Marketing review workbook

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without permission in writing from the authors.

Please do ask if you want to use this for your own courses or conducting your own customer audits.

Requests for permission or for more information should be sent to: Jacqui Malpass
jacqui@jacquimalpass.com

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The purpose of this book is to educate, entertain and provide information on the subject matter covered.
All attempts have been made to verify information at the time of this publication and the author does
not assume any responsibility for errors, omissions or other interpretations of the subject matter. This
book results from the experience of the author. The purchaser or reader of this book assumes
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Page 2 of 80 pages :: © jacquimalpass :: 2005 - 2011

TABLE OF CONTENTS

What is a marketing review? .....................................................................................................................4
How to use this workbook .........................................................................................................................4
Before you start ........................................................................................................................................6
Where am I review ....................................................................................................................................8
SWOT Analysis .........................................................................................................................................9
Market Trends ........................................................................................................................................ 14
Market Environment ............................................................................................................................... 15
Who are your customers?........................................................................................................................ 23
Just for fun ..............................................................................................................................................26
List your top 20 customers ......................................................................................................................28
Working with your customers ................................................................................................................. 30
Competitors ............................................................................................................................................ 35
Products ................................................................................................................................................. 39
Prices ...................................................................................................................................................... 47
Distribution ............................................................................................................................................. 54
Promotion............................................................................................................................................... 57
Technology .............................................................................................................................................68
Action Planning ......................................................................................................................................69
Marketing Controls ................................................................................................................................. 73
Where am I going? .................................................................................................................................. 77
Goals and Objectives .............................................................................................................................. 77
From theory to reality ............................................................................................................................. 79
Market Research .....................................................................................................................................80


What is a marketing review?

First steps
Simplicity is the key. Treat each section like a mini assignment, put it in your diary, assemble the team,
brief them and assign parts of the audit to each member. As you do each section you will feel a sense of
achievement which will motivate you to complete all of the other stages.

How to use this workbook
The book is set up in sections with a set of questions designed to ignite your thought processes, there will
be other questions that you will come up and in each section there is a space in the workbook to write your
answers.
Your answer

Copyright jacquimalpass.com :: Marketing Audit :: Page 4 of 80 Pages :: December 2010 v2.0 :: Jacqui@jacquimalpass.com

Mind mapping
Another way to get your ideas down is to use mind mapping software like Buzan iMindmap. This is a really
useful way to get thoughts and ideas down electronically.

Find a way of capturing information that works for you and your team.


Before you start
Have the following items (either previous or current) ready for review:

 Marketing and advertising budget  Corporate folder
 Strategic plans  Brochures / flyers
 Research reports  Catalogues
 Trade information  Exhibition Stand (picture of)
 Staff experiences / stories  Website
 Branding  Direct mailers / eshots
 Corporate philosophy and mission  Letterheads, compliment slips, business
statement cards
 Key words and phrases to describe your  Letter and fax templates
business  Sales proposals and tenders
 Strap line  Case studies / whitepapers
 Use of colours  Annual report

 Samples of all past promotions and  PR plan
advertising (last two years minimum).  Copies of PR for last 2 years
 Amount, quantities and timing of co-op
programs/funds.

 List of campaigns
 Cost  Number of companies
 Responses  Number ready to be marketed to
 Which promotional mediums have given  Other analyses to include, numbers by
you the best returns? market sector, targeted, in the sales funnel

 By total category for the last three to five  List your top competitors.
years.  List your second and third-ranked
 By month January to December for each competitors.
year.  Samples of past competitors' promotions.
 By yearly total to date.  Samples of competitors collateral
 Samples of competitors website

 Current products / services  Pricing matrix
 Planned products and services  Cost model

By total category for the last three to five years. By month, for as many months as possible.
By month January to December for each year.
By weekly total for each year.

 Other political, legal, economic,  Sales and marketing team structure


environmental or trend issues that may  Personal development plans
affect your business.  Skills matrix
 Reasonable and probable growth for this  Skills gaps
year and the next four years (i.e. as a  Training plans
percentage increase/decrease from the
previous year).
 The issues or tasks that you wish to
outsource to 50five.
 Future plans and goals for expansion,
revenue growth, and timing for these goals.

Chances are this was quite onerous and demonstrates that your systems and structures may be a little out
of whack! Great this is a perfect place to start.

What else can you pull together?
Who can help you?


Where am I review
This is a good exercise to do with others in your business, hand it out and then pull everyone together to
review the answers.

When you have finished try to put it into some order that you can work from and refer back to.

What does my business do? What sort of customers am I most attracted to?

What do they have in common? What common How am I giving my customers what they want?
problems, goals, needs, wants or desires do they Describe.
share?

Who needs what I have to offer? What pay off do people get from my expertise?

Who have you already helped? How have you helped them?

What does it tell you about your business?
What does it tell you about what others in your business think about what you do?


SWOT Analysis
Understanding Strengths, Weaknesses, Opportunities and Threats
Why use the tool? SWOT Analysis is an effective way of identifying your Strengths and Weaknesses, and of
examining the Opportunities and Threats you face.

SWOT analysis is a framework for analyzing your strengths and weaknesses, and the opportunities and
threats you face.

This will help you to focus on your strengths, minimize weaknesses, and take the greatest possible
advantage of opportunities available.
How to use tool:
To carry out a SWOT Analysis write down the answers to the following questions. Where appropriate, use
similar questions:

Strengths:
What advantages do you have?
What do you do well?
What relevant resources do you have access to?
What do other people see as your strengths?

Consider this from your own point of view and from the point of view of the people you deal with. Don't be
modest. Be realistic. If you are having any difficulty with this, try writing down a list of your characteristics.
Some of these will hopefully be strengths!

In looking at your strengths, think about them in relation to your competitors - for example, if all your
competitors provide high quality products, then a high quality production process is not a strength in the
market, it is a necessity.

Your answer


Weaknesses:
What could you improve?
What do you do badly?
What should you avoid?

