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2014 navigate-a guide to marketing planning

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Navigate Consulting Australia Pty Ltd
Navigate Consulting Australia Pty Ltd

Developing a marketing plan for the first timer can be daunting, here we present a user friendly guidebook on the key steps, inputs and take the reader through the development of a marketing plan from start to finish

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A User Friendly Guide to Marketing Plans John Gregg Principal Navigate Consulting April, 2014
1 Basic steps and elements of the marketing plan Step 1 Step 2 Step 3 Market and competition analysis Target market selection Marketing strategy development • Market size • Market growth • Strengths and weaknesses of competitors • Competitors' behavior • Market segmentation • Positioning • Differentiation factors • Market share • Marketing mix – Product – Price – Place – Promotion
2 Step 1: Analyzing the market and competition (1/2) End product • Market size and growth • Current suppliers/ competitors in the market • Companies' behaviors • Strengths and weaknesses of competitors • New potential competitors Key questions • What is the estimated size of the overall market? – Number of users? – What is the potential volume/ units we can sell? – What might the price and overall potential market size be? • What are the market trends? What is the estimated growth for the next 5–10 years? • Who are the current competitors? • What is their business model? Which segments are they serving? • Might some potential new players enter the market? • What are the potential substitutes for your product/service? Market Competition 1
3 Step 1: Analyzing the market and competition (2/2) – How to make an accurate estimate? Hints Start from a solid basis • There may be many unknowns, but if you use easily verifiable figures as a basis, you will build your estimate on solid foundations Follow a logical path • The logic of an estimate should be clear – there should be no breaks in the chain or unspecified assumptions Compare your sources • Wherever possible, check information, such as statements in an interview, against other sources Be creative • The shortest distance is not always a straight line. For example, if one value is unknown, try to find a substitute value that relates to the one that is missing Check for plausibility • For every estimate always ask yourself "Does the result actually make sense?" 1
4 Step 2: Choosing the target segment (1/6) Key questions • Who are your customers or customer groups ("segmentation")? • Which customers or customer groups are particularly attractive financially? • How can you differentiate yourself from the competition ("positioning") for those attractive customers? • What market share and what level of sales do you expect to achieve with these customers? 2
5 Step 2: Choosing the target segment (2/6) Objectives • Define the market/market segments that your product/service can reach • Identify customer groups with similar buying behavior • Help design a specific and targeted value proposition and a strategy by segment Customer segmentation Segment selection Positioning 2
6 Step 2: Choosing the target segment (3/6) Sample of customer segmentation criteria For consumer goods • Geographic: country or population density (urban/rural, etc.) • Demographic: age, gender, income, profession, etc. • Lifestyle: technofreaks, the environmentally-conscious, Generation X, etc. • Behavior: frequency of usage, application of product, etc. • Purchasing behavior: brand preference, price consciousness, etc. For industrial goods • Demographic: company size, sector, location, etc. • Operational: technology employed, etc. • Purchasing behavior: central or decentral purchasing, contracts with suppliers, etc. • Situational factors: urgency of need, order size, etc. 2 Customer segmentation Segment selection Positioning
7 Step 2: Choosing the target segment (4/6) Key questions • Size and growth potential of the different segments? • How good is the match between your product/service and the customer needs? • Is there a potential for differentiation and how can you differentiate your product/service against competing products/services? • What is the financial attractiveness of the segments? 2 Customer segmentation Segment selection Positioning
8 Step 2: Choosing the target segment (5/6) Positioning vis-à-vis competitors • Why should a potential customer buy your product rather than that of one of your competitors? • Why does your product represent a "better" offer (emotionally or rationally)? • How can I best adopt the customers' perspective? • What are the product attributes that the customer values? Need for a clear, compelling, and convincing Unique Selling Proposition (USP) 2 Customer segmentation Segment selection Positioning
9 Step 2: Choosing the target segment (6/6) How to design a compelling USP • Identify relevant customer needs or problems • Define clear customer segments of sufficient size • Design an attractive proposition in terms of products or services • Define your uniqueness by differentiating against the competition • Address the subjective perception of your potential customers • Also ensure customer satisfaction after the purchase 2 Customer segmentation Segment selection Positioning
