Chinelas Havaianas

Anfilofio Furnkranz

Instructor: Dr. James Schiro

Word Count – 2637

London, August 2010

 Table of Contents

1. Executive summary 3
2. Situation Analysis 4
2.1 Market Summary 5
2.11 Market Growth 5
2.2 SWOT Analysis 6
2.21 Strengths 7
2.22 Weaknesses 7
2.23 Opportunities 7
2.24 Threats 7
2.3 Competition 8
2.4 Product Offering 8
2.5 Key to Success 9
2.6 Critical Issues 10
3. Marketing Strategy 10
3.1 Mission 11
3.2 Marketing Objectives 11
3.3 Financial Objectives 12
3.4 Target Markets 13
3.5 Positioning 13
3.6 Strategies 14
3.7 Marketing Mix 14
3.8 Marketing Research 15
4. Financials 15
4.1 Break-Even Analysis 15
4.2 Sales Forecast 15
4.3 Expense Forecast 16
5. Controls 17
5.1 Implementation 17
5.2 Marketing Organization 18
5.3 Contingency Planning 18
6. Bibliography 21
7. Appendices 23
8. Glossary 23

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1. Executive Summary

This marketing plan would touch briefly the strategic

positioning by market, delivering value by segment, and tactical
application by segment of Havaianas.

Havaianas is preparing to enter the expensive high-valued

United Kingdom sandals market. We will compete with low-cost
sandals produced in Brazil and in other emergent countries that
made their way into the market, but it prepares to offer different
brand propositioning of wearing sandals. Havaianas will target a
broad spectrum of the consumer and business markets, taking
advantage of the growing interest of having a relax attitude to
life, observed in many levels of society. The primary marketing
objective is to achieve a market penetration of 17 pairs of
Havaianas (Italy’s threshold) per thousand habitants/annum as a
final target in the UK, from 2 pairs (UK’s average consumption)
today, surpassing the USA’s market penetration which presents
8 pairs of Havaianas consumed per thousand habitants/annum.
That means selling 1,105,000 million pairs in the UK instead of
165,000 thousand per annum as a final target of the marketing
plan. For the first year nevertheless the target is to achieve
something between 5 to 6 pairs, the same level of Spain. The
annual growth target is plus 2 pairs per 1000
inhabitants/annum.

Nevertheless to gain market share Havaianas must answer the

following questions carefully:

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What business are we in?

What future position do we aspire to?

What is our planning horizon?

What core competencies will get us there?

What segments and customers will help us get there?

What measure of success (including financial) will we use?

2. Situation Analysis

Alpargatas Group (http://br.havaianas.com/pt-BR/home/) first

designed inexpensive cloth shoes for Brazilian coffee farmers
back in 1907. More recently and continuing with its footwear
tradition, the Havaianas brand owed by Alpargatas
(www.alpargatas.com.br) expanded worldwide, in countries with
a strong beach culture where consumers already wear sandals.

Havaianas is entering an unmatched phase of international

growth since 1994. A comprehensive marketing plan is
required to reach profitability in the UK, by Internet selling and
other channels, ensuring future success outside Brazil.

Sandals are increasingly popular item generating a turnover of

£22.5 million in 2009 for Alpargatas in USA and Europe alone,
up 159% from the previous year. Nevertheless competition is
intense, and pricing pressures squeeze profitability.

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2.1 Market Summary

The market consists of consumers who prefer to have a relaxed

attitude to wearing sandals when staying indoors or going out
for leisure time, not on situations that requires a more formal
outlook but on situations where informal attitude is required,
like going shopping, buying groceries, taking the family to the
cinema, to the beach, to the museum, parks, and so on and so
forth. Those are the common attributes of its customers,
enhancing the understanding of its target market, its specific
needs, and leveraging even further the communication between
company and its customers. First year and subsequent years the
broad consumer base will be targeted, including men and
women, and children. (Target Market Forecast – Appendix 1)

