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Inter-American Program for the Promotion of Trade,
                   Agribusiness and Food Safety




Marketing Plan for
Value Added Products
Daniel Rodríguez Sáenz
Agribusiness Specialist
E-mail: daniel rodriguez@iica int
        daniel.rodriguez@iica.int
Tel: (305) 260-9010 ext. 232



    Inter-American Institute for Cooperation on Agriculture
The secret of your success
• Success in marketing comes from knowing who
  your customers are and being able to fulfill their
  needs.



                              Customer Oriented
Targeting the Market
1. Define the target market and

2. Develop a market strategy
1. Define the Target Market
  Market segmentation – dividing the market
  into distinct groups requiring different
  products and/or a diff
      d        d/    different strategies
                                       i
Consumer markets      Individuals with different desires,
                      purchasing power, geographical
                      locations and buying practices
Industrial markets    Manufactures, service firms
                      (hotels), transportation
                      (h t l ) t        t ti
                      companies, resellers (wholesalers
                      and retailers)
Government markets    Agriculture,
                      Agriculture Health ….
Segmenting Consumer Markets
• Segments are identified by applying successive variables to
  subdivide a market.
    bdi id       kt
  Geographic Segmentation      Demographic Segmentation

  • Country                        Age
                               •
  • State                          Sex
                               •
  • County                         Family size
                               •
  • City                           Education
                               •
                                   Ethnicity
                                     h ii
                               •
                                   Nationality
                               •
  Psychographic Segmentation   Behavioral Segmentation

  • Social Class                   Occasions
                               •
  • Lifestyle                      Benefits
                               •
  • Personality                    User status
                               •
                                   Usage rate
                                      g
                               •
Segmenting the Florida Market

        Food Products
        Segmentation:
        • Geographic 
        • Demographic 
2. Market Strategy
2.1 Defining the Market Objectives

• These should be quantifiable and measurable in a
  time frame, such as.

  US$ “X” sales in “Y” by the year “Z”.

• I is recommended to state goals i terms of fi
  It i            dd             l in         f five-
  year forecasts and projection.
• For each year the forecast should include sales in
           y
  value and volume.
Market Strategy

Example of Market Objectives

                               Sales Goals


                              Year 1   Year 2     Year 3   Year 4     Year5
 Pounds of Fruit Pulp        20.000    30.000     40.000   60.000    80.0oo
 Pounds of Frozen Fruit      30.000    45.ooo     55.000   70.000   85.000
 Fruit pulp Sales (US$)      23.000
                             23 000    34.500
                                       34 500     48.000
                                                  48 000   75.000
                                                           75 000   104.000
                                                                    104 000
 Frozen Fruit Sales (US$)    27.000    42.750     54.000   73.500    93.500
 % Sales from Food Service       80          75      70       60        50
 % Sales from Retail             20          25
                                              5      3
                                                     30       4
                                                              40        5
                                                                        50
Market Strategy
2.2 Defining the Marketing Mix

 • M k ti Mi i the set of tools th t a company uses
   Marketing Mix is th      t f t l that
   to pursue its objectives in the target market.

 • The four basic elements are:

  ▫   Product
  ▫   Price
  ▫   Place (Distribution)
  ▫   Promotion
Marketing Mix - P d
                Product

                          Delivery


                          Brand
    Credit
                                                 Packaging 
                                                 & labeling 
                                                   lbl
             Quality                                           Post‐ Purchase 
                            Product
                                                               Service
                                        Sizes 
                       Beneficio 
                        Design
                            g
                       Esencial
     Promotion
     P     i

                              Customer Orientation
Marketing Mix - P d
                Product

                                 Product Line With
Product Line 

    D
    e
    p
    t
    h

                         Pulps          Frozen Fruits                Juices
    o
    f
    l
    i
    n           a) Guava           a) Cashew Fruit           a) Coconut
    e           b) Mango           b) Jocote (Andean Plum)   b) Passion Fruit
                c)   Tamarind      c)   Lulo 
                                        Lulo                 c)   Guava
Marketing Mix - P d t
                Product
   k

                 Brand Strategies

                                             Brand
       Generic


                    Private label
                                              Producer


                      Individual


                                    Family
                                                     Single 
Marketing Mix - P d t
                Product
   k
                    Brand: El Latino

                    Description: 100% fruit pulps

                    Flavors: Mango, Passion Fruit, Guava,
                    Papaya, Pineapple, Tropical Berry,
                    Tamarind, Tangerine, ……

                    Shelf Live: 2 years Frozen

                    Pack: 14oz/12 Bags, 14oz/24 Bags
                    Single Portions , 75oz Jar

                          Case size, Case gross wt, cases x
                          pallet, and pallet gross wt.

