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Market Analysis and Marketing Plan
Grading will reward appropriate application of business constructs, content, quality of research and analysis, thoroughness, and effort in providing your client a specific, detailed, and implementable plan Grading will evaluate your use of critical thinking/analysis to form recommendations that are:
- justified on the basis of business principles, secondary and/or primary research, and the current marketing situation facing your client.
- thoroughly developed (specific and detailed) so your client can put the recommendations into action.
Grading will also reward clarity of communication. Proper grammar, spelling, and punctuation are essential for effective communication. Quality of writing counts! Poorly written papers will receive a lowered grade. Leave plenty of time to edit and proofread your work.
Instructions: You have been hired as a consultant to conduct a market analysis and develop a marketing plan. The project requires you to analyze the current marketing situation (using secondary and primary research), set marketing objectives, and develop a marketing strategy.
Although the ultimate goal is to help your client company achieve its long-term potential, the primary emphasis of the plan should be on programs to be implemented over the next year or two. Thus, planning for the next year or two should be detailed (i.e., specific, thoroughly developed, implementable). Any recommendations involving the longer-term (e.g., three years and more) may be more strategic (less detailed), providing general direction and overall strategy.
OUTLINE & SPECIFIC INSTRUCTIONS FOR THE MARKET ANALYSIS
The market analysis contains the following sections. For clarity of communication and to ensure thoroughness, include section headings.
Cover Page: Include the title (Market Analysis and Marketing Plan), name of the client business, course name, professor’s name, class section, group number, authors, and date [This page is numbered “i”, but the number is hidden. Insert a page break at the end of your content; do not use hard returns to format a report.]
Executive Summary: An executive summary does not introduce the paper, nor does it simply tell the reader the topics that will be covered. Rather, it provides a brief version of the paper. It provides the reader (your client or your professor, depending on the audience you are asked to address) an overview of major points and key recommendations prior to reading the entire plan. Summarize the most important points from each section of the paper. Write this last, since it includes information from the entire paper. The executive summary should be proportional to the report. [In the case of Marketing 304, it should be 1 or 2 pages long.] It should “stand alone” and provide a concise yet thorough overview of the report. It is written in prose, not bullet point. [This page is numbered ii. Insert a page break at the end.]
Table of Contents: Provide a table of contents. [Continue with lower case roman numerals subsequent to executive summary. You must employ the Word Table of Contents tool so that the table of contents recognizes your titles and changes with your paper. At the end of your table of contents, insert a section break so that you can begin the body of the paper with Arabic numerals.]
I. Introduction: Here, introduce the purpose of the marketing plan. Briefly tell the reader the purpose of the report, and whom the plan is for. [In the case of 304, the professor is the audience. That is, this is not a plan to present to the firm internally, nor is it a plan to raise capital. The page with the “Introduction” title on it comes after a section break and should be numbered page 1, but the number is suppressed.]
II. Situation Analysis: Analyze the current business and overall market situation facing the client. Conduct secondary research to include company documents and solid data from respected business or academic publications in the library and on the Internet. See the sub-heading “Primary Research” below for requirements regarding primary research. Use your primary research findings (when primary research is required) and secondary research findings to develop and justify the analysis and recommendations both in the market analysis and in the marketing plan. Each of the following components should be a separate sub-heading.
- Company Analysis: Describe the company. Include its history and experience; values, mission and culture; businesses and strategy; resources (financial and human); and current customers, product line(s), location(s), marketing communications, channels of distribution, and pricing. What are the company’s strengths and weaknesses? If this is a marketing plan for a start up, the entrepreneur(s) serves as the “company.”
- Customer Analysis: Provide detail using secondary and, if required, primary data to describe the customer for the product. What basic needs/wants does the product as it stands serve? What needs and wants could be served? What benefits does it provide? Describe the consumers using constructs from your marketing and consumer behavior courses. [In the case of Introduction to Marketing, use the concepts from the chapters and lectures on consumer behavior.] Develop your analysis with research. This is a major section of the report.
