MBA Marketing Seminar [Dr. Carter; MKTG.600]

COMBINED SET OF1st PHASE

“MARKETING PLANNING” TEXT CONCEPT SLIDES

Chapter 1: Introduction to Marketing Planning

The Marketing Plan Handbook

3rd ed.

Marian Burk Wood

1-1

Marketing Planning DefinedMarketing Planning is a systematic, structured

process. It includes:1. Researching and analyzing the current

situation.

2. Developing and documenting the firm’s objectives, strategies and programs,

3. Implementing, evaluating and controlling marketing activities.

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Contents of The Marketing Plan

I. Executive SummaryII. Current SituationIII. Objectives and IssuesIV. Target Market, Customer Analysis and

PositioningV. Marketing StrategyVI. Marketing ProgramsVII. Financial PlansVIII. Implementation and Controls

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The Marketing Planning Process

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Step 1: Research and Analyze the Current Situation

The marketer performs both:

1. External analysis, and

2. Internal analysis

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External AnalysisExternal analysis involves the understanding

of trends that may impact marketing strategy:

Demographic Economic Technological Political-Legal Ecological Social-Cultural

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Internal AnalysisMarketers also assess the firm’s capabilities

and the strategies of competitors in order to:

Build on strengths Exploit competitors’ weaknesses

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Other AnalysesOther areas that are analyzed for their

impact on marketing strategy include: Customers Suppliers Distributors Partners, and Other Stakeholders

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Step 2: Understand Markets and Customers

Can be consumers or businesses A comprehensive understanding of the

customer is desired: Buying habits, needs, wants, attitudes and

behaviors. Who?, What?, Where?, When?, Why?, How? Are buying patterns changing? Why?

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Step 3: Segmentation, Targeting and

Positioning The purpose of segmentation: To group customers with similar needs, wants, behavior or attitudes.

Targeting: The selection of specific segments for marketing. Can be to one segment, multiple segments, or the entire market.

Positioning: Using marketing to create a competitively distinctive place (position) for the brand or product in the mind of the targeted customers.

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Step 4: Plan Direction, Objectives, and Marketing Support

Goals: Long-term performance targets. Objectives: Shorter-term targets that

support the achievement of goals. Sustainable Marketing:

Balancing long-term goals with short-term objectives and budget realities.

Balancing goals and objectives with an eye toward being responsible to the larger society.

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Six Approaches to GrowthBased upon permutations of markets and products.

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CURRENT MODIFIED INNOVATED

EXISTING

EXPANDED(Geographic

)

ENTIRELY NEW

Market Penetration

Market Development

Product Development

Diversification

Step 5: Develop Marketing Strategies and Programs

Utilizing the tools of the “marketing mix”. Consistent with the firm’s overall

direction, goals and strategies. Includes the development of strategic

alliances.

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Alliance Provides Value

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Primary Marketing ToolsThe primary tools for marketing, referred to

as the “Marketing Mix” are: Product Price Promotion, and Channels

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The Marketing Mix

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Product Tangible good or an intangible service. Must be considered in a holistic fashion. Branding must also be considered.

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PricingBased upon a number of factors: How customers perceive the value of the

offering. Positioning. Product costs. Competitive forces. Objectives of the organization.

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Channel How, when and where to make the goods

and services available to customers. Requires effective relationships with

channel partners.

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PromotionInvolves the following activities: Advertising Public Relations Sales Promotion Personal Selling Direct Marketing Use of the Internet

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Step 6: Track Progress, Implement and Control

Mechanisms and methods of measuring progress toward goals: Sales forecasts Budgets Schedules

Comparing actuals vs. projections or the plan.

Making changes as needed.

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Preparing for Marketing Planning

Marketers must develop a number of professional and organizational strengths, including:

Knowledge of markets and customers, Core competencies, and Strategic relationships

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Support Strategies: Customer Service

Customer Service: Reinforces positive perceptions. Enhances business through reputation

and referral. Helps differentiate from competitors. Poor service alienates otherwise loyal

customers.

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Support Strategies: Internal Marketing

Internal Marketing: Focuses all employees on serving

customers. Builds support for the marketing plan. Enhances execution of the marketing

plan throughout the organization.

