Transcript Name of Presentation - Washington, DC Economic Partnership

The Ins & Outs of
Developing An Effective
Marketing Plan
Presented by
Niambi Jarvis
Funded in part through a cooperative agreement
with the U.S. Small Business Administration
What is Marketing?
 The area of business that involves:
• The determination of customer needs/problems
• The development and offering of tailored services
and/or products that have been developed to meet
those needs
• Capturing customers’ perceived value of
product/service through optimal pricing strategies
• The development and implementation of the
promotional activities that are most likely to
reach a business’ target market and stimulate
purchase
• Identifying the ideal point of contact for
customers to access a business’ products and
services
What is a marketing plan &
why should I have one?
 A marketing plan is a business tool that outlines how a
company will attract, acquire and retain its target
market(s)
 An executable & effective marketing plan:
• Identifies the best customer profile (i.e. those
individuals who are most willing and able to purchase
your products)
• Identifies a business’ optimal niche market (area of
specialization)
• Links sales and profit goals to marketing efforts
• Provides an action plan for accomplishing sales and
marketing goals (e.g. brand awareness, increase in
market share, product line extensions etc.)
• Can substantially increase sales & company value
Common Marketing Myths
1. Everyone is our customer
2. Our products are so good, they sell themselves
3. Price is everything
4. All buyers are rational
5. We have no competition
6. Just make more sales calls
7. Good fences make good neighbors
8. Business is complex; therefore solutions are never easy
9. The future is out of our control
10. Follow the leader
Before you start…
 Conduct research
• Product/Service
• Industry size ($) & projections
• Industry trends
• Major players/competitors
• Market share
• Target market characteristics, size, willingness & ability
to pay
 Research sources:
• Primary research – surveys, interviews, focus groups,
suggestion cards, competitive assessment etc.
• Secondary research – DC SBDC, U.S. Census Bureau,
www.fintel.us, bls.gov, Edgar, Third Wave research,
IBIS World, Public Libraries etc.
Marketing Plan Snapshot
I.
II.
Executive Summary
Situation Analysis
• Industry Analysis
• Company Analysis
• Customer Analysis
• Competitor Analysis
• Collaborators
• Keys to Success
III. Marketing Strategy
• Marketing Objectives
• Financial Objectives
• Target Market
• Market Segmentation
• Positioning Strategy
• Marketing Mix
IV. Financials
• Break-even Analysis
• Sales Forecast
• Marketing Expense Forecast
V.
Controls
• Implementation Milestones
• Marketing Organization
• Contingency Planning
I. Executive Summary
The Executive Summary should be written LAST, and
comprise a high level synopsis of:








Company History
Mission Statement
Marketing Objectives
Industry Trends
Target Market
Target Market Need(s)/Challenges
Solutions – Your Products and/or Services
Financial Feasibility (historical sales (if existing) and
projections)
II. Situation Analysis

Industry Analysis
• Historical & projected industry sales (growth or decline)
• Industry trends (e.g. market segmentation, new
products, markets etc.)
• Political/Legal, economic, social and technological
environment

Company Analysis
• Company products/services
• Company history &
customers
• SWOT analysis
II. Situation Analysis

Customer Analysis
• Target market description & needs
• Target market size, trends and growth
• Value drivers

Competitor Analysis
• Major players (include market share %)
• Market position
• Strengths & weaknesses

Collaborators
• Subsidiaries, joint ventures, strategic alliances etc.

Keys to Success
• e.g. Location, effective networking, effective branding,
increased top of mind awareness, consistent customer
follow up & feedback, customized services/products,
supplier relationships etc.
III. Marketing Strategy
Growth Strategies
III. Marketing Strategy

Marketing Objectives (2012)
• Increase brand awareness
• Increase market share by 10%
• Launch two new products
• Achieve an average customer satisfaction rating of 8
out of 10
• Increase customer retention by 10%

Financial Objectives (2012)
• Generate $500,000 in annual sales
• Increase profit margin from 10% to 15%
III. Marketing Strategy
 Target Market

•
•
•
•
•

Business to Consumer (B2C)
Demographics (age, gender, income, education,
generation)
Geography (region, state, population size, density)
Psychographics (activities, interests, opinions,
attitudes, values)
Behavior (usage patterns, frequency of use, benefits
sought, brand loyalty)
Target Market Size & Needs
Business to Business (B2B)
• Business/Organization Type, Revenue/Budget,
Location, Number of Employees, Types of
Services/Products Purchased, Frequency of Use
• Target Market Size & Needs
III. Marketing Strategy

