How To Write A Killer Marketing Plan

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  • 1. Today’s Agenda •! What is a Marketing Plan? Why is it Important? •! How to Write a Marketing Plan? How to Write a Killer Marketing Plan e-Society Seminar March 11, 2010 Dr. Michael Merz Department of Marketing & Decision Sciences College of Business San Jose State University 2 Dr. Michael Merz Department of Marketing & Decision Sciences College of Business, San Jose State University Marketing Plan and Its Importance What is a Marketing Plan? Why is •! Marketing Plan is part of a business plan. •! A document that summarizes marketplace it important? knowledge and the marketing strategies and specific plans to be used in achieving the new venture’s marketing and financial objectives. •! Internal document that helps a new venture flesh out its marketing activities and solidify its goals. It acts as an important road map for the new venture. •! External document that helps a new venture 3 present itself to potential investors, suppliers, 4 business partners, and key job candidates. Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Guidelines for Writing a Marketing Plan How to Write a Marketing Plan? First how NOT to write a Marketing Plan: •! Founders with none of their own money at risk. •! A poorly cited plan. •! Market size is defined too broadly (e.g., target is the $550 billion/year pharmaceutical industry). •! Overly aggressive financials -> loss of credibility •! Sloppiness in any area. 5 6 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University
  • 2. Guidelines for Writing a Marketing Plan Section Description I. Executive Summary •! Briefly reviews the plan’s highlights and objectives I. The Executive Summary •! Guerilla Marketing Plan constitutes good basis for the executive summary II. Current Marketing Situation Describes the current situation, product, market, environment, and competition. III. Environmental Analysis Summarizes environmental trends affecting the new venture and provides SWOT analysis. IV. Objectives and Issues Outlines the specific marketing objectives and identifies issues that may affect the new venture’s attainment of these objectives. V. Marketing Strategy •! Shows the strategy to be used to achieve the marketing objectives •! Explains the segmentation, targeting, and positioning decisions and analyzes the market and segments to be targeted through marketing strategy. Lays out the program supporting the marketing strategy, including VI. Marketing Programs specific activities, schedules, and responsibilities for 4 P’s. VII. Financial Plans Details expected revenues, expenses, and profits based on the 7 8 marketing programs in the plan. Indicates how progress toward objectives will be measured VIII. Implementation Controls and how adjustments will be made to keep programs on track. Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Executive Summary Executive Summary Guerrilla Marketing Plan Guerrilla Marketing Plan – Example The purpose of Prosper Press is to sell the maximum number Guerrilla Marketing Plans are brief. of books at the lowest possible selling cost per book. This will 1.! The first sentence tells the purpose of the marketing be accomplished by positioning the books as being so strategy. valuable to free-lancers that they are guaranteed to be worth more to the reader than their selling price. The target market 2.! The second tells how you’ll achieve this purpose, will be people who can or do engage in free-lance earning focusing upon your benefits. activities. Marketing tools to be utilized will be a combination 3.! The third tells your target market – or markets. of classified advertising in magazines and newspapers, direct 4.! The fourth tells the marketing weapons you’ll employ. mail, sales at seminars, publicity in newspapers and on radio 5.! The fifth tells your niche and position. and television, direct sales calls to bookstores, and mail-order 6.! The sixth tells your identity. display ads in magazines. The niche to be occupied is one that stands valuable information that helps free-lancers succeed, the 7.! The seventh tells your budget, expressed as a ultimate authority for free-lancers. Our identity will be one of percentage of your projected gross revenues. 9 expertise, readability, and quick response to customer requests. 10 Thirty percent of sales will be allocated to marketing. Levinson (2007), Guerilla Marketing Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Product Overview II. Current Marketing Situation •! Description of your new venture product idea. •! Show that new venture idea constitutes an opportunity (durable, timely, attractive, valuable for customers). •! Show that window of opportunity is open. •! Describe how your new venture product idea creates value (solving a problem, finding a gap in the marketplace). •! Results from product/service feasibility analysis. 11 12 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University
  • 3. Window of Opportunity Market Overview Feasibility Analysis has four components. Market Size Window of Opportunity t(1) – t(0) Time - Concept Test Results t(0) t(1) 13 - Usability Test Results 14 -! Industry Attractiveness “Window of opportunity” is a metaphor -! Market Timeliness describing the time period in which a - Identification of Niche Market firm can realistically enter a new market. Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Environmental Analysis III. Environmental Analysis •! The Marketing Environment consists of actors and forces outside the organization that affect management’s ability to build and maintain relationships with target customers. –! Studying the environment allows marketers to take advantage of opportunities as well as to combat threats. –! Marketing environment is made up of a microenvironment and a macroenvironment. –! Marketing intelligence and research are used to collect information about the environment (primary versus secondary research). –! Weigh the pros and cons of making a decision based on 15 16 limited data, or waiting for research. Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Environmental Analysis SWOT Analysis The 5 C’s •! The SWOT analysis is critical: –! Finding opportunities Context –! Avoiding threats –! Understanding strengths Competition Collaborators –! Analyzing weaknesses Competitive Advantage Shared Interests Company Customer Core Competencies Unmet Needs Target Market 17 18 Assess the Situation Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University