                    For each flavor: part number, UPC
                    Code, Pack Size,
Marketing Mix - Price
                   Manufacturing              Transportation


  Labor costs
  Labor costs
                                                                  Service

                             Pricing 
                            decisions
Competition´s 
                                                               Distribution Costs
   price



 Supply & Demand
                                                               Regulations
                                   Tariffs 
Marketing Mix - Price

Approaches for setting prices
  – M k i b d strategies
    Marketing-based       i
  – Cost-based strategies
  – Stato Quo strategy
Marketing Mix - Price
Marketing-based strategies
• Flexible pricing - identical products to different
           p      g            p
  customers at different prices
• Static pricing - identical products to different
  customers at same prices
• Penetration prices - low prices to capture market
  share
   h
• Price skimming – high prices for new and unique
  products
Marketing Mix Price
M k i Mi - P i
Cost-based strategies
C tb        dt t i
• Costs cost + markup- including the fixed and
 variable costs related to exporting

For exporting

• Variable cost + markup- companies with well
                  markup
  established domestic market positions which
  generate revenues that cover their fixed costs
Marketing Mix - Price
        g
Stato Quo strategy
• This i the most common strategy, i consists i
   hi is h                            it    i in
 defining the prices of your product based on the
 competition and the positioning that the company
 wants in the target market.
Marketing Mix - Price
                              Guava Preserve
Product                                        Retail Price   Price per oz
La Fe, 10 oz product form Ecuador                  US$ 1,19       US$ 0,12
Goya,17 oz product form Brazil.                   US$ 1,89       US$ 0,11
Conchita, 9,75 oz, product from                    US$ 1,39       US$ 0,14
Ecuador
Disfruta 16 oz, product from El Salvador          US$ 7,28       US$ 0,46
Euros/500 grms
                                                     0




                                 0
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                                                                                                                             Marketing Mix - Price




          en
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Marketing Mix - Price
        g
Other things to think about
• List Price
   i     i
• Payment Period
• C dit terms
  Credit t
• Discounts
• Allowances
Marketing Mix – Pl
                Place (Distribution)
                      (Di ib i )
• Di t ib ti Ch
  Distribution Channels
                     l
  • Food Channel Sub-sector
  • Processed products
• Marketing Entry Strategies
      Intermediaries
  •
      Brokers
  •
      Distributors
  •
      Private label
  •
Marketing Mix – Pl
                Place (Distribution)
                      (Di ib i )
Distribution Channels

The path or route taken by goods as they move from
producer to final consumer.
Marketing Mix – Place (Distribution)

Food Channel Sub-sectors - Retail

•   Supermarket: Publix, Winn Dixie, Sedano´s, ….
•   Superstore: Super Wal-Mart, Super Target
•   Wholesale club store: Sam´s, Costco, BJ´s
•   Convenience store: gas station

• Independent: fewer than four retail stores
• Chain: An operator of four or more retail stores
Marketing Mix – Place (Distribution)

Food Channel Sub sectors - Food Service
             Sub-sectors


•R t
  Restaurants
            t
• Bars
• Catering services
Marketing Mix – Place (Distribution)
Food Channel Sub-sectors – Institutional

• Healthcare: hospitals, retirement homes, long term
  care
• Education: schools, universities and colleges
• Military: armed forces
• Transportation: train, rails, cruises
• Correctionals
• Workplace: cafeterias, restaurants
Florida:
Florida Processed products distribution channels


                     Importer



    Exporter                            Consumer
                             Retailer




               Distributor
Marketing Mix – Place (Distribution)
Marketing Entry Strategies – Intermediaries
        g     y       g

•   Buy the products in the facility
•   Usually pay in cash
•   Assume the risk of the marketing
•   Pay lower prices to the producers
Marketing Mix – Place (Distribution)
Marketing Entry Strategies – Brokers