Jennifer Aniston Angelina Jolie Cameron Diaz

2.11 Market Growth

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The market for sandals is steady growing market. Regardless of
the economic climate, most of us seem not to be concerned in
spending a few dollars, pounds, or Brazilian Reais to purchase
sandals, as prices are affordable. At Alpargatas sales of
Havaianas has been growing by a steady 8 percent each year.
For example in 2008 the company sold 184 million pairs, 25
million of which were sold outside Brazil - 13.5% abroad. Inside
Brazil, the company has achieved the amazing brand
penetration rate of 850 pairs sold per 1000 inhabitants/annum
but there is more scope to growth abroad, specially in the UK,
maybe achieving between from 15% to 20% of total sales. No
further diversification will be required in this case, but only
through market extension. To reduce risks Internet will be used
as a platform for sales and the company will look for further
partnerships to sell the product.

2.2 SWOT Analysis

The following SWOT analysis captures the key strengths and

weaknesses within the company, and describes the
opportunities and threats facing Havaianas.

The company is looking for combination of values, operational

excellence, product leaderships and customer intimacy,
operating also a push strategy with partnerships and pull
marketing using Internet and others methods of marketing.

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The company though would strike a balance between chasing
market opportunities and managing our internal assets, closing
the gap to the desired position slowly but steadily.

2.21 Strengths

Focusing on extremely strong relationships with distributors

and franchisees abroad. Possibility of giving great discounts.
Low-cost strategy combined with a differentiation in outlook,
using strong and vivid colors to enhance the brand. An efficient,
and stylish Internet store and website. Pricing: out product still
being priced at the lower end of the market, which gives us an
edge with price-conscious customers.

2.22 Weaknesses

Struggling to build brand equity abroad with a lack of brand

awareness, but the issue will be addressed with aggressive
promotion. Finally the company needs to understand that
forecasting fashion is difficult but necessary to profitability.

2.23 Opportunities

The industry seems to be immune to recessions. The company

has the ability to operate on a low-cost structure relative to
competitors. There is a low-cost operational structure within the
company, using a lean structure to compete.

2.24 Threats

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The possibility of new competitors entering the sandals market
with a similar business model and appealing image. Downward
pressure on pricing and completely misjudging where shoes
wearing fashion is heading.

2.3 Competition

List of competitors

Key direct competitors to Havaianas (vibrant with vivid colors

and a marketing strategy of international penetration):

Ipanema Sandals (www.ipanemaflipflops.co.uk)

Azaleias Sandals (www.azaleia.com.br)

Indirect competitor that follows the similarity in shoes

production:

Grendene Brazil (www.grendene.com.br)

Chinese Manufacturers

Despite the strong competition, Havaianas can still carve out a

definite image as a well-known brand.

2.4 Product Offering

Havaianas sells sandals. The general categories of shoes that

are sold by a broad numbers of competitors are: upscale shoes,
stylish work shoes, loafers, dress shoes, and canvas
athletic/stylish shoes.

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Alpargatas started reposition the Havaianas brand more than a
decade ago. New products were introduced with over 300 shoes
of varying colors and styles – and a new emotional personality
was created for the brand as shown in the front-page picture. It
is a result of a carefully orchestrated brand reinvention strategy
taking years to come to fruition. That results on a customer’s
appreciation of variety selection of available shoes making the
experience of finding the perfect pair of sandals an enjoyable
exercise.

2.5 Keys to Success

The keys to success are to meet the international demand for

sandals with a wide selection and focused customer attention
with fashionable designs, and wider selection. Also key points to
success is segmentation, an the management of priority target
segments, with segment managers, brand managers or/and
supply chain managers later to be employed or considered, not
forgetting to address the management of lower priority
segments. The segmentation administrative function would help
to plan the horizon, volume, revenue and profitability, segment
share, and actual share, competitive position to aim for,
timetables and finally a summary of main activities.