  • 4. Objectives versus Goals IV. Objectives and Issues •! Goals and Objectives. –! Goals = Long-term performance targets. –! Objectives= Short-term performance targets. •! The direction chosen must be consistent with the organization’s priorities and strengths. 19 20 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University There are Three Types of Keys to Effective Objectives Objectives in Marketing Plans •! Marketing objectives: Targets for managing certain •! Specific, time-defined, and measurable. marketing relationships and activities. •! Realistic, but challenging. •! Financial objectives: Targets for managing certain •! Consistent with the mission and overall goals. financial results. •! Consistent with internal environmental analysis. •! Societal objectives: Targets for achieving •! Appropriate in light of opportunities and threats. particular results in social responsibility. 21 22 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Mission (Statement) V. Marketing Strategy •! A statement of the organization’s purpose. –! What it wants to accomplish in the larger environment. •! Should be market oriented and defined in terms of customer needs. 23 24 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University
  • 5. Three-Step Process of Target Mission Example Marketing •! New ventures must ask themselves: “What are we selling to whom?” and “Why should a member of In 2002 Microsoft’s The mission statement the target segment buy my product or service mission was "To now reads, "At rather than my competitor’s?” empower people Microsoft, we work to through great help people and •! To answer these questions, a three-step process software -- any businesses throughout is normally followed: time, any place, and the world realize their on any device.” full potential.” 25 26 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Segmentation Target Marketing •! Concept Evaluating market segments/niche markets –! Customers differ in the benefit they expect to receive from a product/service •! Niche size and growth (with growth more important –! While not all customers are heterogeneous, there are than size) often CLUSTERS of customers that are –! Segmentation = cluster of (nearly) similar customers •! Niche structural attractiveness –! Level of competition •! Goal: Identify factors that separate CLUSTERS –! Potential entrants –! Geographic – country, urban/rural, region, etc. –! Substitute products –! Demographic – age, sex, income, education, industry, size of organization –! Power of buyers –! Psychographic – personality traits, perceptual style, –! Powerful suppliers attitudes, reference group, social role –! Product Benefits/Usage – needs, frequency of use, •! New venture’s objectives and resources loyalty, performance requirements 27 28 –! Decision Process – shopping patterns, info search, media habits, price sensitivity Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Target Marketing Positioning Market Coverage Strategies •! Positioning = What the target group perceives about your brand relative to how they perceive the competition. •! Building a competitive advantage is key. •! A new venture has a competitive advantage when customers perceive that its products/services are superior to those of its competitors. •! Find a position/niche and fill it. •! Strive to be unique. –! Positioning/perceptual maps help identify a unique and attractive position. 29 –! Define a unique selling proposition (USP) Entrepreneurs may only consider two segments: the niche they are targeting and Dr. Michael Merz Dr. Michael Merz “everyone else”. Department of Marketing & Decision Sciences College of Business, San Jose State University Department of Marketing & Decision Sciences College of Business, San Jose State University
  • 6. Positioning by Name or Slogan Positioning by Features vs. Benefits •! Entrepreneurs can save significant money in positioning their market •! One common mistake entrepreneurs make is that offerings by: (1) Choosing a name that connotes the appropriate they position their market offering in terms of positioning. features. E.g., •! Please Touch Museum in Philadelphia •! “Customers don’t buy perceived features, they buy •! CDNow (CDs on the Internet) perceived benefits”. •! Netscape Communications (Internet browser) •! NetFlix (movie rentals on the Internet) •! E.g., •! Cars.com (cars on the Internet) “Our cell phones are equipped with sufficient memory to •! 1-800-Flowers, 1-800-Diapers store 100 phone numbers” (2) Developing a “tagline”/slogan to reinforce the (feature positioning) position they have staked out in their market. E.g., vs. •! Visa: “It’s everywhere you want to be” •! Michelin: “Because so much is riding on your tires” “Our cell phones lets you store up to 100 phone numbers, •! MySpace: “A place for friends” giving you the phone numbers of your family and your 31 32 •! eBay: “The world’s online marketplace friends at your fingertips” •! NetFlix: “There is always a movie to watch at home.” (benefit positioning) •! Google: “To organize the world’s information.” Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University How might a surgeon explain a new surgical procedure to a patient lying in a hospital bed, if only technical features (rather than benefits) were explained? VI. Marketing Programs “Have I got an operation for you. Only three incisions and an Anderson Slash, a Ridgeway stubble-side fillip, and a standard dormer slip! Only five minutes with a scalpel; only thirty stitches! We can take out up to five pounds of your insides, have you back in your hospital bed in 75 minutes flat, and we can do ten of 33 34 them in a day”. (McMath and Forbes (April 1998) in Entrepreneur, pp. 135-139) Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University The Marketing Mix Three Levels of Product Additional benefits Assess the Situation (5 C’s) and services built around the core benefit and actual product Select Target Target Market Market Define Product Place Marketing Mix (4P’s) Price Promotion 35 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University
