Chapter 7 - Marketing Plan

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Chapter 7:

The Marketing Plan

Tour 128Entrepreneurship

andBusiness Planning


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Chapter 7: The Marketing Plan

A. The Market NeedsB. SWOT Analysis

C. Detailed Marketing Strategies (MarketingMix)

A. Product

B. Price

C. Promotion

D. Place

D. Terms of Sale and Credit Policy

A. Trade Credit Approvals


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E. Creating and Building Competitive Advantage

1. Competitive Advantage

2. Positional Advantage

3. Sources of Advantage4. Distinctive Capabilities

5. Proposed Investment

6. Drivers of the Activities Resulting to

Competitive Advantage7. Maintaining Competitive Advantage

8. Most Sustainable Source of Advantage


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Marketing Plan

A Marketing Plan includes everything from

understanding your target market and your

competitive position in that market, to how

you intend to reach that market (your tactics)

and differentiate yourself from your

competition in order to make a sale.


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Marketing Plan

The Marketing Plan outlines the specific

actions you intend to carry out to interest

potential customers and clients in your

product and/or service and persuade them to

buy the product and/or services you offer.


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Marketing Plan

Marketing is the way that a business attracts ,

keeps and sells to customers.

There is NO UNIVERSAL MARKETING PLAN,

each business will have a different strategy to

advertise to their customers.


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Marketing Plan

A Market is one of many varieties of systems,institutions, procedures, social relations andinfrastructure whereby parties engage in

exchange.

Many companies today have a Customer

Focus (Market Orientation). This implies thatthe company focuses its activities andproducts on consumer demands.


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Marketing Plan

Market Research is for discovering what

people want, need and believe; and how they

behave. It is a key factor in obtaining an

advantage over competitors and is necessary

in order to determine market needs that can

and should be met.


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A. Product

B. Price

C. Promotion

D. Place




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Market Needs

Your companys target market are the

customers most likely to purchase your

products. The key is to develop a typical

profile of your average customer and

determine their primary needs.


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Market Needs

All marketing should be based on underlyingneeds. For each market segment included inyour strategy, explain the market needs that

lead this group to buy your product or service.

Did the need exist before the business was

there? Are there other products or servicesthat offer different ways to satisfy this sameneed?


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A. Product

B. Price

C. Promotion

D. Place




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SWOT

ANALYSIS


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SWOT Analysis

SWOT Analysisis an analytical method, whichis used to identify and categorize significant

internal factors (i.e. strengths and

weaknesses) and external factors (i.e.opportunities and threats) an organization

faces.


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SWOT Analysis

STRENGTHS They are your companys

internal strengths.

what does your unique structure and/or unique

employee team help you be the best at?

What are your advantages as an organization?

What do you do better than anyone else?

What relevant resources do you have access to?


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SWOT Analysis

If you have difficulty in identifying strengths, try

writing down a list of your organizations

characteristics. Some of these will be your

strengths.

Think about them in relation to your competitors.

If all of your competitors provide high qualityproducts, then a high quality production process

is not a strength but a necessity.


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SWOT Analysis

WEAKNESSES They are your companysinternal weaknesses.

In what areas do your unique structure and/orunique employee team hold you back?

What could you improve?

What do you do badly?

What should you avoid?

What factors can lose you sales?


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SWOT Analysis

Be realistic and face unpleasant truths as soon

as possible.

Consider this: Do other people seem to

perceive weaknesses that you don't see? Are

your competitors doing any better than you?


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SWOT Analysis

OPPORTUNITIES They are external

opportunities for your company

Whats out there that you could easily take

advantage of for your betterment?

What good opportunities can you spot?

What interesting trends are you aware of?


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SWOT Analysis

Useful opportunities can come from:

Changes in technology and markets on both a

broad and narrow scale

Changes in government policy related to your field

Changes in social patterns, population profiles,

lifestyles, etc.

Local Events


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SWOT Analysis

THREATS They are external threats to your

company

Whatsout there that can potentially destroy your

business if yourenot careful?

What obstacles do you face?

What is your competition doing?

Is changing technology threatening your position?

Could any of your weaknesses seriously threaten

your business?


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SWOT Analysis

Strengths and Weaknesses

The Internal Environment - the situation

insidethe company or organization.