Again, consider this from an internal and external basis: Do other people seem to perceive weaknesses that
you do not see? Are your competitors doing any better than you? It is best to be realistic now, and face any
unpleasant truths as soon as possible.

Your answer

Opportunities:
Where are the good opportunities facing you?
What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
Changes in technology and markets, government, social patterns, population profiles, lifestyle
changes, etc.

A useful approach to looking at opportunities is to look at your strengths and ask yourself whether these
open up any opportunities. Alternatively, look at your weaknesses and ask yourself whether you could open
up opportunities by eliminating them.

Your answer


Threats:
What obstacles do you face?
What is your competition doing?
What specifications for your job, products or services changing?
How is changing technology threatening your position?
What are you doing about bad debt or cash-flow problems?
Which if any of your weaknesses seriously threaten your business?

Your answer

Carrying out this analysis will often be illuminating - both in terms of pointing out what needs to be done,
and in putting problems into perspective.


SWOT
Now summarise all of the points above

Strengths Weaknesses

Opportunities Threats

How are you going to:-

use your strengths to take maximum advantage stop your weaknesses getting in the way of
of your opportunities seizing opportunities

use your strengths to overcome or resist the prevent the threats taking advantage of your
threats weaknesses


Key things that have helped you (or prevented) to get to the position you are in today

What are the key things that have Rate 1-10 What are the key things that have Rate 1-10
helped you get where you are today? 10 = most prevented you from going further? 10 = least
successful successful

What does this tell you?
What are you going to do about any of it?

Your answer


Market Trends
To remain competitive you need to get a good understanding of market trends if your business is to make
the most of its opportunities.

It’s a good idea to buy a quality newspaper or trade magazine once a week/month, and subscribe to news
channels / newsletters which affect your market.

These are some things which can affect your market and marketing.
Seasonal / Fashion
Increase/decrease in demand
Change in attitudes
Environmental concerns
Legislation
Outsourcing / Globalisation
Competitors / new entrants / technology

What are the trends affecting your market place?

Your answer


Market Environment

A PEST analysis is an investigation of the important factors that are changing which influence a business
from the outside.

PEST stands for: Political changes - e.g. a change in government, or a change in government policy.
Economic changes - relate to changes in the wider economy such as rises in living standards or the general
level of demand, rises or falls in interest rates, etc. Social changes - relate to changes in wider society such
as changes in lifestyles e.g. more women going out to work, changes in tastes and buying patterns.
Technological changes - relate to the application of new inventions and ideas such as the development of
the Internet and websites as business tools.

What are the main developments with respect to demographics, economy, technology, government and
culture that will affect your organisation's situation?

Political-Legal
 What laws are being proposed that may  International pressure groups
affect marketing strategy?  Government policies
 Current legislation home market  Government term and change
 Future legislation  Are there any insurances that need to be in
 European/international legislation place?
 Regulatory bodies and processes  Trading policies
 What national, or local agency actions  Funding, grants and initiatives
should be watched?
 Home market lobbying/pressure groups

Now Future
Positive Negative Positive Negative


Economic - Demographic
 What effect will forecasted trends in the size,  market and trade cycles
age distribution, and regional distribution of  specific industry factors
population have on your business?  market routes and distribution trends
 home economy situation / trends  customer/end-user drivers
 overseas economies and trends  interest and exchange rates
 general taxation issues  What does your company expect in the way of
 taxation specific to product/services inflation, material shortages, unemployment
 seasonality/weather issues and credit availability in the short and long run?

Now Future

Social-Cultural
 business issues  consumer buying patterns
 lifestyle trends  fashion and role models
 demographics  major events and influences
 consumer attitudes and opinions  buying access and trends
 media views  ethnic/religious factors
 law changes affecting social factors  advertising and publicity
 brand, company, technology image

Now Future


Technology
 competing technology development  information and communications
 research funding  consumer buying mechanisms/technology
 associated/dependent technologies  technology legislation
 replacement technology/solutions  innovation potential
 maturity of technology  technology access, licensing, patents
 manufacturing maturity and capacity  intellectual property issues

Now Future

Environmental
Climate Emissions
Waste reduction Recycling
ecological/environmental issues

Now Future


Porters 5 forces analysis

Bargaining
power of
customers

Bargaining Competitive Threat
power of rivaly within of new
suppliers an industry entrants

Threat of
subsitutes

Power of Customers
This is high where there a few, large players in a market e.g. the large grocery chains. If there are a large
number of undifferentiated, small suppliers e.g. small farming businesses supplying the large grocery
chains. The cost of switching between suppliers is low e.g. from one fleet supplier of trucks to another.

How much power do the people who buy from you have over you? If you only have one or two clients or
main customers they can certainly make or break you.
If you have many more than that, who is most important?
What would happen if they increased their orders dramatically, or stopped buying from you altogether?

Your answer


Power of Suppliers
The power of suppliers tends to be a reversal of the power of buyers.
Where the switching costs are high e.g. Switching from one software supplier to another.
Power is high where the brand is powerful e.g. BMW, Pizza Hut, Microsoft.
Forwards integration e.g. Brewers buying pubs and bars.
Customers are fragmented (not in clusters) so that they have little bargaining power e.g. Petrol stations in
remote places.

You can't survive without your suppliers. The same questions apply.
How many do you have? The smaller the number the more power they have.
Who is most important?
What would happen if they increased their prices, lengthened their delivery times, introduced a different
way of receiving orders, or stopped supplying you?

Your answer


Threat of New Entrants
Be alive to the threat of new entrants into your industry or local marketplace which will increase the level of
competition that you face. This might happen as a result of a change of legislation perhaps deregulating an
industry, or simply because another business feels there are profits to be made by doing things in a different
way. Faced with such a challenge, what would your response be? Economies of scale e.g. the benefits
associated with bulk purchasing.

