Mcom Chapter 4

8/8/2019 Mcom Chapter 4

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CHAPTER- 4

S.I.W.S COLLEGE MARKETING PLAN

MCOM PART - I Page 1Prof. V. Veena Prasad

4.1 MARKETING PLAN:

Marketing plans: focuses on customer acquisition and retention and the resources

required to do this effectively and implement specific marketing functions.

Effective marketing plans should be realistic, include sufficient competitor analysis

and have a long-term as well as short-term focus.

A Marketing plan is a written document that summarizes what the marketer has

learned about the market place and indicates how the firms plans to reach its

marketing objectives.1

The marketing plan is one of the most important outputs of the marketing process

underlies on effective analysis of the industry, business and product situation.

The marketing plan will include the market research; your choice of location (if

thats a factor); the prospect group(s) youve targeted; your competition, branding,

and positioning; the product or service you are selling; and pricing, distribution,and promotion.

4.2 What you need to do

4.2.1. Define your business

y Your product(s) and/or service(s)y Your industry: Is it growing, declining, or holding steady?y Your geographic marketing area: local, regional, national, or globaly Your competition

1Marian Wood definition


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y How you differ from the competition, or what makes you specialy Your pricing structurey The competitions promotion methodsy Your promotion methodsy Your sales and distribution methods

4.2.2. Define your prospects and clients or customers

y Your current client base: age, sex, income, job title, etc. (i.e., demographics)y How your customers learn about your product or service: Internet, email,

public relations, advertising, direct mail, word of mouth, Yellow Pages, etc.

y Patterns or habits your customers and prospects share: where they shop,what they read, watch, and listen to

y Qualities your customers value most about your product or service:selection, convenience, service, reliability, availability, affordability, your

impeccable good looks, etc.

y Qualities your customers like least about your product or service: can theybe adjusted to serve your customers better?

y Prospective customers whom you arent currently reachingy Profiling your typical best client

4.2.3. Define your competition

y Number of competitors within your marketing areay Are there no competitors? If so, thats usually a big, red flag that prospects

arent buying what youre selling

y Does you industry have a high or low barrier to entry? If its low,competitors can crop up quicker than a jackrabbit after quad espresso


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4.2.4. Define your plan and budget

y Previous marketing methods you have used to communicate with yourprospects

y Methods that have been most effectivey Developing your strategyy Developing action plansy Developing a marketing calendary Developing the budget to make it all happen

In the sections below, well review the first two sections of an effective marketing

plan.

4.2.5. Executive Summary

A business plan executive summary is, well, a summary of your overall plan. This

may be just for you or you may share it with others including an advisory board or

mentor.

4.3 FEATURES OF MARKETING PLANS:

y It is a Written document which helps in stating the objectives of theorganization and also to ensure that what area has to be concentrated for

developing and what area is left out. It facilitates easy communication of

objectives to all people within and outside the marketing department in the

organization.


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y The marketing plans are used for directing and controlling the marketingeffort. It operates at two levels , strategic( Long term) and tactical (Short

term). The Strategic Marketing Plan layout the target markets, and the

value proposition the firm will offer, based on the analysis of the best market

opportunities.

The Tactical Marketing Plan specifies the marketing tactics, including

product features, promotion, merchandising, pricing, sales channels and

service.

y The marketing plans should be customer oriented based on the customerneeds and wants. This helps in providing unpromising commitment to the

customer satisfaction while delivering goods and services.

y The purpose of marketing is to identify the segment of customers (targetMarket) for the business and convert the needs into suitable wants and

generate the required profit at the unit level.

y Market analysis i.e. marketing environment scanning has to be doneSWOT analysis and identify and analyze market opportunities.

y Marketing planning involves developing Marketing Mix for achieving themarketing objectives. These are the detailed functional plans that help in the

marketing process.

y The Marketing plan should be competitor oriented, the plan should be ableto tackle competition and ensure survival and growth in future.

y The marketing plan should be developed in accomplishing marketing goalsthey are extending the existing market share, expanding profits, meeting

competition, building strong sales image etc. So marketing plan should

accomplish all marketing objectives.


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y Marketing plan is a continuous process, it starts with identifying the targetmarket and ends with marketing opportunities.

y Marketing plan provides direction, which work has to be done firstaccording to the action plan that been formulated.

y Marketing plan should be flexible , it should be able to be changedaccording to the marketing environment (external & internal) .

y Marketing planning requires a lot of team work. It is not a one man show

The marketing plan then, is a dynamic document which focuses on bringing

Marketing strategies to life, serving as a roadmap for carrying out marketing

activities and implementing marketing strategies.

