2. Nature and concept of
marketing plan
A Marketing Plan is a written strategy for selling the
products/services of a new business. It is a reflection of how serious
a company is in meeting the competition head on, with strategies
and plans to increase market share and attract customers. An
effective Marketing Plan is backed by carefully collected market,
consumer and competitor information, sometimes citing professional
advice.
Why Prepare a Marketing Plan?
A good Marketing Plan will help you to improve your odds against
more experienced competitors and newly emerging ones. The Plan
enables you to recognize and take action on any trends and
consumer preferences that other companies have overlooked, and
to develop and expand your own select group of loyal customers
now and into the future.
The Plan also shows to others that you have carefully considered
how to produce a product that is innovative, unique and
marketable- improving your chances of stable sales and profits reasons for investors to financially back you.
4. Marketing Environment
Successful Companies take outside- Inside
view of the business
Recognition of new Opportunities & Threats
presented by the environment
Need is to continuously monitor & adapt to
the environment
All successful companies recognize &
respond profitably to unmet needs &
Trends
5. The Marketing Environment
Consists of the outside actors and forces that
affect a company’s ability to develop and
maintain successful transactions with its
target customers.
It has two parts:
The microenvironment (actors and forces
close to the company).
The macroenvironment (larger societal
forces).
6. Environmental forces affecting the organization,
as well as its suppliers and customers
Organization
• Marketing department
• Other departments
• Employees
Suppliers
Customers
Environmental forces
Social
• Demographic
shifts
• Cultural
changes
Economic
• Macroeconomic
conditions
• GDP
• Inflation
• Saving / Spending
• Consumer
income
• Stock market
Technological
• Changing
technology
• Impact of
technology
Competitive
Regulatory
• Alternative
forms of
competition
• Components
of competition
• Increasing
foreign
competition
• Laws protecting
competition
• Laws affecting
marketing mix
actions
• Self-regulation
• Consumerism
7. The Marketing Environment
The Microenvironment
Company: Managers working with top
management and other departments.
Suppliers: firms and individuals who provide
the resources needed by the organization to
produce its goods and services.
Marketing intermediaries: firms that help the
company promote, sell, and distribute its
goods to final buyers, e.g., travel trade
intermediaries.
8. The Marketing Environment
The Microenvironment
Marketing services agencies:
marketing research firms, advertising
agencies, media firms, and marketing
consultants.
Financial intermediaries: banks, credit
companies, insurance companies, and
other finance companies.
9. The Marketing Environment
1.
2.
3.
4.
5.
6.
7.
The Macroenvironment
consists of seven major forces:
Competition
Demographic environment
Economic environment
Natural environment
Technological environment
Political environment
Cultural environment
10. 1.Components of Competition
Entry and Exit Barriers
Product Differentiation
Number of Sellers
Market Power
Availability of substitutes
Power of Buyers and Suppliers
11. Continuum of Competition
Many
BASIS OF
COMPARISON
PURE
COMPETITION
Number of sellers
MONOPOLISTIC
COMPETITION
OLIGOPOLY
One
MONOPOLY
• # of sellers
• many sellers
• Large
• Few
• One
• Product
• Homogeneous
• Differentiated
• Similar
• Unique
• Barriers
• No barriers
• No barriers
• High
• Huge
• Mkt power
• None
• Little
• Lots
• Infinite
12. 2. Demographics
is . . . .
describing the population according
to selected characteristics such as
their age, sex, ethnicity, income, and
occupation.
13. Demographic Environment
Size & growth rate of Population
Population Age Mix
Ethnic Population Mix
Household Patterns
Shift from Mass markets to Micro
markets
14. The Marketing Environment
Demographic Environment Trends
Changing age structure of population
The changing Indian family
Geographic shifts in population
Better-educated and more white-collar
population
Increasing diversity
15. The Marketing Environment
3. Economic Environment Trends
Changes in income
Changing consumer spending patterns
Global economic patterns
Income Distribution
Saving, Debt and Credit Availability
16. The Marketing Environment
4. Natural Environment
Natural Resources and Raw Materials
Availability
Ecology and Conservation of resources
17. 5. Technological Forces
Technology is a major environmental force and
refers to inventions or innovations from applied
science or engineering research.
Some of the most dramatic technological changes
occurring now are:
the declining cost and size, and increasing power,
of microprocessors;
the convergence of television, personal
computer, and telephone technologies;
the pervasive trend toward “connectedness”
through the World Wide Web;
the emergence of biotechnology as a key
component of the economy.
