Sheet1n= 5MorningSamples of size 5 were taken to find X-barAfterno.docx

Sheet1n= 5MorningSamples of size 5 were taken to find X-
barAfternoonNightSample #TimeAverage (X-
bar)SmallestLargest16:00
AM49.648.750.72750.249.151.23850.649.651.44950.850.251.85
1049.949.252.361150.348.651.7712 Noon48.646.250.481:00
PM4946.45092494650.610349.848.250.811450.349.252.712551.
45055.313651.649.254.714751.85055.61585148.653.216950.549
.452.4171049.246.150.718114946.350.81912 Mid
Night48.445.450.2201:00
AM47.644.349.721247.444.149.622348.245.2492344845.549.12
4548.447.149.625648.647.4522675049.252.227849.84952.42895
0.349.451.7291050.249.651.83011504952.33112
Noon5048.852.4321:00
PM50.149.453.633249.748.65134348.447.251.735447.245.350.9
36546.844.14937646.84151.23875046.251.739847.44448.74094
744.248.9411047.246.650.2421148.647504312
Midnight49.848.250.4441:00
AM49.648.451.7452504952.24635049.25047447.246.350.54854
744.149.749648.4454950748.844.849.751849.64851.85295048.1
52.753105148.155.2541150.449.554.15512
Noon5048.750.9561PM48.947.651.257249.848.45158349.848.8
50.85945049.150.660547.845.251.261646.44449.762746.444.45
063847.246.648.964948.447.249.5651049.248.150.7661148.447
50.86712 Midnight 47.246.449.2681:00
AM47.446.84969248.847.251.470349.64950.67145150.551.572
550.55051.9
THE MARKETING PLANNING PROCESS 177
and identify both direct and indirect competition. For example,
restaurants face competition from supermarkets, convenience
stores, and delivery services. The next section will elaborate on
the process of assessing the internal strengths and weaknesses
of firms, relative to the competition, and the opportunities and

threats posed by the environment.
SWOT ANALYSIS. The next part of the situation analysis
involves a detailed examination of the firm's internal strengths
and weaknesses, and the external opportunities and threats. This
analysis is often referred to as a SWOT analysis. Figure 5.2
illustrates the various components of a SWOT analysis and their
relationships with one another.
The strengths and weaknesses components of a marketing plan
reflect an evaluation of the firm's internal situation. What are
the things that the firm does well, and where are they below
standard? The opportunities and threats reflect an assessment of
the external environment that the firm faces. Strengths and
opportunities represent positive attributes that the firm can use
to gain a competitive advantage. If items that appear as
strengths and opportunities for the firm are similar to
weaknesses and threats for the competitors, then the firm has a
distinct competitive advantage to leverage for gains in sales and
market share. Similarly, weaknesses and threats are viewed as
problem areas. Firms need to compensate for weaknesses until
they can eliminate them, and if possible, threats need to be
anticipated so strategies can be developed to minimize their
impact.
As shown in Figure 5.2, strengths and opportunities are items
that can be leveraged to gain a competitive advantage. For
example, if a food service operation found that there would be
minimal competition for an off-premise catering business in
addition to its existing restaurant operation, this would
represent an opportunity—an area for potential growth. Using
the same example, a food service operation might find that if it
decided to enter the off-premise catering business, competition
might follow. This potential competition represents an external
threat.

SWOT analysis
SWOTs are the basis on which strategic marketing plans are
developed. Strengths and opportunities are leverage items on
which firms develop competitive advantages. Conversely,
weaknesses and threats are problem areas that must be
minimized if the firm is to achieve maximum success.
(
Strengths
Weaknesses
Opportunities
Threats
Internal items
K
Leverage
Problem
y
Y
External items
)figure 5.2 » SWOT analysis.
178 CHAPTER 5 DEVELOPING A MARKETING PLAN

