Marketing Plan Development Guide

Various formats may be used for structuring the marketing plan. The
overall format of a plan may need to be likely to be adapted to suit the
particular planning needs of the organisation and the circumstances
surrounding the product/service (eg. stage of market development and
product life cycle).

The following development guide represents a simple plan structure which

may be modified and adapted as required. This should be reviewed in
conjunction with text material and other references outlining marketing plan
design.

Title page/cover

Executive Summary

Table of contents

1.0 Introduction

2.0 General Product Information

3.0 Mission and Goals of the Firm

4.0 Analysis of External Environmental Factors

4.1 Product Category Demand Analysis

4.2 Competitive Analysis
4.3 Economic Analysis
4.4 Legal and Political Analysis
4.5 Social Analysis
4.6 Technological Analysis
4.7 Opportunities and Threats

5.0 Analysis of Internal Factors

5.1 Forecasting Market Potential

5.2 Target Market Segments
5.3 Product Life Cycle and Sales Trend Analysis
5.4 Strategies of the Firm
5.5 Current/Proposed Marketing Strategies
5.6 Product
5.6.1 Product Components
5.6.2 Product Modifications
5.6.2 Potential competitor actions/reactions
5.7 Pricing
5.7.1 Pricing Objectives
5.7.2 Impact on Other P’s
5.7.3 Competitor Price Analysis
5.7.4 Criteria For Planned Price Adjustment
5.7.5 Potential Competitor Action/Reaction

5.8 Placement Strategies, Action Plans and Assessments

5.8.1 Placement Task Needs
5.8.2 Placement Option Selection and Evaluation
5.8.3 Analysis of Channels Currently Being Used
5.8.4 Potential Competitor Actions/Reactions

5.9 Promotion Strategies, Action Plans and Assessments

5.9.1 Promotion Campaign Target and Theme
5.9.2 Objective-Task Method
5.9.3 Annual Schedule of Activities
5.9.4 Print Advertisements
5.9.5 Audio Visual Advertisements
5.9.6 Selling/Sales Promotion
5.9.7 Public Relations
5.9.8 Potential Competitor Actions/Reactions

6.0 Budget

7.0 Timing of Actions

8.0 Control and Review Mechanisms

Attachments
1.0 Executive Summary

Include a summary of your plan for busy executives who do not have the time, or
who do not need to know the details of your plan. Be sure to include in your
summary an indication of the business outcomes that you expect to achieve.

2.0 General Product Information

MARKETING PLAN. It is recommended that your marketing plan be for a single

product, not a class or family of products. The reason for restricting your marketing
plan to one product is that each product of a firm will have a somewhat different
target market and set of competitors, as well as potentially being impacted on
differently by various environmental factors. The purpose of completing this activity
is to have you learn the PROCESS of developing and presenting a marketing plan
as you integrate the text material in a real-world marketing activity. The PROCESS
of developing a marketing plan is basically the same whether one is preparing a
marketing plan for a single product, a line of products, or the total product offering
of a firm.

2.1 SIC Numbers

ANZSIC Number. In order to access much of the data reported by the Australian
Bureau of Statistics, it is necessary for you to identify the Australia New Zealand
Standard Industrial Classification (ANZSIC) number for your product.

2.2 Product Description

MARKETING PLAN for (the product can be a good, service, personage, place, or
idea.)

Standard Industrial Classification (SIC) numbers for:

Manufacturer/Provider
Wholesaler/Intermediary
Retailer

Description of the benefits desired by the end-user and features provided by the
product.
 2.3 History Within The Industry

Describe the history of the product form's evolution in the industry. This should
give a clear but concise picture of the development of the product category to date.

2.4 History Within The Firm

Describe the history of the product within the firm. What is the level of experience
the firm has with this product/service and how long has the organisation been
dealing in these markets if at all.

3.0 Mission And Goals Of The Firm

MISSION and GOALS of the FIRM. Successful firms have a mission statement that
addresses the major reason why the firm is in business and goal statements the
are to operationalize the mission statement and give direction for the development
of strategies and their subsequent action/ implementation plans for the firm to
follow in striving to achieve its mission. While in some firms the mission and goal
statements are simply "understood" rather than put in written form, the majority of
successful firms formalise their mission and goal statements in order to
communicate more effectively with both internal and external populations.

Each of the firm's functional units must be aware of and work within the framework
of the firm's overall mission, goal and strategic planning statement in order to
facilitate their accomplishment. Thus, the more clearly those statements are
communicated, the more adequately each of the management decision-making
units of the firm will be able to work to operationalize the goals and mission of the
firm.

Depending on the firm's mission statement, facilitating goals may include

statements regarding market share, profitability, low cost leadership, quality
considerations, innovation, and so forth. The exercise of determining your firm's
mission and goal statements is very worthwhile in that it not only help focus your
attention on analyses of your firm but provides a basis for analysing the competing
firms in the industry.