The high or low cost of entry e.g. how much will it cost for the latest technology?
Do our competitors have the distribution channels sewn up?
Cost advantages not related to the size of the company e.g. personal contacts or knowledge that larger
companies do not own.
Will competitors retaliate?
Government action e.g. will new laws be introduced that will weaken your competitive position?
How important is differentiation? e.g. The Champagne brand cannot be copied.

Your answer


Threat of Substitutes
Sometimes a substitute product or service may arrive, reducing demand for yours. This may happen
because of a technological development, (e-mail over fax or mail is the classic example). Is there a risk of
that happening in your industry? This contains an element of crystal ball gazing, but forewarned is always
forearmed.

Where there is product-for-product substitution e.g. email for fax.
Where there is substitution of need e.g. better toothpaste reduces the need for dentists.
Where there is generic substitution (competing for the currency in your pocket) e.g. Video suppliers
compete with travel companies.
We could always do without e.g. cigarettes.

Your answer


Intensity of rivalry between existing firms
The level of competitive rivalry can be intensified if new entrants come into the marketplace, the power of
buyers and suppliers increases, or if there are possibilities for substitute products and services. Where
competitive rivalry increases the likelihood is that profits will decrease. Can you afford to fight the battle in
the way that you are fighting it at the moment?

This is most likely to be high where entry is likely; there is the threat of substitute products, and suppliers
and buyers in the market attempt to control. This is why it is always seen in the centre of the diagram.

Describe the level of competitive rivalry in your market.

Your answer

Porter, M. (1979) "How competitive forces shape strategy", Harvard Business Review, March/April 1979.


Who are your customers?
Objectives
 Know your customers better and use that knowledge to enhance profitability
 Grow the number of customers, the amount of sales per customer, and the lifetime value of the
customer
 Highly profitable customers: What can we do to keep these customers and keep them spending? How
can we attract more like them?
 Profitable customers: How do we get more of these customers to adapt the habits (spend) like our
highly profitable ones?
 Unprofitable customers: How can we phase out these customers and, in the meantime, serve them
economically?
 Serve each segment more effectively and at a lower cost


How to Profile your customers

Consumer
Demographics Behavioural Geographic Psychological Financial Reasons to buy Other
Age When do they buy Where are they? Social class How they pay Price Do they use
Gender How often do they Lifestyle Disposable income Quality technology?
Occupation buy? Attitudes Brand name recognition How long can you
Income How much do they Interests Customer service expect to keep the
spend Needs & wants Variety of services customer
Why do they buy? Discounts and sales Social Media fans?
(Quality, service, Attractiveness of packaging
guarantees, price, Convenience of
choice) product/service use
Guarantees/Warranties
Technical support
Flexible payment terms
Financing


Commercial
Demographics Behavioural Geographic Psychological Financial Reasons to buy Other
No. employees When do they buy Where are they? Innovative Ability to pay Price What problems does
Turnover How often do they Socially responsible Payment terms Quality your products and
Services & Products buy? Environmentally aware Financial data (T/O, Brand name recognition services solve for your
offered How much do they Expect Credit profit) Customer service customers?
Sector spend Needs & wants Credit worthiness Variety of services What are your
Type of organisation Why do they buy? TO & profit goals for Discounts and sales competitive advantage
Growth stage (Quality, service, future Attractiveness of packaging (why do its customers
Competitors warranty, price, Convenience of store buy /how you different
Markets choice) location from your
Who buys – authority Convenience of competitors)?
Type of employees – product/service use What major challenges
common Guarantees/Warranties are you facing?
characteristics Technical support What are the main
How do they buy Flexible payment terms keys to success?
o Financing How long can you
expect to keep the
customer

Bottom line a customer is someone:-
 Who wants your product
 Who has the ability to pay for your product
 Who has the authority to purchase your product


Just for fun
This is one of the more fun things you can do in your business. It means thinking about your typical customer until you can see them in your mind. Then
you’ll develop an intuitive grasp of what they want, need and fear.

Start by asking a few questions and making some (educated) assumptions...then build up an archetype (or 2 - one male and one female).

Question Him Her
 Personal details: What’s their name, age, job,
marital status? Any children? Pets? Other
dependents?

 Personality: are they introvert or extrovert?
Open or defensive? What’s their attitude to
risk? Are they assertive? Suggestible?
Naturally sceptical?

 Learning style: how do they prefer to receive
information? Do they respond to visual aids?
Do they look for summaries or details? Can
they relate to abstract ideas or do they need
something more tangible?

 Point of view: how do they vote? Which
newspapers do they read? What are their
favourite TV programmes, websites and
other media?

 Lifestyle: how do they spend their leisure
time? What’s their ideal holiday? Who are


their friends? And what type of people would
they cross the street to avoid?

 Anxieties: what’s keeping them awake at
night (and how can you make it go away)?
Think about the symptom and the root of the
problem – and what their life will look like
when the problem is solved.

 Needs & desires: what do they want that they
don’t need? What do they need that they
don’t want? Finally (a really important one...)
what would they hate to miss out on?

Developed by www.earthmonkey.co.uk

List all of the people in the organisation that you could “sell” to? (MD, Finance, IT, HR)

Your answer


List your top 20 customers
Name Segment Value £ Profitabi Number Products/Services Frequenc Date Last Date Last
lity % of sales y of Sale Contact (phone,
Purchase face to face)


Who are your top 20%?
Does the 80/20 rule apply to you - 80% of your business from 20% of your customers?
% Segment Number of sales Value Profitability Products/Services Contribution to total revenue %

Top 5%

Top 10%

Top 20%


Do you spend the majority of your time supporting your best customers? Which ones?
Which if any customers you should sack?
What is the right mix of products or services for those customers with the greatest buying power?
What do you like most about your customers?
What do your customers like most about you?
What do you each dislike about each other?

