Transcript Introduction to Marketing

Marketing Planning
Professor Carl Mela
BA 460 Product Management
Fuqua School of Business
• Brand
Management
System
• On Building
A Brand
• Managing
Across
Brands
Marketing Plan – 1
Agenda
• Marketing Planning
• PharmaSim
Marketing Plan – 2
The Purpose of Planning
• “Planning is everything, plans are
nothing.”
– General Eisenhower
• Planning is to a large extent the job of
making things happen that would not
otherwise occur.
Marketing Plan – 3
Obstacles to Planning
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Good Forecasting
Time
Lack of Process
Lack of Management Commitment
Marketing Plan – 4
Responsibility for Planning
Industrial Consumer Service
Products Products
Firms
Marketing
managers or
directors
Vice President mktg or similar
Product/brand
managers
General managers,
division heads
Sales, advertising,
mktg research
Planning titles
Committee or team
Source: Conference Board
34%
17%
36%
25
29
12
15
23
0
11
8
36
6
9
0
9
13
1
4
8
4
Marketing Plan – 5
Responsibility for Approving Plans
Industrial Consumer Service
Firms
Products Products
President,
chairman, CEO
General division
manager
Vice Presidentmarketing
Group head
Committee
Executive (or
senior VP)
Other
Source: Conference Board
38%
44%
48%
22
14
8
12
12
9
11
11
4
4
0
16
4
3
13
3
24
0
Marketing Plan – 6
Planning Horizon
< 1 year
1 year
1 year + reference
to later years
1 year + longer
term plan
> 1year
Source: Conference Board
Industrial Consumer Service
1%
6%
0%
18%
23%
14%
44%
40%
58%
18%
19%
16%
15%
0%
28%
Marketing Plan – 7
Top Down v. Bottom Up
• Bottom Up
– Closer to implementation, motivated by
control, better forecasts
• Top Down
– More vision at the top, more
coordination
Marketing Plan – 8
Planning Process
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Set Deadlines / Initiate Process
Gather Data
Analyze Data / Situation Assessment
Make Plans & Forecasts
Refine Plan
Management Approval
Disseminate, Monitor & Control
Marketing Plan – 9
Assess Situation
Consider Company Goals
Set Measurable Objectives
Develop Strategies, Action Plans,
Responsibility Assignments, and Due Dates
Evaluate Programs Against Objectives
Attainable
Unattainable
Draft Marketing Plan
Compare Programs to Resources
Feasible
Infeasible
Submit Plan for Approval
Approved
Go
Source: Conference Board
Not Approved
The Marketing Plan
• Where are we now?
• Where do we want to be?
• How do we get there?
Marketing Plan – 11
Marketing Plan
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Executive Summary
Situation Analysis
Marketing Objectives
Strategy and Tactics
Monitors and Controls
Financial Documents
Marketing Plan – 12
Situation Analysis
• Review of Status and Future Outlook
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Not just data, but implications
Brevity, prioritization of information
Diagnostic, not descriptive
Contains:
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Category Analysis and Forecast Trends
Sales Analysis
3 C Analysis
Planning Assumptions
Summary (Problems and Opportunities)
Marketing Plan – 13
Objectives
• “If you don’t know where you want to
go, any road will take you there”
• Precise, with dates and numbers
• Sales, profits, share, etc.
• Measurable and achievable
• Subsequent strategy and tactics must
demonstrate compliance with objectives
Marketing Plan – 14
Strategy and Tactics
• Strategy is means to accomplish goal,
e.g., awareness goal will be met by
advertising
• Tactics pertains to the
implementation, e.g., media schedule,
agency, message, etc.
