Unit 4:

MARKETING PLAN

Ngô Quý Nhâm Email: quynham@gmail.com Web: sites.google.com/site/ngoquynham

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Lecture outline

F  Overall marketing strategy F  Marketing Mix §  Product §  Pricing §  Place §  Promotion

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Marketing Strategy

F  Marketing strategy

§

...firm’s approach to marketing its products and services stated in broad term, which firm the basis of all its marketing-related activities.

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Discussion

What are key elements of a marketing strategy?

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Overall Marketing Strategy

Marketing strategy components: F  Target consumers F  Positioning

§  Gives a product a clear, distinctive and desirable place

F  Positioning involved selecting competitive

advantages: §  Differentiation Low Cost §

in the minds of target consumers compared with competing products.

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Customer Value Proposition

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Product strategy: Three levels of products

•

Physical good, service or most often some of both Branding Packaging Service Product-ine

•  •  •  •

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Product strategy: Three levels of products

Installation

Core Product

Delivery

Packaging

Actual Product

Credit

Features

After- sale service

Core benefit or service

Styling

Brand name

Quality

Payment

Warranty

Augmented product

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Product strategy: Individual Product Decision

F  Product attributes

(product quality, feature, design)

F  Branding

F  Packaging decisions

F  Product-support services decisions

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Product strategy: Product Line Decision

F  Product line-length decisions

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Product strategy: Product Line Decision

F  Product line-filling decisions

F  Product line modernization decisions

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Pricing strategy

Pricing objectives •

Pricing Policies •

–  Price Flexibility

–  Levels over PLC

–  Discounts and allowances

–  Geographic terms

Legal factors •

Markup chain in channels •

Costs •

Demand (price sensitivity) •

–  Competition/Substitutes

Price of other products in line •

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Pricing Strategy: Pricing objectives

Target Return

Profit Oriented

Maximize Profits

Dollar or Unit Sales Growth

Pricing Objectives

Sales Oriented

Growth in Market Share

Meeting Competition

Status Quo Oriented

Nonprice Competition

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Price Level Policies

Price Skimming

Price

Sell at high price before reducing to next price level and repeat

Initial Price

In price skimming, initial price is set high--at top of the demand curve Most sensible when: •  Demand is inelastic

Second Price

•

There is an “elite market” that is less price sensitive

Final Price

Barriers to entry (patents, etc.) •

•  Gradually working down the

Quantity

demand curve with lower priced marketing mixes over time.

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Price Level Policies

Penetration Pricing

Price

Penetration pricing means

entering the market with a

Whole market price

low initial price:

•

Capture market share quickly

Take advantage of growth •

•

If competition is likely to follow quickly, or if

•

Quantity

A low price will give competitors less incentive to enter

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Value Pricing

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Discounts Reduce the Price Paid

Quantity

Seasonal

Discount Pricing

Sale

Cash

Discounts are usually defined as a percentage off of a list price

Trade

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Markups

50.00

Wholesaler 30.00

Producer

24.00

Markup = 20.00 = 40%

Markup = 6.00 = 20%

Markup = 2.40 = 10%

Cost = 30.00 = 60%

Cost = 24.00 = 80%

Cost = 21.60 = 90%

Markup is usually stated as a percent of the selling price, not of the cost

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Types of cost

Fixed Costs

Variable Costs

Rent

Raw materials

Depreciation

Component parts

Manager’s salaries

Hourly wages

Property taxes

Packaging & freight

Insurance

Sales commisions

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Break Even Analysis

Higher

Profit Area

Total Revenue Curve Total Cost Curve

Break-Even Point

Loss Area

t s o C d n a e u n e v e R l a t o T

More

0

Units of Production

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Consumer Demand is Related to Price Sensitivity

MR

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The Price Elasticity of Demand

F  As price decreases §  Revenue rises when demand is elastic. §  Revenue falls when it

is inelastic.

§  Revenue reaches it

peak when elasticity of demand equals 1.

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Consumer Demand is Related to Price Sensitivity

Availability of Substitutes

Key Issues

Comparison Difficulty

Who Pays?

Size of Total Expenditure

Significance of End Benefit

Sunk Investment

Switching Costs

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Place Strategy

•  Distribution availability goals •  Ideal market exposure level •  Distribution customer service

level

•  Channel type (direct, indirect) •  Who manages the overall

channel

•  How to manage

transportation, storage and materials handling •  Kinds of middlemen

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Promotion Strategy Integrated Marketing Communications

Strategy decisions to blend:

•  Personal Selling

•  Sales Promotion

•  Advertising

•  Publicity

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Promotion Plan

Promotion objectives

What is content of the message?

Who are your audience?

Where does it take place?

When does it?

26

Determine which communication channels?

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