18. An Environmental Scan of the India
Technological Trends
Information Age Focus
increased use of information and communication
technology – cell phones / teleconferences (ads)
growing focus on the internet as consumers and
businesses go online
expanded computer power
growing use of electronic money or “e-cash”
File Sharing
Growing concern about privacy
19. The Marketing Environment
6. Political Environment
Increased legislation and regulation affecting
business
International legislation
Government intervention in natural resource
management
Changing government agency enforcement
Growth of public-interest groups
Increased emphasis on ethics and socially
responsible actions
20. The Marketing Environment
7. Cultural Environment
Beliefs, Values and Lifestyles
Persistence of cultural values
Subcultures
21. The Marketing Environment
Responding to the Marketing Environment
Three basic options:
Passively accept the marketing environment
and do not try to change it.
Adopt an environmental management
perspective; take aggressive action to affect
the publics and forces in the environment.
Use the technique of environmental scanning
24. The four controllable factors of the
marketing mix:
Product,
Price,
Promotion,
Place
It can be manipulated to develop an
effective marketing plan, but what can
companies do about the uncontrollable
factors? Successful marketers focus on
these aspects of marketing, as well.
25. Competition. It is important for marketers to
understand their competition’s marketing mix. This
involves looking at what they are doing and how they go
about doing it. This allows you to see what they could
be doing better, and use that information within your
marketing strategy. And depending on your size, you
may be able to influence your competition when you
make the most of your signature strengths.
Economy. The current economy must also be taken
into consideration. Luxury items may not do as well in a
hurting economy. You can see the opportunities
available to offer the most affordable product.
Your marketing strategy will need to be adjusted in
order to maintain or increase your market position in
challenging circumstances.
26. Regulations. Changes in current laws and regulation are also key
factors for companies to keep into consideration. As laws and
regulations change, what kinds of products are allowed, how they
are produced, exporting and importing regulations, and shipping
can change drastically. There could be barriers of trade, such as
quotas restricting the amount of imports or tariffs that would affect
the entire market and, perhaps, necessitate and complete change in
strategy which to a nimble company can create new opportunities.
Technology. Having the latest technology can reduce costs,
improve the quality of your product, and make marketing more
effective. This can allow you to better target your customer,
produce more efficiently, and create innovative products. As
technology changes, your product or service may become obsolete,
like the many manufacturers of buggy whips after the invention of
the automobile. It is the role of marketers to monitor the
marketplace and changing technology and to adapt to those
changes.
27. Social. Marketing can be improved by paying attention
to current social trends, such as concern for the
environment and going ―green‖. Knowing what is most
important to your customers will allow you to fine tune
your marketing strategy to better target customers and
create the kind of products and services they.
29. PEST Analysis:
P – Political
E – Economical
S – Socio cultural
T – Technological
Used as decision making tool at the time of
launch of new
product/business/model/strategy
30. POLITICAL:
•Government type and stability
•Freedom of press, rule of law and levels of
Bureaucracy
Corruption
•Regulation and de-regulation trends
•Social and employment legislation
•Tax policy, and trade and tariff controls
•Environmental and consumer-protection legislation
•Likely changes in the political environment
31. ECONOMIC:
•Stage of business cycle
•Current and project economic growth, inflation and interest
rates
•Unemployment and labor supply
•Labor costs
•Levels of disposable income and income distribution
•Impact of globalization
•Likely impact of technological or other change on the
economy
•Likely changes in the economic environment
32. SOCIO – CULTURAL:
-Population growth rate and age profile
-Population health, education and social mobility, and
attitudes to these
-Population employment patterns, job market freedom
and attitudes to work
-Press attitudes, public opinion, social attitudes and
social taboos
-Lifestyle choices and attitudes to these Socio-Cultural
changes
33. TECHNOLOGICAL:
-Impact of emerging technologies
-Impact of Internet, reduction in communications costs
and increased remote working
-Research and Development activity
-Impact of technology transfer
34. PEST ANALYSIS – AVIATION SECTOR ( INDIA)
POLITICAL:
-Liberalization of the Sector
- Excise Duty and Sales Tax on Aviation Turbine Fuel
- Modernization of Airports
- Interface form Other Agencies
- Entry Barriers for New Players
ECONOMICAL:
- Contribution to Economy
- Rising Fuel Costs
- Investments in the Sector
35. SOCIAL:
- Developments in Airport Cities
- Employment Opportunities
- Ensuring a Level Playing Field
- Safety Regulation
TECHNOLOGICAL:
- Growth of Electronic Ticketing
- Satellite based Navigation Systems
- Technical Cooperation with EU
36. PEST ANALYSIS – TATA buys JAGUAR
POLITICAL:
- Strong tax incentives for inbound investors
- Strong political motivation for globalization
- Strong reputation and trust
- Adaptive legislative framework
- Negative effect on the IT industry after 2009 as the government’s
initiative of Tax holiday under STPI expires (Thinking Street 2007).