•   Independent sales force
•   Don´t take title of the products
•   Work
    W k on a commission basis
                      ii bi
•   Provide their services to a number of different producers
•   Own the clients
•   Has a small structure
•   Don´t assume the commercial risk
•   No after-sales service
•   Usually don´t decide on the marketing
•   Short term relations
Marketing Mix – Place (Distribution)

Marketing Entry Strategies – Distributors
        g     y       g

•   Take title of the products
•   Resell the product for a profit
•   Have a developed structure
•   Assume the commercial risk
•   Offer after-sales services and follow-up to customers
•   Usually take part or define the marketing
•   Long term relations
Marketing Mix – Place (Distribution)

Marketing Entry Strategies - Private            Label
        g     y       g

   A brand owned by a wholesaler, retailer or distributor.
•
• Store brands now account for one of every five items sold
  in U.S. supermarkets.
• In South Florida most of the distributors of ethnic products
  work with their own brands (Goya, El Sembrador, La Fe,
  Iberia, El Latino …..)
Marketing Mix – Place (Distribution)

Marketing Entry Strategies - Private Label
        g     y       g

Benefits for the producers:

• Economies of scale
• Minor i
    i    investment in promotion or packing
                    i          i        ki
• Market Information
• Most of the regulations are responsibility of the owner
  of the brand
Marketing Mix – Place (Distribution)

Marketing Entry strategies - Private Label
        g     y       g

Risks for the producers:

• They can be easily replaced if another producer can
  offer better prices or b
   ff b          i       better quality f the same
                                   li for h
  price.
Marketing Mix – Place (Distribution)

Marketing Entry strategies - Private label
Marketing Mix – Pl
                Place (Distribution)
                      (Di ib i )
Other things to think about

• Location
• Inventory
• Transport
       p
Marketing Mix – Pl
                Place (Distribution)
                      (Di ib i )
Marketing Mix – Promotion
Promotion Strategy
                gy

     Is the mix of promotional tools a company uses
 •
     to reach theirs distribution channels and target
     customers.
Marketing Mix – Promotion
Promotional Tools
      Advertising - large number of potential customers,
 •
     very expensive (TV, radio, newspapers, magazines).
     Personal Selling - f
     P        l S lli   face to f
                                face, l
                                      long-term
 •
     relationships (representatives), trained sales force.
     Sales Promotion - short run, coupons, contests
                               run coupons contests,
 •
     tastings
     Public Relations – build public awareness through
 •
     non-commercial means, such as news or public
     campaigns
Marketing Mix – Promotion
Sales Promotion

     More accessible for small and medium sized
 •
     companies
     Effective in the short term
 •
     Get the attention of the potential customer
          h         i     fh        il
 •
     Provide the costumer with purchase incentives
 •
     Can be developed f th consumers or f
     C bd l            d for the             for
 •
     distributors (commercial)
Marketing Mix – Promotion
Commercial Sales Promotion
  • Quantity Discounts
  • Cash Discount
  • Seasonal Discount
  • Sales Contests
  • Rewards
  • Sampling
  • Tasting
        i
Promotional Strategy for S
P    ti   l St t     f Supermarkets i Mi i
                               k t in Miami
 Item                      Unitary               Units       Investment
                        Investment
   “Slotting fee” for    US$ 2.700           6 flavors       US$ 16.200
    6 SKUS in 34
    Points of sale


   One box of              US$ 50    29 Points of sale        US$ 1.450
   product for each
   supermarket

    Tasting. 4 times,     US$ 100    29 supermarkets,        US$ 11.600
    1 hour per day in                4 times per stores
    the 29                                       1hour
    supermarkets

 TOTAL                                                    US$ 29.250
Promotional Strategy for Distributors in Miami

