2 0 • M a rk e tin g Ethic:
571
r e v i e w in g t h e c o n c e p t s
Well— here you are i t
th e end o t yo ur in tro d u c to ry
marketing travels! In this chapter, we've closed w ith many
im portant
concepts
in vo lvin g
m a rke tin g ’s
Describe the principles o f socially responsible
marketing.
sweeping
M a ny com panies o rig ina lly opposed these social
impact on ind ivid u a l consumers, o th e r businesses, and
m ovem ents and laws, b u t m ost o f th e m n ow recognize
society as a w hole. You learned th a t responsible marketers
a need fo r positive consum er in fo rm a tio n , education,
discover w ha t consum ers w a n t and respond w ith th e rig h t
and p ro te c tio n . Some com panies have follo w e d a p olicy
market offerings, priced to give g ood value to buyers and
o f enlightened marketing, w hich holds th a t a com pany's
profit to th e producer. A m a rketin g system should deliver
m a rketin g should s u p p o rt th e best lon g -ru n perform ance
customer value and im prove th e q u a lity o f consum ers'lives.
o f th e m a rketin g system. Enlightened m a rketin g consists
In w orking to m eet consum er needs, m arketers may take
o f five principles: consum er-oriented m arketing, customer-
some actions th a t are n o t to everyone's likin g o r benefit.
value m arketing, innovative m arketing, sense-of-mission
Marketing managers should be aware o f th e m ain criticisms
marketing, and societal m arketing.
of marketing.
Explain the role o f ethics in m arketing.
Identify the m ajor social criticism s o f marketing.
Increasingly, com panies are responding to the need
M arketing's im p a ct on ind ivid u a l consumer welfare
to p rovide c o m pa n y policies and guidelines to help
has been criticized fo r its high prices, deceptive
th e ir managers deal w ith questions o f m arketing ethics.
unsafe
O f course even th e best guidelines c a n n o t resolve all the
products, planned obsolescence, and p o o r service to
practices,
high-pressure
selling,
shoddy
or
d iffic u lt e thical decisions th a t ind ivid u a ls and firm s m ust
disadvantaged consumers. M arketing's im p a ct on society
make. But there are some principles th a t m arketers can
has been criticized fo r creating false w ants and to o m uch
choose fro m . O ne p rin c ip le states th a t such issues should
materialism, to o few social goods, cu ltu ra l p o llu tio n , and
be decided by th e free m arket and legal system. A second,
too m uch p o litica l power. C ritics have also criticized
and m ore enlightened p rin ciple , puts respo n sibility n ot
marketing's im pa ct
on
harm ing
on th e system b u t in th e hands o f ind ivid u a l com panies
com petitors
reducing
th ro u gh
and managers. Each firm and m a rketin g manager m ust
acquisitions, practices th a t create barriers to entry, and
w o rk o u t a philo sop h y o f socially responsible and ethical
unfair co m p e titive m a rketin g practices. Some o f these
behavior. U nd e r the societal m a rketin g concept, managers
and
other
businesses
fo r
c o m p e titio n
concerns are justifie d ; som e are not.
m u st lo o k beyond w h a t is legal and allow able and
Define consumerism and environm entalism and
explain how they affect m arketing strategies.
Concerns a b o u t th e m a rketin g system have led to
citizen action movements. Consumerism is an organized
social m o vem e n t in ten d e d to strengthen th e rights and
power o f consum ers relative to sellers. A le rt m arketers
view it as an o p p o rtu n ity to serve consum ers b e tte r by
providing m ore consum er in fo rm a tio n , e ducation, and
protection.
Environm entalism
is
an
organized
d evelop standards based on personal integ rity, co rpo ra te
conscience, and lo n g -te rm consum er welfare.
Because business standards and practices vary fro m
c o u n try to co u n try , th e issue o f ethics poses special
challenges
fo r
in te rn a tio n a l
marketers.
The
grow ing
consensus am on g today's m arketers is th a t it is im p o rta n t
to make a c o m m itm e n t to a c o m m o n set o f shared
standards w o rld w id e
social
movem ent seeking to m in im ize th e harm d one to th e
environm ent and q u a lity o f life by m a rketin g practices.
The firs t wave o f m o d e rn e n viro n m e n ta lism was drive n by
environm ental groups and concerned consumers, whereas
the second wave was drive n
by gove rn m e nt, w hich
passed laws and regulations g o ve rn ing ind u stria l practices
im pacting th e e n v iro n m e n t. The firs t tw o e n v iro n m e n ta lis m
waves are n o w m erging in to a th ird and stronger wave in
which com panies are accep tin g respo n sibility fo r d o in g no
e nvironm ental harm . C om panies n ow are a d o p tin g policies
o f environm ental s u sta in a b ility— deve lo pin g strategies th a t
both sustain th e e n v iro n m e n t and p roduce p ro fits fo r th e
company.
