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Unformatted text preview: Marketing Lecture – Marketing Plans Marketing Differentiation & Penetration are Keys to Market Planning Gene N. Landrum, Ph.D. E-Mail: [email protected] Dr. Gene doing research at the Leonardo da Vinci Museum in Florence, Italy If you don’t know where you’re going, If any road will take you! Get a map or a plan or pay dearly for a wayward journey wayward Experiential Learning is About Thinking on Your Feet Experiential In this class you are expected to learn to think on your own and will never be punished – get a bad grade for doing so. Try something radical in your plan or presentation and find how it empowers you! What is Learning About? It is growth via experience. Apply textbook theories to on-the-street problems – only try to sell Innovators and Early Adopters since Laggards don’t buy. An example is the ban on using graphics to illustrate an example by the APA. The Chinese are correct in that a picture is worth 1000’s of words. It’s a road map to find what your position is relative to others Without a plan you have no idea of where you Without are going and any road will take you. Document your dreams with a roadmap – in this class the map is the Marketing Plan. map Make sure to chase what you love and know and Make not delude yourself via arrogance or ignorance both of which can destroy your plans both Identify market voids and adversarial weakness Identify and bet it all in those arenas and even if you fail you will have succeeded in altering markets. you Market Planning Strategy Market EXPERIENTIAL CLASS WORK EXPERIENTIAL “We learn best from our experience” Senge aEach student will analyze one chapter in the textbook and deliver it to the class via a Power Point presentation. Outline the top 10 theories from one chapter and enhance it with at least one web citation. t Grades for presentations are based on Breadth (Summarize), Professional delivery (look at audience), Comprehension and thoroughness of materials t There are no excuses for missing class when a presentation is due (call from the jail or the hospital); no-shows fail in school and in life Being nervous is good. It makes you try harder and be better! Each slide should take no more than 30 seconds. It will not be good if you do not start with 5 minutes, reduce to 2 and then pare it to 30 seconds. You are expected to summarize the materials in a professional manner. The 4 P’s in Marketing a Product is Research Driven The The Product (Wrist-Net) cannot be Promoted (advertised), Priced Product Promoted (high/low) or Placed (retail store where sold) without insight into (high/low) Placed the end user (target consumer/market) without adequate research into the opportunities and threats in those markets Product Strategy: Always define the product in terms of its attraction to target consumer via specifications, benefits, unique features that make it special – a rendering saves many words Promotional Strategy: Advertising and publicity must be aimed at target maraket and build brand awareness Pricing Strategy: Do a competitive analysis of what similar products sell for and price range – high, low, medium - relative to the price elasticity – low price sells more Place Strategy: Develop sales distribution strategy – consumer products will sell through retail, direct or on the web; a service may be delivered in a Place of business Key Questions to Pose in Marketing & Business Planning What – Who – Where – When – Why - How WHAT business are you in? Define Target Markets with demographic analysis WHO are the Primary, Secondary & Tertiary Customers or Clients? WHERE will the customer want to buy? Online, Retail, Direct, Distribution strategy? WHEN will they buy? Is business seasonal? Frequency of return visits? Sales cycle? WHY? What is the motivating force of your product or service that appeals to your customer? Is it different enough to make a difference? Is price what they can afford? HOW? Can I