XYZ Midwest Communications
Marketing Plan Example
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How to Use This Example
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This Marketing Plan Example was designed to work in conjunction with the How to Write an Effective
Marketing Plan Quick Start Guide and the Marketing Plan Template for Avaya BusinessPartners. This
example serves as the basis of a Marketing Plan, outlining the relevant sections as well as
recommendations and examples for the length and content of each section, whereas information about how
to compose the body of the plan is found within the Quick Start Guide. Please refer to the pages noted in
red to learn more about each topic. (For example, to find information about what is a Mission Statement is
and how to write one please refer to page [4] of the Quick Start Guide.)
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2 Marketing Plan
A. Executive Summary – Purpose [Page 4]
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a. Mission Statement
XYZ Midwest Communications is a provider of corporate communications solutions and
services. Over the past 12 years XYZ Midwest Communications has built up a base of over
1,100 customers in education, hospitality and financial markets. XYZ Midwest
Communications is one of the largest enterprise and small to medium enterprise (SME)
communications providers in the Midwest quickly expanding into northeast markets.
XYZ Communications sole focus is to provide leading edge communications solutions at
a competitive price with long-term stability and support for the future.
Our expertise allows us to provide enterprise and SME with communications solutions in
the following disciplines:
•
Unified Communications
•
Mobility
•
IP Telephony
•
Contact Center
b. Company History
XYZ Midwest Communications was founded in 1997 in Columbus, Ohio by John Doe
Starting as a local network and telephone system provider for SME companies, XYZ
Midwest Communications expanded in 2000 as a privately held firm specializing as a
provider of IP Office solutions to SME companies in the greater Ohio area including
Cleveland, Cincinnati, and Columbus.
Currently XYZ Midwest Communications, headquartered in Columbus, Ohio has over 200
employees and sub contractors serving customers throughout the Midwest region.
3 During the early 2000’s, XYZ devoted its resources to expanding its core set of products
beyond the SME space into enterprise level companies with the need of a Unified
Communications platform.
In the late 2007 XYZ began to expand XYZ’s geographic footprint beyond the borders of
Ohio to the great Midwest, offering SME and enterprise solutions in Chicago, Milwaukee,
Detroit and Philadelphia.
Towards the end of 2008, XYZ has partnered with a leading worldwide communications
partner to offer a vast range of maintenance and service plans for all communication
platforms licensed through XYZ.
c. Resources and Competencies
XYZ Midwest Communications is the Midwest’s leading provider of forward thinking
communications solutions that provide the most comprehensive and cost saving options
for SME companies.
d. Environment
Headquartered in Columbus, Ohio, XYZ Midwest Communications has branch offices in
five major cities including Cleveland, Chicago, Philadelphia, Detroit, and Milwaukee.
The current economic recession has stifled growth by making prospective customers
unwilling to commit to long-term capital investments. To mitigate the loss of net new
revenue, XYZ has focused its efforts on maintaining and retaining the current customer
base through customer loyalty and migration programs is a top priority.
4 B. Situational Analysis [Page 5]
a. Product Analysis
XYZ Midwest Communications is a single-source provider of leading-edge
communications solutions and support services for businesses ranging from 5 to 10,000+
employees per location. XYZ’s products and services are integral to XYZ’s customers'
success and represent the leading edge of technology.
i. Current products
Unified Communications:
Unified Communication (UC) will enhance revenue and improve customer
service through a wide range of product benefits. UC allows mobile, remote and
office workers to access information and communications methods including
e-mail, voice mail and mobile services to be more productive by helping
employees to make quicker decisions.
Mobility:
The terms mobile worker and mobile office describe a workplace that is
transforming the way companies do business. The mobile office allows
companies to take advantage of network solutions and execute business almost
anywhere. The freedom to work on the fly increases productivity and revenues.
IP Office:
IP Office is a highly modular IP telephony system designed to meet the needs of
home offices, standalone businesses, and networked branch and head offices for
small and medium enterprises. The award-winning IP Office gives growing
companies a complete solution for telephony, messaging, networking,
conferencing, and customer management.
Contact Center:
Contact Centers communicate with customers in a number of ways, but who
initiates the contact defines the type of Contact Center. If the outside world
initiates contact, then the Contact Center is said to be an inbound contact center.