• Stage 1: Distributor
  ▫ Negotiate the price
  ▫ Offer a discount for the first order “introduction price
                                          introduction price”
  ▫ Direct incentive for the seller (US$ 5 per box).
• Stage 2: Incentive for the retailer
  ▫ Tasting (US$ 100 per hour + product)
  ▫ Customer sales promotion ( 2 x 1, buy 1 and receive 50% on
    another one)
• Stage 3: Second order
  ▫ Direct incentive for the seller (US$ 3 per box)
  ▫ Retailer: buy 10 boxes and receive 12.
                y
Promotional Strategy f S
P    ti   l St t     for Supermarkets
                                 kt
Marketing%20 Plan
Marketing Budget
• Marketing tactics must be planned only if they
  can be funded and implemented.
                         p
• It can serve as a summary of the marketing
  activities.
• It can work as time line for implementation.
Marketing Budget
• Marketing budget includes the cost of the
  marketing activities, but also the market
            g          ,
  research.
• It should include the source of funds (borrowed,
  savings, percent of revenue)
• Marketing budgets are often set at 5 to 10
  percent of the annual sales.
         t f th          ll
Evaluation and Follow-up
   Type of Control
   T     fC t l         Prime R
                        Pi    Responsibility
                                     ibilit          Purpose of Control
                                                     P        fC t l                    Approaches
                                                                                        A      h

                                                                         • Sales analysis
                        Top management    To examine whether the results • Market-share analysis
Annual plan control
                        Middle management are being achieved             • Sales-to-expense analysis
                                                                         • Financial analysis

                                                                               Profitability by:
                                             To examine where the              • Territory
Profitability control   Marketing controller company is making or losing       • customer group,
                                             money                             • Channel
                                                                               • Order size
                                                                           Efficiency of :
                        Line and staff       To evaluate and improve the   • Sales force
Efficiency
Efficienc control       management           spending efficienc and impact • Ad ertising
                                                       efficiency            Advertising
                        Marketing controller of marketing expenditures     • Promotion
                                                                           • Distribution
                                               To examine whether the
                                               company is pursuing its best    • Marketing effectiveness rating
                        Top management
Strategic control                              opportunities with respect to     instrument
                        Marketing auditor
                                               markets, products, and          • Marketing audit
                                               channels
Wrapping-up. E
W    i       Estructure of a Marketing Pl
                         f M k i Plan
 Section                Description

 Executive summary      Presents a brief overview of the plan
                                                         plan.
 Corporate mission      Defines the goals and objectives of the company in the target market.
 statement
 Market analysis        Includes the market information gathered during the market research process

 Market segmentation    Defining the target market
 Market objectives      Sales volumes, sales values and market share goals for the next five years.
 (current and long-
 term)
 Product strategy       Analysis of where the company’s product is positioned with respect to the
                        capabilities of competitive offerings.
 Pricing strategy       Determination of a strategy best suited for target markets.

 Promotional strategy
                   gy   Description of the p
                              p            promotional elements that will be used.

 Distribution system    Description of the distribution channels and their roles and responsibilities.

 Budgets                The financial implications of executing the marketing plan.

 Time line and          A listing of priority actions, including what will be done, who will be responsible
 performance criteria   for each task, the time frame of the tasks and how much each will cost. Includes
                        a procedure for follow-up and evaluation.
Thank You
          hk
   Daniel Rodríguez Sáenz
E-mail: daniel.rodriguez@iica.int