4.4 STEPS IN MARKETING PLAN:

It is a multi-step process, which considers the following:

1) Formulating a strategy of your company or your division and making sure thatappropriate linkages are made between company strategy and marketing

activity planning.

2)Analyzing the environment within which you do business to make sure youconsider the marketplace, the industry, competitors, and other influences.

3) Carrying out market profiling, enabling you to identify market segment, targetcustomer types, and overall demand. Additionally, analysis of the industry and

competitors, coupled with analysis of customer types, enables the creation of

demand possibilities and the resulting forecasts. It also allows you to formulate

appropriate value propositions, and to position the products key benefits to the


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target audience, and finally, why a customer would choose your solution versus

the competition. and expressing key values and benefits to the target audience

4) The marketing mix, which considers a combination of activities which come

together harmoniously, in bringing the product to market and sustaining it while

in the market, which includes:

i. Deciding on which products meet the need of identified market targets

ii. Pricing those products so that the true, competitive value is recognized by themarket targets.

iii.Defining promotional programs to reach those targets, this can include

Communications and advertising programs.

iv. Creating channels to effectively distribute your products to your target

audience.

v.Determining who youll need to work with in successfully bringing the

product to market, including sales teams (to make sure that volumes can be

attained),

vi. Launching new products or product line extensions as needed.

vii. Training the sales force to competitively position the product or service.

viii. Budgeting of marketing programs so that the appropriate sales goals and

Corporate strategies can be attained.

ix. Executing on the plan - creating marketing project plans, and understanding

dependencies on other organizations. Also included are measurements

to determine the success of your marketing activities.

x. Identifying risks


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4.4.a Step 1 Define the Strategy

Strategy is carried out as a multi-step process, defined as:

1) Assessing the current situation (where you are)

2) Identifying the desired end state or goal (where you want to be)

3) Mapping a path to achieve the goal (the strategy)

4) Creating measurements to determine success factors

5) Re-assessing the situation and revise the strategy

Each is described below:

SWOT analysis. SWOT stands for strengths, weaknesses, opportunities, and

threats. The overarching goal of SWOT is to determine where the companys

products, services, or product lines fit within the context of the internal and the

external environments. Conducting this analysis helps you to figure out where it is

today, and where it needs to be in the future. An outcome of the SWOT analysis is

to help you define what youre good at and to leverage those strengths to determine

the opportunities you might be able to take advantage of. Weaknesses reveal your

vulnerabilities. By harnessing this data, youll have a way to validate and guide

your marketing investments. From this exercise, you can also derive some key

marketing objectives which carry through to the next exercise

4.4b. Step 2 Business Environment Analysis

Analyzing the business environment is situated as Step 2 in this template to

emphasize its importance in data gathering. Steps 1 and 2, formulating strategy and

business environment analysis can actually go hand in hand. The reason is that

these are surveying techniques that allow you to put the information into


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perspective.

Business environment analysis actually can help feed SWOT analyses. The reason

for this is that the business environment influences your strategies. For example, an

competitive threat influences how you identify or prioritize new opportunities.

Marketing professionals often refer to environmental analysis as scanning.

Business environmental analysis is not a one-time event; it is an on-going effort. It

is incumbent on team members to adopt a focus on scanning the horizon and be

constantly on the look out for shifts and changes. Since the marketplace is always

changing, your awareness helps you to understand business drivers and an

evolving customer need, which leads to the identification of market opportunities,

alert you to potential problems with customers, competitors, and the industry in

general. Another area on which you may with to focus when deriving strategies for

products or markets has to do with understanding of Key Business Issues what

are the compelling issues impacting current marketing strategies and programs?

Are there overwhelming issues relating to unmet demand or business needwhich

has been uncovered?

4.4c. Step 3 Market Profiling

Market profiling involves the market research that needs to be carried out. The

ultimate goal is to identify the attractiveness of the marketplace and the

competitive posture you wish to assume. From this, you can determine the ultimate

demand for your product or service with respect to market share, revenue potential,and ultimately, the profitability of your products and services. Market profiling is

made up of the following activities:

A. Analyzing the industry in which your company compete. Here are some


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approaches to identifying the characteristics of the industry:

a) Identify if there are any political issues in the geographic area of interestb)Determine the general state of the economy.c) Understand any of the societal trends or issues which may be prevalent

In your area of interest.

d) Consider the state of the technologies used in this market spacee) Secure actual growth rates of the industry using visuals to show the trend

lines.

f) Find out if there are any trends you can discern being used within thisindustry space.

g) Determine how products and services are actually delivered from supplier tocustomer.