ECONOMIC:
-
Strong technical skills
Strong export base
Strong infrastructure links
Competitive labour cost model
Adaptive investment authority to technological investments
Highly mobile work force
37. SOCIAL:
- Strong science and educational culture
- Strong management culture
- Adaptive English speaking population
TECHNOLOGICAL:
- Strong R & D culture and facilities
- Strong tie-ups with western technology companies
- Adaptive to new technologies
40. Do you know how successfully
your newly developed product
will sell on the market?
Planning, development and introduction of new products
is always associated with uncertainty.
Specific knowledge regarding potential target consumers
and their probable spending on the new product
provides you with more certainty concerning the market
success of new product developments.
We can offer you precise and reliable information in this
area after conducting a market potential analysis.
41. Definition and Goals
Market potential describes the maximum capacity of a
defined market for a specific product / a service within
a defined time period.
In this context market refers to the total of all potential
consumers with a certain need or desire who are willing
or able to satisfy this need or this desire through the
purchase of products / services.
The sales potential can then be derived from the results
of the market potential analysis.
Market potential consists of the upper limit of total
demand which would theoretically be converged on at
(infinite) rise of marketing expenditures of all relevant
providers (see figure).
42. Total demand
(per time period)
Market potential
--------------------------------------------------------
Market minimum
--------------------------------------------------------Market expenditures of the
entire industry
43. Applications
Market potential analyses are especially used for growth
or unsaturated markets for which ―market size‖ cannot
simply be estimated through the actual market volume.
Market potential analysis offers decision support for
specific questions for which such as:
Exploration of potential (target) markets
Determination of company locations
Evaluation of ideas (screening) Designation of sales
areas
44. Market share
Market share is the portion or percentage
of sales of a particular product or service
in a given region that are controlled by a
company.
example, there are 100 widgets sold in a
country and company A sells 43 of them,
then company A has a 43% market share
45. Market Share
Or – you sold widgets for a total cost of
$860 and the people in the country spend
a total of $2,000 on the same widgets,
then the market share is $860/$2,000 or
43%
The two different methods of calculating
market share won't always provide the same
answer,
46. Market Share
Market share is used by businesses to
determine their competitive strength in a
sector as compared to other companies in
the same sector
47. Method 1 – Number of
Buyers
Estimate the total number of buyers in
your market and determine how
successful your competition is
Per month, estimate the number of
people that will buy your product or
service
This is your percentage
48. Method 1 – Number of
Buyers
Ex/ Organic Coffee House
Number of Tim Horton’s – 3040
Market Share = 76% of Coffee and Baked
Goods
Tim’s Sells 3 million cups a day
3,000,000/ 3,040 = 987 cups sold per day per store
987* 30 days = 29,605 per month
29,605 / .76 = 38,954 cups a month for a store to
have 100% market share in their area
49. Method 1 – Number of
Buyers
Our Organic Coffee House should get 2%
of the market, based off of the following
data… (trends that support your business)
2% of total market share or 779 cups sold
a day
38,954 * 0.02 = 779 cups sold a day
50. Method 2 – Percent of
Sales
Total Market Share of top 5 competitors and
average last five years of sales
Ex/ Organic Coffee House
Top Five Competitors
Tim Horton’s – 76% - Sales $14 billion
Starbucks – 7% - Sales $1.3 billion
Timothy’s Coffees World Inc – 4% - Sales $736 million
Second Cup – 2% - Sales $386 million
William's – 1.5% - Sales $276 million
51. Method 2 – Percent of
Sales
I think we can have a market share of
0.05% based on the following data …
(trends…)
Market share of 0.05% = $ 9.2 million sales
53. Concept
The consumer market pertains to buyers who purchase
goods and services for consumption rather than resale.
However, not all consumers are alike in their tastes,
preferences and buying habits due to different
characteristics that can distinguish certain consumers
from others.
These particular consumer characteristics include
various demographic, psychographic, behaviorialistic
and geographic traits.
Marketers usually define these consumer characteristics
through market segmentation, the process of separating
and identifying key customer groups.
54. Demographic
Characteristics
Characteristics of consumer markets based on
demographics include differences in gender, age, ethnic
background, income, occupation, education, household
size, religion, generation, nationality and even social
class.
Most of these demographic categories are further
defined by a certain range.
55. Psychographic
Characteristics
Psychographic characteristics of consumers include interests,
activities, opinions, values and attitudes.