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REVIEWING THE KEY TERMS
Consumerism 559
Consumer-oriented m arketing 564
Customer-value m arketing 564
Deficient products 565
Desirable products 565
Enlightened m arketing 563
Environmentalism 560
Environmental sustainability 561
Innovative m arketing 564
Pleasing products 565
Salutary products 565
Sense-of-mission m arketing 565
Societal m arketing 565
DISCUSSING THE CONCEPTS
1.
In w hat ways do consumers believe th a t marketers make
products more expensive to the end consumer?
4.
Can an organization be focused on both consumerism
and environm entalism at the same time? Explain.
2.
W hat deceptive marketing practices have you witnessed
personally? Are they price, prom otion, product, or
packaging based? Make a list and then briefly describe
one incident in detail.
5.
In w hat ways do companies benefit from practicing the
philosophy o f enlightened marketing?
6.
Select three moral dilemmas from Table 20.1. Propose an
ethical response for each dilemma.
3.
Review claims made by critics th a t marketing creates false
w ants and to o much materialism, to o few social goods,
cultural pollution, and to o much political power. Do you
agree o r disagree w ith these claims?
APPLYING THE CONCEPTS
1.
Visit aciage.com and click on the "why it m atters" section
on the left-hand colum n. Choose tw o reports at this
site and discuss how they relate to the ethical and social
responsibility topics in this chapter.
2.
Recent public concerns over children and the Internet
resulted in the C hildrens O nline Privacy Protection
A ct (COPPA) in the U.S. A m ong o ther things, this act
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requires Web sites th a t are visited by children under the
age o f 13 to post a privacy policy detailing any personally
identifiable inform a tio n collected from those children.
Do some research and answer the question: What
consumer need does COPPA meet?
3.
Visit adbuster.org. W hat is the purpose o f this Web site?
Do you th in k it is effective w ith its message?
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573
9
FOCUS ON TECHNOLOGY
Cause-related marketing and corporate philanthropy,
companies donating a portion o f th e ir profits to charity,
have been popular for some tim e. Meet Goodsearch.com,
which harnesses the power o f Internet technology to create
a business model based on donations. A recent entry into the
crowded search engine market dom inated by Google and
Yahoo!, Goodsearch differentiates itself on its a bility to raise
money for thousands o f charities. Founded by a brother and
sister who lost th e ir m other to cancer, Goodsearch lets people
use the power o f Yahoo! search engine technology to search
the Internet w hile donating money to charity. Searchers
choose an existing charity on Goodsearch or add their own
charity. Each tim e they search, 50 percent o f the advertising
revenues are donated to the charity. Each search earns about
$0.01, so continued searching could reach the follo w in g totals
in one year.
0
FOCUS ON ETHICS
In a commercial shown repeatedly over Chinese TV,
cross-talk star Guo Degang is seen endorsing a "special
Tibetan fat-elim inating tea." The promise o f a slimmer figure
('Three boxes w ill flatten big stomachs!" was the product's
tagline) and a celebrity endorsement made the tea a hot
seller. Thousands o f boxes retailing at 29 yuan ($3.85) flew o ff
supermarket shelves. Sales exceeded $13 m illion in 2006. For
his role, Guo pocketed $265,000.
However, in March 2007, a CCTV program on consumer
rights featured the tea as among th e dubious and substandard
products and services it had uncovered. The tea was
pulled from the market and Guo came under fire online for
"irresponsible behavior." Netizens vilified him together w ith
other celebrities w ho had fronted m isleading ads.
According to th e State Adm inistration o f Industry and
Commerce, 2.5 m illion Chinese take incorrect m edicine every
year, deceived by misleading commercials. The authorities
have stepped up efforts to prevent bogus ads from appearing
on radio, TV, newspapers, and magazines. Still, consumers
0 VIDEO CASE
NFL
Think o f the NFL and you m ig h t conjure up images o f burly
football players and adrenaline-filled stadiums. But the league
offers fans much more than Sunday afternoons full o f football.
Players and teams alike consider football and com m unity
involvement to be the tw in pillars o f the NFL. Through more
than 20 separate com m un ity programs, the NFL focuses
considerable m anpow er on its efforts to give back to the
com m unity and encourage others to do the same. In addition,
for more than 30 years the NFL has partnered w ith United Way.
NFL teams and players support local United Way chapters by
making personal appearances, p articipating in jo in t programs,
and offering campaign contributions.The NFL and United Way
have also created public service television ads featuring NFL
stars vo lunteering in th e ir com m unities— reading to children,
playing shuffleboard w ith senior citizens, and w orking at local
charities. In total, more than 1,000 such ads have aired during
Charity
Size
Number of
Supporters
Small
Medium
Large
Average Searches
per Day
Estimated
Revenue/Year
100
2
$730
1,000
2
$7,300
10,000
2
$73,000
1. Were you aware o f Goodsearch? If not, w hy have so few
people heard o f it?
