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Fuqua School of Business

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Presentation on theme: "Fuqua School of Business"— Presentation transcript:

1 Fuqua School of Business
Marketing Planning Professor Carl Mela BA 460 Product Management Fuqua School of Business Brand Management System On Building A Brand Managing Across Brands

2 Agenda Marketing Planning PharmaSim

3 The Purpose of Planning
“Planning is everything, plans are nothing.” General Eisenhower Planning is to a large extent the job of making things happen that would not otherwise occur.

4 Obstacles to Planning Good Forecasting Time Lack of Process
Lack of Management Commitment

5 Responsibility for Planning
Source: Conference Board

6 Responsibility for Approving Plans
Source: Conference Board

7 Planning Horizon Source: Conference Board

8 Top Down v. Bottom Up Bottom Up Top Down
Closer to implementation, motivated by control, better forecasts Top Down More vision at the top, more coordination

9 Planning Process Set Deadlines / Initiate Process Gather Data
Analyze Data / Situation Assessment Make Plans & Forecasts Refine Plan Management Approval Disseminate, Monitor & Control

10 Consider Company Goals
Assess Situation Consider Company Goals Set Measurable Objectives Develop Strategies, Action Plans, Responsibility Assignments, and Due Dates Evaluate Programs Against Objectives Attainable Unattainable Draft Marketing Plan Compare Programs to Resources Feasible Infeasible Submit Plan for Approval Approved Not Approved Go Source: Conference Board

11 The Marketing Plan Where are we now? Where do we want to be?
How do we get there?

12 Marketing Plan Executive Summary Situation Analysis
Marketing Objectives Strategy and Tactics Monitors and Controls Financial Documents

13 Situation Analysis Review of Status and Future Outlook
Not just data, but implications Brevity, prioritization of information Diagnostic, not descriptive Contains: Category Analysis and Forecast Trends Sales Analysis 3 C Analysis Planning Assumptions Summary (Problems and Opportunities)

14 Objectives “If you don’t know where you want to go, any road will take you there” Precise, with dates and numbers Sales, profits, share, etc. Measurable and achievable Subsequent strategy and tactics must demonstrate compliance with objectives

15 Strategy and Tactics Strategy is means to accomplish goal, e.g., awareness goal will be met by advertising Tactics pertains to the implementation, e.g., media schedule, agency, message, etc. how to, by whom, by when, with what resources

16 Monitors and Controls 74% of consumer product firms have explicit sales promotion tactics Only 36% monitor 69% of industrial firms have explicit sales tactics Only 46 % monitor Only 1 in 4 firms has a contingency plan Both good and bad events (e.g., competitor merges or leaves) What ifs and appropriate trigger points Source: Conference Board

17 PharmaSim Goal: Provide context for plan
20% plan, 5% performance Assignment detailed on website Goal: More experience in decision making More brand oriented than Markstrat More promotion and advertising decisions, less production Play against pc, not classmates

18 PharmaSim Overview of Market 250MM Persons (1% Growth /Year)
2% GNP Growth Moderate Inflation 80% of Population Suffers from Colds OTC Market is $2BB Growth 4% / Yr Manufacturer Sales = $1.5BB Five companies Capacity adjusts automatically to demand

19 PharmaSim Market Competition Four Trade (not Consumer) Categories
Four competitors (B, C, D, and E) Four Trade (not Consumer) Categories Cold, nasal, cough, and allergy Brands Have Five Attributes Symptoms relieved, side effects, form (capsule, liquid, spray), duration of relief, and price

20 PharmaSim Market

21 PharmaSim Consumers Buying behavior varies with Buying process
Illness/symptom (cold, cough, allergy), age, and usage occasion (day or night, work or home) Thus, can segment by illness, age, or usage Note: mfg. sales study (pre-defined category)  consumer survey (usage) Buying process Awareness  Purchase Intention  In Store Attractiveness  Purchase Usage Satisfaction  Repurchase

22 PharmaSim Channel Through Wholesale or Direct to:

23 PharmaSim Decisions Pricing Salesforce Size MSRP Trade
<250 Units, <2500 Units, >2500 Units Wholesale Salesforce Size Direct (By Channel) Indirect (Wholesale, Merchandisers - Retail Sales Support, Detailers for M.D.’s)

24 PharmaSim Decisions Advertising Targeting Message
Segments (By Age and Usage) Agency Budget Message Message (primary demand, benefits, competitive comparison, or reminder message) Benefits (e.g., aches, congestion, etc.)

25 PharmaSim Decisions Trade Promotions Consumer and Trade
Allowances (% of MSRP by channel) Co-op Ads (total $ and which channels) Consumer and Trade POP ($ and which channels) Trial Size ($) Coupons ($ and face value)

26 PharmaSim Decisions Product Reformulation - before decision 2
Line extension - before decision 4 New product - before decision 5 Your own product - before decision 8

27 PharmaSim Tips Please review tips on website (link from syllabus)
Read pages 5-66 carefully. E.g., buried on page 66 is the statement that FC continue when product is dropped. Important, but easily missed. Other examples abound.

28 Other PharmaSim Tips Think analytically Sales = Share * Market Size
Share = f (marketing $ and quality, value/price, synergies among marketing activities, fit with segments selected, positioning relative to competition) Size = f(population, needs, available product benefits, industry marketing $ and quality, product life cycle)

29 More Tips Marketing $ can interact Deals more effective with ads
Stockpiling is possible Understand the role of channel and how to motivate Think about the ramifications of your strategies A leading brand (Allround) should never run comparison ads against a niche brand (Coughcure) Line extensions do not need the same marketing $ as new brands Allocate marketing $ to area with highest returns Key opportunity is chance to introduce new product into a market with a real need (e.g., Allright Allergy). Shift resources to new product

30 One Last Tip Cost dynamics, margin management, value based pricing, and capacity utilization are essential to profitability.

31 Marketing Plan Assignment
The assignment is detailed on the website and linked to the syllabus. First move of Pharmasim should take 2 hours. Then, about 1 hour + for the remaining 7 moves for a total of 10 hours. Harvard runs 10 moves in 24 hours period.

32 Marketing Plan Assignment
Three parts (4 pages & Exhibits) Situation analysis Marketing program and financials Executive summary, contingencies, and post-mortem 3 reports = 20% , performance = 5% Please turn in copy of diskette and administrator report with the first two parts Note: marketing planning (although not handed in) should occur each period of PharmaSim!

33 Marketing Plan Assignment
Marketing plans represents 20-30% of what you will do. Daily product management is the other 70-80%. This Assignment aligns with both.

34 Summary Marketing Plan PharmaSim is Vehicle for Plan Executive Summary
Situation Analysis Marketing Objectives Strategy and Tactics Monitors and Controls Financial Documents PharmaSim is Vehicle for Plan

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