A. Mission Statement
B. Goal Statements: Describe the primary (written or unwritten) goals of the firm
which may have an impact on its marketing plans.
 4.0 Analysis of External Environment Factors

Refer to your text for a detailed explanation of

the following environmental/uncontrollable
variables.

Product Category Demand Analysis:

Calculate the total value of the market for the product category.

Competition:
A table is usually used to compare the critical attributes of competing
products and services.

Economic:
Identify the key economic factors likely to impact on the product category in
question.

Legal/Political:
Identify the key legal factors likely to impact on the product category in
question.

Social:
What social trends or influences are likely to impact on the market for your
product or service.

Technological:
Identify any technological developments which are likely to have a bearing
on the product category.

Opportunities And Threats:

In response to your analysis of the external environment (above),
identify the key EXTERNAL opportunities and threats perceived. Make
sure that the opportunities and threats are logically linked to issues
identified in your environmental analysis.
 4.1 Product Category Demand Analyses.

The provider of a product; whether at the supplier, manufacturer, wholesaler, or

retailer level, needs to know about the characteristics of the end-user of the
product. Determining potential demand for a product includes assessing the
demographic, psychographic and behaviour pattern data in order to develop a
product offer that can be of mutual benefit to all parties involved. In today's
marketing approach, the segmentation of a population into subgroups; that are
large enough to present an economic opportunity, can be attracted to differentiated
offering, and which can be accessed, is the norm. The concept that one product will
meet the needs and desires of all persons, or that everyone is a potential customer
for the product, is not realistic with today' differentiated product offerings to
segmented markets.

A major use of the data generated by the demand analysis process is as an input in
forecasting the overall industry demand as well as demand for an individual
product. The forecasted product demand is translated into anticipated sales, which
are translated into production output figures, personnel needs, financial needs,
revenue expectations, and so forth as well as being used for pricing, promotion,
and placement considerations. The data generated here are applied in the
INTERNAL ANALYSES portion.

The terms may be defined as:

Demographic:
Facts that can be determined and tabulated such as age, education, income,
height, weight, occupation, address, etc.

Psychographic.
Aspects that describe an individual's personality and the factors that indicate their
life-style preferences and behaviours.

Purchase Behaviour Pattern.

Information about where, when, how, etc. a type of product is purchased.

Keep in mind, as stated in the Introduction, that each of the areas of investigation
has a wide variety of data that could be gathered and analysed. The Marketing
Plan Development Guide has been designed to be a generic guide rather than to
be specific to any one product. You may find that only portion of the data called for
are applicable to your particular product. At the same time, you may need to add a
type of data that you feel is needed for the adequate assessment of factors
affecting your product. Therefore, feel free to add and delete categories of data so
that the end result is information and analyses tailored for your product.
 4.2 Competitive Analysis

COMPETITIVE ANALYSIS. No business operates in an environment without

competition. Knowledge of the competition's past, present and potential strategies
is critical for the design and delivery of your effective strategic and
action/implementation plans to operationalize the firm's mission and goal
statements

The gathering and analysing of data about the competition and their past and
present actions need to be an ongoing activity. While there are a variety of sources
of data for conducting competitor analyses, the bulk of the information needed
regarding your product's competition is normally available from public sources such
as the business and economic analysis sections of newspapers, popular consumer
and trade magazines, annual business reports, retailers, wholesalers, published
statistics, professional conferences, trade shows, personal observation, and a
multitude of other sources. Your skill to observe and analyse competitors can also
provide considerable data for analysis. It is not necessary to resort to questionable
ethical or legal practices to gather pertinent data about competitors.

A major task in this analysis is the culling out of unimportant information so that the
resulting data gives a comprehensive yet concise picture of the competition.

You should also assess the relative strengths and weaknesses of your own product
and organisations in relation to competitors.

Elements Your Firm Competitor A Competitor B

etc

Product
Similarities
Differences

Competitive Edge
Product Strategies
Pricing Strategies
Promotion Strategies
Placement Strategies
Strengths (relative)
Weaknesses (relative)
 4.3 Economic Analysis.

The economic health of the environment in which a business operates impacts

both directly and indirectly on its market potential and marketing activities. In
general, if the indicators of economic health for the total environment tend to be
positive; such as the level of employment, interest rates, exchange rates,
productivity, etc., the market potential for most products will also be positive.
Because of this, it is essential to include an analysis of the economic factors
relevant to the firm's efforts to provide the product and the potential market's
ability to purchase the product

A basic understanding of economics and economic data reporting is essential for

being able to identify and analyse economic trends and judge their potential
impacts on your strategies and action plans. For example, if the economy is judged
to be expanding at a steady rate without a threat of inflationary pressures, that
information is of more value when placed in context with what has transpired in the
past and what is anticipated within some predictable future than if the information is
viewed as unrelated to other events and trends.

After identifying the current status of an economic factor, three trend possibilities
are predicted. They are the best possible situation that could take place, the worst
possible situation that could take place, and that which you think is most likely to
take place during the planning period under consideration. The results of your
economic analysis can have a significant impact on your judgement of the
opportunities and threats posed for your product due to external environment
factors.

