MKTG434 CH7 – Flashcards
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Marketing Plan
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-Directs a company's marketing effort -Assembles relevant facts about the organization, its markets, products, services, customers, and competition -Forces all departments to focus on the customer -Lists goals and objectives for specific periods of time -Lays out precise strategies and tactics to achieve them -Length and complexity of the plan depends on the size of the company -planning is an ongoing activity
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Effect of the marketing plan on IMC
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-Helps analyze and improve all company operations (marketing ; advertising programs) -Defines the role of advertising in the marketing mix -Enables better implementation, control, and continuity of advertising programs -Ensures efficient allocation of IMC dollars
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Traditional top-down marketing plan
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1. Situation analysis 2. marketing objectives 3. marketing strategy 4. marketing tactics
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Situation analysis
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FIRST step of TOP-DOWN marketing plan: -Factual statement of the organization's current situation and how it got there through SWOT ANALYSIS -company's history, growth, products ; services, sales volume, share of market, competitive status, market served, distribution systems, past advertising programs, marketing research studies, and etc.
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SWOT analysis
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Uses the facts in the situation analysis to point out: 1. strengths-capabilities 2. weaknesses-capabilities 3. opportunities-environmental factors 4. threats-environmental factors
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Marketing objectives
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SECOND step of TOP-DOWN marketing plan: Goals of the marketing effort expressed in terms of the needs of specific TARGET MARKETS and specific SALES OBJECTIVES Derived from corporate objectives related to: 1. satisfying objectives: needs of target market 2. sales-target objectives: specific sales goals
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need-satisfying objectives
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management's view of organization to shift FROM producer or products/services TO satisfier of market needs -View the business broadly -Customer's POV
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sales-target objective
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specific, quantitative, realistic marketing goal achieved within a specific period of time -total sales volume -sales volume by product -market segment -customer type -market share in total or by product line -gross profit in total or by product line -share growth -share of market
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Corporate objectives
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Goals of the company stated in terms of: 1. profit* 2. return on investment* 3. net worth 4. earnings ratio 5. corporate reputation
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Marketing stretegy
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THIRD step of the TOP-DOWN marketing plan -Statement of how the company is going to achieve its marketing objectives 1. Defining the target markets 2. Determining the strategic positioning 3. Developing the marketing mix for each target market *determines the role and amount of advertising in the marketing mix EXAMPLES: -increase distribution -initiate new uses -change product line -develop new markets -lower prices
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Defining the target market
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STEP 1 of marketing strategy: -process of market segmentation ; research
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Positioning
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STEP 2 of marketing strategy: Determine the position strategy *The association of a brand's features and benefits with a particular set of customer needs, CLEARLY DIFFERENTIATING IT FROM THE COMPETITION in the mind of the customer **Place a brand occupies competitively in the minds of consumers -based on consumers' PERCEPTIONS
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Developing a position strategy
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1. product attribute-features 2. price/quality 3. use/application-how a product is used 4. product class-against competitors with the same benefits 5. product user: against group who uses the product 6. product competitor: helps define the subject brand w/ competitor's position 7. cultural symbol: apart from others using recognized symbol 8. By category: defining/redefining product category
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Determining the marketing mix
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STEP 3 of marketing strategy Determining a cost-effective marketing mix for each target market
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Marketing tactics
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FOURTH step to TOP-DOWN marketing plan: -Specific short-term actions (action programs) used to achieve marketing objectives -Determine who and when the actions should be taken, internally & externally, by whom, & when
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Bottom-up marketing plan
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Focus on ingenious tactics first -Start with ONE tactic -Smaller companies with no time for formal planning 1. marketing results 2. marketing strategy 3. marketing tactics
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Relationship marketing
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-Creating, maintaining, and enhancing long-term relationships with customers and other stakeholders -Results in exchanges of information and other things of mutual value -market-driven conception of marketing will focus on managing strategic partnerships and positioning the firm, aimed for delivering superior value to customers
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Value
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Ratio of perceived benefits to the price of the product
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Stakeholders
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employees, centers of influence, stockholders, financial community, & the press
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Importance of relationship marketing
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1. The cost of lost customers (LCV) 2. The cost of acquiring new customers 3. Value of loyal customers
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Lifetime customer value (LCV)
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Total profit value of a customer to a marketer over the course of that customer's lifetime *unnecessary losses due to poor service ; negative WOM
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Cost of acquiring new customers
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-acquiring is more expensive -hard to lure satisfied customers away from competitors Costs 5-8 times as much in marketing, advertising, and promotion to acquire new customers as it does to keep an existing one
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The value of loyal customers
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90% of profit comes from repeat purchases -long-term customers are willing to pay premium prices, make referrals, increase their annual buying, ; demand less hand-holding
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Levels of relationship
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More stakeholders (customers) the more difficult to develop personal relationships -BRAND RELATIONSHIPS can be psychological or symbolic, personal, or created by brand promotion, publicity, advertising, or by people
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profit margins
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High-profit margin product/service categories make deeper, personal relationships more desirable -Nordstrom Low profit margins per customer suggest that the marketer should pursue basic transactional relationships augmented by brand image advertising
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Basic transactional relationship
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company sells the product but does not follow up -target
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Reactive relationship
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The company sells the product and encourages customers to call if they encounter any problems -men's warehouse
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accountable relationship
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The company phones customers shortly after the sale to check whether the product meets expectations and asks for product improvement suggestions and any specific disappointments. -Helps the company improve offering -acura dealers
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proactive relationship
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the company contacts customers from time to time with suggestions about improved product use or helpful new products (apple)
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partnership relationship
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The company works continuously with customers (& other stakeholders) to discover ways to deliver better value -Nordstrom's
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Integrated Marketing Communications (IMC)
