8 Top Down v. Bottom Up Bottom Up Top Down Closer to implementation, motivated by control, better forecastsTop DownMore vision at the top, more coordination
9 Planning Process Set Deadlines / Initiate Process Gather Data Analyze Data / Situation AssessmentMake Plans & ForecastsRefine PlanManagement ApprovalDisseminate, Monitor & Control
10 Consider Company Goals Assess SituationConsider Company GoalsSet Measurable ObjectivesDevelop Strategies, Action Plans,Responsibility Assignments, and Due DatesEvaluate Programs Against ObjectivesAttainableUnattainableDraft Marketing PlanCompare Programs to ResourcesFeasibleInfeasibleSubmit Plan for ApprovalApprovedNot ApprovedGoSource: 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 ObjectivesStrategy and TacticsMonitors and ControlsFinancial Documents
13 Situation Analysis Review of Status and Future Outlook Not just data, but implicationsBrevity, prioritization of informationDiagnostic, not descriptiveContains:Category Analysis and Forecast TrendsSales Analysis3 C AnalysisPlanning AssumptionsSummary (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 numbersSales, profits, share, etc.Measurable and achievableSubsequent strategy and tactics must demonstrate compliance with objectives
15 Strategy and TacticsStrategy is means to accomplish goal, e.g., awareness goal will be met by advertisingTactics pertains to the implementation, e.g., media schedule, agency, message, etc.how to, by whom, by when, with what resources
16 Monitors and Controls74% of consumer product firms have explicit sales promotion tacticsOnly 36% monitor69% of industrial firms have explicit sales tacticsOnly 46 % monitorOnly 1 in 4 firms has a contingency planBoth good and bad events (e.g., competitor merges or leaves)What ifs and appropriate trigger pointsSource: Conference Board
17 PharmaSim Goal: Provide context for plan 20% plan, 5% performanceAssignment detailed on websiteGoal: More experience in decision makingMore brand oriented than MarkstratMore promotion and advertising decisions, less productionPlay against pc, not classmates
18 PharmaSim Overview of Market 250MM Persons (1% Growth /Year) 2% GNP GrowthModerate Inflation80% of Population Suffers from ColdsOTC Market is $2BB Growth 4% / YrManufacturer Sales = $1.5BBFive companiesCapacity adjusts automatically to demand
19 PharmaSim Market Competition Four Trade (not Consumer) Categories Four competitors (B, C, D, and E)Four Trade (not Consumer) CategoriesCold, nasal, cough, and allergyBrands Have Five AttributesSymptoms relieved, side effects, form (capsule, liquid, spray), duration of relief, and price
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 usageNote: mfg. sales study (pre-defined category) consumer survey (usage)Buying processAwareness Purchase Intention In Store Attractiveness Purchase Usage Satisfaction Repurchase
22 PharmaSim ChannelThrough Wholesale or Direct to:
24 PharmaSim Decisions Advertising Targeting Message Segments (By Age and Usage)AgencyBudgetMessageMessage (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 TradePOP ($ and which channels)Trial Size ($)Coupons ($ and face value)
26 PharmaSim Decisions Product Reformulation - before decision 2 Line extension - before decision 4New product - before decision 5Your 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 possibleUnderstand the role of channel and how to motivateThink about the ramifications of your strategiesA leading brand (Allround) should never run comparison ads against a niche brand (Coughcure)Line extensions do not need the same marketing $ as new brandsAllocate marketing $ to area with highest returnsKey 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 TipCost 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 analysisMarketing program and financialsExecutive summary, contingencies, and post-mortem3 reports = 20% , performance = 5%Please turn in copy of diskette and administrator report with the first two partsNote: 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 AnalysisMarketing ObjectivesStrategy and TacticsMonitors and ControlsFinancial DocumentsPharmaSim is Vehicle for Plan