Because of the global nature of the present-day business environment, your

analyses have to include assessments of the economic factors in each foreign
market that you intend to be in as well as the overall aspects of global economic
conditions.

Economic Analysis (of the nation NOT the firm)

Trend Scenarios
Current Status Best Possible Worst Possible
Most Likely

Economic cycle stage

Rate of growth
Rate of inflation
Employment level
GNP
Amount of National Debt
Prime interest rate
Consumer Price Index
Median income per household
Average consumer
savings rate
International rate of
exchange
 4.4 Legal/Political Analysis

LEGAL/POLITICAL ANALYSIS. A pro-active stance in modern day firms includes

ongoing assessments of current and potential impacts in the legal/political arenas,
not only on the domestic but also on the international scene.

Laws, regulations, court rulings, interpretations of existing laws and regulations,

changing legal and political climates, as well as numerous other governmental
actions or inaction’s require appraisal on the domestic and the international level. In
addition, the existing and potential political action trends of the voting population,
such as the question of business and political ethics should be closely watched for
potential regulatory or legislative action. While many persons would wait for legal
assistance, much can be done by the lay-person to get a sense of the legal and
political climates in their markets. The print and audio media are good places to
start becoming more aware of the current status of public opinion and legislators'
opinions on the vast number of issues impacting on business. Those sources also
provide clues to possible trends of the future that could dramatically affect the
political/legal climate in which the firm may have to operate.

You might want to do additional reading on this topic or consult with somebody
with relevant experience.

Legal: Existing Domestic Laws and how they are being interpreted by the court and
regulatory agencies

Trend Scenarios
Current Status Best Possible Worst Possible
Most Likely

Contract law
Consumers' "Rights" legislation
Trade Practices Law
Regulatory Agencies
Current domestic political climate
Potential domestic political impacts
Current international political climate
(per country or trade association)
 4.5 Social Analysis

SOCIAL ANALYSIS. Businesses that do not attempt to assess the impacts of

present and future attitudes and actions of societal groups are gambling in a
potentially dangerous game of financial Russian Roulette. It has become the
marketeer’s task to audit societal currents and to utilise the information to the firm's
advantage.

Cultural, cross-cultural, sub-culture, and social group environments of each o the

markets, domestic and foreign that the firm is in or anticipates to enter, need to be
assessed in the effort to understand and utilise the data in a pro-active rather than
a reactive management style. An understanding of a present environment is difficult
without a knowledge of how the past has help forge the present. In like manner, an
understanding of the past and present societal environments provides a framework
in which to assess the possibility of various events happening in the future. And the
future is the time frame for which to plan.

Acquiring information about the social fabric of a market calls on the marketeer’s
abilities to see the individual parts that comprise the total. The information can
come from a multitude of sources but the talent is in the information being
accurately interpreted.

Social changes such as trends in life-styles, consumer protection, "green

marketing", buying behaviours, etc. have both immediate and long-run marketing
implications. These and many more changes may need to be considered in the
preparation and updating of a marketing plan. Since each marketing plan must be
tailored to the product under consideration, generally only those social impact
factors which are judged to have a direct influence on the product need to be
included in the analysis.

Remember to also analyse the cultural, cross-cultural and social aspects of each
foreign location that you plan to operate in as part of your total market.

Trend Scenarios
Current Status Best Possible Worst Possible
Most Likely

Cultural values
Cross-Culture impacts
Sub-culture values
Social group values
Work
Leisure
Courtship
Marriage
Divorce
Sex
Age Groups

Etc

4.6 Technology Analysis

TECHNOLOGY ANALYSIS. An unchanging technological environment is not a

realistic condition in business. A successful firm develops its strategies with the
understanding that its current product will become obsolete through technological
advancements as well as end-user preferences. The changes may originate within
the firm or industry but they frequently result from advancements entirely outside
the industry. Thus, technological analysis requires the scanning of other potential
sources of technical advancement as well as scanning for technological change
within the industry.

Within the Industry Outside

the Industry
Domestic/Onshore

Business
Government
Universities
Foreign/Offshore Business
Government
Universities

4.7 Opportunities and Threats To The Firm

(Based On The External Analysis)

OPPORTUNITIES and THREATS. Based on the foregoing data and your analyses
of it, identify those aspects that present opportunities for the firm to pursue and
threats for the firm to attempt to mitigate.

An external environment factor that presents an opportunity for the firm should be
factored into the product marketing plan in such ways that its impact advances the
intended outcome(s) of the plan. For example, the population's attitude toward
"Green Marketing" can impact on demand for various products, their composition
and packaging; the competition's actions; legislation and enforcement; purchasing
pattern changes; and research for more advanced technologies to deal with the
environment.

What opportunities do the external factors provide your product?

Potential threats present in the external environment also need to be analysed for
their impacts on the firm and its product. Having identified a threat to the firm or its
product permits the firm the opportunity to formulate a strategy to lessen, if not
eliminate, the threat to the firm or its product.

What threats do the external factors present to your product?

