The Practice of Marketing Planning

1. The Practice ofMarketing Planning

2. Agenda The Marketing Process The Benefits of a Marketing Plan Preparing to write a Marketing Plan Market Analysis SWOT Analysis Marketing Objectives 4P Marketing Tactics Customer Service as a marketing instrument Implementation of the Marketing Strategy Financials Marketing Control Process Groupwork

3. Schedule

4. The Marketing Process Planning Control Execution  Marketing is a continuous process of planning, execution and control

5. The periodical development of a detailed marketing plan is crucial for various reasons: The Benefits of a Marketing Plan - Top-level reflection; take time to reflect the business model in depth - Guideline to success; although plans are always imperfect – an inaccurate plan is better than no plan - Company operational instructions as basic information for all functions how to work together - Written strategy as reminder for what was agreed (if people change, memories fail etc) - Rallying point for all your people that feel engaged in an exciting process and understand the companies overall strategy

6. Preparing to write a Marketing Plan Before starting to write a marketing plan, the following information should be at hand: • Your company’s latest financial data (profit and loss, operating budgets etc) and latest sales figures by product and region (current year and past 3-5 years) - Your understanding of your marketplace: competitors, geographical boundaries, existing distribution channels and customers, demographic data, trends in the market - Input from your sales people and customer-rations people - Input from your research & development department about status of planned products & services - Your companies overall company purpose, vision and value statement and higher-ranking (e.g. global) targets - Organisational table

7. Market Analysis • The "market situation" section should contain your best and most clear-headed description of the current state of the marketplace: • What are your products/services or product/service lines? • What is the dollar size of your markets? What is the volume of the markets? • What is your sales and distribution setup? • What geographic area do you sell to? • Describe your audience in terms of population, demographics, income levels • What competitors exist in this marketplace? • Historically, how well have your products sold? Market share development? • What is the status of your brands (consumer perception, product life cycle)? • Consumer/customer learnings

8. SWOT Analysis Weaknesses Strengths • your specialist marketing expertise. • a new, innovative product or service • location of your business • quality processes and procedures • any other aspect of your business that adds value to your product or service • lack of marketing expertise • undifferentiated products or services (i.e. in relation to your competitors) • location of your business • poor quality goods or services • damaged reputation Internal Opportunities Threats • a new competitor in your home market • price wars with competitors • a competitor has a new, innovative product or service • competitors have superior access to channels of distribution • taxation is introduced on your product • growing segments, sub-segments • a developing market such as the Internet. • mergers, joint ventures or strategic alliances • moving into new market segments that offer improved profits • a new international market • a market vacated by an ineffective competitor External

9. SWOT AnalysisInteractive Please prepare a SWOT analysis for the following products (figures to be estimated): Group A: A new detergent from Ariel for the German market that consists only of biological ingredients, but is 20% more expensive than regular Ariel. Group B: A new mobile telephone concept that allows to make calls free of charge, but with short 5 second ad‘s every minute Group C: The Mercedes-Benz global car brand Group D: A revolutionary product that allows tobe „beamed“ from one place to another; cost of production approx. 200.000 US$ per product

10. Marketing Objectives All marketing objectives have to be in line with your overall company purpose, vision and value statement. Example: Vision Reckitt Benckiser is about passionately delivering better solutions in household cleaning and health & personal care to customers and consumers, wherever they may be, for the ultimate purpose of creating shareholder value. This vision defines both our purpose and our values as a Company and encompasses our commitment to product quality and safety, customer service, innovation, global reach and corporate social responsibility. Values Our core values are a set of guiding principles through which we think, behave and conduct our business in order to deliver on our vision; they are: Achievement, Teamwork, Entrepreneurship, Commitment

11. Marketing ObjectivesVision and Value Statement (Example) We will provide branded products and services of superior quality and value that improve the lives of the world's consumers. As a result, consumers will reward us with leadership sales, profit, and value creation, allowing our people, our shareholders, and the communities in which we live and work to prosper. Innovation Is the Cornerstone of Our Success We Are Externally Focused We Are Strategically Focused in Our Work

12. Marketing ObjectivesInteractive Does your company have a vision statement? What are the purpose, vision and values of your company?

13. Marketing Objectives Marketing objectives have to be SMART: Specific - Be precise about what you are going to achieve Measurable - Quantify you objectives Achievable - Are you attempting too much? Realistic - Do you have the resource to make it happen?Timed - State when you will achieve the objective Marketing objectives for the operation you are responsible for have to be in line with overall company, brand, regional and/or global marketing objectives.

14. Marketing Objectives Marketing objectives can be defined in the short-term (1 year) and in the long-term (3-5 years)… • Here are some typical marketing objective categories: • Financial targets (turnover, profit, gross margin, cost of goods) • Introduce new products • Extend or regain market for existing product • Enter new territories for the company • Boost sales in a particular product, market or price range. Where will this business come from? Be specific. • Cross-sell (or bundle) one product with another • Enter into long-term contracts with desirable clients • Raise prices without cutting into sales figures • Refine/upgrade a product • Enhance manufacturing/product delivery

15. 4P Marketing Tactics How can we make our objectives happen?

16. 4P Marketing Tactics - Price Interactive What is the pricing strategy of your company or a certain product? Why did you choose this pricing strategy?

