Brand Management

BA5122 MBA EVE 60 A

Unit 2
Key Concepts
• Discuss the various Components of marketing plan
• Define the competitive set
• Identify the Levels of market competition
• Explain the Methods for determining competitors
• Discuss the Category attractiveness analysis
• Describe the Aggregate market factors
• Explain Category factors and environmental analysis
• State the Market Potential & Sales Forecast
• Formulate Sales Forecasting
• Discuss the Estimation of Market Potential and Sales Potential
Components of Marketing Plan
1. Executive Summary: The executive summary introduces your company and explains the major
points of your plan
Things to do:
(a) Briefly describe the nature of your business and the products or services you offer.
(b) State your mission and company objectives.
(c) Describe your management and marketing team, and the structure of your organization.
(d) Summarize the marketing objectives and strategies contained in the plan.
2. Current Situation: This section provides information about your location, target market and
competitive environment. Also, identifies key issues your company faces.
Things to do:
(b) Describe your current or planned business location.
(c) Describe you target market.
(d) Include a brief competitor and issues analysis.
Components of Marketing Plan
3. Competitor and Issues Analysis: This section includes the details of the competitor and issue
analysis.
Things to do:
(a) Include information about other individuals or companies (competitors) who offer similar
products and services as you.
(b) List key business issues that are potential challenges, such as new legislation or the impact of an
impending technological advance in your industry.
4. Marketing Objectives: As the name suggests, this section states your marketing objectives,
including the time frame for achieving them.
Things to do:
(a) List key objectives that you want to achieve through your plan.
(b) Include the time frame against each objective
Components of Marketing Plan
5. Marketing Strategy: The section including marketing strategy describes how you plan on achieving
your marketing objectives.
• Product: Describes your product or service in detail, including product features and benefits.
• Price: Describes your pricing strategy and payment policies.
• Promotion: Describes the promotional tools or tactics you will use to accomplish your marketing
objectives.
• Place: Describes how and where you will place your product so customers have access to it and how you
will make the sale.
6. Action Programs: Describes what will be done, when it will begin or be completed, and who will
accomplish the tasks.
7. Budget: Lists the cost of the marketing activities you are describing in the marketing plan.
8. Measurements: Describes numerical targets that will measure the results of implementing your
marketing plan, including time limits for achieving your goals. For example, increase sales by 10
percent in 12 months.
9. Supporting Documents: Include any supporting documents referenced in other plan sections here,
such as resumes of key personnel, spreadsheets, and market research results.
Defining the Competitive Set
Choosing your “competitive set,” is a step by step task. Data has to be gathered on each step before
the analysis can be preceded further.
1. One has to define one’s competitors in terms of primary and secondary importance.
Example: For a Fitness club or Spa, the primary competitors may be comparable properties (such as
upscale day spas within a fifty-mile radius), while the secondary competitors could be any similar
product competing for the same consumer dollars-such as fitness clubs, full-service beauty salons
and community-based wellness centers.
2. List the bases of competition and key success factors for industry success—in descending order of
importance. Then define competitive characteristics in terms of:
(a) Market segments
(b) Products offered
(c) Prices/rates
(d) Advertising programs
(e) Distribution Channels
Levels of Market Competition
The level of competition can also vary. At various levels, competition can be in
1. Product form: In this level one has to convince the customers his brand is better
than others.
2. Category: This level involves one to convince customers that his product form (like
small refrigerator) is best in a particular category (of refrigeration).
3. Generic: Generic level of competition involves the marketers to convince
customers that a particular category (refrigeration) is best way to satisfy needs (of
providing safe food).
4. Budget: Under this level of competition, the customers are convinced that generic
benefits (of refrigeration) are best use of income compared to TV, washing machine,
etc.
Factors Determining Competition
• Price • Cost advantages
• Cost of Production • Advertising and Marketing
• Demand in the Market • Research and Development
• Availability of Substitutes expenditure
• Number of existing Players in • Presence of Sunk Costs
Market • International Trade Restrictions
• Barriers to Entry • Sunk Costs
• Limit Pricing
Methods for Determining Competitors
• Substitution in Uses
• Perceptual Mapping
• Levels of Competition
• Brand Switching
• Managerial Judgment
• Geographic
• Porter’s 5 forces
Category Attractiveness Analysis
An essential component of the marketing planning process is an
analysis of a product’s potential to achieve a desired level of return on
the company’s investment. Thus the category analysis is done to define
the set of competitors against which one most often competes on a
daily basis.
Aggregate Market Factors
Aggregate market factors include those factors that are determinant of
the entire market segment.
• Category Size
• Category Growth
• Stage in Product Life Cycle
• Category Attractiveness Analysis
• Profits
Category Factors
Although the aggregate factors are important determinants of the
category attractiveness, they do not show the underlying structural
factors affecting the category. Porter developed a five force model to
assess the structure of the industries.
1. Threat of New Entrants
2. Bargaining Power of Buyers
3. Bargaining Power of Suppliers
4. Current Category Rivalry
5. Pressure from Substitutes
Environmental Analysis
Environmental factors include those factors that are outside the control
of the firm and its industry. These factors can be divided into five
categories viz.:
1. Technological
2. Political
3. Economic
4. Regulatory
5. Social
Competitor Analysis
Possible sources of competitor data using Davidson’s categorization are
mentioned in the following table:
Customer Segmentation
Market segmentation is done on the following lines:
• Geographic factors
• Demographic factors
• Psychological factors
• Socio-cultural factors (Family, Society, Cultural and sub-cultural segmentation)
• Use related
• Benefit segment
• Combination of some of the above mentioned factors.
Market Potential
Market potentials and sales forecasts are not the same thing, although the two are
sometimes used interchangeably. Market potentials typically refer to total sales
possibilities. Several different potentials may be considered depending on what
conditions are assumed. One potential could have to do with the conditions of use.
Example: The amount of toothpaste that would be used if all persons using
toothpaste brushed after every meal.