Your answer

Working with your customers
How do you deal with your customers

Action Things to consider
Initial contact  How are telephone, fax, e-mail, mail enquiries
dealt with?
 What impression does the customer get of your
organisation?
 How fast and efficiently is any enquiry deal with?
Negotiation  How do you make sure you understand what the
customer really wants?
 How do you handle price negotiations?
 Are you flexible enough to meet their delivery
requirements?
Supply and delivery  Do you supply or deliver when and where you said
you would?
 Do your drivers or logistics company maintain the
image of your company?
 How do you know if the customer is satisfied?
Complaints  Is the complaints process customer-friendly
 Can the people handling the complaint take
immediate action?
 Does the customer go away happy - how do you


know?
Relationships  What is your customers' view of other people in
your “value chain”?
 How do you know?
 How are you going to help those on whom you
depend to add value to the customers who
depend on

Your answer

Who are the stakeholders?
Shareholders Sub-contractors
Customers Bank
Staff Unions
Suppliers Local community

Your answer

 What involvement do they have?
 How much power or control do they have?
 Who are your champions?
 Who do you need to change?


Rate them 1-10 (1 being the most important)
Who needs me? Who do I need?

Who do I need to keep sweet? Who is always in the background?

Why do customers buy from you?

Customers expect quality, delivery and service, how do you add value?

Your answer

Customer Lifecycle
In customer relationship management (CRM), customer life cycle is a term used to describe the
progression of steps a customer goes through when considering, purchasing, using, and maintaining
loyalty to a product or service. Its about :-

 Customer acquisition
 Customer retention
 In short how do you get them and keep them loyal.


What do you have in place to track your customers and keep them loyal?

Your answer

Referrals

Marketing by getting referrals is not only simple, it's low cost. Many people do not bother to ask their
customers, suppliers or others for a referral.

Make a list of those customers or suppliers (or anyone in your network) that you feel you have done a
great job for and who you could ask for a referral.

Your answer


What is your market position
Your market position is the place you occupy in the mind of your prospective clients. It's how they
think of you as compared to your competitors.

High price

Products and services Unique products and
very similar to services
everyone else

Lower price

What next
1. Database – if you are planning to buy a customer/prospect database you can now
segment it and only buy relevant data.
2. Up-sell/cross – now you can see which additional products you can sell to each
segment/customer
3. Product mix - now you can see which products/services are missing from each segment
4. Customer phase out – now you can phase out unprofitable customers
5. Campaign management – now you can start to think about how to target each segment


Competitors
Objectives
By knowing your Competitor you may be able to predict their next moves, exploit their weaknesses
and undermine their strengths.

Business competitors are:
Other organisations offering the same product or service now.
Other organisations offering similar products or services now.
Organisations that could offer the same or similar products or services in the future.
Organisations that could remove the need for a product or service.

Step 1 – What can you find out about your competitors?

Against each item put s for strength or w for weakness. e.g.
FACTOR My Business Competitor 1 Competitor 2 Competitor 3 Importance to
Customer (rate
1 to 5 1 being
highest)
Delivery Same day (S) Next day (W) Next Day (W) Same day (S) 1

Use the following sheet for each competitor, you can amalgamate them at the end.
FACTOR My Business Competitor Importance
to
Customer
(rate 1 to 5
1 being
highest)
Mission Statement
Brands
Products/Services (main)
Products/Services (secondary)
Product supply source
Pricing Strategy
Delivery costs
Quality
Service
Reliability
Stability
Expertise
Company Reputation
Number of customers
Customer retention levels
Location
Where do they sell
Sales Method
Credit Policies
Image


FACTOR My Business Competitor Importance
to
Customer
(rate 1 to 5
1 being
highest)
Marketing Methods
Do they have a website
What threats do they pose?
What strategies are your
competitors pursuing and
how successful are these
strategies?
How are your competitors
likely to respond to any
changes to the way you do
business?
Senior Management
Similarity
Differences
How well do they use
technology?

 What else could you monitor?

Step 2 - Getting other data

Data you can collect Other opportunities Internet resources
Annual accounts? Meetings with suppliers Dun & Bradstreet -
Press releases Trade shows http://dbuk.dnb.com/english/default.
Newspaper articles Meetings with competitors htm
Brochures Ex Employees Reuters -
Proposals Customers http://www.investor.reuters.com/Sto
Presentations ckEntry.aspx?target=/stocks
Campaigns Company reports online -
Price lists http://www.carol.co.uk/
Patent applications Corporate reports -
Tenders http://www.corpreports.co.uk/
Website http://www.icc.co.uk/
Suppliers websites Kompass - http://www.kompass.com/
Search engines Keynote - http://www.keynote.co.uk/
Surveynet - http://www.survey.net/
WAG – www.wales.gov.uk
European patent office -
http://www.survey.net/


Step 3 – SWOT
Use the information you have collected to carry out a mini SWOT analysis on your competition.

Rate
Total
Name Market Strengths Weaknesses
Share

You

Competitor 1

Competitor 2

Competitor 3

Competitor 4

Competitor 5

What Next?
Competitive strategies:
 Cost leadership: Can you be a low-cost producer and sell equivalent or better goods in the
marketplace for less?
 Differentiation: How can you distinguish your product in the marketplace?
 Innovation: Is there opportunity to create a new way of doing business, perhaps one that
changes the nature of the industry?
 Growth: Are there opportunities to expand production, sell into new markets, and introduce new
products?
 Alliance: Can current or prospective production, promotion, and distribution be improved
through partnerships with suppliers, distributors, and others?
 Time: Can your business reduce product cycle time? Offer express customer service? Use time in
other ways that your competitors are not doing?

Your answer


Other
How can you lock in customers and suppliers?
What are the switching costs for customers and/or suppliers?
How can you improve business processes?
How can you raise entry barriers for rivals and substitute products?

Your answer


Products

Product management is the day-to-day management your products/services at all stages of the
product lifecycle.

Product Levels
There are 3 levels of products:-

 the CORE product
 the ACTUAL product
 and the AUGMENTED product

The CORE product is NOT the tangible,
• Core
physical product. You can't touch it. That's
because the core product is the BENEFIT of
Product • Actual
• Augmented
the product that makes it valuable to you.