5.0 Analysis of Internal Environmental Factors

Target Market Segment(S)

Forecasts

Product Life Cycle & Sales Trend

Analyses

Strategies And Action Plans For The

Firm
 Product
 Price
 Promotion
 Placement

5.1 Forecasting Market Potential.

One of the initial steps in developing a market forecast is the determination of what
factors to include in the forecasting data base and the relative importance of each
of those factors. List the factors, which usually includes some areas considered
under the External Analyses that you would intend to analyse as part of your
forecasting data base plus the relative importance of each of the factors for your
forecast and a brief rationale as to why you would include each of the factors in
your forecast. Use as much additional space as necessary to list factors of
importance to be included in your market potential forecast.

Sources of Forecasting Data. The types of data listed above may be of

considerable importance in forecasting the demand for your product, however,
unless the data are available to be used it cannot be factored into your forecast.
Therefore, it is necessary to specify where you would obtain or have obtained your
forecasting data.

If the data are not quantifiable it may only be of value for subjective judgments and
as such are open to questions of interpretation by other individuals. Therefore, if
the option is available, use quantitative rather than subjective data for your
forecasts, ie. facts verses feelings.
 (If you have the data available to you AND you also have the computer software
and hardware available, you might want to input your data and run one or more of
the two most frequently uses quantitative forecasting approaches, Time Series and
Regression Analyses.)
 Factor Importance Rationale

1.

2.

3.

4.

5.

6.

Specify the source(s) for each of the forecast data factors.

5.2 Target Market Segment(s).

The categorisation of a population into segments, using on one or more factors

becomes the basis for selecting a specific group or groups of individuals that a firm
feels that it not only has a competitive edge in serving but also is large enough to
be financially attractive and that it is accessible to the firm. Once the target market
is identified, management works to position the product favourably in the minds of
the target market. The text chapter 5 (Kotler P et al (1994), Marketing in Australia
and New Zealand, Prentice Hall) Market Segmentation, Targeting, and Position,
provides a good introduction to the fundamentals on these topics.

List the population segmentation variables that you feel are pertinent for you
product, including any relevant data compiled under the Product Category Demand
analyses .

Under Target Market Components, the data for the Estimated Market Total No. for
each target market subgroup should be the total number of individuals in that
category where you anticipate marketing your product. The Estimated Market
Share for your product should be your best estimate of a realistic percent of the
total market that your product has or could attain. Calculate market share
percentages by dividing the Market Total figure into the estimated size of you
product's market rather than using other methods for calculating market share. (If
you guess at a market share percent without having the data to calculate the
percent, multiply the Estimated Market Total number by your estimated percent to
see what would be the size your market.)

Whatever the segment(s) you select, your target market needs to have the
characteristics of being 1. large enough to be profitable to pursue, 2.
accessible, and 3. within the firm's abilities and resources to enter and
compete successfully.

Target Market Segment(S) Number of

Individuals

1.

2.

3.

4.

Estimated Market
Target Market Components Total #
Share %

Australian market (as a whole; by specific

states; or by geographic region(s)
specifying the states that are in
that area)

Total (geographic)
Target Market =
 5.3 Product Life Cycle and Sales Trend Analysis

The Product Life Cycle (PLC) is a concept of how a type of product would go
through a series of market conditions depicting the product's acceptance by the
market. The product class level of acceptance is considered to relate to the span of
time that the product is available in the market, starting with its introduction to the
target market . The usual drawing of the theoretical "normal" PLC is the first
two-thirds to three-quarters of a bell shaped curve that depict the market
acceptance of the class of product for an industry. The curve begins a the left-hand
side of a graph, at the zero intersection of the vertical axis scaled in units of volume
or revenue and the horizontal axis labelled as a time span that is not specified by
months or years until after the product class has progressed through the PLC
stages, and hindsight permits a more clear understanding of what has taken place.
The strategy action impacts of the various firms in the industry are intended to
impact on the "normal" PLC so as to bring about a change to the shape of the PLC
so that it does not follow the theoretical PLC curve. The sum of the strategy actions
by all the firms in the industry usually results in a modification of the PLC from the
conceptualised "normal" shape.

The composite sales data for the industry's competing firms gives each firm's
management data for judging where it perceives the relative position of the product
class to be as it moves through the various stages of the theoretical Product
Life-Cycle, (PLC). Without assessing the status of market acceptance for the
product class, a firm tends to judge the industry based on its own experience,
which can be far from reality.

The comparison of a firm's charted sales trend data and its assumption of where
the product type is positioned on the PLC assists management in predicting the
type of market forces that might be present during the forecasting time period The
value of a PLC chart is in the assumptions made by the different business planners
as to where, currently, on the PLC curve that the industry product is so that a firm's
strategies may be planned in relation to anticipated market conditions and forces.

Step 1

Chart your firm's Sales Trend Data for the product for the time it has been offered
for sale. Use a chart with the vertical axis scale in monetary or volume units and the
horizontal axis scaled in units of time.