get the bucks to make it happen and am I qualified to operate or should I pay someone else to run the joint? Who provides the seed $? Have I put up enough? Begin by defining What business you are in with an appropriate mission and define the Primary demographic, geographic, psychographic customer characteristics. Where defines the place or distribution strategy to get to the low fruit clients. When is about seasonality and sales cycle or frequency of visits. Why demands that you differentiate your product from Brand X ala benefits and features – go where the pack fears. If unaware of your primal advantage you are in trouble. How will you find the seed $? Angels want to think you can’t fail as you have personally mortgaged you to the hilt and have put every cent you have on the table. No one will give you money to make a big salary? Scrap the idea! Marketing Plan Research Paper Requirements Marketing PC generated with APA citations on all graphs or illustrations; Graphics to enhance the imagery is okay in this class as “humans think not in words but in images” Paper must include a minimum of 3 bibliographical citations that will be tied to the Reference Section at the end. Make a back up copy as the instructor keeps your paper Use 12 Point Times New Roman Type in the paper and at least 24-point type on your Power Point presentation that will summarize your findings. It will be delivered in session #15 The Power Point presentation should include no more than a dozen slides and take approximately 20 minutes The Marketing Plan Paper is due in week fifteen Business Plan Topics to Choose From Business Joe’s Security Business or Pizza Emporium Joe’s Description: Pick any family business or one that you have always dreamed of owning and operating – Mary’s Pizza Parlor, Kid’s Playland, etc. (Your Name) Internet Café (Your Description: Located in SW, FL with a dozen PC’s online appealing to vacationers in need of communicating while imbibing in: coffee, teas, Danish, deserts, wine and cheese; a socializing venue for techies and foreigners featuring couches, round tables and chairs. Price and promote through pertinent mediums. (Your Name) Matchmaker Maven Matchmaker Description: Create a website featuring matchmaking among some definitive age group (define in Target Market section) and make sure to price and promote to get enough traffic to be profitable with a definitive Strategic Marketing opportunity. Orgone Energy Truth Ring Orgone Description: Launch a Truth Ring; a magical ring that within ten feet will warm the fingers of anyone shaking hands; if lying the hands will be stone cold. Price it at $1000 in either a man’s or woman’s version. Precise target marketing is crucial as is a Mission, Vision, packaging, promotions and advertising; the Strategic Marketing Opportunity section is crucial as is capitalization strategy Marketing Plan – Product or Service Marketing TABLE OF CONTENTS COVER PAGE (TITLE, TO WHOM, FROM WHOM, DATE) TABLE OF CONTENTS - [This is due in week six of the course] include: Critical Thinking (Innovative analysis of new product idea), Taking Initiative (developing a Marketing Plan to implement your idea), Effective Communications (deliver paper in class), Leadership Ability (Role playing as CEO of firm in plan), Research Ability (researching the Target Markets in plan) MISSION OR VISION STATEMENT (CREDO: predicting your destiny) PRODUCT/SERVICE DEFINITION (WHAT IS IT, PICTURE, PRICE, PACKAGING?) TARGET MARKETS (PRIMARY & SECONDARY #’S OF POTENTIAL CUSTOMERS) STRATEGIC MARKETING OPPORTUNITY (WHAT IS YOUR EDGE/VALUE ADDED) PRICING STRATEGY (PRICE ELASTICITY: WILL YOU SELL MORE IF CHEAP? ) PROMOTION STRATEGY (INCL: PRESS RELEASE, WEB PAGE MOCKUP, & LIST OF HOW YOU INTEND TO PROMOTE & ADVERTISE YOUR PRODUCT) DISTRIBUTION STRATEGY (DIRECT VIA WEB, RETAIL STORE? OR REPS?) INCLUDE A 5 YEAR SALES FORECAST SHOWING UNITS, $, & CGS) – TIE THE SALES FORECAST TO THE TARGET MARKETS IE PIPELINE FILL:10% OF 6000 TEACHERS WILL BUY 600 