Market segmentation – involves dividing the market
into groups of individual sub-markets with different
needs, wants and behavior.
Each segment must be:
Identifiable: the differentiating attributes of the segments must be
measurable so that they can be identified.
Accessible: the segments must be reachable through communication and
distribution channels.
Substantial: the segments should be sufficiently large to justify the
resources required to target them.
Unique: to justify separate offerings, the segments must respond
differently to the different marketing mixes.
Durable: the segments should be relatively stable to minimize the cost of
frequent changes.
III. Marketing Strategy

Positioning Strategy – this involves creating an image
or identity in the minds of your target market (Unique
Selling Proposition (USP)).
What are the first things that come to mind when you think of the following
brands?
III. Marketing Strategy
Perceptual Map
High Quality
Low
Price
High
Price
Low Quality
III. Marketing Strategy

Marketing Mix – The 4P’s
Product/Service
• Product Portfolio
• Features & Benefits
• Product Manufacture/Acquisition
• Packaging
• Unique value proposition – what sets my
products/services apart from my competition?
III. Marketing Strategy

Marketing Mix – The 4P’s continued
Price
• Price listing
• Discounts, payment terms, bundling etc.
• Cost factors and mark-up
• Pricing Strategy & logic (penetration, skimming,
competitive value-based)
 Penetration - Setting the price low in order to attract customers and gain
market share; the price will be raised later once this market share is gained
 Skimming - Selling a product at a high price, sacrificing high sales to gain a
high profit, therefore ‘skimming’ the market; usually employed to reimburse the
cost of investment of the original research into the product (commonly used in
electronic markets)
 Competitive Pricing - Setting the price based upon prices of similar
competitor products
 Value-Based Pricing - Pricing a product based on the perceived value and
not on any other factor
III. Marketing Strategy
 Marketing Mix – The 4P’s continued
Promotions
• Determine Promotional Budget & Mix based on
marketing objectives
• Determine 3 Ms - Message, Media and Measurement
Promotional Mix
III. Marketing Strategy
Remember – Connect marketing objectives to
promotional strategy
Advertising - build general awareness/inquiries/traffic, encourage
product trial, shift awareness (e.g. change attitude), response to
competitor promotion, increase use or purchase rate, support other
market decisions (e.g. support sales force), general corporate/product
image building, etc.
Sales promotion - build inquires, increase product trial, encourage
repurchase, build traffic, support other promotions
Personal selling - new account development, account
support/maintenance, increase product trial, encourage
purchase/repurchase, build traffic, support other promotions
Public relations - build general awareness/inquiries/traffic, encourage
product trial, shift awareness (e.g., change attitude), respond to negative
news/perception, image building, prepare markets for future activity (e.g.
new product)
III. Marketing Strategy
Concepts to remember when developing promotional
strategies:
• Integrated Marketing Communications –
Ensure that all aspects of the promotional mix such
as advertising, sales promotion, public relations, and
direct marketing work together as a unified force,
rather than allowing each to work in isolation
III. Marketing Strategy
 Concepts to remember when developing promotional
strategies:
• Customer Relationship Marketing
Involves developing and maintaining long-term
relationships with customers so that they will
keep coming back to make repeat purchases.
Small companies have an advantage over their
larger rivals at relationship marketing.
Requires a company to make customer service
an all-encompassing part of its culture.
III. Marketing Strategy