Step 2

Chart total industry sales volume for the product since it has been available on the
market. Use a chart with the vertical axis scaled in monetary or product units and
the horizontal axis labelled as time.
Step 3

State the Product Life Cycle stage that you feel the product is in at the present time
and your reasoning for that judgement based on the EXTERNAL ANALYSES, your
Forecasting Market Potential information and the charted industry sales volumes.

PLC
stage_____________________________________________________________
____

Rationale for your judgement:

 5.4 Strategies of the Firm .

The strategies of a firm grow out of its mission and goals statements. Strategies are
more specific planning statements of what the firm intends to d to achieve the more
general/global statements of mission and goals. As such, strategy statements are
written in measurable terms as to quality, quantity an time frame outcomes so that
the specification of a strategy also suggests how it is to be assessed and at what
level of attainment.

FUNCTIONAL AREA STRATEGIES. Each functional area formulates strategies for

itself so as to operationalize the firm's overall strategy(ies). The firm may for
example, have a goal of growth in market share of three percent. To support that
goal, Production may plan to increase its output to provide an inventory of finished
goods to supply such an increase in market share. Human Resources may have to
provide for the personnel to facilitate Production's strategy while Finance would
plan for the financial resources to provide the production inputs as well as handle
the risks inherent in such a growth strategy. The marketing strategies that might
need to be organised to achieve the market share growth goal could include 1.)
recommending product development ideas so that the product more adequately
meets the wants of the end-user target market, 2.) plan a price incentive program,
3.) develop a promotion campaign to highlight the product's modification and/or
price program, and 4.) devise placement alternatives to increase market coverage.

General Strategy(ies) of the Firm

1.

2.

Functional Area General Strategy (ies)

Finance
Human Resource Management

Marketing (4Ps, see following pages of guide)

Production
 5.5 Prior/Current Marketing Strategies.

In planning a course of action, one of the areas of assessment needed is the result
of prior actions and the monitoring of the current strategies and action plans. Past
strategies and action plans may or may not have been successful in the
environment that was encountered at that time. Because the hoped for result is not
always the outcome, it is necessary to analyse prior and current strategies and their
implementation tactics in the effort to determine the cause(s) for the outcomes that
were better than and less than the anticipated results of the firm's actions.

The marketing function's sub-units of product, price, placement, and promotion as

well as more specific strategies, action plans and other information are addressed
in the balance of the Guide.

Substantially Exceeded Expectations and Why:

Prior/Current Strategy Prior/Current Action Plans

1.
2.
3.
4.

Substantially Fell Short of Expectations and Why:

Prior/Current Strategy Prior/Current

Action Plans

1.
2.
3.
4.
 5.6 Product.

The remainder of the Marketing Plan Development Guide deals with each of the
components of the marketing mix. The marketing mix overall strategy statement
(section on general strategy statements) is now expanded into more specific
strategy statements with companion implementation/actions plans and their
evaluation methods.

Substantially Exceeded Expectations and Why:

Strategies (rank order) Action Plans Per Strategy Evaluation

Method(s)

1. a.
b.
c.

2. a.
b.
c.

3. a.
b.
c.

Etc
 5.6.1 Product Components.

Few products are complete by themselves. They need ancillary components to

provide the benefits desired by the end-user. Ancillary components consist of such
things as product imagery involved with branding and packaging, assurance that
the product will continue to perform as indicated at the time of purchase assistance
with maintaining the product, and so forth. Ancillary components may also consist
of a companion product, a service, the personality of the provider of the initial
product, and any number of other aspects that make the main product more useful
or valuable to the end-user.

Ancillary product components do not include aspects of the marketing mix

components of price, placement or promotion.

Product Component Descriptions/Examples

CURRENT PROPOSED

Brand considerations (name, trademark,

logo, graphics, colour, family,
individual, mixed, etc.)

Packaging considerations
(cost, protection, promotion, ease of use,
production needs, shelf density, acceptance
by the market, provide product information,
can be recycled, etc.)

Warranty/Guarantee

Service/Repair

Returns/Allowances

Physical presentation of tangibles

(especially services)

ETC
 5.6.2 Product Modifications.

No product completely satisfies its target market indefinitely without some type of
modification. Even without some type of competitive pressure, a firm needs to
adjust its product to continue to satisfy the shifting wants of its target market.

From the early steps of the product research and development process, product
modification considerations should be an ongoing activity. Pro-active product
development and product management should help the firm be prepared for
competitive actions and external environmental impacts. Pro-active considerations
for product modification should include planning for a variety of competitor activities
as well as for market conditions anticipated with the various stages of the PLC.

Planned Product Modifications/Changes at Anticipated Stages of Market

Growth/Competitive Activity

PLC Growth Stage/

Product Modification/Change Competitive Activity

1.

2.

3.

4.

List the competitor actions/reactions you anticipate due to the implementation of

your product strategy and action plans.

Contingency plan for competitor actions.

 5.7 Pricing.

The marketing mix overall strategy statement is now expanded into more specific
pricing strategy statements with companion implementation/actions plans and their
assessment methods and accepted levels of attainment.