5 Conversely, if the contact center itself is responsible for initiating contact, then
the Contact Center is said to be an outbound Contact Center.
ii. Product pricing
XYZ Midwest Communications’ competitive pricing strategy is based upon
extensive analysis and research compiled from not only the target market, but
also the competition. XYZ also prices solutions in packages that include various
benefits to SMB or enterprise customers.
iii. Product placement/distribution
As an Avaya BusinessPartner, XYZ Midwest Communications distributes a mix
of industry leading communications products directly from the manufacturer to
the end-users within the SME space. We also offer complete services and
partner-certified support for those business communications systems, from
planning through installation and maintenance to internal employees and network
of approved contractors.
iv. Product promotion
The key objectives of marketing are to raise brand awareness, generate leads,
drive revenue, and enhance customer loyalty. The following methods are use to
achieve these objectives:
•
•
•
•
•
•
•
•
•
•
•
Search Engine Marketing/Search Engine Optimization
Landing Page Optimization
E-mail Marketing
Mobile Marketing
Guided Voice Mail
Web Portal
Events
Webinars
Print Advertising
Customer Referrals
Customer References
6 b. Current Target Markets
i. Marketing Approach
XYZ Midwest Communications has identified seven markets as primary and
secondary targets for growth in all product lines.
Primary markets: Defined as new growth opportunity markets in which
XYZ Midwest Communications has a presence but not a dominating
footprint: Chicago, Milwaukee, Detroit, and Philadelphia.
Secondary markets: Current base markets with a strong footprint for
customer retention focus without large growth opportunities: Cleveland,
Columbus, and Cincinnati.
ii. Demographic/psychographic profile
XYZ Company is targeting two organizational levels, both of which have
purchase processes in place that guide XYZ’s demo/psychographic profiles. In
most cases, the decision to purchase XYZ products and services is made by a
management-level technology expert responsible for the selection, installation
and maintenance of company communication resources, and more importantly,
the return on those investments.
Enterprise
Companies with 2,500 or more employees with over 30 years in the hospitality
and financial sectors. Typically, XYZ’s target in these organizations is a Chief
Information Officer (CIO), IT Director or similar who is a 35-50 year old with
hands-on professional experience with technology systems. This target is
responsible for company-wide purchases, large budgets, and organizational
returns on technology investments. They are often time-stretched, often troubleshooting instead of planning, and must always find a balance among strategy,
implementation, and cost.
7 SME
Companies in the hospitality and education sector. Typically XYZ target in these
organizations is an IT Director, facilities director or similar who is a 30-50 year old
male with a range of professional experience in technology systems - from amateur
to expert. This target is responsible for recommending company-wide purchases,
negotiating contracts, and technology troubleshooting. They're time-stretched from
wearing different hats often only partly focused on communications and they are
always attempting find a balance between needs and cost. However, they are more
flexible than larger companies and can make purchase decisions quickly.
iii. Targeted Customers
The end-users of XYZ’s products and services (as opposed to the purchase
decision maker) are the employees of these companies who want their
communications to be simple, powerful and "invisible." However, every employee's
needs vary, from the salesperson on the road to the administrator at the entrance,
so it is impossible to generalize how, when or why they'll use XYZ’s products.
However, all target customers recognize that XYZ Midwest Communications
products and services can help them be more efficient, connected, and flexible.
They want a "trusted advisor" with experience planning and implementing
communication solutions quickly and at a competitive price.
iv. Purchase Process
At the SME level, the purchase process varies. It can be one IT Director
researching alone or several parties involved in research, procurement and
approval. The advantage of SME can be the speed and flexibility of the decisionmaking process.
At the Enterprise level, there is a more formalized purchase process that often
involves several departments and related approvals. In most cases, budgets for
large projects are secured by the beginning of the fiscal year and projects are bid
to several vendors before moving into the approval phase.
In both cases, demonstrating relevant experience, competitive pricing, and
proven returns on investment are crucial to the purchase process.
8 v. Market Size Estimates
Market size estimates are derived from the established TAMs per capita for each
individual market for both SME and Enterprise.