ITEMS IN THREE YEARS (200 PER YEAR) MANAGEMENT CHART (BIO SHEET ON YOU AS CEO & WHY QUALIFICATONS?) COMPETITIVE ANALYSIS – SWOT ANALYSIS – BE HONEST BUT POSITIVE BIBLIOGRAPHY (GIVE 4 CITATIONS VALIDATING TARGET STATISTICAL DATA) GETTING STARTED GETTING PICK PRODUCT OR SERVICE THAT IS EXCITING TO YOU; ONE THAT YOU CAN GET INTO (EXAMPLE: MAGIC DIET PILLS, VIAGRA BEER, ELDER-CARE, ANTI-WRINKLE CREAMS – PICK WHAT YOU KNOW) WRITE A MISSION STATEMENT THAT IS YOUR CREDO, DREAM OR PHILOSOPHY; ITSHOULD DEFINE PARAMETERS OF AN IDEA IDENTIFY TARGET MARKETS: PRIMARY & SECONDARY AND QUANTIFY THEM BY AGE & OTHER DEMOGRAPHICS – SHOW THEM IN A PIE CHART IN PLAN IDENTIFY PARAMETERS OR MAGNITUDE OF PROJECT? IS IT COLLIER COUNTY, FLORIDA, U.S., OR THE WORLD? YOU CAN’T BEGIN BEFORE DEFINING THE HUMAN AND FINANCIAL RESOURCES REQUIRED FOR THE PROJECT Picking a Brand Name in Mass Marketing Picking Brand names are key in mass communications, conjuring an image to sell Brand products/services; P.T. Barnum made midget Charles Stratton into General Tom Thumb; Henry Deutschendorph, Jr. didn’t sell like the moniker John Denver Thumb; A brand name should be easy to say, spell & remember, fit the product, tell a story, work in various mediums and be eye-candy aSEND MESSAGE: VOLKSWAGEN MEANING “PEOPLE’S CAR” aTELLS A STORY (WGN: Chicago Tribune’s broadcast – World’s Greatest Newspaper) aSHORT WORDS BEST (INTEL RATHER THAN INTELLIGENT ELECTRONICS) t BRANDS SHOULD NOT BE TOO TOPICAL (MOTEL 6, KFC = FRIED TO FRESH) aBRANDS SHOULD ELICIT INNER EMOTION (GODIVA, VIRGIN BRIDES, NIKE) aNOSTALGIC START - WHAT DOES 7-ELEVEN STAND FOR? HRS OF OPERATION? aPRODUCT CAN OFFER INSIGHT OR METAPHOR OF BUSINESS: MILK), WALKMAN, CURVES (FITNESS), SUBWAY (QUICK FOOD) SILK (SOY aCONVEY A PHILOSOPHIC MESSAGE (WD-40, CISCO, SOBE’S, BLACKBOARD) Mission & Vision Statements – Credos not Definitions Mission An ideology or philosophy; GM’s mission is to deliver efficient transportation with cars like Cadillac, Chevy as a result. In 2050 transportation MICROSOFT’S MISSION may be jetpacks MICROSOFT’S “A PC on every desk” (They don’t even build PC’s) AMAZON.COM’S MISSION AMAZON.COM’S “Work Hard, Have Fun, Make History” MISSION OF NCH – Healthcare System MISSION “To restore, promote, and maintain health in the people we serve” RITZ-CARLTON MISSION “Ladies and Gentlemen serving Ladies and Gentlemen” Missions don’t describe products, they’re a philosophy of life Vision statements should define what you want to become, not how you Vision intend to become it - which is the purview of objectives & goals intend “Our vision is to become the finest integrated health care system in the U.S.” NCH HEALTH CARE VISION VISION STATEMENTS New Product or Firm Elevator Pitch New You’ve got 30 seconds to tell your story. It had better be simple You’ve and succinctly communicate your message to an angel investor and Three-Five-Floor Pitch on a Big Cheese Venture A new exciting entertainment emporium for the whole family. It new will be fun with pizza, games and amusements, and generate $2 million in annual sales revenues with a 20% pre-tax profit – double that of other such establishments. Studies show people will love the concept and we only need $2 million to make it happen. concept Eight- Ten Floor Add-On Pitch Investors will be offered a seat on the Board of Directors and a Investors sweetheart deal to make it worth their while - $100,000 for 2% equity in the firm with a realistic opportunity for a 30-40 times return on their investment in four to six years – like a biz plan? return Strategic Market Opportunity for Big Cheese Pizza Strategic Being Radically Different is our market edge Being Big Cheese is not a normal pizza operation. It is unique in these ways: Nothing exists in this market area, a virtual market void, for the whole family to eat, have fun and be entertained Virtual Reality state-of-the-art games and play items such as Air Hockey, Foosball and ski-balls will grace the playland area This unit