Strategies (rank order) Action Plans Per Strategy Evaluation

Method(s)

1. a.
b.
c.

2. a.
b.
c.

3. a.
b.
c.
 5.7.1 Objectives.

The first step in the price determination process is the specification of the firm's
price objectives. The following are twenty-one (21) pricing objectives. Select your
pricing objective(s) from the list if you wish, but choose carefully because the
choice of one could eliminate another objective a choice in that they are not all
compatible with each other.

1. Long-run profitability (to make a profit - nothing about how much of a profit)

2. Maximise long-run profits (not the same as maximum profits)

3. Maximise short-run profits (frequently associated with Return-On-Investment

4. Market share goals (maintain or increase)

5. Growth (not the same as gaining market share but can be in association with it)

6. Survival (just to stay in business - usually a short-run objective)

7. Stabilise the market (reduce/eliminate price competition or price war situations)

8. Desensitise customers to price (another way to reduce price

comparisons/competition)

9. Obtain/maintain price leadership

10. Discourage entry/erect a barrier to entry (usually by having lower costs than the
firm that is trying to enter the market)

11. Speed exit of marginal firms/products (caution must be exercised to not appear
predatory or an unfair pricing practice in the eyes of the courts)

12. Avoid government investigation/intervention/regulation (restraint of trad or unfair

competition)

13. Enhance the image of the firm and its offerings (can be anything from a bargain
to a premium price)

14. Be regarded as a "fair" company by the end-user (that the firm charges a
reasonable price for its products)

15. Help sell "weak" items in a product group

16. Be considered a trustworthy and reliable firm by the competition

17. Create interest and excitement about the product (usually associated with a
new product introduction or an inventory reduction)

18. Discourage others from cutting prices (a retaliatory tactic used to "educate" a
price cutter)

19. Make the product "visible" (frequently tied with 13, 15 &/or 17)

20. Build traffic (frequently termed "loss-leaders" in the retail trades)

21. Prepare to sell-off the product/business at a high price (one of the reasons for
having a good understanding of accounting and finance if you are considering
buying a firm or the rights to a product)

Pricing policy objectives.

1.

2.

3.

4.

External environmental influences to be considered when developing the

firm's price policy.

Environmental Factor
Anticipated Impact/Influence

1.

2.

3.

4.
 5.7.2 Impact On The Other P's.

EXAMPLE. A pricing strategy to reduce price sensitivity for a product might have
an impact on the other three components of the marketing mix in the following way:

PRODUCT. The perceived quality of the product is enhanced by some type of

product modification, warranty improvement, or approach intended to convey a
product quality image

PLACEMENT. The channel outlets selected to carry the product should have a
perception with the target market as being a provider of quality merchandise rather
than emphasising product price.

PROMOTION. The promotion message and media selected should convey a

feeling of quality to the target market rather than sensitise them by price
comparisons. For example, the message might be oriented to product information
for shopping comparisons or project an imagery while the media would not be a
free standing insert in the Sunday edition of a newspaper.

Pricing's relationship of the other 4 Ps' strategies and action plans as they impact
on and/or are impacted by your pricing strategy and action plan decisions.

PRODUCT

PLACEMENT

PROMOTION
 5.7.3 Competitor Price Analysis

Skimming: Price is relatively high in relation to what most segments of buyer would
be willing to pay for the product. Aimed at a target market that is not price sensitive
for some reason, such as a status symbol product.

Neutral/Adaptive: Price is within the middle range of prices that most buyers
would judge to be a reasonable or appropriate price for the product.

Penetration: Price is set low in relation to what most similar products are priced in
the hope of generating a high volume of sales by gaining a lager share of the
market.

Competitor Price Analyses.

The usual type of industry pricing policy (skimming, neutral/adaptive, or

penetrating) with examples.

Are prices usually bundled or unbundled?

The usual speed, frequency and rationale for price changes made in the industry:

 Price Increases
 Price Decreases

5.7.4 Criteria For Planned Price Adjustment.

Criteria for YOUR planned price adjustments:

Trade discounts and allowances

End-User discounts and allowances

Markdowns

Additional markups

Timing and magnitude of the adjustment(s)

 5.7.5 Potential Competitor Action/Reaction

List the competitor actions/reactions you anticipate due to the implementation of

your pricing strategy and action plans.

Contingency plan for competitor actions.

 5.8 Placement Strategies, Action Plans & Assessments

PLACEMENT. The marketing mix overall strategy statement is now expanded into
more specific placement strategy statements with companion
implementation/actions plans and their assessment methods and accepted levels
of attainment

Substantially Exceeded Expectations and Why:

Strategies (rank order) Action Plans Per Strategy Evaluation

Method(s)

1. a.
b.
c.

2. a.
b.
c.

3. a.
b.
c.

