MKTG 3450 – Marketing Plan Q&A I received a few questions this morning (last night) about the marketing plan that’s due next week. I prepared this document to answer those questions AND address some issues that came up with the plan in previous terms. Let’s start by getting a little perspective on the marketing plan you need to create. To do this, I’m going to ask you a series of questions… First, for the purposes of this project… Who Are YOU? – You are the “Marketing Manager” for a company called ML Backpacks. Who/What is ML Backpacks? – It is a division or wholly-owned subsidiary (your choice) of Prime Apparel formed for the purpose of “launching a new line of backpacks”. Who Am I? – In the game (simulation), I’m Susan, Chief Marketing Officer at Prime Apparel! You met me in the first Mini-Sim. I’m also Dr. Loveland, your instructor charged with assessing whether you understand and can apply the steps in the strategic market planning process! Put yourself in this frame of mind. Pretend I hired you (and a couple of dozen others) as a “marketing manager intern” at Prime Apparel. I put you through our marketing management training program that included a review of the major decisions facing marketing managers and nine tutorials that assessed your marketing decision-making skills and gave you multiple chances to master various strategic marketing concepts. Now, at the end of the program, I’ve given you one last chance to prove that you know, understand, and can apply the steps in strategic marketing planning to manage a specific marketing campaign by writing a marketing plan and then proving your skills in a simulation game… What have I asked you to do first? Develop a written marketing plan to “launch a new line of backpacks for ML Backpacks.” So, with that perspective firmly in mind… What is a marketing plan? Go to page 80 in your textbook. It is an “abbreviated example marketing plan” for a small jet taxi service. You’re going to want to follow along with that marketing plan as you read the rest of this document… What is the first step you need to take to do develop a marketing plan? Conduct a thorough situation analysis. What is the first step in conducting a situation analysis? Analyze the macro-level external environment What are the political/legal, sociocultural, technological, and economic factors that could affect your launch of a new line of backpacks? Now, you might be tempted to think this doesn’t apply to the simulation since it isn’t a real environment…you would be wrong, and here’s why… The environment may be simulated, but it behaves realistically (at least as far as it is possible in a small-scale simulation game). The system gives me the option of throwing a new change in the external environment at you every single round…and I took full advantage of that option! Some of these changes may be in the macro- level environment such as a change in consumer preferences (sociocultural). In my role as CMO of Prime Apparel, I want to know you understand the relevant factors that could affect your plans. …more importantly (at least as far as your grade is concerned), this is where you demonstrate to me (your instructor) that you can think critically about a business and identify ways that the macro-environment could affect that business. Remember that the broad goal of this assignment is to demonstrate that you understand and can apply the steps in the strategic marketing planning process…ALL the steps, not just a few of them! What do I need to do next? Analyze the competitive environment. You’ll start with the macro-competitive factors discussed in the example (threat of new entrants, rivalry among existing firms, threat of substitutes, and bargaining power of buyers and suppliers). Remember that you are thinking about the backpack market as a whole…what are the macro-competitive forces in that market. The simulation doesn’t give you this information, you’re going to need to think critically about the elements and discuss how they would influence competition in the backpack market…the real backpack market, not just the simulated one! You should also do a thorough analysis of your specific competitors. For the simulation, you actually have two groups of competitors to consider…the simulated competitors in the game AND your classmates who are playing the same game. You have five simulated competitors in the game. What do you know about them that could influence the market segment(s) you target and the product/price/promotion/distribution strategies you choose to reach that target! What will you need to do to beat them on the KPIs shown in the guidelines (net profit, ROM, mkt share, revenue, units sold, customer satisfaction, and product satisfaction)? If you didn’t take notes related to competitive actions in the mini-sim, you can use the tutorial to get a feel for who they are targeting and what strategies they are likely to pursue. Your second group of micro-competitors is the other students playing the game. The “instructor assigned” grade does the same thing the simulation grade does but it compares your results to your classmates’ results. It is important to consider that it is possible to beat the simulated competitors with a fairly large variety of strategic choices. The simulated competitors will adjust to you and to each other… your presence in the simulation influences the strategic choices of the other competitors and their choices should influence you. That’s not the case in the competition with your classmates since you do NOT know what they are doing…you don’t know how much revenue or profit they are earning and you don’t know how many units they are selling. Thus, you need to pay attention to the Maximum and Average benchmarks I gave you in the guidelines…if you’re underperforming, you might want to adjust your strategy (or expect a low grade for the 2 nd part of your simulation grade). What else do I need to analyze