Analysis for Marketing Planning Defining the Market

Marketing Planning A written document containing a specific blueprint for business/business unit’s marketing program and allocations for a specific period of time.

Corporate strategic planning Group or sector planning SBU planning Annual marketing plan

Marketing Planning Sequence Collect data Analyze data Develop objectives, strategies, programs Develop financial documents Negotiate final plan Measure progress toward objectives Audit

Marketing Plan Components Executive summary Situation analysis Industry analysis Competitor analysis Customer analysis Demand analysis & forecasts Marketing objectives Marketing strategy Marketing tactics Product/brand management Pricing management Distribution management Communications management Budget Implementation and control plan Contingency plan

Market Definition How a business sees or defines its market for its product/service. Who do we or will we compete with?

Different Bases of Competition Customer-oriented Marketing-oriented, i.e., advertising and promotion Resource-oriented Geographic

Methods for Determining Competitors Existing categories Substitutability Managerial judgment

Defining market using customer-based data Brand switching Basic question: Are these products substitutes for each other? Positive cross-elasticity of demand Substitute products Negative cross-elasticity of demand Complementary products

Customer judgment Based on customer perceptions Overall similarity--perceptual map

More Gentle Anacin 3   Tylenol Reg. Str. Less Strong More Strong  Tylenol Extra Str.  Bufferin  Bayer  Anacin  Anacin Max.  Excedrin Less Gentle

Customer judgment Similarity of consideration sets Product deletion Substitution in use

Defining market by levels of competition Identify levels or dimensions of competition Three dimensions of competition: Works from broad to narrow Identifies all possible opportunities, enabling business to be proactive and to anticipate consumer needs

First Dimension: Identifies competing product classes serving generic need. Example: Generic need = thirst Competing product classes = milk, soda, coffee, tea, juices, water, etc.

Second Dimension: Identifies competing product forms within product class. Example: Product class = coffee Competing forms = whole bean, ground, instant, coffee bags, etc.

Third Dimension: Identifies competing brands within product form. Example: Product form = whole bean Competing brands = Folger’s, Starbuck’s, Millstone, Gevalia, etc.

Marketing Definition Broad Narrow Thirst Milk Soda Coffee Tea Juice Ground Whole Bean Instant Coffee Bag Narrow Folger’s Starbuck’s Millstone Gevalia

Product form competition: Diet colas Product category competition: Soft drinks Generic competition: Beverages Budget competition: Food & entertainment

Choosing Competitor Focus Depends on several factors: Long-term vs. short-term Product life cycle stage Rate of change in technology Firm’s distinctive capabilities

Product Life Cycle