Go;.:lb
Goals are broad statements of what the firm seeks to
accomplish.
Inherent in this analysis is the need for managers to examine
what the business does well and what could be improved. At the
same time, a critical assessment of the market is needed to
determine, as specifically as possible, the threats and potential
opportunities that exist outside the firm. Management must ask,
"What do we have or offer that is different, unique, or superior
to what the competition offers consumers?" Management must
also examine the organization's shortcomings by asking, "What
do we provide that is below average?"
The process of identifying internal strengths and weaknesses or

external threats and opportunities is similar to examining a
balance sheet with assets and liabilities. The strengths and
opportunities are used to promote the business and to make
decisions about new directions that should be taken.
Conversely, managers must make every effort to correct or
neutralize the weaknesses and threats. Many managers find it
difficult to identify an organization's weaknesses or threats
clearly, tending to overlook or downplay negative factors.
Successful managers can usually predict the future and adapt to
meet the changes that are occurring in the marketplace.
Although this may not be entirely true, those who are successful
seem to know what will occur in the marketplace before it
actually happens. Is it luck or successful planning? One
definition of luck is "preparation meeting opportunity."
Successful managers are students of trends. They carefully
watch the broad marketing environment discussed in Chapter 1,
looking for subtle changes in the economic, political and legal,
social, and technological environments that may potentially
influence their businesses. They carefully study the moves made
by their competitors and do everything they can to stay close to
their customers. In doing so, they attempt to match their
product-service mix to the ever-changing needs and wants of
their customers and potential customers.
Objectives
Objectives are more detailed statements of what the firm intends
to achieve. Well written objectives should state
(1) what will be accomplished in measurable terms,
(2) within what specific time frame it will be accomplished, (3)
which individual or group will be responsible for achieving the
objective, and (4) how the results will be evaluated.
Defining the Firm's Goals and Objectives
A firm's goals and objectives should evolve from the mission

statement. Goals are broad statements of what the firm seeks to
accomplish. For example, a firm may develop a goal that states,
"We are seeking to achieve the number one market share in the
mid-Atlantic region." The goal does not tell how the results are
to be achieved; rather, it states, in broad terms, the desired
result. Objectives are more detailed statements, or refinements,
of what the firm intends to accomplish. A good objective
includes (1) what will be accomplished in measurable terms, (2)
within what specific time frame it will be accomplished, (3)
which individual or group will be responsible for achieving the
objective, and (4) how the results will be evaluated.
An old saying that still holds true notes that there are three
types of companies:
1. Companies that make things happen
2. Companies that watch things happen
3. Companies that wonder what happened
Companies that make things happen are generally engaged in
planning. They have established a mission statement as well as
goals that lead to the formation of overall strategies that result
in success. Becoming overly concerned with day-to-day
operations causes the downfall of many hospitality
organizations. The result is that managers become so engrossed
in meeting the daily demands of their positions that they fail to
see the big picture—they cannot see the forest for the trees.
Because of this myopic perspective, they are not aware of
trends, and when the competitive environment does change, they
are not prepared for it. Successful planning is a key element in
the financial success of all firms. Hospitality and tourism firms
that allocate human and monetary resources for planning are
much more likely to reach their financial goals than firms that
do not engage in planning.

THE MARKETING PLANNING PROCESS
Successful marketing begins with careful assessment of the
competitive environment, followed by the development of a
marketing plan. The sections that follow provide a framework
for this process.
Framework for Marketing Plans
Marketing plans are normally developed for both short-term and
long-term time frames. Short-term plans are normally for a
period of up to one year, while long-term plans for a period of
greater than one year, often for two or more years.
One-year plans are fairly tactical in nature. The plans are
specific in terms of the action plans and the activities that will
be undertaken to
the marketing planning process 171
170 chapter 5 developing a marketing plan
achieve the stated objectives. Budgets are included, and the
allocations of resources to each action plans is normally stated.
The metrics that will be used to access the success attained for
each objective. These performance metrics are normally
monitored monthly, or at least quarterly. If the performance
targets are not being achieved, changes in the action plans and
tactics will be necessary to increase the likelihood of achieving
the stated objectives.
Long-term plans, normally for a period of longer than one-year
are developed with a more strategic focus. These plans normally

follow a framework similar to the following.
I. Executive Summary. This is a summary that provides an
overview of the entire plan.
II. Situation Analysis
A. Market Summary
1. Target markets. What specific markets are targeted? Why are
these specific segments the best targets? How have the target
markets changed over time?
2. Market analysis. Where does current business come from?
How has this changed in the past one to two years?
3. Market demographics. Describe the customers
demographically. Where do they come from geographically?
What travel or consumption behavior do they exhibit?
4. Market needs. What needs are customers trying to satisfy?
How have these needs changed in the past one to two years?
When customers are asked why they buy from your
organization, what would they say?
5. Market trends. How has the market or competitive behavior
changed? Have there been changes in either supply or demand?
6. Market growth. What has been the annual growth in the
market in the past one to two years? How does this growth
compare to other similar situations?
B. SWOT (Strengths, weaknesses, opportunities, or threats)
analysis
1. Strengths. What are the internal strengths of the operation?
What does the organization do well? In what ways in the
organization stronger than competitors?
171 the marketing planning process 2
2. Weaknesses. What are the internal weaknesses of the
operation? What does the organization need to improve? In what
ways is the organization weaker than, or at a competitive
disadvantage to competitors?
3. Opportunities. In what ways is the organization positioned to