- Industry Analysis: Describe the industry in which the company operates. This section includes:
- Competitive analysis:
Who are the major competitors? Remember to use a market driven notion of competition. Describe representative competitors. What are their values, missions and cultures? What are their businesses and strategies? Who are their customers? What is their value proposition? What benefits do they provide? How do their products/services, channels of distribution, and pricing deliver those benefits? How do they communicate the value to the consumers and potential consumers? What are their strengths and weaknesses? Be careful not to plagiarize by cutting and pasting or paraphrasing without correct citations of your sources and proper use of quotation marks.
Explain the structure of the industry. What are the major factors driving the marketplace and differentiating the competitors? Provide one or two industry structure maps. Are there gaps in the market such that lucrative target markets are not being adequately served? Are there significant barriers to entry or exit? Are there major buyers or suppliers that have a lot of power? Are there threats of or existing substitutes? How competitive is the industry? Is it saturated? Is it growing?
- Environmental trends: Describe trends that impact or may impact the target market or this industry. What will be the effect? Will this company be hurt (benefit) more or less than competitors by this threat (opportunity)? Focus on trends that impact this industry specifically. Some types of trends to consider include (only include those that are relevant to the industry):
- Economic environment: Anticipate the economic and business conditions in the geographic target market (e.g. local, international). How will they impact this industry and this company?
- Political and regulatory environment: Does this industry have the favor of current politicians? Or is this industry receiving negative attention from politicians and regulators (e.g. tobacco manufacturers)? What is the regulatory environment? Are there pending laws (or pending overturning of laws) that will affect this industry? If the project embraces international markets, consider the political and regulatory environments in those overseas markets. What are relevant tariffs and duties? What is the political stability in that market, and what is the attitude toward U.S. firms? Don't list regulations and laws without showing the connection between the laws and the product/service.
- Social and cultural factors: What social or cultural factors or trends impact this industry? Is the product consistent with cultural norms and core values? Are there societal trends in the culture or in possible target markets’ subcultures that may support or impede the acceptance of the product? Additionally, will reference groups or opinion leaders influence the consumer’s decision to buy/use the product? Explain.
- Technology: What technological factors will impact this industry? Is technology a threat, perhaps replacing a product or service offered in this industry? And/or does technology create opportunities in this industry? Is the product high-tech or state-of-the-art for the market needs it satisfies? Are newer products replacing older ones frequently? Does technology impact the production, packaging, or distribution of the product? Does the client own proprietary technology, or could competitors readily duplicate the technology currently used? In short, how does the technological environment impact the product?
- Demographics: Are changing population demographics affecting this industry? What demographic trends will affect the acceptance or rejection of the client’s product/service? If you recommend your client target a specific demographic group, determine if there will be population shifts into or out of that market. Are any other demographic groups growing in size or market attractiveness that might represent promising future markets for the product? For example, the growing size of the Latino population has created opportunities for many industries, as has the general aging of America.
- Key publics: Are there other publics that have power or impact in this industry? Examples include financial (investors), media, government, and special interest groups.
D. SWOT Table: SWOT stands for strengths, weaknesses, opportunities and threats. This table summarizes your situation analysis in a visual form. Everything you list in the SWOT table should have been discussed in the previous sections of the situation analysis. Strengths and weaknesses are internal to the company, while opportunities and threats exist outside the company (e.g. due to competition, customers, or environmental trends).
1. Opportunities: Identify areas of customer need in which you anticipate the client can perform profitably. Opportunities identified should have both a high level of attractiveness (e.g., anticipated market growth, potential profitability), and a high probability of success given the strengths and weaknesses of the company.
2. Threats: Identify challenges posed by unfavorable trends or developments that, in the absence of defensive marketing action, may lead to a decline in sales and/or profits. Threats should be classified according to their seriousness and probability of occurrence as follows:
a. Major threats: Identify threats that can seriously hurt the client and that have a high probability of occurrence. [NOTE: the marketing strategy sections should specifically address these issues. Develop objectives and strategy/action programs to prevent the threats from fully materializing, and to cope with them if they do.]
b. Potential threats: Identify unfavorable trends or developments you perceive either as serious or as having a high probability of fully materializing, but not both. [These do not need to be addressed in the strategy section, but alert the client to them so they can be monitored.]
c. Minor threats: Identify other threats that are not very serious and have a low probability of fully developing. [These do not need to be specifically addressed in the marketing strategy sections. However, the client should be made aware of them.]