5.8.1 Placement Tasks Needed.

The distribution activities that need to be accomplished in order to provide a

product to the end-user vary due to a number of factors. The activities that result in
the end-user being able to secure your product need to be identified and assessed
on a level of need and the ability of your firm or a channel member to perform each
needed task. Those tasks can be grouped under the headings of intermediary
marketing activities and wholesaling activities.

The specification of the distribution activities needed to facilitate getting your

product from you, the manufacturer/provider, to the end-user assists in setting forth
some of the criteria for selecting and evaluating your channel structure and its
members.
Product Placement Tasks Needed and the Ability to be Provided by This Firm
and/or by Other Organisations.

Level Ability to be
Needed Provided by
Task Needed High LowOur Firm
Others

Marketing Activities:
Forecasting and Market Intelligence

Sales Activities
Sales force training and management

Prospecting

Missionary sales

Initial sales

Subsequent sales

Telemarketing

Promotion Activities
Advertising
Independent

Coop ads with wholesalers

Coop as with retailers

Sales Promotion

Public Relations (Publicity)

Wholesaling Activities
Warehousing/storage

Materials handling system(s)

Inventory maintenance

Bulk division

Order Processing

Regular orders
 Special orders

Outbound transportation

Financing and risk

management

Technical assistance provided

other channel members

Returns and allowances

Product servicing/repair
 5.8.2 Placement Option Selection & Evaluation

SELECTION and EVALUATION. In addition to the marketing and wholesaling

activities to be assessed as part of the reseller system, the managerial abilities of
resellers need to be assessed to both select firms to be channel members and to
evaluate your channel members' management abilities.

Placement Option Selection and Evaluation Criteria

Criteria Degree Of Importance Minimum Level of

Acceptance

Managerial assessment factors

Reputation with clients for:

Management

Prices/negotiating

Office operations

Warehousing operations

Delivery commitments met

Return/allowance policies

Management expertise indicators:

Knowledgeable about end-users

Sales force professionalism: Training and retraining

Knowledge of product lines

Assistance provided to retail customers

Stock outs and back orders

Potential for our being able to influence/ motivate/exert some degree of control

Minimum Level of Acceptance

 5.8.3 Analysis Of Channels Currently Being Used

Evaluation Criteria Retail

Wholesale

Management assistance/services provided to:

Management assistance/services provided by:

Cooperative advertising/promotion

Technical assistance/services provided to:

Technical assistance/services provided by

Sales force assistance/training provided to:

Sales force assistance/training provided by:

5.8.4 Potential Competitor Action/Reaction

List the competitor actions/reactions you anticipate due to the implementation of

Your placement strategy and action clans.

Contingency plans for competitor actions.

 5.9 Promotion Strategies, Action Plans & Assessments

PROMOTION. The marketing mix overall strategy statement is now expanded into
more specific promotion strategy statements with companion
implementation/actions plans and their assessment methods and accepted levels
of attainment.

Strategies (rank order) Action Plans Per Strategy Evaluation

Method(s)

1. a.
b.
c.

2. a.
b.
c.

3. a.
b.
c.

Etc
 5.9.1 Promotion Campaign Target and Theme

CAMPAIGN PLAN. The beginning of a full promotion campaign plan starts with
specifying various aspects about the target of the campaign. Review the data that
you recorded previously about the end-user.

The first step in preparing a promotion campaign plan is an analysis of the

individuals in the target market(s). Who are they? What motivates them? What
types of messages and levels of appeal do they pay attention to? What media d
they read, watch, and listen to? What are their attitudes toward promotion efforts?
These and a number of other questions need to be answered if your promotion
efforts are to be effective in motivating the targeted end-users and intermediaries to
respond to your communications efforts in the manner that you desire.

In addition, a promotion campaign should have a unifying theme that is short and
memorable, so that each of the four components of the promotion campaign can tie
into the theme and have a reinforcing impact on the minds of your target markets.

PROMOTION CAMPAIGN PLAN

Target Market A Target Market B

End-Users are-

They read-

They watch-

They listen to-

Their attitudes are-

Their motivations are-

Their behaviours are-

Specify the overall theme of your promotion campaign.

 5.9.2 Objective-Task Method.

The promotion campaign planning system used with the Guide is the
Objective-Task Method. The initial step of the method is to write down the
promotion objectives for the promotion campaign. Each objective statement and
task statement should indicate a fairly specific evaluation criterion.

Each objective can have a variety of enabling tasks/ action plans that could
contribute to accomplishing the objective. For example, an objective of obtaining a
5% increase in trade brand awareness (as opposed to consumer brand awareness)
at the end of the annual promotion campaign could be addressed by a variety of
advertising tasks, by sales promotion techniques, and by public relations efforts as
well as by inducing salespeople to feature the brand during their contracts with
clients. One of the major questions is what combination of tasks could prove to be
the most effective and cost efficient in achieving each promotion objective? To help
determine the answer about cost efficiency, the cost for each task/action plan
identified is calculated. The task(s) that promise the greatest impact for the cost to
reach an objective are selected.

The final planning activities of the Objective-Task Method is to prioritize objectives,

select those objectives to be funded, total the costs for the tasks/action plans of the
selected objectives, and then obtain the financial commitment to operationalize the
campaign plan.