Havaianas has a value proposition, the vivid attitude to life that

implies wearing sandals while being formal at the same time:
the proposition is real to customer’s perspective, it is quantified,
relevant, much better suited as it is accompanied Brazil’ image

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as a country, and can reward the company with the expect
outcomes, further penetration in international markets.

Barack Obama – USA President

2.6 Critical Issues

Its critical issues are to continue to take a modest international

expansion approach, and expand internationally at a reasonable
rate, not for the sake of expansion in itself, but because it is a
value creation and a prudent approach. Distribution is a critical
issue and important channel partners will be chosen and they
include superstores, shoes stores, fashion stores, sandals
specialty stores, online retailers and through its own website
(www.havaianas.com).

3. Marketing Strategy

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The challenge for Havaianas is to grow without losing its edge.
New ideas come from establishing a network of inspiring
collaborations with people and companies, evolving the brand’s
communications by adding more edge and originality to its
advertising.

Another form of marketing to be described later in detail will be

Internet selling. The strategy of Internet selling is to increase
the target customer's awareness of Havaianas.

Feed on the reputation of global brands as a way to raise its

profile globally, the brand has joint distribution and product
development efforts with brands like Celine, HStern, The Gap
and Swarovski.

3.1 Mission

Havaianas exist to attract, increase, and maintain the customer

based, at the same increment international sales by Internet
selling. The company will adhere to its core product and service,
exceeding always customers’ expectations.

3.2 Marketing Objectives

Increase repeat customers. Decrease customer acquisition costs.

Build an effective Internet campaign, bringing in new customers
at an increased rate. The main marketing objective is to make
customers to see the sandals is not only a simple basic holiday
sandal (rubber sole, two straps), but sandals with bright colours

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and a colourful and vivid brand that give an idea of fashion and
relaxation and total concentration. Curiosity is what the brand
will try to achieve, but uniqueness, colourfulness will help
identify the sandals with Brazil, as a holiday or relaxation
destination or life style.

The brand has left the working-class target origin to venture to

middle-class, towards now to the likes of Jennifer Aniston, Kelly
Slater, John Paul Gaultier.

Here in the UK it would be no different: free publicity generated

by international stars wearing the sandals, word-of-mouth
expansion, and aspirational advertising campaigns, some styles
marketed also alongside some designers like Lacoste and John
Galliano of Dior.

The idea to follow the same plan used to penetrate other

international markets: the use of a dedicated, persistent and
committed marketing department, maintaining a clear focus on
the product, as flexible as possible (low-cost), as fast as
possible (competitive formula), making it harder to competitors
to get a foothold.

3.3 Financial Objectives

Experience the required growth rate internationally, reducing

costs, and reaching international sales target by a set time scale.

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First-year sales revenues are projected to be between £2.6
million to £6.6 million, based on sales of 325 thousand to 390
thousand pairs of the Havaianas at a unit price of £8 to £17
each, depending on discounts, promotions, channels, wholesale
or retail. Going forward the prices will be reviewed and adjusted
under a wider pricing strategy to tackle new opportunities and
threats.

Company Overall Objective

Overall is to increase to 15% to 20% the pairs sold outside Brazil

compared to total production. Just as illustration in Brazil the
market penetration is 842 pairs of sandals sold per 1000
inhabitants/annum.

3.4 Target Markets

Havaianas is targeting all demographical segments on chosen

geographical areas of international expansion, covering broad
categories of people that expresses a joyful way of life, vibrant
attitude, with colourful and bold tendencies towards life,
including high-earners, professionals, but also people with low
disposable income.

3.5 Positioning

Havaianas will leverage their competitive edge to achieve this

desired positioning, e.g. international expansion. Its competitive
edge includes an unmatched selection in colors and styles. This

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selection will be achieved in two ways. The first is a very specific
effort to carry as many styles of sandals as possible. The
competitive edge is the recognition of this unserved niche and
the serving of this demand. The second will be able to offer a
large selection through a unique inventory model that stocks a
large number of styles.

