Marketing Planning & Problem Solving
[Dr. Carter; MKTG.490]
COMBINED SET OF
MARKETING PLANNING
TEXT SLIDES

The Marketing Plan Handbook
3rd ed.
Marian Burk Wood
1-1

Marketing Planning is a systematic, structured process. It includes:
1.
2.
3.
Researching and analyzing the current situation.
Developing and documenting the firm’s objectives, strategies and programs,
Implementing, evaluating and controlling marketing activities.
1-2

I.
II.
III.
IV.
V.
VI.
VII.
VIII.
Executive Summary
Current Situation
Objectives and Issues
Target Market, Customer Analysis and
Positioning
Marketing Strategy
Marketing Programs
Financial Plans
Implementation and Controls
1-3

The Marketing Planning Process
1-4

Step 1: Research and Analyze the
Current Situation
The marketer performs both :
1.
2.
External analysis, and
Internal analysis
1-5

External analysis involves the understanding of trends that may impact marketing strategy:
 Demographic



Economic
Technological
Political-Legal


Ecological
Social-Cultural
1-6

Marketers also assess the firm’s capabilities and the strategies of competitors in order to:


Build on strengths
Exploit competitors’ weaknesses
1-7

Other areas that are analyzed for their impact on marketing strategy include:
 Customers
 Suppliers
 Distributors
 Partners, and
 Other Stakeholders
1-8

Step 2: Understand Markets and
Customers
 Can be consumers or businesses
 A comprehensive understanding of the customer is desired:

Buying habits, needs, wants, attitudes and behaviors.

Who?, What?, Where?, When?, Why?, How?

Are buying patterns changing? Why?
1-9



Step 3: Segmentation,
Targeting and

Positioning customers with similar needs, wants, behavior or attitudes.
Targeting: The selection of specific segments for marketing. Can be to one segment, multiple segments, or the entire market.
Positioning: Using marketing to create a competitively distinctive place (position) for the brand or product in the mind of the targeted customers.
1-10

Step 4: Plan Direction, Objectives, and Marketing Support
 Goals: Long-term performance targets.
 Objectives: Shorter-term targets that support the achievement of goals.
 Sustainable Marketing:

Balancing long-term goals with short-term objectives and budget realities.

Balancing goals and objectives with an eye toward being responsible to the larger society.
1-11

Based upon permutations of markets and products.
CURRENT MODIFIED INNOVATED
Market Penetration
Product Development
EXISTING
EXPANDED
(Geographic)
ENTIRELY NEW
Market Development Diversification
1-12

Step 5: Develop Marketing
Strategies and Programs


Utilizing the tools of the “marketing mix”.
Consistent with the firm’s overall direction, goals and strategies.
 Includes the development of strategic alliances.
1-13

1-14

The primary tools for marketing, referred to as the “Marketing Mix” are:
 Product
 Price
 Promotion, and
 Channels
1-15

1-16

 Tangible good or an intangible service.
 Must be considered in a holistic fashion.
 Branding must also be considered.
1-17

Based upon a number of factors:
 How customers perceive the value of the offering.
 Positioning.
 Product costs.
 Competitive forces.
 Objectives of the organization.
1-18

 How, when and where to make the goods and services available to customers.
 Requires effective relationships with channel partners.
1-19

Involves the following activities:
 Advertising
 Public Relations
 Sales Promotion
 Personal Selling
 Direct Marketing
 Use of the Internet
1-20


Step 6: Track Progress, Implement and Control
Mechanisms and methods of measuring progress toward goals:

Sales forecasts

Budgets

Schedules
 Comparing actuals vs. projections or the plan.
 Making changes as needed.
1-21

Preparing for Marketing Planning
Marketers must develop a number of professional and organizational strengths, including:
 Knowledge of markets and customers,
 Core competencies, and
 Strategic relationships
1-22

Support Strategies: Customer Service
Customer Service:
 Reinforces positive perceptions.
 Enhances business through reputation and referral.
 Helps differentiate from competitors.
 Poor service alienates otherwise loyal customers.
1-23

Support Strategies: Internal Marketing
Internal Marketing:
 Focuses all employees on serving customers.
 Builds support for the marketing plan.
 Enhances execution of the marketing plan throughout the organization.
1-24