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Marketing%20 Plan

  • 1. Inter-American Program for the Promotion of Trade, Agribusiness and Food Safety Marketing Plan for Value Added Products Daniel Rodríguez Sáenz Agribusiness Specialist E-mail: daniel rodriguez@iica int daniel.rodriguez@iica.int Tel: (305) 260-9010 ext. 232 Inter-American Institute for Cooperation on Agriculture
  • 2. The secret of your success • Success in marketing comes from knowing who your customers are and being able to fulfill their needs. Customer Oriented
  • 3. Targeting the Market 1. Define the target market and 2. Develop a market strategy
  • 4. 1. Define the Target Market Market segmentation – dividing the market into distinct groups requiring different products and/or a diff d d/ different strategies i Consumer markets Individuals with different desires, purchasing power, geographical locations and buying practices Industrial markets Manufactures, service firms (hotels), transportation (h t l ) t t ti companies, resellers (wholesalers and retailers) Government markets Agriculture, Agriculture Health ….
  • 5. Segmenting Consumer Markets • Segments are identified by applying successive variables to subdivide a market. bdi id kt Geographic Segmentation Demographic Segmentation • Country Age • • State Sex • • County Family size • • City Education • Ethnicity h ii • Nationality • Psychographic Segmentation Behavioral Segmentation • Social Class Occasions • • Lifestyle Benefits • • Personality User status • Usage rate g •
  • 6. Segmenting the Florida Market Food Products Segmentation: • Geographic  • Demographic 
  • 7. 2. Market Strategy 2.1 Defining the Market Objectives • These should be quantifiable and measurable in a time frame, such as. US$ “X” sales in “Y” by the year “Z”. • I is recommended to state goals i terms of fi It i dd l in f five- year forecasts and projection. • For each year the forecast should include sales in y value and volume.
  • 8. Market Strategy Example of Market Objectives Sales Goals Year 1 Year 2 Year 3 Year 4 Year5 Pounds of Fruit Pulp 20.000 30.000 40.000 60.000 80.0oo Pounds of Frozen Fruit 30.000 45.ooo 55.000 70.000 85.000 Fruit pulp Sales (US$) 23.000 23 000 34.500 34 500 48.000 48 000 75.000 75 000 104.000 104 000 Frozen Fruit Sales (US$) 27.000 42.750 54.000 73.500 93.500 % Sales from Food Service 80 75 70 60 50 % Sales from Retail 20 25 5 3 30 4 40 5 50
  • 9. Market Strategy 2.2 Defining the Marketing Mix • M k ti Mi i the set of tools th t a company uses Marketing Mix is th t f t l that to pursue its objectives in the target market. • The four basic elements are: ▫ Product ▫ Price ▫ Place (Distribution) ▫ Promotion
  • 10. Marketing Mix - P d Product Delivery Brand Credit Packaging  & labeling  lbl Quality Post‐ Purchase  Product Service Sizes  Beneficio  Design g Esencial Promotion P i Customer Orientation
  • 11. Marketing Mix - P d Product Product Line With Product Line  D e p t h Pulps Frozen Fruits Juices o f l i n a) Guava a) Cashew Fruit a) Coconut e b) Mango b) Jocote (Andean Plum) b) Passion Fruit c) Tamarind c) Lulo  Lulo c) Guava
  • 12. Marketing Mix - P d t Product k Brand Strategies Brand Generic Private label Producer Individual Family Single 
  • 13. Marketing Mix - P d t Product k Brand: El Latino Description: 100% fruit pulps Flavors: Mango, Passion Fruit, Guava, Papaya, Pineapple, Tropical Berry, Tamarind, Tangerine, …… Shelf Live: 2 years Frozen Pack: 14oz/12 Bags, 14oz/24 Bags Single Portions , 75oz Jar Case size, Case gross wt, cases x pallet, and pallet gross wt. For each flavor: part number, UPC Code, Pack Size,
  • 14. Marketing Mix - Price Manufacturing Transportation Labor costs Labor costs Service Pricing  decisions Competition´s  Distribution Costs price Supply & Demand Regulations Tariffs 
  • 15. Marketing Mix - Price Approaches for setting prices – M k i b d strategies Marketing-based i – Cost-based strategies – Stato Quo strategy
  • 16. Marketing Mix - Price Marketing-based strategies • Flexible pricing - identical products to different p g p customers at different prices • Static pricing - identical products to different customers at same prices • Penetration prices - low prices to capture market share h • Price skimming – high prices for new and unique products
  • 17. Marketing Mix Price M k i Mi - P i Cost-based strategies C tb dt t i • Costs cost + markup- including the fixed and variable costs related to exporting For exporting • Variable cost + markup- companies with well markup established domestic market positions which generate revenues that cover their fixed costs
