11

Creating a Powerful

Marketing Plan

Creating a Powerful

Marketing Plan

22

This fishing lure manufacturer I know had all these flashy green and purple lures.

I asked, “Do fish take these?”

“Charlie,” he said, “I don’t sell these lures to fish.”

- Charles Munger

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Building a Guerrilla Marketing PlanBuilding a Guerrilla Marketing Plan

MarketingMarketingThe process of creating and delivering The process of creating and delivering desired goods and services to customers.desired goods and services to customers.Involves all of the activities associated with Involves all of the activities associated with winning and retaining loyal customers.winning and retaining loyal customers.

Guerrilla marketing strategiesGuerrilla marketing strategiesUnconventional, lowUnconventional, low--cost, creative marketing cost, creative marketing techniques that allow a small company to techniques that allow a small company to wring more bang from its marketing bucks wring more bang from its marketing bucks than do larger rivals.than do larger rivals.

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A Guerrilla A Guerrilla Marketing PlanMarketing Plan

1.1. Pinpoints the specific target markets the Pinpoints the specific target markets the company will serve.company will serve.

2.2. Determines customer needs and wants Determines customer needs and wants through market research.through market research.

3.3. Analyzes a firm's competitive advantages and Analyzes a firm's competitive advantages and builds a marketing strategy around them.builds a marketing strategy around them.

4.4. Creates a marketing mix that meets customer Creates a marketing mix that meets customer needs and wants.needs and wants.

55

MARKETING MIXMARKETING MIX

Product Price Place Promotion

Functionality List priceChannel members Advertising

Appearance DiscountsChannel

motivationPersonal selling

Quality AllowancesMarket

coveragePublic

relations

Packaging Financing Locations Message

BrandLeasing options Logistics Media

Warranty Service levels Budget

66

Pinpointing the Target MarketPinpointing the Target Market

One objective of market research One objective of market research is to pinpoint the company's is to pinpoint the company's target target market, market, the specific group of the specific group of customers at whom the company customers at whom the company aims its products or services.aims its products or services.Without a clear image of its target Without a clear image of its target market, a small company tries to market, a small company tries to reach almost everyone and ends up reach almost everyone and ends up appealing to almost no one!appealing to almost no one!

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Market ResearchMarket Research

Market research is the vehicle for gathering the Market research is the vehicle for gathering the information that serves as the foundation for information that serves as the foundation for the marketing plan.the marketing plan.Never Never assumeassume that a market exists for your that a market exists for your companycompany’’s product or service; prove it!s product or service; prove it!Market research does Market research does notnot have to be time have to be time consuming, complex, or expensive to be useful. consuming, complex, or expensive to be useful.

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Market ResearchMarket Research(continued)(continued)

How to Conduct Market Research:How to Conduct Market Research:Define the objective.Define the objective.Collect the data.Collect the data.

Individualized (oneIndividualized (one--toto--one) marketingone) marketing

How to Become an Effective OneHow to Become an Effective One--toto--One Marketer.One Marketer.

Identify your best customers, never passing up the

opportunity to get their names.

Collect information on thesecustomers, linking their

identities to their transactions.

Calculate the long-term valueof customers so you know

which ones are most desirable(and most profitable).

SuccessfulOne-to-OneMarketing

Know what your customers’buying cycle is and time yourmarketing efforts to coincide

with it - “just-in-time marketing.”

Make sure your company’sproduct and service quality

will astonish your customers.

See customer complaints for what they are - a chance to improve your service and

quality. Encourage complaints and then

fix them!

Enhance your products andservices by giving customers

information about them and howto use them.

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Market ResearchMarket Research(continued)(continued)

How to Conduct Market Research:How to Conduct Market Research:Define the problem.Define the problem.Collect the data.Collect the data.

Individualized (oneIndividualized (one--toto--one) marketingone) marketingData miningData mining

Analyze the data and interpret the Analyze the data and interpret the results.results.Draw conclusions and act.Draw conclusions and act.

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DATAMININGDATAMINING

Data mining is a process in which computer Data mining is a process in which computer software that uses statistical analysis, database software that uses statistical analysis, database technology, and artificial intelligence finds technology, and artificial intelligence finds hidden patterns, trends, and connections in hidden patterns, trends, and connections in data so that business owners can make better data so that business owners can make better marketing decisions and predictions about marketing decisions and predictions about customerscustomers’’ behavior.behavior.

