6 <^5 7 tf 7 MARKETING PLANNING Where Strategy Meets Action Stephan Sorger University of California PEARSON Boston Columbus Indianapolis New York San Francisco Upper Saddle River Amsterdam Cape Town Dubai London Madrid Milan Munich Paris Montreal Toronto Delhi Mexico City Sao Paulo Sydney Hong Kong Seoul Singapore Taipei Tokyo
CONTENTS Preface xix Acknowledgments xxiii About the Author xxv CHAPTER 1:The Planning Process 2 What is a Marketing Plan? 3 Marketing Planning in Action 4 Advantages of Effective Planning 4 Marketing Planning in Action 5 Cross-functional Collaboration 5 Marketing Planning in Action 7 The Marketing Planning Process 7 Marketing Planning in Action 8 Marketing Plan Outline 8 Book Organization 10 Marketing Planning in Action 11 Summary 12 Key Terms 12 Discussion Questions 12 Exercises 13 CHAPTER 2: Objectives 14 Marketing Planning in Action 15 Organizational Mission and Competitive Advantage 15 Mission 16 Competitive Advantage 16 Setting Objectives 18 Clear Objectives 19 Practical Planning 20
viii Contents Summary 22 Key Terms 23 Discussion Questions 23 Exercises 23 CHAPTER 3: Market Overview 24 Market Description 25 Industry, Category, Customer Need 25 Marketing Planning in Action 26 NAICS Code 26 Market Sizing 26 Available Published Reports 27 Commissioned Reports 28 Articles and Internet Searches 28 Marketing Planning in Action 29 Government Sources 29 Niche Markets 29 Marketing Planning in Action 30 Market Trends and Forces 31 Market Trends 31 Marketing Planning in Action 32 Marketing Planning in Action 33 Marketing Planning in Action 33 Marketing Planning in Action 34 Market Forces 35 Marketing Planning in Action 36 Practical Planning 37 Summary 39 Key Terms 40 Discussion Questions 40 Exercises 41 CHAPTER 4: Market Segments 42 Market Segmentation: Consumer Markets 43 Consumer Market Segmentation: Demographic 44 Marketing Planning in Action 44 Consumer Market Segmentation: Geographic 45
Contents Marketing Planning in Action 46 Consumer Market Segmentation: Psychographic 46 Marketing Planning in Action 47 Consumer Market Segmentation: Behavioral 47 Consumer Market Segmentation: Other Approaches 48 Market Research for Consumer Markets 48 Marketing Planning in Action 52 Marketing Planning in Action 52 Marketing Planning in Action 53 Market Segmentation: Business Markets 54 Business Market Differences from Consumer Markets 54 Marketing Planning in Action 56 Business Market Segmentation: Demographic 56 Marketing Planning in Action 57 Business Market Segmentation: Operating Variables 57 Marketing Planning in Action 58 Business Market Segmentation: Purchasing Approaches 58 Marketing Planning in Action 59 Business Market Segmentation: Situational Factors 59 Marketing Planning in Action 60 Business Market Segmentation: Personal Characteristics 60 Marketing Planning in Action 61 Market Research for Business Markets 62 Targeting: Consumer Markets 64 Marketing Planning in Action 66 Marketing Planning in Action 66 Marketing Planning in Action 67 Targeting: Business Markets 67 Marketing Planning in Action 67 Marketing Planning in Action 68 Marketing Planning in Action 68 Positioning: Consumer Markets 68 Positioning Approaches 69 Points of Difference and Parity 70 Marketing Planning in Action 70