  • 18. Marketing Mix - Price g Stato Quo strategy • This i the most common strategy, i consists i hi is h it i in defining the prices of your product based on the competition and the positioning that the company wants in the target market.
  • 19. Marketing Mix - Price Guava Preserve Product Retail Price Price per oz La Fe, 10 oz product form Ecuador US$ 1,19 US$ 0,12 Goya,17 oz product form Brazil. US$ 1,89 US$ 0,11 Conchita, 9,75 oz, product from US$ 1,39 US$ 0,14 Ecuador Disfruta 16 oz, product from El Salvador US$ 7,28 US$ 0,46
  • 20. Euros/500 grms 0 0 1 2 3 4 5 6 7 8 9 Am ar oy Ed 2.99 us ho Ja co M bs oe ve 5.99 n D a pi c l la k 4.6 m ay er M el ita 3.98 3.99 Ja La va zz a Co st 7.98 ar i ca Da l la m 3.99 ay er ja co b Be s ll Kr o n ar o m Marketing Mix - Price en Edel Coffee gr a Se n e 8 ga l fre d La o 6.5 va zz a Ce Ja l lin co is bs 6.5 6.49 Cr e T o me 5.4 Ps Sc café we 4.35 4 35 iz e rs Ts 3.99 hi Se bo i tz em pa 6.155 ca C o do lo 4.49 9 m bia 5.49
  • 21. Marketing Mix - Price g Other things to think about • List Price i i • Payment Period • C dit terms Credit t • Discounts • Allowances
  • 22. Marketing Mix – Pl Place (Distribution) (Di ib i ) • Di t ib ti Ch Distribution Channels l • Food Channel Sub-sector • Processed products • Marketing Entry Strategies Intermediaries • Brokers • Distributors • Private label •
  • 23. Marketing Mix – Pl Place (Distribution) (Di ib i ) Distribution Channels The path or route taken by goods as they move from producer to final consumer.
  • 24. Marketing Mix – Place (Distribution) Food Channel Sub-sectors - Retail • Supermarket: Publix, Winn Dixie, Sedano´s, …. • Superstore: Super Wal-Mart, Super Target • Wholesale club store: Sam´s, Costco, BJ´s • Convenience store: gas station • Independent: fewer than four retail stores • Chain: An operator of four or more retail stores
  • 25. Marketing Mix – Place (Distribution) Food Channel Sub sectors - Food Service Sub-sectors •R t Restaurants t • Bars • Catering services
  • 26. Marketing Mix – Place (Distribution) Food Channel Sub-sectors – Institutional • Healthcare: hospitals, retirement homes, long term care • Education: schools, universities and colleges • Military: armed forces • Transportation: train, rails, cruises • Correctionals • Workplace: cafeterias, restaurants
  • 27. Florida: Florida Processed products distribution channels Importer Exporter Consumer Retailer Distributor
  • 28. Marketing Mix – Place (Distribution) Marketing Entry Strategies – Intermediaries g y g • Buy the products in the facility • Usually pay in cash • Assume the risk of the marketing • Pay lower prices to the producers
  • 29. Marketing Mix – Place (Distribution) Marketing Entry Strategies – Brokers • Independent sales force • Don´t take title of the products • Work W k on a commission basis ii bi • Provide their services to a number of different producers • Own the clients • Has a small structure • Don´t assume the commercial risk • No after-sales service • Usually don´t decide on the marketing • Short term relations
  • 30. Marketing Mix – Place (Distribution) Marketing Entry Strategies – Distributors g y g • Take title of the products • Resell the product for a profit • Have a developed structure • Assume the commercial risk • Offer after-sales services and follow-up to customers • Usually take part or define the marketing • Long term relations
  • 31. Marketing Mix – Place (Distribution) Marketing Entry Strategies - Private Label g y g A brand owned by a wholesaler, retailer or distributor. • • Store brands now account for one of every five items sold in U.S. supermarkets. • In South Florida most of the distributors of ethnic products work with their own brands (Goya, El Sembrador, La Fe, Iberia, El Latino …..)
  • 32. Marketing Mix – Place (Distribution) Marketing Entry Strategies - Private Label g y g Benefits for the producers: • Economies of scale • Minor i i investment in promotion or packing i i ki • Market Information • Most of the regulations are responsibility of the owner of the brand
  • 33. Marketing Mix – Place (Distribution) Marketing Entry strategies - Private Label g y g Risks for the producers: • They can be easily replaced if another producer can offer better prices or b ff b i better quality f the same li for h price.
  • 34. Marketing Mix – Place (Distribution) Marketing Entry strategies - Private label
  • 35. Marketing Mix – Pl Place (Distribution) (Di ib i ) Other things to think about • Location • Inventory • Transport p
  • 36. Marketing Mix – Pl Place (Distribution) (Di ib i )
  • 37. Marketing Mix – Promotion Promotion Strategy gy Is the mix of promotional tools a company uses • to reach theirs distribution channels and target customers.