3.6 Strategies

Havaianas' marketing strategy will seek to create international

customer awareness of their products, enhancing the customer
base, working towards building customer loyalty.

Other methods of communication would be Internet selling and

strategic relationships with other fashion chains.

Product: the brand, and the colours will be also displayed on

packaging and campaigns.

Pricing: expecting to lower the price of the model as sales

increments, bringing new desirable channel partners and taking
share of established competitors.

Distribution: selective distribution, Internet, well-known stores

and online retailers, with demonstrations or products, full-
colour photos and vivid displays, plus arrangements towards
special payments terms for retailers that place volume orders.

3.7 Marketing Mix

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Havaianas marketing mix is comprised of specifics approaches
to pricing, distribution, advertising and promotion, and
customer service. It includes trade sales promotion campaigns.

3.8 Marketing Research

Internet would be the main conduit of marketing research

because of time constraints to conduct any in depth research on
this paper focused on surveys, focus groups, analysis of
customer’s attitudes, brand awareness research, and customer
satisfaction studies to measure market reaction.

4. Financials

This section will offer a financial overview of Havaianas and

Alpargatas as it relates to the marketing activities. Havaianas
will address break-even analysis, sales forecasts, expense
forecasts, and how those link to the market strategy.

4.1 Break-Even Analysis

The break-even analysis indicates how many items will be

needed to reach the break-even point, including break-even
analysis, using assumptions like average estimated monthly
fixed cost. (Appendix 4 – Break-Even Analysis)

4.2 Sales Forecast

The first month will be used to set up the Internet store in a

chosen country. Employees will be hired and inventory will be

15
purchased. There will be no sales activity during a set number
of months. At determined month Havaianas will begin to see
sales activity, all according to a forecast showing at what month
sales will really begin to pick up.

Penetration Country Objective (Appendix 2 – Monthly Sales

Forecast)

Key Performance Indicators

UK market share: 5 to 6 pairs per a thousand

inhabitants/annum

UK total unit sales between 325,000 to 390,000 pairs per a

thousand inhabitants/annum

First-year sales revenues: between £2.6 million (worst projection)

to £6.6 million (best projection)

Unit price between £8 to £17 each

Second-year and going forward: review of pricing strategies

upon completion of first year.

4.3 Expense Forecast

The marketing expenses will be higher relative at the beginning

of operations compared to other months as trading progresses,
when Havaianas is trying to generate interest.

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The Expense Forecast would include Marketing Expense Budget
for over seven years, including advertisements and other
expenses, showing also total sales and marketing expenses on
different rows, finally showing a percent of sales as forecasted.

The marketing expense budget is a percentage of the sales

turnover of the previous year with a budget gap based on the
difference between last year and the current year for any threats
that might appear against the business (please see SWOT
analysis), with the exception of first year (fixed amount) that
requires a higher expenditure on marketing plan, given the
department the financial flexibility to invest in marketing on a
step strategy as to achieve the required growth of 2 pairs plus
per 1000 inhabitants/annum. (Appendix 3 – Marketing Expense
Budget)

5. Controls

The purpose of Havaianas' marketing plan is to serve as a guide

for the organization. The following areas will be monitored to
monitor performance: revenue (monthly and annual), expenses
(monthly and annual), repeat businesses and customer
satisfaction.

5.1 Implementation

The following milestones identify the key marketing programs.

It is important to accomplish each one on time and on budget.

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 Milestones (Appendix 5)

Marketing plan completion

Web Development

Initial Advertisements

Initial Printed Material

Discretionary Spending

Market Penetration

Tight controls would be implemented to measure and monitor

quality and customer service satisfaction. Any deviation from
the plans would be investigated with variance analysis and key
performance indicators comparison.

5.2 Marketing Organization

A team located in the United Kingdom will be formed to handle

national sales campaigns, trade and consumer sales promotions,
and public relations efforts, but ultimate overall responsibility
would be with chief marketing officer.