There are three main uses of market potential and these are:
1. Allocation of marketing resources
2. Defining sales techniques
3. Setting sales quotas.
Estimating Market Potential
The key steps in estimating market potential are:
1. Define your target market and market segments.
2. Define the geographic boundaries of your market.
3. Derive an average selling price.
4. Determine the average annual consumption.

Estimating Market Potential: MP = N x P x Q;

Where:
• MP = market potential
• N = number of possible buyers
• P = average selling price
• Q = average annual consumption
Sales Forecasting
• Sales forecasting is the process of organizing and analyzing information in a way
that makes it possible to estimate what your sales will be.
• A sales forecast is a prediction based on past sales performance and an analysis
of expected market conditions. The true value in making a forecast is that it
forces us to look at the future objectively.
• Conducting a sales forecast will provide your business with an evaluation of past
and current sales levels and annual growth, and allow you to compare your
company to industry norms.
• It will also help you establish your policies so that you easily can monitor your
prices and operating costs to guarantee profits, and make you aware of minor
problems before they become major problems.
Sales Forecasting
• Sales forecasting is the process of organizing and analyzing information in a way
that makes it possible to estimate what your sales will be.
• A sales forecast is a prediction based on past sales performance and an analysis
of expected market conditions. The true value in making a forecast is that it
forces us to look at the future objectively.
• Conducting a sales forecast will provide your business with an evaluation of past
and current sales levels and annual growth, and allow you to compare your
company to industry norms.
• It will also help you establish your policies so that you easily can monitor your
prices and operating costs to guarantee profits, and make you aware of minor
problems before they become major problems.
The Importance of Sales Forecasting
• Sales forecasting is a self-assessment tool for a company. You have to
keep taking the pulse of your company to know how healthy it is.
• A sales forecast reports, graphs and analyzes the pulse of your
business. It can make the difference between just surviving and being
highly successful in business.
• It is a vital cornerstone of a company’s budget. The future direction of
the company may rest on the accuracy of your sales forecasting.
The Importance of Sales Forecasting
Companies that implement accurate sales forecasting processes realize important
benefits such as:
• Enhanced cash flow
• Knowing when and how much to buy
• In-depth knowledge of customers and the products they order
• The ability to plan for production and capacity
• The ability to identify the pattern or trend of sales
• Determine the value of a business above the value of its current assets
• Ability to determine the expected return on investment (This can be very helpful
if the company is trying to obtain financing from investors or other lending
institutions).
Information is Needed to Prepare a Sales Forecast?
The following are some of the external factors that can affect sales:
• Seasonality of the business
• Relative state of the economy
• Direct and indirect competition
• Political events
• Styles or fashions
• Consumer earnings
• Population changes
• Weather
• Productivity changes