Transcript Building a marketing plan

Retained
95%
Satisfied
70% (140,000)
Do Complain
10%(6,000)
Customer
Base
200,000
Dissatisfied
30% (60,000)
Don’t Complain
90% (54,000)
Not retained
5%
-7,000
Retained
90%
5,400
Not Retained
10%
-600
Retained
22%
Not Retained
78%
New Customers Needed
24.86%
133,000
11,800
-42,120
49,720
Customer Performance
Retained
Customers
Lost
Customers
New
Customers
# of Customers
150,000
-50,000
50,000
Revenue per C.
$800
$200
$400
Sales Revenue (millions)
$120
$10
$20
$150
50%
25%
25%
43.8%
$400
$50
$100
$60.0
$2.5
$5.0
$60
$60
$300
$9.00
$3.00
$15.00
$27.0
$51.00
-$0.50
-$10.00
$40.5
Percent Margin
Margin per C.
Gross Profit (millions)
Marketing Expense per C.
Marketing Expenses (mill.)
Net Marketing
Contribution (millions)
Operating Expenses
(millions)
Net Profit Before Taxes
(millions)
Overall
Performance
200,000
$67.5
$33.0
$7.5
Customer Performance
Retained
Customers
Lost
Customers
New
Customers
# of Customers
160,000
-40,000
40,000
Revenue per C.
$800
$200
$400
Sales Revenue (millions)
$128
$8
$16
$152
50%
25%
25%
43.8%
$400
$50
$100
$64.0
$2.0
$4.0
$65
$65
$300
Marketing Expenses (mill.)
$10.40
$2.60
$12.00
$25.0
Net Marketing
Contribution (millions)
$53.60
-$0.60
-$8.00
$45.0
Percent Margin
Margin per C.
Gross Profit (millions)
Marketing Expense per C.
Overall
Performance
200,000
$70.0
Operating Expenses
(millions)
$33.0
Net Profit Before Taxes
(millions)
$12.0
Definitely
Will Not
Repurchase
Will Not
Repurchase
Probably
Will Not
Repurchase
Probably
Will
Repurchase
Intention to Repurchase
Plan to
Repurchase
Percent
Definitely
Will
Repurchase
Probability
Definitely Will Repurchase
25%
1.00
Plan to Repurchase
35%
.80
Probably Will Repurchase
20%
.60
Probably Will Not Repurchase
15%
.40
Will Not Repurchase
3%
.20
Definitely Will Not Repurchase
2%
0.00
Total: 100%
Customer Retention
.72
72%
Customer Life (purchase periods)
20
Customer Life (N)
15
(given rate of customer retention)
N
10
1
1  CR
CR = Customer Retention Rate
5
0
50 % 55 % 60 % 65 % 70 % 75 % 80 % 85 % 90 % 95 %
Retention rate
Average Profit per Credit
Card Customer
$80
$60
$40
$30
$49
$42 $44
$55
Period
$20
$0
-$20
0
-$40
-$60
-$51
1
2
3
4
5
0
1
2
Present
Present Value of
Cash Value of Cash
Flow
$1
Flow
-$51
$30
$42
1.00
.909
.826
-$51,00
$27,30
$34,70
3
$44
.751
4
$49
.683
5
$55
.621
Net Present Value of Cash Flow
$33,00
$33,50
$34,20
$111,70
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Strategic market planning
Offensive and defensive strategies
Building a marketing plan
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Specify strategic direction for each
product/market and to allocate resources in a
way that will bring about desired short- and
long-run performance
Requires an assessment of:
◦ Business performance
◦ Market attractiveness
◦ Competitive position
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Market forces
◦ Market size
◦ Growth rate
◦ Buyer power
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Competitive environment
◦ Number of competitors
◦ Price rivalry
◦ Ease of entry
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Market access
◦ Customer familiarity
◦ Channel access
◦ Sales requirements
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Differentiation position
◦ Product quality
◦ Service quality
◦ Brand image
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Cost position
◦ Unit cost
◦ Transaction cost
◦ Marketing expenses
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Marketing position (presence)
◦ Market share
◦ Brand awareness
◦ Distribution
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Invest to grow
◦ Invest marketing resources to grow the market or
market share
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Improve position
◦ Invest to improve and/or strengthen competitive
position
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New market entry
◦ Invest to enter new attractive markets or develop
new product markets
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Protect position
◦ Invest to protect market share and competitive
advantage
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Optimize position
◦ Optimize price-volume and marketing resources to
maximize profits
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Monetize
◦ Manage market position for maximum cash flow
with limited marketing resources
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Harvest/Divest
◦ Manage the product for maximum short-run cash
flow or minimum losses
Market attractiveness
New market
entry
Improve position
Invest to grow
Improve position
Protect position
Invest to grow
Protect position
Improve position
Optimize
position
Harvest
Improve position
Optimize
position
Invest to grow
Protect position
Optimize
position
Harvest or Divest
Monetize,
Harvest, or
Divest
Monetize,
Harvest, or
Divest
Competitive position
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Creativity versus structure
Why marketing plan?