10 Step 3: Executing the marketing plan Key area What it helps us to do • Develop pricing strategies • Determine how industry/sector structure (e.g., supply, demand, cost dynamics) and the conduct of individual players affects overall industry price levels • Understand consumer price elasticities and their implications for the value equation • Generate hypotheses about the price architecture/structure to maximizes value over the lifetime of both the product and the customer • Design and manage Sales channel • Understand the elements of a good channel strategy (e.g., alignment with customer segment needs) • Understand the levers for improving channel performance (partner networks, incentives) • Understand the key levers of a successful sales force management program 3
11 PRICING OPTIONS Price structure Costs Option • Consumer goods market – Industry cost structure is known to both competitors and customers – Customers know the product well Applicability • Gasoline • Chemicals Example Value • Complex goods, value lies in the economic effect more than in true product value (e.g., intellectual property) – Price comparison difficult – Must be highly tailored to customer needs – Customers not very familiar with product • Pharmaceuticals • High-tech products • Watches (Rolex, Breitling, etc.) Strategic • Overriding strategic goals that will lead to long-term profits – Product whose value lies in imitation – Substitute or new product without established benefit • Zanussi coffee makers • Australian domestic flights Highest possible profit Competitors • Hotly contested market as regards price – Price is an important purchase factor – Customers make a price comparison – Price comparison is simple • DRAM chips 3
12 PRICING – HOW TO HARVEST MAXIMUM CUSTOMER SURPLUS • Gather experience with little volume while still operating in a real market • Obtain highest margin with limited, early production • Move up along the demand curve with increasing capacity • Maintain margin through downward movement on the learning curve Advantages • Target the large market without knowing how to win over the important customers (opinion-makers) • Damage to the brand because early production does not suit market demands • Iterative price adjustments simply forgotten • Insufficient experience with scale economies and learning effect Mistakes by start-ups Set a high price and attack the market segment with the least price sensitivity Opinion- makers Quick succes- sors Early adapters Stragglers Market acceptance Price 3
13 PRICING - CORE FACTORS OF PENETRATION PRICING Customer value high due to a not yet mature market • High price elasticity • Latent demand • Possibility of becoming a customer "standard" Own performance costs drop dramatically with a rise in volume • Dropoff of high, variable unit costs • Transition to new, fixed cost structure Competitors cannot match price due to structure • Higher cost structure • Limited freedom due to current customer/market situation • Market share/volume currently very low 3
14 Step 3: Executing the marketing plan Key area What it helps us to do • Develop pricing strategies • Determine how industry/sector structure (e.g., supply, demand, cost dynamics) and the conduct of individual players affects overall industry price levels • Understand consumer price elasticities and their implications for the value equation • Generate hypotheses about the price architecture/structure to maximizes value over the lifetime of both the product and the customer • Design and manage Sales channel • Understand the elements of a good channel strategy (e.g., alignment with customer segment needs) • Understand the levers for improving channel performance (partner networks, incentives) • Understand the key levers of a successful sales force management program 3
15 SALES CHANNELS – MULTIPLE OPTIONS AVAILABLE Licensing ILLUSTRATIVE OEM Sales partner Direct Achieved share of value Relativerisk 3
16 SALES CHANNELS - SELECTION CRITERIA Franchise • Interest high on the part of franchisees • Lack of financing • Sustainability through patent • Ensure garanteed minimum fee • No customer loyalty • Lion's share of value added by franchisees OEM • New product launch in hotly contested market • Fragmented customer base • Quick market penetration desired • Strong negotiating position through package benefits • No profit margin • Dependence on OEM product development • Few findings from end consumer market Sales partner • Limited market access, "high hurdles" • Thorough understanding of the market necessary (e.g., regional market) • Dependence on sales partner • Uneven distribution of value added Direct sales • Customer loyalty necessary • Concentrated customer base • High cost • Low market penetration When? Risk for start-up company Sales channel 3