x Contents Marketing Planning in Action 71 Positioning: Business Markets 71 Positioning: Approches 71 Points of Difference and Parity 72 Marketing Planning in Action 72 Marketing Planning in Action 73 Practical Planning 73 Summary 76 Key Terms 78 Discussion Questions 79 Exercises 79 CHAPTER 5: Competitive Landscape 80 Competitive Framework 81 Competitor Identification 81 Marketing Planning in Action 83 Competitive Comparison Framework 84 Marketing Planning in Action 85 Marketing Planning in Action 86 Marketing Planning in Action 87 Marketing Planning in Action 87 Marketing Planning in Action 88 Marketing Planning in Action 90 Competitive Research 90 Secondary Data 90 Primary Data 96 Marketing Planning in Action 97 Practical Planning 98 Competitor Identification 98 Competitive Comparison Framework 98 Summary 102 Key Terms 102 Discussion Questions 102 Exercises 103
Contents CHAPTER 6: Strategy 104 Market Opportunities 106 New Market Segments 106 Marketing Planning in Action 107 Go-to-Market Approach 107 Marketing Planning in Action 108 Differentiating Functionality 108 Marketing Planning in Action 109 Strategy 110 Strategies for Financially Based Objectives 111 Marketing Planning in Action 113 Strategies for Market Share-Based Objectives 114 Marketing Planning in Action 115 Strategies for Product and Service-Based Objectives 117 Marketing Planning in Action 119 Strategies for Brand-Based Objectives 119 Marketing Planning in Action 122 Strategies for Customer-Based Objectives 122 Marketing Planning in Action 125 The Marketing Mix 126 Practical Planning 126 Summary 127 Key Terms 128 Discussion Questions 129 Exercises 129 CHAPTER 7: Products and Services 130 Marketing Planning in Action 131 Product and Service Tactics 132 Product/Service Life Cycle Model 132 Marketing Planning in Action 133 Marketing Planning in Action 133 Marketing Planning in Action 134 Marketing Planning in Action 134
xii Contents Marketing Planning in Action 135 Product/Service Tactics during Life Cycle Stages 135 Product/Service Value Proposition 138 Marketing Planning in Action 141 Differentiation 142 Differentiation Approaches: Products 142 Marketing Planning in Action 144 Differentiation Approaches: Product-Related Services 144 Marketing Planning in Action 146 Differentiation Approaches: Services 147 Marketing Planning in Action 148 Marketing Planning in Action 149 Marketing Planning in Action 150 Marketing Planning in Action 150 Marketing Planning in Action 151 Practical Planning 152 Product/Service Tactics 152 Value Proposition 153 Differentiation 155 Summary 155 Key Terms 156 Discussion Questions 156 Exercises 157 CHAPTER 8: Pricing 158 Marketing Planning in Action 159 Pricing Tactics 160 Pricing Characteristics 160 Marketing Planning in Action 160 Marketing Planning in Action 162 Marketing Planning in Action 162 Marketing Planning in Action 163 Marketing Planning in Action 163 Pricing Tactics during the Life Cycle 164
Contents xiii Marketing Planning in Action 167 Pricing Objectives: Determining the Role of Price 168 Survival Pricing Objective 168 Profit Maximization Pricing Objective 168 Market Share Maximization Pricing Objective 168 Market Skimming Pricing Objective 169 Product/Service-Quality Leadership Pricing Objective 169 Pricing Approaches 169 Setting the Price 169 Marketing Planning in Action 170 Marketing Planning in Action 170 Marketing Planning in Action 171 Marketing Planning in Action 172 Marketing Planning in Action 173 Marketing Planning in Action 173 Marketing Planning in Action 174 Marketing Planning in Action 174 Net Pricing Analysis 175 Pricing and Profit 176 Practical Planning 178 Pricing Tactics 178 Pricing Approach 179 Summary 180 Key Terms 180 Discussion Questions 181 Exercises 181 CHAPTER 9: Distribution 182 Marketing Planning in Action 184 Distribution Intensity 185 Distribution Intensity: Overview 185 Distribution Intensity: Adapting to Life Cycle Stages 186 Marketing Planning in Action 187 Distribution Channel Levels, Consumer Markets 187 Consumer Distribution Channel Levels: Overview 187