B.Understanding the competitors with whom you compete. In order to carry thisout, here are some suggestions:

a. Make a list of competitors, along with the products they offer. Can you determine

the total revenue of all competitors combined? This could give you a rough

estimate of the size of the overall marketplace.

b. Determine the brand images of each of the competitors.

c. Identify how each of the products are positioned in the market and with respect to

other competitors.

d. Find out who their suppliers are.

e. Determine the number of employees on staff, and whether they are hiring more

people or cutting back, and why.


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f. Make a list of the kinds of activities they engaged in over the past year

or two. For example, did they introduce new products, adjust their

prices, embark on advertising campaigns, etc.

i. Take this list and figure out what you think they might do next, and

ii. Make a list of the kinds of things you might want to compete.

iii. Use the following table to create a profile for each competitor

C) Identifying market segments and ultimate customers to pursue.

Market segments represent groupings of customer types who have similar needs.

Market segmentation helps the product manager or marketing manager to tailor a

specific marketing mix to satisfy the needs of a group of customers (a segment).

Market targets are sub-groups with similar needs. For each of the following

exercise, you may be broadly defining market segments, or defining market

targets within those segments. The more finely focused your efforts, that is, on

your target markets, the more focused your marketing programs will be. Since

customers are driven by needs (problems that need to be solved), your complete

understanding of these segments, and the targeted groups will help you with

more finely tuned marketing programs. Use this questioning technique to help

you:

a. Name the segment or segmentsUse age, geography, or other means

Example People living in the northeast states

b. Define the target

Use more detailed categorizations

Example Employed males aged 50-60 living in New York

State with incomes over $75,000


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D) Define the buying process.

Depending on the kind of product and the market (business to consumer products

versus business to business products), you need to be able to define how people

make purchasing decisions. In businesses, the decision maker may be different

than the actual user of the product. Consumers, depending on whether the product

is a daily staple, durable necessity (cars, appliances, etc.), or impulse

item, the buying process is different.

E) Forecasting sales volumes and market share.

Most people equate forecasting to short-term estimates of sales or unit volumes.

Forecasting to evaluate market opportunities and potential profitability is a long-

range planning activity and is more complex. The reason becomes clear when

considering that all businesses try to create forecasts so they can put business and

marketing programs into perspective. For example, marketing programs may

require periodic investments or product groups may be considering the launch of a

new or improved product, or businesses may be considering expansion into new

markets. Therefore, key decisions are made based on forecasts. Unfortunately,

most forecasts are inaccurate. Thats because they are forecasts. It is a difficult task

at best especially in industries where market conditions can change rapidly.

However, we can try to minimize the errors of forecasting by trying to understand

as much about the market environment as possible so that we can determine if

there is a market for a product or service, where that market is and how much of

it can be captured over what period of time? Once the market is understood and


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believed to be attractive, one can then determine what investment should be

made in marketing activities to access that market. Your market share forecasts

may be driven by some of the following (although these will vary by industry and

market):

a. The maximum number of customers in a market area

b. The number of customers whose needs create an interest in specific products and

Services

c. The rate at which customers actually use products

d. The affordability of products being offered

e. The value and benefits of the products being offered

4.4d. Step 4 Marketing Mix

Once the market segments and the market targets are determined, actionable

elements of the marketing plan can be uncovered. The Marketing Mix is a

commonly used term appearing in many marketing publications and is used widely

by marketing managers and product managers to describe the framework for actual

marketing plans and programs for a company. To describe the marketing mix, one

expression has become predominant the 4Ps, which include:

a) Product a complete description of the product, its attributes, and how itsbenefits and value are positioned in the marketplace.

b) Price A translation of the value or willingness of a customer to pay for theproduct.

c) Promotion how customers are informed about the product or how businesses communicate benefits, value, pricing actions, or product

attributes.


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d) Place (distribution channels) the manner in which businesses deliverproducts to customers.

The marketing plan should contain a description of all of the elements of the

marketing mix. Imagine that each P is a lever in a marketing machine. As the

product moves through the market, the product team and/or marketing managers

will be making adjustments to those levers of the marketing mix. The goal for

this section of the marketing plan is to define each of the elements of the marketing

mix and how those elements will come together in a sound plan.