c. Competitor Analysis [Page 6]
i. Direct Competitors
9 ii. Competitor Strengths and Weaknesses
ABC Communications:
Primary Markets:
Chicago, Milwaukee
Secondary Markets:
Cleveland
Primary focus:
Hospitality, enterprise level
Secondary Focus:
Financial, enterprise level
Strengths:
Market share, legacy relationships
Weaknesses:
Customer service, depth of services offered
Chicago Telecom:
Primary Markets:
Chicago, Milwaukee
Secondary Markets:
Philadelphia
Primary focus:
Financial, enterprise level
Secondary Focus:
None
Strengths:
Customer service, customer satisfaction
Weaknesses:
Persistent management changes and
resulting lack of strategic direction
Communications MidAmerica
Primary Markets:
Detroit, Milwaukee
Secondary Markets:
Chicago
Primary focus:
Financial, SME
Secondary Focus:
Hospitality, SME
Strengths:
Customer service, aggressive price promotion
Weaknesses:
Customer turnover rate, low brand recall
Telecom & Technologies
Primary Markets:
Philadelphia
Secondary Markets:
Cleveland
Primary focus:
Education, Financial, Govt, Enterprise
Secondary Focus:
Hospitality, SME
Strengths:
Technology expertise, popular advertising
Weaknesses:
Limited maintenance/services offering
10 Milwaukee Telecom
Primary Markets:
Milwaukee
Secondary Markets:
Chicago
Primary focus:
SME
Secondary Focus:
None
Strengths:
Technology expertise, Customer Service
Weaknesses:
No enterprise focus
SME Telecom
Primary Markets:
Chicago
Secondary Markets:
Cleveland
Primary focus:
Financial
Secondary Focus:
Hospitality
Strengths:
Outside Sales Force, pricing
Weaknesses:
Limited maintenance/services offering
iii. Competitive Trends
Primary markets: Competitors in these markets rely heavily on existing
relationships and word-of-mouth (viral) advertising. Also, there seems to be little
focus among competitors on upsell opportunities and demonstrating the value of
improved communications technologies and services.
Secondary markets: Competitors in these markets are increasingly attempting
to erode XYZ's market share by combining aggressive promotional tactics with
customer service. However, this is a short-term solution and that XYZ’s
Communications steady focus on retaining profitable and satisfied customers will
result in more than enough growth to compensate.
11 d. Financial Analysis
i. Current Sales Analysis
XYZ’s average total Sales for SME and Enterprise is $1 Million per year. 4% of
Total Revenue ($40,000) goes towards XYZ’s marketing expenses.
ii. Profitability Analysis
Gross Revenue $1,000,000
Total Sales
Cost of goods =
$700,000
=
Product
Head Count
Shipping
Travel
Marketing/Advertising
12 Profit
$300,000
e. Business/Marketing Analysis [Page 7]
XYZ’s strength in Ohio markets will require reinforcement as the economic downturn
continues to be felt. XYZ’s renewed focus on loyalty and retention should provide that
reinforcement. XYZ’s growth in newer markets will also focus on customer relationship
management while also building awareness for XYZ’s expanded presence.
i. Economic
The current economic downturn is XYZ’s biggest economic challenge. Many
customers are in "wait and see" mode and unwilling to invest in large technology
purchases, not matter how vital. By focusing on services for XYZ Company’s
current customer base, XYZ Company will stay top of mind and be wellpositioned for growth as the economy recovers.
ii. Regulatory or Political
As providers of communications technology for businesses, XYZ’s biggest
regulatory and/or political consideration relates to privacy and security. XYZ’s
products and services enable the exchange and storage of sensitive information
and must follow applicable state and federal regulations. While the ultimate
responsibility for security and privacy rests with the customer, XYZ must continue
to position ourselves as thought leaders in this area.
iii. Technology
The one constant in technology is change. Products get exponentially more
powerful as quickly as they become "dinosaurs." Expertise requires continuous
education. This flux has created a familiar struggle in the minds of XYZ’s
customers: the need to balance technology with investment. The most valuable
services we can offer XYZ’s customers are accurate Return on Investment (ROI)
analysis, flexible solutions, and an empathetic approach that recognizes
customers' willingness to invest only as much as can be financially justified within
the larger context of company profitability.
13 iv. Legal
As stated previously, XYZ Company’s only unique requirements outside of
normal adherence to business/commercial law are state and federal regulations
regarding privacy and security.
v. Geographic
XYZ is headquartered and focused on the Midwest region of the U.S. with plans
to expand into the Northeast region in the future. XYZ’s expansion into larger
cities like Chicago and Philadelphia will require more rigorous marketing analysis
for those locations to ensure that XYZ’s money is being used effectively in those
highly competitive markets.
vi. Seasonal
Seasonality only has a limited impact on XYZ’s business operations. Winter
storms occasionally bring enough snow to cause power outages and related
complications with communications systems. It's up to each regional office to
sufficiently staff up during these times. We will also be testing some seasonal
marketing to XYZ’s database to see if the impact of these occasional storms
affects purchase decisions.
vii. Vertical or Market Specific
One trend to watch will be the rise of wireless connectivity. As people begin to
rely more on wireless technology for their communications, we will have to stay
ahead of the curve and offer solutions that maximize the value of wireless. Also
where is the opportunity by vertical? With rapid healthcare expansion of long
term care for the baby boomer generation this is a vertical to focus on.
