Chapter 8 The Marketing Plan McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives To understand the relevance of industry and competitive analysis to the market planning process To describe the role of marketing research in determining marketing strategy for the marketing plan To illustrate an effective and feasible procedure for the entrepreneur to follow in engaging in a market research study

Learning Objectives To define the steps in preparing the marketing plan To explain the marketing system and its key components To illustrate different creative strategies that may be used to differentiate or position the new venture’s products or services

Industry Analysis Provides knowledge that can affect marketing strategy decision making Identifies competitors’ strengths and weaknesses Competitor analysis Documenting current strategies of primary competitors

Table 8.1- An Assessment of Competitor Marketing Strategies and Strengths and Weaknesses

Marketing Research for the New Venture Step one - Defining the purpose or objectives Step two - Gathering data from secondary sources Step three - Gathering information from primary sources Step four - Analyzing and interpreting the results

Difference Between a Business Plan and a Marketing Plan Road map for the entire organization over time Focuses on decisions pertaining to all the functional departments and future growth strategies Marketing plan Focuses on marketing activities of a venture Integral part of a business plan

Understanding the Marketing Plan Written statement of marketing objectives, strategies, and activities Provides answers to three basic questions Where have we been? Where do we want to go (in the short term)? How do we get there?

Characteristics of a Marketing Plan A marketing plan should: Provide a strategy Be based on facts/valid assumptions Describe an appropriate organization for implementation Provide for short-term and long-term continuity Be simple and short Be flexible Specify criteria for control

Table 8.5 - Outline for a Marketing Plan

Characteristics of a Marketing Plan Marketing system Interacting internal and external factors that affect: Venture’s ability to provide goods and services to meet customer needs

Figure 8.1 - The Marketing System

The Marketing Mix Combination of product, price, promotion, distribution: Needed to meet marketing objectives

Table 8.7- Critical Decisions for Marketing Mix

Steps in Preparing the Marketing Plan Defining the business situation Situation analysis: Describes past and present business achievements of new venture After the start of venture, information should relate to: Present market conditions Performance of the company’s goods and services Future opportunities or prospects

Steps in Preparing the Marketing Plan Defining the target market/opportunities and threats Target market: Specific group of potential customers toward which the venture aims its marketing plan Market segmentation: Dividing a market into definable and measurable groups for purposes of targeting marketing strategy Identify strengths and weaknesses in the target market

Steps in Preparing the Marketing Plan Establishing goals and objectives Marketing goals and objectives: Statements of level of performance desired by new venture Respond to the question, “Where do we want to go?” Organizational goals should: Represent key areas Be limited in number (between six and eight)

Steps in Preparing the Marketing Plan Defining marketing strategy and action programs Marketing strategy and action plan Specific activities outlined to meet the venture’s business plan goals and objectives Product or service Describe the product or service

Steps in Preparing the Marketing Plan Pricing - Three important elements include Costs Margins or markups Competition Distribution Evaluate the choice of distribution channel Promotion Identify the medium to inform potential consumers about the products

Steps in Preparing the Marketing Plan Marketing strategy: Consumer versus business-to-business markets Business-to-business markets - Selling products or services to another business Consumer markets - Sales to households for personal consumption

Steps in Preparing the Marketing Plan Budgeting the marketing strategy Identifying costs to meet desired goals and objectives Implementation of market plan Monitoring the progress of marketing actions Tracking results of the marketing effort Preparing for contingencies

Steps in Preparing the Marketing Plan Weaknesses in market planning Poor analysis of the market and competitive strategy Unrealistic goals and objectives Poor implementation of the outlined plan actions Unforeseen hazards like weather or war