1. Marketing Planning & Problem Solving [Dr. Carter; MKTG.4900]
COMBINED SET OF
1st SECTION
MARKETING PLANNING
TEXT SLIDES

2. Chapter 1: Introduction to Marketing Planning
The Marketing Plan Handbook
3rd ed.
Marian Burk Wood
1-1

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

4. Contents of The Marketing Plan
Executive Summary
Current Situation
Objectives and Issues
Target Market, Customer Analysis and Positioning
Marketing Strategy
Marketing Programs
Financial Plans
Implementation and Controls
1-3

5. The Marketing Planning Process
1-4

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

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

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

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

10. 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

11. Step 3: Segmentation, Targeting and Positioning
The purpose of segmentation: To group 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

12. 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

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

14. 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

15. Alliance Provides Value
1-14

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

17. The Marketing Mix
1-16

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

19. Pricing 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

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

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

22. 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

23. 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

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

25. Support Strategies: 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

26. 5 Guiding Principles for Effective Marketing Planning
Expect Change
Emphasize Relationships
Involve Everyone
Seek Alliances
Innovate to Provide Value
1-25

27. Chapter 2: Analyzing the Current Situation
The Marketing Plan Handbook
3rd ed.
Marian Burk Wood
2-1

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

29. Internal Factors Mission Resources Offerings Previous Results
Business Relationships
Keys to Success and Warning Signs
2-3

30. External Factors Demographics Ecological Economic Technology-related
Political-Legal
Social-Cultural
Competitors
2-4

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

32. Internal Analysis: Resources
Human
Financials
Informational
Supply
2-6

33. Internal Analysis: Offerings
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

34. 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

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

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

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

38. 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

39. 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

40. 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

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

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

43. 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

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

45. 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

46. 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

47. Porter’s Five Forces Model
2-21

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

49. SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
2-23

50. SWOT Analysis (cont’d)
2-24

51. 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

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

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

54. Markets Must Be Analyzed
Markets are always changing
Market analysis is performed to better understand:
Requirements
Behaviors, and
Attitudes
3-3

55. Market Share
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

56. Consumer vs. Business Markets
3-5

57. 5 Basic Levels of Market 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
Customers who are qualified to buy based on age or other criteria.
Target Market
Customers that the company intends to target.
Penetrated Market
Customers who are already buying the product.
3-6

58. Analyzing Customer Needs and Behavior
3-7

59. Analyzing Consumer Markets
Information needs include:
Who?
What?
Where?
When?
Why?
How?
3-8

60. Considerations for the Consumer Market
Cultural
Social
Personal
3-9

61. 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

62. 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

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

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

65. 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

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

67. 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

68. 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

69. Planning Marketing Research
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

70. Examples of Sources of Secondary Research
3-19

71. 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

72. Primary Research Problem Definition Data Collection
What information is needed?
How will it be used?
Data Collection
Methods include:
Observation
Surveys
Experiments
3-21

73. 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

74. 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

75. Using Marketing Research
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

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

77. 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

78. 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

79. Market Segmentation
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

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

81. Overview of Segmentation, Targeting and Positioning
4-6

82. 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

83. Grading Feedback for Segmentation & Targeting Profile Report:
CUSTOMER DATA PROFILING AS FOOD FOR THOUGHT
Categories
Index/Chart
Process/Content
Food
Menu Summary
Salad
Pasta
Chicken
Fish
Meat
Menu Detail
Salad Types, Servings, Prices
Pasta Dishes, Servings, Prices
Chicken Meals, Servings, Prices
Fish Meals, Servings, Prices
Meat Meals, Servings, Prices
Recipe & Actual Food
Salad Recipes
Pasta Recipes
Chicken Recipes
Fish Recipes
Meat Recipes
Customer
Data
Segmentation
Bases/Variables
Demographic
Geographic
Psychographic
Behavior
Descriptors
(“Peeling the Onion”)
Age, Gender, Income, HHold, Occup.
Country, Region, State, City, SMSA
Lifestyle, AIO, VALS, Personality
Purchases, Retail, Scanner
Search/Source
& Actual Data
Census, yr, #,%,$,etc.
Census/Maps/GIS, loc/proximity, pop, etc.
Lifestyle/Personality surveys & focus groups
Cons. Expend. Survey, Econometric Retail, Nielsen, Epsilon, Acxiom

84. 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

85. Segmenting by Demographics
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

86. Segmenting by Geographics
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

87. 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

88. 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

89. 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

90. Segmenting by Demographics
Common business demographic variables used:
Industry
Business size
Business age
Ownership structure
4-14

91. Segmenting by Geographics
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

92. 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

93. Assessing Segment Attractiveness
4-17

94. Ranking and Choosing Among Potential Segments
Here is an approach sometimes taken:
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