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5 Guiding Principles for Effective Marketing Planning1. Expect Change

2. Emphasize Relationships

3. Involve Everyone

4. Seek Alliances

5. Innovate to Provide Value

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Chapter 2: Analyzing the Current Situation

The Marketing Plan Handbook

3rd ed.

Marian Burk Wood

2-1

Environmental Scanning and Analysis

Involves the analysis of both: Internal Factors, and External Factors

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Internal Factors Mission Resources Offerings Previous Results Business Relationships Keys to Success and Warning Signs

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External Factors Demographics Ecological Economic Technology-related Political-Legal Social-Cultural Competitors

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Internal Analysis: MissionMission: States the firm’s fundamental

purpose. Indicates how the firm will add value.

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Internal Analysis: Resources Human Financials Informational Supply

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Internal Analysis: OfferingsExamining what the firm is currently

offering in the way of goods and services: Fit with mission and resources. Affirm role of each line and item.

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Internal Analysis: Previous Results Results include:

Sales (dollars and units). Profitability. Customer acquisition and retention costs. Other financial results.

Provide clues to firm’s strengths and weaknesses.

Helps separate the effective programs from the less-effective programs.

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Internal Analysis: Business Relationships

Includes relationships with: Suppliers Distributors Other business partners

Examine: Capacity Quality Value provided

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Internal Analysis: Keys to Success and Warning Signs

Keys to Success: Identify special factors most crucial to

success. Maintain focus on key priorities.

Warning Signs Indicate potential problems with the plan.

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External Analysis: Demographic Trends

Examined by target market: Consumer Demographics Business Demographics

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External Analysis: Consumer Demographic TrendsKey consumer demographic trends include: Population growth Population composition:

Age Gender Ethnicity Religious makeup Education Occupation Household size Income

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External Analysis: Business Demographic Trends Size and growth of industries

Number of companies. Number of locations or branches. Number of employees. Sales revenues.

Trends in new business formation may signal emerging opportunities.

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External Analysis: Economic Trends

Must keep an eye on global, national, regional and local economic trends.

Some measures typically monitored: Buying power Income Debt Credit Usage

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External Analysis: Ecological Trends

Potential impacts: Availability of raw materials. Government regulations. Social attitudes.

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External Analysis: Technological Trends

Key trends include: Cell phones Computers Digital media Internet access Increasing bandwidth

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External Analysis: Political-Legal Trends

Legal Trends: Laws includes international, federal, state and local. Related to:

Competitive behavior Pricing Taxation Promotion Distribution Product liability Labeling

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External Analysis: Political-Legal Trends

Political Trends Global. national, or local Can signal a change in the legal

environment.

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External Analysis: Social-Cultural Trends

Key trend: Increasing diversity in markets. Keep tabs on popular culture.

Tends to be volatile. Core beliefs and values change more

slowly over time.

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External Analysis: Competitors

Identify: Current competitors. Possible future competitors.

Learn about the unique competitive advantages of each competitor.

Track trends in market share.

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Porter’s Five Forces Model

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Three Fundamental Business Strategies

Cost Leadership Strategy Differentiation Strategy Focus Strategy

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SWOT Analysis Strengths Weaknesses Opportunities Threats

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SWOT Analysis (cont’d)

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Exhibit 2.5 Judging Organizational Strengths & Weaknesses

Past Performance Trends Comparison vs. Competitors

Specific Goals or Targets Personal Opinions of

Strategic Decision Makers

Are organizational resources & capabilities

strengths or weaknesses?

Chapter 3: Understanding Markets and Customers

The Marketing Plan Handbook:

3rd ed.

Marian Burk Wood

3-1

What is a Market? Market = All the potential buyers for a

particular product or service. Markets can be defined by:

Product Customer definition Geography

3-2

Markets Must Be Analyzed Markets are always changing Market analysis is performed to better

understand: Requirements Behaviors, and Attitudes

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Market Share Market share : The percentage of total

sales (dollars or units) held by a particular company, brand or product.

Directly affects segmentation and marketing.

Serves as a baseline for understanding historical market dynamics.

