Chapter 7: The Marketing Plan

Tour 128 Entrepreneurship and Business Planning

Chapter 7: The Marketing Plan

A. The Market Needs B. SWOT Analysis C. Detailed Marketing Strategies (Marketing Mix)
A. B. C. D. Product Price Promotion Place

D. Terms of Sale and Credit Policy A. Trade Credit Approvals

Chapter 7: The Marketing Plan

E. Creating and Building Competitive Advantage 1. Competitive Advantage 2. Positional Advantage 3. Sources of Advantage 4. Distinctive Capabilities 5. Proposed Investment 6. Drivers of the Activities Resulting to Competitive Advantage 7. Maintaining Competitive Advantage 8. Most Sustainable Source of Advantage

Marketing Plan
A Marketing Plan includes everything from understanding your target market and your competitive position in that market, to how you intend to reach that market (your tactics) and differentiate yourself from your competition in order to make a sale.

Marketing Plan
The Marketing Plan outlines the specific actions you intend to carry out to interest potential customers and clients in your product and/or service and persuade them to buy the product and/or services you offer.

Marketing Plan
Marketing is the way that a business attracts , keeps and sells to customers. There is NO UNIVERSAL MARKETING PLAN, each business will have a different strategy to advertise to their customers.

Marketing Plan
A Market is one of many varieties of systems, institutions, procedures, social relations and infrastructure whereby parties engage in exchange. Many companies today have a Customer Focus (Market Orientation). This implies that the company focuses its activities and products on consumer demands.

Marketing Plan
Market Research is for discovering what people want, need and believe; and how they behave. It is a key factor in obtaining an advantage over competitors and is necessary in order to determine market needs that can and should be met.

Chapter 7: The Marketing Plan

A. The Market Needs B. SWOT Analysis C. Detailed Marketing Strategies (Marketing Mix)
A. B. C. D. Product Price Promotion Place

D. Terms of Sale and Credit Policy A. Trade Credit Approvals

Market Needs
Your companys target market are the customers most likely to purchase your products. The key is to develop a typical profile of your average customer and determine their primary needs.

Market Needs
All marketing should be based on underlying needs. For each market segment included in your strategy, explain the market needs that lead this group to buy your product or service. Did the need exist before the business was there? Are there other products or services that offer different ways to satisfy this same need?

Market Needs
Focus not on what you have to sell, but rather on the buyer needs you satisfy.
Shoe Store, are you selling shoes or are you satisfying the buyer needs for covered feet? Are there additional underlying needs, such as style, prestige for fashion footwear, padding for runners or jumping for basketball players, that relate to selling shoes.

Chapter 7: The Marketing Plan

A. The Market Needs B. SWOT Analysis C. Detailed Marketing Strategies (Marketing Mix)
A. B. C. D. Product Price Promotion Place

D. Terms of Sale and Credit Policy A. Trade Credit Approvals

SWOT ANALYSIS

SWOT Analysis
SWOT Analysis is an analytical method, which is used to identify and categorize significant internal factors (i.e. strengths and weaknesses) and external factors (i.e. opportunities and threats) an organization faces.

SWOT Analysis
STRENGTHS They are your companys internal strengths.
what does your unique structure and/or unique employee team help you be the best at? What are your advantages as an organization? What do you do better than anyone else? What relevant resources do you have access to?

SWOT Analysis
If you have difficulty in identifying strengths, try writing down a list of your organizations characteristics. Some of these will be your strengths. Think about them in relation to your competitors. If all of your competitors provide high quality products, then a high quality production process is not a strength but a necessity.

SWOT Analysis
WEAKNESSES They are your companys internal weaknesses.
In what areas do your unique structure and/or unique employee team hold you back? What could you improve? What do you do badly? What should you avoid? What factors can lose you sales?

SWOT Analysis
Be realistic and face unpleasant truths as soon as possible. Consider this: Do other people seem to perceive weaknesses that you don't see? Are your competitors doing any better than you?

SWOT Analysis
OPPORTUNITIES They are opportunities for your company external

Whats out there that you could easily take advantage of for your betterment? What good opportunities can you spot? What interesting trends are you aware of?

SWOT Analysis
Useful opportunities can come from:
Changes in technology and markets on both a broad and narrow scale Changes in government policy related to your field Changes in social patterns, population profiles, lifestyles, etc. Local Events

SWOT Analysis
THREATS They are external threats to your company
Whats out there that can potentially destroy your business if youre not careful? What obstacles do you face? What is your competition doing? Is changing technology threatening your position? Could any of your weaknesses seriously threaten your business?