17. 4P Marketing Tactics - Place • There are five basic distribution channel decisions: • Do we use direct or indirect channels? (e.g. 'direct' to a consumer, 'indirect' via a wholesaler) • Single or multiple channels • Types of intermediary (wholesaler, agent, retailer, internet, etc.) • Number of intermediaries at each level (e.g. how many retailers in Southern Spain). • Which companies as intermediaries to avoid 'intrachannel conflict' (i.e. infighting between local distributors)

18. 4P Marketing Tactics - Place Interactive Which distribution channel would you choose if you plan to enter the German market with your companies product or service?

19. 4P Marketing Tactics - Promotion • The elements of the promotions mix are: • Personal Selling • Sales Promotion • Public Relations • Direct Mail • Trade Fairs and Exhibitions • Advertising • Sponsorship

20. 4P Marketing Tactics - Promotion Interactive You are the marketing manager for a product/service. Your annual turnover in Germany is 10 Mill. €.Your promotional budget is 2 Mill €. What is your target group?Which promotion channels would you choose and how much would you invest in each channel?Group A: Apple iPod MP3-PlayerGroup B: Steradent denture cleanerGroup C: Siemens air-conditioning machines for restaurantsGroup D: Expedia.de travel agency chain

21. 4P Marketing Tactics - Product Products are more than they seem to be. They have three levels: Actualproduct Non-tangibleproduct benefit Added valueas non-physicalpart of theproduct

22. 4P Marketing Tactics - Product You can either introduce new products on the market (NPD – new product development) or improve an existing product (EPD – existing product development). Typically products have a certain life cycle:

23. 4P Marketing Tactics - Product Products are positioned vs. competition on a positioning map:

24. 4P Marketing Tactics – ProductInteractive Please prepare a positioning map vs. major competitors for the following brands/products; think about the variables in advance: Group A: Mercedes-Benz cars Group B: Marlboro cigarettes Group C: Hugo Boss perfume Group D: Budweiser beer

25. Realise Sales Acquire Retain Sales Service Customer Service as Marketing Instrument What is customer service and what will it help? Customer Service skills, often referred to as "soft skills" are skills that virtually everyone needs to be able to compete is today's marketplace. • Good customer service skills help you to: • Keep your customers happy & satisfied! • Get new customers by word of mouth! • Sell more product with less effort! • Reduce problem situations and the cost of resolving them! • Increase the productivity and value of everyone in the company! • Keep your business stable and growing!

26. Why bother with customer service? • It costs between 3 and 10 times as much to replace • customers who have gone to a competitor than to keep • them. • Every $1 spent on Customer Service is $3 to $10 in • marketing! • Customers seldom make purchase decisions based on • price alone • Reduced prices do not always poach customers from • a competitor • Service and customer experience are of significant • importance • Many customers do not complain, they simply leave

27. Key points of customer service There are six main dimensions to Customer Service: • 1: Trust • Products • Quality • Security/Privacy • Reliable & Responsive • 2: Efficiency • Immediacy • Simplicity • Completeness • 3: Knowledge • Information • Advice • Awareness • 4: Control • Decisions • Personalisation • Flexibility • 5: Choice • Options • Value Network • Channels • 6: Commitment • Dedication • Collaboration • Loyalty

28. How to operationalise your customerservice programme Define Service Set Targets Establish Service Measure Service Customer Feedback • Never forget to gather customer feedback to continuously improver your service • You can obtain feedback via staff that is in touch with the customer or customer feedback questionnaires

29. Customer ServiceInteractive Please prepare a customer service plan for the following business operations: Group A: Metro - a large german supermarket chain Group B: Lufthansa Group C: Expedia.de – a large german travel agency Group D: McDonalds – fast food restaurants The plan should contain of SMART targets, list of the services you want to offer, top 5 customer service rules for your employees, how to measure the results.

30. Implementation of the Marketing Strategy A month-to-month agenda shows the implementation of all components of the marketing plan for the plan period.

31. The financial sections contain all relevant financial data for the plan period (as total or month-to-month overview). Financials Return of investment of special measures (NPD, new advertising strategy, new production facilities, etc.) have to be calculated separately. The financial overview is the basis for the agreed budget for the plan period.

32. A financial overview could look like this:kEURGross sales basic products 13.000Gross sales from NPD 1.500Gross sales total 14.500Cost of goods 6.500Gross margin 8.000TV-advertising 2.000Promotion 1.500PR 300NPD introduction 800Cost of marketing 4.600Product contribution 3.400Overhead costs 2.100Profit/loss 1.300 Financials

33. Marketing Control Process

34. Marketing Control Process • There are many approaches to control: • Market share analysis • Sales analysis • Quality controls • Budgets • Marketing research • Marketing information systems (MkIS) • Feedback from customers satisfaction surveys • Cash flow statements • Customer Relationship Management (CRM) systems • Sales per thousand customers, per factory, by segment • Location of buyers and potential buyers • Activities of competitors to aspects of your plan • Distributor support • Performance of any promotional activities. • Market reaction/acceptance to pricing policies • Service levels

35. Group Work Please prepare a full marketing plan for one of your group members product, brand or service. The presentation should contain all major aspects. Please estimate figures/data that are not available. The presentation will be held in front of the audience (flip chart). Presentation will be 5 minutes for each group. Please watch the time!

36. I wish you a lot of success with your future marketing plans!