Chapter 15 The Marketing Plan Copyright Houghton Mifflin

Chapter 15 The Marketing Plan Copyright © Houghton Mifflin Company

Overview • Relationship marketing • The marketing plan • Product/service promotion • Online marketing Copyright © Houghton Mifflin Company 2

Relationship Marketing Copyright © Houghton Mifflin Company 3

Identifying and Rewarding the Best Customers • Calculate lifetime customer value: Present value of future purchases + Referrals – Maintenance • Reward your best customers – Frequency programs – Just-in-time marketing – Complaint marketing Copyright © Houghton Mifflin Company 4

Preparing the Marketing Plan • Define your approach to the market based on understanding customers’ needs • Make a list of the marketing options • Think like a customer: imagine the business from the customer’s point of view Copyright © Houghton Mifflin Company 5

Preparing the Marketing Plan (cont. ) • Study the competition: What makes them successful or unsuccessful? • Analyze the options and rank them – Whether they meet customers’ needs – Whether they fit in the entrepreneur’s budget Copyright © Houghton Mifflin Company 6

The One-Paragraph Marketing Plan • Purpose: What will the plan accomplish? • Benefits: How will the product/service help the customer or satisfy a need? • Target market: Who is the primary buyer? • The market niche: Where do you fit in the industry or market? Differentiation? Copyright © Houghton Mifflin Company 7

The One-Paragraph Marketing Plan (cont. ) • Marketing tactics: What tools will you use? • Company’s identity: How will customers see the company? • Budget: How much money is allocated to the marketing plan? Copyright © Houghton Mifflin Company 8

Marketing Plan Outline • One-paragraph marketing plan • Key marketing issues that will affect the success of the company • It contains launch objectives for the campaign • Milestones • Strategic alliances • Metrics to measure effectiveness • Strategic alignment: goals and tactics Copyright © Houghton Mifflin Company 9

Strategies for Pricing • What are you trying to accomplish? – Increase sales – Increase market share – Maximize cash flow – Maximize profit – Set up entry barriers to competition – Define an image – Control demand Copyright © Houghton Mifflin Company 10

Types of Pricing • Cost-based: cost + operating costs + profit • Demand-based: what are customers willing to pay? • Competition-based: priced in line with competitors • Psychological pricing: $12. 99 – bargain • Distribution channel: consider number of intermediaries • Extrapolating from other industries Copyright © Houghton Mifflin Company 11

Promotion-Guerrilla Marketing • Take advantage of free publicity – What’s your compelling story? – Get customer testimonials • Give your product away if – You will see this customer again – The cost is low, margins high – Customers need to try the product to decide – You can provide samples at a large event Copyright © Houghton Mifflin Company 12

Advertising • Print Media – Newspapers for broad coverage in a geographic area, low cost – Magazines to target a particular interest – Yellow pages for broad reach, but expensive – Signs encourage impulse buying Copyright © Houghton Mifflin Company 13

Advertising (cont. ) • Direct marketing: mail, mail order, coupons, telemarketing, TV shopping networks – Success depends on the mailing list • Broadcast media – Radio for local or regional advertising – Television to target an interest group on cable TV Copyright © Houghton Mifflin Company 14

Personal Selling • Do your homework before you try to sell • Build credibility with the customer before you sell • Position yourself as a solution provider • Grab the customer’s interest immediately Copyright © Houghton Mifflin Company 15

Personal Selling (cont. ) • Let the customer use the product • Don’t waste the customer’s time; get to the point quickly • If the customer says no, gently ask why and offer to let him/her talk to current customers Copyright © Houghton Mifflin Company 16

Trade Shows and Exhibits • Rent booth space and design the site well • Hire professionals to distribute information or to get people to the booth • Have knowledgeable, personable people in the booth • Offer something free • Follow up with letters to anyone leaving a business card Copyright © Houghton Mifflin Company 17

Online Marketing • Your marketing strategy should be anticipated, personal, and relevant • Consider viral marketing – Analogous to word-of-mouth • Affiliate programs – Strategic partnerships with companies that offer complementary products and services Copyright © Houghton Mifflin Company 18

Why Customers Use the Internet • It’s convenient: no crowds, traffic, or parking issues • It’s easy to compare prices • They have immediate access to a greater variety of stores around the globe • They often pay less online • It’s entertaining Copyright © Houghton Mifflin Company 19

Why Customers Don’t Use the Internet • The time lag between purchasing and receiving • Cannot test or try on the product • Can be risky dealing with a retailer you don’t know • Privacy issues • Opportunity: solve these problems Copyright © Houghton Mifflin Company 20

Take-Aways • List what students took away from the discussion in real time Copyright © Houghton Mifflin Company 21