SWOT Analysis
Strengths and Weaknesses
The Internal Environment - the situation inside the company or organization. For example, factors relating to products, pricing, costs, profitability, performance, quality, people, skills, adaptability, brands, services, reputation, processes, infrastructure, etc. Factors tend to be in the PRESENT.

SWOT Analysis
OPPORTUNITIES and STRENGTHS
The External Environment - the situation outside the company or organization. For example, factors relating to markets, sectors, audience, fashion, seasonality, trends, competition, economics, politics, society, culture, technology, environmental, media, law, etc. Factors tend to be in the FUTURE.

Chapter 7: The Marketing Plan

A. The Market Needs B. SWOT Analysis C. Detailed Marketing Strategies (Marketing Mix)
A. B. C. D. Product Price Promotion Place

D. Terms of Sale and Credit Policy A. Trade Credit Approvals

Detailed Marketing Strategies (Marketing Mix) A Marketing Mix is a general phrase used to describe the different kinds of choices organizations have to make in the whole process of bringing a product or service to market.

Detailed Marketing Strategies (Marketing Mix)

When marketing products, firms need to create a successful mix of:
The right product Sold at the right price In the right place Using the most suitable promotion.

Detailed Marketing Strategies (Marketing Mix)

The right product ( product has to have right features, it must look good and work well) Sold at the right price (consumers need to buy in large numbers to produce a healthy profit) In the right place (right place in the right time, making sure that goods arrive when and where they are wanted) Using the most suitable promotion (target market needs to be aware of the existence and availability of such product)

Detailed Marketing Strategies (Marketing Mix) - PRODUCT

PRODUCT - The product is the central point on which marketing energy must focus. It is seen as an item that satisfies consumer demands. It is a tangible good or intangible service. Marketing plays a key role in determining: the appearance of the product - in line with the requirements of the market. the function of the product - products must address the needs of customers as identified through market research.

Detailed Marketing Strategies (Marketing Mix) - PRODUCT

What does the customer want from the product/service? What needs does it satisfy? What features does it have to meet these needs? Are there any features you've missed out? Are you including costly features that the customer won't actually use? What does it look like? How will customers experience it? What is it to be called? How is it differentiated versus your competitors? What is the most it can cost to provide, and still be sold sufficiently profitably?

Detailed Marketing Strategies (Marketing Mix) - PRICE

PRICE this will create sales revenue, all the others are costs. Price is determined by the discovery of what customers perceive is the value of the item on sale. The pricing policy of businesses will vary according to time and circumstances.

Detailed Marketing Strategies (Marketing Mix) - PRICE

What is the value of the product or service to the buyer? Are there established price points for products or services in this area? Is the customer price sensitive? Will a small decrease in price gain you extra market share? Or will a small increase be indiscernible, and so gain you extra profit margin? What discounts should be offered to trade customers, or to other specific segments of your market? How will your price compare with your competitors?

Detailed Marketing Strategies (Marketing Mix) - PROMOTION

PROMOTION the business of communicating with customers. It provides information that will assist them in making a decision to purchase a product or service. It comprises of elements like advertising, public relations, sales organization and sales promotion.

Detailed Marketing Strategies (Marketing Mix) - PROMOTION

Advertising covers any communication that is paid for, from cinema commercials, radio and Internet advertisements through print media and billboards. Public relations is where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word-of-mouth is any informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and public relations

Detailed Marketing Strategies (Marketing Mix) - PROMOTION

Where and when can you get across your marketing messages to your target market? Will you reach your audience by advertising in the press, or on TV, or radio, or on billboards? By using direct marketing mailshot? Through PR? On the Internet? When is the best time to promote? Is there seasonality in the market? Are there any wider environmental issues that suggest or dictate the timing of your market launch, or the timing of subsequent promotions? How do your competitors do their promotions? And how does that influence your choice of promotional activity?

Detailed Marketing Strategies (Marketing Mix) - PLACE

PLACE concerned with various methods of transporting and storing goods, and then making them available for the customer in a place convenient. This involves the distribution system. Distribution is achieved by using more distribution channels, including: Retailers Wholesalers Distributors / Sales Agents Direct (e.g. via e-commerce) one or

Detailed Marketing Strategies (Marketing Mix) - PLACE

Where do buyers look for your product or service? If they look in a store, what kind? A specialist boutique or in a supermarket, or both? Or online? Or direct, via a catalogue? How can you access the right distribution channels? Do you need to use a sales force? Or attend trade fairs? Or make online submissions? Or send samples to catalogue companies? What do you competitors do, and how can you learn from that and/or differentiate?

