An effective Marketing Plan contains more just than an outline of marketing activities for the following year. Yes, proposed marketing activities should be listed within a Marketing Plan. However, a marketing plan should be more comprehensive, providing a framework for pricing, branding, positioning, decision making, and market research moving forward. Marketing Plans provide a basis for effective decision making, and integrated marketing communications.
Contained below is sample Marketing Plan. Company names and industry have been changed to protect confidential information.
PitchPerfect is a company specializing in computer peripherals, and over the past six years has produced a voice recording device (VRD) and a digital vocal communicator (DVC).
As technology in the external environment is continually improving, PitchPerfect aim to constantly respond to technological changes and utilize new-found knowledge to enhance our products.
Our critical success factors in response to external and internal issues include:
- Speedy and effective Research and Development
- Sufficient access to effective distribution
- Access to fast and comprehensive market research
Over the next three years, PitchPerfect aim to offer products primarily targeting students in the VRD market and harried assistants in the DVC market. We aim to provide distribution of high intensity in both distribution channels in the next three years for both the VRD and DVC markets to ensure customer satisfaction. Direct advertising will be implemented in the VRD market whilst pioneering advertising will be utilized in the emerging DVC market.
An increased distribution intensity and change of advertising strategies as explained later in the report will result in a budget allocation of $1,571,283 leading into the year following the end of this marketing plan.
As an Australian company servicing our national market, Pitch Perfect recognizes our customers as those who are looking to enhance their technological experience in message communications with computer devices, be it for amusement, business or casual experimentation.
Our three brand level competitors in the VRD market are VoiceBox, VozTech and voicebox, whilst our two competitors in the DVC market are dicktate and BlasT.
Identification of the market segments
The market segments are students, home users, creators, managers, parents and assistants. We have decided to target managers and creators for our VRD product, while the primarily target is assistants in the DVC market.
It is assumed that economic factors will remain unchanged during the time frame of this marketing plan, as will sociocultural, political, legal and natural-environment (including ecological) factors.
Technology is predicted to continually grow as researchers discover more uses for the microchip and the computer peripherals industry thrives and expands. This is not expected to affect product opportunities but is expected to affect customer behavior as they become more comfortable with technological progress.
Expected future Market Trends
At the decline stage of the product life cycle, the VRD market is becoming less competitive. New entrants into the market are extremely unlikely because of the declining stage of the product life cycle, and because strong brands are already present in the market, reflecting low competition. Given the success and competitive turbulence of the VRD market in the past years, many buyers have emerged, hence decreasing the bargaining power of individual buyers, as the demand for the product has been so high.
The great differentiation between the four competing firm’s products, resulting from the magnitude of customer preferences being satisfied is also a cause for low bargaining power of buyers. This is an attractive aspect of the VRD market for competing firms.
The emergence of the DVC product that acts as a substitute product with enhanced features leads to decreased market appeal. These combined factors imply low expected competitiveness in the VRD market for the next three years, which increases the attractiveness of the market. Although the declining stage of the product life cycle is a concern as sales are expected to decrease. However, since the VRD is still a large market, we believe we can continue to meet the changing needs of our target segments and hence maintain a substantial profit in the VRD market.
There are currently three competitors in the VRD market being: voicebox, Voztech and VoiceBox. There are currently only two competitors in the DVC market being; blast and dicktate. One major issue faced by all competitors in the VRD market is whether or not to enter the DVC market, and if they do, how do they split their resources in both markets and still compete.
In both the VRD and DVC markets, all firms sell through middlemen and it is these retailers who in turn sell to the final customers. While some of these middle men focus on sales to business customers, and others focus on sales to the final customers, the all refer to themselves as dealers. Since firms are not able to sell directly to final customers, they all rely on channels of distribution, which can be classified into full-service dealers (Channel one) and discount dealers (channel two).
Full-Service deals tend to serve local customers with a carefully selected range of products. These can range from small “independents” to larger chains. While many of them make use of some sort of website, the majority of their focus tends be on in-store sales. The main benefits of distribution through this channel is that good full-service dealers are equipped with well-trained sales people who can provide customers with important information, demonstrations, and personalized service both before and after the purchase. This channel of distribution is particularly attractive for customers who are heavily involved in the purchasing decision and process as they are able to physically see and compare different options. They also provide peace of mind for customers who desire assurance of having someone nearby incase problems arise with their product.
Critical success factors
- Speedy and effective Research and development
- Sufficient access to effective distribution
- Access to fast and comprehensive market research
All critical success factors have been developed based on managerial judgment.
- Effective research and development is essential in both the DVC and VRD market to ensure, the correct creation of product specifications, which is vital to success in both industries.
- Access to distribution is essential to ensure products are reached by consumers
- Access to market research is essential to allow effective changes to products, without it business success within the VRD and DVC market are impossible.
From the above table, it is clear that there are aspects of the DVC market tend to be more attractive than for the VRD market. With the VRD entering into decline, and a larger number of competitors, there is less opportunity for profit in the VRD market than there is in the growing DVC market which has fewer competitors. This is because the decline stage of the product life cycle suggests that we will see a reduction in the number of competitors, declining sales, lower profits, and a reduced amount of market activity
Due to our relatively high product specifications, and the relationship this has with production costs, we are unable to be the cost leader in the market for either of our products unless we change the specifications. This will affect our ability to target more price sensitive segments of the markets, making it difficult to capitalize on the growth of the student segment of the VRD market.
Due to the lack of competition in the VRD market we have been able to gain market share in numerous segments without close alignment of our product to their preferences as not all segments are being directly targeted by our competition. The growth of this market and the lack of competition, however, make it an attractive market and therefore the risk of new entrants is high.
Problem (Issue) Statements
- How can we utilize our relatively high advertising budget and brand awareness to capitalize on the growth of the DVC market?
- How can we capitalize on our product close alignment with the preferences of the students, given the VRD market entering into decline?
- Given that we have to now split our resources between two markets, how can we cope with the threat of new entrants into the DVC market?
- Given our past inability to predict sales amounts, how can we take advantage of the growth in the students segment?
- To keep our share of the Harried Assistants market segment at over 50% over the next 3 periods.
- To increase net profit by 50% from $2.3 million to $3.5 million over the next 3 years.
- To grow our DVC sales at a rate that is larger than the growth of the market over the next 3 years.
The DVC will exhibit the same brand name as the VRD to ensure the beneficial transference of previously gained positive brand image acquired in the VRD market. This ‘umbrella branding’ positioning strategy limits the risk of introductory costs associated with the launch of the new DVC product, as it will be supported by the already esteemed brand image of Pitch Perfect, attained through the VRD market.
Brand image and subsequent associations created in the mind of consumers will be that of a quality, valuable product. The key product positioning strategy is to ensure high levels of product special commands yet low pricing reflect this positioning. Therefore all product and promotions will seek to reinforce the perception of students and home users, that Pitch Perfects VRD is a reliable, good quality product that stands for value.
Direct advertising will exist to harvest profits in remaining periods. This is an attempt to maximize market share quickly given a declining product life cycle. In accordance with this above average customer service, creates a competitive advantage over the main competitor voicebox.
The sales promotion strategy will focus on a pull strategy through excessive advertising and sales promotions. This will occur in order to fulfill the objective of maintaining high brand awareness.
Following a detailed analysis of current market trends, segments, products and positioning, marketing activities can be planned, and defined. for the 12 months, based on a solid framework.