Chapter

8
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McGraw-Hill/Irwin Entrepreneurship, 7/e

Copyright 2008 The McGraw-Hill Companies, Inc. All rights reserved.

Marketing Plan
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Written Statement Of Marketing objectives, strategies and Activities to be followed in Business Plan

Marketing Plan
MP responds to three Qs

Where have we been ? Where are we going ? How do we get there ?

E conduct market research to respond to these Qs Research involves Secondary / Primary data process

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Prior to Marketing Plans preparation:

INDUSTRY ANALYSIS and COMPETITOR ANALYSIS

Marketing Research for the New Venture

Who will buy the product or service ?
What is the size of the potential market ? What price should be charged ?

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what is the most appropriate distribution

channel ? What is the most effective promotional strategy to reach and inform potential customers ?

Market Research involves gathering of data in order to determine such information:

Four Steps In Market Research

Step One: Defining the Purpose or Objectives BZUPAGES.COM

Step Two: Gathering Data from Secondary Sources

Step Three: Gathering Information from Primary Sources

Step Four: Analyzing and Interpreting the Results

(a) Defining the purpose or objectives

Sit down & Make a list of the information that will

be needed to prepare the marketing plan.

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Ex: E may think there is a market for his product but is not sure who the customers will be

So ask people what they think of the product or service and if they would buy it & background demographics How much potential customers would be willing to pay for the product or service Where the potential customers would prefer to purchase the product or service Where the customer would expect to hear about or learn about such a product or service

(b) Gathering data from secondary sources

Newspaper articles-

Libraries:
Government agenciesTrade magazines: dept & Chamber of

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commerce Internet

Dept & Chamber of Commerce

Local Banks/ Dept of Labor Local Media

(c ) Gathering information from primary sources Data collection procedures BZUPAGES.COM

Observation: record customers buying behaviors
interviewing: telephone- Mail- personal

focus groups: 10-12 potential customers

Questionnaire: sample questionnaire

(d) Analyzing and interpreting the results

Can be hand-tabulated or entered on a computer

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Results should be evaluated and interpreted in

response to the research objectives

Data can be cross-tabulated in order to provide

more focused results.

Example: Entrepreneur compare results of Q by

different Age, Occupation, Location- fine tuning can provide valuable insights particularly regarding the segmentation of the market

Understanding the Marketing Plan

Designed to provide answers to three basic questions:
Where have we been?(operational plan)

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History of marketplace Marketing Strengths & Weaknesses of the firm Market Opportunities & Threats
Where do we want to go (in the short term)?
Q addresses marketing Objectives & Goals- in next 12 months

How do we get there?

Q discusses Marketing strategy implementation- when it will occur- who will be responsible for monitoring

Characteristics of the Marketing Plan

A marketing plan should:
Provide a strategy. Be based on facts/assumptions Be simple and short. Be flexible.
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Specify criteria for control.

The Marketing Mix

Combination of product, price, promotion, and distribution

and other marketing activities needed to meet marketing objectives.

Marketing Mix Variable Product Critical Decisions Quality of components or materials, style, features, options, brand name, packaging, sizes, service availability, and warranties. Quality image, list price, quantity, discounts, allowances for quick payment, credit terms, and payment period. Use of wholesalers and/or retailers, type of wholesalers or retailers, how many, length of channel, geographic coverage, inventory, and transportation. Media alternatives, message, media budget, role of personal selling, sales promotion (displays, coupons, etc.), and media interest in publicity.

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Price

Channels of distribution

Promotion

Steps in Preparing the Marketing Plan

Define the business situation.

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Define the target market: opportunities and threats. Consider strengths and weaknesses. Establish goals and objectives. Define marketing strategy.

Defining the Business Situation

WHERE HAVE WE BEEN?

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Information for a new venture:

Describe how the product or service was developed. Why it was developed.(satisfy consumers needs)

Information after a new venture has started up:

Present market conditions.

Performance of the companys goods and services.

Future opportunities or prospects.

Defining the Target Market/ Opportunities & Threats

Target market: specific group of potential customers

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toward which venture aims its marketing plan.

Knowledge of this provides a basis for determining the

appropriate marketing action strategy.

Market segmentation: process of dividing a market

into definable and measurable groups for purposes of targeting marketing strategy
Otherwise E have to identify a product or service that

would meet the needs of everyone in the marketplace Allows the entrepreneur to more effectively respond to the needs of more homogeneous consumers.

Process of Segmenting and Targeting

Decide on general market or industry to pursue.
Henry ford manufactured a single product(one color, one style, one size, etc) Reebok Discovered that many customers who bought running shoes were not athletes (comfort & Style)

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Divide market into smaller groups based on:

Characteristics of the customer Geographic Demographic Psychographic Buying situation Desired benefits (e.g., product features) Usage (e.g., rate of use) Buying conditions Awareness of buying intention

Process of Segmenting and Targeting (2 of

2)
Select segment or segments to target.

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Develop a marketing plan integrating product, price,

distribution, and promotion.

Restaurant market is segmented by state, type of restaurant (fast food, family) R part of hospital, school, company etc

Establishing Goals and Objectives

Establish realistic and specific goals and

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objectives.
Marketing goals and objectives respond to the

question: Where do we want to go?.

( market share, profits, sales, number of distributors,

new product launch, pricing policy, sales promotion & advertising support).
Number of goals or objectives can be limited to

between six and eight.

Defining Marketing Strategy and Action Programs (1 of 2)

Specific activities outlined to meet the ventures

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business plan goals and objectives.

Product or service
May consider more than the physical characteristics.

Packaging, brand name, price, warranty, image, service,

delivery time, features, style, and even the Web site.

 Pricing
Costs Competition Margins or markups

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Defining Marketing Strategy and Action Programs (2 of 2)

Distribution
Provides utility to the consumer. Must also be consistent with other marketing mix

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variables.

 Promotion
Entrepreneur needs to inform potential consumers

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about the products availability or to educate the consumer

Methods include: print, radio, or television, Internet,

direct mail, trade magazines, or newspapers.

Marketing Strategy: Consumer vs. Business-to-Business Markets

In B2C:
Entrepreneur sells product/service to consumers. Indirect and Direct channel of distribution.

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In B2B:
Entrepreneur sells product/service to businesses. Direct channel of distribution.

Marketing Strategies for B2C and B2B are

different.

Budgeting the Marketing Strategy

Costs should be clear.

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Assumptions if necessary are to be stated clearly.

Implementation of the Market Plan

Not a formality; it is a commitment by an

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entrepreneur to a specific strategy.

Monitoring the Progress of Marketing Actions

Tracking specific results (Sales data by product,

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territory, sales rep, outlet) of the marketing effort.

In addition; prepare for contingencies and natural

causes.
Adjustments in marketing plan are proportional to

weakness or strength of marketing plan.