5.3 Contingency Planning

Difficulties and risks:

Problems reaching the break-even point due to lack-luster sales.

Worst risks may include:

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Determining that the business cannot support itself on an
ongoing basis.

Having to liquidate equipment/inventory to cover liabilities.

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6. Bibliography:

Alpargatas (2005) Welcome [Online]. Available from:

http://www.alpargatas.com.ar/english/index2.htm (Accessed: 27 July 2010)

Anderton, A., Hall, D., Jones R., & Raffo, C. (2009) Business Studies. 4th ed.
London: Pearson Education International

Anthony, S.D., Christensen, C.M., & Raynor, M.E. (2003) ‘Six Keys to
Building New Markets by Unleashing Disruptive Innovation’, E-Partner. The
Online Agent, [Online]. Available from:
http://hbswk.hbs.edu/item/3374.html (Accessed: 10 July 2010)

Cheverton, P. (2004) Key Marketing Skills. 2nd ed. London and Sterling:
Kogan Page

Chung, T.S., & Rust, R.T. (2006) ‘Marketing Models of Service and
Relationships’, Marketing Science, 25, November-December, pp. 560-580

Christensen, C.M., & Raynor, M.E. (2003) ‘The Innovator’s Solution’,

Concentrated Knowledge for the Busy Executive, [Online]. Available from:
http://www.theinnovatorssolution.com/book.html#Anchor-41701
(Accessed: 10 July 2010)

Davies, H., & Lam, P. (2001) Managerial Economics. An Analysis of Business

Issues. 3rd ed. London: Pearson Education Limited

Evans, P., Shulman, L.E., & Stalk, G. (1992) ‘Competing on Capabilities’, In

Harvard Business Review, ed. Harvard Business Review on Corporate
Strategy. Boston: Harvard Business School Press, 1999, pp. 171-204

Gamble ,J., Strickland, III A. J., & Thompson, A.A.Jr. (2008) Crafting and
Executing Strategy. The Quest for Competitive Advantage: Concepts and
Cases. 17th ed. London: McGraw-Hill Irwin International Edition

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Gapper, J., 2010. Chief of Confusion. The Financial Times Online, [internet]
14 April. Available at: http://www.ft.com/cms/s/0/9fb7c20a-475e-11df-
b253-00144feab49a.html [Accessed 16 July 2010]

Grande, C., 2007. The risk of extension. The Financial Times Online,
[internet] 4 June. Available at: http://www.ft.com/cms/s/0/9fb7c20a-
475e-11df-b253-00144feab49a.html [Accessed 16 July 2010]

Gratton, L., 2010. The winds of change are blowing towards the workplace.
The Financial Times, 26 Jul. p. 14

Gulati, R., 2010. Wanted: a new approach to inventiveness. The Financial

Times, 27 Jul. p. 12

Havaianas (n.d) Home [Online]. Available from:

http://www.lojasrenner.com.br http://br.havaianas.com/pt-BR/home/
(Accessed: 27 July 2010)

Jacobs, E., 2010. Navigating Cultural Difference. The Financial Times, 20

Jul. p.14

Lacey, R., & Sneath, J.Z. (2006) ‘Customer Loyalty programs: are they fair to
Consumers?’, Journal of Consumer Marketing, Volume 23, Number 7, pp.
458-464

Lemon, K.N., Rust, R.T, & Zeithaml, V.A. (2004) ‘Customer-centered Brand
Management’, Harvard Business Review, September 2004, pp. 1-10,
[Online]. Available from: http://scholar.google.co.uk/scholar?q=customer-
centered+brand+management&hl=en&btnG=Search&as_sdt=2001&as_sdt
p=on (Accessed: 16 July 2010)

Kanter, R.M. (2003) On the Frontiers of Management. 1st ed. Boston:

Harvard Business School Publishing

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Keller, K.L. & Kotler, P. (2009) Marketing Management. 13th ed. London:
Pearson Education International

Rosenzweig, P. (2008) ‘Best Business Books 2008: Strategy. A Tale of Two

Competitors’, Strategy + Business, Winter 2008, Issue 53 [Online].
Available from: http://www.strategy-business.com/article/08408b?pg=all
(Accessed: 10 July 2010)

Vecchio, R.P. (2006) Organizational Behaviour: Core Concepts. 6th ed.