will feature crawl apparatus around the ceiling, walls including rock-climb in play area – adults can’t go but can watch A costumed squirrel will hand out Fortune Nuts treats free There are 125,000 children in the 2-11 range in the Ft. Myers/Naples SMSA. This equals 50,000 target households Assuming only 20% of permanent households visit once each quarter spending $40 each visit the store will generate $1.6 million New Product or Firm Elevator Pitch New You have about 30 seconds to tell your story. It better be simple You and succinctly communicate your message to an angel investor and Three-Five-Floor Pitch on a Big Cheese Venture A new exciting entertainment emporium for the whole family due new to sharing fun, pizza, games and amusements. Sales of $2 million annually with a 20% pre-tax profit ($400K) – 2X-4X of similar establishments and 50% ROI on your $800,000 invested. Studies show people are prone to do what the family as a unit loves – no matter if it is a bit pricey. matter If You have another 5 floors Keep on Pitching Investors will have a Board seat and be given a sweetheart deal for Investors stock in the new entity - 3% equity for each $100K and up to 30% for a $1M investment. Projections call for a 30X-40X return in four to six years – Would you like a copy of the biz plan? to There are 4 P’s in Marketing a Product or Service The Product - Internet Café or Orgone Truth Ring - cannot be Product Promoted (advertised), Priced (high/low) or Placed (sold) without Promoted Priced Placed insight into the end user (target consumer/market) Product Strategy: Always define the product – Internet café on 5th Ave. South in Naples – a rendering saves many words Promotional Strategy: Advertising and publicity aimed at target market – ads on the Weather Channel for vacationers Pricing Strategy: What would you pay for coffee, Danish and going online to get your e-mail in Paris? – high, low, medium relative to the price elasticity Place Strategy: Develop sales distribution strategy for Orgone Truth Ring; what places will sell it best; Gift stores, Airline catalogues, Sharper-Image stores & catalog Differentiation & Penetration are Keys to Market Differentiation Planning Planning TARGET MARKETS – Define & Quantify TARGET For planning it is key to segment potential customers into Primary, Secondary & Tertiary groups or market segments via detail on their demographic profile. Then quantify your findings – how many are there in which locales. IF YOU ARE SELLING TO TEACHERS? IF Tell me how many teachers are in the target market area of Collier or Lee County, Florida - a Pie Chart will enhance the plan and the grade IF YOUR PRODUCT IS AIMED AT SINGLES? How many singles between the ages of 18 and 35 are in SW, FL (show Bar Chart on the various market segments) IF YOU ARE SELLING ENERGY BARS? Quantify the #’s of retailers in various specialties who will stock and sell your product – Health Food Stores, Drug stores, Pro Shops, etc Attack Unsatisfied Market Needs-Never Products Identify Unfulfilled Needs and Fill Them Elegantly! Identify and the Quantify in Pie or Bar Charts the #’s in your target markets or in your demographic profiles target Play Emporium Targeted Customer Strategy Primary Targets: Family Units with 2-11 year olds within 15 miles of store Primary (45,000 kids under age 14 in Collier County and 60,000 in Lee County) Secondary Targets: Kids B’Day Parties and other Special Events within 25 miles of store – make it affordable and easy for mothers (estimate the # of birthday parties and special events to be held weekly) Tertiary Targets: Little League teams, Parents W/O Partners, Special Ed student groups, YMCA, ball teams or school groups (estimate the # of special groups attending each month) Timeline Chart for High-Tech Product Launch Timeline 1st sale Event/Function Q-1 Q-2 Q-3 Q-4 Q-5 Q-6 SEEDS $ RAISED FOR ENG X Engineering Timeline -----------------X Establish Corp Facility ---------X Design Display Package for offshore