In managing the Marketing Mix, it is important to understand that no one lever is

pulled on its own. These levers are adjusted in a synchronized, holistic manner in

response to a variety of observed conditions or data about market conditions. For

example, your promotional mix may be made up of a series of print advertising

campaigns, events, and email advertising. The pricing programs may include

promotional tie-ins and discounts, and your promotional campaigns may focus

only on select channels.. Additionally, the marketing mix activities should beaccompanied by market driven metrics. Metrics may focus on things like customer

satisfaction, revenue growth, market share, customer retention rates, etc. The

company may establish many metrics which may need to be modeled or analyzed

using simulations or sensitivity studies to show how one specific marketing mix

model and the variables which may influence market

outcomes.

Key practices to consider in the marketing mix are the creation of value

propositions and in positioning the product. The Value Proposition is used to

define and prove the economic or strategic benefit of the product or service for a

given target market. It must be expressed in the customers terms. The proof


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4.4f. Step 6 Launching Products and/or Services

If the marketing plan includes the introduction of a new product, a line-extension,

or derivative, a formal launch plan should be established. The product launch is an

intense series of activities and tasks that actually begins in the early product

development phase. The product launch should be treated as a complex project

with a variety of dates and deliverables, and is a representation of the confluence of

development and marketing activities, and is best achieved through efficient cross-

functional team interactions. There are complex dependencies between cross-

functional team members.

4.4g.Step 7 Training the Sales force

As products and services evolve, the sales force should have updated information

and training so they are prepared to qualify customers and represent the value and

benefits provided by the products and services they represent. Whether or not the

sales force is direct or indirect, they need to be equipped with the right tools to

drive the revenue objectives of the firm. This section is devoted to defining the

work needed to help the sales force to sell. It should be written simply and

concisely and in an objective style, and should include:

1)The markets on which youre focusing.2) Overviews about the products, services, or solutions overviews theyll be

selling.

3)Methods to qualify opportunities and to understand customer needs.4)Methods to capture the customers attention by providing compelling value

propositions.


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5) Positioning for the product against the competition.6) Customer references.7) Resources where more information is available for sales teams.A.Selling Strategy Provide a paragraph or some bullets that can be used to

help the sales teams to be successful .

B.Describe the product, service or solution. If there are simple diagrams orproduct architectures, they should be included here. Furthermore, provide

the following:

a) List price and possible discountsb) A marketplace summary, including segments, targets, and ideal

customer profiles. Also, help them to identify key buyers, users,

influencers, or decision makers, if the situation warrants this.

c) The availability dates, which correspond to the established marketwindows.

C. Teach the Sales force to get the customers attention and get them excitedabout whats being offered. Each target group has a specific set of needs.

These were identified during the market segmentation and targeting.

Compelling information which serves to surprise customers and prospects

because of your knowledge and understanding of their specific issues and

challenges will be highly beneficial to establishing rapport. The following sub-

sections establish this framework for you, and were described in other parts ofthis marketing plan.

a) A description of the market segment and the target groups in this segmentb) Listing of observed customer issues and challenges, which may be articulated

asneeds.


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c) The value proposition (see earlier sections on this topic) which can be used todescribe the benefits of the product, service or solution

d)The positioning statement. Pay particular attention to your advantages versusthe competition.

e) e. An analysis of the competition

4.4h. Step 8 Budgeting

No marketing or business plan is complete without a financial plan. The budgets

established for is marketing plan should be prepared within the context of the

financial targets for the firm. Furthermore, the financial plan establishes some of

the metrics against which actual performance will be evaluated as the plan is

executed.

4.4i. Step 9 Executing

Just like the Launch plan, the marketing plan is usually carried out by a number of

individuals from other business functions, or other groups within the marketing

department. If, for example, there is a pricing team, and their programs are

dependent on the advertising and promotion teams work with outside agencies,

their work plans need to be coordinated and the associated dependencies identified.

As the marketing teams meet together, or with the cross-functional product team,

the deliverables and metrics should be fully understood so that program status and

issues can be communicated.

Every dimension of the marketing plan requires an investment. Whether its

carrying out a research project or investing in a big advertisement. All activities are


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planned to drive business. Therefore, measurements need to be put into place to

determine whether the investment yielded the intended results.