Mason, U.S.A: Thomson South-Western

Wreden, N. (2009) ‘The Promise of Self-Segmentation’, Strategy + Business,

October 2009, [Online]. Available from: http://www.strategy-
business.com/article/00004?pg=all (Accessed: 14 July 2010)

7. Appendices

(Please see Attachments)

8. Glossary

(Source: Keller, K.L. & Kotler, P. (2009) Marketing Management. 13th ed.
London: Pearson Education International)

A
advertising any paid form of non personal presentation and promotion of ideas,
goods, or services by an identified sponsor.

B
brand a name, term, sign, symbol, or design, or a combination of them, intended
to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors.
brand awareness consumers’ ability to identify the brand under different
conditions, as reflected by their brand recognition or recall performance.
brand dilution when consumers no longer associate a brand with a specific
product or highly similar products or start thinking less favorably about the brand.
brand elements those trademarkable devices that serve to identify and

23
differentiate the brand such as a brand name, logo, or character.
brand equity the added value endowed to products and services.
brand extension a company’s use of an established brand to introduce a new
product.
brand image the perceptions and beliefs held by consumers, as reflected in the
associations held in consumer memory.
brand knowledge all the thoughts, feelings, images, experiences, beliefs, and
so on that become associated with the brand.
brand line all products, original as well as line and category extensions, sold
under a particular brand name.
brand mix the set of all brand lines that a particular seller makes available to
buyers.
brand personality the specific mix of human traits that may be attributed to a
particular brand.
brand portfolio the set of all brands and brand lines a particular firm offers for
sale to buyers in a particular category.
brand value chain a structured approach to assessing the sources and
outcomes of brand equity and the manner in which marketing activities create
brand value.
branding endowing products and services with the power of a brand.
branding strategy the number and nature of common and distinctive brand
elements applied to the different products sold by the firm.
breakeven analysis a means by which management estimates how many units
of the product the company would have to sell to break even with the given price
and cost structure.

C
company demand the company’s estimated share of market demand at
alternative levels of company marketing effort in a given time period.
company sales forecast the expected level of company sales based on a
chosen marketing plan and an assumed marketing environment.
competitive advantage a company’s ability to perform in one or more ways that
competitors cannot or will not match.
core benefit the service or benefit the customer is really buying.
core competency attribute that (1) is a source of competitive advantage in that
it makes a significant contribution to perceived customer benefits, (2) has
applications in a wide variety of markets, (3) is difficult for competitors to imitate.
core values the belief systems that underlie consumer attitudes and behavior,
and that determine people’s choices and desires over the long term.
corporate retailing corporately owned retailing outlets that achieve economies
of scale, greater purchasing power, wider brand recognition, and better-trained
employees.
customer training training the customer’s employees to use the vendor’s
equipment properly and efficiently.

24
delivery how well the product or service is delivered to the customer.

E
e-business the use of electronic means and platforms to conduct a company’s
business.
e-commerce a company or site offers to transact or facilitate the selling of
products and services online.
e-marketing company efforts to inform buyers, communicate, promote, and sell
its products and services over the Internet.
e-purchasing purchase of goods, services, and information from various online
suppliers.
exchange the process of obtaining a desired product from someone by offering
something in return.

F
fixed costs (overhead) costs that do not vary with production or sales revenue.
forecasting the art of anticipating what buyers are likely to do under a given set
of conditions.

G
global firm a firm that operates in more than one country and captures R&D,
production, logistical, marketing, and financial advantages in its costs and
reputation that are not available to purely domestic competitors.
global industry an industry in which the strategic positions of competitors in
major geographic or national markets are fundamentally affected by their overall
global positions.