gain a competitive advantage?
4. Threats. In what ways is the organization at a competitive
disadvantage when external factors are examined?
C. Competition. Who are the major competitors? How has this
competitive set changed in the past one to two years? Have
competitors taken actions which create challenges or
opportunities?
D. Service offerings. What is the primary product-service mix
of the organization? Has this changed in the past one to two
years?
III. Marketing Strategy
A. Mission. What is the mission statement of the organization?
Does the mission statement need to be reviewed or modified?
B. Objectives. What is the overall strategy of the organization?
How is this strategy operationalized? What specific objectives
will execute the strategy? How will performance against the
objectives be measured? Are the objectives reasonable? Are
time parameters to accomplish the objectives stated? What
resources will be required to achieve the objectives?
1. Marketing. What are the specific objectives related to the
marketing strategy?
2. Financial. What are the specific financial performance
objectives? These are normally associated with each of the
marketing objectives? What level of performance is desired?
C. Target marketing. What strategies and tactics are associated
with each targeted market segment?
D. Positioning. How is the organization positioned? How will
this positioning strategy be implemented?
E. Marketing mix. How will each of the marketing mix elements
be implemented?
F. Marketing research. Is any marketing research necessary to
prepare for future marketing plans?

G.
IV. Financials, Budgets, and Forecasts
A. Sales forecast. What is the monthly sales forecast for each
target market?
B. Expense forecast. What is the monthly budget for each
item in the
marketing budget?
V. Controls
A. Implementation milestones and metrics. What are the
monthly milestones? How will these be monitored? What
action(s) will be taken if performance falls below the
milestones?
B. Contingency planning. What action(s) will be taken if
performance falls below the milestones? How will decisions
regarding changes in the marketing plan be made? Who will be
involved in this review and analysis?
Students often find it useful to review marketing plans as a
means to learn more about how they are developed, the type of
strategies and tactics that successful firms use. Companies
normally do not widely distribute marketing plans, or very
apparent reasons. However, Convention and Visitors Bureaus
also develop marketing plans. These are normally public
documents. Below are links to sample plans.
Ft. Lauderdale, Florida -
http://www.sunny.org/static/index.cfm ? contentID=411 Austin,
Texas -
http://www.ci.austin.tx.us/vision/downloads/cvb_plan.pdf
Spokane, Washington -
http://www.visitspokane.com/upload_content/31_5_orig.pdf
No magic formula will guarantee success for a firm in the
hospitality and tourism industry. Even well-managed firms may
fail to achieve the desired level of success. However, managers
can take steps that will increase the probability of success.
Figure 5.1 illustrates the basic steps in the marketing planning

process. If managers focus on these elements, they are more
likely to lead the firm in a direction that will accomplish its
goals.
Before actually beginning the marketing planning process, each
firm should establish a mission statement. A firm's mission
statement defines its purpose and how to differentiate it from its
competitors. It should provide managers with the general
guidelines for decision making. Typically, mission statements
are brief, often only a sentence or two and always less than two
paragraphs; they define the scope of business for the
corporation, and they

Mission statement
A firm's mission statement defines its purpose and how to
differentiate it from its competitors. It should provide managers
with the general guidelines for decision making.
(
1
r
Define the firm's goals and objectives
Formulate marketing strategies and action plans
Implement action plans and monitor performance
Conduct a situation analysis
)

Position statement
Position statement describes the mission to the firm's external
stakeholders (i.e., customers, suppliers, and the general
community) in terms of the public's perceptions of the benefits
offered.
figure 5.1 • The marketing planning process.
answer the question, "What business are we in?" For example, if
a corporation defined its mission as providing outstanding