14 f.
Summary of Current Situation
i. SWOT analysis (Strengths, Weaknesses, Opportunities and Threats)
15 C. Marketing Strategy and Objectives [Page 8]
a. Marketing Strategy
XYZ will change its focus to differentiate itself from the pack and improve the business by
satisfying the real need of SME and Enterprise businesses for reliable communications
technology including hardware, software, and all related services.
i. Market Growth
Anticipated change for 2009:
•
•
•
•
•
•
•
•
Chicago
4%
Detroit
- 5%
Cleveland
2%
Cincinnati
2%
Milwaukee
10%
Indianapolis
10%
Columbus
1%
Philadelphia
4%
ii. New Market Development
Chicago
Target enterprise level customers whose current provider is having unanticipated
supply problems with their partner because of a looming bankruptcy.
Milwaukee
Focus on the SME market with new IP telephony products through a strong push
of the sales force on the ground using local events and road shows.
Indianapolis
Lead generation campaign focusing on UC services to begin moving the market
into a primary focus with tactics such as EM, DM, GVM and SEO.
Philadelphia
Lead generation campaign focusing on UC services to begin moving the market
into a primary focus with tactics such as EM, DM, GVM and SEO.
16 iii. Market Stability
Cleveland
Focus on maintenance and migration packages to sustain current market levels
and customer base.
Cincinnati
Focus on maintenance and migration packages to sustain current market levels
and customer base.
Columbus
Focus on maintenance and migration packages to sustain current market levels
and customer base.
iv. Cost Control
Limit spending on supplies, travel, bonus, power, hardware during the
economic recession.
v. Market Exit
At this time there no immediate plans or need for market exit strategy. Detroit
as a secondary market focus will be reviewed on a quarter by quarter basis.
b. Financial Objectives
1. Increase sales by 6%.
2. Increase gross margin to more than 1-2%.
3. Increase XYZ’s non-hardware sales to 3-4% of the total.
i. Customer Sales
Customer Sales objectives for 2009:
Percentage
Dollar Amount
UC
40%
460,000
IP Office
30%
300,000
Mobility
10%
100,000
Contact Center
20%
200,000
TOTAL SALES
100%
1,060,000
17 ii. Margins
1. Sales cost expense:
$200,000
2. Marketing/advertising:
$40,000
3. Travel:
$100,000
4. Product expense:
$300,000
5. Misc:
$60,000
Total:
$700,000
iii. Profitability
$1,060,000 -
$700,000
= $360,000
iv. Ratios
•
Acid Test Ratio: (cash + marketable securities) / current liabilities
•
Cash Ratio: cash / current liabilities
•
Debt to Income ratio: total debt / net income
•
Long Term Debt Ratio: long term debt
•
Gross Profit Margin: gross profit / sales
c. Marketing Objectives [Page 9]
i. Target Market Objectives
Market Share
Chicago
12%
Detroit
10%
Cleveland
16%
Cincinnati
15%
Milwaukee
20%
Indianapolis
20%
Columbus
28%
Philadelphia
12%
18 ii. Branding and Demand Generation Objectives
Brand awareness:
40% in Primary Markets
25% in Secondary Markets
New "cold" leads:
15% increase
Referrals from new or existing customers:
15% increase
Lead to sales conversion:
Increase to 20% total
iii. Market Research Objectives
XYZ’s immediate focus on customer retention and loyalty will also be XYZ’s first
foray into deep database marketing. XZY have hired a database marketing
analyst to lead XYZ’s customer loyalty program and anticipate testing eight
promotional campaigns throughout the year to see which type of programs
motivate XYZ’s customers the most. XYZ objectives are industry average
response rate (~2%) for all campaigns with any stronger returns to be evaluated
for future use and optimization.
iv. Internal Resource Objectives
The rise in customer requests for information about Session Initiation Protocol or
SIP Technology (phone to phone connection over a data network – peer-to-peer)
reveals a need for us to raise XYZ’s internal level of expertise in designing,
implementing, and training others to use this technology at the small and medium
business level.
v. Other Objectives
More internal knowledge-sharing events and communications programs. XYZ
Company needs to find an engaging way to share information learned while
creating bonding experiences for employees to raise morale.
