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Section 3.3 Developing A Marketing Plan,Wendy Umberger, Dawn Thilmany and Susan Hine Department of Agricultural and Resource Economics Colorado State University,Section Summary,Analyze strengths, weaknesses, opportunities and threats Research customers, costs and competition Develop the marketing mix using product, price, place and promotion,Strategic Marketing Plan,COSTS,CUSTOMER,COMPETITION,Strength Weakness Opportunity Threat,Product Price Promotion Place,FINAL STRATEGY,RESEARCH,Marketing Component,Focus on strength, weakness, opportunity and threat (SWOT) analysis of your three Cs: Customers Costs Competition Market research on marketing mix: Product Price Place Promotion,SWOT Analysis,Strengths = Opportunities Weaknesses = Threats Analyze: Company perspective Competitions perspective What can be emulated or learned?,Examples Of Business Strengths,Good management Efficient business organization High employee satisfaction Excellent financial records Facilities in new or good condition Using current technology and information Using successful marketing techniques,Examples Of Business Weaknesses,Poor management Lack of communication between staff and management - disorganization High employee turnover Poor facilities Using out-dated technology Poor financial records,Examples Of Market Opportunities,Market trends, change in consumer tastes and preferences Available federal grant money Research proving the health benefits of a certain product you raise Zero to slight competition from others in your region,Examples Of Market Threats,Research indicating product is no longer safe for consumers health New entrants into the market (i.e., supermarkets selling own brand of “organic beef”) Existence of substitute products, or the inability to truly differentiate your product from others,SWOT Analysis: Your Company,What does your company do very well? What are your companys weak areas? Where is your company most competitive? Why? Whats the difference between your product and others? What services or attributes set you apart?,Your Company,Where is your company now? Where does your company want to be? What must be done to achieve this? What is the timeframe? What are the obstacles? What resources are required for success? How is success measured?,SWOT Analysis: The Competition,Where is the competition? Where are they trying to go? What is their plan of action? What are their perceived obstacles? What timeframe will they use? How can you measure their success? What can you emulate?,The Three Cs Of Marketing,1. Customer 2. Costs 3. Competition,1. The Customer,What unique value does your product bring? Who are your customers/clients? Describe them. Demographics: age, gender, income, etc. Psychographics: buying patterns Where do you find your customers?,1. The Customer,How do you reach your customers? What motivates your customers? How do people satisfy the need for your product right now? Who is there to satisfy the need for your product right now your competition?,2. Your Costs,Know variable costs of producing your product Realize there are fixed costs that must be paid, whether you produce your product or not Use variable and fixed costs to calculate the break-even point where costs are covered without profit Compare break-even with industry standards Financial analysis: Given the numbers and value perceived by the customer, can you feasibly go into production?,3. The Competition,From SWOT analysis, assess your business strengths and weaknesses compared to your competitors Emulate your competitions strengths and overcome their weaknesses Differentiate your product so the competitions product is not substitutable,The Marketing Mix,PRODUCT,PRICE,PLACE,PROMOTION,Marketing,1. Product,Goods that satisfy the needs of a target market should have the following characteristics: Physical features (design and packaging) Branding and image/personality Degree of customer service Consistent quality and supply Pricing to cover costs & generate required margins or returns,1. Product,Product characteristics, continued: Cuts the consumer wants (steak, hamburger, jerky, value-added entre, etc.) Fresh, frozen, prepared Form purchased versus live cut up (1/4 beef) Inspection requirements,2. Price,Set prices based on: Value-based pricing (match price to perceived value by customer, brand loyalty, customer- oriented price) Competition-based pricing (match prices to similar products of your competition) Cost-based pricing (set price dependent upon production costs) Use discounts or incentives to boost sales,3. Place Distribution Channel,Where customers purchase product Product must be at the right place, at the right time, in order to sell & provide profit to producer Channels include: Direct sales, internet sales, broker or distributor Determine customer service level by your firm,Risk / Return Tradeoff Direct Sales,Farmers market: Revenues direct to producer Target market & growth potential are small Mail order: Revenues direct to producer Greater chance of shipping problems like spoilage,Risk / Return Tradeoff Direct Sales,Internet sales: Increases accessibility to product for new and current customers Lower transaction costs (fewer labor hours) Requires a lot of planning & attention to detail Need well-designed Web site to promote product & draw customers Must maximize value of customers business to get repeat purchases Need to maintain Web site & keep current,Risk / Return Tradeoff Broker/Distributor,Broker: Agent may increase sales and access to retail market Fewer revenues to the producer Distributor: Increases access to more markets May also distribute competing products,Issues In Establishing A Distributor Relationship,Product viability: must assure the product will benefit distributor, retailer or restaurateur Market research: inform distributor where your product fits in marketplace; emphasize uniqueness or appeal Costs: average of $0.25-0.30 is spent on marketing for each dollar of expected sales Fit: choose a distributor who carries complementary product lines; visit stores they service,4. Promotion,Includes advertising, public relations & sales promotions Influences attitudes & buying behaviors of customers in a target market Should encourage product purchase & market expansion Effective if you have a product consumers want Important for positioning a product in the market,Promotional Objectives,Stimulate sales Differentiate product offerings in varying markets Share information Accentuate value of product Stabilize seasonal demand,Source: Lou Pelton, David Strutton, & James Lumpkin. 1997. Marketing Channels: A Relationship Management Approach, pp 99-109.,Promotional Methods,Advertising: newspaper, television, magazine, radio, Internet, billboard Does your business have a unique story? Public relations: community service or events Sales promotions: point-of-purchase displays, trade shows, exhibitions and demonstrations (free samples) Word of mouth,Source: Lou Pelton, David Strutton, & James Lumpkin. 1997. Marketing Channels: A Relationship Management Approach. pp 99-109.,When Promoting Your Product,Determine desired message you want your customers to have about your product Set goals promotion will accomplish - either public relations for your business or increasing product sales Design a budget for promotiona
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