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Consumer vs. Business Markets

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5 Basic Levels of Market Definition

Level DefinitionPotential Market All customers who may be

interested in a particular offering.

Available Market Customers who are interested, possess sufficient income, and have access to the offering.

Qualified Available Market

Customers who are qualified to buy based on age or other criteria.

Target Market Customers that the company intends to target.

Penetrated Market

Customers who are already buying the product.

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Analyzing Customer Needs and Behavior

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Analyzing Consumer MarketsInformation needs include: Who? What? Where? When? Why? How?

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Considerations for the Consumer Market

Cultural Social Personal

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Consumer Market: Cultural Considerations Different cultures means different approaches to

buying situations, due to differing values, beliefs and preferences.

Subcultures: Groups within a larger culture that preserve distinct cultural identity: Religion Ethnic background Lifestyle

Class: Levels of socioeconomic status. Persons of same class exhibit similar behaviors

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Consumer Market: Social Considerations Social influences on behavior include:

Family members Friends Work Groups Civic Organizations

Within social groups, consumers are influenced by opinion leaders, who provide advice and guidance.

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Consumer Market: Personal Considerations Personal factors include:

Family life cycle Lifestyle Psychological makeup

Psychographic characteristics include: Motivations Perceptions Attitudes

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Considerations for the Business MarketSpecial considerations for businesses

include: Organizational Connections

Internal players Suppliers

Organizational Considerations Company characteristics Derived demand

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Organizational Connections: Internal PlayersAlso to consider: Those who initiate the decision Those who use the products/services Those who evaluate the alternatives Those who approve the release of funds

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Organizational Connections: SuppliersCurrent relations with competing suppliers

should be considered: Long-term contracts Evaluations Requirements Other elements

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Organizational Considerations: Company CharacteristicsCompany characteristics include: Company’s size and industry Current market share and growth Competitive situation Buying policies and procedures Financial constraints Timing of the purchases

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Organizational Considerations: Derived DemandDerived demand: The principle that demand

for business products is based upon (derived) demand for related consumer products.

Derived demand requires that B2B marketers be aware of emerging trends and needs in consumer markets and be ready to help their business customers serve their consumer customers.

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Planning Marketing ResearchTwo basic types of research: Secondary Research:

Information already collected for another purpose.

More readily available and less expensive than primary research.

Primary Research: Research conducted to address a specific

situation

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Examples of Sources of Secondary Research

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Secondary Research: Some CautionsSome cautions for using secondary research: Before using, check dates and sources. Consider the source’s credibility

Reputable? Unbiased?

Look into the sources cited by your secondary source

Be careful about applying general learning to your specific situation.

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Primary Research Problem Definition

What information is needed? How will it be used?

Data Collection Methods include:

Observation Surveys Experiments

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Primary Research Techniques: Focus Groups Small group of customers/prospects Guided discussion Yields insights into customer thinking,

attitudes and behaviors Drawback: May not be representative of

the entire market.

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Primary Research Techniques: Ethnographic Research Ethnographic Research: Observing how

customers behave in actual product purchase or usage situations, and asking to clarify the reasons for behavior.

Helps marketers to: Develop new product ideas. Fine-tune personal selling approaches. Plan for other marketing attention.

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Using Marketing Research If research is needed, include this as a

budget item in your marketing plan. Plan for ongoing market research to help

measure results during implementation. Good decision making involves weighing

the pros and cons of making a decision based on limited data, or waiting for research.

Be respectful of consumer privacy concerns.

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Chapter 4: Planning Segmentation, Targeting and Positioning

The Marketing Plan Handbook:

3rd ed.

Marian Burk Wood

4-1

Fragmentation and Intense Competition Customers exhibiting a wider variety of:

Needs Attitudes, and Behaviors

Companies must differentiate themselves more distinctly in the markets where they compete.

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The Need for Segmentation, Targeting and Positioning

A move away from mass marketing. A move towards segment marketing. Allows marketers to focus their resources

on the most promising opportunities. Improves marketing efficiency and

effectiveness

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Market Segmentation Definition: the process of grouping

customers within a market according to similar needs, habits or attitudes that can be addressed through marketing.

Even within a large segment, marketers often can identify niches.