5 Guiding Principles for Effective
Marketing Planning
1.
2.
3.
4.
5.
Expect Change
Emphasize Relationships
Involve Everyone
Seek Alliances
Innovate to Provide Value
1-25

The Marketing Plan Handbook
3rd ed.
Marian Burk Wood
2-1

Environmental Scanning and Analysis
Involves the analysis of both :
 Internal Factors, and
 External Factors
2-2

 Mission
 Resources
 Offerings
 Previous Results
 Business Relationships
 Keys to Success and Warning Signs
2-3

 Demographics
 Ecological
 Economic
 Technology-related
 Political-Legal
 Social-Cultural
 Competitors
2-4

Mission:

States the firm’s fundamental purpose.
 Indicates how the firm will add value.
2-5

 Human
 Financials
 Informational
 Supply
2-6

Examining what the firm is currently offering in the way of goods and services:
 Fit with mission and resources.
 Affirm role of each line and item.
2-7

Internal Analysis: Previous Results
 Results include:

Sales (dollars and units).

Profitability.

Customer acquisition and retention costs.


Other financial results.
Provide clues to firm’s strengths and weaknesses.
 Helps separate the effective programs from the less-effective programs.
2-8

Internal Analysis: Business Relationships
Includes relationships with:
 Suppliers
 Distributors
 Other business partners
Examine:
 Capacity
 Quality
 Value provided
2-9

Internal Analysis: Keys to Success and Warning Signs
Keys to Success:

Identify special factors most crucial to success.

Maintain focus on key priorities.
Warning Signs

Indicate potential problems with the plan.
2-10

External Analysis: Demographic Trends
Examined by target market:

Consumer Demographics

Business Demographics
2-11

External Analysis: Consumer
Demographic Trends
Key consumer demographic trends include:
 Population growth
 Population composition:



Age
Gender
Ethnicity





Religious makeup
Education
Occupation
Household size
Income
2-12

External Analysis: Business
Demographic Trends
 Size and growth of industries

Number of companies.

Number of locations or branches.

Number of employees.

Sales revenues.
 Trends in new business formation may signal emerging opportunities.
2-13

External Analysis: Economic Trends
 Must keep an eye on global, national, regional and local economic trends.
 Some measures typically monitored:

Buying power

Income

Debt

Credit Usage
2-14

External Analysis: Ecological Trends
Potential impacts:

Availability of raw materials.

Government regulations.

Social attitudes.
2-15

External Analysis: Technological Trends
Key trends include:
 Cell phones
 Computers
 Digital media
 Internet access
 Increasing bandwidth
2-16

External Analysis: Political-Legal Trends
Legal Trends: Laws includes international, federal, state and local. Related to:
 Competitive behavior






Pricing
Taxation
Promotion
Distribution
Product liability
Labeling
2-17

External Analysis: Political-Legal Trends
Political Trends
 Global. national, or local
 Can signal a change in the legal environment.
2-18

External Analysis: Social-Cultural Trends
 Key trend: Increasing diversity in markets.
 Keep tabs on popular culture.

Tends to be volatile.
 Core beliefs and values change more slowly over time.
2-19

External Analysis: Competitors
 Identify:

Current competitors.

Possible future competitors.
 Learn about the unique competitive advantages of each competitor.
 Track trends in market share.
2-20

2-21

Three Fundamental Business Strategies
 Cost Leadership Strategy
 Differentiation Strategy
 Focus Strategy
2-22

 S trengths
 W eaknesses
 O pportunities
 T hreats
2-23

2-24

Exhibit 2.5
Judging Organizational Strengths & Weaknesses
Past Performance Trends Comparison vs. Competitors
Are organizational resources & capabilities strengths or weaknesses?
Specific Goals or Targets Personal Opinions of
Strategic Decision Makers

Chapter 3: Understanding Markets and Customers
The Marketing Plan Handbook:
3rd ed.
Marian Burk Wood
3-1

 Market = All the potential buyers for a particular product or service.
 Markets can be defined by:

Product

Customer definition

Geography
3-2

 Markets are always changing
 Market analysis is performed to better understand:

Requirements

Behaviors, and

Attitudes
3-3

 Market share : The percentage of total sales (dollars or units) held by a particular company, brand or product.
 Directly affects segmentation and marketing.
 Serves as a baseline for understanding historical market dynamics.
3-4

