8. the marketing plan

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McGraw-Hill/IrwinEntrepreneurship, 7/e Copyright 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 8


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Marketing Plan

Written Statement Of Marketingobjectives, strategies and

Activities to be followed in

Business Plan


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Marketing Plan

MP responds to three Qs

Where have we been ?Where are we going ?

How do we get there ?

E conduct market research to respond to these Qs

Research involves Secondary/ Primarydata process

Prior to Marketing Plans preparation:

INDUSTRY ANALYSIS and COMPETITOR ANALYSIS


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Marketing Research for the New Venture

Who will buy the product or service ?

What is the size of the potential market ?

What price should be charged ?

what is the most appropriate distribution

channel ? What is the most effective promotional strategy

to reach and inform potential customers ?

Market Research involves gathering of data in order

to determine such information:


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Four Steps In Market Research

Step One: Defining the Purpose or Objectives

Step Two: Gathering Data from Secondary Sources

Step Three: Gathering Information from Primary Sources

Step Four: Analyzing and Interpreting the Results


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(a) Defining the purpose or objectives

Sit down & Make a list of the information that will

be needed to prepare the marketing plan.

Ex: E may think there is a market for his product but is

not sure who the customers will be

So ask people what they think of the product or service

and if they would buy it & background demographics

How much potential customers would be willing to

pay for the product or service Where the potential customers would prefer to

purchase the product or service

Where the customer would expect to hear about or

learn about such a product or service


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(b) Gathering data from secondary sources

Newspaper articles-

Libraries:Government agencies-

Trade magazines: dept & Chamber of

commerceInternet

Dept & Chamber of

Commerce

Local Banks/ Dept

of Labor

Local Media


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(c ) Gathering information from primary sources

Data collection procedures

Observation: record customers buying behaviors

interviewing: telephone- Mail- personal

focus groups: 10-12 potential customers

Questionnaire: sample questionnaire


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(d) Analyzing and interpreting the results

Can be hand-tabulated or entered on a computer

Results should be evaluated and interpreted in

response to the research objectives

Data can be cross-tabulated in order to provide

more focused results.

Example: Entrepreneur compare results of Q by

different Age, Occupation, Location- fine tuning canprovide valuable insights particularly regarding the

segmentation of the market


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Understanding the Marketing Plan

Designed to provide answers to three basic questions: Where have we been?(operational plan)

Where do we want to go (in the short term)?

How do we get there?

History of marketplace

Marketing Strengths & Weaknesses of the firm

Market Opportunities & Threats

Q addresses marketing Objectives & Goals- in next 12 months

Q discusses Marketing strategy

implementation- when it will occur- who will be

responsible for monitoring


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Characteristics of the Marketing Plan

A marketing plan should:Provide a strategy.

Be based on facts/assumptions

Be simple and short.

Be flexible.

Specify criteria for control.


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The Marketing Mix

Combination of product, price, promotion, and distribution

and other marketing activities needed to meet marketingobjectives.

Marketing Mix

Variable

Critical Decisions

Product

Quality of components or materials, style, features,

options, brand name, packaging, sizes, service availability,

and warranties.

PriceQuality image, list price, quantity, discounts, allowances for

quick payment, credit terms, and payment period.

Channels of

distribution

Use of wholesalers and/or retailers, type of wholesalers orretailers, how many, length of channel, geographic

coverage, inventory, and transportation.

Promotion

Media alternatives, message, media budget, role of

personal selling, sales promotion (displays, coupons, etc.),

and media interest in publicity.


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eps n repar ng e ar e ngPlan

Define the business situation. Define the target market: opportunities and threats.

Consider strengths and weaknesses.

Establish goals and objectives. Define marketing strategy.


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Defining the Business SituationWHERE HAVE WE BEEN?

Information for a new venture:

Describe how the product or service was developed.

Why it was developed.(satisfy consumers needs)

Information after a new venture has started up:

Present market conditions.

Performance of the companys goods and services.

Future opportunities or prospects.


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Defining the Target Market/ Opportunities & Threats

Target market: specific group of potential customerstoward which venture aims its marketing plan.

Knowledge of this provides a basis for determining the

appropriate marketing action strategy.

Market segmentation: process of dividing a market

into definable and measurable groups for purposes

of targeting marketing strategy

Otherwise E have to identify a product or service that

would meet the needs of everyone in the marketplace

Allows the entrepreneur to more effectively respond to

the needs of more homogeneous consumers.


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Process of Segmenting and Targeting

Decide on general market or industry to pursue. Henry ford manufactured a single product(one color,

one style, one size, etc)

Reebok Discovered that many customers who bought running shoeswere not athletes (comfort & Style)

Divide market into smaller groups based on:

Characteristics of the customer Geographic

Demographic

Psychographic

Buying situation Desired benefits (e.g., product features)

Usage (e.g., rate of use)

Buying conditions

Awareness of buying intention


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Process of Segmenting and Targeting (2 of2)

Select segment or segments to target. Develop a marketing plan integrating product, price,

distribution, and promotion.

Restaurant market is segmented by state,type of restaurant (fast food, family)

R part of hospital, school, company etc


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Establishing Goals and Objectives

Establish realistic and specific goals andobjectives.

Marketing goals and objectives respond to the

question: Where do we want to go?.

( market share, profits, sales, number of distributors,

new product launch, pricing policy, sales promotion

& advertising support).

Number of goals or objectives can be limited tobetween six and eight.

f S


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Defining Marketing Strategy and Action

Programs (1 of 2)

Specific activities outlined to meet the venturesbusiness plan goals and objectives.

Product or service

May consider more than the physical characteristics.

Packaging, brand name, price, warranty, image, service,

delivery time, features, style, and even the Web site.


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Pricing

Costs

Competition Margins or markups

D fi i M k ti St t d A ti


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Defining Marketing Strategy and Action

Programs (2 of 2)

Distribution

Provides utility to the consumer.

Must also be consistent with other marketing mix

variables.


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Promotion

Entrepreneur needs to inform potential consumers

about the products availability or to educate the

consumer

Methods include: print, radio, or television, Internet,

direct mail, trade magazines, or newspapers.


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Marketing Strategy: Consumer vs.

Business-to-Business Markets

In B2C: Entrepreneur sells product/service to consumers.

Indirect and Direct channel of distribution.

In B2B:

Entrepreneur sells product/service to businesses.

Direct channel of distribution.

Marketing Strategies for B2C and B2B aredifferent.


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Budgeting the Marketing Strategy

Costs should be clear.

Assumptions if necessary are to be stated clearly.


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Implementation of the Market

Plan

Not a formality; it is a commitment by anentrepreneur to a specific strategy.


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Monitoring the Progress of Marketing

Actions

Tracking specific results (Sales data by product,territory, sales rep, outlet) of the marketing effort.

In addition; prepare for contingencies and natural

causes.

Adjustments in marketing plan are proportional to

weakness or strength of marketing plan.

8. the marketing plan

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