Concepts to remember when developing promotional
strategies:
• Developing a Competitive Edge
 Focus on the customer
 Devotion to quality
 Attention to convenience
 Concentration on innovation
 Dedication to service and customer satisfaction
 Emphasis on speed
III. Marketing Strategy
Why develop a customer centric approach to business?
• 67% of customers who stop patronizing a business do so
because an indifferent employee treated them poorly.
• 96% of dissatisfied customers never complain about rude
or discourteous service to the company, but...
• 91% will not buy from that business again.
• Treating customers indifferently or poorly costs the
average company 15% to 30% of gross sales!
• 100% will tell their “horror stories” to at least nine other
people.
• 13% of those unhappy customers will tell their stories to
at least 20 other people.
III. Marketing Strategy
• Customer retention:
Companies that are successful at retaining their
customers constantly ask themselves (and their
customers) these four questions:
1.
2.
3.
4.
What are we doing right?
How can we do that even better?
What have we done wrong?
What can we do in the future?
III. Marketing Strategy
 Marketing Mix – The 4P’s continued
Place/Distribution
• Location, location, location (accessibility, foot traffic,
importance to customer, proximity to competition,
parking, size, image)
• Types of channels used
o Direct (retail store, sales force, internet etc.)
o Indirect (retailers, wholesalers, agents etc.)
o Combination
• Distribution costs (e.g. shipping, transportation, distributorship fee)
• Sales Strategy (e.g. sales approach, based on geography)
• Production & inventory capacities
• Cyclical fluctuations or seasonal demands
IV. Financials
Break-even Analysis
• Break-even Point is the level of sales in which a business’ revenue
equals its expenses
• Break-even Formula =
Total Fixed Costs
for a Single
Selling Price per unit – Variable Cost per unit
Product
• Break-even Formula =
for Services or
Multiple Products
Total Fixed Costs
1– (Total Variable Costs/Projected Sales)
Important Definitions:
Fixed Costs – Costs that remain the same regardless of sales
volume e.g. rent, insurance, advertising etc.)
Variable Costs – Costs that are directly related to sales (e.g. sales
commissions, inventory costs, direct labor etc.)
IV. Financials
Sales Forecast
• List assumptions/sales logic (e.g. seasonality, growth, increased
capacity)
• Estimated sales per product/service offering
• Estimated sales per market segment
Sigmund’s Gourmet Pasta Sales Forecast Example
2012
2013
2014
Individuals
$103,710
$262,527
$327,424
Families
$150,304
$380,474
$474,528
Total Sales
$254,014
$643,001
$801,952
2001
2002
2003
Individuals
$46,669
$118,137
$147,341
Families
$67,637
$171,213
$213,538
$114,306
$289,350
$360,879
Sales
Direct Cost of
Sales
Subtotal Direct
Cost of Sales
IV. Financials
Marketing Expense Forecast
• List assumptions/expense logic (e.g. outdoor ads during summer,
sales promotions during slower months, advertising vehicle
proportion)
• Estimated marketing expense per product/service offering
• Estimated marketing expense per market segment
Sigmund’s Gourmet Pasta Marketing Expense Forecast Example
Marketing Expense Budget
2012
2013
2014
Direct mail
$5,267
$5,605
$5,421
Banner ads
$11,704
$12,455
$12,047
$7,022
$7,473
$7,228
------------
------------
------------
$23,993
$25,533
$24,696
9.45%
3.97%
3.08%
Other
Total Sales and
Marketing
Expenses
Percent of Sales
V. Controls
Implementation Milestones
Promotional
Mix
Objective
Vehicle
Target
Market
Budget
Timeline
Expected
Revenue
Executor
Measurement
Advertising
Increase
brand
awareness
Washingtonian
Magazine
*Segment
I
$5,000
1/1/2011 –
1/3/2011
$10,000
William
Carter
Customer
surveys, % of
expected
readership
Sales
Promotion
Increase
product
trial
Coupons
*Segment
II
$3,000
5/1/2011 –
6/1/2011
$5,000
Debbie
Allen
Coupons
redeemed
Personal
Selling
Increase
product
trial
Sales team
*Segment
III
$100,
000
8/1/2011 –
12/1/2011
$300,
000
Richard
Clark
Sales closes
Direct
Marketing
Encourage
purchase/
repurchase
E-mail
campaign I
*Segment
II
$2,000
2/1/2011 –
4/30/2011
$20,000
Lucy
Smiles
E-mail click
through rate
V. Controls
Marketing Organization
•Describe primary marketing roles and qualifications &
background of individuals in these roles
•Outsourcing
Contingency Planning
•Increase/decrease in demand
•Customer price sensitivity
•Channel issues (e.g. with manufacturers, suppliers,
distributors, retailers)
•Competitive retaliation (price wars, product imitation)
•Diminished return on marketing investment
•Location challenges (construction, new residents etc.)
•Product quality/recall
Thank You!
Please Contact the DC SBDC for Consulting:
DC Small Business Development Center
GADGET Center, Howard University
2801 Georgia Ave., NW
Washington, DC 20001
Office: 202.319.1393
Twitter: @dcsbdc
Facebook: \dcsbdc