  • 38. Marketing Mix – Promotion Promotional Tools Advertising - large number of potential customers, • very expensive (TV, radio, newspapers, magazines). Personal Selling - f P l S lli face to f face, l long-term • relationships (representatives), trained sales force. Sales Promotion - short run, coupons, contests run coupons contests, • tastings Public Relations – build public awareness through • non-commercial means, such as news or public campaigns
  • 39. Marketing Mix – Promotion Sales Promotion More accessible for small and medium sized • companies Effective in the short term • Get the attention of the potential customer h i fh il • Provide the costumer with purchase incentives • Can be developed f th consumers or f C bd l d for the for • distributors (commercial)
  • 40. Marketing Mix – Promotion Commercial Sales Promotion • Quantity Discounts • Cash Discount • Seasonal Discount • Sales Contests • Rewards • Sampling • Tasting i
  • 41. Promotional Strategy for S P ti l St t f Supermarkets i Mi i k t in Miami Item Unitary Units Investment Investment “Slotting fee” for US$ 2.700 6 flavors US$ 16.200 6 SKUS in 34 Points of sale One box of US$ 50 29 Points of sale US$ 1.450 product for each supermarket Tasting. 4 times, US$ 100 29 supermarkets, US$ 11.600 1 hour per day in 4 times per stores the 29 1hour supermarkets TOTAL US$ 29.250
  • 42. Promotional Strategy for Distributors in Miami • Stage 1: Distributor ▫ Negotiate the price ▫ Offer a discount for the first order “introduction price introduction price” ▫ Direct incentive for the seller (US$ 5 per box). • Stage 2: Incentive for the retailer ▫ Tasting (US$ 100 per hour + product) ▫ Customer sales promotion ( 2 x 1, buy 1 and receive 50% on another one) • Stage 3: Second order ▫ Direct incentive for the seller (US$ 3 per box) ▫ Retailer: buy 10 boxes and receive 12. y
  • 43. Promotional Strategy f S P ti l St t for Supermarkets kt
  • 45. Marketing Budget • Marketing tactics must be planned only if they can be funded and implemented. p • It can serve as a summary of the marketing activities. • It can work as time line for implementation.
  • 46. Marketing Budget • Marketing budget includes the cost of the marketing activities, but also the market g , research. • It should include the source of funds (borrowed, savings, percent of revenue) • Marketing budgets are often set at 5 to 10 percent of the annual sales. t f th ll
  • 47. Evaluation and Follow-up Type of Control T fC t l Prime R Pi Responsibility ibilit Purpose of Control P fC t l Approaches A h • Sales analysis Top management To examine whether the results • Market-share analysis Annual plan control Middle management are being achieved • Sales-to-expense analysis • Financial analysis Profitability by: To examine where the • Territory Profitability control Marketing controller company is making or losing • customer group, money • Channel • Order size Efficiency of : Line and staff To evaluate and improve the • Sales force Efficiency Efficienc control management spending efficienc and impact • Ad ertising efficiency Advertising Marketing controller of marketing expenditures • Promotion • Distribution To examine whether the company is pursuing its best • Marketing effectiveness rating Top management Strategic control opportunities with respect to instrument Marketing auditor markets, products, and • Marketing audit channels
  • 48. Wrapping-up. E W i Estructure of a Marketing Pl f M k i Plan Section Description Executive summary Presents a brief overview of the plan plan. Corporate mission Defines the goals and objectives of the company in the target market. statement Market analysis Includes the market information gathered during the market research process Market segmentation Defining the target market Market objectives Sales volumes, sales values and market share goals for the next five years. (current and long- term) Product strategy Analysis of where the company’s product is positioned with respect to the capabilities of competitive offerings. Pricing strategy Determination of a strategy best suited for target markets. Promotional strategy gy Description of the p p promotional elements that will be used. Distribution system Description of the distribution channels and their roles and responsibilities. Budgets The financial implications of executing the marketing plan. Time line and A listing of priority actions, including what will be done, who will be responsible performance criteria for each task, the time frame of the tasks and how much each will cost. Includes a procedure for follow-up and evaluation.
  • 49. Thank You hk Daniel Rodríguez Sáenz E-mail: daniel.rodriguez@iica.int