The ACTUAL product is the tangible,
physical product. You can get some use out
of it.

The AUGMENTED product is the non-physical part of the product. It usually consists of lots of added
value, for which you may or may not pay a premium.


What are your main products/services?

Your answer


What are the features, benefits and USP’s (unique selling points) of each product ?

Your answer
Products/services Features Benefits (Which means that) What makes it different?


What after sales /warranty do you offer?

Your answer
Product/Service After sales service/warranty

Summary

Product / service Core (Benefits) Actual Augmented


Where are they on the product lifecycle?

Introduction Growth Maturity Decline

Introduction Stage Growth Stage Maturity Stage Decline Stage

•At the Introduction (or •The Growth Stage is •The Maturity Stage is •In the Decline Stage, the
development) Stage characterised by rapid when competition is market is shrinking,
market size and growth growth in sales and most intense as reducing the overall
is slight. Substantial profits. Profits arise due companies fight to amount of profit that
research and to an increase in output maintain their market can be shared amongst
development costs may (economies of scale) and share. Here, both the remaining
have been incurred. possibly better prices. marketing and finance competitors. At this
Marketing costs may be Businesses usually become key activities. stage, great care has to
high in order to test the continue to invest in Marketing spend has to be taken to manage the
market, launch it and set increasing their market be monitored carefully, product carefully. It may
up distribution channels. share. Promotional since any significant be possible to take out
resources are moves are likely to be some production cost, to
traditionally invested in copied by competitors. transfer production to a
products that are firmly The Maturity Stage is cheaper facility, sell the
in the Growth Stage. the time when most product into other,
profit is earned by the cheaper markets. Care
market as a whole. should be taken to
control the amount of
stocks of the product.
Depending on whether
the product remains
profitable, a company
may decide to end the
product.

In reality very few products follow such a prescriptive cycle. The length of each stage varies
enormously. The decisions of marketers can change the stage, for example from maturity to decline
by price-cutting. Not all products go through each stage. Some go from introduction to decline. It is
not easy to tell which stage the product is in.

Sales &
profitabilit
y

Introduction Growth maturity Decline


Where are your products?
Your answer

Products/services Embryonic Growth Maturity Decline

Are there elements of your offering which can be removed or added? What are these

Your answer
Product/Service Feature to be added Feature to be removed


 What if any products/services be phased out?
 What if any products/services be added to the line? Have you included in your range those
products or services which are more likely to be in demand in future?
 What is the general state of health of each product/service and the product mix as a whole?

Your answer

Product/Service Phased out Bought in / developed State of health


Are some of products/services that are seasonal – how can you maximise the 'quiet
times'?

Your answer

How does the profitability or the future potential of each product line compare?

Your answer
Product/Service Profitability Future potential


Prices
Price is the amount of money or goods for which a thing is bought or sold

For your customers, price is the monetary expression of the value to be enjoyed/benefits of
purchasing a product, as compared with other available items.

A products perceived value may be increased in one of two ways – either by:
(1) Increasing the benefits that the product will deliver, or,
(2) Reducing the cost

Knowing the difference between cost and value can increase profitability.

 The cost of your product or service is the amount you spend to produce it.
 The price is your financial reward for providing the product or service.
 The value is what your customer believes the product or service is worth to them.

For a product:
 Quality of the materials used
 Finished product performance
 Packaging
 Delivery
 After sales service
 Warranty

For a service:
Level of experience
Responsiveness
Ability to meet deadlines
Value add


Analyse your costs

The first step in developing a pricing strategy is to collect data about the buying habits of your
customers. You can use that data to calculate a product's price elasticity of demand, which is a
measure of how price changes affect consumers' willingness to buy a product. You can:-

 Sell your product in a limited number of markets to get a feel for how your customers react to
the product.
 Sell your product at slightly different prices in each market to determine the price that produces
the most revenue.
 Analyse historical data
 Ask your customers

All prices must, in the long term, cover the costs of generating or marketing your product or service
and produce a reasonable profit.

Use the following table to analyse your products / prices.

Product/Service Cost of Overheads Distribution Commissions Profit
production costs
(materials,
labour etc)

Compare to your competitors
You need to consider the prices charged by your competitors, to give you a benchmark against which
to position your own price.

Product/Service Your price Competitors price


How is your product better value than the competitor's?
Are you getting as much (£) for your product as your competitor?
Are your customers paying more for the extra value they receive? What will your competition do if
you change your prices?

Your answer


Describe your pricing strategy

The following is a description of a variety of methods.

•After you’ve calculated your cost based price, you can
Competitor based
compare this price against market prices.

•Set a high price when you have a unique (and possibly luxury)
Premium pricing
product or service.

•This is a no frills low price when you have no frills products or
Economy pricing
services.

•This focuses on the price you believe customers are willing to
Value based pricing
pay, based on the benefits your business offers them.

•The price charged for products and services is set artificially
Penetration pricing
low in order to gain market share.

•Charge a high price because you have a substantial
Price skimming
competitive advantage, i.e. you may be first to market.

Psychological / odd value pricing •£9.97 instead of £10.00

•Different prices for different elements. E.g. Basic wash could
Product line pricing
be £2, wash and wax £4, and premium car care £7.

Optional product pricing •Add in optional extras.

•When you have a product, that only you can service, or where
Captive product pricing
you have a product where only your refills will fit.

Product bundle pricing •Bundle several products together and set a new price.

Promotional / discounted pricing •E.g. BOGOF (Buy One Get One Free).

•Prices are reflected in the additional costs to get it
Geographical pricing
somewhere. Or it is rare in a location.

•Set a very low price to attract customers and then try to up
Loss leader pricing
sell them.

•This method takes into account your costs, your desired
Cost plus
profit, and then totals these into a price.


