MARKETING PLAN

Students will develop a Marketing Plan integrating the material presented in lectures and class activities. The
selected product must be approved by the instructor. Students will submit a report which should have 10-15
pages (excluding reference list and appendices). The report must have the following parts:

1.0 Introduction & Mission Statement

Many people find it easier to write the introduction last, as it should contain a brief statement on each of the
following:

 the essence of your business

 your overall strategy
 key actions or areas you plan to exploit
 any major factors which will affect the plan

You may wish to treat the first bullet as your mission statement. The mission statement is not a framed page of
random buzz words for customer consumption, but a practical, clear concept of the business you are trying to
build.

2.0 Current Market Position

This information summary can be extracted from the marketing audit. Whilst some of this information is used in
the SWOT analysis in the next section, it is extremely useful to have a clear understanding of the current
position of your business, in terms of marketing activity. It is suggested that you use the following sub
headings:

 Product - what products are you selling, what is their market position, what are their competitors.
 Place - where are you currently selling your product, how does this compare to competition.
 Price - what pricing policy do you have? Do you discount? How does this compare to competition?
 Promotion - what types of activities are you currently carrying out?

If you are running a business that provides a service, you should also consider your activities regarding:

 People - quality, recruitment, training.

 Processes - written procedures you have in place to ensure consistency of service.
 Physical Evidence - what message does the appearance of your premises or your people send out to your
customers.

3.0 SWOT

3.1 Strengths and Weaknesses

It is not always easy to assess the strengths and weaknesses of your own business objectively. You may wish to
get someone else close to you or the business to help you. If you are working in different market segments or
with different products it may be easier to carry out your analysis on each segment/product separately.

You might consider the following:

  distinctive product or company strengths
 financial resources
 range and level of service
 client base
 price/fee structure
 distributors
 promotion and selling

3.2 Opportunities and Threats

This is a summary of outside influences and their implications, and the key elements should have been
identified in the marketing audit.

3.3 Competitor Analysis

Here you have the opportunity to summarise the findings of the audit regarding your major competitors. You
need also to try to predict where you think they will be during the time period of your plan, their likely
strategies, customers and markets. You can then use this information to carry out a mini SWOT analysis on
your competition.

4.0 Objectives and Issues

Your objectives should be a realistic statement of what you want to achieve as a result of the analysis you have
carried out. Your strategy should then detail how you plan to achieve it.

Objectives need to be SMART (specific, meaningful, achievable, realistic and time-limited). They need to
be quantitative (i.e. expressed where possible in terms of values, volumes and market shares), and need to cover
the period of the plan e.g. sell 400 units in the next twelve months.

Your objectives may relate to sales volume or market share. You may wish to generate more volume from
existing customers or new business from new customers. You may wish to obtain revenue from a different
distribution channel such as the internet or mail order. Within this element of the plan it is better to work with
top level targets - you can break them down into more specific tasks in the Action Plans.

5.0 Marketing Strategy

5.1 Brief Description of Strategy

Your strategy statement should state in broad detail how the marketing objectives are to be achieved. It should
provide a summary of the more detailed strategies that you will outlined later in this section. As with the
introduction, you may find this overview statement is easier to produce once you have developed your detailed
strategies.

Ideally you should be able to use your SWOT analysis, and statement of Key Issues and Opportunities to help
you choose the market segments in which you will compete, and determine how to position your firm against
competition. In reality you often find that external factors have to some extent determined your objectives in
terms of sales and product development, and you need to develop strategies to meet those objectives.

5.2 Target Market

For a small business, the segment or segments you choose are vitally important, as you can probably only serve
a limited number of segments without overreaching yourself. Before you choose, consider the following:

 Who are your customers?

 Is there a market niche which has not been catered for?
 Are customers in this market satisfied or are they looking for a change?
 Can you offer them something which really meets their needs?
 Will you generate enough business in this segment to survive?
 Alternatively, is there too much business? Will you overreach yourself?
 How will competitors react?
 Can you communicate to this market effectively?

5.3 Positioning Statement

Use the following pointers to help you develop a strong statement defining your approach to your market and
how you intend to be seen.

 Do you have a clear understanding of your customer's needs?

 Do you understand your strengths?
 How will you differentiate your product from competition?
 Which elements of the marketing mix are crucial to success?

5.4 Branding Strategy

It is important to give careful consideration over whether to develop a brand strategy. Even if you are trading in
a commodities market, your company rather than your product can be used as the brand to establish.

A clear branding strategy for your products, your services or your company will differentiate you in the
marketplace. It will enable you to charge more for your product, provide repeat purchases, make it easier for
your sales force to sell and give your customers confidence.

A strong brand is not created overnight, but by using the promotional mix and the support of your customers
you can create a personality and identity for your brand.