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RESEARCH TECHNIQUESRESEARCH TECHNIQUES

PRIMARYPRIMARY

Customer SurveysCustomer SurveysFocus GroupsFocus GroupsDaily transactionsDaily transactionsOther IdeasOther Ideas

SECONDARYSECONDARY

Business DirectoriesBusiness DirectoriesDirectDirect--mail listsmail listsCensus DataCensus DataForecasts Forecasts ArticlesArticles

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Relationship MarketingRelationship Marketing(Customer Relationship Management)(Customer Relationship Management)

Involves developing and maintaining Involves developing and maintaining longlong--term term relationships relationships with customers so that they will with customers so that they will keep coming back to make repeat purchases.keep coming back to make repeat purchases.Small companies have an advantage over their Small companies have an advantage over their larger rivals at relationship marketing.larger rivals at relationship marketing.Requires a company to make customer service Requires a company to make customer service an allan all--encompassing part of its culture.encompassing part of its culture.Customers are part of Customers are part of allall major issues the major issues the company faces.company faces.

1414

The Relationship Marketing ProcessThe Relationship Marketing Process

Connect Connect &&

CollectCollect

Conduct detailed customer intelligence to Conduct detailed customer intelligence to pinpoint most valuable customers and to learn pinpoint most valuable customers and to learn all you can about them, including their lifetime all you can about them, including their lifetime value (LTV) to the company.value (LTV) to the company.

Make contact with most valuable customers Make contact with most valuable customers and begin building a customer database using and begin building a customer database using data mining and data warehousing techniques. data mining and data warehousing techniques.

Learn from your customers by encouraging Learn from your customers by encouraging feedback from them; develop a thorough feedback from them; develop a thorough customer profile and constantly refine it. customer profile and constantly refine it.

Based on what you have Based on what you have learned, contact customers learned, contact customers with an offer designed for with an offer designed for them. Make customers feel them. Make customers feel special and valued. special and valued.

If you have done If you have done everything else correctly, everything else correctly, this step is relatively easy. this step is relatively easy. Superb customer service is Superb customer service is the best way to retain your the best way to retain your most valuable customers.most valuable customers.

LearnLearn

AnalyzeAnalyze

BuildBuildRelationshipsRelationships

Sell, Sell, Service, Service,

and Satisfyand Satisfy

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Steps in CRMSteps in CRM

Collect meaningful information on existing Collect meaningful information on existing customers and compile it in a database.customers and compile it in a database.Mine the database to identify the companyMine the database to identify the company’’s s best and most profitable customers and their best and most profitable customers and their buying habits.buying habits.Use the information to establish lasting Use the information to establish lasting relationships with these customers. relationships with these customers. Attract more customers who fit the profile of Attract more customers who fit the profile of the companythe company’’s best customers. s best customers.

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Four Levels of Customer SensitivityFour Levels of Customer Sensitivity

Level 1: Customer Awareness. Prevailing attitude: “There’s a customer out there.”Managers and employees know little about their customers and view them only in themost general terms. No one really understands the benefit of close customer relationships.

Level 2: Customer Sensitivity. A wall stands between the company and its customers.Employees know a little about their customers but don’t share this information withothers in the company. The company does not solicit feedback from customers.

Level 3: Customer Alignment. Managers and employees understand the customers’central role in the business. They spend considerable time talking about and withcustomers, and they seek feedback through surveys, focus groups, customer visits, andother techniques.

Level 4: Customer Partnership. The company has embraced a customer service attitudeas an all-encompassing part of its culture. Customers are part of all major decisions. Employees throughout the company routinely use data mining reports to identify the best customers and to serve them better. The focus is on building lasting relationshipswith the company’s best customers.

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Guerrilla Marketing StrategiesGuerrilla Marketing Strategies

Find a niche and fill it.Find a niche and fill it.DonDon’’t just sell; entertain.t just sell; entertain.Strive to be unique.Strive to be unique.Create an identity for your Create an identity for your business.business.Connect with customers on an Connect with customers on an emotional level. emotional level.

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Focus on the customer.Focus on the customer.Devotion to quality.Devotion to quality.Attention to convenience.Attention to convenience.Concentration on Concentration on innovation.innovation.Dedication to service and Dedication to service and customer satisfaction.customer satisfaction.Emphasis on speed.Emphasis on speed.