Terms of Sale and Credit Policy

Terms of Sale - the delivery and payment terms agreed between a buyer and a seller. In international trade, terms of sale also set out the rights and obligations of buyers and sellers as applicable in the transportation of goods.

http://www.michaels.com/Terms-of-Sale/Terms-ofSale,default,pg.html http://www.standardtermsofsale.com/

Terms of Sale and Credit Policy

Credit Policy - Guidelines that spell out how to decide which customers are sold on open account, the exact payment terms, the limits set on outstanding balances and how to deal with delinquent accounts.

Though most consumers expect to pay cash or use a credit card when making a purchase, commercial customers typically want to be billed for any products and services they buy. You need to decide how much credit you're willing to extend them and under what circumstances.

Terms of Sale and Credit Policy

As you create your policy, consider the link between credit and sales. Easy credit terms can be an excellent way to boost sales, but they can also increase losses if customers default. A typical credit policy will address the following points: Credit limits. You'll establish figures for the amount of credit you're willing to extend and define the parameters or circumstances. Credit terms. If you agree to bill a customer, you need to decide when the payment will be due. Your terms may also include early-payment discounts and late-payment penalties. Deposits. You may require customers to pay a portion of the amount due in advance.

Terms of Sale and Credit Policy

Credit cards and personal checks. Your bank is a good resource for credit card merchant status and for setting policies regarding the acceptance of personal checks. Customer information. This section should outline what you want to know about a customer before making a credit decision. Typical points include years in business, length of time at present location, financial data, credit rating with other vendors and credit reporting agencies, information about the individual principals of the company, and how much they expect to purchase from you. Documentation. This includes credit applications, sales agreements, contracts, purchase orders, bills of lading, delivery receipts, invoices, correspondence, and so on.

Trade Credit Approvals

Trade Credit - An arrangement to buy goods or services on account, that is, without making immediate cash payment. Trade credit is the credit extended to you by suppliers who let you buy now and pay later. Any time you take delivery of materials, equipment or other valuables without paying cash on the spot, you're using trade credit. The supplier provides the customer with an agreement to bill in a stipulated number of days.

Competitive Advantage
An advantage a firm has over its competitors. It gives a company an edge over its rivals and an ability to generate greater value for the firm. It can come in the form of resources, technology, specialized skills, better distribution networks, etc.

Positional Advantage
Positional Advantages must describe the firms position in the industry as a leader in either cost or differential.
Cost Advantage a firms ability to produce good or service at a lower cost than competitors, gives ability to sell at a lower price. Differentiation Advantage when firms products or services differ from competitors and are seen by customers as better or of higher value than a competitors products.

Sources of Advantage
These sources encompass a variety of business and marketing channels, including customer service, location or real estate, operational efficiency, product qualities, and employee talent.

Distinctive Capabilities
Is a business strategy to which a successful company have attributes other firms cannot have and replicate.
Architecture structure of relational contacts within or around the organization (customers, suppliers, employees). Reputation strong corporate reputation Innovation a strong capability to generate technological innovations

Proposed Investment
Document prepared by the management of a firm for prospective investors or lenders. It details the (1) nature of the business, (2) growth potential, (3) objectives and the amount of finance required to realize them, (4) promised collateral or security, and (5) a plan for timely repayment of interest and principal

Drivers of the Activities Resulting to Competitive Advantage

Maintaining Competitive Advantage

In order to build and maintain a sustainable, competitive advantage, you need to have Competitive Products (i.e., as good as your competition); Superior Service (better than your competitors); and Good Relationships. How can you maintain those advantages?

Most Sustainable Source of Advantage

Competitive Products Goods are usually most susceptible to replication in an even lower price. This is the most competitive category and as a result, most price sensitive. Any advantage gained here will not be sustainable.

Most Sustainable Source of Advantage

Superior Services services are a little easier to maintain as an advantage over competitors. They are intangible, therefore less price sensitive. You must be able to deliver service more superior than competitors. Though additional service costs money.

Most Sustainable Source of Advantage

Good Relationships - The area that doesnt cost a fortune, and generates big rewards for those who use it. You care, and you need and want to demonstrate this care to your customers. This is the basis for true sustainable competitive advantage.