  • 7. Product Price •! Describe, in detail, your product/service idea. Competitors Prices •! Describe how your product/service fulfills unmet Product’s Perceived marketplace needs. Value •! Differentiate your product/service from the Skim Pricing competition. Feasible •! Explain why and how customers will switch to your Price Range product or service. Penetration Pricing •! Describe how you will defend your product or service from competition. Product’s Cost 37 38 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Price Promotion •! Describe and justify your pricing strategy. •! Describe how you will communicate with current •! Provide evidence that your target market will and potential customers. accept your price (e.g., product feasibility analysis –! Advertising results). –! Public relations •! Position your strategy relative to current and –! Personal selling potential competition. –! Sales Promotion –! Direct Marketing •! NOTE: Low price often (usually) is NOT a good –! Other means of promotion strategy for a startup! •! Explain why the chosen strategy is most effective in reaching your target market. 39 40 •! Note: Use Guerrilla Marketing Techniques. Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Promotion Place •! Explain how you will deliver your product or service Promotion Tool Use to your customers. Advertising Efficiently get messages to large –! How will your customers acquire your product or service? audience. •! Describe and justify the distribution channels you Sales Promotion Stimulate immediate purchase, reward repeat purchases, motivate sales will use. personnel. •! Describe how you will gain access to your planned Public Relations Build positive image, strengthen ties with distribution channels. stakeholders. Direct Marketing Reach targeted audiences, encourage direct response. Personal Selling Reach customers one-to-one to make 41 42 sales, strengthen relationships. Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University
  • 8. Place Distribution Channels VII. Financial Plans 44 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Financial Plans •! Sales/revenue forecast. VIII. Implementation Controls •! Marketing expense budget(s). •! Break-even analysis. •! Profit and loss analysis. 45 46 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Measuring what Matters Identifying Metrics •! Measurement •! Working backward from mission, goals, and –! Schedules identifying the timing of marketing tasks. objectives. –! Metrics to gauge progress toward achieving objectives. •! Looking for key components or activities related to customer buying behavior. •! Control •! This includes metrics for each of the three key –! Identify. areas: –! Analyze. –! Marketing objectives. –! Correct. –! Financial objectives. –! Societal objectives. 47 48 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University
  • 9. Sample Marketing Metrics Sample Financial Metrics Objective Metric Objective Metric To acquire new Measure number or percentage of customers. new customers acquired by month, To increase sales revenue Measure product sales in dollars quarter, year. by product. per week, month, quarter, or year. To retain current Measure number or percentage of To improve profitability. Measure gross or net margin for a customers. customers who continue purchasing set period by product, line, during a set period. channel, marketing program, or To increase market share. Measure dollar or unit sales divided customer. by total industry sales during a set To reach break-even. Measure the number of weeks or period. months until a product’s revenue To accelerate product Measure the time needed to bring a equals and begins to exceed development new product to market. 49 costs. 50 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Sample Societal Metrics Sample Behavioral Metrics Objective Metric Behavior Metric To make products more Measure the proportion of each environmentally friendly. product’s parts that are recyclable Customer Awareness Customer awareness per or have been recycled during a set telephone survey. period. Customer Learning Number of information packets To build awareness of a Measure awareness among the requested, number of hits to a social issue. target audience after the program website. or a set period. Customer Attitudes Customer attitudes per telephone To conserve electricity or Measure amount used by month, study, feedback on blogs, fuel. quarter, year. customer letters. 51 52 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University Contingency Plan •! Plans that organizations have ready to implement if their original strategies are disrupted by significant, unexpected changes, such as: Thank you! –! Computer system outages –! Power outages –! Natural disasters Now, follow your dreams! –! Etc. •! Should be creative in terms of considering options, priorities, and resources. Q&A 53 54 Dr. Michael Merz Dr. Michael Merz Department of Marketing & Decision Sciences Department of Marketing & Decision Sciences College of Business, San Jose State University College of Business, San Jose State University