Typical measurements might consider:

a) Did the marketing program generate the number of sales leads?b) Were the numbers of sales leads sufficient to create proposals which led to

new business?

c) Did the advertisement generate more visits to the website?d)Did the new product generate higher levels of customer satisfaction?

It is up to the person, team, or organization to determine which metrics to use, the

frequency with which they are evaluated, and the follow on action plans which

clarify or redirect the business in deriving new marketing initiatives.

4.4j. Step 10 Risk Analysis

As described, all operational elements and project plans need to come together

seamlessly, results tracked against performance metrics, and corrective actions

taken. Unfortunately, this isnt always the case. This section should be used to

articulate the risks and issues that may emerge if deadlines arent met or results

arent achieved. The mere mention of these items is only the first step. The real

challenge is to define the alternative action plans should a specific condition be

encountered .


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4.5 Contents of the Marketing Plan

1. Executive summary and Table ofContents.

The marketing plan should open with a brief summary for senior management of

the maingoals and recommendations.

The table of contents outlines the rest of the plan and all supporting and

operational detail.

2. Situation Analysis:This section presents relevant background data on sales,

costs, the market, competitors, and the various forces in the macro environment.

Firms will use all this information to carry out a SWOT analysis. How do we

define the market, how big it is, and how fast it is growing? What are the relevant

trends? What is the product offering and what critical issues do we face Firms will

use all this information to carry out a SWOT analysis.

3. Marketing Strategy:Here the product manager defines the mission, marketing

and financial objectives, and groups and needs that the market offerings are

intended to satisfy. The manager then establishes the product lines competitive

positioning, which will inform the game plan to accomplish the plans objective

all this requires inputs from other areas such a purchasing , manufacturing sales

finance and human resources

4. Financial Projections:Financial projections include a sales forecast, an expense

forecast and a break-even analysis. On the Revenue Side, the projections show the

forecasted sales volume, by month and product category. On the Expense Side,

they show the expected costs of marketing, broken down into finer categories.


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The Break-even Analysis shows how many units the firmmust sell monthly to off-

set its monthly fixed costs andaverage per unit variable costs.

5. Implementation Controls: This last section of the marketing plan outlines the

controls for monitoring and adjusting implementation of the plan.It spells out the

goals and budget for each month and quarter, so management can review each

periods results and take corrective action as needed. Firms must also take a

number of different internal and external measures to assess progress and suggest

possible modifications. Sometimes, contingency plans are included which outline

steps the management would take in response to specific environmental

developments, such as price wars or strikes

4.6 HOW A MARKETING PLAN SHOULD BE?

A marketing plan should be simple and should be easily understandable bythe marketing teams. It should be precise and clear planning and easy

implementation of the plan should be their.

Marketing plans should identify the specific action to be taken for theimplementation of the objectives. It should be measurable and a concrete

one.

All objectives formed should be realistic. It should be comprehensive ie. It should contain all the elements for

formulating them .

It should be goal oriented.

Marketing plans should highlight the core objectives of the organization. Ithas to explain what exactly has to be doneHence it should be clear and

avoid ambiguity.

It should be measurable.


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A marketing plan should act as a ready tool to provide guidance anddirection concerned with the implementation of the same.

A marketing plan should be focused to meet the desired objectives. It should be time bound. It should be future oriented. It should be flexible. It should be consumer oriented. It should be competitive.All the people responsible in the implementation of the plan should support

and be committed and acceptable with the plan . They should support the

plan.

4.7 Case

I f you were running an airport and wanted to find out the probability of success

for a retail store selling travel supplies and impulse items, you might need to

find out how many passengers go through the airport every day. You wouldneed to understand the number of planes, their capacity and schedules in

order to figure out how many people would actually be passing through a

given area, and then make assumptions about the number of people who

would have an interest in shopping in that store. Further, you would want to

figure out how much an average purchase might be in that store and multiply

that amount by the number of people who you believe might go into that store.


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MCOM PART - I Page 22

4.8 Conclusion

A marketing plan, like other plans, is a roadmap, enabling a business to define its

current situation (where are we?), its goals (where do we want to go?) and the path

to get there (the marketing strategy and the tactical plans, as represented by the

marketing mix). Carrying out this process requires a degree of discipline, structure,

and some creativity. It cannot be emphasized enough that market profiling and

research be carried out on an ongoing basis. The marketplace is filled with so many

dynamics, that by not paying attention, you could lose your competitive advantage.

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