Franchising: An Entrepreneur’s Guide

4e
by Richard J. Judd and Robert T. Justis
Ch. 5 - The Franchise Marketing
Process
Introduction

A marketing strategy: identifying one or more target markets and

creating a marketing mix.
The marketing mix: controllable factors to be considered in
combination to satisfy the needs or wants of customers in the
target market.
Strategic Planning in Franchising

The franchisor’s principal responsibilities:

1. Business’ image
2. Determining the market direction
3. Recruitment and selection of franchises
4. Grand opening and ongoing advertising programs in support of
the local franchisees’ units.
The Changing Marketplace

The franchisor and the franchisee need to be sensitive to the

changing habits, tastes, desires, and spending patterns of their
customers.
Of particular concern is the changing demographic patterns in the
21st century
Problems in Applying Strategic Planning to Smaller
Businesses
The small firm usually doesn’t have specialized staff personnel
readily available.
A small business owner often lacks the time to step back and
evaluate, plan, and objectively determine what should be the next
step.

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Steps in Strategic Planning

Franchise organization mission- A successful franchisor asks

and answers these questions.
 What is my business?
 Who is my customer?
 What are the needs of my customer?
 What do I want my business to be in the long run?

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Steps in Strategic Planning

Hierarchy of objectives- use the mission statement to formulate

a detailed set of supporting objectives for
 the major functions of the business
 the distribution network

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Steps in Strategic Planning

Determining Niche(s)-
 a segment of the total line of products and services offered by
competitors within the industry
 a predetermined group of customers targeted according
– size of group
– income level
– location.

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Products and Services

When planning for future success, the franchisor should always

keep possible synergies in mind
By combining products and services, a franchisor can maximize
the value of his business both to the consumer and potential
franchisees

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Marketing Strategy for Continuity and Growth

To ensure sustainable growth, a marketing strategy should include

the following elements:
Objectives
Threats and Opportunities
Target Markets
Marketing Strategy for Continuity and Growth

To ensure sustainable growth, a marketing strategy should include

the following elements:
Product Mix
Plans of Action
Market Research and Intelligence
Determining the Marketing Mix

Set of controllable elements put together to reach the target

market.
The marketing mix includes the following:
1.product
2.place
3.price
4.promotion
Product

Is made of a unique set of physical and “psychological” attributes

designed to satisfy the wants or needs of a group of people.
Consistency a key franchise product attribute
 By failing at product consistency, one franchise can measurably
hurt the business of other franchisees.
The Service as a Product

1. Perishability- a particular service cannot be stored for a period

of time.
2. Intangibility- product/service can not be seen, touched,
smelled, tasted or heard prior to purchase.
3. Variability- the random levels of quality that the customer can
receive as they purchase/receive/consume the service.
4. Inseparability- the simultaneous production and consumption
of a service.
Changes in Market Strategy

Product Life Cycle

introduction- a period of slow, gradual sales growth
growth- the life-cycle curve takes a dramatic upward surge
maturity- the rate of sales growth slows and ultimately, sales level
off
decline- sales volume drops as demand shifts to other products
Other Marketing Concerns

Target Marketing
The explosion in the choices available to consumers has made
the marketer’s job much more complicated.
This requires a strenuous rethinking of brands and target markets
New Product Development
Innovation doesn’t stop with initial success – it is needed to
ensure long term growth

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Other Marketing Concerns

Assess the Marketing Program’s Effectiveness

Even the perfect plan on paper requires some tweaking to
maximize its effectiveness, therefore an appropriate assessment
protocol is needed to maximize its value

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Effective Tactical Execution

1. Strategies are to be crafted, not calculated.

2. Learning, flexibility and adaptability are critical (new) norms.
3. Belief in the franchise system vision and mission.
4. Franchise system’s culture is of crucial importance.
5. A feeling of brand “ownership” and loyalty to the company is
paramount.
6. Effective communication across and within all organization
levels.

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Questions?