Developing a Marketing Plan

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Developing a Marketing Plan

• MGT 252 Lecture 2

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Todays 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.

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Marketers tasks
Look for Opportunities Consumer Competition Com
pany (Uncontrollable 3Cs)
Implement Positioning Product Price Promotion
Place (Controllable 4Ps)
Segmenting Targeting Positioning (STP)
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The Management Process
PLANNING Analyze situation (3 Cs) Set goals
(STP) Select strategies and tactics (4 Ps)
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
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Key Planning Concepts

• Mission The statement that indicates the
  boundaries of an organizations activities.
• 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.
• Strategy A broad plan of action by which an
  organization intends to reach its objective(s).
• Tactic A means by which a strategy is
  implemented. They generally cover a shorter time
  period than strategies.

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Suzuki Auto

• Mission Committed to provide value-packed
  products
• Objective Triple the sales in North America in 5
  years.
• Strategies
• (i) add product selections
• (ii) improve consumer confidence about the
  quality.
• Tactics
• (i) introduce seven new vehicles
• (ii) Open Road Promise Warranty

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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
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Strategic Company Planning

• Define the organizational mission.
• Analyze the situation.
• Situation Analysis get information about the
  company its business environment from
  accessible sources, e.g. library, employees.
• Set organizations objectives.
• Select strategies to achieve these objectives.

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Strategic Company Planninge.g., Pfizer

• 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.
• Organizational Objectives We dedicate ourselves
  to humanity's quest for longer, healthier,
  happier lives through innovation in
  pharmaceutical, consumer, and animal health
  products.
• Situation Analysis
• Select Strategies

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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

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BCG Growth Share Matrix
Companys Market Share
High
Low
High
Stars
Question marks
Industry Growth Rate
Low
Cash cows
Dogs
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Product Market Growth Matrix
PRESENT PRODUCTS
NEW PRODUCTS
PRESENTMARKETS
Product development
Market penetration
NEWMARKETS
Market development
Diversification
The product-market growth matrix depicts the
options available in considering markets and
products.
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Strategic Marketing Planning

• Conduct situation analysis.
• Develop marketing objectives.
• Determine positioning differential advantage
• Select target markets and measure market demand.
• Design a strategic marketing mix.

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Recall Marketers tasks
Look for Opportunities Consumer Competition Com
pany (Uncontrollable 3Cs)
Implement Positioning Product Price Promotion
Place (Controllable 4Ps)
Segmenting Targeting Positioning (STP)
3. Determine positioning differential
advantage 4. Select target markets measure
market demand
1. Situation analysis 2. Develop marketing
objectives
5. Design the strategic marketing mix
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(No Transcript)
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WestJet Facts

• Canadas 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 Jan-June 2002.
  Up 47 from year earlier.
• Only fly domestically.
• Profitable.
• Lower costs than Air Canada.

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1. Situation Analysis

• SWOT assessment
• Strengths, Weaknesses, Opportunities, Threats
• WestJet
• Strengths
• Weaknesses
• Opportunities
• Threats

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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?

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3. Positioning Differential Advantage

• Positioning refers to a products 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?

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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?

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5. Marketing Mix

• Price (base, coupons, discounts, etc.)
• Product (or service)
• Promotion (marketing communications)
• Placement (distribution)
• Plus customer service.
• WestJet?

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Annual Marketing Planning

• Executive Summary (one page)
• Situation Analysis (two to three pages)
• STP, Objectives
• Strategies
• Tactics
• Evaluation Procedures (one page)

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Suzuki

• New SUV

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1. Executive Summary

• Thrust of the plan
• Intended for executives who need an overview, but
  wont be doing the nitty-gritty.
• Summarize the next seven sections.
• Suzuki
• One of the worlds largest automakers.
• Has small market share in North America.

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2. Situation Analysis

• Analyze past, present, and future conditions
  based on easily accessible sources.
• SWOT
• STP
• Suzuki
• Good production facilities.
• Not that well-known in North America, compared
  with other Japanese brands such as Honda, Toyota.
• The previous generation of XL7 were truck based.

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3. Objectives

• Specific Annual Objectives this factor increase
  by x over y months.
• Explain why these are good objectives.
• Suzuki
• Sell 4,000 XL7 next year.

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4. Strategies

• Price, product, promotion, and placement ideas
  for each target market.
• Suzuki
• Product Improves its size, style, and comfort
  level
• Price Maintain low prices.
• Promotion Use word-of-mouth, warranty.
• Placement Makes it easier for customer to buy it.

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5. Tactics

• Specific action plans for each strategy.
• Who, how, and when.
• Suzuki
• 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
  Japaneses brands.
• Placement Add more dealers.

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6. Evaluation Procedures

• How evaluate success? How compare performance to
  goals?
• Evaluate periodically throughout the year.
• Suzuki
• What is final market share? Make sure defined
  market.
• Were sales cannibalized? It might hurt its
  compact SUV Grand Vitara.
• Monitor sales periodically.

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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.

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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!

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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

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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 programs

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Figure 2-1 Relationship-Insensitive External
Environmental Forces
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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

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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.

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Competition

• competition takes place at three levels
• directly at the brand or store level
• at the level of substitute products/services
• other demands upon our buying power
• Could be from international (e.g. outsourcing).

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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 segments
• increased emphasis on service quality and value

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Technology

• 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

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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

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Controllable Environmental Forces

• The companys 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
  uncontrollable
• these forces may be considered relationship-sensit
  ive, as it is of considerable importance for the
  firm to establish solid relationships with these
  partners in its success

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Figure 2-2 Relationship-Sensitive External
Environmental Forces
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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
  firms products and services
• E.g. dealers, wholesalers and retailers.

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Internal Environmental Forces

• internal factors influence the firms marketing
  strategies, programs and activities, and have the
  potential to affect customer satisfaction
• RD competitive advantage
• Production facilities affect quality
• Financial affect promotional budget
• Human resources affect services
• Location accessibility

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Summary

• Marketing needs to carefully planned and managed.
• This takes place on three levels
• Strategic Company Planning
• Strategic Marketing Planning
• Annual Marketing Planning
• Environment for Strategy and Planning