Obviously, many magazines are geared toward a consumer's
interest.
For example, prenatal magazines target expectant mothers who are
interested in learning more about caring for a baby.
Additionally, consumer activities can include participation in martial
arts or basket weaving.
Opinions and attitudes can be both specific or general.
A company may better understand consumer opinions and attitudes
after conducting a focus group, and can use that information to
tailor advertising or marketing campaigns.
Consumer values can pertain to how a group of individuals feels
about certain social issues, which can be of interest to non-profit or
charitable organizations.
56. Behavioralistic
Characteristics
Behavioralistic characteristics can also be garnered through
marketing research.
Behavioralistic characteristics of consumer markets include product
usage rates, brand loyalty, user status or how long they have been
a customer, and even benefits that consumers seek.
Companies like to know how often their consumers visit their
restaurants, stores or use their products.
Company marketing departments usually try to distinguish between
heavy, medium and light users, whom they can then target with
advertising.
Marketers like to know which customers are brand loyalists, as
those consumers usually only buy the company's brand.
57. Geographic
Characteristics
Consumer markets also have different geographic
characteristics.
These geographic characteristics are often based on
market size, region, population density and even
climate, according to the article "Market Segmentation"
at netmba.com, a online business reference site.
A small retailer may find opportunities in a small market
in which larger competitors have no interest.
Companies that sell beachwear will likely sell more
products in warmer climates.
Consumers in different regions of the country also have
different tastes in food and style.
58. Consumer markets and
buyer behavior
Marketing and environmental stimuli enter the buyers
consciousness.
The buyer’s characteristics and decision process lead to
certain purchase decisions.
The marketer’s task is to understand what happens in
the buyer’s consciousness between the arrival of outside
stimuli and the buyers purchase decision.
59. A consumer buying behavior is influenced by
cultural, social, personal and psychological
factors.
Cultural
factor
Sub-culture
Social class
Social factor
Personal
factor
Psychological
factors
Reference
group
Age and
stages in life
cycle
Motivation
Family
Occupation
and economic
circumstances
Perception
Roles and
status
Life style
learning
Personality
and self
concept
Beliefs and
attitudes
61. Comparison of organizational
versus consumer markets
The crucial differences from a marketing
viewpoint are:
The motivations of the buyer: what the
organization will do with the product and the
benefits it seeks to obtain.
The demographics of the market.
The nature of the purchasing process and
the relationship between buyer and seller.
62. Purchase motives—Derived demand
Demand for industrial goods and services is:
Derived from the demand for consumer goods
and services.
Relatively inelastic.
More erratic because small increases or decreases
in consumer demand can, over time, strongly
affect the demand for manufacturing plants and
equipment.
More cyclical.
64. Purchasing processes and relationships –
Organizational markets are characterized
by the following:
Use of professional buying specialists
following prescribed procedures.
Closer buyer–seller relationships.
Presence of multiple buying influences.
More apt to buy on specifications.
65. Companies selling to organizational
markets needs to keep one eye on:
Possible changes in organizations’ buying
behavior for its product.
Trends in the underlying consumer markets.
Organizational marketers tend to:
Use direct selling.
Be heavy users of ―high-involvement‖ media.
66. Participants in the organizational
purchasing process:
Users
Influencers
Gatekeepers
Buyers
Deciders
67. The organizational buying center
The individuals in this group share
knowledge and information relevant to the
purchase of a particular product or service.
Marketing implications
Which individuals to target.
How and when each should be contacted.
What kinds of information and appeals each
is likely to find most useful and persuasive.
68. Organizational Buyers –
Manufacturers,
Wholesalers,
Retailers,
Government Agencies
They buy goods and services for their
own use or for resale.
70. Organization Buying
Derived Demand
Demand for industrial products and services
driven by demand for consumer products and
services. It is based on expectations of future
consumer demand.
Size of order or purchase is typically much
larger than that in consumer buying.
Number of potential buyers is usually
much smaller than in consumer buying.
71. Organizations buy products and services
for one main reason: To help them
achieve their objectives. The buying
objective is usually to increase profits
through reducing costs or increasing
sales.
72. Organizational Buying
Criteria are objective
Price
Ability to meet the quality specifications
required for the item
Ability to meet delivery schedules
Technical capability
Warranties and claim policies
Past performance on previous contracts
Production facilities and capacity
73. 5 Steps in Buyer Decision
Process
Problem
Recognition
• Why do I need it?
Information Search • What exactly is this product?
Analysis of
Alternatives
• What options are available?
Purchase Decision • How exactly does purchase happen?
Post-purchase
Behaviour
2/9/2014
• Did I make the right choice?
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