Free Global Shipping. Description At last marketing managers and business executives concerned with profitability and sustained growth of their organisation have at their fingertips a practical guide which tells them how to prepare and use a marketing plan. In this new edition of Marketing Plans, one of the world's leading marketing educators has greatly expanded his book to include the key recent developments in marketing techniques and a range of practical marketing tools.
In Marketing Plans, the whole process of marketing planning - from initial assessment of a company's business plan to the steps necessary to ensure a company achieves its profit targets - is fully explained.
There is an additional section which provides a step-by-step 'this is how you do it' guide to devising your own marketing plan, combining the very best of current practice with the necessary theoretical background. Marketers, executives and students studying for CIM and CAM exams will find the application of basic marketing principles to sound business practice invaluable. ISO operates similarly. To complete in a market you must meet its quality standards, but once all players are at this level there is no differential advantage, ie business strengths.
Question 10 It shows at a glance how the product portfolio is balanced. An objective will ensure that a company knows what its strategies are expected to accomplish and when a particular strategy has accomplished its purpose. Without objectives, strategy decisions and all that follows will take place in a vacuum. Further, objectives should be measurable; otherwise they are not objectives.
Marketing objectives are normally stated in standards of performance for a given operating period or conditions to be achieved by a given date. Thus measurement should be in terms of some or all of: sales volume, sales value, market share, profit, or percentage penetration of outlets. Marketing objectives consider the two main dimensions of commercial growth: product development and market development. There will be different marketing responses to each permutation in the matrix, and the formulation of marketing objectives for each quadrant will be different for different companies.
Thus pursuing marketing objectives concerned with new products in new markets is the riskiest strategy of all because it takes the organization furthest away from its known strengths and capabilities and further into the unknown.
New resources and skills have to be developed. Diversification is what has led many companies to go bankrupt and why many of those that diversified through acquisition during periods of high economic growth have since divested themselves of businesses that were not basically compatible with their own distinctive competence.
The marketing objectives should be consistent with the information from the product life cycle analysis and portfolio matrix or DPM, see Figure 5. Creative and intelligent interpretation of the portfolio matrix is key to establishing the right marketing objectives for your company. Figure 6. You can do this to show first, where they will be if the company takes no action, and second, where you would ideally prefer them to be.
These latter positions will become the marketing objectives. Segment Tight control Increase productivity eg specialization Invest selectively Allocate key managers Invest selectively Reduce Hold wide distribution pattern Emphasize cost reduction viz.
Gap analysis is a technique used to explore the shortfall between the corporate objective and what can be achieved by various strategies. As described in Figure 6. Marketing strategy enables the organization to select the customers, and hence the markets, it wishes to deal with. By indicating what strengths are to be developed, what weaknesses are to be remedied, and in what manner, marketing strategies enable operating decisions to bring the organization into the right relationship with the emerging pattern of market opportunities, which previous analysis has shown to offer the highest prospect of success.
The main components of marketing strategy are: the company, customers, and competitors. The point to remember about differentiation as a strategy is that you must still be cost-effective. In such cases, the attainment of low costs must be a corporate goal if adequate margins are to be obtained. The ultimate strategy for commodity market situations, where there is no differentiation or cost advantage, is to move to either a cost leadership or niche strategy.
A niche position is achieved through offering added value, whereas in a cost leadership position, the values offered are cost competitive. Marketing strategies should state in broad terms how the marketing objectives are to be achieved. Marketing strategies define broadly the means of implementing the marketing plan and are not concerned with detailed courses of action, which are the one-year operational, or tactical plans derived from the strategic plans.
Therefore, let us consider next what should appear in the advertising and sales promotion plans, the sales plan, the pricing plan and the distribution plan Chapters 7, 8, 9 and 10 respectively. Write the box letter in the brackets. Which of the following, taken individually will not help to close the gap? There are five main strategies to apply to products according to their position on the directional policy matrix.
What are they? Write your answers in the spaces provided. Two opposing forces meet armed with muskets that take three minutes to reload. Force A has soldiers and Force B, However, the troops in Force A are better trained and can expect to bring down 20 per cent of their opponents in each volley.