Objective-Task Method

Objective Task Cost Task Cost

1. a.
b.
c.

2. a.
b.
c.

3. a.
b.
c.

Etc
 5.9.3 Annual Schedule Of Activities.

Part of the process of calculating the costs for various tasks to operationalize
objectives is to determine those activities which will take place during the
campaign. A promotion campaign, which is a fixed cost for accounting purposes, is
planned and budgeted for on an annual basis. A complete annual promotion
campaign includes each of the four components of advertising, personal selling,
public relations, and sales promotion scheduled during the planning period. The
annual schedule of activities may be divided into quarters, months or weeks and
each of the four promotion components may not have equal coverage during each
of the time periods. An example of this would be the seasonality present in many
product lines.

While each of the four promotion components need not be included in each
period's activities, they do need to work in concert to produce a maximum impact
on the target market(s). For example, the manufacturer of a consumer durable
product might schedule a news release for a product innovation they hope will be
reported on about a month before the annual industry trade show where new
models are displayed to wholesalers and retailers. The preparation of advertising
brochures and product specification flyers must be scheduled to be ready for the
trade show. The sales personnel who will be staffing the company's booth at the
trade show as well as the field salesforce will need training, selling aids, and maybe
a sales contest for added motivation. In addition to the reseller market, a promotion
package for the end-user market would need to be developed.

As you can see, planning for one component of a promotion campaign leads to
considerations of a number of related pieces for a complete promotion campaign.

Annual Schedule of Activities:

1st Qtr.
Jan

Feb

Mar

2nd Qtr.
Apr

May

Jun
3rd Qtr.

5.9.4 Print Advertisement.

A "thumbnail" or rough sketch of a print media advertisement normally includes an

attention getting heading or illustration; the body, or written message; a signature
line or logo; and frequently some type of depiction of the product. The technical
aspects of print advertising are beyond the scope of this course however, you can
rely to a fair extent on your past experiences with viewing ads to guide you in what
"looks right".

(HINT: Make your message and name stand out. Don't worry about your artistic
talents or the "lifelike" appearance of any illustrations. The idea here is to present a
concept not an ad’ ready for publication.)

Print Media Advertisement "Thumbnail"/Rough Sketch

 5.9.5 Audio-Visual Advertisement.

A story board is a series of pictures that are intended to show what would be seen
by an audience and below each picture is a script specifying the sounds and text
for that scene. Frequently, the script is also used for only audio presentations such
as radio.

Story boards can also be prepared for the intermediary market as well as the
end-user market(s). Intermediary story board programs and audio presentations
are used at trade shows and during "canned" sales presentations.

Audio-Visual Story Board Example

5.9.6 Sales Promotion.

Sales promotion activities are those things done be the firm to induce or entice
someone to purchase a product for an end-use, induce intermediaries to carry and
sell, or attempt to build recognition and goodwill. Sales promotion activities might
be defined as all those inducement or enticement efforts that are not classified
under advertising, personal selling, or public relations (including publicity).

The list to the right does not exhaust the various ways that a firm might use sales
promotion activities.

Sales Promotion Activities Anticipated impact

End-Users

Coupons

Price Packs

Premiums

Samples

Rebates

Contests
 Sweepstakes

Specialty Items (caps, pens, key chains etc.)

Intermediaries
Sales awards

Premiums for salesforce achievements

Sales Aids

Contests

Trade Show Materials

5.9.7 Public Relations.

Public relations activities have become increasingly common in Australian business

firms' promotion activities. Public relations efforts are directed not only toward
channel members and potential customers of the firm but also toward other
individuals and organisations that might have an impact, positive or negative, on
any number of aspects affecting the firm. While many persons who specialise in
providing public relations services may not feel that non-professionals are capable
of developing the public relations component for promotion campaign, you can
begin to develop a basic understanding and "feel" for the area of activity.

Public Relations Activities:

1. Publicity

1. News releases about

a. Product
b. Company
c. Personnel
d. Other

2. News worthy events

a.
b.
c.

Special Events and Participation’s

1. Sponsored events
2. "Good Citizen" Participation’s
 5.9.8 Potential Competitor Actions/Reactions

List the competitor actions/reactions you anticipate due to the implementation of

your promotion strategy and action plans.

Contingency plans for competitor actions.

 6.0 Budget

You should include in your plan a projected profit and loss statement and
cash flow forecast (if required) indicating key financial ratio. Explanatory
notes should be included and take into account internal financial constraints
(eg need for positive contribution in each quarter etc).

7.0 Timing of Actions

A project implementation plan outlining the critical events and desirable

completion dates. Those familiar with project planning and critical path
analysis should produce a suitable project summary or a Gannt chart.

8.0 Control and Review Mechanisms

The mechanisms by which actions flowing from the marketing plan will be
reviewed and controlled should be indicated. These may include the control
of action plans, profitability, efficiency and effectiveness of strategies.

Further details of control mechanisms may be seen in your text.