CHAPTER 11 DEVELOPING THE MARKETING PLAN
Chapter 11 Overview • New Company Marketing Issues • The Marketing Plan • Understanding the Customer • Understanding the Product or Service • Understanding Pricing • Building Relationships and Repeat Sales Through Promotion • Tracking Customers • Maintaining Customer Relationships for Life
New Company Marketing Issues • Marketing the new company and the new product or service • Marketing strategies for small companies are not the same as for large ones • Limited resources and experience
The Marketing Plan - Preparation • Make a list of options • Think like a customer • Study the competition • Analyze the options and rank them
The Marketing Planin One Paragraph • The purpose of the plan • Benefits of the product/service • The customer • The company's identity • The market niche • The marketing tactics • Percentage of sales the budget will represent
Example of a One-Paragraph Marketing Plan The purpose of the marketing plan is to create awareness for ABC Corporation, which will sell innovative, portable power equipment at the highest quality and the lowest possible cost by positioning itself as the leader by providing reliable, dual power source products that reduce the number of pieces of equipment the user must own. The target market is the construction industry, and, more specifically, those who use power tools in areas where no source of power is available. The niche ABC will enter is that of construction companies that own or lease power equipment. Initial marketing tactics will include direct sales to equipment rental outlets, advertisements in trade publications, and trade shows. ABC’s customers will see the company as service-oriented with a quick response to customer needs in both service and product design. Twelve percent of sales will be applied to the marketing strategy.
Product Movement Influence The Target Customer vs.the End User
Defining the Customer • Demographics • Psychographics • Geographics
? Market Research Questions • Who is the customer? • What do they typically buy and how do they hear about it? • How do they like to buy this type of product or service? • How often do they buy? • How can the company best meet the customers' needs?
Steps to Market Research • Assess information needs. What do we want to know? • Research secondary sources first • Measure the target market with primary field research • Forecast demand for the product or service
Mail Surveys • Keep the questionnaire short • Don't ask leading questions • Ask the easy questions first • Ask demographic questions last • Give response ranges for sensitive questions like age and income
Mail Survey vs. Interview or Phone Survey • Mail surveys have a lower response rate • Mail does not have the benefit of non-verbal communication • In a mail survey there is no way to clarify a response • A mail survey usually requires a follow-up survey
Focus Groups • Consist of a representative sample of potential customers • For consumer products, do a blind study • Good for generating detailed feedback
Choosing the Sample • Sample selection is the most critical part of primary research • Random sample: research has little control over who is selected • Convenience sample: not everyone in the defined target market has a chance of being chosen
Understanding the Product or Service • Bundle of benefits to the customer • Intangible benefits such as savings in time and money are most important • Positioning is the way the customer views the product or service, as well as the company
TM Branding • Qualities and philosophy of the company • Defend your brand name • Use the trademark as an adjective • Make sure the media use it correctly • Use a unique typographical treatment • Be careful in the selection of a brand name
Packaging and Labeling • Industrial products use utilitarian packaging • Consumer packaging should attract attention on the shelf • All packaging should tell: • What the product is • The key benefits • Company philosophy
Determinants of Price • Strong demand relative to supply • Inelastic demand • Intense competition • Additional features • New technology • Product positioning
Long-Term Pricing Policies • Become the low price supplier in the industry • Create the widest price range • Maximize penetration of a market • Create price leadership • Position the company in a specific market • Obtain a specific share of the market
Strategies for Pricing • Increase sales • Increase market share • Maximize cash flow • Maximize profit • Set up entry barriers • Define an image • Control demand
Examples of Pricing Strategies • Cost-based pricing • Sliding on the demand curve • Skimming • Demand-based pricing • Penetration • Competition-based pricing • Psychological pricing • Loss leader pricing
Pricing Problems • Prices are always based on costs • Different people set prices with no agreement among them • Prices always follow competition • New prices are a percentage increase over the previous year's prices • Prices to all customers are the same • Discounts are standardized
Advertising • Target the correct audience • Present a positive picture • Reflect the vision and culture of the company • Ask for the sale
How to Get Noticed • Create a special event your company sponsors • Become an expert in your field • Give product away, especially to celebrities • Offer free information • Be the first to do it
Publicity and Public Relations • Publicity is free advertising for a product, service, or business • Public relations is a strategy for presenting the company to the public
How to Get Publicityfor Your Company • Determine what is newsworthy about your company • Get to know people in the media on a first name basis • Make it easy for the reporter to write about the company
Tracking Customers • Track your customers over time using a database • Don't try to sell something every time you meet the customer • Use a voice mail system for feedback • Use a bulletin board service or website to provide free information
The Customer Information File • Recency » When did the customer last make a purchase? • Frequency » How often does the customer purchase? • Monetary value » How much do they spend on average per purchase? » How much have they spent over the last six months?
Keeping the Best Customers • Frequency programs • Club or membership program • Just-in-time marketing • Complaint marketing • Toll-free number • Electronic bulletin boards
Customers' Criteria for an Effective Customer Service Policy • Reliability • Assurance • Tangibles (appearance) • Empathy • Responsiveness
? How Do You Know You’re Customer Oriented? • Do you treat different customers differently? • Do you create a learning relationship? • Do you keep your customers? • Do you organize around customers?