They are twice as effective as Force B. When either force is reduced to less than 50 per cent of its original number it will retire from the field. The diversification box of the Ansoff matrix has to be treated with care because it represents: a The least profitable options.
If you choose an invest strategy, which of the statements below are true T or false F? Which of the following are true T or false F? Gap analysis is used to: a Monitor the gap between you and competitors. The Ansoff Matrix, shown below, helps to identify four broad strategies.
These are: i New product iii Market development. Indicate which strategy fits in which box by writing a, b, c or d in the brackets above. Increasing advertising, by itself will incur costs and not necessarily generate revenue.
Cutting costs can influence profitability but will not generate revenue. Lowering the target moving the goalposts is no way to run a business. Answer: c , e and j. Question 5 After the opening exchange Force B is down to men.
The next round reduces it to , then , then approx. Question 6 It doubles the risk by calling for new products and new markets. It can do so in a variety of ways, either on an impersonal or personal basis. Impersonal communication is accomplished indirectly, using advertising, promotion, point-of-sale displays, and public relations, while personal communication is undertaken directly, in face-to-face meetings, generally using a sales force.
It comprises the advertising, sales promotion and sales plans. The former two involve impersonal communication, while the latter concerns personal communication. This chapter considers the advertising plan and the sales promotion plan.
The sales plan is the focus of Chapter 8. The usual assumption is that advertising is deployed in an aggressive role and that all that changes over time is the creative content.
But the role of advertising usually alters during the life cycle of a product. For example, the process of persuasion awareness, interest, attitude formation, decision to act cannot normally start until there is some level of awareness about a product or service in the marketplace.
Creating awareness is therefore one of the most important objectives early on the PLC. It is worth remembering too that, for optimum effect, advertising effort can be directed not only at consumers, but at all those who influence commercial success, including channels, shareholders, media, employees, suppliers and government.
The first step in preparing an advertising plan is to decide on reasonable, achievable objectives for advertising. A common misconception is that advertising objectives should be set in terms of sales increases. As advertising is one of a host of determinants of sales levels which also includes product quality, price and customer service, for example , sales increases cannot be a direct objective of advertising.
It is also important to be clear on the distinction between marketing objectives and advertising objectives. Marketing objectives are concerned with what products go to which markets, whereas advertising objectives are measurable targets concerned principally with changing attitudes and creating awareness.
Having defined and agreed the advertising objectives, all other steps in the process of assembling the advertising strategy flow naturally from them. Are these specific communications objectives? It is essentially a problem-solving activity designed to encourage customers to behave more in line with the economic interests of the company, ie to bring forward their decision to buy.
Sales promotion involves the making of a featured offer to defined customers within a specific time limit. The offer must include benefits not inherent in the product or service, as opposed to the intangible benefits offered in advertising, such as adding value through appeals to imagery.
Typical tasks for sales promotion include: controlling stock movement; counteracting competitive activity; encouraging repeat purchase; securing marginal buyers; getting bills paid on time; and inducing trial purchase. It is generally used as a short-term, tactical initiative, in contrast with the notion of advertising as a long-term, strategic activity that changes with the PLC.
However, sales promotion does have a strategic role to play in helping to strengthen the bond between seller and buyer, and thus a sales promotion strategy is required to ensure that each promotion increases the effectiveness of the next in terms of impact and investment of resources.
Further, it is possible to establish a style of sales promotion that, if consistently applied, will help to establish the objectives of a product over a long period of time, which are flexible and have staying power. Confusion about what sales promotion is, often results in expenditures not being properly recorded. Not surprisingly, sales promotion is notoriously one of the most mismanaged of all marketing functions. In order to manage sales promotion expenditure effectively, it is essential that objectives for sales promotion be established, in the same way that objectives are developed for advertising, pricing or distribution.