For example, factors relating to products, pricing,

costs, profitability, performance, quality, people,

skills, adaptability, brands, services, reputation,

processes, infrastructure, etc.

Factors tend to be in the PRESENT.


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SWOT Analysis

OPPORTUNITIES and STRENGTHS

The External Environment - the situation

outside the company or organization.

For example, factors relating to markets, sectors,

audience, fashion, seasonality, trends,

competition, economics, politics, society, culture,

technology, environmental, media, law, etc.

Factors tend to be in theFUTURE.


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A. Product

B. Price

C. Promotion

D. Place




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Detailed Marketing Strategies

(Marketing Mix)

AMarketing Mix is a general phrase

used to describe the different kinds

of choices organizations have to

make in the whole process of

bringing a product or service tomarket.


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(Marketing Mix)

When marketing products, firms need to

create a successful mix of:

The right product

Sold at the right price

In the right place

Using the most suitable promotion.


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(Marketing Mix) The right product ( product has to have right

features, it must look good and work well)

Sold at the right price (consumers need to buy in

large numbers to produce a healthy profit) In the right place (right place in the right time,

making sure that goods arrive when and where

they are wanted)

Using the most suitable promotion (target market

needs to be aware of the existence and availability

of such product)


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(Marketing Mix) - PRODUCT PRODUCT - The product is the central point on which

marketing energy must focus. It is seen as an item that

satisfies consumer demands. It is a tangible good or

intangible service.

Marketing plays a key role in determining:

the appearance of the product - in line with the

requirements of the market. the function of the product - products must address the

needs of customers as identified through market

research.


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(Marketing Mix) - PRODUCT What does the customer want from the product/service?

What needs does it satisfy?

What features does it have to meet these needs?

Are there any features you've missed out?

Are you including costly features that the customer won't

actually use?

What does it look like? How will customers experience it?

What is it to be called? How is it differentiated versus your competitors?

What is the most it can cost to provide, and still be sold

sufficiently profitably?


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(Marketing Mix) - PRICE

PRICE this will create sales revenue, all the

others are costs. Price is determined by the

discovery of what customers perceive is the

value of the item on sale. The pricing policy of

businesses will vary according to time and

circumstances.

D t il d M k ti St t i


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(Marketing Mix) - PRICE What is the value of the product or service to the

buyer?

Are there established price points for products or

services in this area?

Is the customer price sensitive? Will a small decrease in

price gain you extra market share? Or will a small

increase be indiscernible, and so gain you extra profit

margin? What discounts should be offered to trade customers,

or to other specific segments of your market?

How will your price compare with your competitors?


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(Marketing Mix) - PROMOTION

PROMOTION the business of

communicating with customers. It provides

information that will assist them in making a

decision to purchase a product or service.

It comprises of elements like advertising,

public relations, sales organization and sales

promotion.


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(Marketing Mix) - PROMOTION Advertising covers any communication that is paid for, from

cinema commercials, radio and Internet advertisements through

print media and billboards.

Public relations is where the communication is not directly paidfor and includes press releases, sponsorship deals, exhibitions,

conferences, seminars or trade fairs and events.

Word-of-mouth is any informal communication about theproduct by ordinary individuals, satisfied customers or people

specifically engaged to create word of mouth momentum. Sales

staff often plays an important role in word of mouth and public

relations


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(Marketing Mix) - PROMOTION

Where and when can you get across your marketing

messages to your target market?

Will you reach your audience by advertising in the press, or

on TV, or radio, or on billboards? By using direct marketingmailshot? Through PR? On the Internet?

When is the best time to promote? Is there seasonality in

the market? Are there any wider environmental issues that

suggest or dictate the timing of your market launch, or thetiming of subsequent promotions?

How do your competitors do their promotions? And how

does that influence your choice of promotional activity?


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(Marketing Mix) - PLACE PLACE concerned with various methods of

transporting and storing goods, and then making

them available for the customer in a place

convenient. This involves the distribution system.

Distribution is achieved by using one or

more distribution channels, including:

Retailers

Wholesalers

Distributors / Sales Agents

Direct (e.g. via e-commerce)


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Terms of Sale and Credit Policy

Terms of Sale- the delivery and payment terms agreed

between a buyer and a seller.