2. Would you use this Web site? Discuss.
3. What search engine do you use? Why are you loyal to this
search engine?
have increasingly called for a law th a t holds personalities
appearing in an ad responsible for prom oting problem atic
products. One victim said, "Stars should n ot abuse th e ir fame.
They should do background checks and not endorse products
they themselves have n ot tried or are n ot sure about."
Defending him self on a blog, Guo reasoned th a t he was
paid to do the tea ad and th a t if th e product was n ot as
advertised, the responsibility should lie w ith the company
w hich paid him. He added th a t he him self had tried the tea
and found it to be "pretty good." However, his defense cut
no ice w ith some consumers w ho are suing him and the
manufacturer o f the tea.18
1. Should there be regulations against celebrities endorsing
problem atic products?
2. Should celebrities conduct background checks and not
endorse products they have n ot tried or are uncertain
about?
3. Should celebrities be held at a higher standard in product
endorsements than other individuals such as product
experts and satisfied customers o f a brand?
NFL games, making it th e longest-running public service ad
campaign in history.
It's dear th a t the partnership benefits United Way. With
help from the NFL, United Way fundraising has skyrocketed
from $800 m illion in 1974 to nearly $4 billion today. But the
NFL benefits too. Working in the com m unity makes players
more accessible and helps to b uild stronger relationships w ith
fans by connecting w ith them in th e ir own backyards.
After view ing the video featuring the NFL, answer
the fo llo w in g questions about m arketing and social
responsibility.
1. Why does the NFL partner w ith United Way? How, if at all,
does th a t partnership im pact your o pinion o f the league?
How does it im pact your interest in volunteering?
2. Make a list o f social criticisms o f the NFL. Then visit
JoinTheTeam.com and read more about the NFL's outreach
programs. Do these efforts alleviate any concerns you
have about the league's negative im pact on society?
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3. By the text s definition, does the NFL practice "enlightened
marketing"?
Part 4 * E x te n d in g
0
COMPANY CASE
Alibaba.com: Shark
Attack
r n iO
and selling o f shark fins, is “the New York Stock Exchange of
shark fins," says Doug las. W olfgang Leander, director of shark
preservation at the Ocean Realm Society, a Florida-based
lobbying group, "They are offering the shark fin traders a
very convenient platform to do business."
The Response
Alibaba denies any w rongdoing regarding shark fins. Its
spokesperson Christina Splinder said, "We respect our
members' rights to make th e ir own decisions on issues of
cultural tradition." Alibaba has a policy prohibiting Web site
users from listing products taken from animals protected
by local or international law such as the Convention on
International Trade in Endangered Species o f Wild Fauna
and Flora (CITES), she says.
"We had an open dialogue w ith activists," she adds. "We
to o k th e ir suggestions and opinions on board and reviewed
our policies... We decided th a t our current policy is the
appropriate policy at this time."Trade in officially recognized
endangered species "is strictly forbidden on Alibaba," says
Splinder. "Our editing team w ill prom ptly remove listings
Patric Douglas runs a San Francisco company w hich offers
shark diving for thrill-seekers. His customers go o u t on a
if we become aware th a t listings are not CITES compliant."
Sharks are n ot on the CITES protected list.
boat, get into cages, are submerged beneath th e ocean,
and watch sharks swim by. His company, Mega O utdoor
Adventures, takes about 500 people a year to th e waters
o ff Baja California to see all sorts o f sharks, including great
whites, tig er sharks, and whale sharks. Thanks to his sharkdiving business, Douglas has also become an unlikely
leader o f a campaign targeting one o f China's leading
e-commerce
companies,
Allbaba.com,
a
business-to-
business marketplace th a t is 40 percent owned by Yahoo!.
Alibaba provides small and midsized companies in China
the o p p o rtu n ity to find buyers and sellers overseas. And,
am ong the numerous products displayed on its Web site
are num erous types o f shark fins, prized by many Chinese
as the vital ingredient in shark fin soup. This delicacy is
often offered at high-end Chinese restaurants in East Asia.
The Campaign
Not Enough Bite
Hence, activists contend th a t Alibaba uses a different
standard than th e CITES list. They argue that some of the
shark fin merchants using the company's site are violating
laws proh ib itin g over-fishing o f sharks. "A vast proportion
o f this trade is actually done illegally," says Brian Darvell,
a University o f Hong Kong professor o f dental material
science. Darvell was active in a 2005 grassroots movement
th a t successfully pressured Disney to drop shark fin soup
from the menus at Hong Kong Disneyland hotels.
W hile the Hong Kong governm ent says local buyers and
sellers only deal in legitim ately obtained shark fins. Darvell
says th a t argum ent "is sim ply inconceivable. The volume
is so great. We know th a t fishing occurs in areas that are
supposed to be protected."