Cost plus
Example: Full cost plus pricing seeks to set a price that takes into account all relevant costs of
production. This could be calculated as follows:

Total budgeted cost + selling / distribution costs + other overheads + MARK UP ON COST

Budgeted sales volumes

E.g. Consider a business with the following costs and volumes for a single product:
Fixed costs:
Production costs £ 100,000
Research and development £ 25,000

Fixed selling costs £ 55,000
Administration and other overheads £ 32,000
TOTAL FIXED COSTS £ 212,000

Variable costs
Variable cost per unit £ 2

Total variable costs £ 200,000

TOTAL COSTS £ 412,000

Mark-Up
Mark-up % required 45%
TOTAL COSTS plus MARK UP £ 597,400
Budgeted sale volumes (units) £ 100,000

SALES PRICE £ 5.97

Describe your pricing strategy

Product/Service Lifecycle Pricing strategy


 What would be the likely response of demand to higher or lower prices?
 To what extent are prices set on cost, demand, and/or competitive criteria? Why?
 What temporary price promotions do you use, how effective are they?
 How do customers perceive the link between price and quality in your product
 What would be the likely response of demand to higher or lower prices?
 Why did you introduce the product / service? If you have already covered your overheads and are
using spare capacity you can use marginal costing and lower prices.
 How could you 'skim the cream'? If your new product is superior to the competition you can sell
it at a higher price than competition. The volume sold may be small, but the profit margins will
be high.
 How could you adopt 'penetration pricing'. Low prices and high volumes.

Your answer


Measure
But above all remember you need to make a profit. So analyse and measure what you do.

There will be times when you need to change your prices. Before you do, you should analyse the
impact on your profitability.
 What effect will the price change have on the volume of sales?
 What will the effect be on the profit per sale?
 What effect will this have on my customers?
 How will my competitors react?
 What tactics could we use, e.g.
o introduce new, higher-priced products or services and make old, cheaper ones
obsolete
o lower the specification - and your costs - while maintaining the same price

Your answer

Remember work on profits not sales volume.


Distribution

Getting the right product to the right customers in the right place at the right time

Distribution decisions have significant implications for:
 pricing
 margins and profits
 marketing budgets
 sales techniques

Distribution channels can include one or more of these options:

Retail • selling to final consumer buyers

Wholesale • an intermediary distribution channel

Sales force • employees who sell on your behalf

Brokers/agents/associates • who sell for a commission

Internet • Online channels

How do you distribute your products / services

Your answer

 How else could you distribute your products and services?
 Which are the most effective? Why?


Identify how your competitors distribute their products

Competitor Product Distribution method

How does your direct competition sell their product? Is it effective enough to follow?

Identify costs associated with your distribution channels

Product Distribution method Costs

Which channels will maximise sales and profit?
What alternative methods of distributing your product that would result in more service or less cost?

Your answer


Match your methods to your strategy

Product Target Market Distribution method Alternatives

What are the main channels bringing products to customers?
How convenient is it for them to purchase your product or service
Who is your target audience
How does your organisation give adequate service, along with the product, to customers?
What are the efficiency levels and growth potentials of the different trade channels?

Your answer


Promotion
Promotion is just one part of the marketing mix. It involves communicating information about your
company, brand, products/services.

A number of activities will go to make up the promotional mix, these can include:-

Likes and dislikes
We all have likes and dislikes, if you keep
information sent, given or collected you will soon Attention

start to see what is real rubbish, what was the
visual impact, do the messages actually mean
anything to you, did you understand them, did it
get your attention, did they stimulate any interest,
did it create any desire by offering something you
Action
AIDA Interest

want OR helping you to avoid pain, did they make
you want to take action.

 Go through items that you have collected, Desire

put them into piles of likes and dislikes
 Write down what you liked and disliked
 Are there things that you could use in your business?

Your answer


Personal Selling
The primary function of sales is to generate and close leads, educate prospects, fill needs and satisfy
wants of consumers appropriately, and therefore turn prospects into customers.
What is the format of your sales force, is it large enough, right mix of people / skills?
How can it be organised along the best lines of specialisation (territory, market, product)?
Are they split for customer retention and new business?
Does the sales force show high morale, ability, and effectiveness?
Are they sufficiently trained? What training do they need?
What incentives do you offer? Do they have enough incentives?
What are the procedures adequate for setting quotas and evaluating performance?
How could you use a telemarketing team or use an external source to increase appointments and
leads?

Your answer


Advertising
Advertising includes billboards, bus stops, printed flyers, radio, cinema, TV, web banners, web pop-
ups, magazines, newspapers, sides/backs of buses, taxis, tubes and trains, product placement, the
backs of event tickets, car park and supermarket receipts.
 What are your organisations advertising objectives?
 How does your advertising get its messages across? How do you know?
 Are the themes, graphics and copy consistent? Test this.
 Who writes your copy? Is it effective? Too much jargon? Ask.
 Are the chosen media adequate?
 What is your budget, what is your ROI?
 Why are you advertising?
 What are you advertising?
 What is the typical response rate?

Your answer


Internet
 Do you have banner ads on other sites? Which ones? Which are effective?
 Do you use pay per click? How effective is it?
 Do you have a blog? When did you last write on it?
 Have you entered your details in online directories? Which ones?
 Do you Twitter or Facebook?
 Do you have a newsletter? When did you last send it out? What was the response?

Your answer

Incentives/Gifts
What incentives and gifts do you use and where? How effective are these?
What is missing?

Your answer


Networking
 Which networking events do you regularly attend? How are they working for you? Who goes and
what are their objectives?
 When did you last ask for a speaking slot?
 What business clubs can you join? List them? Who can you go with?

Your answer

Website
 Do you have a website? How would you describe it?
 How well can you navigate the website?
 Does it have a search facility?
 Do you have separate sections for each product or service?
 Do you have downloadable collateral, video or other interesting information?
 Can you buy online? What methods can you pay with?
 Have you optimised your site?
 Do you swap links with other organisations?

Your answer


Events/Exhibitions/Seminars
 Do you attend any regular exhibitions or events? Which ones, why, how effective are they?
 Do you run any in-house seminars? How effective are they?
 Can you partner with anyone? Who?
 Can you get your suppliers to co-fund?
 Describe your event planning process.
 List exhibitions you have been too and describe your success rate?

