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CHAPTER TWENTY-ONECHAPTER TWENTY-ONE

For use only withPerreault/Cannon/McCarthy or Perreault/McCarthy texts.© 2008 McGraw-Hill Companies, Inc.McGraw-Hill/Irwin

Developing Innovative Marketing PlansDeveloping Innovative Marketing Plans

When we finish this lecture you should

1. Know the content of and differences among strategies, marketing plans, and a marketing program.

2. Understand all of the elements of the marketing strategy planning process and the strategy decisions for the four Ps.

3. Understand why product classes and typical mixes should be considered when developing a marketing plan.

4. Understand ways the marketing strategy and plan are likely to need to change at different stages of the product life cycle.

When we finish this lecture you should

5. Understand the basic forecasting approaches and why they are used to evaluate the profitability of potential strategies.

6. Know what is involved in preparing a marketing plan, including estimates of costs and revenues and specification of other time-related details

7. Understand ways firms can become involved in international marketing.

The Development of Marketing Plans (Exhibit 21-1)Strategy Planning, Implementation, and Control (Exhibit 21-1)

Blending the Blending the marketing mixmarketing mix

Writing marketing Writing marketing plansplans

Forecasting the Forecasting the target market target market potential & salespotential & sales

Putting Together InnovativeMarketing Plans

Marketing Planning Process Is More Than Assembling the Four Ps

……We’ve become a We’ve become a model for how to do model for how to do

business on the business on the Internet. Everything Internet. Everything from being integrated from being integrated

with suppliers to e-with suppliers to e-commerce to customer commerce to customer

support …creating support …creating efficiencies that result efficiencies that result

in business to in business to business at its best. business at its best.

Online. Online.

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Developing Different Marketing Mixes

S.W.O.T. Analysis

S.W.O.T. Analysis

Which of the following would a S.W.O.T. analysis classify as an “opportunity” for Microsoft:

A. Microsoft has a great deal of cash available for marketing strategies.

B. Microsoft develops new patented technology that makes its software run faster.

C. European trade regulators consider rulings that would require Microsoft to develop a new version of Windows for its market.

D. Emerging markets in Asia and Africa show increased demand for computers and software.

E. The company hires an expert in online advertising.

Checking your knowledge

Marketing Mix Flows from Target Market Dimensions (Exhibit 21-3)

Marketing Manager Must Blend the Four Ps

Product Life Cycle Guides Planning (Exhibit 21-4)

Forecasting Target Market Potential and Sales

We can tell you who We can tell you who your next customer your next customer is – right down to is – right down to

the partially the partially hydrogenated hydrogenated

canola oil on his canola oil on his poly/cotton poly/cotton undershirt.undershirt.

So, Predicting Future Behavior Takes Judgment!So, Predicting Future Behavior Takes Judgment!

Two Approaches to Forecasting (Exhibit 21-5)

Extending Past Trends Can Miss Turning PointsExtending Past Trends Can Miss Turning Points

Bread producer’s estimated sales: $4,700,116

Bread producer’s estimated sales: $4,700,116

Bread producer’s estimated sales: $4,700,116

Bread producer’s estimated sales: $4,700,116

Previous year’s total food sales in Denver, CO: $4,700,116,000

Previous year’s total food sales in Denver, CO: $4,700,116,000

Previous year’s total food sales in Denver, CO: $4,700,116,000

Previous year’s total food sales in Denver, CO: $4,700,116,000

Past share:1/10% of total retail food sales in target markets – a factor of .001

Past share:1/10% of total retail food sales in target markets – a factor of .001

Past share:1/10% of total retail food sales in target markets – a factor of .001

Past share:1/10% of total retail food sales in target markets – a factor of .001

xx ==

The Factor Method Can Use Several Factors!The Factor Method Can Use Several Factors!