Interestingly, Alibaba's critics found an ally in Hong
Harvesting shark fin can be a brutal practice. After finning,
Kong's to p shark fin traders group. Charlie Lim. general
sharks are often tossed back into the ocean to sink to the
secretary o f the Shark Fin and Marine Products Association
botto m and die. Douglas and other activists say th a t shark
in th e city, says th a t cyberspace is a risky venue for shark fin
populations w orldw ide are declining given the grow ing
merchants. "To buy shark's fin, you really need to look at the
dem and for the fins. "Something evil is going on here," he
fins and check the quality," he says. "I presume only small or
says. The shark fin trade "is decim ating the oceans."
Thus, since 2006, Douglas and o ther activists have
new com panies w ould tu rn to the Internet.There m ight be a
greater chance to be duped if everything is done online."
sent petitions w ith thousands o f signatures to Alibaba
dem anding th a t founder, chairman, and CEO Jack Ma crack
dow n on the shark fin merchants using its site. Alibaba,
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w hich has over 180 companies engaged in the buying
W hat Next?
Having made no progress w ith Alibaba, th e activists pledge
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to continue lobbying. Yet, they are aware th a t they face a
20
575
major hurdle in gettin g people to care about saving creatures
The problems haven't just been about free-speech issues.
that are hardly beloved by many. "Sharks aren't cuddly and
In April 2007, a Chinese court ruled against Yahoo! China
cute," says Duncan Carson, a Madrid-based activist running
(owned by Alibaba) in a lawsuit brought by the International
the Web site stopsharkfinning.net. "So people aren't inclined
Federation o f the Phonographic Industry. The suit alleged
to take notice."
th a t the company facilitated digital music piracy. Alibaba,
For Yahoo!, the campaign against Alibaba by the world's
w idely rum ored to be readying for an initial public offering,
shark activists is the latest in a string o f China-related public
is appealing. Probably the last th ing it wants is another black
relations challenges. In 2006, Yahoo! and other companies
mark.
were condemned for th e ir willingness to cooperate w ith the
Chinese governm ent in censoring the Internet in China. In
May 2007, Shi Tao, a journalist currently im prisoned in China,
sued Yahoo! in the U.S.
Questions For Discussion
f
1. W hich o f the textbook's criticisms o f marketing's im pact
on consumers, if any, are evident in the Alibaba case?
2. W hich o f th e criticism s o f marketing's im pact on society,
if any, are evident in the Alibaba case?
3. Evaluate Alibaba's policy response to the shark fin
activist com m unity. Could it have done more? W hy or
w hy not?
4. W hat should the activists do next? Is theirs a lost
environm ental cause?
5. Visit stopsharkfinning.net. Is the prod u ctio n and
marketing o f shark fins socially, ethically, and
environm entally responsible? H ow w ould you im prove
the situation?
Source:
Bruce Einhorn, "Sharks Circle China's Alibaba.com,"
BusinessWeek Online Asia, July 20,2007.
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MARKETING PIAN
The Marketing Plan: An Introduction
As a m arketer, y o u 'll need a g o o d m a rk e tin g p la n to p ro v id e d ire c tio n and focus fo r y o u r
brand, p ro d u ct, o r com pany. W ith a d e ta ile d p la n , a n y business w ill be b e tte r p rep a re d to
launch a n e w p ro d u c t o r b u ild sales fo r e x is tin g p ro d u cts. N o n p r o fit o rg a n iz a tio n s also
use m a rk e tin g p lans to g u id e th e ir fu n d ra is in g a nd o utre ach e ffo rts . E ven g o v e rn m e n t
agencies p u t to g e th e r m a rk e tin g p la n s fo r in itia tiv e s such as b u ild in g p u b lic awareness
of proper n u tr itio n and s tim u la tin g area to u ris m .
The Purpose and Content of a Marketing Plan
U nlike a business p la n , w h ic h o ffe rs a b ro a d o v e rv ie w o f th e e n tire o rg a n iz a tio n 's m issio n ,
objectives, strategy, a nd resource a llo c a tio n , a m a rk e tin g p la n has a m o re lim ite d scope. It
serves to d o c u m e n t h o w th e o rg a n iz a tio n 's stra te g ic objectives w ill be a chieved th ro u g h
specific m a rk e tin g strategies a n d tactics, w it h the cu sto m e r as the s ta rtin g p o in t. It is also
linked to the p la n s o f o th e r d e p a rtm e n ts w ith in the o rg a n iz a tio n . S uppose a m a rk e tin g
plan calls fo r s e llin g 200,000 u n its a n n u a lly . The p ro d u c tio n d e p a rtm e n t m u s t gear u p to
make th a t m a n y u n its , th e fin a n ce d e p a rtm e n t m u s t h ave fu n d in g a va ila b le to co v e r the
expenses, the h u m a n resources d e p a rtm e n t m u st be re ad y to h ire and tra in staff, a n d so
on. W ith o u t the a p p ro p ria te le ve l o f o rg a n iz a tio n a l s u p p o rt and resources, no m a rk e tin g
plan can succeed.