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Steps in the Segmentation Process

1. Select the general market: Eliminate markets that have no need for the

product or are inappropriate for other reasons.

2. Apply segmentation variables.

3. Assess and select segments for targeting

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Overview of Segmentation, Targeting and Positioning

4-6

Consumer Segmentation Variables

Type of Variable Examples

Behavioral and Attitudinal

Benefits sought, rate of usage, attitude toward product and usage, price sensitivity.

Demographic Age, gender, family status, household size, income, occupation, education.

Geographic Location, distance, climate.

Psychographic Lifestyle, activities, interests.

4-7

Segmenting by Behaviors and AttitudesIn many ways, the best way to segment: Help marketers analyze the specific value

that a particular group expects from the offering.

Include variables like: Benefits required or expected Usage occasion and status Loyalty status Technological orientation Attitudes toward products or usage

4-7

Segmenting by Demographics Popular for segmentation because they

are common and easily identified consumer characteristics.

Often point to meaningful differences in: Consumer needs and wants. Product consumption. Media usage.

However, care must be taken to avoid over-generalization or stereotyping.

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Segmenting by GeographicsMay be based on: A company’s ability to sell and service

products in certain areas or climates, Its interest in entering promising new

markets, or Its reluctance to sell in certain areas due

to environmental threats or unfavorable climate.

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Segmenting by Psychographics

Includes such variables as lifestyles, activities, interests and attitudes.

Provides a deeper understanding of what and why consumers buy.

When consumer activities or interests cross demographic and/or geographic lines.

4-11

Business Segmentation Variables

Type of Variable Examples

Behavioral and Attitudinal

Purchasing patterns and process, user status, benefits expected, order size/frequency, buyer/influencer/user attitudes.

Demographic Industry, business size, business age, ownership structure.

Geographic Location, distance, climate.

4-12

Segmenting by Behaviors and Attitudes Helps marketers identify what specific business

segments want and value, as well as how/why they buy.

Includes variables such as: Purchasing patterns User status Attitude toward technology Loyalty status Price sensitivity Order size/frequency Attitudes Benefits expected

4-13

Segmenting by DemographicsCommon business demographic variables

used: Industry Business size Business age Ownership structure

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Segmenting by Geographics Utilizes such variables as nation, region,

state, city and climate. Allows for the grouping of potential

customers according to: Concentration of outlets Location of headquarters Geography-related needs or responses

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Assessing Potential Target Markets

Target Market: The segment of the overall market that a company chooses to pursue.

Each potential segment must be evaluated based upon fit with the firm’s: Resources Core competencies Goals and objectives Offerings

4-16

Assessing Segment Attractiveness

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Ranking and Choosing Among Potential SegmentsHere is an approach sometimes taken:

1. Take all potential targets.

2. Rate each potential target across a number of selected criteria. Develop “importance” weights for each of the criteria.

3. Develop a composite score for each segment.

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Sample Segment Ranking

Segment

Growth Potential

Competitive Superiority

Fit with Company

ResourcesOverall Score

A 3 5 2 10

B 5 4 4 13

C 4 2 3 9

Scoring key: 5 = highly attractive, 4= moderately attractive, 3 = average, 2 = moderately unattractive, 1 = highly unattractive

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Coverage Strategies Concentrated Marketing

Concentrating the marketing efforts on only one key segment.

Undifferentiated Marketing Targeting all segments with the same

marketing strategy. Differentiated Marketing

Creating a separate marketing strategy for each segment.

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Personas Growing number of companies are

gaining insights by developing personas: Detailed but fictitious profiles representing

how individual customers in their targeted segments behave, live and buy.

Give marketers a deeper understanding of what shapes each segment’s needs, preferences, buying behavior and consumption patterns.

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Positioning

Positioning is the differentiation of the brand or product on the basis of attributes that customers find meaningful.

Positioning conveys the value that the brand provides and sets the brand apart.

Sets the tone for the marketing plan. Should be re-evaluated periodically.

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Meaningful Differentiation

Some sources of meaningful differentiation: Product features Service attributes Channel attributes Pricing attributes Other attributes

Consideration is also given to positions being staked out by the competition.

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