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Identifying opportunities
Focused market strategy
Resource allocation
Performance roadmap
Building a marketing plan
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Part I – Situation analysis (where are we now?)
◦ Step 1: Current situation
◦ Step 2: SWOT analysis
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Part II – Marketing strategy (where do we want
to go?)
◦ Step 3: Strategic market plan
◦ Step 4: Marketing mix strategy
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Part III – Performance plan (what is the
expected impact?)
◦ Step 5: Develop a revenue plan + marketing budget
◦ Step 6: Develop a profit plan
◦ Step 7: Performance review
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Analyzing customers
◦ Needs analysis
◦ Decision making processes
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Analyzing context
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Demographic environment
Economic environment
Socio-cultural environment
Political/legal environment
Technological environment
Natural environment
Analyzing the company
◦ Analysis of the business model
◦ Competitive advantage
◦ Collaborators and complementers analysis
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Analyzing competitors
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Part I – Situation analysis (where are we now?)
◦ Step 1: Current situation
◦ Step 2: SWOT analysis
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Part II – Marketing strategy (where do we want
to go?)
◦ Step 3: Strategic market plan
◦ Step 4: Marketing mix strategy
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Part III – Performance plan (what is the
expected impact?)
◦ Step 5: Develop a revenue plan + marketing budget
◦ Step 6: Develop a profit plan
◦ Step 7: Performance review
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External factors
◦ Opportunities
◦ Threats
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Internal factors
◦ Strengths
◦ Weaknesses
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Part I – Situation analysis (where are we now?)
◦ Step 1: Current situation
◦ Step 2: SWOT analysis
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Part II – Marketing strategy (where do we want
to go?)
◦ Step 3: Strategic market plan
◦ Step 4: Marketing mix strategy
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Part III – Performance plan (what is the
expected impact?)
◦ Step 5: Develop a revenue plan + marketing budget
◦ Step 6: Develop a profit plan
◦ Step 7: Performance review
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Purpose
◦ A marketing plan lays out a campaign to fulfill a
company’s marketing strategy
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Content
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Executive summary
Table of contents
Summary of current situation
Assessment of market opportunity
Summary of the company’s marketing strategy
A marketing budget
Forecast unit sales and revenues
Plan for monitoring and evaluating action plans
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Graphs copied from:
◦ www.value-basedmarketing.com/uncategorized/what-would-youdo-with-dell-computer/#more-21
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What would you do with Dell computer?
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”Create a better way to buy a computer”
Reduced distribution costs: By cutting out the
middleman, distribution costs were reduced
giving the company a competitive price
position.
◦ Improve the buying experience: Dell’s knowledgeable staff had
expertise to help customers who were frequently unknowing. In
contrast, IBM, Apple and others were selling through resellers who
were not necessarily knowledgeable about the product. Michael
Dell surmised that customers would find value in talking to staff
who had good product knowledge and could help guide purchase
decisions to suit the customers’ needs.
◦ Guide future product development: The direct selling model gave
Dell first-hand knowledge of customers’ needs.
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Improve core business
Shift portfolio to higher-margin offerings
Balance liquidity, profitability, and growth
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Pride & Ferrell: Ch. 1, 2 & 3
Best, Roger J. (2009): Market-Based
Management: Strategies for Growing
Customer Value and Profitability, 5th ed.,
Pearson Prentice Hall, New Jersey (ISBN-13:
978-0-13-233653-6)