mail order

              5.      Sales through cooperative buying groups

              6.      Wholesale sellers

              7.      Retail Sellers

The next analysis needed is the cost of obtaining each of these revenues:

        a.    How much advertising and promotional expenses were spent?

              1.      Advertising expenditures
                      (a) by product-line
                      (b) specific products
                      (c) spending by market
                      (d) institutional advertising
                      (e) other

              2.     Promotional expenses: (for each category at a. 1 above)
                      (a) events
                      (b) coupons
                      (c) premiums
                      (d) other

        b.    Sales service expenses: (for each category at a. 1. above)

              1.      Personnel costs

              2.      Travel, etc.

              3.       Facilities cost
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        c.     Personal sales expenses: (for each category at a. 1. above)
               1.     Personnel costs (excluding commissions)

               2.      Commission expense

               3.      Travel

               4.      Trade shows, etc.

                5.     Facilities costs


Some of the areas of recommendations with savings or without may include:

   Line item budget costs (i.e.: proper advertising, etc.)
   Proper distribution methods
   Proper pricing analysis
   Product line evaluation
   Packaging
   Focus groups utilization

Your client may profess that savings are not that important to them since they will be making
their money from the profits of the increased revenue but that's not how we operate. We must be
able to show the client savings and it can be done in a Sales

Planning And Control Program as easily as in any other. If you have any questions on where to
look for savings areas above what we have shown you here please call your Senex. You may
also have your Senex patch you through to the Research and Technical Support Senex at
extension 410.

Video Tape ( Market Planning)

The videotape section you will use for Market Planning is titled "Marketing Strategy For Fast
Growth" .

Show sections 1 through 10. (approximately 30 minutes) of the videotape. Each of the
videotape presentations will be separated by the George S. May Logo. This will be a
natural stopping point. You may state during the presentation which sections you want the
client to pay particular attention to so that you may give the client and key people
homework to do and forms to complete after the presentation.

Develop questions that get the client and key personnel to thinking about where they stand
now, where they want to be, and how they are going to get there. Two approaches may be
used: The first is to stop after each section and, using a flip chart, ask the client and his
staff questions such as those listed below. The second approach is to give the client and his
staff the set of questions at the back of this chapter and ask them to answer the questions
as part of their homework assignment. During the next session, (next day or several days
later) collect the homework and using a flip chart post the answers each staff member has
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provided. Act as a facilitator for this discussion, because it is very likely that there will
many divergent points of view. Do not let the meeting end until you have established the
official company position on each relevant point. If necessary, you may have to schedule a
follow-up meeting to achieve final resolution. By taking this approach, you will complete all
21 sections of this element and will have a comprehensive marketing strategy based on the
consensus of the key players in management

Questions to be asked after viewing section one: How does the company create the
perception of unique added value in comparison to competitors in:

   1. Quality? What is it about the quality of the product or service the company offers
      that sets it apart from the competition?

   2. Service? What is about the service that sets the company apart form the

   3. Relationships with the customer? What sort of relationships with the customers
      does the company have that sets it above the competition?

How does the company plan to:

   1. Create new customers (High cost)

   2. Keep current customers? (Low cost)

Questions to be asked after viewing section two:

There are four approaches to successful marketing:
      a)      Creating utility.
              *      What is it about this product or service that makes it useful to
              *     What customer need does this product/service satisfy?
      b)      Pricing
             *       What price must be established in order for customers to perceive
                     value in the product/service?
              *      What price must it be in order for customers to decide they can afford to buy it?
      c)      Adapting to customers reality
              *      What does the customer really expect?
              *      How does the company convince the customer he will get it with this product/service?

       d)     True value
              *     What represents true value to the customer?
              *     How is this true value defined: - in dollars, speed of delivery, longevity, ease of use,
                    convenience, accessibility, appearance ?
              *     How does the company convince the customer he will receive this with the company's
                    products/services ?

Three key questions to be asked after viewing section three:

1) Is there a market for this product/service? (Don't let egos get in the way of a truthful
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   answer to this question!) Define the market - age group, special interest groups, other

2) Is the market big enough? Size the market - number of potential customers, number of
   dollars that customers will spend, etc.

