Chapter 8

The Marketing Plan

McGraw-Hill/Irwin
Entrepreneurship, 7/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
 Industry Analysis
• Provides sufficient knowledge of the external
environment that can affect marketing strategy
decision making.
– Begins with broadest-based assessment (national)
and then proceeds to local market analysis.
• Information can be gathered through:
– Secondary sources.
– Market research initiatives (Primary sources).

• Benefits:
– Entrepreneur can understand the industry opportunity and
threats and its competitors’ strengths and weaknesses.
 Competitor Analysis

• Document current strategies of primary

competitors, then;
• The information can be utilized to formulate the
market positioning strategy.

• This analysis:
– Enlightens entrepreneurs.
– Provides a solid basis for marketing decision
making.
Assessment of Competitor Marketing Strategies and
Strengths and Weaknesses
Competitor A Competitor B Competitor C

Product/
Service Strategies

Pricing Strategies

Distribution
Strategies
Promotion
Strategies
Strengths and
Weaknesses
 Marketing Research
for the New Venture (1 of 2)
• Defining the purpose or objectives
– Make a list of the information that will be needed to
prepare the marketing plan e.g. about the product,
customers, demographics, attitudes, how much to
charge, where to place and promote the product,
etc.

• Gathering data from secondary sources

– Trade magazines
– Newspaper articles
– Libraries
– Government agencies
– Internet
 Marketing Research
for the New Venture (2 of 2)
• Gathering information from primary sources
– Data collection procedures: Observation,
networking, interviewing, focus groups, and
experimentation.
– Data collection instrument: Questionnaire.
– Method – Telephone, Mail, Personal Interview,
Internet

• Analyzing and interpreting the results

– Can be hand-tabulated or entered on a computer.
– Results should be evaluated and interpreted in
response to the research objectives
– Data can be cross-tabulated in order to provide
more focused results.
 Understanding the Marketing Plan

• Marketing plan: written statement of marketing

objectives, strategies, and activities to be
followed in business plan.

• Designed to provide answers to three basic

questions:
– Where have we been?
– Where do we want to go (in the short term)?
– How do we get there?
 Outline for a Marketing Plan

• Situation Analysis
– Background of the venture
– Strengths and Weaknesses of venture
– Market Opportunities and Threats
– Competitors analysis

• Marketing objectives and Goals

• Marketing Budgets
• Controls/Feedbacks
 Characteristics of the Marketing Plan

• A marketing plan should:

– Provide a strategy.
– Be based on facts/assumptions.
– Describe an organization for implementation.
– Provide for short-term and long-term continuity.
– Be simple and short.
– Be flexible.
– Specify criteria for control.
 The Marketing System

External
Environment
Economy
Culture
Technology
Demand
Legal considerations
Raw materials
Competition
Market- Marketing Purchase
Entrepreneur
planning strategies decisions
decisions directed to of
customers customers
Internal
environment
Financial resources
Suppliers
Goals and objectives
Management team
 Factors Affecting the Marketing System
• Marketing system: interacting internal and external factors
that affect venture’s ability to provide goods and services
to meet customer needs.
• External variables that affect the marketing plan:
– Economy
– Culture
– Technology
– Demand
– Regulation
– Raw materials (suppliers)
– Distributors
– Competitors

• Internal variables that affect the marketing plan:

– Financial resources
– Management team
– Suppliers
– Company mission
 The Marketing Mix
• Combination of product, price, promotion, and distribution
and other marketing activities needed to meet marketing
objectives.
Marketing Mix Variable Critical Decisions

Quality of components or materials, style, features,

Product options, brand name, packaging, sizes, service
availability, and warranties.

Quality image, list price, quantity, discounts, allowances

Price for quick payment, credit terms, and payment period.

Use of wholesalers and/or retailers, type of wholesalers

Channels of distribution or retailers, how many, length of channel, geographic
coverage, inventory, and transportation.

Media alternatives, message, media budget, role of

Promotion personal selling, sales promotion (displays, coupons,
etc.), and media interest in publicity.
 Steps in Preparing the Marketing Plan

• Define the business situation.