17 SALES MANAGEMENT OPTIONS “Long line” • Loose • 0 - 50% • Quarterly/ annually • None • Intensive support • Output • Large-scale projects “Short line” • Medium • 50 - 80% • Monthly • Rough • Rough guidelines, intensive support • Output, input • Assembly • Auto • Chemicals “Tight reins” • Tight • 100% • Daily/weekly • Detailed • Detailed guidelines • Input • Consumer goods Management style Planned sales time Reporting cycle Visit planning Activity planning Monitoring parameter(s) Examples Complexityofcustomer relationship Complexity of sales activity-product HighLow LowHigh “tight reins” “short line” “long line”
18 Step 3: Executing the marketing plan • Manage branding and marketing communic- ations • Understand the core elements of the brand (rational and emotional benefits and tangible and intangible associations) • Be aware of brand architecture options (umbrella, mutually reinforcing, independent) and understand the benefits/risks associated with each one • Understand how to use the purchase funnel to optimize marketing spend effectiveness • Develop product strategies • Prioritize product initiatives and identify gaps in the product offering • Understand the stages of a product lifecycle, determine in which stage a particular product exists, and understand the implications for product strategy • Understand the dimensions that are important for new product development strategy (timing, insights into customers) What it helps us to doKey area 3
19 Step 3: Executing the marketing plan • Manage branding and marketing communic- ations • Understand the core elements of the brand (rational and emotional benefits and tangible and intangible associations) • Be aware of brand architecture options (umbrella, mutually reinforcing, independent) and understand the benefits/risks associated with each one • Understand how to use the purchase funnel to optimize marketing spend effectiveness • Develop product strategies • Prioritize product initiatives and identify gaps in the product offering • Understand the stages of a product lifecycle, determine in which stage a particular product exists, and understand the implications for product strategy • Understand the dimensions that are important for new product development strategy (timing, insights into customers) What it helps us to doKey area 3
20 Check list for a convincing marketing plan Is the Unique Selling Proposition formulated precisely and from the customer’s perspective? Which customers make up your target segment? Why is this segment particularly interesting for your company? How large is the whole market? How large is the market you are interested in? How will it develop? Who are your competitors? What substitutes are available for your product? How do you expect your market share and your sales volume to develop? What price are you asking? What distribution channel(s) will you use? How much will your advertising cost? Does your business plan answer the following questions?

More Related Content

2014 navigate-a guide to marketing planning

  • 1. A User Friendly Guide to Marketing Plans John Gregg Principal Navigate Consulting April, 2014
  • 2. 1 Basic steps and elements of the marketing plan Step 1 Step 2 Step 3 Market and competition analysis Target market selection Marketing strategy development • Market size • Market growth • Strengths and weaknesses of competitors • Competitors' behavior • Market segmentation • Positioning • Differentiation factors • Market share • Marketing mix – Product – Price – Place – Promotion
  • 3. 2 Step 1: Analyzing the market and competition (1/2) End product • Market size and growth • Current suppliers/ competitors in the market • Companies' behaviors • Strengths and weaknesses of competitors • New potential competitors Key questions • What is the estimated size of the overall market? – Number of users? – What is the potential volume/ units we can sell? – What might the price and overall potential market size be? • What are the market trends? What is the estimated growth for the next 5–10 years? • Who are the current competitors? • What is their business model? Which segments are they serving? • Might some potential new players enter the market? • What are the potential substitutes for your product/service? Market Competition 1
  • 4. 3 Step 1: Analyzing the market and competition (2/2) – How to make an accurate estimate? Hints Start from a solid basis • There may be many unknowns, but if you use easily verifiable figures as a basis, you will build your estimate on solid foundations Follow a logical path • The logic of an estimate should be clear – there should be no breaks in the chain or unspecified assumptions Compare your sources • Wherever possible, check information, such as statements in an interview, against other sources Be creative • The shortest distance is not always a straight line. For example, if one value is unknown, try to find a substitute value that relates to the one that is missing Check for plausibility • For every estimate always ask yourself "Does the result actually make sense?" 1
  • 5. 4 Step 2: Choosing the target segment (1/6) Key questions • Who are your customers or customer groups ("segmentation")? • Which customers or customer groups are particularly attractive financially? • How can you differentiate yourself from the competition ("positioning") for those attractive customers? • What market share and what level of sales do you expect to achieve with these customers? 2