Your answer

Direct Marketing
Direct marketing is a way of sending your messages directly to your prospects and customers, using
things such as mail (direct mailers, postcards, mail order catalogues, newsletters ), email and SMS.
 What direct mailers do you have? What campaigns are they linked to?
 How often do you send them?
 What are the messages? How do these fit in with other messages?
 Are they addressed to the right person? When did you last check?
 Have you regularly unsubscribe emails users who request it? What process do you have in place
to do this?
 Do you have an anti spamming policy? When did you last update it?
 Do you use pre-paid envelopes?
 How often do you send newsletters? Where is your plan?
 How often do you follow up? Who does it? Do you have a telemarketing team?

Your answer


Database
 Do you have a sales and marketing database? What format is it in? Who keeps it up to date?
 Is it used by the sales team / customer service / marketing?
 What kind of data does it contain? Can you segment customers for campaigns?
 Do you buy mailing lists? From where? How often?
 Have you cross checked your data with the telephone preference service?

Your answer


Sales Promotion
Sales promotion is marketing communications employed for a pre-determined, limited time to
increase demand of your products and services.
Which of these do you use and how effective are they:-
 Money off offers
 Price reductions - A temporary reduction in the price, such as buy before October 12th and get £x
off
 Repackaging price - Get 25% extra
 Coupons, or a coupon booklet is inserted into the local newspaper or delivery by the postman,
on checkout the customer is given a coupon based on products purchased, on-line coupons
 Rebates offered if the receipt or label is mailed to back to you
 Competitions
 Point-of-sale displays:
 Incentives for customers and sales
 Training
 Marketing development funds
 Do you offer any package (bundled) deals?
 Can you make an offer with a partner? (Cross promotion)
Your answer


Publicity
Publicity is the deliberate attempt to manage the public's perception of a product, service or
organisation.
 Does your organisation have a carefully formulated program of publicity?
 Who is your PR company? Who manages them?
 What is your PR plan?
 Who will do this for you internally (if you don’t use an external one)?
 Do you have publicity photos? Who took them? How up to date, relevant and interesting are
they?
 When did you last send press releases, letters to editors, write whitepapers or expert pieces?
 What is your policy for crisis management?
 What events are you speaking at?
 How often do you make announcements for appointments, annual reports, events etc?

Your answer


Sponsorship
 Who and why do you sponsor?
 How effective is your sponsorship?
 What is the cost and ROI?

Your answer


Collateral
Do you have the following?
Logo Business Cards Company Folder Brochures
Catalogue Flyers Compliments Slip Letterhead
Exhibition Stand Presentations Sales Proposals Proposal Cover
CD/DVD Covers

Go back to your pile of likes and dislikes and compare those with your collateral.
 Are the themes, colour, graphics and copy effective?
 How effective is your packaging?
 Did you use the same designer for all of your work?
 Are your designs consistent?
 What quality does your collateral convey?
 Are you embarrassed to hand out your business card?
 Does you corporate literature reflect what you do?
 Is your identity rubbish but you don’t know how to sort it out?
 Is it a painful and time consuming process getting new collateral done?
 Does your designer understand your business objectives and reflect them back in your identity?

Your answer

Not having a good identity will damage your reputation and cost you valuable sales.

Demonstrate that you mean business and ensure that your target market knows who you are and
then remembers what you stand for by having consistently designed high quality collateral.


Technology
Marketing needs to make use of a vast amount of technology, for example:-

 Database
 Customer relationship management software (CRM)
 Email & E-newsletters
 Website
 Blog
 Social networking sites
 Auto responders
 E-books
 Graphics packages
 Office products
 Google Adwords

Make a list of all of the technology you employ which impacts your marketing.

Your answer

Are you properly trained, and use it all effectively? If not book some training.
What other technology do you need?

Your answer


Action Planning
Push and Pull
There are two main kinds of promotional strategy - "push" and "pull".
A push strategy tries to create consumer demand for a product.
A pull strategy tries to build up demand for a product.

Campaign Management
Describe the process you go through when planning a campaign.
What meaning do the campaign codes have?
Do you have a promotional plan which ties in with your objectives? Describe it.
List campaigns, tactics, costs and ROI

Your answer


Create an action plan a direct mailer.
Example:
What is the purpose of this marketing activity? To up-sell my support services package to my
existing customers
What are the expected results? Get 80% of my customers to take out an annual
support contract.
Develop better marketing materials
Clean up database
Get better at following up direct mailers
Who is your Target Market? Existing customers who have bought a solution
from me in the last 2 years.
What are your strategy and tactics? Direct mailer and email, follow up calls
Create copy and test it
Get names and clean up
Send and follow up
Try to get a meeting so that we can talk about
other things that we do.
What is your marketing message? Peace of mind
Free updates
What marketing materials do you need (website, Postcards, email template, names, website
flyers, brochure, proposal etc)
Key to the plan Well thought out
Affordable –
good value
What is the offer By spending just £450 per annum you will get
access to a fully qualified support person who will
help you out within 8 hours (or 4 if you take the
premium contract), and free upgrades to the
system, within that version.
What is the call to action? Order now at introductory prices
Follow-up - How and when will you follow up? 1 week after it goes out follow up calls
What is the cost? 60p per postcard incl. telephone calls
What is the timeline? 3 months from April 1st


Create an action plan for your activities.
Objective:-
Marketing Activity

What is the purpose of this marketing activity?

What are the expected results?

Who is your Target Market?

What are your strategy and tactics?

What is your marketing message?

What marketing materials do you need (website,
flyers, brochure, proposal etc)

Key to the plan

What is the offer

What is the call to action?

Follow-up - How and when will you follow up?

What is the cost?

What is the timeline?


How do you follow up your campaigns?

Write down 3 ways you will follow up each campaign.