• Define the target market (Industry):
opportunities and threats.
• Consider strengths and weaknesses (you &
competitors).
• Establish goals and objectives (market
positioning) e.g. “great value at reasonable
price” and to “capture 5-8% local market share”
• Define marketing strategy and action programs.
 Defining the Business Situation
• Situation analysis: describes past and present
business achievements of new venture.

• Information for a new venture:

– Describe how the product or service was
developed.
– Why it was developed.

• Information after a new venture has started up:

– Present market conditions.
– Performance of the company’s goods and services.
– Future opportunities or prospects.
 Defining the Target Market

• Target market: specific group of potential

customers 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.
– Allows the entrepreneur to more effectively respond
to the needs of more homogeneous consumers.
 Process of Segmenting and Targeting (1 of 2)
Decide on general market or industry to pursue.

Divide market into smaller groups based on:

– Characteristics of the customer
• Geographic e.g. location national & international market
• Demographic e.g. age, gender, income, occupation & etc
• Psychographic e.g.
– Buying situation
• Desired benefits (e.g., product features)
• Usage (e.g., rate/frequency of use)
• Buying conditions (time available and product purpose)
• Awareness of buying intention (familiarity and
willingness to buy)
 Process of Segmenting and Targeting (2 of 2)

• Select segment or segments to target.

• Develop a marketing plan integrating product,

price, distribution, and promotion (4Ps).
 Establishing Goals and Objectives
• Establish realistic and specific goals and
objectives.
– Marketing goals and objectives respond to the
question: “Where do we want to go?” e.g.
market share, profits, sales, market penetration,
pricing policies, number of distributors, sales
promotion, advertising activities and etc.
• Not all goals are quantifiable but better off to have
its.
• Number of goals or objectives can be limited to
between six and eight.
• Goals should represent key areas (market share
etc.)to ensure marketing success.
 Defining Marketing Strategy and Action Programs
(1 of 2)
• Specific activities outlined to meet the venture’s
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
– Margins or markups
– Competition
 Defining Marketing Strategy and Action
Programs (2 of 2)
• Distribution
– Provides utility to the consumer i.e. sorting activities
.
– Must also be consistent with other marketing mix
variables.

• Promotion
– Entrepreneur needs to inform potential consumers
about the product’s availability or to educate the
consumer
– Methods include: print, radio, or television, Internet,
direct mail, trade magazines, or newspapers.
Major Considerations in Channel Selection

• <<Insert Table 8.7>>

 Marketing Strategy: Consumer versus
Business-to-Business Markets
Business-to-business • Consumer markets
markets – Involve sales to
– Selling of products or households for personal
services to another consumption
business. – Usually aims at selling a
– Usually aims at selling a small volume in one
large volume in one transaction.
transaction. – Involves a more market
– Involves a more direct intermediaries.
channel of distribution
e.g. manufacturer to • Marketing mix (4Ps) for
purchasers both is the same.
– Use trade magazine – Techniques and
advertising, direct sales, strategies within the mix
and trade shows. of these factors vary
significantly.
 Budgeting and Implementation

• Budgeting
– Costs are reasonably clear if the entrepreneur has
followed the procedure of detailing the strategy and
action programs.
– If assumptions are necessary, they should be
clearly stated since these information are useful in
preparing the financial plan.
• Implementation
– The plan is meant to be a commitment by the
entrepreneur to a specific strategy.
– Entrepreneur should ensure coordination and
implementation of the plan.
 Monitoring the Progress of
Marketing Actions Plan (1 of 2)

• Involves tracking specific results of the

marketing effort which depends on specific
goals and objectives outlined in the marketing
plan.

• Entrepreneur should be prepared for

contingencies.
– Minor adjustments in the plan is normal but,
significant changes indicate a poorly prepared plan.
 Monitoring the Progress of
Marketing Actions Plan (2 of 2)
• Weaknesses in market planning due to:

– Poor analysis of the market and competitive

strategy.
– Unrealistic goals and objectives.
– Poor implementation of the outlined plan actions.
– Unforeseen hazards like weather or war.