In order to achieve these objectives, the promotion can take one of three forms. When considering the cost element, you must remember that the promotional costs have to be weighed up against the benefits of reducing the sales problem, which the sales promotion is intended to solve. The cost-effectiveness of the sales promotion must be established and integrated into the overall marketing plan. The objectives for each sales promotion should be clearly stated, such as trial, repeat purchase, distribution, a shift in buying peaks, combating competition, and so on.
Then the strategy to implement the objectives must be worked out. Sales promotion strategy should follow the standard route of: select the appropriate sales promotion technique; pretest; mount the promotion; and finally, evaluate in depth.
Spending must be analysed and categorized by type of activity eg, special packaging, special point-ofsale material, loss of revenue through price reductions, and so forth. As for the sales promotion plan itself, the objectives, strategy and brief details of timing and costs should be included. It is important that the sales promotion plan should not be too detailed, and only an outline of it should appear in the marketing plan. Detailed promotional instructions will follow as the marketing plan unfurls.
It is also important to ensure that any sales promotion is well coordinated in terms of what happens before, during and after the promotion. At different stages, different people might be participating and special resources might be required.
Therefore the plan needs to be prepared in a simple way that most people can follow. Objectives Show how the objectives of the promotion are consistent with the marketing objectives. Background Provide the relevant data or justification for the promotion. Promotional offer Briefly, but precisely, provide details of the offer.
Eligibility State who is eligible and where. Timing Specify when the offer is available giving opening and closing dates. Date plan Give the dates and responsibilities for all elements of promotion.
Support Identify special materials, samples, etc that are required by the sales force, retailers, etc. Administration Include budgets, storage, invoicing, delivery, etc. Sales plan Cover briefing meetings, targets, incentives, etc. Sales presentation List points to be covered. Sales reporting Give details of any special information required. Assessment Define how the promotion will be evaluated.
Which of the following are impersonal communications I and which are personal communications P. Each box suggests that the buying process might be organized differently. Your task is to match the suggestions below with the appropriate boxes in the matrix. There is one mark for each correct answer. Product complexity High Low High a b c d Commercial uncertainty Low i Routine buying process operated at a low management level. What is a benefit? Tick which of the following communication tasks lend themselves to impersonal methods.
Early majority Late majority Part 2 What proportion of the total population, approximately, does each of the missing groups represent? An advertisement is most effective if: a It appears almost everywhere. In the Boston Matrix, which box contains the products most likely to benefit from advertising? Which of the following criteria would you use to measure the efficacy of an advertising campaign? Decide which of the following statements about sales promotions are true T or false F.
Which of the reasons listed below would NOT justify this type of promotion? Question 3 Remember, a benefit is something bestowed by the product or service that the customer values. A cheaper price is not therefore a benefit if the customer seeks high quality or exclusivity.
Nor is something the product does better a benefit, unless we can be sure that this particular advantage is what the customer seeks. Question 4 Answers: b , c and f can only be completed satisfactorily using face-to-face communication. Answer: a , d and e. Question 5 Part 1: Answer: Early adopters sometimes called opinion leaders and laggards. Part 2: Answer: It might only mean that an ineffective advertisement is seen by more people. Question 8 Advertising objectives can be many and varied.
For example, some objectives may be to improve customer confidence or create an awareness of a new product. Thus the only correct answer is c. Question 9 Answer: All are false. Question 10 This type of promotion will do nothing for falling profits, but could be very successful in terms of meeting the other objectives.
Traditionally, companies had sales forces long before marketing was in vogue. This sometimes explains why, in many organizations, sales and marketing are regarded as two separate functions. However, where sales departments act independently of marketing, they often attain their short-term sales goals but fail to achieve the mix of products and markets consistent with its longer-term strategic marketing objectives.
Sales messages can be made more customer-specific, questions can be asked and answered, and the salesperson can ask for an order and perhaps negotiate on price, delivery or special requirements. Such flexibility and personalization in communication can greatly enhance service levels and help close sales, but at a high cost.
When the total costs of recruiting, managing and providing salespersons with all the necessary resources and support systems is considered, personal selling often accounts for more expenditure than advertising and sales promotion combined. Before attempting to produce a sales strategy, it is necessary to establish what information customers will require from the sales force. Communication efficiency depends on achieving a match between the information required and the information given.