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Building and reinforcing mutually profitable relationships with the stakeholders and the general public -By developing and coordinating strategic communications programs that make contact with a brand through media -communication becomes the driving, integrating force in the marketing mix through organization SYNERGY: WHOLENESS
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market-driven
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bundling services together with products to create a unique product experience -companies ; customers working together to find solutions
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flexible marketing
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-integrated marketing communications reach customers at different levels in new and better ways
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Synergy
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Effect achieved when the SUM of the parts IS GREATER than that EXPECTED from adding together the individual components WHOLE IS GREATER than the sum of its parts -wholeness in communications
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Endcap promotion
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special display at the end of an aisle
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Sources of brand messages
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Everything we do (; don't do) sends a message: 1. planned messages 2. product messages 3. service messages 4. unplanned messages *each influence a stakeholder's relationship decision, we must know where messages come from, the impact, cost to influence or control them
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Planned messages
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traditional marketing messages -least impact = self-serving Advertising, sales promotions, personal selling, merchandising materials, publicity releases, event sponsorship
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Product messages
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Every element of the marketing mix sends a message (product, price, distribution (place), communication (promotion)) packaging, price, distribution elements -have great impact
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service messages
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result from employee interactions with customers -greater impact than planned messages
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unplanned messages
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gossip, unsought new stories, crises -have a huge impact on customers' attitudes -can be anticipated
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The integration triangle
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Illustrates how perceptions are created from various brand sources 1. SAY: planned messages are about themselves 2. DO represent: product, service messages- what the company does 3. CONFIRM: unplanned messages-What others say and confirm (or not) about what the company says or does
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Advertising plan
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Builds on the goals that have been established for ad program -incorporates rationale for proposed budget and a plan for conducting research -Reviewing the marketing plan -Setting advertising objectives
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Reviewing the marketing plan
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-where the company wants to go -how it intends to get there -role of advertising in marketing mix information from the situation analysis should be organized into a SWOT analysis
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Setting advertising objectives
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-determine what tasks advertising must take on -advertising objectives should be realistic, and measurable What strengths and opportunities can be leveraged? What weaknesses and threats can be addressed?
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To maximize synergy benefits of IMC
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1. ensure consistent positioning 2. facilitate interactions between company and its customers or other stakeholders 3. actively incorporate a socially responsible mission into the organization's relationships with its stakeholders *cross-functional planning ; monitoring of activities enhances relationships *leads to loyalty and brand equity *offers accountability by maximizing resources and linking communication activities directly to organizational goals
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supermarket scanner data
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-identifies specific users of products -measures purchase behavior ; relate it to specific brands ; categories -measures impact of various ads and communication activities ; determines value in influencing actual purchase -captures ; evaluates this information over time
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Advertising pyramid
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Tasks advertisers can perform: 1. Action 2. Desire 3. Conviction 4. Comprehension 5. Awareness *3 dimensions: time, dollars, and people
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awareness
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acquaint people with the company, product, service, and/or brnad
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comprehension
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communicate enough information about product that some some will understand the product's purpose, image, position, and features
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conviction
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persuade certain number of people to believe in product's value
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desire
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stimulated people who are convinced of product's value
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action
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request additional information, use a coupon, visit a store, or purchase
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learn-feel-do model of advertising effects
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assumes people rationally consider a prospective purchase, and once they feel good, they act on it -advertising affects attitude, & attitude leads to behavior
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do-feel-learn model of advertising effects
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-impulse -behavior leads to attitude which leads to knowledge
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Advertising strategy
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-Advertising strategy described how to get to the advertising objective Consists of 2 subcategories: 1. Creative strategy 2. Media strategy
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creative strategy
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Serves as the creative team's guide for writing and producing an advertisement 1. defines target audience 2. restates advertising objective 3. specifies key benefits to be communicated 4. offers support for those benefits
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media strategy
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Helps media planners determine how messages will be delivered to consumers 1. defines communication objectives 2. describes how these will be accomplished through media vehicles
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Allocating funds for advertising
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Advertising is considered as a current business expense -Change in marketing activities affects sales Change in market share because: -perception quality -WOM -introduction of new products -competitive trade promotion -more attractive outlets -better personal selling -seasonal changed in business cycle *Should be evaluated for wastefulness
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Principles for advertising to sales and profits
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1. In consumer goods marketing, increase in market share is related to the increase in marketing budget 2. Sales increase with advertising ; rate of return flattens and then declines at some point 3. Consistent investment is important for advertising as its durability is brief 4. There are levels below which advertising expenditures have no effect on sales 5. There will be some sales even if there is no advertising 6. There are saturation limits above which additional ad expenditures do little to increase sales
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Methods of allocating funds
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1. Percentage-of-sales 2. Share-of-market/share-of-voice 3. Objective/task method
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Percentage-of-sales method
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*most popular, simple, free, safe Based on: 1. % of last year's sales: % based on industry average and experience 2. anticipated sales for next year (works well) 3. combination of the two
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Share-of-market/share-of-voice method
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Based on determining the firm's goals for a certain share of the market -Applying a slightly higher percentage of industry advertising dollars to the budget *attempts to link advertising $s with sales objectives -keep its share of advertising comparable to its market share * used for new product introductions =1.5 of brand's target share
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Objective/task method
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*Budget-buildup method *Marketing tool to help generate sales Defines the objectives and how advertising is to be used to accomplish them 1. Define the objectives 2. Determining strategy 3. Estimating the cost -adaptable to changing market conditions and can be easily revised