– how to, by whom, by when, with what
resources
Marketing Plan – 15
Monitors and Controls
• 74% of consumer product firms have explicit
sales promotion tactics
– Only 36% monitor
• 69% of industrial firms have explicit sales
tactics
– Only 46 % monitor
• Only 1 in 4 firms has a contingency plan
– Both good and bad events (e.g., competitor
merges or leaves)
– What ifs and appropriate trigger points
Source: Conference Board
Marketing Plan – 16
PharmaSim
• Goal: Provide context for plan
– 20% plan, 5% performance
– Assignment detailed on website
• Goal: More experience in decision making
• More brand oriented than Markstrat
– More promotion and advertising decisions, less
production
– Play against pc, not classmates
Marketing Plan – 17
PharmaSim
• Overview of Market
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250MM Persons (1% Growth /Year)
2% GNP Growth
Moderate Inflation
80% of Population Suffers from Colds
OTC Market is $2BB Growth 4% / Yr
Manufacturer Sales = $1.5BB
Five companies
Capacity adjusts automatically to demand
Marketing Plan – 18
PharmaSim Market
• Competition
– Four competitors (B, C, D, and E)
• Four Trade (not Consumer) Categories
– Cold, nasal, cough, and allergy
• Brands Have Five Attributes
– Symptoms relieved, side effects, form (capsule,
liquid, spray), duration of relief, and price
Marketing Plan – 19
PharmaSim Market
119.1
126.1
Cold
Cough
366.4
Allergy
879.7
Nasal
Marketing Plan – 20
PharmaSim Consumers
• Buying behavior varies with
– Illness/symptom (cold, cough, allergy), age, and
usage occasion (day or night, work or home)
– Thus, can segment by illness, age, or usage
– Note: mfg. sales study (pre-defined category) 
consumer survey (usage)
• Buying process
– Awareness  Purchase Intention  In Store
Attractiveness  Purchase Usage Satisfaction
 Repurchase
Marketing Plan – 21
PharmaSim Channel
• Through Wholesale or Direct to:
9%
4%
22%
Independent Drugstores
Chain Drugstores
Grocery Stores
Convenience Stores
37%
28%
Mass Merchandisers
Marketing Plan – 22
PharmaSim Decisions
• Pricing
– MSRP
– Trade
• <250 Units, <2500 Units, >2500 Units
• Wholesale
• Salesforce Size
– Direct (By Channel)
– Indirect (Wholesale, Merchandisers - Retail
Sales Support, Detailers for M.D.’s)
Marketing Plan – 23
PharmaSim Decisions
• Advertising
– Targeting
• Segments (By Age and Usage)
• Agency
• Budget
– Message
• Message (primary demand, benefits, competitive
comparison, or reminder message)
• Benefits (e.g., aches, congestion, etc.)
Marketing Plan – 24
PharmaSim Decisions
• Trade Promotions
– Allowances (% of MSRP by channel)
– Co-op Ads (total $ and which channels)
• Consumer and Trade
– POP ($ and which channels)
– Trial Size ($)
– Coupons ($ and face value)
Marketing Plan – 25
PharmaSim Decisions
• Product
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Reformulation - before decision 2
Line extension - before decision 4
New product - before decision 5
Your own product - before decision 8
Marketing Plan – 26
PharmaSim Tips
• Please review tips on website (link
from syllabus)
• Read pages 5-66 carefully. E.g.,
buried on page 66 is the statement
that FC continue when product is
dropped. Important, but easily
missed. Other examples abound.
Marketing Plan – 27
Other PharmaSim Tips
• Think analytically
• Sales = Share * Market Size
– Share = f (marketing $ and quality,
value/price, synergies among marketing
activities, fit with segments selected,
positioning relative to competition)
– Size = f(population, needs, available
product benefits, industry marketing $
and quality, product life cycle)
Marketing Plan – 28
More Tips
• Marketing $ can interact
– Deals more effective with ads
• Stockpiling is possible
• Understand the role of channel and how to motivate
• Think about the ramifications of your strategies
– A leading brand (Allround) should never run comparison
ads against a niche brand (Coughcure)
– Line extensions do not need the same marketing $ as new
brands
• Allocate marketing $ to area with highest returns
• Key opportunity is chance to introduce new product into a
market with a real need (e.g., Allright Allergy).
– Shift resources to new product
Marketing Plan – 29
One Last Tip
• Cost dynamics, margin management,
value based pricing, and capacity
utilization are essential to
profitability.
Marketing Plan – 30
Marketing Plan Assignment
• The assignment is detailed on the website
and linked to the syllabus.
• First move of Pharmasim should take 2
hours. Then, about 1 hour + for the
remaining 7 moves for a total of 10 hours.
Harvard runs 10 moves in 24 hours period.
Marketing Plan – 31
Marketing Plan Assignment
• Three parts (4 pages & Exhibits)
– Situation analysis
– Marketing program and financials
– Executive summary, contingencies, and post-mortem
• 3 reports = 20% , performance = 5%
• Please turn in copy of diskette and administrator
report with the first two parts
• Note: marketing planning (although not handed
in) should occur each period of PharmaSim!
Marketing Plan – 32
Marketing Plan Assignment
• Marketing plans represents 20-30% of
what you will do.
• Daily product management is the other 7080%.
• This Assignment aligns with both.
Marketing Plan – 33
Summary
• Marketing Plan
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Executive Summary
Situation Analysis
Marketing Objectives
Strategy and Tactics
Monitors and Controls
Financial Documents
• PharmaSim is Vehicle for Plan
Marketing Plan – 34