Now that the Situation Analysis is complete, move on to the next part of the paper to provide the market-product focus and goal setting based upon the research and analysis. The most important common mistake that occurs is a failure to make the logical connection between the analysis and the recommendations. Remember, the only reason to do research is to provide a basis for managerial recommendations. Make certain that all recommendations are supported by the research.
III. Market-product Focus & Goal Setting: Provide support and rationale for these decisions.
- Segmentation, Target Markets, Growth Strategy and Value Proposition
1. Market segmentation: Identify the most appropriate bases for segmenting the market and define relevant market segments. At a minimum, most segmentation strategies consider geographic and demographic segments. Further, psychographic (lifestyle) segmentation and one or more types of behavioral segmentation (e.g., benefits sought, usage occasions, etc.) are usually useful. Justify your choice of segmentation bases. If you recommend segmenting the market on the basis of demographics (e.g., age and gender) and usage occasions, explain why. Then, segment the market, defining the relevant segments you believe to exist (e.g., the various age/gender segments, the various usage occasion segments).
2. Target market(s): Based on the above segmentation analysis and any further insights provided by the secondary and/or primary research, identify the best (most logical and most promising) target market(s). Are the benefits sought in each target homogeneous? Are the targets measurable, accessible, substantial, differentiable, and actionable? What is the market potential for these targets?
3. Market-product grid and growth strategy: Provide a market-product grid for the industry. There are two forms this can take and you should do both unless they are so similar that one works. The first kind is Ansoff’s (1957 HBR) diversification grid with the four quadrants of the old/new and product/market (e.g. penetration, diversification, etc.) The second kind lists all products (or product categories) and all markets and indicates which product/market cells the company will focus on. Where is the client currently on the grid(s)? Which growth strategy do you recommend and why (market penetration, product development, market development, or diversification). Justify the recommendation based on such considerations as the current marketing situation, client’s resources, stage in the product life cycle, etc.
4. Value Proposition: Provide a clear and simple statement of your recommendation for target market(s), the benefits of the offering(s), and the strategic (not specific) price (review value proposition lecture). Relate your recommendation to Porter’s three generic business strategies.
- Positioning Strategy: The positioning strategy captures how you want target consumers to view the client’s offering(s) relative to the competition on benefits that are important to the target(s). It locates the value proposition within the competitive environment and communicates recommended points of difference. The positioning strategy should differentiate the product/service so as to “own” a clear, distinctive, and desirable place in the minds of target customers. Provide two positioning maps that communicate your strategy.
- Set Market and Product Goals: Based upon the situation analysis and segmentation, targeting and positioning strategy, recommend specific and realistic marketing objectives (goals) for the client. Most businesses pursue several objectives simultaneously, including profitability goals, sales growth goals, market expansion, market share improvement, risk containment, technological or service leadership, etc. Objectives should be:
- arranged hierarchically from the most important to the least important;
- stated as specifically as possible (e.g., sales volume within a specifically defined market);
- stated in quantitative (measurable) terms whenever possible, and include a time frame; (For example, rather than stating “increase market share,” state something like “increase market share to 5% within the next twelve months.”)
- realistic based on the situation analysis, and
- internally consistent with the strategy recommendations. (For example, it is unrealistic to expect profits to increase significantly in the short-term if you advise your client to invest heavily in promotion to build awareness and market share.)
IV. Marketing Mix:
Plan strategy/action programs for each element of the marketing mix. It is essential that the marketing mix recommendations be consistent with the current marketing situation/SWOT analysis. Further, the marketing mix must support the recommendations regarding objectives, target market(s), and positioning. Use primary and secondary research, and marketing theory to guide the strategy.