Consumer vs. Business Markets
3-5

5 Basic Levels of Market Definition
Level Definition
Potential Market All customers who may be interested in a particular offering.
Available Market Customers who are interested, possess sufficient income, and have access to the offering.
Qualified
Available Market
Target Market
Customers who are qualified to buy based on age or other criteria.
Penetrated
Market
Customers that the company intends to target.
Customers who are already buying the product.
3-6

Analyzing Customer Needs and Behavior
3-7

Information needs include:
 Who?
 What?
 Where?
 When?
 Why?
 How?
3-8

Considerations for the Consumer Market
 Cultural
 Social
 Personal
3-9

Consumer Market: Cultural
Considerations


Different cultures means different approaches to buying situations, due to differing values, beliefs and preferences.
Subcultures: Groups within a larger culture that preserve distinct cultural identity:

Religion


Ethnic background
Lifestyle
 Class: Levels of socioeconomic status.

Persons of same class exhibit similar behaviors
3-10

Consumer Market: Social
Considerations
 Social influences on behavior include:

Family members

Friends

Work Groups

Civic Organizations
 Within social groups, consumers are influenced by opinion leaders , who provide advice and guidance.
3-11

Consumer Market: Personal
Considerations
 Personal factors include:

Family life cycle

Lifestyle

Psychological makeup
 Psychographic characteristics include:

Motivations

Perceptions

Attitudes
3-12

Considerations for the Business
Market
Special considerations for businesses include:
 Organizational Connections

Internal players

Suppliers
 Organizational Considerations

Company characteristics

Derived demand
3-13

Organizational Connections:
Internal Players
Also to consider:
 Those who initiate the decision
 Those who use the products/services
 Those who evaluate the alternatives
 Those who approve the release of funds
3-14

Organizational Connections:
Suppliers
Current relations with competing suppliers should be considered:
 Long-term contracts
 Evaluations
 Requirements
 Other elements
3-15

Organizational Considerations:
Company Characteristics
Company characteristics include:

Company’s size and industry
 Current market share and growth


Competitive situation
Buying policies and procedures


Financial constraints
Timing of the purchases
3-16

Organizational Considerations:
Derived Demand
Derived demand: The principle that demand for business products is based upon
(derived) demand for related consumer products.
Derived demand requires that B2B marketers be aware of emerging trends and needs in consumer markets and be ready to help their business customers serve their consumer customers.
3-17

Two basic types of research:
 Secondary Research:

Information already collected for another purpose.

More readily available and less expensive than primary research.
 Primary Research:

Research conducted to address a specific situation
3-18

Examples of Sources of
Secondary Research
3-19

Secondary Research: Some
Cautions
Some cautions for using secondary research:


Before using, check dates and sources.
Consider the source’s credibility


Reputable?
Unbiased?


Look into the sources cited by your secondary source
Be careful about applying general learning to your specific situation.
3-20

 Problem Definition

What information is needed?

How will it be used?
 Data Collection

Methods include:



Observation
Surveys
Experiments
3-21

Primary Research Techniques:
Focus Groups
 Small group of customers/prospects
 Guided discussion
 Yields insights into customer thinking, attitudes and behaviors
 Drawback: May not be representative of the entire market.
3-22

Primary Research Techniques:
Ethnographic Research
 Ethnographic Research: Observing how customers behave in actual product purchase or usage situations, and asking to clarify the reasons for behavior.
 Helps marketers to:

Develop new product ideas.

Fine-tune personal selling approaches.

Plan for other marketing attention.
3-23

 If research is needed, include this as a budget item in your marketing plan.
 Plan for ongoing market research to help measure results during implementation.
 Good decision making involves weighing the pros and cons of making a decision based on limited data, or waiting for research.
 Be respectful of consumer privacy concerns.
3-24

Chapter 4: Planning Segmentation,
Targeting and Positioning
The Marketing Plan Handbook:
3rd ed.
Marian Burk Wood
4-1

Fragmentation and Intense
Competition
 Customers exhibiting a wider variety of:

Needs

Attitudes, and

Behaviors
 Companies must differentiate themselves more distinctly in the markets where they compete.
4-2

The Need for Segmentation,
Targeting and Positioning
 A move away from mass marketing.
 A move towards segment marketing.
 Allows marketers to focus their resources on the most promising opportunities.
 Improves marketing efficiency and effectiveness
4-3