5.5 Product Strategy

Product

You should use this section to cover your long-term product strategy. If you are providing a service then you
should consider your service(s) as your product(s). Is your present product range viable and how can it be
improved? Which new products do you need to develop to meet changing market conditions and how can you
go about it? You will need to consider:

 Features/benefits analysis
o Would additional features or services add value to your offering?
o Are there elements of your offering which are unnecessary in the eyes of your customers and can
be removed?
 Unique selling proposition of your products
 Proposed new products
 o Have you included in your range those products or services which are more likely to be in
demand in future?
o Have you some product or service lines that have highly seasonal demand - can you maximise
the 'quiet times'?
o How does the profitability of each product line compare?
o How does the future potential for each product line compare?

5.6 Pricing Strategy

Pricing Strategy

Price affects how much of your product is sold, to whom it is sold, what services must go with it and ultimately
how much profit you make.

If you are currently developing a new product or service you will know that setting a price can be one of the
most difficult decisions you make in business. On the other hand, you may be in a position that having set a
price, it is now difficult to make necessary adjustments without sending the wrong signals to your market.
When pricing is handled sensitively it can have a dramatic effect on the profitability of your firm.

There are no infallible rules for setting the right price, as different businesses at different times use pricing to
achieve quite different objectives. There are four key factors which affect your decision, and all must be
carefully considered before moving forward.

Cost

All prices must, in the long term, cover the costs of generating or marketing your product or service and
produce a reasonable profit. You need to be aware, however that:

 There can be difficulties establishing true costs

 You may end up with a price lower than the market is willing to pay
 Your 'long term' may be different to that of your competitors
 You may need to consider costs across the whole range, rather than for the individual product

Demand

In setting your price you need to take account of the effect price can have on your sales volumes. If there is little
difference between brands in your market price sensitivity is likely to be high and small price differences will
seriously affect demand. You need to be careful, however, as many business people have found that too great a
price drop may sell many more units and make them work much harder, but won't actually increase sales
revenue!

Alternatively, if your product or service is differentiated from your competition you may find that your
customers are not as sensitive to price as you first thought.

Competition

You need to consider the prices charged by your competitors, to give you a benchmark against which to
position your own price. You should not slavishly follow competitors prices however, as you should be striving
to differentiate your product or service in some way to make your offering unique.
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Your pricing policy will send messages to the marketplace about your product.

 For many products there is a 'going price' which it can be dangerous to go below, as people will assume
your product is inferior, or competing in a different sector of the market.
 If you are selling an up-market product through exclusive distributors a high price is likely to increase
acceptability.
 Psychologically many people still perceive £3.99 to be around the £3 price mark, and, more importantly,
you may find that your customers are as receptive to a price of £5.99 as £5.70.
 You don't need to charge the same price for your product or service in all segments. You may find that,
for example, you can charge more for pre-packaged fruit than for fruit provided to be sold loose.
Alternatively, you may find that your service is perceived and used differently by the various segments
of your market e.g. a cleaning company may be able to charge more per hour for domestic cleaning, than
for offices.

Having considered the above, you still need to decide which level of price you will set. You will need to resolve
four basic issues:

Why did you introduce the product?

If you have already covered your overheads and are using spare capacity you can use marginal costing and
lower prices. If it is a long term commitment to the market requiring investment you will have to consider a
different policy.

Should you 'skim the cream'?

If your new product is superior to the competition you can sell it at a higher price than competition. The volume
sold may be small, but the profit margins will be high.

Should you adopt 'penetration pricing'

This route aims to get quick acceptance by setting low prices at launch so as to achieve high volumes quickly.

What will the competitors do?

You need to consider what countermeasures your competitors may take. How vulnerable are they? Will they be
forced to defend themselves aggressively? Are they in such a secure position that they can take long term
actions to undermine your position?

5.7 Distribution Strategy

Distribution Strategy (Place)

Your customers will expect to find your products:

 Available when and where they need them

 In quantities that suit them
 In surroundings that enable them to make a good choice between products
 With access to other services to help them use the product (such as after sales service)
This is the time to think of new strategies for distributing your products or services. Have you considered the
following options:

 Dealing directly with your customers - retailing, selling through the internet, mail order
 Using a specialist intermediary - agent, specialist outlet, catalogue company, retailer
 Use a wholesaler - reduce administration

When choosing remember to consider the following:

 Your customers
 Your product characteristics
 The nature of the distributor
 Your competitors
 Your company size
 The environment in which you are operating

5.8 Promotional Strategy

Promotional Strategy

No matter how wonderful your product, no matter how unique your service, the world is unlikely to beat a path
to your door unprompted. You need to carry out promotional activity to attract the right sort of business, in the
right quantity, at the right time and to distinguish you from the competition.

Promotion is not just about advertising your business, nor is it just about selling. It's about pulling together a
range of techniques, in the most cost-effective way you can, to initiate, increase and maintain awareness of what
you offer to your customers. You need to move your customers from total lack of awareness through to the
point at which they actually buy and buy again.

You may also wish to use the planning process as the opportunity to carry out additional market research into
your customer's needs, your perceptions in the marketplace and how you could improve your product/service.

The components that make up the Promotion element of the Marketing Mix are known as the 'Promotional
Mix'. Technically there are five elements - Public Relations, Advertising, Sales Promotion, Personal Selling and
Direct Marketing.

