The Marketing Audit and the Marketing Plan

1
The Marketing Audit and the Marketing Plan

• Systematically takes stock of an organisations
  marketing health and plans the direction and
  scope of marketing activities

2
Definition

• the means by which a company can understand how
  it relates to the environment in which it
  operates...
• ..the means by which a company can identify its
  own strengths and weaknesses as they relate to
  opportunities and threats
• The marketing plan serves as a roadmap that
  guides the context and scope of marketing
  activities
• McDonald 1989

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Marketing audit issues

• Internal audit (Portfolio analysis, PLC)
• Macro-environment (PEST)
• Task environment (Competition, channels,
  customers)
• Markets
• Strategic issues (segmentation, positioning,
  competitive advantage)
• Marketing mix (7Ps)
• Marketing organisational structure and
  organisation

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Internal audit Coca-Cola strategic objectives

• accelerate carbonated soft drinks growth, led by
  Coca-Cola
• 2. broaden the family of products, wherever
  appropriate e.g. bottled water, tea, coffee,
  juices, energy drinks
• 3. grow system profitability capability
  together with the bottlers
• 4. creatively serve customers (e.g. retailers) to
  build their businesses
• 5. invest intelligently in market growth
• 6. drive efficiency cost effectiveness by using
  technology and large scale production to control
  costs
• 7. enabling our people to achieve extraordinary
  results everyday.

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Internal audit how to plot the portfolio matrix
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The BCG Matrix

• Assess the general level of growth in the
  products market
• Measure the market share relative to the largest
  competitor in the industry
• Decide whether there are enough strong products
  to support weak ones
• Is the portfolio balanced between existing
  strength and emerging opportunity?

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Coca-Cola product/market summary
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Bottled water size and segmentation. Look at
each Market in turn and find growth rate
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Bottled water brand shares Identify brand leader
market shares
The CC brand Malvern has less than 1 market
share. Express in terms of Brand leaders share.
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Portfolio analysis for CCGB
Malvern Water
8.5 market growth 0.06 RMS
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PLC questions

• Where is each product in its lifecycle?
• Which products are profitable?
• Should new products be added to the portfolio?
• Which products are worth supporting?

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Macro-environment PEST
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Purpose of PEST analysis

• What environmental factors are affecting the
  organisation?
• Which of these are most important at the present
  time?
• Which of these are most important in the future?
• Forms the Opportunities (area of buyer need) and
  Threats (unfavourable trend requiring defensive
  action) of the SWOT analysis

14
Political/legal factors (including Global
factors)

• Monopolies/competition legislation
• Environmental protection laws (eg environmental
  protection legislation favours hybrid
  technologies)
• Taxation policy
• Foreign trade regulations
• Employment law
• Government stability
• Important political events
• Critical global markets
• Newly industrialised countries

15
Economic factors

• Personal savings rates
• Interest rates
• Money supply
• Inflation
• Unemployment
• Disposable income
• Energy availability and cost

16
Sociocultural factors(including Demographic
factors)

• Population demographics
• Income distribution
• Social mobility
• Lifestyle changes
• Attitudes to work and leisure
• Shifts in preferences regarding product and
  service characteristics
• Levels of education
• Concerns about the environment

Eg increasing concentration of worlds population
in cities
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Technological factors

• Spending on research
• Focus of technological effort
• New discoveries/developments/product innovations
• Rates of obsolescence

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Task environment Competitor analysis

• Identify and analyse competitors very carefully
• Potential competitors/emerging competition
• Emerging needs
• Competitor product range
• Competitor marketing activities

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Example competitors for CCGB
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Customers, segmentation, positioning

• How are markets segmented?
• How is the soft drinks market segmented?
• Is the cola market segmented further?
• Who buys the product, where, when why and how
  often?
• How do consumers view the product?
• Are some segments growing and some in decline
  (for each product/market?)

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Task environment Behavioural segmentation
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Usage segmentation
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Demographic segmentation
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Psycho-demographic segmentation
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Psychographic segmentation
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Psychographic segmentation

• Lifestyle typologies
• eg slob I do
• not consider my
• diet to be healthy

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Internal analysis Marketing mix

• Products
• Prices
• Promotional activities
• Distribution
• New product development
• Customer service

NOTE THIS MARKETING MIX ANALYSIS WOULD FORM PART
OF A MARKETING AUDIT BUT DOES NOT FORM PART OF
THIS ASSIGNMENT QUESTION (SLIDES 26-31)
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Product strategy
Summarise

• What products at what prices for what customer
  segments?
• Market share of each product or line?
• Stages in PLC of each product?
• Which products account for largest proportion of
  sales and profits
• What are strengths and weaknesses of each product

29
Product strategy
Your idea for your new product is likely to
emerge from here!

• Opportunities for modifications or additions in
  each segment
• What are weaknesses and threats to products
• How do each products features, benefits,
  branding, packaging compare with competitive
  offerings
• What changes to lines and mixes will help achieve
  goals

30
Place (channel) strategy

• How and where do customers prefer to buy?
• Describe current distribution strategy
• Which channels perform the best?
• How does each channel contribute to sales,
  profits etc?
• Channel implications of new strategies?

31
Pricing strategy

• How does pricing strategy support the objective
  (eg skimming, penetration?)
• How do channel decisions affect pricing
• How do promotion decisions affect pricing
• What are the products costs and how do they
  affect the price?
• How do customers see relationship between price
  and benefits?
• What are prices and costs of competing products?
• Are discounts an appropriate tactic?
• Is it advisable to raise prices and if so how?

