AAA Marketing Plan Training Welcome Day 1 Charles Gitau August 2016 Kigali workshop
Introduction participants Please introduce yourself in 1 minute: Name Company name Sector Reason why you are here Expectations
Introduction to the training
Program Day 1: 09.00-10.00: Introduction 10.00-18.00: Situation analysis + Marketing strategy Day 2: 09.00-12.00: Marketing strategy + Financial + Controls 13.00-18.00: Branding
Goal Goal of the training: 1. Provide you insights and understanding of the marketing planning process 2. Provide you the marketing plan format and train you how to use it to make your own plan 3. Help you to kick-start making your own marketing plan and coach you further by email if so desired.
Structure Structure of the training: It follows the structure of a real-life marketing plan, step by step, throughout the two days In this way, marketing concepts are explained and practiced in the most practical way We will do exercises and have discussions throughout, to make it as practical as possible You will go home with new ideas and choices made, and ready to make your own marketing You will receive a format and example, and distance coaching to make your own
What will we do? Components Learn to capture and analyse market insights, to know what is, and learn to strategize, based on these insights, to know what and how to do Training follows the Marketing plan format: Executive summary Situation analysis Marketing strategy Financial forecasts, budgets Implementation controls
Marketing plan vs Business plan Business plan AAA provides BP trainings to members. Goal is to help making members bankable for longer term external financing Requires very in-depth planning and 4-year choices The Business plan is more strategic It is about the what and why of your business Marketing plan AAA also provides Marketing plan trainings. Goal is to help members make solid choices to grow their business, regardless of possible external financing Branding is part of the Marketing plan trainings The Marketing plan is more tactical, with 1-year choices It is about the how to execute of your business
Real-life need for Marketing plan Advise to 3 warehouse operators in Kenya:
Situation analysis
Marketing plan: section 1 Training follows the Marketing plan format: 1. Executive summary: section 1 - you will do this at the end, not part of this training 2. Situation analysis 3. Marketing strategy 4. Financial forecasts, budgets 5. Implementation controls
Marketing plan: section 2 Training follows the Marketing plan format: 1. Executive summary 2. Situation analysis: section 2 capture and analyze market insights 3. Marketing strategy 4. Financial forecasts, budgets 5. Implementation controls
Situation analysis: components In our marketing plan, under section 2, we sum up the findings of our Situation analysis. We focus on the following components: Introduction Summary: this you do at the end Part 1 Macro environment Demographics, Needs, Trends Marketing environment, supply chain Part 2 SWOT Analysis Keys to Success, Critical Issues
Situation analysis: part 1
Macro environment We are part of an exchange economy We buy resources and make products/services Often through processors / middlemen Consumers give labour to make the resources Government collects tax, and provides public goods/services and part of a simple marketing system Sellers and buyers: connect through 4 flows Inner loop: exchange of money for goods/services Outer loop: exchange of information (adds and customer needs)
Our place in a modern exchange economy a d 1 b c
Structure of a simple marketing system
Mapping and analyzing demographics, needs, trends Understand needs, wants, and demands Target your markets, ensure good segmentation and positioning Provide value and ensure satisfaction Provide offerings, use good branding
Mapping and analyzing your marketing environment Understand your marketing channels to act Understand your supply chain to professionalize Understand your place in the overall marketing environment Know your competition and act
Mapping and analyzing activities in your value chain Map your full chain, both primary and support level, looking at: sourcing producing distributing marketing after-sale Primary Activities Support Activities Inbound Logistics Operations Outbound Marketing Logistics Procurement Human Resource management Technological Development Service Margin Infrastructure
Situation analysis: part 2
Exercise For your company, do a brief: Mapping and analyzing demographics, needs, trends Mapping and analyzing your marketing environment Mapping and analyzing all activities in your value chain
External Internal SWOT analysis To define: where do I stand as a company Starting point is that you look through the eyes of your company to the outside world and map your SWOT SStrength O Opportunity WWeakness TThreat
SWOT analysis Step 1: scan your External environment Is there a Marketing opportunity for my SME? An area of buyer need & interest that I have a high probability of profitably satisfying Is there an Environmental threat to my SME? A challenge posed by an unfavorable trend or development that, without a defensive marketing action, will lead to lower sales or profit
SWOT analysis Step 2: scan your Internal environment Can we, as a company, take advantage of the opportunities in the External environment? What are our Strengths to do so? What are our Weaknesses that stand in the way?
