Lecture Four
- 1. Marketing planning, adsand promotions Product and Brand Management (23C630) Ch. 2, Ch. 11 & Ch. 12 September, 20th Giuseppe Pedeliento, University of Bergamo (Italy) Visiting Aalto University School of Economics, Department of Marketing
- 2.
- 3. Marketing Plan A marketing plan is a written document containing the guidelines for the business center’s marketing programs and allocations over the planning period.
- 4. Time Horizons forMarketing Plans Time Consumer Industrial Services Period Products Products 1 year 62% 45% 65% 3 years 5% 5% 8% 5 years 15% 17% 3% Long term 4% 3% 6% Indefinite 0% 2% 2% Other 14% 28% 16%
- 5. Hierarchy of Planning Corporate Strategic Planning Group or Sector Planning SBU Planning Annual Marketing (Business) Plan
- 6. Objectives of aMarketing Plan 1. Define the current business situation. 2. Define problems and opportunities facing the business. 3. Establish objectives. 4. Define the strategies and programs necessary to achieve the objectives. 5. Pinpoint responsibility for achieving product objectives. 6. Encourage careful and disciplined thinking. 7. Establish a customer/competitor orientation.
- 7. Frequent Mistakes inthe Planning Process • The speed of the process • The amount of data collected • Who does the planning • The structure • Length of the plan • Number of courses of action considered • Who sees the plan • Not using the plan as a sales document • Insufficient senior management leadership • Frequency of planning
- 8. Marketing Planning Sequence Update historical data Collect current situation data Data analysis Develop objectives, strategies, programs Develop financial document Negotiate s final plan Measure progress toward objectives Audit 8
- 9. Marketing Plan Summary(1/2) I. Executive summary V. Supporting marketing II. Situation analysis programs A. Category/competitor definition VI. Financial documents B. Category analysis C. Company and competitor VII. Monitors and analysis controls D. Customer analysis E. Planning assumptions VIII. Contingency plans III. Objectives IV. Product/brand strategy 9
- 10.
- 11. Company mission TheCommuni- or vision cations Mix Overall business plan Unit marketing plan Unit communication plan and objectives Communications strategies Advertising Public relations Sale Direct Packaging promotion marketing and graphics Advertising objectives Advertising strategy Advertising tactics 11
- 12. Marketing Communications Expenditures: Consumervs. B2B Products 12
- 13. Ways That AdvertisersTarget Potential Customers • Content targeting • Behavioral targeting • User targeting • Tech targeting
- 14. Strategic Advertising Objectives • Awareness • Interest • Information search • Comprehension • Attitude • Intention • Trial/purchase • Evaluation/reevaluation 14
- 15. Methods for SettingAdvertising Budgets • Objective and task • Percentage-of-sales • Competitive parity • Affordable • Experimentation • Decision calculus 15
- 16. The Relationship betweenCumulative Advertising Spending and Market Share Tobacco Industry, 1989 30 Marlboro • 25 20 15 Winston • 10 Virginia Slims Kool • Salem • Camel 5 Newport • Benson & Hedges • • • Merit Pall 0 Parliament Mall • • • • Kent % • • More Vantage $0 0.4 0.8 1.2 1.6 Cumulative advertising investment (1967-1989) (in 1989 billions of dollars)
- 17.
- 18. CHANNEL AND PROMOTION STRUCTURE Manufacturer Manufacturer 1 2 Trade promotion Customer Channel A Channel B promotion (Retailer A) (Retailer B) Retail promotion Customer 18
- 19. Changes in Advertising andPromotion Spending 1981 1986 1991 1994 1998 Advertising 43% 34% 25% 26% 22% Consumer Promotion 23% 26% 25% 25% 20% Trade Promotion 34% 40% 40% 49% 58%
- 20. Customer Promotion Objectives Objective Typical Programming I. Long-run (relationship building) A. Awareness enhancement Lotteries, contests, B. Image enhancement Sponsorships II. Short-run (transactional) A. Current customers 1. Buy more Volume discounts/special “value” packages 2. Be more loyal “In pak” coupons, premiums, frequent buyer 3. Buy now programs B. Occasional customer (deal prone; brand switchers) Capture next purchase C. Noncustomers Coupons, displays, rebates Trial Trial sizes, sampling 20
- 21. Trade Promotion Objectives Objective Typical Programming Transactional: increase Volume allowances stocking levels Financing terms Discount/price cuts Slotting allowances Transactional: increase Advertising allowances sales efforts Display allowances Premiums Contests Sales force incentives (not all dealers allow this) Relationship building Free goods 21
- 22. Factors Affecting Promotions 1. The product is relatively standardized (as opposed to when the product is produced or supplied to order). 2. There are many end users. 3. The typical purchase amount is small. 4. Sales are made through channel intermediaries rather than directly to end users. 5. The product is premium priced. 6. The product has a high contribution margin. 7. The product or service has a small market share. 22
- 23. Impacts of Promotion •Temporary retail price reductions substantially increase sales • Higher market share brands are less elastic • The frequency of deals changes the consumer’s reference price • The greater the frequency of deals, the lower the relevance of the deal for customers • Display and feature advertising have strong effects on item sales • Advertised promotions can result in increased store traffic • Promotions affect sales in complementary and competitive categories
- 24. Marketing planning, adsand promotions Product and Brand Management (23C630) Ch. 2, Ch. 11 & Ch. 12 September, 20th Giuseppe Pedeliento, University of Bergamo (Italy) Visiting Aalto University School of Economics, Department of Marketing