The organization must therefore identify the major influencers in each purchase decision and find out what information customers are likely to need at different stages of the buying process. It will also need to know if the customer is buying for the first time or contemplating a repeat order. Customer information needs may range from details about the product range and product performance, to price, running costs, guarantees, load sizes, competitor products, special offers, reordering, and so on.
To optimize the sales force and obtain best value for money from personal selling, an organization must resolve three basic issues. It must determine the requisite number of salespeople, their precise sales role and how they are to be managed. Salespeople essentially undertake three activities. They make calls, travel and administrate.
By analysing their current workload and considering alternative ways of undertaking these responsibilities, the organization can decide what constitutes a reasonable workload ie, how many calls it is possible to make in a working day given the concomitant time values for clerical tasks and travel and how territories can be equitably allocated. Equally, an assessment of existing and potential customers should be made and the annual total number of calls calculated, bearing in mind that different customer categories need different call rates.
Additional quantitative objectives might include the number of telephone contacts, service calls, distance travelled or reports submitted for a defined period. Qualitative objectives should also be set. The emphasis should be placed on measurable performance standards, such as expectations of work quality, efficiency, style and behaviour, rather than non-measurable factors, such as creativity, loyalty, interest and enthusiasm, which can easily be misconstrued as favouritism or unfairness.
While monitoring what salespeople do can largely be accomplished through reports, sales figures and so on, assessing how they do things usually requires observing them in action. Having measurable standards of performance enables managers to identify the area and nature of help that salesperson needs, and to respond appropriately. For instance, he or she may need more information about prices and products, more support in terms of administration or joint visits, or more training to improve his or her skills set.
Perhaps most crucial of all is creating the right motivational climate. To maximize sales force performance it is necessary to achieve the optimal balance between incentives and disincentives. While remuneration will always be a key determinant of motivation, sales managers can improve sales force performance by clarifying performance expectations, providing rewards consistent with performance, giving due praise and recognition, ensuring freedom from fear and worry, and encouraging in their sales team a sense of doing a job that is worthwhile and valued.
Due to the uniqueness of each business situation and sales force make-up, no two sales plans will be exactly the same. However, some general guidelines can be given. Table 8. These objectives will be the logical result of breaking down the marketing objectives into actual sales targets.
Discussion and agreement between manager and salesperson Scrutiny of individual customer records. Observation of selling in the field Failure to achieve agreed objectives. Complacency with range of sales made to individual customers 3 To plan journeys and call frequencies to achieve the minimum practical selling cost To achieve appropriate call frequency on individual customers.
Shortfall on agreed total number of calls made over an agreed time period 4 To acquire new customers Number of prospect calls during time period. Selling new products to existing customers Identify total number of potential and actual customers who could produce results. Low ratio of existing to potential customers 5 To make a sales approach of the required quality To exercise the necessary skills and techniques required to achieve the identified objective of each element of the sales approach.
Which of the following statements is true? Most companies: a Spend more on advertising than on the sales force. Which of these is true? The real secret to success in sales depends upon: a Having up-to-date product knowledge. Deciding how many salespeople you need can be critical. Should the decision be based upon: a What you can afford? A good salesperson will: a Make meetings a two-way conversation.
If you were the sales manager, what order of priority would you give to the customer communications in each box? Tick in which of the following situations telephone selling could be used successfully. Which of the following is the most important? A good salesperson will be strong on: a Striking up a friendship with the customer.
Which of these is the most accurate statement? Choose the most appropriate ending for the following statement. Is it: a Total assets? Question 2 Answer: a and d may have some bearing on sales success, but b is the critical factor. Question 3 Although some companies resort to a , b and c , d is the only sensible answer. These all help the sales process. Improving relationships with high potential clients must be rated highly. Maintaining good relationships with important customers is easier than making them in the first place.