3) Is the market concentrated enough to reach through normal distribution channels?
   How will this product/service be distributed?

4) What will the distribution cost? Is the distribution channel flexible enough to handle
   large swings in demand?

Continue in this vein, asking questions after each section, and posting them on the flip
chart. Even If you elect to give the client and his staff homework and collect the answers at
the next session, it's a good idea to stop at least briefly after each section and have a
discussion so that all participants understand what that section was all about.

When the discussions and follow for sections 1 through 10 are complete, view sections 11
through 21 and continue the process.

The marketing function is the primary reason for success or failure, yet few people pay any
attention to marketing. There are twenty-one key principles that must be analyzed and used to
develop a Market Plan and two points to always remember: 1) The Customer is always right
(from their own point of view) and 2) Marketing is a skill that can be learned.

Point Number One: Create a Customer or Keep a Customer. It is always more expensive to
create customers than to keep customers. So why do so many businesses continually try to create
new customers instead of focusing on keeping the customer they already have? Possibly they
don't know how to keep a customer or what the purpose of marketing is. The purpose of
marketing is to create PERCEPTIONS OF UNIQUE ADDED VALUE. You keep customers by
creating relationships with them and providing service and quality in all of your products and

Point Number Two: There are Four Main Approaches to Marketing Success.

   a) Create Utilities, a product or service that satisfies a basic need. (Federal Express)

   b) Pricing, start low, gain market share and use economies of scale to reduce price again.

   c) Adapt to a customer's reality, "if it doesn't work, I shouldn't have to pay for it". (Sears)

   d) Deliver true value as perceived by your customers. What represents value to
      your customer? (Tandy had a redundant process so it wouldn't crash). There are two key
      words in marketing: Uniqueness and Niche. Find a niche in the market where your
      uniqueness really makes a difference.

Point Number Three: Three Questions to Ask Regarding the Market.

   a) Is there a Market for your product or service? 80/20/1 rule states the 80% of new
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        products or services will fail, 20% of them will pay for themselves and 1 % will be very
        successful. Bring out as many products as you can.

   b) Is the Market big enough?

   c) Is the Market concentrated enough? It can be spread out too far to deliver the product or
      service profitably. The delivery channels are often more important than the product or

Point Number Four: All Successful Marketing is Based on Good Research and Intelligence.

A Focus Group made up from your customers is the best source to gather
information. Key questions to ask

   a) Who is your customer? Who buys it now, who bought it in the past, and what are their

   b) Where is your customer geographically? How will you deliver the product or service?

   c) How does your customer buy? Direct Mail, Shopping, with another product, etc. etc.

   d) Why do they buy your product or service? What's the benefit for them, what do they

   e) What is it being used or bought for? What are they going to do with it when they get it?

Point Number Five: Needs.
Need is a felt dissatisfaction, so your product or service has to satisfy that need:

        a)     People buy to be better off (improvement)

        b)     People are interested in the benefit, not the product: what they will enjoy.

        c)     Buying the product or service will result in the feeling they anticipate.

        d)     People buy solutions to problems.

        e)     People buy to save or earn time or money.

        f)     People buy for gain or to avoid a loss.

        g)     The more basic the need, the simpler or direct the appeal; the more complex the
               need, the more subtle the appeal must be.
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Point Number Six: Competitive Analysis

        a)     Who or What is the competition? (Who: companies, What: lack of knowledge
               about your product or service).

        b)     Why do people buy from your competition? (What i.e. the benefit or advantage)

        c)     Why should they switch to you? (State it in 25 words or less or rethink your

        d)     What are your critical assumptions about the competition? (Don't under estimate

        e)     What are they doing right? (Imitate them and do it better)

        f)     What non-competitor can you hook up your sales with to get an advantage?

Point Number Seven: Competitive Advantage (Perceptions of Unique
Value =High Profits)
       Be the best at something and be sure that everyone in your business knows what
       that superior factor is. What is our advantage, what should it be, what could it be?
                                Make your product or service unique.