in the environment? You need to conduct a SWOT analysis, which means you need to identify the internal strengths and weaknesses of ML Backpacks. Most of this will be made up by you since the game doesn’t tell you much about the company characteristics…but some of it should be obvious (hint, one weakness is that you’re a new company with no experience in the market). End the situation analysis section with a SWOT matrix like the one shown that identifies the broad strategic options for ML Backpacks to enter the backpack market. What is the next step in strategic marketing planning? Conduct market research. There’s quite a bit of market research results provided in the simulation, especially about the target market. Some of it is secondary research (e.g., reach & pricing of promotional methods) and some is obviously primary research (market size & preferences, response to positioning messages, etc.). This section should summarize key research findings that would influence your choice of a broad strategy for entering the backpack market. …and you can treat the tutorial as “test marketing” to collect additional information about competitors, the backpack market, and the relationship between outcomes and various product, price, place, and promotion options. Report results that you’ll use later to justify your choice of a basic strategy for entering the market. What’s the next step in strategic marketing planning? Set your goals and objectives. I would suggest you set goals related to the KPIs since that is what determines your score against the simulated competitors in the game AND the real competitors outside the game! This section can be a list of broad goals and specific objectives. Demonstrate understanding of the characteristics of effective objectives you learned in previous coursework (for example, SMART objectives – Specific, Measurable, etc…). What’s the next part of a marketing plan? Identifying your target market. Specifically, you need to talk about market segmentation, explain which segment you are targeting, and how you will position your company/product to that segment. The simulation gives you a TON of information about the different market segments…and you can generate more information using the tutorial. Here is where you prove to your boss (me) and your instructor (also me) that you understand how marketers segment markets (what variables are most important, how do demographic or other differences influence needs and demands of each market). Use appropriate terminology…Chapter 7 tells you the broad categories of variables that can be used to segment consumer markets (e.g., demographics, psychographics, etc…)…demonstrate that you understand that by classifying the information the simulation gives you about each market segment. Next you would select your target. While, in the real world, you might select multiple markets, the simulation allows you to specify only one of the 5 possible segments as your target. Note that, with the data, you may be able to identify a secondary target for most backpack designs (another group that, while not your biggest customer group, might also buy your backpack with the right distribution, pricing, positioning, and advertising strategies. In the plan, you’ll explain and justify your choices for a primary target market (and for the secondary target if applicable). Finally, in this section you want to tell me how you will position ML backpacks relative to your competitors to serve the selected target. For example, if you think your market is price conscious, then you’d mention the importance of pricing at or below competitors. Etc… What comes after the discussion of market segmentation, targeting & positioning? Marketing mix strategies. Here you’re go through each of the marketing mix elements (product, place, price, promotion) and explain your strategy for reaching your selected target market. For example, for product, you could clip an image of your backpack from the tutorial and describe why you selected the features you selected. For price, you might say something like, “We set a price of $___ because it provides a gross margin of ___% or $___ and is slightly ___________ with the average price the target market is willing to pay. We also believe this price blah, blah, blah, blah. Do I need to talk about implementation? Yes. This section would be somewhat less detailed than a real world marketing plan that would include such things as assigning responsibilities to employees and providing an implementation calendar. However, there is still information you can include to demonstrate your understanding of what’s involved in implementing a marketing plan. You can give me a broad calendar (in the Q1 we will advertise in ____ and ___, in Q3 we will modify/add ______ to reach out to our secondary target…blah, blah, blah…). This only needs to be a paragraph or so. You’ll want to include a sales forecast and a budget…you can obtain the numbers for this by playing with the tutorial. …and you might want to forecast both $ sales (revenue) and unit sales since both are important KPIs used to judge your performance. What results do you expect in Q1…at the end of year 1?…at the end of year 2? How much money will you need to implement the plan? What is your promotional budget per quarter? Year? Finally, wrap up a brief discussion of some control measures. What KPIs will you monitor to make sure you’re on track to achieve your long-term goals…how you might respond if your strategies aren’t working the way you expected at the end of the first quarter?…the first year? Wrap it all up and put it in a pretty package…add a cover page, an executive summary, professional formatting (single space please), maybe some graphs or images or ?? to make it look like something you would hand to the CMO of a large company or to the upper managers at your workplace who asked you to provide a plan for a similar marketing project…