19 d. Tactical Marketing Programs [Page 11]
XYZ customers in the education, hospitality, and financial industries focus on customer
service, so will XYZ. Word of mouth is vital to XYZ’s success. XYZ must make sure that
once XYZ gains a customer, they never loses them. Likewise, XYZ needs to make their
current customers feel valued and vital. One way XYZ will reinvigorate relationships is
through successful database marketing. However, every day, XYZ’s people must convey
this idea during every encounter. Most of all, XYZ must always remember to sell the
company, not simply products or services.
i. Target Markets
Primary markets:
XYZ needs more brand awareness in these markets, as well as solid lead
generation for growth. XYZ will begin marketing on and offline in these markets,
increasing the number of seminars and public events XYZ host, running lead
generation and branding campaigns, and advertising services.
Secondary markets:
XYZ has a strong foothold in these markets and not a lot of room for new growth.
However, these markets will be the focus of XYZ’s database marketing test
campaigns so XYZ can learn how to "move the needle" with existing customers
who are satisfied with their products and service. We'll focus on marketing XYZ’s
brand and XYZ’s services. This effort will include incentives for referrals in XYZ’s
primary markets to close the loop.
ii.
Product and Promotion:
Products:
Unified Communications
The "Escape the Cube" campaign will position Unified Communications solutions
as a profit center. Recent studies have shown that employees who control their
work locations and hours are more efficient and productive. This campaign will
encourage customers to help their employees "Escape the Cube."
20 Beat Nortel
The "Beat Nortel" campaign will position Avaya solutions overall as superior to
Nortel and remind customers that Nortel recently filed for bankruptcy protection.
However, the bigger focus will be on XYZ and Avaya and the deep partnership
they offer—that won't go away.
Services:
Maintenance
The "Maintenance" campaign will position XYZ maintenance services as a wise
investment in an economic downturn, when you don't want to risk the cost of
disruptions or outages. This campaign will also remind customers that the value
of XYZ maintenance services is more than monetary.
24x7 Migration
The "24x7 Migration" campaign will position XYZ Consulting and Integration
services as an unbeatable partner for customers overwhelmed at the idea of
switching systems. XYZ will remind them that they can manage every aspect of
implementation and integration, any time, anywhere.
iii.
Pricing
XYZ’s pricing strategy utilizes a combination of Competition-Based Pricing and
Cost-Plus Pricing. XYZ’s pricing objectives revolve around ROI, market share,
profit level and price leadership. Price setting for a specific solution is
calculated after a thorough analysis of the following:
•
•
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Competitive pricing considerations
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•
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Demand considerations
Customer expectations
Economic conditions
Cost factors
ROI (Return on Investment)
Company expectations (required margins)
21 D. Budgeting Analysis & Implementation
a. Marketing Budget [Page 14]
Marketing Budget is determined as 1-4% of Total Revenue. XYZ’s has allocated 4% or
$40,000 of $1,000,000 (the yearly average Total Revenue for XYZ.)
i.
Break down each tactical strategy
ii. Show detailed spending timetables by month and by year
22 iii. Show spending by products and services, business segments, and
geographic area
b. Performance Analysis [Page 15]
i. Recommended Success Metrics:
•
Success for XYZ Company is derived from the following metrics:
o
Awareness
o
Number of Leads
o
Customer Retention Rate
o
Conversion Rate
ii. Marketing Contribution
1) Contribution Margin: sales – variable cost
2) Contribution Margin Ratio: (sales – variable costs) / sales
iii.
Breakeven Analysis
Breakeven Point: fixed costs / contribution margin
iv.
Implementation Plan
Breakeven Point: fixed costs / contribution margin
23 E. Additional Considerations [Page 16]
a. Internal Factors
Towards the end of 2008, XYZ has partnered with a leading worldwide communications
partner to offer a vast range of maintenance and service plans for all communication
platforms licensed through XYZ. While the initial launch was relatively trouble-free, we
anticipate minor delays or related issues in information sharing that may affect marketing
planning and execution as the transition continues through the year.
b. External Factors
The worldwide economic recession is predicted to continue through the end of this year. It
will most likely keep business growth at the same level as previous years, making a focus
on customer retention a short-term priority. That said, the continuing evolution of
communications technology makes long-term growth likely.
c. Research Limitations
All information has been researched and vetted to the best of XYZ’s abilities. However,
some regional marketing data has been compiled from several disparate sources and
presented as a "common denominator" for those markets, most notably Milwaukee. Also,
competitor data for Chicago Telecom is two years old and may not reflect recent changes
observed in the company's marketing programs.
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