Mfg. -------------X Hire Key Sales Personnel to Launch ----------X Develop Price Sheets, brochures, Press Kit, Co-op Package X Manufacturing Negotiated ------------X 2nd Traunch of Capital - $2M X Manufacturing Commences - 5000 units ---------------X FORMAL LAUNCH IN NYC, VEGAS, ORLANDO X Press Release in Orlando, NYC & Naples with Media ------X Key Personnel Recruited/Hired ---------------X Attend Consumer Electronics in Vegas to Announce -------------------X First Million in Sales Revenues ---------------X $5 Million in Sales Revenues --------------X Demographic Analysis of US Market Potential by SMSA’S Demographic METHOD OF SEGMENTING MARKETS & SETTING SALES QUOTAS SOURCE: SALES & MARKETING BUYING POWER INDEX (2005) AREA # STATES HSHLDS BPI - % #RET SLS PER/HS REST/POT (2008 data) SOUTH - 12 STATES 35.980M 7.4M 140K (2008) 30.25% 6.13% .1429% .2034 .2517 .6806 .5194 23.98% 22.23% 24.6% 100% (2208) $34,584 $33,740 $42,170 $41,861 $29,979 $44,207 $36,043 $38,500 $34,650 $42,745 774 1:150K 240 49 1 1.6 2 5 4 182 175 168 FLORIDA - 1 STATE NAPLES FT. MYERS/CAPE CORAL 235K SARASOTA/BRADENTON 311K FT. LAUDERDALE W. PALM BCH/BOCA EAST 11 STATES 730K 551K 27.385M 26.335M 25.335M 116.036M CENTRAL 14 STATES WEST 13 STATES TOTALS 50 STATES Florida Play Emporium Potential Store Opening Analysis MARKET AREAS 1 DAYTONA/ST. AUGUSTINE 2 FT. LAUDERDALE/POMP/HOLL 3 FT. MYERS/CAPE CORAL/NAPLES 4 FT. PIERCE/STUART/VERO 5 GAINESVILLE/OCALA 6 JACKSONVILLE 7 LAKELAND/WINTER HAVEN 8 MELBOURNE/TITUSVILLE 9 MIAMI + KEYS 10 ORLANDO 11 PENSACOLA/FT. WALTON/PAN 12 SARASOTA/BRADENTON/CHAR. 13 TALLAHASSEE METRO AREA 14 TAMPA/ST. PETE/CLEARWTR 15 WEST PALM BEACH/BOCA RATON TOTALS PRIMARY TARGET MARKETS # Hshlds 222K 778K 321K 142K 209K 462K 204K 213K 900K 717K 250K 350K 150K 1.1M 533K 6.6M 3808 H-EBI $ 45K $ 55K $ 60K $ 52K $ 43K $ 59K $ 44K $ 46K $ 50K $ 58K $ 46K $ 55K $ 56K $ 53K $ 73K $ 54K $ 56K %-EBI .16 .66 .30 .11 .14 .40 .15 .15 ..75 .65 ..20 .28 .12 .88 .51 5.5% 3.3% # UNITS 4 15 6 3 4 9 4 4 18 14 5 7 3 20 10 126 69 % POT 3% 12% 5% 2% 2% 7% 3% 3% 14% 11% 4% 6% 2% 16% 8% 100% 55% * ITALICS = PRIMARY TARGET OPENINGS (One per each 50K Households in Target Market) TARGET MARKET CATERING PRODUCTS TARGET Sports Bars, Stadiums, Spas, Cruise Ships, Delis & Pizza, Fitness Centers, Pro Shops, Ice Cream shops infoUSA & DATABASE AMERICA 2005 TYPE OUTLET TYPE DELIS, COFFEE SHOPS & PIZZA CRUISE SHIPS & CAMPGROUNDS GOLF & TENNIS PRO SHOPS FITNESS CENTERS (SPAS) SPORTS BARS ICE CREAM PARLORS FRATERNAL ORG (VFW, ELKS) 15,000 HOTELS/MOTELS (OVER 100 ROOMS) MINITURE GOLF, SKI RESORTS, FAIRS, FESTIVALS, CARNIVALS TOTALS # U. S. OUTLETS FL 100% 70,000 12,000 20,000 15,000 45,000 15,000 900 10,000 5,000 2,000 209,000 6% 4,200 720 1,200 900 2,700 900 4,500 600 300 120 12,540 SOUTH 30% 21,000 3,600 6,000 4,500 13,500 4,500 2,400 3,000 1,500 600 62,700 INN/ADPT+EARLY- MAJ. 16% 11,200 1,920 3,200 2,400 7,200 2,400 7,500 1,600 800 320 33,440 50% 35,000 6,000 10,000 7,500 22,500 7,500 5,000 2,500 1,000 105,500 PRICING STRATEGY WRINKLE CREAM PRICING For a two-step distribution operation. Give a brief write-up on For your pricing strategy in your Marketing Plan your PRODUCT PRICED DIFFERENTLY FOR SPECIALTY CATALOGS, INTERNET, PRODUCT PHYSICIANS THAN FOR DEPARTMENT STORES AND DRUB STORES PHYSICIANS SPECIALTY RETAILERS (50% MARGINS) PRODUCT ECONOMY SIZE FAMILY SIZE RETAIL $60 $100 WHLSL $30 $50 COST $9 $12 MARGIN % 70% 75% MASS MARKET RETAILERS (40% MARGINS) PRODUCT ECONOMY SIZE FAMILY SIZE RETAIL $50 $83 WHLSL $30 $50 COST $9 $12 MARGIN % 70% 75% Sample Target Market Sample Analysis for Business Plans Analysis Viagra Beer Target Markets Segment Markets Relative to Sales Potential Tertiary M arket: 50-Yrs & UP 20% Secondary M arket: Gifts 2 0-Somethings 30% Primary M arket: Gifts 4 0-Yr olds 50% Sample Target Costs for Marketing a New Product Sample Research the Potential Pipeline Fill in the U.S. Research Unit sales of 10 Wrinkl...
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