In international trade, terms of sale also set outthe rights and obligations of buyers and sellers as

applicable in the transportation of goods.

http://www.michaels.com/Terms-of-Sale/Terms-of-

Sale,default,pg.html

http://www.standardtermsofsale.com/


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Credit Policy - Guidelines that spell out how to decide which

customers are sold on open account, the exact payment

terms, the limits set on outstanding balances and how to deal

with delinquent accounts.

Though most consumers expect to pay cash or use a credit

card when making a purchase, commercial customers typically

want to be billed for any products and services they buy. You

need to decide how much credit you're willing to extend themand under what circumstances.


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As you create your policy, consider the link between credit andsales. Easy credit terms can be an excellent way to boost sales,

but they can also increase losses if customers default. A typical

credit policy will address the following points:

Credit limits.You'll establish figures for the amount of credit

you're willing to extend and define the parameters or

circumstances.

Credit terms. If you agree to bill a customer, you need to

decide when the payment will be due. Your terms may alsoinclude early-payment discounts and late-payment penalties.

Deposits.You may require customers to pay a portion of the

amount due in advance.


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Credit cards and personal checks.Your bank is a good resource

for credit card merchant status and for setting policies regarding

the acceptance of personal checks.

Customer information. This section should outline what you

want to know about a customer before making a credit decision.Typical points include years in business, length of time at

present location, financial data, credit rating with other vendors

and credit reporting agencies, information about the individual

principals of the company, and how much they expect to

purchase from you. Documentation. This includes credit applications, sales

agreements, contracts, purchase orders, bills of lading, delivery

receipts, invoices, correspondence, and so on.


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Trade Credit Approvals

Trade Credit - An arrangement to buy goods or services

on account, that is, without making immediate cash

payment. Trade credit is the credit extended to you by

suppliers who let you buy now and pay later.

Any time you take delivery of materials, equipment or

other valuables without paying cash on the spot, you're

using trade credit.

The supplier provides the customer with an agreementto bill in a stipulated number of days.


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Competitive Advantage

An advantage a firm has over its competitors.It gives a company an edge over its rivals and

an ability to generate greater value for the

firm.

It can come in the form of resources,

technology, specialized skills, betterdistribution networks, etc.


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Positional Advantage

Positional Advantages must describe the firmsposition in the industry as a leader in either

cost or differential.

Cost Advantagea firmsability to produce goodor service at a lower cost than competitors, gives

ability to sell at a lower price.

Differentiation Advantagewhen firmsproducts

or services differ from competitors and are seenby customers as better or of higher value than a

competitorsproducts.


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Sources of Advantage

These sources encompass a variety of

business and marketing channels, including

customer service, location or real estate,

operational efficiency, product qualities, andemployee talent.


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Distinctive Capabilities

Is a business strategy to which a successful

company have attributes other firms cannot

have and replicate.

Architecture structure of relational contacts

within or around the organization (customers,

suppliers, employees).

Reputationstrong corporate reputation Innovation a strong capability to generate

technological innovations


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Proposed Investment

Document prepared by the management of a

firm for prospective investors or lenders. It

details the (1) nature of the business, (2)

growth potential, (3) objectives and theamount of finance required to realize them,

(4) promised collateral or security, and (5) a

plan for timely repayment of interest andprincipal

D i f th A ti iti R lti


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Drivers of the Activities Resulting

to Competitive Advantage

M i t i i C titi


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Maintaining Competitive

Advantage

In order to build and maintain a sustainable,

competitive advantage, you need to have

Competitive Products (i.e., as good as your

competition); Superior Service (better than

your competitors); andGood Relationships.

How can you maintain those advantages?

M t S t i bl S f


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Most Sustainable Source of

Advantage

Competitive Products Goods are usually

most susceptible to replication in an even

lower price. This is the most competitive

category and as a result, most price sensitive.

Any advantage gained here will not be

sustainable.

M t S t i bl S f


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Advantage

Superior Services services are a little easier

to maintain as an advantage over competitors.

They are intangible, therefore less price

sensitive. You must be able to deliver service

more superior than competitors. Though

additional service costs money.

M t S t i bl S f


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Advantage

Good Relationships - The area that doesnt

cost a fortune, and generates big rewards for

those who use it. You care, and you need and

want to demonstrate this care to your

customers. This is the basis for true

sustainable competitive advantage.

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Chapter 7 - Marketing Plan