Marketing Plan Direction and Objectives

1. Marketing Planning & Problem Solving[Dr. Carter; MKTG.4900] COMBINED SET OF 2nd section MARKETING PLANNING TEXT SLIDES

2. The Marketing Plan Handbook: 3rd ed. Marian Burk Wood Chapter 5: Planning Direction, Objectives, and Marketing Support 5-1

3. Determining Marketing Plan Direction • The ultimate purpose of the marketing plan is to help the organization achieve its objectives. • Goals = Long-term objective targets. • Objectives= Short-term objective targets • The direction chosen must be consistent with the organization’s priorities and strengths. 5-2

4. Options for Marketing Plan Direction 5-3

5. Growth Most business plans call for unit or dollar sale growth. The four broad strategies for growth are: • Market penetration • Market development • Product development, and • Diversification 5-4

6. Six Approaches to Growth Based upon permutations of markets and products. CURRENT MODIFIED INNOVATED Product Development Market Penetration EXISTING EXPANDED (Geographic) ENTIRELY NEW Market Development Diversification From Ch.1; 1-12

7. Market Penetration • Is the growth strategy in which the company sells more of the existing products to customers in existing markets or segments. • It is especially viable for companies that can build on established customer relationships and positive value perceptions. 5-5

8. Market Development • Market development involves identifying and reaching new segments or markets for existing products. 5-6

9. Product Development • Product development is a growth strategy in which the company sells new products to customers in existing markets or segments. 5-7

10. Diversification • Diversification is a growth strategy of offering new products in new markets to take advantage of new opportunities: • Through internal product development capabilities, or • By starting or buying a business 5-8

11. Advantage: Diversification can help avoid over-reliance on a small number of products or markets Disadvantage: Diversification can dilute available resources and open the organization to competitive attacks on multiple fronts. Pros and Cons of Diversification 5-9

12. Growth Not Always Possible • Growth not always desirable or possible • E.g., tough economic times • Priorities may be to: • Maintain current share • Seek highest possible profits • Retrench 5-10

13. Nongrowth Strategies Nongrowth strategies include: • Filing for bankruptcy • Withdrawing from certain markets • Deleting products • Limiting distribution • Closing a division 5-11

14. Setting Marketing Plan Objectives Exact objectives depends upon: • The current situation. • Environmental issues and keys to success. • Customers in targeted segments. • The organization’s mission and goals. • The chosen positioning. 5-12

15. Keys to Effective Objectives • Specific, time-defined and measurable. • Realistic, but challenging. • Consistent with the mission and overall goals. • Consistent with internal environmental analysis. • Appropriate in light of opportunities and threats. 5-13

16. Three Types of Objectives in Marketing Plans Marketers usually set three types of objectives in marketing plans: • Marketing objectives: Targets for managing certain marketing relationships and activities, • Financial objectives: Targets for managing certain financial results, and • Societal objectives: Targets for achieving particular results in social responsibility. 5-14

17. Marketing Objectives Targets for managing certain marketing relationships and activities: • Customer acquisition • Customer retention • Customer satisfaction • Channel relationships • Unit sales • Market share • Product development • Order fulfillment 5-15

18. Financial Objectives • To be effective, financial and marketing objectives should be consistent. • At times, key financial objectives may give way to achieve a coveted marketing objective. • Financial objectives generally include: • Sales volume and product targets • Profitability targets • Return on Investment (ROI) targets • Break-even targets 5-16

19. Answering to Stakeholders • Various stakeholders have an interest in the activities of the organization: • Customers • Suppliers • Employees • Civic leaders • Others • These stakeholders track company progress on key issues and often hold them accountable. 5-17

20. Societal Objectives Fulfilling societal objectives: • Polishes company and/or brand image. • Shows the organization is doing something constructive about important issues. • Some of the key issues include: • “Greener” products • Charitable donations • Involvement in community projects • Energy conservation • Issue awareness 5-18

21. Cause Related Marketing • Links the marketing of a brand, good or service to a charitable cause. • Although charitable, there is an explicit marketing connection. 5-19

22. Planning Marketing Support Before plunging into the details of planning the marketing mix, marketers need to set objectives for two aspects of marketing support: • Internal Marketing: marketing to managers and employees inside the company, and • This includes upward communication • Customer Service 5-20

23. Internal Marketing May take the form of: • Internal newsletters • Web pages • Training meetings • Marketing or sales meetings • Other techniques 5-21

24. Internal Marketing Support Objectives • Keep employees focused on customers. • Keep employees involved in marketing. • Keep employees informed about marketing. • Improve employee performance and satisfaction. 5-22

