APP Integrated Marketing Plan Proposal Increases Revenue and Reduces Costs
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American Premium Petroleum is proposing an integrated marketing plan to increase profits by boosting revenue and reducing costs. The plan recommends using a marketing database to track customer purchase history in order to better target promotions, adjust pricing strategies, and identify opportunities for additional sales. Maintaining and updating the database quarterly would allow for analysis of trends to predict future demand and profitability.
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APP Integrated Marketing Plan Proposal Increases Revenue and Reduces Costs
- 1. American Premium Petroleum (APP) Integrated Marketing Plan Proposal Mengxin Li Xinglan Liu Hiral Vatiya James Zheng
- 2. Agenda: Why does APP need an integrated marketing plan? How can an integrated marketing plan increase profit? Profit = Revenue - Profit Increase Revenue Volume Price Decrease Cost Our recommendations Lift to bottom-line!
- 3. Increase revenue Differentiate your brand Create awareness Pricing strategy Understanding customer demands Quantity Geographic location Decrease cost Customer Relationship Management (CRM) Customer segmentation Serve niche market Track Key Performance Indicators (KPIs)
- 4. Marketing database can help to facilitate both revenue increase and cost reduction To track performance over time To allocate resource effectively and optimally To serve the customer better To predict the future more accurately
- 5. Revenue = Volume * Price Maximize revenue stream by increasing volume at the optimal price
- 6. Marketing database helps to increase volume and adjust the price for maximum revenue Increase volume Acquire new customers Retain existing customers Increase market share Target niche markets Adjust the price Improve profit margin Customer segmentation Price discrimination Dynamic pricing Demand based Using database to build pricing models
- 7. Database tracks customer actions and transactions, hence it can help to identify area of growth, potential cross-sell or up-sell opportunities Importance: To create highly customized offers that steer consumers to the “right” merchandise and services—at the right moment, at the right price, and in the right channel Tracking customer actions by each transactions customer made Purchase quantity Purchase price Purchase frequency Response to the marketing efforts Customers in all channels Business to Distributor Business to Business (White label and Non-white label) Business to Consumer E-commerce Export (Future)
- 8. Segmentation using marketing database can help to adjust pricing strategy Segmentation based on Location Customer type (Distributor, Business- white label and non-white label, consumer, E-commerce) Product types (PCMO, Diesel, Marine, Hydraulic, Compressor, 2 Cycle,Transmission) Purchase quantity Dynamic pricing Price discrimination
- 9. Using a marketing database to organize and analyze different product, hence improve product performance Organize product matrix into database Each product & sizes should have a unique SKU Track KPIs of each individual product Profit margin Volume Create different categories of product High end vs. economical positioning Sell at different price points
- 10. Decrease Cost Primary cost might arise from logistic management, bad debt, customer relationship management (CRM)
- 11. Effective CRM with customer database to differentiate the most and least profitable customers Customer lifetime value Bad debt expense Long payment time Defaults on payment To reduce marketing cost Understand who should we promote to To monitor supply chain performance To mange product matrix efficiently
- 12. Example of customer information captured in the database (Business to Distributor) Clients information: e.g. Business to Distributors Distributor Name Product Name Product SKU Purchase Quantity Quanti yType Location Date of Purchase Total Order Size Days to pay Mid State Distributors Economy Synthetic Blend 12334 2 Totes Texas Jan 2015 $70,000 12 Petro Four Distributors High Mileage 12337 4 5 Gallon Pail California May 2015 $55,000 18 Tractor Supply Industrial 13324 1 Bulk (Tanker /Rail) Illinois Nov 2015 $90,000 40
- 13. Our Recommendations Aggressive lead generation campaigns both online & offline to maximize customer acquisition
- 14. Aggressive customer acquisition in automotive lubricant industry through initial simple select segmentation Automotive lubricants accounted for an estimated 53.2% of industry revenue in 2014 B2B marketing to support sales team Content marketing White papers Lead generation Geographic location Top 5 location with highest demand Purchase quantity Initial offer Referral program Sponsor trade shows
- 15. Database management: Update & back up quarterly and leverage on external data to enhance internal information Quarterly update will help to understand and analyze past trends Use model to predict future demand and profitability Back-ups can help to freeze point-in-time customer data Use to understand response to promotions done in the past Examples of external data source Industry Report (Just-in time data analysis, Physical Infrastructure, Industry wise trends) Sales team, dealers, and distributors Govt. Publications and Reports Trade Associations Published surveys of Markets Foreign markets and International agencies Records of other companies (competitors)
- 16. Why Us? Improve business performance with 2-prone approach Increase revenue + Decrease cost Integrate with marketing database to maximize efficiency Analyze past trends to predict the future Leverage on your formula for success Customer acquisition to support sales team We bring lift to your bottom-line!
- 18. Appendix
- 19. APP SWOT Strength Weakness ● Low overhead cost ● No inventory cost ● Highest quality product by API governing ● The most competitive pricing ● Good customer experience and customer service ● Has a knowledge and experience in the petroleum industry ● Diverse product types with different container options ● Low shipping fee ● Healthy supply and distribution relationship ● Multiple sales channels ● Ample capital and credit in 1st year ● Strong management team ● New company-low brand awareness ● Unsustainable business model ● Limited refineries place ● No customer yet ● Low budget ● No E-commerce platform ready
- 20. Opportunity Threats ● Tempting market size which is $18B ● The industry is keep growing by 4.1% every year ● The market is competitive-many best know brands APP SWOT
Editor's Notes
- Marketing plan can help describe product characteristics in greater detail that helps differentiate yourself from the competitors. Highlight the uncommon characteristics of the business model to the business partners (clients/customers/retailers) To get good at serving the niche market To compare and differentiate yourself from the competitors rather than falling into default price comparison To drive awareness and engagement around the brand Digital presence + Meaningful metrics = Direct impact to the bottom line
- To generate personalized communications to promote its products and services Managing different types of transactions performed by an individual or business To analyze customer behavior and cluster “liked-behavior” groups for further communication To serve the customers that are making buying decisions in advance without consulting a salesperson (to simplify information) To have a digital leg-up against the competition and gain an early edge when facilitating the initial phases of the buying process through the online presence (well before they get that phone call from their potential client)
- Reap significant financial rewards by forecasting sales and analyzing the trend of past marketing strategies To grow the market share at low cost (cost effective way of increasing your brand followers) To continue to grow in challenging times when marketing budget is stretched Optimizing operations for specific business goals
- Utilizing the marketing database has several benefits: Gathering the customer’s basic information and data in order to understand customer demands and needs. Using the historical selling database to understand which product is popular or unpopular, so that APP could plan better inventory or supply management and decrease the opportunity cost. Using promotion database to check which advertisement most attract a potential customer, so that APP could allocate marketing expense effectively. Leveraging the product database to understand which location has more demand than other location, so that APP could do some strategically plan to increase the customer or even cost down the 3rd party sales team.
- Target B2B automotive - •Automotive lubricants accounted for an estimated 53.2% of industry revenue in 2014.