 Definition: the process of grouping customers within a market according to similar needs, habits or attitudes that can be addressed through marketing.
 Even within a large segment, marketers often can identify niches .
4-4

Steps in the Segmentation Process
1. Select the general market:

Eliminate markets that have no need for the product or are inappropriate for other reasons.
2. Apply segmentation variables.
3. Assess and select segments for targeting
4-5

Overview of Segmentation,
Targeting and Positioning
4-6

Consumer Segmentation Variables
Type of Variable Examples
Behavioral and
Attitudinal
Benefits sought, rate of usage, attitude toward product and usage, price sensitivity.
Demographic Age, gender, family status, household size, income, occupation, education.
Geographic Location, distance, climate.
Psychographic Lifestyle, activities, interests.
4-7

Segmenting by Behaviors and
Attitudes
In many ways, the best way to segment:
 Help marketers analyze the specific value that a particular group expects from the offering.
 Include variables like:


Benefits required or expected
Usage occasion and status



Loyalty status
Technological orientation
Attitudes toward products or usage
4-7

 Popular for segmentation because they are common and easily identified consumer characteristics.
 Often point to meaningful differences in:

Consumer needs and wants.

Product consumption.

Media usage.
 However, care must be taken to avoid over-generalization or stereotyping.
4-9

May be based on:

A company’s ability to sell and service products in certain areas or climates,
 Its interest in entering promising new markets, or
 Its reluctance to sell in certain areas due to environmental threats or unfavorable climate.
4-10

Segmenting by Psychographics
 Includes such variables as lifestyles, activities, interests and attitudes.
 Provides a deeper understanding of what and why consumers buy.
 When consumer activities or interests cross demographic and/or geographic lines.
4-11

Business Segmentation Variables
Type of Variable Examples
Behavioral and
Attitudinal
Purchasing patterns and process, user status, benefits expected, order size/frequency, buyer/influencer/user attitudes.
Demographic Industry, business size, business age, ownership structure.
Geographic Location, distance, climate.
4-12

Segmenting by Behaviors and
Attitudes


Helps marketers identify what specific business segments want and value, as well as how/why they buy.
Includes variables such as:




Purchasing patterns
User status
Attitude toward technology
Loyalty status




Price sensitivity
Order size/frequency
Attitudes
Benefits expected
4-13

Common business demographic variables used:
 Industry
 Business size
 Business age
 Ownership structure
4-14

 Utilizes such variables as nation, region, state, city and climate.
 Allows for the grouping of potential customers according to:

Concentration of outlets

Location of headquarters

Geography-related needs or responses
4-15

Assessing Potential Target Markets
 Target Market: The segment of the overall market that a company chooses to pursue.
 Each potential segment must be evaluated based upon fit with the firm’s:

Resources

Core competencies

Goals and objectives

Offerings
4-16

Assessing Segment Attractiveness
4-17

Ranking and Choosing Among
Potential Segments
Here is an approach sometimes taken:
1.
2.
3.
Take all potential targets.
Rate each potential target across a number of selected criteria. Develop
“importance” weights for each of the criteria.
Develop a composite score for each segment.
4-18

Segment
A
B
C
Growth
Potential
Competitive
Superiority
Fit with
Company
Resources
3
5
4
5
4
2
2
4
3
Overall
Score
10
13
9
Scoring key: 5 = highly attractive, 4= moderately attractive, 3 = average, 2 = moderately unattractive, 1 = highly unattractive
4-19

 Concentrated Marketing

Concentrating the marketing efforts on only one key segment.
 Undifferentiated Marketing

Targeting all segments with the same marketing strategy.
 Differentiated Marketing

Creating a separate marketing strategy for each segment.
4-20

 Growing number of companies are gaining insights by developing personas:

Detailed but fictitious profiles representing how individual customers in their targeted segments behave, live and buy.
 Give marketers a deeper understanding of what shapes each segment’s needs, preferences, buying behavior and consumption patterns.
4-21

 Positioning is the differentiation of the brand or product on the basis of attributes that customers find meaningful.
 Positioning conveys the value that the brand provides and sets the brand apart.
 Sets the tone for the marketing plan.
 Should be re-evaluated periodically.
4-22

 Some sources of meaningful differentiation:

Product features

Service attributes

Channel attributes

Pricing attributes

Other attributes
 Consideration is also given to positions being staked out by the competition .
4-23