Steps in Preparing the Marketing Plan
1. Defining the Business Situation
Situation analysis: describes past and present business achievements of the new venture.
For a new venture → show how and why the product/service was developed.
After startup → provide info on:Present market conditions.
Performance of the company’s goods/services.
Future opportunities or prospects.
2. Defining the Target Market / Opportunities and ThreatsTarget market = specific group of potential customers the venture aims at.
Market segmentation = dividing a market into definable and measurable groups for targeting.
3. Process of Segmenting and Targeting CustomersDecide on the general market or industry to pursue.
Divide market into smaller groups based on:
Customer characteristics: geographic, demographic, psychographic.
Buying situation: desired benefits, usage, buying conditions, awareness, intention.
Select target segment(s).
Develop a marketing plan integrating Product, Price, Place, Promotion, Packaging, Positioning, and People.
Consider strengths and weaknesses in the target market.
4. Establishing Goals and ObjectivesStatements of performance levels desired.
Should answer: “Where do we want to go?”
Not all goals are quantifiable.
Limit goals/objectives to 6–8.
Goals must cover key areas for marketing success.
5. Defining Marketing Strategy and Action Programs
Product (and Packaging)
More than physical characteristics.
Includes packaging, brand name, warranty, image, service, delivery time, features, style, and website.
PriceBased on costs: materials, labor, suppliers, overhead, etc.
Margins/markups: must cover overhead + profit.
Consider competition.
Place (instead of Distribution)Provides utility to consumers.
Must align with other marketing mix variables.
PromotionInform/educate potential consumers about product availability.
Methods: print, radio, TV, internet, direct mail, trade magazines, newspapers.
Balance costs vs. effectiveness in meeting objectives.
PositioningCreating a distinct image in the minds of customers relative to competitors.
PeopleInvolves employees, customer service, and all human interactions that shape customer experience.6. Marketing Strategy: Consumer vs.
Business-to-Business Markets
B2B Markets: sell to other businesses, usually in large volume transactions, more direct channel. Use trade magazines, direct sales, trade shows.
Consumer Markets: sales to households for personal consumption.
7. Budgeting and Implementation
Budgeting:
Costs should be clear.
State assumptions if necessary.
Links to financial plan.
Implementation:
Represents entrepreneur’s commitment to a strategy.
Ensure coordination and execution.
8. Monitoring the Progress of Marketing Actions
● Track results of marketing effort.
● Prepare for contingencies.
● Small adjustments = normal, big changes = poor planning.
● Weaknesses may arise from:
○ Poor market/competition analysis.
○ Unrealistic goals.
○ Poor implementation.
○ External hazards (weather, war, etc.).
§Penetration Strategy
§A strategy to grow by encouraging existing customers to buy more of the firm’s current products.
§Marketing can be effective in encouraging frequent repeat purchases.
§Does not involve anything new for the firm.
§Relies on taking market share from competitors and/or expanding the size of the existing market.
§Market Development Strategies
§Strategy to grow by selling the firm’s existing products to new groups of customers.
§New geographical market - Selling in new locations.
§New demographic market - Selling to a different demographic group.
§New product use - Selling an existing product, which may have a new use, to new groups of buyers.
§Product Development Strategies
§A strategy to grow by developing and selling new products to people who are already purchasing the firm’s existing products.
§Provides opportunities to capitalize on existing distribution systems and on the corporate reputation the firm has with these customers.
§Diversification Strategies
§A strategy to grow by selling a new product to a new market.
§Backward integration - A step back (up) in the value-added chain toward the raw materials.
§Forward integration - A step forward (down) in the value-added chain toward the customers.
§Horizontal integration - Occurs at the same level of the value-added chain but simply involves a different, but complementary, value-added chain.
1. Penetration Strategy
● Focus: Increase sales of existing products to current customers.
● Example: Park Street Coffee can launch a loyalty program (buy 5 coffees, get 1 free) or happy-hour discounts to encourage repeat
purchases.
● Evaluation: Low risk, effective for boosting customer frequency, but limited growth once the local market saturates.
2. Market Development Strateg
● Focus: Sell existing products to new customer groups.
● Examples:
○ New geographical market: Open a new branch in Dhanmondi or Gulshan.
○ New demographic: Target office workers by offering corporate coffee catering or students with student discounts.
○ New use: Promote cold coffee bottles for take-home consumption.
● Evaluation: Moderate risk, expands customer base, but requires investment in marketing and outlets
3. Product Development Strategy
● Focus: Introduce new products to existing customers.
● Examples: Add healthy snacks, smoothies, and bakery items to menu; introduce seasonal drinks (pumpkin spice latte, mango cold
brew).
● Evaluation: Uses existing reputation and customer trust, but risk lies in product acceptance and higher operational complexity.
4. Diversification Strategy
● Focus: New products for new markets.
● Examples:
○ Backward integration: Partner with or start sourcing from local coffee farmers/roasters.
○ Forward integration: Launch a mobile app for online orders and delivery.
○ Horizontal integration: Open a dessert shop or tea lounge under the same brand.
● Evaluation: Highest risk but offers long-term growth and brand diversification.
§Procedure
§Funding stage - Establishment of contract; investment of money; documentation of terms and conditions, and scope of research.
§Development stage - Sponsoring company performs actual research.
§Exit stage - Commences when technology is successfully developed; sponsoring company and the limited partners commercially reap the benefits
through either equity partnerships, royalty partnerships, or joint ventures.
§Benefits:
§Provides funds with minimum amount of equity dilution.
§Reduces the risks involved.
§Strengthens sponsoring company’s financial statements.
§Costs:
§Expending of time and money.
§Restrictions placed on technology can be substantial.
§Exit from the partnership may be too complex.
§Functions of the board of directors:
§Reviewing operating and capital budgets.
§Developing longer-term strategic plans for growth and expansion.
§Supporting day-to-day activities.
§Resolving conflicts among owners or shareholders.
§Ensuring the proper use of assets.
§Developing a network of information sources for the entrepreneurs.
§They meet the requirements of the Sarbanes-Oxley Act and the following criteria:
§Ability to work with a diverse group and commit to the venture’s mission.
§Ability to understand the market environment.
§Ability to contribute important skills to the new venture’s achievement of planning goals.
§Ability to show good judgment in business decision making.
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