A lth o u g h the exact le n g th a n d la y o u t w ill v a ry fro m c o m p a n y to com pany, a m a rk e tin g
plan u s u a lly co n ta in s th e sections describ e d in C h a p te r 2. S m a lle r businesses m a y create
shorter o r less fo rm a l m a rk e tin g p la n s, w hereas c o rp o ra tio n s fre q u e n tly re q u ire h ig h ly
structured m a rk e tin g p lans. To g u id e im p le m e n ta tio n e ffe ctive ly, e v e ry p a rt o f th e p la n
must be d escribed in c o n sid e ra b le d e ta il. Som etim es a c o m p a n y w il l p o st its m a rk e tin g
plan on an in te rn a l W eb site, w h ic h a llo w s m anagers and e m plo ye es in d iffe re n t loca tio n s
to consult sp ecific sections a n d c o lla b o ra te o n a d d itio n s o r changes.
The Role of Research
M a rk e tin g p la n s are n o t created in a va cu u m . To d e v e lo p successful stra te g ies and a ction
program s, m a rke te rs need u p -to -d a te in fo rm a tio n a b o u t th e e n v iro n m e n t, th e c o m p e titio n ,
and the m a rk e t segm ents to be se rved . O fte n , a n a lysis o f in te rn a l d ata is th e s ta rtin g p o in t
for assessing the c u rre n t m a rk e tin g s itu a tio n , s u p p le m e n te d b y m a rk e tin g in te llig e n c e
and research in v e s tig a tin g th e o v e ra ll m a rke t, th e c o m p e titio n , ke y issues, and threats
and o p p o rtu n itie s issues. A s th e p la n is p u t in to effect, m a rke te rs use a v a rie ty o f research
techniques to m easure p rog re ss to w a rd obje ctive s a n d id e n tify areas fo r im p ro v e m e n t if
results fa ll s h o rt o f p ro je ctio n s. F in a lly, m a rk e tin g research h elp s m a rk e te rs le a rn m ore
about th e ir cu sto m e rs' re q u ire m e n ts, e xpe ctatio n s, p e rce p tio n s, and sa tis fa c tio n levels.
This d eeper u n d e rs ta n d in g p ro v id e s a fo u n d a tio n fo r b u ild in g c o m p e titiv e a dva n ta g e
th ro u gh w e ll-in fo rm e d se g m e n tin g , ta rg e tin g , and p o s itio n in g d ecisions. T h u s, the
m a rketin g p la n s h o u ld o u tlin e w h a t m a rk e tin g research w il l be co n d u c te d a n d h o w the
fin d in g s w ill be a p p lie d .
The Role of Relationships
The m a rk e tin g p la n s h o w s h o w the c o m p a n y w ill esta b lish and m a in ta in p ro fita b le
custo m e r re la tio n s h ip s . In th e process, h o w e ve r, it also shapes a n u m b e r o f in te rn a l and
external re la tio n s h ip s . First, it affects h o w m a rk e tin g p e rso n n e l w o rk w it h each o th e r and
w ith o th e r d e p a rtm e n ts to d e liv e r v a lu e a n d sa tisfy cu sto m e rs. Second, it affects h o w the
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c o m p a n y w o rk s w it h s u p p lie rs , d is trib u to rs , and stra te g ic a llia n ce p a rtn e rs to achieve
a
A p p e n d ix 1 * M a rk e tin g Plan
th e objectives lis te d in th e p la n . T h ird , it in flu e n ce s the c o m p a n y 's d e a lin g s w ith other
sta ke h old ers, in c lu d in g g o v e rn m e n t re g u la to rs , the m e dia , and the com m unity at large.
A ll o f these re la tio n s h ip s are im p o r ta n t to th e o rg a n iz a tio n 's success, so they should be
consid e red w h e n a m a rk e tin g p la n is b e in g d e v e lo pe d .
From Marketing Plan to Marketing Action
C o m p a n ie s g e n e ra lly create y e a rly m a rk e tin g pla n s, a lth o u g h som e p la n s co ver a longer
p e rio d . M a rk e te rs s ta rt p la n n in g w e ll in a dva n ce o f th e im p le m e n ta tio n date to allow
tim e fo r m a rk e tin g research, th o ro u g h a nalysis, m a na g e m en t re vie w , and coordination
b e tw e e n d e p a rtm e n ts. The n , a fte r each a c tio n p ro g ra m begins, m a rk e te rs m o n ito r ongoing
results, co m pa re th e m w it h p ro je c tio n s , a na lyze a n y d ifferences, a nd take corrective steps
as needed. Some m a rke te rs also p rep a re c o n tin g e n c y p la n s fo r im p le m e n ta tio n if certain
c o n d itio n s em erge. Because o f in e v ita b le and so m etim e s u n p re d ic ta b le environm ental
changes, m a rke te rs m u s t be re ad y to u p d a te and a d a p t m a rk e tin g p la n s at a ny time.