I
image the set of beliefs, ideas, and impressions a person holds regarding an
object.
industry a group of firms that offer a product or class of products that are close
substitutes for one another.
innovation any good, service, or idea that is perceived by someone as new.

J
joint venture a company in which multiple investors share ownership and
control.

L
life-cycle cost the product’s purchase cost plus the discounted cost of
maintenance and repair less the discounted salvage value.
lifestyle a person’s pattern of living in the world as expressed in activities,
interests, and opinions.
line extension the parent brand is used to brand a new product that targets a
new market segment within a product category currently served by the parent
brand.

25
line stretching a company lengthens its product line beyond its current range.
loyalty a commitment to rebuy or re-patronize a preferred product or service.

M
market demand the total volume of a product that would be bought by a defined
customer group in a defined geographical area in a defined time period in a
defined marketing environment under a defined marketing program.
market forecast the market demand corresponding to the level of industry
marketing expenditure.
market logistics planning the infrastructure to meet demand, then implementing
and controlling the physical flows or materials and final goods from points of
origin to points of use, to meet customer requirements at a profit.
market potential the upper limit to market demand whereby increased
marketing expenditures would not be expected to stimulate further demand.
marketing process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to create exchanges
that satisfy individual and organizational goals.
marketing implementation the process that turns marketing plans into action
assignments and ensures that such assignments are executed in a manner that
accomplishes the plan’s stated objectives.
marketing management the art and science of choosing target markets and
getting, keeping, and growing customers through creating, delivering, and
communicating superior customer value.
marketing plan written document that summarizes what the marketer has
learned about the marketplace, indicates how the firm plans to reach its
marketing objectives, and helps direct and coordinate the marketing effort.
marketing research the systematic design, collection, analysis, and reporting of
data and findings relevant to a specific marketing situation facing the company.
mission statements statements that organizations develop to share with
managers, employees, and (in many cases) customers.

P
penetrated market the set of consumers who are buying a company’s product.
perceived value the value promised by the company’s value proposition and
perceived by the customer.
perception the process by which an individual selects, organizes, and interprets
information inputs to create a meaningful picture of the world.
potential market the set of consumers who profess a sufficient level of interest
in a market offer.

R
risk analysis a method by which possible rates of returns and their probabilities
are calculated by obtaining estimates for uncertain variables affecting
profitability.

26
sales analysis measuring and evaluating actual sales in relation to goals.
sales budget a conservative estimate of the expected volume of sales, used for
making current purchasing, production, and cash flow decisions.
sales promotion a collection of incentive tools, mostly short term, designed to
stimulate quicker or greater purchase of particular products or services by
consumers or the trade.
sales quota the sales goal set for a product line, company division, or sales
representative.
sales-variance analysis a measure of the relative contribution of different
factors to a gap in sales performance.
satisfaction a person’s feelings of pleasure or disappointment resulting from
comparing a product’s perceived performance or outcome in relation to his or
her expectations.
service any act or performance that one party can offer to another that is
essentially intangible and does not result in the ownership of anything.
strategic brand management the design and implementation of marketing
activities and programs to build, measure, and manage brands to maximize their
value.
strategic marketing plan laying out the target markets and the value
proposition that will be offered, based on analysis of the best market
opportunities.
strategy a company’s game plan for achieving its goals.
style a product’s look and feel to the buyer.
supply chain management (SCM) procuring the right inputs (raw materials,
components, and capital equipment); converting them efficiently into finished
products; and dispatching them to the final destinations.

T
tactical marketing plan marketing tactics, including product features,
promotion, merchandising, pricing, sales channels, and service.
target market the part of the qualified available market the company decides to
pursue.
total costs the sum of the fixed and variable costs for any given level of
production.
trend a direction or sequence of events that has some momentum and
durability.

V
value proposition the whole cluster of benefits the company promises to
deliver.
variable costs costs that vary directly with the level of production.

27