hospitality services in the budget-priced segment of the market,
this would be its primary focus. This is the message that is
conveyed to the firm's internal stakeholders: owners/ investors,
managers, and employees. Second, those involved in the
planning process often create a series of value statements,
which describe what the firm believes in and how it will attempt
to execute the mission statement. Finally, managers create a
position statement, which describes this mission to the firm's
external stakeholders (customers, suppliers, and the general
community) in terms of the public's perceptions of the benefits
offered.
This idea of focus, or purpose, is important when proceeding
with the marketing planning process. A firm's mission is a
function of its available resources and capabilities. It is
difficult to operate outside these parameters and still remain
successful. For example, the budget hotel mentioned earlier
would not be able to compete for customers with full-service
hotels that offer a wide array of amenities and services that are
not available at budget properties. Budget hotels know that they
appeal to price-sensitive customers who want a nice room that
is clean and safe. If the hotel adheres to its mission, there will
be no confusion among the stakeholders, and there is a better
chance for success. Once the mission statement is established,
the firm can begin the planning process.
It is often easier to develop mission statements after reviewing
samples. Excellent samples can be found at
http://www.missionstatements.com,
http://www.mystrategicplan.com/strategic-planning-
topics/mission-state-ments.shtml, and
http://www.workstar.net/library/mission.htm.
SPC CASE ANALYSIS: AMERICO DRILLING SUPPLIES
MGT 4314 – Spring 2015
Dr. Nayebpour

In November 2013, John Adams, a customer service
representative of Americo Drilling Supplies (ADS), was
summoned to the Houston warehouse of Drilling Contractors,
Inc. (DCI), to inspect three boxcars of mud-treating agents that
ADS had shipped to the Houston firm. DCI had filed a
complaint that the 50 Pound bags of treating agents that it had
just received from ADS were short-weight by approximately
5%.
The light-weight bags were initially detected by one of DCI’s
receiving clerks, who noticed that the rail road side scale tickets
indicated that the net weights were significantly less on all
three of the boxcars than those of identical shipments received
on October 25, 2013. ADS’s traffic department was called to
determine if lighter-weight dunnage or pallets were used on the
shipments. (This might explain the lighter weights.) ADS
indicated, however, that no changes had been made in the
loading or palletizing procedures. Hence, DCI randomly
checked 50 of the bags and discovered that the average net
weight was 47.51 pounds. They noted from past shipments that
the bag net weights averaged exactly 50.0 pounds, with an
acceptable standard deviation of 1.2 pounds. Consequently,
they concluded that the sample indicated a significance short-
weight. ADS, was then contacted, and Adams was sent to
investigate the complaint and to issue a 5% credit to DCI.
DCI, however, was not completely satisfied with only the
issuance of credit for the short shipment. The charts followed
by their mud engineers on the drilling platforms were based on
50-pound bags of treating agents. Lighter-weight bags might
result in poor chemical control during the drilling operation and
might adversely affect drilling efficiency. (Mud-treating agents
are used to control the pH and other chemical properties of the
open during drilling operations.) This could cause severe
economic consequences because of the extremely high cost of
oil and natural gas well-drilling operations. Consequently,

special use instructions had to accompany the delivery of these
shipments to the drilling platforms. Moreover, the light-weight
shipments had to be isolated in DCI warehouse, causing extra
handling and poor space utilization. Hence, Adams was
informed that CDI might seek a new supplier of mud-treating
agents if in the future it received bags that deviated
significantly below 50 pounds.
The quality control department at ADS suspected that the light-
weight bags may have resulted from “growing pains” at the
Orange plant. Because of the earlier energy crises, oil and
natural gas exploration activity had greatly increased. This
increased activity, in turn, created increased demand for
products produced by related industries, including drilling
muds. Consequently, ADS had to expand from one shift (6 A.M.
to 2 P.M.) to a two-shift (2 P.M. to 10 P.M.) operation in Mid
2011s, and finally to a three-shift operation (24 hours per day)
in September of 2013.
The additional night shift bagging crew was staffed entirely by
new employees. The most experienced foremen were
temporarily assigned to supervise the night shift. Most emphasis
was placed on increasing the output of bags to meet the ever-
increasing demand. It was suspected that only occasional
reminders were made to double-check the bag weight feeder. (A
double check is performed by systematically weighting a bag on
a scale to determine if the proper weight is being loaded by the
weight-feeder. If there is significant deviation from 50 pounds,
corrective adjustments are made to the weight-release
mechanism.)
To verify this expectation, the quantity control staff at ADS
randomly sampled the bag output and prepared the following
table. Five bags were sampled and weighted each hour.
ANALYSIS
Assume you are John Adams of ADS. Based on the following
analysis, prepare a report to be submitted to both ADS and DCI