- Product: Describe recommendations with regard to the product. Describe the product and its features and attributes. Discuss product design improvements, product augmentation and support services, branding, brand name, packaging, labeling, building and protecting brand equity, possible line extensions, etc. as appropriate for the client. Be as specific and detailed as possible in developing the recommendations.
- Pricing: Recommend an overall pricing strategy (consistent with the recommended objectives, target market, positioning, and product strategy), and develop a specific suggested price. The overall strategy should derive from an analysis of customer perceptions, competitor pricing, and estimated costs. Use secondary and primary research to justify the recommendations. Describe the cost structure and resulting profit margins. In addition to the overall pricing strategy and suggested retail price, develop specific plans for any discounts and allowances. Recommend and plan the use of other pricing tactics as appropriate.
- Channels of Distribution: Recommend an appropriate distribution strategy. Justify the recommendation. Recommend appropriate distribution coverage (intensive, selective, or exclusive). What will the channel structure look like (e.g., store-based retailers, internet retailers, wholesalers and retailers, direct marketing, corporate vertical marketing system, etc.)? If distribution through wholesalers and store-based retailers is recommended, explain why, and include recommendations as to specific types of wholesalers and specific retailers. If direct marketing is recommended (e.g., direct mail, internet), explain why and develop specific plans. What is the plan for marketing logistics; that is, how will the client transport the product to the distributor and/or consumer?
- Integrated Marketing Communications: Recommend an integrated marketing communications program. State communication objectives. Specify types of promotion. Which tool is being used toward consumers? Which targets? Which tools for the trade?
- Advertising: To whom? Where? When? Why?
- Sales promotion: To whom? What types? When? Why?
- Personal selling: Who? When? Where? How? Why?
- Public relations: What kind? What message? When? How? Why?
- Direct marketing: What kind? To whom (list?)? What message? When? Why?
- Social Media: What kind? To whom? How? Why?
- Sponsorship: Describe any recommended charity donations or event sponsorships. What is their purpose?
*For all of the above, include the purpose of the promotion and describe how to measure the promotion’s effectiveness.
NOTE: The appropriate promotion mix may be driven by the distribution strategy. For example, if distribution is through wholesalers and retailers, the client will need to use trade promotion (e.g., trade advertising, trade sales promotion, and/or personal selling) to secure and maintain this distribution. (This is in addition to consumer promotion.) Similarly, direct marketing through the Internet needs a promotion strategy to attract consumers to the web site (as well as specific planning for the web site itself).
Be specific in the IMC section. If advertising is recommended, specify the media plan, message, and format. In discussing the media plan, recommend a specific web-based strategy, for magazine advertising recommend specific magazines by name; for direct mail recommend appropriate types of mailing lists; for television advertising discuss the time of day, type of show or cable station, etc. Also discuss issues of reach, frequency, and timing. Justify recommendations based on cost-effectiveness and relevance to target customers. Regarding message and format, plan the emphasis of the ads (the message should communicate the positioning strategy), how the product should be portrayed, and the execution style to be used. In other words, the plan should specify how the ads should look, what they should say, and where, when, and how often they should appear. If publicity is planned, specify how the client should go about trying to obtain it. This might include recommending press releases be sent to specific media, specifying what the releases should say, specifying events the client should sponsor, etc. If social media is recommended, what tools do you recommend and what can the client do to make it effective?
- Budget and Financials: Establish projections for unit and dollar sales, costs, and gross profits for one or two years. Calculate the “break even” analysis based upon projected costs. Evaluate this break-even. Is it reasonable? What market share will it require? Consider the total cash outlays required. Are there sufficient resources available to cover these costs? Worksheets go in the appendix. Always explain where the working numbers come from. Always list all assumptions.
V. Implementation Plan: How does the plan fit together? What is the schedule and time frame? Who has the responsibilities?
A. Implementation Schedule: Provide a “calendar” or schedule of how everything fits together for the next one or two years. This might include product launch, promotion activities, scheduled price changes, assessment activities, etc. Clever creation of this chart will allow inclusion of information about responsibilities.
