Marketing Planning

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Marketing Planning

• Professor Carl Mela
• BA 460 Product Management
• Fuqua School of Business

• Brand Management System
• On Building A Brand
• Managing Across Brands

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Agenda

• Marketing Planning
• PharmaSim

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The Purpose of Planning

• Planning is everything, plans are nothing.
• General Eisenhower
• Planning is to a large extent the job of making
  things happen that would not otherwise occur.

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Obstacles to Planning

• Good Forecasting
• Time
• Lack of Process
• Lack of Management Commitment

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Responsibility for Planning
Source Conference Board
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Responsibility for Approving Plans
Source Conference Board
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Planning Horizon
Source Conference Board
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Top Down v. Bottom Up

• Bottom Up
• Closer to implementation, motivated by control,
  better forecasts
• Top Down
• More vision at the top, more coordination

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Planning Process

• Set Deadlines / Initiate Process
• Gather Data
• Analyze Data / Situation Assessment
• Make Plans Forecasts
• Refine Plan
• Management Approval
• Disseminate, Monitor Control

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Assess Situation
Consider Company Goals
Set Measurable Objectives
Develop Strategies, Action Plans, Responsibility
Assignments, and Due Dates
Evaluate Programs Against Objectives
Unattainable
Attainable
Draft Marketing Plan
Compare Programs to Resources
Infeasible
Feasible
Submit Plan for Approval
Not Approved
Approved
Go
Source Conference Board
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The Marketing Plan

• Where are we now?
• Where do we want to be?
• How do we get there?

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Marketing Plan

• Executive Summary
• Situation Analysis
• Marketing Objectives
• Strategy and Tactics
• Monitors and Controls
• Financial Documents

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Situation Analysis

• Review of Status and Future Outlook
• Not just data, but implications
• Brevity, prioritization of information
• Diagnostic, not descriptive
• Contains
• Category Analysis and Forecast Trends
• Sales Analysis
• 3 C Analysis
• Planning Assumptions
• Summary (Problems and Opportunities)

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Objectives

• If you dont know where you want to go, any road
  will take you there
• Precise, with dates and numbers
• Sales, profits, share, etc.
• Measurable and achievable
• Subsequent strategy and tactics must demonstrate
  compliance with objectives

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Strategy and Tactics

• Strategy is means to accomplish goal, e.g.,
  awareness goal will be met by advertising
• Tactics pertains to the implementation, e.g.,
  media schedule, agency, message, etc.
• how to, by whom, by when, with what resources

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Monitors and Controls

• 74 of consumer product firms have explicit sales
  promotion tactics
• Only 36 monitor
• 69 of industrial firms have explicit sales
  tactics
• Only 46 monitor
• Only 1 in 4 firms has a contingency plan
• Both good and bad events (e.g., competitor merges
  or leaves)
• What ifs and appropriate trigger points

Source Conference Board
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PharmaSim

• Goal Provide context for plan
• 20 plan, 5 performance
• Assignment detailed on website
• Goal More experience in decision making
• More brand oriented than Markstrat
• More promotion and advertising decisions, less
  production
• Play against pc, not classmates

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PharmaSim

• Overview of Market
• 250MM Persons (1 Growth /Year)
• 2 GNP Growth
• Moderate Inflation
• 80 of Population Suffers from Colds
• OTC Market is 2BB Growth 4 / Yr
• Manufacturer Sales 1.5BB
• Five companies
• Capacity adjusts automatically to demand

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PharmaSim Market

• Competition
• Four competitors (B, C, D, and E)
• Four Trade (not Consumer) Categories
• Cold, nasal, cough, and allergy
• Brands Have Five Attributes
• Symptoms relieved, side effects, form (capsule,
  liquid, spray), duration of relief, and price

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PharmaSim Market
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PharmaSim Consumers

• Buying behavior varies with
• Illness/symptom (cold, cough, allergy), age, and
  usage occasion (day or night, work or home)
• Thus, can segment by illness, age, or usage
• Note mfg. sales study (pre-defined category) ?
  consumer survey (usage)
• Buying process
• Awareness ? Purchase Intention ? In Store
  Attractiveness ? Purchase ?Usage Satisfaction ?
  Repurchase

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PharmaSim Channel

• Through Wholesale or Direct to

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PharmaSim Decisions

• Pricing
• MSRP
• Trade
• lt250 Units, lt2500 Units, gt2500 Units
• Wholesale
• Salesforce Size
• Direct (By Channel)
• Indirect (Wholesale, Merchandisers - Retail Sales
  Support, Detailers for M.D.s)

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PharmaSim Decisions

• Advertising
• Targeting
• Segments (By Age and Usage)
• Agency
• Budget
• Message
• Message (primary demand, benefits, competitive
  comparison, or reminder message)
• Benefits (e.g., aches, congestion, etc.)

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PharmaSim Decisions

• Trade Promotions
• Allowances ( of MSRP by channel)
• Co-op Ads (total and which channels)
• Consumer and Trade
• POP ( and which channels)
• Trial Size ()
• Coupons ( and face value)

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PharmaSim Decisions

• Product
• Reformulation - before decision 2
• Line extension - before decision 4
• New product - before decision 5
• Your own product - before decision 8

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PharmaSim Tips

• Please review tips on website (link from
  syllabus)
• Read pages 5-66 carefully. E.g., buried on page
  66 is the statement that FC continue when product
  is dropped. Important, but easily missed. Other
  examples abound.

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Other PharmaSim Tips

• Think analytically
• Sales Share Market Size
• Share f (marketing and quality, value/price,
  synergies among marketing activities, fit with
  segments selected, positioning relative to
  competition)
• Size f(population, needs, available product
  benefits, industry marketing and quality,
  product life cycle)

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More Tips

• Marketing can interact
• Deals more effective with ads
• Stockpiling is possible
• Understand the role of channel and how to
  motivate
• Think about the ramifications of your strategies
• A leading brand (Allround) should never run
  comparison ads against a niche brand (Coughcure)
• Line extensions do not need the same marketing
  as new brands
• Allocate marketing to area with highest returns
• Key opportunity is chance to introduce new
  product into a market with a real need (e.g.,
  Allright Allergy).
• Shift resources to new product

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One Last Tip

• Cost dynamics, margin management, value based
  pricing, and capacity utilization are essential
  to profitability.

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Marketing Plan Assignment

• The assignment is detailed on the website and
  linked to the syllabus.
• First move of Pharmasim should take 2 hours.
  Then, about 1 hour for the remaining 7 moves
  for a total of 10 hours. Harvard runs 10 moves
  in 24 hours period.

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Marketing Plan Assignment

• Three parts (4 pages Exhibits)
• Situation analysis
• Marketing program and financials
• Executive summary, contingencies, and post-mortem
• 3 reports 20 , performance 5
• Please turn in copy of diskette and administrator
  report with the first two parts
• Note marketing planning (although not handed in)
  should occur each period of PharmaSim!

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Marketing Plan Assignment

• Marketing plans represents 20-30 of what you
  will do.
• Daily product management is the other 70-80.
• This Assignment aligns with both.

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Summary

• Marketing Plan
• Executive Summary
• Situation Analysis
• Marketing Objectives
• Strategy and Tactics
• Monitors and Controls
• Financial Documents
• PharmaSim is Vehicle for Plan