Executives regarding the status of the filling process at ADS
and recommend method to improve quality control at the filling
station. Use the data provided in the Excel data file.
Insert all graphs and provide analysis in this word file after
every question. Only the Word file is graded.
a- Calculate the Range Column in Excel (Largest-Smallest) and
find mean and standard deviations for Average Weight,
Smallest, Largest, and Range columns.
b- What is the standard deviation of individual bags if sample
-
-bar based on part b calculation,
c- Construct a time series plot of all four variables (4 graphs)
and discuss your findings based on the graphs.
d- Construct X-bar and R Charts, graph, and discuss your
findings based on the control charts. Is it out of control? Why?
Explain.
e- Is there any differences between performances of three
shifts? Hint: (Carve out the morning, afternoon, and night shift
data into three columns and graph them. Explain your findings.
f- Use One Way Analysis of Variance (ANOVA) to compare the
three groups (shifts) to test if there is significant differences in
the performance of three shifts. Use Alpha =0.01. Can you
conclude that night shift is to be blamed for most of the
variation?
g- Assume Tolerance limits of 50.1±1.7 lbs. is specified in the
sales contract and find the Process Capability index Cpk.
Explain what it indicates and if process is capable to meet
contractual agreement.
h- If the improved process average is adjusted to 50.3 lbs. and
process standard deviation is reduced to .90, what is the new
Cpk? Are you comfortable for making such recommendation to
management? Explain.

i- Find the control limits for an X-bar and R chart if a new
improved process has average of 50.1 lbs. and R-bar of 2 lbs.
Assume n=6 for new process control.
j- Provide complete conclusion regarding your findings and
make recommendations regarding the filling process in your
conclusion paragraph.
Due Date: Sunday April 3, 2015. Must submit both Excel file
and Word File in Blackboard.
Sample #
Time
Average
Smallest
Largest
1
6:00 AM
49.6
48.7
50.7
2
7
50.2
49.1
51.2
3
8
50.6
49.6
51.4
4
9
50.8
50.2
51.8
5
10

49.9
49.2
52.3
6
11
50.3
48.6
51.7
7
12 Noon
48.6
46.2
50.4
8
1:00 PM
49
46.4
50
9
2
49
46
50.6
10
3
49.8
48.2
50.8
11
4
50.3
49.2
52.7
12
5
51.4

50
55.3
13
6
51.6
49.2
54.7
14
7
51.8
50
55.6
15
8
51
48.6
53.2
16
9
50.5
49.4
52.4
17
10
49.2
46.1
50.7
18
11
49
46.3
50.8
19
12 Mid Night
48.4
45.4

50.2
20
1:00 AM
47.6
44.3
49.7
21
2
47.4
44.1
49.6
22
3
48.2
45.2
49
23
4
48
45.5
49.1
24
5
48.4
47.1
49.6
25
6
48.6
47.4
52
26
7
50
49.2
52.2

27
8
49.8
49
52.4
28
9
50.3
49.4
51.7
29
10
50.2
49.6
51.8
30
11
50
49
52.3
31
12 Noon
50
48.8
52.4
32
1:00 PM
50.1
49.4
53.6
33
2
49.7
48.6
51
34

3
48.4
47.2
51.7
35
4
47.2
45.3
50.9
36
5
46.8
44.1
49
37
6
46.8
41
51.2
38
7
50
46.2
51.7
39
8
47.4
44
48.7
40
9
47
44.2
48.9
41
10

47.2
46.6
50.2
42
11
48.6
47
50
43
12 Midnight
49.8
48.2
50.4
44
1:00 AM
49.6
48.4
51.7
45
2
50
49
52.2
46
3
50
49.2
50
47
4
47.2
46.3
50.5
48
5
47

44.1
49.7
49
6
48.4
45
49
50
7
48.8
44.8
49.7
51
8
49.6
48
51.8
52
9
50
48.1
52.7
53
10
51
48.1
55.2
54
11
50.4
49.5
54.1
55
12 Noon
50
48.7

50.9
56
1PM
48.9
47.6
51.2
57
2
49.8
48.4
51
58
3
49.8
48.8
50.8
59
4
50
49.1
50.6
60
5
47.8
45.2
51.2
61
6
46.4
44
49.7
62
7
46.4
44.4
50

63
8
47.2
46.6
48.9
64
9
48.4
47.2
49.5
65
10
49.2
48.1
50.7
66
11
48.4
47
50.8
67
12 Midnight
47.2
46.4
49.2
68
1:00 AM
47.4
46.8
49
69
2
48.8
47.2
51.4
70

3
49.6
49
50.6
71
4
51
50.5
51.5
72
5
50.5
50
51.9
3
1

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