B. Monitoring and Evaluation: How will performance be measured? What measures and data will be collected? When? How will it be analyzed and evaluated? What are the benchmarks? How is success and failure defined?
VI. Risks and Threats: What are the possible risks and threats in this plan? For example, does the client risk alienating current customers by targeting a new market? Does this entrepreneurial plan put the client at risk of bankruptcy? Discuss how the plan minimizes these threats and what contingency plans should be.
VII. Conclusion: Summarize the plan. Be persuasive. Make clear why this is the best possible plan for this company at this time. What will be achieved by this plan?
VIII. References (Works Cited)
Select a web-based bibliography tool early in the project so all team members can easily add their references to it as they go. Use an accepted method of reference citation, such APA or MLA. Include sufficient information so the original article, book or website can be accessed. NexisLexis, Yahoo, etc. are not sources. They are databases, like a library. Cite the actual source. If citing a website, provide the full URL for the exact page on which the information was included and provide the date you accessed the page. Be critical of information. Anyone can post anything on the web, and many web sites contain inaccurate and biased information. Use objective and legitimate popular, trade and academic publications and websites. Lack of proper citations will indicate intent to plagiarize.
Attach as appendices information that provides more detail than is necessary in the body of the report. For example, include here a copy of a survey that was conducted or a mailing list that was constructed. Appendices should be labeled with letters (Appendix A, Appendix B, etc.), have a title, and be referred to in the text. Appendices should be ordered according to the order they are mentioned in the text.
Market Research: You will always rely heavily on secondary research when creating a marketing or business plan. Seldom will you create a marketing or business plan without also conducting primary research. Primary research will be in the form of observation, in-depth interviews, focus groups, or surveys. In 304, I only require you to identify what you think is the most important research the firm should do and to design the research plan, including the instrument, to do it. In 304 I do not require you to actually conduct the research. In BUS 491 and MBA culmination projects I do require you to design, carry out, and analyze primary research. The research plan or full research project (depending) should be referred to in the report according to the section it is most relevant to. For example, if you are doing consumer research, it should be discussed in the consumer section; however, pricing research should be discussed in the pricing section. For 304, the research plan and instrument will be graded as part of the final, not midterm, report. The details of the plan, including the questionnaire, sampling plan, etc. should be included as an appendix.
X. Table and Figures
Professional reports (such as MBA culmination projects or BUS 491 client-based projects) include critical tables and figures in the reports. For MKTG 304 projects, due to page limit realities, refer to the table or figure in the text, and use publication style indications of where the table or figure should be inserted, so that the reader knows when to look at it and what he or she should be learning from the table or figure. Also, clearly label the table or figure so that the reader can determine its purpose without reading the text. When attaching the tables and figures at the end of the report, put each one on a separate page (unless they belong in a group) and clearly label each one (e.g. Table 1: Sales Trends). Present professional tables and figures. For example, construct a Word table instead of cutting and pasting an Excel spreadsheet. See “Report Guidelines” for further explanation.
Strong business writing is required. Do not overlook misspelled words. Use appropriate grammar, punctuation, capital letters, and spacing. Format the document. Eliminate unnecessary spacing and lack of coherence. Headings and sub-headings must follow a logical sequence. Proofread as a group to take advantage of different perspectives.
BUS 491 & MBA Culmination Projects
Additional analyses should be included in the BUS 491 and MBA Culmination Projects that lean the plan more toward a business plan. Tools such as Porter’s Cross, Value Chain Analysis, and a significantly higher standard on budgets and financials (sensitivity analyses, etc.) are expected.
A Word of Encouragement:
Writing a marketing or business plan for a client is a challenge both for the professor and for the students. It is a challenging assignment and in addition we may run into real world difficulties. It is not as “neat” as textbook exercises. However, we have found it to be one of the best learning experiences. Students frequently tell us (two weeks after it’s done and for years afterwards how much they learned from the experience. Many go on to do exactly the same thing in their jobs and their businesses. Many students have told us their plan helped them land the job they wanted. Also, when business students create marketing plans for local businesses, they are giving back to the community in an important way. So…hang in there, do the best you can, and create something you can be proud of.
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