  • 6. 5 Step 2: Choosing the target segment (2/6) Objectives • Define the market/market segments that your product/service can reach • Identify customer groups with similar buying behavior • Help design a specific and targeted value proposition and a strategy by segment Customer segmentation Segment selection Positioning 2
  • 7. 6 Step 2: Choosing the target segment (3/6) Sample of customer segmentation criteria For consumer goods • Geographic: country or population density (urban/rural, etc.) • Demographic: age, gender, income, profession, etc. • Lifestyle: technofreaks, the environmentally-conscious, Generation X, etc. • Behavior: frequency of usage, application of product, etc. • Purchasing behavior: brand preference, price consciousness, etc. For industrial goods • Demographic: company size, sector, location, etc. • Operational: technology employed, etc. • Purchasing behavior: central or decentral purchasing, contracts with suppliers, etc. • Situational factors: urgency of need, order size, etc. 2 Customer segmentation Segment selection Positioning
  • 8. 7 Step 2: Choosing the target segment (4/6) Key questions • Size and growth potential of the different segments? • How good is the match between your product/service and the customer needs? • Is there a potential for differentiation and how can you differentiate your product/service against competing products/services? • What is the financial attractiveness of the segments? 2 Customer segmentation Segment selection Positioning
  • 9. 8 Step 2: Choosing the target segment (5/6) Positioning vis-à-vis competitors • Why should a potential customer buy your product rather than that of one of your competitors? • Why does your product represent a "better" offer (emotionally or rationally)? • How can I best adopt the customers' perspective? • What are the product attributes that the customer values? Need for a clear, compelling, and convincing Unique Selling Proposition (USP) 2 Customer segmentation Segment selection Positioning
  • 10. 9 Step 2: Choosing the target segment (6/6) How to design a compelling USP • Identify relevant customer needs or problems • Define clear customer segments of sufficient size • Design an attractive proposition in terms of products or services • Define your uniqueness by differentiating against the competition • Address the subjective perception of your potential customers • Also ensure customer satisfaction after the purchase 2 Customer segmentation Segment selection Positioning
  • 11. 10 Step 3: Executing the marketing plan Key area What it helps us to do • Develop pricing strategies • Determine how industry/sector structure (e.g., supply, demand, cost dynamics) and the conduct of individual players affects overall industry price levels • Understand consumer price elasticities and their implications for the value equation • Generate hypotheses about the price architecture/structure to maximizes value over the lifetime of both the product and the customer • Design and manage Sales channel • Understand the elements of a good channel strategy (e.g., alignment with customer segment needs) • Understand the levers for improving channel performance (partner networks, incentives) • Understand the key levers of a successful sales force management program 3
  • 12. 11 PRICING OPTIONS Price structure Costs Option • Consumer goods market – Industry cost structure is known to both competitors and customers – Customers know the product well Applicability • Gasoline • Chemicals Example Value • Complex goods, value lies in the economic effect more than in true product value (e.g., intellectual property) – Price comparison difficult – Must be highly tailored to customer needs – Customers not very familiar with product • Pharmaceuticals • High-tech products • Watches (Rolex, Breitling, etc.) Strategic • Overriding strategic goals that will lead to long-term profits – Product whose value lies in imitation – Substitute or new product without established benefit • Zanussi coffee makers • Australian domestic flights Highest possible profit Competitors • Hotly contested market as regards price – Price is an important purchase factor – Customers make a price comparison – Price comparison is simple • DRAM chips 3
  • 13. 12 PRICING – HOW TO HARVEST MAXIMUM CUSTOMER SURPLUS • Gather experience with little volume while still operating in a real market • Obtain highest margin with limited, early production • Move up along the demand curve with increasing capacity • Maintain margin through downward movement on the learning curve Advantages • Target the large market without knowing how to win over the important customers (opinion-makers) • Damage to the brand because early production does not suit market demands • Iterative price adjustments simply forgotten • Insufficient experience with scale economies and learning effect Mistakes by start-ups Set a high price and attack the market segment with the least price sensitivity Opinion- makers Quick succes- sors Early adapters Stragglers Market acceptance Price 3