32
Promotion strategy

• Who is the target audience and what are
  appropriate promotion tools and messages?
• What do we want to achieve through promotion?
• How will we use advertising, sales promotion, PR,
  direct marketing, personal selling?
• Message content, emotional or rational

33
SWOT analysis

• Strengths and weaknesses focus on present, past,
  internal factors (portfolio analysis, marketing
  mix) where we are now
• Opportunities and threats focus on present,
  future, external factors (competitors, PEST)
  where we want/dont want to be

34
CCGB Strengths/Weaknesses

• STRENGTHS
• Existing brand names
• Brand attractiveness to retail partners
• Strong distribution network
• Ability to take risks

• WEAKNESSES
• Heavily dependent on carbonates
• Unbalanced portfolio
• Market failures (Dasani, Burn)
• Unresponsive to consumer trends

35
CCGB Opportunities/Threats

• OPPORTUNITIES
• Strong growth health segments
• Sports/energy
• Growth in pub/restaurant premium soft/juice
  sector

• THREATS
• Saturation/decline in carbonates
• Growth in retailer brands
• Health concerns
• Ethical concerns
• Benzene in diet drinks

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Marketing objectives

• Fill the gap between where we are now and where
  we want to be
• How will we get there?
• S pecific
• M easureable
• A chievable
• R elevant
• T ime bound

37
Marketing objectives
Develop present User markets
Discover new User markets
Improve quality
Market development
Product improvement
Improve existing Products to increase use
Improve service
ENLARGE THE MARKET
INCREASE MARKET SHARE
Product development
Improve Customer service
IMPROVE PROFITABILITY
Develop new products
Sales volumes
Availability
Eliminate Unprofitable Lines/activities
Increased efficiencies
Credit
Increase sales and Marketing effort
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Growth objectives
PRODUCT
Current New
MARKET PENETRATION
PRODUCT DEVELOPMENT
Current
MARKET
DIVERSIFICATION
MARKET DEVELOPMENT
New
Ansoffs Growth Matrix
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Sample marketing objectives

• UNIT SALES sell 1000 units in each targeted
  segment during every month in 2007
• MARKET SHARE Capture 3 of the UK freshly
  squeezed orange juice market by June 2007
• PRODUCT DEVELOPMENT Develop and introduce two
  new products targeting xyz segments by June 2007
• ORDER FULFILMENT Cut the order cycle time to I
  day by June 2007

40
Marketing strategy

• Marketing strategies are the means by which the
  objective will be achieved
• Generally concerned with marketing mix elements
• Product delete, add, modify, designs,packaging
• Price policy for products/segments
• Place distribution channels, customer service
• Promotion advertising, sales force, sales
  promotion, PR, exhibitions, direct mail

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The first year implementation plan

• Specify actions to put strategy into operation
• Describe actions in respect of each marketing mix
  element individually
• Begin your plan 2 months prior to product launch
  (you might consider test marketing to gauge
  product performance in restricted distribution
  outlets)
• Remember you have to stock the trade prior to
  launch and may target some of your promotional
  activity at distributors

42
Product strategy

• Describe in detail your new product/service idea
• Who is the target customer and how will it meet
  their needs?
• What customer benefit are you selling? Eg product
  features/packaging, taste, convenience, quality
• Mean Bean Chilli vegetarian with nine
  distinctive bran varieties, and fire roasted
  green chillies with a robust blend of spices.
  Available in an easy to open microwaveable sachet
  in individual 250g servings

43
Price strategy

• Make the price point clear (you have researched
  prices earlier in the marketing audit)
• Identify the price position relative to
  competitors eg higher quality higher price
• Howlin Coyote Mean Bean Vegetarian Chilli is
  2.99 for a 250g serving. The significant taste
  advantage and the convenience advantage justify
  the premium price position relative to competitor
  x, y, z

44
Distribution strategy

• Howlin Coyote Mean Bean Vegetarian Chilli will be
  distributed through existing channels/new
  channels
• Method of distribution eg direct, wholesalers,
  retailers
• Types of retailer, examples

45
Promotion strategy

• How will you use advertising, personal selling,
  direct marketing, internet promotion, sales
  promotion, PR, sponsorship?
• What are the key promotional activities
• Think about your communication message, your
  choice of communications media and promotional
  costs
• How will you encourage consumers to trial a new
  product?
• Instore demonstrations of Howlin Coyote Mean
  Bean Chilli will be conducted to give consumers a
  chance to learn about the products unique
  qualities. To generate trial and repeat purchase
  money off coupons will be distributed in-pack,
  via direct mail, in-store

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Which type of promotional activity?
Advertising to create awareness Sales promotion
and personal selling are interactive
and encourage trial Advertising to
encourage repeat purchase and loyalty
47
Other strategies

• People, Physical Evidence and Process must be
  considered if you are proposing a new service or
  if there are key process elements in your
  distribution strategy (such as Dell)

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Summary of key points

• The new market opportunity must be justified by
  research findings from your PEST analysis eg
  trend to healthy eating and vegetarian
• This means detailed research of the company and
  its markets
• The objective must be SMART (10 marks just for
  this) eg grow retail channel sales of Howlin
  Coyote Mean Bean Chilli to 10000 cases by March
  2009
• The implementation plan deals in detail with each
  aspect of the marketing mix