Squeezing extra business out of those with whom the company has a good relationship comes next. This is clearly the lowest priority; in fact, who wants this business? Question 6 Answer: a and b — assuming the product was not too complex. Question 8 This also explains why the composition of the DMU can vary from company to company and according to the nature of the purchase.
Question 9 Like any other manager, the sales manager has to get results through others, not do their job for them. Thus developing each sales representative is a key task for successful managers.
Moreover, it is generally easier and quicker to change a price than it is to alter an advertising campaign, revamp a sales promotion, or to deploy the sales force in a different manner. The pricing decision is important for two main reasons: price not only affects the margin through its impact on revenue; it also affects the quantity sold through its influence on demand.
In short, price has an interactive effect on the other elements of the marketing mix, so it is essential that it is part of a conscious marketing scheme, with objectives that have been clearly defined. Pricing is also traditionally a source of disagreement between marketers and accountants: the marketer sometimes wants to hold or reduce the net selling price in order to increase market share, while the accountant often wants to increase the price of a product in order to maximize profitability.
Certainly, any team comprising a financially alert marketer and a marketingorientated accountant will make formidable opposition in the marketplace. We know that it is important for an organization to have a well-defined hierarchy of objectives to which all its activities and actions, including pricing, can be related. As corporate objectives will influence marketing objectives, so marketing objectives will influence pricing objectives.
For instance, marketing objectives for a particular product may dictate a short-term emphasis on profitability rather than market share, which will obviously influence the pricing strategy. The setting of marketing objectives for any particular product, then, is the starting point in any consideration of pricing.
It would be foolish, for example, to position a product as a high-quality, exclusive item, and then to price it too low. Price is one of the clearest signals customers have of the value of the offer the company is making them, and there has to be a sensible relationship between the two. For, if two products are perceived as the same, the one with the lowest price will win most of the time.
It is therefore necessary to analyse the prices charged by your competitors for their versions of your product or service, before deciding your own price. Potential competitors should be another consideration. A lower launch price, with possibly a quicker rate of diffusion and hence a greater rate of experience, may make it more difficult for a potential competitor to enter the market profitably. The most common way of setting price is to use the cost-plus approach, arriving at a price that yields margins commensurate with declared profit objectives.
Whatever costing system is used as the basis for reaching pricing decisions, it must be accurate, for without this there is no point of reference to put pricing into perspective. Costing systems that allocate fixed costs to all products in the range can produce misleading results. Where channel intermediaries are used, such as wholesalers, distributors and retailers, the company will need to consider rewarding them for their services.
This reward is in effect a payment for the services they provide and for the costs saved by the supplier. However, the total channel margin may have to be shared between several intermediaries and still reach the consumer at a competitive price. Various types of margins are commonly encountered, most of which take the form of discounts against a nominal price list. This is a discount given against the pricelist for services made available by the intermediary, eg, holding inventory, buying in bulk, redistribution, etc.
This is a discount given to intermediaries who order in large lots. This is the discount given to distributors to encourage them to share jointly in the promotion of the product s involved. In order to encourage prompt payments of accounts, a cash discount of around 2.
The question of margins both the margin retained by the firm and thus by implication the margin allowed the distributor should therefore be addressed in the context of overall marketing strategy and the financial policy and capital structure of the firm. As a general rule, the company should give away only the costs it saves by using an intermediary. Is this because: a It gives accountants too much power? Below is a typical demand curve.
Referring to this, which of these statements is the most accurate? What ought to be its pricing policy towards them?
A popular form of positioning map is price versus quality, shown below. Which of the zones A, B, C or D on the map correspond to the descriptions given here? Successful pricing strategies are likely to result from examining which of the factors listed below? Tick your choice. The PIMS database shows that there is a distinct relationship between quality, sales, price, costs and market share.
Which of the combinations below is correct, a, b, c or d? Which of the following circumstances favours a skimming policy S and which ones a penetration policy P? In the context of the product life cycle, what would be your pricing policy for a product at its maturity phase?
