Chapter 6_Marketing Plan

8/7/2019 Chapter 6_Marketing Plan

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MarketingMarketing

MEDEC UiTMMEDEC UiTM


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MarketingMarketing

SESSION OBJECTIVES

understand the marketing concept and the

role of marketing in small and medium-

sized businesses

determine target market, market size andmarket share in order to forecast sales

prepare a marketing plan

Attheendofthesession,studentsshouldbeableto:


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What is Marketing?What is Marketing?

The performance of business activities that direct the flow

of goods and services from producer to customer or user

-AMA 1946-

As the process of planning and executing the conception,

pricing, promotion, and distribution of ideas, goods, and

services to create exchanges that satisfy individual andorganizational objectives.

-American Marketing Association-

SEVERAL DEFINITIONS


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Marketing is a social and managerialprocess by which individuals and groups

obtain what they need and want through

creating and exchanging products and

value with others

-Kotler-


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Marketing DefinitionMarketing Definition

Marketing is defined activities that are carried out

systematically to encourage and increase sales of

products/services as long as the activities are in line

with religious and ethical practices.

-MEDEC-


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Marketing ConceptMarketing Concept

Philosophy of Marketing:

All activities are designed to satisfying customersneeds and wants, as well as contributing towards

profit for the business.

Thus,companiesshould identifyneedsandwantsoftargetmarketsanddeliverthesedesiredproducts

betterthantheircompetitors.


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OTHERAPPROACHES:

PRODUCT CONCEPT:

Focusingonproduction:devotingtoproductioncapability,

product quality,andcontinousproduct improvement.

Assumption: Customerspreferproductthatoffershighest

performance,featuresorquality.Bestproductwillbedemandedbyhemarket.

SELLING CONCEPT:

Focusingonpromotionefforts,aggressivesellingandcreatingsalestransaction.

Assumption:aggressivesellingleadstocustomerpurchase.

Sellwhatthecompanymakes.


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Steps in Preparing a MarketingSteps in Preparing a Marketing

PlanPlan1. Define the product concept

2. Identify the target market

3. Estimate market size4. Identify competitors

5. Estimate market share

6. Develop sales forecast7. Develop marketing strategies

8. Prepare a marketing plan


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Identifying Target MarketIdentifying Target MarketBusinesses need to focus their

marketing activities toward

certain groups of customers.These customers are chosen based

on the business ability to satisfy

the needs and wants of the groups.These selected customers are

known as the target market


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Target MarketTarget Market

Target market is defined as the

groups of customers that haveneeds and wants that can be

satisfied by the business through

the supply of goods or services


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Market Categories ConsumerMarket

Business Market (Industrial Market)

G

overnment Market/Agencies

Non-ProfitOrganizations/Bodies


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Steps in Identifying TargetSteps in Identifying Target

MarketMarket1. Identify products/services that

can be offered by the business

2. Market Segmentation

geographic segmentation

demographic segmentation

psychographic segmentation

3. Choose a target market from the

identified market segments


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Geographic Segmentation

Marketsub-groupingbasedonlocationof

customers

Example: Dividingacountrybasedon

zones,states,postalcodes,districtetc.


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Demographic Segmentation Marketsub-groupingbasedondemographic

factors

Example: Dividingamarketbasedon

factorssuchasgender,age,educationlevel,

ethnicbackground,religionetc.


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Psychographic Segmentation Marketsub-groupingbasedon

psychologicalfactors.

Example: Dividingamarketbasedon

factorssuchaslifestyle,socialclass,etc.


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Importanceofidentifying

the Target Market

Notpractical nooneproductcansatisfyneedsorwantsofallconsumers.

Impossibletosatisfyeverybody

Limitedbusinessresources

Focusefforts betterutilizationofresources


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Market SizeMarket Size

This includes purchases of competitors

products within the same market. Market

size is normally stated in monetary term or

units. It can be calculated daily, weekly,monthly or yearly.

Marketsizereferstothetotal potential

purchase of the target market.


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CompetitorsCompetitors

The entrepreneur should analyze the

strengths and weaknesses of the

competitors in terms of size, experience,years in business, financial ability and

product line

Competitorsrefertootherbusinessesthat

offersimilar,substitute oralternative

products/servicestothesametargetmarket.


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Market ShareMarket Share

Marketsharereferstotheestimated

potentialsalesofthebusinessaftertakingintoconsiderationthemarketsizeand

competitors influences. Marketshare is

oftenrepresented intermsofpercentageofpotentialmarketsizedowned.


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Sales ForecastSales Forecast

Sales forecast is expected purchases

from the identified target market. It is

quoted in units or in Ringgit f o r a

period of a year or a month


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Sales ForecastSales Forecast

Customers awareness

Seasonal factors

Characteristics of the business sector

In forecasting sales, the entrepreneur

should consider the followings:

Note: Prepare monthly for the first year and annually for

the second and third year


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Estimatingyoursales What istheacceptedaverageprofitmargin?

Howmuch isyourvariableandfixedcosts?

Calculateyourminiumsalesrequiredforoneyear.


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Calculatingprofit Margin GrossProfit Margin = Sales COSG

Sales

Minimum Sales Required = Fixed Costs

Desired Margin


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SalesForecast:Factorstoconsider

Customerawarenessofbusiness & product

Seasonalfactors

Characteristicsofthebusinessactivity

durationtoharvest

Strengthofcompetitors


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Developing Marketing StrategiesDeveloping Marketing Strategies

In order to achieve its sales forecast, the

entrepreneur must develop appropriate

marketing strategies to generate sales fromthe target market. Factors to consider:

Product/Service

Price

Place (distribution)

Promotion


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Product and Service StrategiesProduct and Service Strategies

Product Design/Service Package

Packaging

Brand Name

After Sales Service


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Pricing StrategiesPricing StrategiesValue-based pricing- perceived value

Cost-based pricing

Cost-plus pricing - Price = Cost + Mark-up

Break-even pricing - Priced to equate cost

Competition-based pricing priced based on

the going rate


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Distribution StrategiesDistribution Strategies

Manufacturer Wholesaler Retailer Consumer

Manufacturer Wholesaler Consumer

Manufacturer Retailer Consumer

Manufacturer Consumer


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Promotion StrategiesPromotion Strategies

Advertising

e.g.newspaper,television,radio,

magazinesSalespromotion

e.g.premiums,patronagerewards,

point-of-purchasepromotions,

couponsPublicrelations

e.g.sponsorship


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The Marketing BudgetThe Marketing Budget

Fixed asset Signboard

Transportation (Buy)Monthly expenditure

Salaries and fringe benefits of marketing staff

Transportation (Rent & Maintenance)

Other expenditures

Advertisement/promotion

Documents

Chapter 6_Marketing Plan