A Bread Producer Example of the Factor Method

Forecasting Company Product Sales by Extending Past Behavior

Producers of Business Products Can Use Several Factors Too (Exhibit 21-7)

Leading SeriesLeading SeriesLeading SeriesLeading SeriesTime SeriesTime SeriesTime SeriesTime Series

IndicesIndices

Other Trend Extension Methods

Estimates from Sales People

Estimates from Sales PeopleEstimates from Sales People

Estimates from Sales People

Jury of Executive Opinion

Jury of Executive Opinion

Jury of Executive Opinion

Jury of Executive Opinion

Surveys, Panels,

Market Tests

Surveys, Panels,

Market Tests

KeyMethods

Predicting Future Behavior Calls for More Judgment and Some Opinions

Viktor Potrenko conducted research for his dance studio, VP Dance. There is only one other dance studio currently in town and his research indicated that the market potential was $400,000 for the coming year. From this information we know that:

A. His dance studio should have a marketing plan that forecasts $400,000 in sales.

B. His dance studio’s sales will be less than $400,000 in the coming year.

C. Potrenko has yet to develop his marketing strategy.D. If his studio gets a 40 percent market share, then the

other studio will have sales of $600,000 in the coming year.

E. None of the above are true.

Checking your knowledge

MarketingMix Price

SellingCost

AdvertisingCost

TotalUnits

SalesRevenue

TotalCost

TotalProfit

Analysis of Costs and Sales Can Guide Planning (Exhibit 21-8)

MarketingMix Price

SellingCost

AdvertisingCost

TotalUnits

SalesRevenue

TotalCost

TotalProfit

More “What If?” Questions (Exhibit 21-9)

Types ofDemand-Oriented

Pricing

Key Partsof a

Marketing Plan

Name of Product-Market

Name of Product-Market

Special Implementation

Special Implementation

Customer Analysis

Customer Analysis

Competitor Analysis

Competitor Analysis

Company Analysis

Company Analysis

Marketing EnvironmentMarketing

Environment ProductProduct

PlacePlace

PromotionPromotion

PricePrice

Marketing Information

Needs

Marketing Information

Needs

Forecasts and Timing

Forecasts and Timing ControlControl

The Marketing Plan Brings All the Details Together

+Other

Marketing Plans

Other Marketing

Plans

Other Marketing

Plans

Other Marketing

Plans

+Time-

Related Details

Time-Related Details

Marketing Plan

Marketing Plan=

Time-Related Details

Time-Related Details

Marketing Plan

Marketing Plan

Target MarketTarget Market

+

Marketing Mix

Marketing Mix

= Marketing Strategy

Marketing Strategy

Target MarketTarget Market

Marketing Mix

Marketing Mix

Marketing Strategy

Marketing Strategy

A Firm’s Marketing Program

A Firm’s Marketing Program

=

Companies Plan and Implement Whole MarketingPrograms

Lower Levels of Involvement

Lower Levels of Involvement

• Exporting

• Licensing

• Contract manufacturing

• Management contracting

Planning for Involvement in International Marketing

Lower Levels of Involvement

Lower Levels of Involvement

• Exporting

• Licensing

• Contract manufacturing

• Management contracting

Higher Levels of InvolvementHigher Levels of Involvement

• Joint venturing

• Wholly owned subsidiaries

• Multinational corporations

Planning for Involvement in International Marketing

Maria Petrino is the marketing manager at Imported Toys, a small online retailer. She has developed a marketing mix for one of the retailer’s prime target groups – grandparents. She has finished laying out the details of who in the firm does what during the next year to attract the grandparents. Maria apparently has created:

A. Only a marketing strategy.

B. A marketing plan.

C. A marketing program.

D. Both a marketing strategy and the associated marketing plan.

E. All of the above are correct.

Checking your knowledge

© 2008 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Interactive Exercise: International Marketing

You now

1. Know the content of and differences among strategies, marketing plans, and a marketing program.

2. Understand all of the elements of the marketing strategy planning process and the strategy decisions for the four Ps.

3. Understand why product classes and typical mixes should be considered when developing a marketing plan.

4. Understand ways the marketing strategy and plan are likely to need to change at different stages of the product life cycle.

You now

5. Understand the basic forecasting approaches and why they are used to evaluate the profitability of potential strategies.

6. Know what is involved in preparing a marketing plan, including estimates of costs and revenues and specification of other time-related details

7. Understand ways firms can become involved in international marketing.

Key Terms

• S.W.O.T. analysis

• Market potential

• Sales forecast

• Trend extension

• Factor method

• Factor

• Time series

• Leading series

• Indices

• Jury of executive opinion

• Spreadsheet analysis

• Exporting

• Licensing

• Contract manufacturing

• Management contracting

• Joint venturing

• Wholly-owned subsidiary

• Multinational corporations