  • 14. 13 PRICING - CORE FACTORS OF PENETRATION PRICING Customer value high due to a not yet mature market • High price elasticity • Latent demand • Possibility of becoming a customer "standard" Own performance costs drop dramatically with a rise in volume • Dropoff of high, variable unit costs • Transition to new, fixed cost structure Competitors cannot match price due to structure • Higher cost structure • Limited freedom due to current customer/market situation • Market share/volume currently very low 3
  • 15. 14 Step 3: Executing the marketing plan Key area What it helps us to do • Develop pricing strategies • Determine how industry/sector structure (e.g., supply, demand, cost dynamics) and the conduct of individual players affects overall industry price levels • Understand consumer price elasticities and their implications for the value equation • Generate hypotheses about the price architecture/structure to maximizes value over the lifetime of both the product and the customer • Design and manage Sales channel • Understand the elements of a good channel strategy (e.g., alignment with customer segment needs) • Understand the levers for improving channel performance (partner networks, incentives) • Understand the key levers of a successful sales force management program 3
  • 16. 15 SALES CHANNELS – MULTIPLE OPTIONS AVAILABLE Licensing ILLUSTRATIVE OEM Sales partner Direct Achieved share of value Relativerisk 3
  • 17. 16 SALES CHANNELS - SELECTION CRITERIA Franchise • Interest high on the part of franchisees • Lack of financing • Sustainability through patent • Ensure garanteed minimum fee • No customer loyalty • Lion's share of value added by franchisees OEM • New product launch in hotly contested market • Fragmented customer base • Quick market penetration desired • Strong negotiating position through package benefits • No profit margin • Dependence on OEM product development • Few findings from end consumer market Sales partner • Limited market access, "high hurdles" • Thorough understanding of the market necessary (e.g., regional market) • Dependence on sales partner • Uneven distribution of value added Direct sales • Customer loyalty necessary • Concentrated customer base • High cost • Low market penetration When? Risk for start-up company Sales channel 3
  • 18. 17 SALES MANAGEMENT OPTIONS “Long line” • Loose • 0 - 50% • Quarterly/ annually • None • Intensive support • Output • Large-scale projects “Short line” • Medium • 50 - 80% • Monthly • Rough • Rough guidelines, intensive support • Output, input • Assembly • Auto • Chemicals “Tight reins” • Tight • 100% • Daily/weekly • Detailed • Detailed guidelines • Input • Consumer goods Management style Planned sales time Reporting cycle Visit planning Activity planning Monitoring parameter(s) Examples Complexityofcustomer relationship Complexity of sales activity-product HighLow LowHigh “tight reins” “short line” “long line”
  • 19. 18 Step 3: Executing the marketing plan • Manage branding and marketing communic- ations • Understand the core elements of the brand (rational and emotional benefits and tangible and intangible associations) • Be aware of brand architecture options (umbrella, mutually reinforcing, independent) and understand the benefits/risks associated with each one • Understand how to use the purchase funnel to optimize marketing spend effectiveness • Develop product strategies • Prioritize product initiatives and identify gaps in the product offering • Understand the stages of a product lifecycle, determine in which stage a particular product exists, and understand the implications for product strategy • Understand the dimensions that are important for new product development strategy (timing, insights into customers) What it helps us to doKey area 3
  • 20. 19 Step 3: Executing the marketing plan • Manage branding and marketing communic- ations • Understand the core elements of the brand (rational and emotional benefits and tangible and intangible associations) • Be aware of brand architecture options (umbrella, mutually reinforcing, independent) and understand the benefits/risks associated with each one • Understand how to use the purchase funnel to optimize marketing spend effectiveness • Develop product strategies • Prioritize product initiatives and identify gaps in the product offering • Understand the stages of a product lifecycle, determine in which stage a particular product exists, and understand the implications for product strategy • Understand the dimensions that are important for new product development strategy (timing, insights into customers) What it helps us to doKey area 3
  • 21. 20 Check list for a convincing marketing plan Is the Unique Selling Proposition formulated precisely and from the customer’s perspective? Which customers make up your target segment? Why is this segment particularly interesting for your company? How large is the whole market? How large is the market you are interested in? How will it develop? Who are your competitors? What substitutes are available for your product? How do you expect your market share and your sales volume to develop? What price are you asking? What distribution channel(s) will you use? How much will your advertising cost? Does your business plan answer the following questions?