SWOT analysis Step 3: Market opportunity analysis Five key questions, based on the defined Marketing opportunity: 1. Can we articulate our benefits convincingly to a defined target market(s)? 2. Can we locate the target market(s) and reach them with cost-effective media and trade channels?
SWOT analysis (continue) 3. Do we possess (or have access to) the critical capabilities and resources we need to deliver the customer benefits? 4. Can we deliver the benefits better than any actual or potential competitors? 5. Will the financial rate of return meet or exceed our required threshold for investment?
Real-life SWOT: Kenya (1) Strengths Strong capital base hence ability to pay farmers on the spot Delivery of consistent grain quality markets Planning and timely purchasing from sellers and delivery to the buyers Ability to purchase, store and sell large volumes Highly competent and experienced staff especially in Quality Assurance unit Certification by EAGC on WRS Weaknesses Lack of own warehouses hence inability to expand or modify premises Fewer number of farmers willing to store grains under WRS Lack of partnership with farmers and groups during production stages hence affecting quality High transport and logistics cost between Eldoret and main markets Nature of business does not support WRS does Opportunities Forging partnership with other organizations that support capacity enhancement to farmers (improve awareness and quality of grains delivered) Establishment of regional business hubs on grain trading (Tanzania, Uganda, Rwanda, Malawi, Zambia) Collaboration and partnering with regional grain producers and traders on an e-platform such as Open Book Trading (OBT) Value adding on grains through commencement of a milling and packaging business Threats Stiff competition from other grain traders Warehouse owners could get better tenancy offer and demand the business to vacate Inadequate awareness and support on WRS could make it unprofitable despite certification
Real-life SWOT: Kenya (2) Strengths Close linkages to farmers Location in a grain-rich area Strong membership base & management structure Existence of an elaborate Business Plan that captures all aspects of business such as sustainability, sourcing, technology, competitive edge, gender balance amongst others Good infrastructure Weaknesses Low working capital Lack of managerial skills in some committee members Inability to handle large volumes of grain Inability of members to meet WRS quality and volume requirements Opportunities New regional markets for grains Increased revenues from storage and grading services Opportunity to introduce mobile drying services to members and non-members Increase revenue streams from farm inputs due to new facility and increasing demand Threats Competition from grain traders Low production by members could render the facility dormant Conflict amongst members Low profitability if stakeholders do not support WR Diversification to non-agricultural businesses (real estate) may derail grain business
SWOT analysis Towards implementation: Formulate goals Goals should be realistic Be specific, put in a time line Objectives per department/unit, arrange by priority Objectives should be quantitative Objectives must be consistent
SWOT analysis Use your SWOT to further analyze and describe your: 1. Competition 2. Services (that come with the product), to excel 3. Your keys to success 4. Your critical issues 5. Your macro environment issues
Exercise For your company, do a brief: Scan of the external environment, defining marketing opportunities, and the environmental threats to get there Scan of your company s internal environment to take advantage of these opportunities, defining your strengths to do so and weaknesses that stand in the way.