Your answer

1

2

3


Marketing Controls
There is no planning without control. If an objective states where you want to be and the plan sets out
a road map to your destination, then control tells you if you are on the right route or if you have
arrived at your destination.
Resources
 What resources are allocated to accomplish the marketing tasks?
 What marketing resources are allocated to various markets, territories and products?
 What marketing resources are allocated to the major elements of the marketing mix (i.e.
product quality, personal selling/contact, promotion and distribution)

Make a list of your available resources.

Your answer

What else do you need?

Your answer


Budgets
Where is the budget? How and when do you set it?
What are your campaign/promotion etc costs and what your ROI (return on investment)

Your answer

You should develop a simple spreadsheet which enables you to cost out each campaign or activity.
You can then measure the returns you get against each one. Do not expect miracles, its takes time
for your marketing messages to get through.

Implementation
 Where is your annual marketing plan? When do you start the planning? How often do you up
date it?
 Does your organisation implement control procedures (monthly, quarterly, and yearly) to ensure
your annual objectives are being achieved?
 How does your organisation carry out periodic studies to determine the contribution and
effectiveness of various marketing activities?
 What is your organisations marketing information system to service the needs of managers for
planning and controlling operations in various markets?

Your answer


Organisation
 Who is your high-level marketing officer/manager to analyse, plan and implement the marketing
work of your organisation?
 Who else is directly involved in marketing activity?
 What training, incentives, supervision or evaluation is needed?
 How are the marketing responsibilities structured to serve the needs of different marketing
activities, products, markets and territories in the best way possible?
 What other resources do you need?
 Do the staff understand and practice the marketing concept? If not what are your plans to
change this?

Your answer


Measurement
How do you measure success?

Write down 3 measurements of success for your business

Your answer

Congratulations and well done. You are now ready to create your marketing action plan.


Where am I going?

Goals and Objectives

Setting goals and objectives is the most important aspect of any plan. Without these you will be
going no where.

Goals
Goals are the large statements of what you hope to accomplish but usually aren't very measurable.
Goals are more vague and focus on the longer term. They create the setting for what you are
proposing.

The overall goal should define the long-term communications aspirations:-

 Increase turnover to £1 million in 3 years

Objectives
Under the goal, you set specific objectives. Objectives differ from goals in their specificity and ability
to be evaluated and measured

Marketing objectives develop out of your business goals and objectives. And they should be driving
your marketing strategy. Meeting marketing objectives should lead to sales - if they don't, then you
probably have established the wrong objectives, or you aren't executing them effectively.

Objectives should seek to answer the question 'Where do we want to go?'. And ‘how do we get
there?’

What are your marketing / financial objectives?
The purposes of objectives include:
 to enable a company to control its marketing plan.
 to help to motivate individuals and teams to reach a common goal.
 to provide an agreed, consistent focus for all functions of an organisation.

Goals are broad Objectives are narrow
Goals are general intentions Objectives are precise
Goals are intangible Objectives are tangible
Goals are abstract Objectives are concrete
Goals can't be validated as is Objectives can be validated


 Your goals/objectives should include financial elements, such as revenue, gross profit, sales per
salesperson, and so on Number of leads needed to get the right number of visits, quotes and
orders
 Number of Customers
 Market share
 By market segment
For each.

However, they should also include non-financial elements such as units sold, contracts signed, clients
acquired, and articles published.

Sales levels
 product and service

Examine the objectives

SMART Objectives

There are a number of business objectives, which an organisation can set, e.g.:

Market share objectives: Obtain 3% market share of the [your industry] by 2013.

Profit objectives: To increase sales margins by 10% from 2010 – 2012.

Growth objectives: To grow by 15% year on year for the next five years.

Brand awareness objectives: To increase brand awareness over a specified period of time

However, whenever you set your objectives you need to remember SMART

S Specific
M Measurable
A Achievable
R Relevant
T Time bound

Set objectives that you can really do something with.


From theory to reality

Write down 3 objectives for your marketing.

Objective Long / Medium
/ Short Term
1

2

3

How will you meet your goals and objectives?

First you will have undertaken some analysis of your business and performed some market research
to ensure that these are realistic and relevant.

Example.

Target Price

Mark
Objectives: I want to attract 10 new businesses who will spend an average of £5400 each on our
document managements solutions over the next 12 months

Product

Break it down into small chunks, and start asking some relevant questions.

The Plan
Now that the objectives are set, and have been broken down into bitesized chunks, you can now
begin to pull together a plan to meet them.


Market Research
In order to obtain information about the wants, needs, preferences, beliefs and likely behaviour of
potential consumers of your products and services you need to conduct some market research.

There are two ways to do market research:
Secondary Research involves analyzing information that already has been gathered for another
purpose.
Primary Research involves collecting new information to meet your specific needs.
Primary research can be:
 Qualitative: Gathering descriptive information, usually representing verbal or narrative data
through open-ended interviews or focus groups.
o Open-ended interviews are composed of questions that can not be answered with a
simple yes or no. This type of interview gives you a lot of information, but is time
consuming for both you and the person you are interviewing. The greatest benefit to
you is that you will learn a lot about the group you are studying including common
trends, emotional motivators, and general likes and dislikes of your primary market.
o Focus groups should be led by professionals skilled in leading small groups of 6 to 12
people through a series of questions ranging from specific to general in nature.
Usually, focus group sessions last for at least an hour. Since focus groups must be
lead by trained professionals to be most effective, they are the most expensive form
of market research.
 Quantitative: Gathering numerical information that can be analyzed statistically through
surveys.
o Surveys take longer to develop, but are generally easier to administer than other
types of market research. Since they take less time to complete, people are usually
more willing to answer them. Also, surveys provide excellent information if they are
well-constructed with thoughtful questions. The easiest and most cost effective way
to conduct surveys is either by telephone or where the product is sold.

Planning your research
What information is required
 Identify search methods
 Set a timeframe for the research
 Establish the research budget
 Compile and analyse the results
 Present the results in a plan

Now you have completed your research you can start to plan!

END


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