Point Number Eight: Who will be your competitor?

        a)     What are their strengths and weaknesses?

        b)     What will be their response to your intrusion?
               *The purpose of moving into a new market is to gain share, not spend money

        c)     What do you have to do differently than your competitor to grow, succeed and

        d)     Who will be your competitor tomorrow and what can you do to prepare for it?

Point Number Nine: Tactics of Diversion and Discussion. Diversion:

        a)     Appear to by unworthy of attention, too small

        b)     Appear to be unbeatable, get market share quickly

        c)     Be secretive until you are ready to launch

        d)     Redirect attention to low profit high volume product or service
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Point Ten: The Market Plan

        a)   Product or Service: Clearly state what it is and what it isn't

        b)   Price: Skim and Penetration
             Skim: Price it high and target innovators (techies)
             Its weakness is high profits draw competition
             Penetration: Price it low to kill off competition
             Its weakness is competition by pricing only

        c)   Place: Where is the product or service to be sold, nation, region, state, store, etc..

        d)   Promotion: How are you going to advertise to get it to where you want it to be?

Product , Price, Place and Promotion make up the MARKETING MIX, ALWAYS REVIEW THE

Point Number Eleven: The Firstest with the Mostest Be the market leader. High Profit and
High Risk.

Point Number Twelve: Hitting Where They Ain't.

        a)   Introduce a new product or service into an existing market.

        b)   Create an imitation only do it better.

        c)   Positioning of the product or service (uncola)

        d)   Adding something new or different to the product or service.

Point Number Thirteen: Dominate a Niche.

        a)   Tollgate: A product or service that everyone must have in order to get into an
             industry. Hughes development of the diamond bit drill

        b)   Specialty Skill: Electronic Spreadsheets, little use for paper spreadsheets now.

        c)   Specialty Market: Polaroid and the instant development of film. Uses of patents.

Point Number Fourteen: Customer Focus. Successful marketing puts the customer in the
center and surrounds them with company communications. Customer feedback drives the

Point Number Fifteen: Positioning.

        a)   How do you want to be seen by your customers and what will they say about you?
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         b)        How would it be useful to be perceived this way?

         c)        What can you do now to start that perception today?

         d)        How can you position your product or service so it stands out from competition?

Point Number Sixteen: Creative Marketing and Growth Strategy.

                          Existing       New

        Existing             a                 c

        New                  b                 d

   a) Sell more in an existing market.
      Combine products and/or services, develop or modify delivery systems, and/or reduce
   b) Sell new products or services to existing customers.

   c) Find new markets for existing products or services.

   d) Sell new products or services in new markets using existing resources.
      "Bundle of Resources Concept": your company is a bundle of resources.
      What can it do besides what it is doing now with the same resources?

Point Number Seventeen: What Other Ways Can You Sell Your Product or

There are at least twenty-two ways to sell, yet most people only use one or two:
Mail, Direct, Telephone, Retail, Wholesale, Manufactures Reps, Distributor,
Multi-Level, Franchise, Newspaper, TV, Trade shows, Promotions, etc. etc.

Point Number Eighteen: Look at New Products or Services You Can Create With Existing

Point Number Nineteen: Distribution Channels.
Distribution Channels are more important than the product or service; they remain
after the product or service declines.
    a) What additional product or service can be sold through an existing channel.
    b) What additional channels are there? ( look at the competition )
    c) What new products or services can be created for your existing channels?
    d) What new products or services can be created for new channels?
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   (Avon took new products and moved from door to door to office to office

Point Number Twenty: Market Research and Market Testing.

   a) Develop a bias for action; go to the customer.

   b) Ask a live customer.

   c) Develop a prototype, but do it fast ( days, not months

   d) The only real test is a market test.

   e) Aim for immediate feedback.

Point Number Twenty one: Four Keys.

a) Specialization: Only go into markets where you can offer better value.

b) Differentiation: The key to profits. How can we differ our product or service from our
   competitor? ( they can't shop your price or find a similar product Packaging, Quality, People,
   Relationships or Service.

c) Segmentation: Look for the "who" in the market place for "whom" you have developed your
   product or service who will be willing to pay the most.

d) Concentration: Focus on the market segment that you can sell the most of your product or
   service at the highest price; those who need it the most.

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