Marketing strategy
Marketing plan: section 3 Training follows the Marketing plan format: 1. Executive summary 2. Situation analysis 3. Marketing strategy: Section 3 - from analyze to strategize 4. Financial forecasts, budgets 5. Implementation controls
Marketing strategy section 3 from analyze to strategize: putting it on paper
Marketing strategy: components Under section 3 of our marketing plan we put your marketing strategy on paper We focus on the following components: Introduction Summary: this you do at the end Part 1 Mission statement Objectives Part 2 Target Marketing and Positioning Marketing Mix: product, place, price, promotion
Recap: why a marketing plan? Why do a situation analysis? Why a SWOT? Why strategize? I know my business, I do it for so long, I don t have time Yes, but society changes, new requirements come up There are forces coming from society, they require new capabilities Information Technology Globalization Collect Information Communicate with Customer Major Societal Forces New Company Capabilities Consumer Information Increased Competition Differentiate Goods
The 5 marketing concepts 5 marketing concepts (or philosophies) They evolved over time but not all companies change with time...and many continue working under the production concept Production Product Selling Marketing Holistic 1. Production concept: simply produce and distribute 2. Product concept: invest in product, but not in market 3. Marketing concept: know your market, produce accordingly 4. Holistic concept: ultimate goal, be one with your market Still too many SME companies are trapped in 1 and 2
The marketing plan Directs and coordinates your SME in its marketing effort At strategic and tactical level At product line or brand level
How do we write it Length and layout varies from SME to SME Most tactical marketing plans cover 1 year In a plan from 5 to 50 pages Small enterprises shorter or less formal Large enterprises more formal and structured
Strategic and tactical Strategic Do the situation analysis Plan for strategy Tactical Use the situation analysis Plan for implementation Analysis of marketing opportunities Target the marketing decisions Create the mission and value proposition Product features Promotion Merchandising Pricing Sales channels Service
Marketing planning Marketing planning steps: Create the longer-term basis (3-4 yrs) for the tactical (annual) implementation plan and its control Based on situation analysis outcomes: towards formulation and implementation
Marketing strategy: part 1
Mission statement Defining it: very simple yet very difficult questions If you get this right the rest comes easy But get it right first! What is our business? Who is the customer? What is of value to the customer? What should our business be? What will our business be?
Mission statement A good Mission statement gives you a shared sense of purpose, direction and opportunity. It is your impossible dream. Focus on a limited number of goals Stress the company s major policies and values Define the major competitive spheres within which the company will operate Take a long-term view (your strategic or business plan) Make it as short, memorable, and meaningful as possible
Mission statement A vague not so good mission statement: To build total brand value by innovating to deliver customer value and customer leadership faster, better, and more completely than our competition
Mission statement Don t see yourself just as a product (or service) but as part of the marketing system Your products or services come and go, but basic needs and customer groups endure forever Ask yourself: who am I in the customer satisfaction process? to guide you in this Company Product Market Missouri-Pacific Railroad We run a railroad We are a people-and-goods mover Xerox We make copying equipment We improve office productivity Standard Oil We sell gasoline We supply energy Columbia Pictures We make movies We market entertainment
Exercise Make a mission statement for your company
Markets Setting objectives: tool 1 Marketing strategy planning: Product-market expansion grid Use one or more of the 4 types of marketing growth planning 1. Current product in current market 2. Current product in new market Current New Product Development 3. New product in current market 4. New product in new market Current Products New
Setting objectives: tool 2 Marketing strategy planning: Integrated growth Jointly with marketing environment Supplier SME business Wholesaler Competitor
Setting objectives: tool 3 Marketing strategy planning 3: Diversification New opportunities, move in
Fine-tuning objectives Regardless of the tool you use: Always use the 5 Forces of Porter model to fine-tune Using next slide: double check feasibility of objectives and to target the market Substitute Products Buyer Power New Entrants Supplier Power Rivals
Setting objectives: tool 4 Michael Porter identified five forces that determine the long-run attractiveness of your market or market segment: 1. Threat of intense segment rivalry: a segment is unattractive if it already contains numerous, strong, or aggressive competitors. 2. Threat of new entrants: the most attractive segment is one in which entry barriers are high and exit barriers are low. New Entrants Substitute Products Rivals Buyer Power Supplier Power 3. Threat of substitute products: a segment is unattractive when there are actual or potential substitutes for the product. Substitutes place a limit on prices and on profits. 4. Threat of buyers growing bargaining power: a segment is unattractive if buyers possess strong or growing bargaining power. 5. Threat of suppliers growing bargaining power: a segment is unattractive if the company s suppliers are able to raise prices or reduce quantity supplied.
Exercise For your company: Indicate which tool(s) you would use to set your objectives, and explain why Briefly describe how Porter s 5 forces relate to your company
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