For e ffe ctive im p le m e n ta tio n and c o n tro l, th e m a rk e tin g p la n s h o u ld define how
progress to w a rd obje ctive s w il l be m easured. M a na g e rs ty p ic a lly use budgets, schedules,
a nd p e rfo rm a n ce sta n d a rd s fo r m o n ito rin g and e v a lu a tin g re sults. W ith budgets, they
can co m pa re p la n n e d e x p e n d itu re s w it h a ctu a l e x p e n d itu re s fo r a g iv e n week, month,
o r o th e r p e rio d . Schedules a llo w m a n a g e m e n t to see w h e n tasks were supposed to be
c o m p le te d — a n d w h e n th e y w e re a c tu a lly co m p le te d . P e rfo rm an ce s ta n d ard s track the
outcom es o f m a rk e tin g p ro g ra m s to see w h e th e r th e c o m p a n y is m o v in g forw ard toward
its objectives. Som e e xam p le s o f p e rfo rm a n c e sta n d a rd s are: m a rk e t share, sales volume,
p ro d u c t p ro fita b ility , and cu sto m e r satisfa ctio n.
Sample Marketing Plan for Sonic
T h is section takes y o u in s id e th e sa m p le m a rk e tin g p la n fo r Sonic, a hypothetical
s ta rt-u p co m pa n y. T h e c o m p a n y 's fir s t p ro d u c t is the S onic 1000, a m u ltim e d ia personal
d ig ita l assistant (P D A ), also k n o w n as a h a n d h e ld c o m p u te r. S onic w ill be competing
w it h Palm , H e w le tt-P a c k a rd , a n d o th e r w e ll-e s ta b lis h e d P D A riv a ls in a crowded, fastch a n g in g m a rk e tp la c e w h e re enh a n ced c e ll p ho n e s a n d m a n y o th e r e lectronics devices
have P D A fu n c tio n a lity . T h e a n n o ta tio n s e x p la in m o re a b o u t w h a t each section o f the plan
s h o u ld c o n ta in a nd w h y.
Executive Summary
Executive sum m ary
T h is se c tio n su m m a riz e s th e m ain g oals,
re c o m m e n d a tio n s, a n d p o in ts a s a n
Sonic is p re p a rin g to la u n c h a new' m u ltim e d ia P D A p ro d u c t, th e S onic 1000, in a maturing
o v e r v ie w fo r se n io r m a n a g e rs w h o m u st
m a rke t. D e sp ite th e d o m in a n c e o f P D A le a d e r P alm , w e can compete because ou r product
re a d a n d a p p ro v e th e m a rk e tin g p lan.
o ffe rs a u n iq u e c o m b in a tio n o f features a t a v a lu e -a d d e d p rice . We are targeting specific
G en erally, a ta b le o f c o n te n t s fo llo w s this
segm ents in the c o n s u m e r a nd business m a rkets, ta k in g a dva n ta g e o f opportunities
s e c tio n fo r m a n a g e m e n t co n v e n ie n c e .
in d ic a te d b y h ig h e r d e m a n d fo r easy-to-use P D A s w it h e x p a n d e d communications,
e n te rta in m e n t, and sto ra g e fu n c tio n a lity .
The p rim a ry m a rk e tin g o b je c tiv e is to a chieve firs t-y e a r U.S. m a rk e t share o f 3 percent
w ith u n it sales o f 240,000. T h e p r im a r y fin a n c ia l o bje ctive s are to a chieve firs t-v e a r sales
revenues o f $60 m illio n , keep firs t-v e a r losses to less th a n $10 m illio n , a nd break even
e a rly in th e second vear.
Current Marketing Situation
Cu rrent m arketing situation
In th is s e c tio n , m a rk e tin g m a n a g e rs
d isc u ss t h e o ve ra ll m a rk e t, id e n tify th e
m a rk e t s e g m e n ts th e y w ill ta rg e t, an d
p r o v id e in fo rm a tio n a b o u t th e
c o m p a n y 's c u rre n t situ atio n .