Public Relations Strategy

Good PR will generate understanding and positive interest in your business. It will whet potential customers'
appetite for more information, prompt enquiries, re-establish dormant contracts and reinforces your image with
existing customers.

PR is a long-term process, to do with developing an image and a reputation with your customers and the market
as a whole. Often this image is created by cumulative effect, based on the quality of your printed materials, your
staff, and the willingness of your customers to broadcast their good experiences. You can however devise
strategies to focus your approach, aimed at enhancing your reputation with people whose opinion you value.

You need to set objectives for your PR so that you have a clear idea what communications message you want to
send out. Your PR activities should then aim to reinforce those messages in the mind of the public.
Publicity is the part of PR which involves capitalising on 'newsworthy' events or opportunities - using the press
to sending a positive message to your marketplace. This is a more tactical activity and a publicity plan should be
included in your one-year plan.

Many people believe PR to be free. This is why a lot of small businesses are not very good at it!

Managing your PR can take up a lot of time and it is often easy to miss good PR opportunities simply because
you are too busy, or too close to the story. Many small businesses use the services of a PR agency. This does
not need to be expensive and may pay for itself in the long term - consider whether this route should be part of
your strategy.

You must remember however, that PR cannot be used to guarantee results as you have no direct control over
what is reported, how and when

Advertising Strategy

Advertising is an almost universal tool. You can use it to gain your customers' attention, attract customers'
interest, create desire for your product and service and then prompt them to buy.

Advertising is defined by the American Marketing Association as:- 'Any paid form of non-personal presentation
and promotion of ideas, goods or services by an identifiable sponsor'. Some people believe direct mail is classed
as an advertising activity.

There are many ways you can advertise your business, and the opportunities are growing. Advertisements can
be placed in local and national press, in magazines, and on the internet. You can also create ads for poster sites,
radio, cinema and TV. Advertising can be as simple as dropping leaflets through doors in your local town, or
placing posters in shop windows. You can use direct mail to carry out a mail shot to potential customers,
existing customers or lapsed customers.

With the more simple advertisements the printer or the person who has sold you the space should be able to help
you construct them. For more ambitious campaigns you probably will need the help of an ad agency.

To create your strategy you need to have a clear understanding of:

 The message you want to send - this should be simple and consistent throughout your activities.
 The target audience you want to reach - at this stage you should know what products or services you
want to send to which market segments.

You will then need to decide which type of activity will best reach your target audience, and carry your
message. Cinema advertising is good for targeting young people, trade magazines are good for targeting
specific industries, whilst leisure and lifestyle titles could be used to target particular age groups.

Direct Marketing Strategy

The US Direct Marketing Association defines direct marketing as 'An interactive system of marketing which
uses one or more advertising media to effect a measurable response/and or transaction at any location'.

Effectively to be classed as direct marketing your activity must involve response, it is often two way
communication, developing a relationship between supplier and customer. Response is carefully measured in an
attempt to take the waste out of marketing and should be part of your long-term strategy. Activity through
virtually any media can be classed as direct marketing, including telemarketing and it is one of the fastest
growing marketing disciplines in the UK.

For most small business, direct mail is the type of direct marketing activity carried out most commonly.

Sales Promotion Strategy

Although often considered as a tactical activity sales promotion is an essential part of the marketing mix. It has
been said that sales promotion can be used to persuade people to take a course of action, which without that
persuasion, they would not normally take.

The Institute of Sales Promotion defines sales promotion as 'a range of tactical marketing techniques, designed
within a strategic marketing framework, to add value to a product or service, in order to achieve a specific sales
and marketing objective.'

Your sales promotion strategy could be developed to support the following activities:

 Introduction of new products - by encouraging stocking or trial

 Attract new customers - by encouraging stocking or trial
 Maintain competitiveness - by providing discounts or special pricing
 Reduce seasonality - by encouraging consumption out of season
 Increase the amount people use your product

Promotions could include free samples, coupons, competitions, temporary price reductions, buy one get one free
offers or free gifts. If you sell your products through a third party you could also look at providing point of sale
material, or special promotions aimed at encouraging your distributor to sell or stock more products

Personal Selling Strategy

The most expensive and the most effective form of promotion is personal selling. Even if your business does
not have a sales force you will have found yourself selling at sometime - whether you were selling your idea to
the bank or encouraging a shop to stock your product.

You need to develop strategies for targeting the right markets, prospecting, developing accounts, and customer
care.

 How will your sales activities be supported by other elements of the promotional mix? Can you use
direct mail to generate leads? Is your PR so good that sales people can easily gain sales appointments?
Have people heard of you?
 Do you have the optimum number of sales people and are they deployed correctly? Are they split
geographically, or would it be better to have them focusing on different products or different market
areas? Should you have someone focusing on new business only, or managing key accounts?
 Have you given enough consideration to the people and processes side of the business to deliver good
customer care (see Services Marketing).

This is also the time to consider whether a sales team is necessary, or whether you could use emerging
techniques such as e-commerce, or telesales to support or replace some of your sales team