xiv Contents Consumer Distribution Channel Levels: Adapting to Life Cycle Stages 189 Marketing Planning in Action 191 Distribution Channel Levels, Business Markets 192 Business Distribution Channel Levels: Overview 192 Business Distribution Channel Levels: Adapting to Life Cycle Stages 193 Marketing Planning in Action 195 Logistics: Physical Distribution of Goods 195 Logistics: Overview 195 Marketing Planning in Action 197 Logistics: Adapting to Life Cycle Stages 198 Marketing Planning in Action 198 Practical Planning 198 Summary 199 Key Terms 200 Discussion Questions 201 Exercises 201 CHAPTER 10: Promotion 202 Marketing Planning in Action 203 Promotion Tactics 204 Introductory Phase 204 Growth Phase 205 Maturity Phase 205 Decline Phase 206 Marketing Planning in Action 207 Integrated Marketing Communications 208 Integrated Marketing Communications Goals 208 Integrated Marketing Communications Mix 208 Marketing Planning in Action 211 Promotion Vehicles 212 Advertising Programs 212 Marketing Planning in Action 214 Marketing Planning in Action 216
Contents xv Marketing Planning in Action 217 Marketing Planning in Action 221 Social Media and Digital Marketing 221 Marketing Planning in Action 225 Sales Promotions 227 Marketing Planning in Action 230 Public Relations 230 Marketing Planning in Action 232 Events and Experiences 232 Marketing Planning in Action 235 Direct Marketing 235 Marketing Planning in Action 237 Personal Sales 237 Practical Planning 238 Promotion Tactics 238 Marketing Communications Mix 239 Summary 241 Key Terms 242 Discussion Questions 243 Exercises 243 CHAPTER 11: Finance 244 Break-even Point 245 Fixed Cost 245 Unit Cost 246 Price 246 Sales Forecast 246 Break-even Volume Calculation 246 Break-even Time Calculation 247 Break-even Point Sensitivity 248 Marketing Planning in Action 248 Pro Forma Income Statement 249 Revenue 249 Cost of Goods Sold (COGS) 249 Gross Margin Amount 249 Gross Margin Percentage 250
xvi Contents Expenses, Total 250 Operating Income 250 Marketing Planning in Action 250 Capital Budgeting Analysis 251 Net Present Value (NPV) 252 Internal Rate of Return 252 Marketing Planning in Action 253 Marketing Budget 254 Advertising Expenses 254 Social Media and Digital Marketing Expenses 254 Sales Promotions Expenses 254 Public Relations Expenses 254 Events and Experiences Expenses 254 Direct Marketing Expenses 255 Personal Selling Expenses 255 Marketing Planning in Action 256 Practical Planning 257 Summary 259 Key Terms 260 Discussion Questions 260 Exercises 261 CHAPTER 12: Implementation 262 Project Schedules 264 Marketing Planning in Action 265 Control Metrics 266 Control Charts 266 Marketing Dashboards 268 Metrics Family Tables 268 Marketing Planning in Action 269 Contingency Plans 269 Marketing Planning in Action 272 Practical Planning 272 Schedule 272 Metrics Family Table 272 Contingency Plan 275
Contents xvii Summary 276 Key Terms 277 Discussion Questions 277 Exercises 277 CHAPTER 13: Sample Marketing Plan 278 Marketing Planning in Action 279 Sample Marketing Plan: 2011 Ford Fiesta: Report-Based Format 280 Executive Summary 280 Objectives 280 Market Overview 281 Market Segments 282 Competitive Landscape 283 Strategy 287 Marketing Mix: Product 288 Marketing Mix: Pricing 290 Marketing Mix: Distribution 291 Marketing Mix: Promotion 292 Finance 295. Implementation 297 Sample Marketing Plan: 2011 Ford Fiesta: Ten Slide Format 299 Marketing Plan: 2011 Ford Fiesta 300 Summary 304 Key Terms 305 Discussion Questions 305 Exercises 305 Endnotes 306 Index 311