Sonic, fo u n d e d 18 m o n th s ago b y tw o e n tre p re n e u rs w it h e xperience in th e PC market
is a b o u t to e n te r th e n o w -m a tu re P D A m a rk e t. M u ltifu n c tio n ce ll phones, e -m a il devices,
and w ire le ss c o m m u n ic a tio n device s are in c re a s in g ly p o p u la r to d a y ; forecasts suggest
th a t a n n u a l sales o f su ch d e vice s w il l g r o w a t m o re th a n 50 p erce n t fo r th e n e xt three
years. C o m p e titio n is th e re fo re m o re in te n se even as P D A d e m a n d fla tte n s , industry
c o n s o lid a tio n co n tin u e s, a n d p r ic in g p ressures squeeze p r o fita b ility . Yet th e w orldw ide
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A p p e n d ix 1 * M a rk e tin g Plan
579
PDA m a rk e t re m a in s su b sta n tia l, w ith a n n u a l sales o f 10 to 15 m illio n u n its . To gain
m arket share in th is d y n a m ic e n v iro n m e n t, Sonic m u s t c a re fu lly ta rg e t s p ecific segm ents
w ith features th a t d e liv e r b en e fits va lu e d b y each cu sto m e r g ro u p .
r
Market Description
Sonic's m a rk e t consists o f consu m e rs and business users w h o p re fe r to use a sin g le d evice
M arket description
B y d e s c rib in g th e ta r g e te d s e g m e n ts
for c o m m u n ic a tio n , in fo rm a tio n storage and exchange, and e n te rta in m e n t o n the go.
in d e ta il, m a r k e te r s p r o v id e c o n te x t
Specific segm ents b e in g ta rg e te d d u r in g the fir s t ye ar in c lu d e profe ssio n als, c o rp o ra tio n s ,
fo r th e m a r k e tin g stra te g ie s a n d
students, e n tre pre n eu rs, and m e d ica l users. T a b le A l . l sh ow s h o w the Sonic 1000
d e t a ile d a c t io n p r o g r a m s dis c u s se d
la te r in t h e p la n.
addresses th e needs o f targeted co n su m e r a n d business segm ents.
PD A purchasers can choose b e tw e e n m o d e ls based o n several d iffe re n t o p e ra tin g
systems, in c lu d in g system s fro m Palm , M ic ro s o ft, and S ym b ia n , p lu s L in u x v a ria tio n s .
Benefits and product features
E x h ib it 1 c la rifie s t h e b e n e fits th a t
p r o d u c t fe a tu re s w ill d e liv e r t o satisfy
Sonic licenses a L in u x-b a se d system because it is s o m e w h a t less v u ln e ra b le to a tta ck b y
th e n e e d s o f c u s t o m e rs in e a c h
hackers and viruse s. W ith h a rd d riv e s b e co m in g co m m o n p la ce in the P D A m a rket, Sonic
ta r g e te d s e g m e n t.
is e q u ip p in g its firs t p ro d u c t w it h an u ltra fa s t o ne -g iga b yte h a rd d riv e fo r in fo rm a tio n
and e n te rta in m e n t storage. T e ch n o lo g y costs are decreasing even as c a p a b ilitie s are
increasing, w h ic h m akes v a lu e -p ric e d m o d e ls m o re a p p e a lin g to consu m e rs and to
customers w it h o ld e r P D A s w h o w a n t to tra d e u p to new er, h ig h -e n d m u ltifu n c tio n
units
Table A1.1 Needs and Corresponding Features/Benefits of Sonic PDA
I
Targeted Segment
Customer Need
Corresponding Feature/Benefit
Professionals {consumer
market)
w Stay in touch conveniently and securely
while on the go
« Built-in mobile phone and push-to-talk to
communicate anywhere at any time;
wireless e-mail/Web access from anywhere;
Linux-based operating system less
vulnerable to hackers
t* Perform many functions hands-free
w ithout carrying multiple gadgets
w Voice-activated applications are convenient;
GPS function, camera add value
Students (consumer
market)
t* Perform many functions hands-free
w ithout carrying multiple gadgets
* Express style and individuality
w Compatible with numerous applications and
peripherals for convenient, cost-effective
note taking and functionality
t* Wardrobe of PDA cases in different colors,
patterns, and materials
Corporate users
(business market)
« Security and adaptability for proprietary
tasks
t* Obtain driving directions to business
meetings
Entrepreneurs (business
market)
t* Organize and access contacts, schedule
details, business and financial files
t* Get in touch fast
« Customizable to fit corporate tasks and
networks; Linux-based operating system less
vulnerable to hackers
t# Built-in GPS allows voice-activated access to
directions and maps
t* No-hands, wireless access to calendar,
address book, information files for checking
appointments and data, connecting with
contacts
t# Push-to-talk instant calling speeds up
communications
Medical users (business
market)
t* Update, access, and exchange medical
records
w Photograph medical situations to maintain
a usual record
« No-hands, wireless recording and exchange
of information to reduce paperwork and
increase productivity
« Built-in camera allows fast ana eas\
photography, stores images *cr ater retrieval
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A p p e n d ix 1 * M a rk e tin g Plan
f
Product review
Product Review
O u r firs t p ro d u c t, th e Sonic P D A 1000, o ffe rs th e fo llo w in g s ta n d a rd features w ith a
The product review should summarize
the main features for all of the company's
products. The information may be
organized by product line, by type of
customer, by market, or (as here) by
order of product introduction.