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

96. Coverage Strategies Concentrated Marketing Undifferentiated 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

97. Personas
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

98. Positioning
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

99. Meaningful Differentiation
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

100. Chapter 5: Planning Direction, Objectives, and Marketing Support
The Marketing Plan Handbook:
3rd ed.
Marian Burk Wood
5-1

101. Determining Marketing Plan Direction
The ultimate purpose of the marketing plan is to help the organization achieve its objectives.
Goals = Long-term objective targets.
Objectives= Short-term objective targets
The direction chosen must be consistent with the organization’s priorities and strengths.
5-2

102. Options for Marketing Plan Direction
5-3

103. Growth Most business plans call for unit or dollar sale growth.
The four broad strategies for growth are:
Market penetration
Market development
Product development, and
Diversification
5-4

104. Market Penetration
Is the growth strategy in which the company sells more of the existing products to customers in existing markets or segments.
It is especially viable for companies that can build on established customer relationships and positive value perceptions.
5-5

105. Market Development
Market development involves identifying and reaching new segments or markets for existing products.
5-6

106. Product Development
Product development is a growth strategy in which the company sells new products to customers in existing markets or segments.
5-7

107. Diversification
Diversification is a growth strategy of offering new products in new markets to take advantage of new opportunities:
Through internal product development capabilities, or
By starting or buying a business
5-8

108. Pros and Cons of Diversification
Advantage: Diversification can help avoid over-reliance on a small number of products or markets
Disadvantage: Diversification can dilute available resources and open the organization to competitive attacks on multiple fronts.
5-9

109. Growth Not Always Possible
Growth not always desirable or possible
E.g., tough economic times
Priorities may be to:
Maintain current share
Seek highest possible profits
Retrench
5-10

110. Nongrowth Strategies Nongrowth strategies include:
Filing for bankruptcy
Withdrawing from certain markets
Deleting products
Limiting distribution
Closing a division
5-11

111. Setting Marketing Plan Objectives
Exact objectives depends upon:
The current situation.
Environmental issues and keys to success.
Customers in targeted segments.
The organization’s mission and goals.
The chosen positioning.
5-12

112. Keys to Effective Objectives
Specific, time-defined and measurable.
Realistic, but challenging.
Consistent with the mission and overall goals.
Consistent with internal environmental analysis.
Appropriate in light of opportunities and threats.
5-13

113. Three Types of Objectives in Marketing Plans
Marketers usually set three types of objectives in marketing plans:
Marketing objectives: Targets for managing certain marketing relationships and activities,
Financial objectives: Targets for managing certain financial results, and
Societal objectives: Targets for achieving particular results in social responsibility.
5-14

114. Marketing Objectives
Targets for managing certain marketing relationships and activities:
Customer acquisition
Customer retention
Customer satisfaction
Channel relationships
Unit sales
Market share
Product development
Order fulfillment
5-15

115. Financial Objectives
To be effective, financial and marketing objectives should be consistent.
At times, key financial objectives may give way to achieve a coveted marketing objective.
Financial objectives generally include:
Sales volume and product targets
Profitability targets
Return on Investment (ROI) targets
Break-even targets
5-16

116. Answering to Stakeholders
Various stakeholders have an interest in the activities of the organization:
Customers
Suppliers
Employees
Civic leaders
Others
These stakeholders track company progress on key issues and often hold them accountable.
5-17

117. Societal Objectives Fulfilling societal objectives:
Polishes company and/or brand image.
Shows the organization is doing something constructive about important issues.
Some of the key issues include:
“Greener” products
Charitable donations
Involvement in community projects
Energy conservation
Issue awareness
5-18

118. Cause Related Marketing
Links the marketing of a brand, good or service to a charitable cause.
Although charitable, there is an explicit marketing connection.
5-19

119. Planning Marketing Support
Before plunging into the details of planning the marketing mix, marketers need to set objectives for two aspects of marketing support:
Internal Marketing: marketing to managers and employees inside the company, and
This includes upward communication
Customer Service
5-20

120. Internal Marketing May take the form of: Internal newsletters
Web pages
Training meetings
Marketing or sales meetings
Other techniques
5-21

121. Internal Marketing Support Objectives
Keep employees focused on customers.
Keep employees involved in marketing.
Keep employees informed about marketing.
Improve employee performance and satisfaction.
5-22

122. Customer Service
Customers have different customer service needs at different points in the buying process:
Before the sale
At the moment or point of sale
After the sale
5-23

123. Customer Service Objectives
Meet targeted segment’s needs, expectations.
Attract, retain, satisfy customers.
Reinforce the product or brand positioning.
Allocate service resources appropriately.
Service recovery
Customer service is rarely perfect every time
5-24

124. Shaping the Marketing Mix
Managers look to the key priorities of the organization as they determine action steps and allocate resources.
All tactics and programs developed :
Must be consistent with mission, direction, goals and objectives, and
Support the mission, direction, goals and objectives.
5-25

125. The Strategy Pyramid
5-26