25. Customer Service Customers have different customer service needs at different points in the buying process: • Before the sale • At the moment or point of sale • After the sale 5-23

26. Customer Service Objectives • Meet targeted segment’s needs, expectations. • Attract, retain, satisfy customers. • Reinforce the product or brand positioning. • Allocate service resources appropriately. • Service recovery • Customer service is rarely perfect every time 5-24

27. Shaping the Marketing Mix • Managers look to the key priorities of the organization as they determine action steps and allocate resources. • All tactics and programs developed : • Must be consistent with mission, direction, goals and objectives, and • Support the mission, direction, goals and objectives. 5-25

28. The Strategy Pyramid 5-26

29. Chapter 6: Developing Product and Brand Strategy The Marketing Plan Handbook: 3rd ed. Marian Burk Wood 6-1

30. Introduction • Product strategy is critical to the success of the overall marketing strategy. • Value is captured in two key areas: • Product Strategy • Existing and proposed products. • Branding • Value enhancement through awareness and image. 6-2

31. Product Strategy • Product value is derived from • Features, and • Benefits received • Products can be tangible goods, services, places, ideas, organizations, or people. 6-3

32. Designing a Service 6-4

33. Features and Benefits • Features: Specific attributes that enable a product or service to perform its function. • Benefits: Need-satisfaction outcomes. 6-5

34. Mass Customization • Mass Customization: Creating products, on a large scale, with features tailored to the needs of individual customers. Offerings should be analyzed, feature by feature, to help understand the benefits and value derived by the target customers. Try to avoid “feature bloat”. 6-6

35. Sample Needs, Features and Benefits 6-7

36. Quality Quality: Put simply, how well the product satisfies customers. • Basic functionality is only the price of entry. • Superior quality attracts business. • Poor quality can lead to negative word-of-mouth. 6-8

37. Design Design: Quality comes from design, components/ingredients and processes. • At the forefront of many categories. • Includes “emotional quality” – the impact of design on how it makes the customer feel. 6-9

38. Packaging • Keeps products safe. • Helps companies burnish their brand imagery and highlight points of differentiation. 6-10

39. Labeling • Communicates product contents, uses and warnings. • Conforms to national, regional and local laws and requirements mandating warnings, allowable use of certain phrases, and even the size and type of words used. • Helps attract attention, stand out from retail clutter. 6-11

40. Product Development Steps in the Product Development Process: • Idea generation. • Screening of new ideas. • Initial concept testing. • Business analysis. • Prototype design. • Market testing. • Commercialization. • Monitoring customer reaction. Let’s look at product strategy from the perspective of this development process… 6-12

41. Product Strategy andThe Product Development Process 6-13

42. The Product Life Cycle Marketers must carefully monitor the environment to determine where their industry or product may be among the following stages of the PLC: • Introduction • Growth • Maturity • Decline Let’s look at product strategy from the perspective of the Product Life Cycle… 6-14

43. Product Strategy andthe Product Life Cycle 6-15

44. Product Mix and Product Lines • Product Mix: The overall assortment of all product or services offered. • Product Lines: A group of products that are all similar in some way. • Product Mix Width: Number of lines offered. • Product line Depth: Number of products in a line. 6-16

45. Line Extensions & Brand Extensions • Line Extension: Putting an established brand on a new product and adding it to an existing product line. • A low fat version of Lay’s potato chips. • Brand Extension: Putting an established brand on a new product in a different category for a new customer segment. • E.g., Snicker’s brand ice cream. 6-17

46. Product Line and Mix Decisions 6-18

47. Planning Branding • Branding gives a product a distinct identity and differentiates it from competitive products using: words, designs, and symbols. • In terms of branding, a product may carry: • Company name and individual brand. • Courtyard by Marriott • Individual name. • Gap, Old Navy • Private-label brand. • Wal-Mart • Multiple Brands (co-branding, ingredient branding). • Dell PC with Intel computer chips 6-19

48. Brands Should Be…. • Meaningful. • Recognizable and memorable. • Capable of being legally protected. • Suitable for international markets.

49. Branding and Positioning • Branding not only identifies a particular product, but it sets it apart from the competition (both direct and indirect). • Positioning: What the target group perceives about your brand relative to how they perceive the competition. 6-20

50. The Power of Brand Equity • Brand Equity: the extra value customers perceive that enhances their long-term loyalty to a brand. • Can insulate a company against competitive threats. • Can help new products achieve acceptance. • The Value of Strong Brands: • Encourages brand loyalty. • Boosts customer lifetime value. • The total amount that a customer spends on a brand or with a company during the life of their relationship. 6-21