Would you: a Price competitively? A skimming policy may be best described as one where: a Prices are set low to mop up all the price sensitive customers. What would be the objective of offering a distributor a cash discount? Answers Question 1 While a cynic might prefer a , the true answer is b. Question 3 The company will only invest in the very best prospects and price these competitively to gain market share.
Here the company is supplying high quality but not asking the price commensurate with this. Here the company is charging a high price yet the product is of poor quality.
Question 5 Your pricing strategy must reflect your marketing objectives. However, it will be tempered by a realistic assessment of what customers are prepared to pay, the margin you expect to make hence the need to know costs and the price of competing products or services.
In all likelihood this is still a star the market is probably still growing and needs to be managed as one. Later, when demand and competition abates it can be appropriate to stabilize the price and minimize promotional costs. Note, in order to make impact on volume of sales, some form of volume discount would be arranged. Similarly, other incentives not necessarily cash would reward the other specific distribution objectives, eg, prizes or services.
When it is considered, the prime concern seems to focus on the physical aspects, the logistics of getting goods transported from the company to the customer. Distribution, however, embraces a much broader concept than just the delivery of goods. In addition, it takes into account the strategic importance of distribution channels and the potential value of channel intermediaries. Unless there is a formalized distribution structure, distribution-related activities may be spread across production, marketing, procurement, finance and so on, leading to conflicts of interest between distribution decisions.
The person responsible for distribution, therefore, has several variables to contend with in the search for trade-offs; taken together these constitute the distribution mix.
Together, these five areas make up the total cost of distribution within a company. In some businesses, distribution costs can amount to 20 per cent of the selling price. This emphasizes the importance of considering distribution within the context of the entire marketing mix. If a product is not available when and where the customer wants it, it will surely fail in the market. The optimal choice of distribution channels will be dependent on the type of business concerned and the markets it is engaged in.
While some companies use multiple channels, often involving several intermediaries, others choose to deal with their customers more directly. The role of an intermediary is to provide the means of achieving the widest possible market coverage at lowest unit cost. As customer service is increasingly a key determinant of competitive advantage, and it is likely that different customer segments will require different levels of customer service, managing customer service provision is a complex and critical activity.
It is also an expensive one. Research has shown that once the service level defined as the percentage of occasions the product is available to customers, when and where they want it increases beyond the 70—80 per cent mark, the associated costs increase exponentially. In many cases, such high levels of customer service are not necessary. Thus the choice of service level for a particular product should balance supplier costs and customer benefits; the point of balance being reached when the costs equal the extra revenue gained by the extra level of availability.
The proven direct correlation between customer retention and profitability suggests that the costs of providing enhanced customer service could be seen as a justified investment in customer retention. As in the development of the other tactical plans, distribution planning should begin with the distribution audit see Figure 2.
A simple, iterative approach to distribution planning can be summarized as the following steps; the content of which will shape the distribution strategy. Determine marketing objectives. Evaluate changing conditions in distribution at all levels.
Determine the distribution task within overall marketing strategy. Establish a distribution policy in terms of type, number and level of outlets to be used. Set performance standards for distributors. Obtain performance information. Compare actual with anticipated performance. Make improvements where necessary.
The interrelationship between developing the marketing plan and developing the distribution plan is usefully depicted in Figure Marketing audit Marketing objectives Marketing strategies Product programme Marketing plan Pricing programme Promotion Distribution audit Distribution programme Distribution missions Distribution operations Distribution objectives Distribution channels selection Distribution strategies Distribution budget Distribution plan Distribution performance measures Figure Mark each of the following statements either true T or false F.
Distribution is only concerned with: a The physical transportation of goods. The distribution mix is made up of five items. Here are four of them. What is the missing item? Write your answer in the space provided. Facilities Inventory Transport Unitization …………… 3. Which of the following criteria would be attractive when it comes to selecting a channel intermediary? Product availability levels are a key component of customer service.
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Marketing Plans. Pitir Pokir. Phil Harris. Malcolm McDonald. A short summary of this paper. Download Download PDF. Translate PDF. The book has been thoroughly revised, and every chapter has been carefully updated with special attention to the latest developments in marketing.
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