L in u x OS:
u
Voice re c o g n itio n fo r h an d s-fre e o p e ra tio n
u
B u ilt-in ce ll p h o n e fu n c tio n a lity and p u s h -to -ta lk in s ta n t c a llin g
o
D ig ita l m u s ic /v id e o re co rd in g , d o w n lo a d in g , and p la y b a c k
W ireless W eb a n d e -m a il, te x t m essaging, in s ta n t m essaging
O rg a n iz a tio n fu n c tio n s , in c lu d in g calendar, address b oo k, s y n c h ro n iz a tio n
u
G lo b a l p o s itio n in g system fo r d ire c tio n s and m aps
u
C on n e cto rs fo r m u ltip le p e rip h e ra ls a nd a p p lic a tio n s
u
O n e -g ig a b y te h a rd d riv e w it h e x p a n s io n p o te n tia l
t*
In te rch a ng e a ble case w a rd ro b e o f d iffe re n t c o lo rs and p a tte rn s
F irst-ye a r sales revenues are proje cte d to be $60 m illio n , based o n sales o f 240,000
S onic 1000 u n its at a w h o le sa le p ric e o f $250 each. D u r in g th e second year, w e plan
to in tro d u c e th e S onic 2000, also w it h L in u x OS, as a h ig h e r-e n d p ro d u c t o ffe rin g the
fo llo w in g s ta n d a rd features:
t*
v
G lo b a l p h o n e a n d m essaging c o m p a tib ility
T ra n sla tio n c a p a b ilitie s to send E n g lis h te x t as C hinese text (o th e r languages to be
o ffe re d as a d d -o n o p tio n s )
ti
f
Competitive review
The purpose of a competitive review
is to identify key competitors,
describe their market positions,
and briefly discuss their strategies.
In te g ra te d s ix -m e g a p ix e l cam era
C om petitive Review
The em ergence o f n e w m u ltifu n c tio n phones, m a rk e te d b y m o b ile p ho n e manufacturers
and carrie rs, has pressu re d in d u s tr y p a rtic ip a n ts to c o n tin u a lly add features and cut
prices. C o m p e titio n fro m sp ecia lize d devices fo r te x t and e -m a il m essaging, such as
B la ckB e rrv devices, is a m a jo r fa c to r as w e ll. K e y c o m p e tito rs in c lu d e :
u
P alm . The tre n d y Treo P D A -p h o n e com bos accou n t fo r m ore than h a lf o f Palm’s
$1.6 b illio n in a n n u a l revenues. A s the b e s t-k n o w n m a k e r o f P D As, Palm has
a chieved e xcelle nt d is tr ib u tio n in m u ltip le ch annels and has alliances w ith a
n u m b e r o f m o b ile p h o n e service ca rrie rs in th e U.S. and E urope. Its latest models
are a v a ila b le w it h e ith e r the P a lm o r the W in d o w s o p e ra tin g system ,
u
H e w le tt-P a c k a rd . H P is ta rg e tin g business m a rk e ts w ith its iP A Q Pocket PC
devices, m a n y w it h w ire le s s c a p a b ilitie s to a c c om m o d a te co rp o ra te users. For extra
se curity, one m o d e l a llo w s access b y fin g e r p r in t m a tch as w e ll as b y passw ord. HP
enjoys e xcelle nt d is trib u tio n , a nd its p ro d u c ts are p ric e d fro m b e lo w S300 to more
th a n $600.
u
Sam sung.
M any
of
th is
m a n u fa c tu re r's
p ro d u c ts
c o m b in e
m o b ile
phone
ca p a b ilitie s w it h m u ltifu n c tio n P D A features. Its i730, a s m a rtp h o n e based on the
W in d o w s o p e ra tin g system , p ro v id e s w ire le s s W eb access and M P 3 stre a m in g and
d o w n lo a d s , p la v s v id e o s, and o ffe rs P D A fu n c tio n s such as address b oo k, calendar,
a nd speed d ia l.
o
R IM . Research in M o tio n m akes th e lig h tw e ig h t B la ckB e rrv w ire less phone PDA
p ro d u c ts th a t are p o p u la r a m o n g c o rp o ra te users. A lth o u g h legal entanglem ents
h ave s lig h tly s lo w e d m a rk e t-s h a re m o m e n tu m , R IM 's c o n tin u o u s in n o v a tio n and
s o lid cu sto m e r se rvice s u p p o rt c le a rly stre n g th e n its c o m p e titiv e s ta n d in g .
v
Siem ens. T h is c o m p a n y 's la test P D A -p h o n e c o m b in a tio n s h ave several distin ctive
features. Fo r e xa m p le , som e m o d e ls d ia l a n y p h o n e n u m b e r th a t the user w rites
on th e screen w it h a stylu s . A ls o , o n som e m o de ls, the k e y b o a rd s lid e - o u t o f the
w a y w h e n n o t in use. Siem ens is a p a r tic u la r ly fo rm id a b le c o m p e tito r in European
m arkets.
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