Guerrilla Marketing StrategiesGuerrilla Marketing Strategies(continued)(continued)

1919

Focus on the CustomerFocus on the Customer67% of customers who stop patronizing a 67% of customers who stop patronizing a business do so because an indifferent employee business do so because an indifferent employee treated them poorly.treated them poorly.96% of dissatisfied customers 96% of dissatisfied customers never complain never complain about rude or discourteous service, but...about rude or discourteous service, but...

91% will 91% will notnot buy from that business again.buy from that business again.100% will tell their 100% will tell their ““horror storieshorror stories”” to at to at least least nine other peoplenine other people..

13% of those unhappy customers will tell 13% of those unhappy customers will tell their stories to at least their stories to at least 20 other people20 other people..

2020

Focus on the CustomerFocus on the Customer(continued)(continued)

Treating customers indifferently or poorly costs the Treating customers indifferently or poorly costs the average company from average company from 15% to 30% of gross sales15% to 30% of gross sales!!Replacing lost customers is expensive; it costs Replacing lost customers is expensive; it costs five five timestimes as much to attract a new customer as it does as much to attract a new customer as it does to sell to an existing one!to sell to an existing one!About 70% of a companyAbout 70% of a company’’s sales come from s sales come from existing customers.existing customers.Because 20% of a typical companyBecause 20% of a typical company’’s customers s customers account for about 80% of its sales, no business can account for about 80% of its sales, no business can afford to alienate its best and most profitable afford to alienate its best and most profitable customers and survive!customers and survive!

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Focus on the CustomerFocus on the Customer(continued)(continued)

Companies that are successful at retaining Companies that are successful at retaining their customers constantly ask themselves their customers constantly ask themselves (and their customers) four questions:(and their customers) four questions:

1. What are we doing right?1. What are we doing right?2. How can we do that even better?2. How can we do that even better?3. What have we done wrong?3. What have we done wrong?4. What can we do in the future?4. What can we do in the future?

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Devotion to QualityDevotion to QualityQualityQuality--more than just a slogan on the more than just a slogan on the company bulletin board. company bulletin board. WorldWorld--class companies treat quality as a class companies treat quality as a strategic objective, an integral part of the strategic objective, an integral part of the company culture. company culture. This is the philosophy of Total Quality This is the philosophy of Total Quality Management (TQM).Management (TQM).

Quality in the product or service itself. Quality in the product or service itself. Quality in every aspect of the business and its Quality in every aspect of the business and its relationship with the customer.relationship with the customer.Continuous improvement in quality.Continuous improvement in quality.

2323

How Do Customer Define Quality How Do Customer Define Quality in a Product?in a Product?

Reliability (average time between breakdowns)Reliability (average time between breakdowns)Durability (how long an item lasts)Durability (how long an item lasts)Ease of useEase of useKnown or trusted brand nameKnown or trusted brand nameLow priceLow price

Quality

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How Do Customer Define Quality How Do Customer Define Quality in a Service?in a Service?

Tangibles (equipment, facilities, Tangibles (equipment, facilities, people)people)Reliability (doing what you say you Reliability (doing what you say you will do)will do)Responsiveness (promptness in Responsiveness (promptness in helping customers)helping customers)Assurance and empathy (conveying Assurance and empathy (conveying a caring attitude)a caring attitude)

Quality

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Attention to ConvenienceAttention to Convenience

Is your business conveniently located near Is your business conveniently located near customers?customers?Are your business hours suitable to your Are your business hours suitable to your customers?customers?Would customers appreciate pickup and Would customers appreciate pickup and delivery services?delivery services?Do you make it easy for customers to buy Do you make it easy for customers to buy on credit or with credit cards?on credit or with credit cards?

2626

Attention to ConvenienceAttention to Convenience(continued)(continued)

Are your employees trained to handle Are your employees trained to handle business transactions quickly, efficiently, business transactions quickly, efficiently, and politely?and politely?Does your company offer Does your company offer ““extrasextras”” that that would make customerswould make customers’’ visits easier?visits easier?Can you adapt existing products to make Can you adapt existing products to make them more convenient for customers? them more convenient for customers? Does your company handle telephone calls Does your company handle telephone calls quickly and efficiently?quickly and efficiently?

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Concentration on InnovationConcentration on InnovationInnovation Innovation

The key to future success.The key to future success.One of the greatest strengths of One of the greatest strengths of entrepreneurs. It shows up in the new entrepreneurs. It shows up in the new products, techniques, and unusual products, techniques, and unusual approaches they introduce.approaches they introduce.

Entrepreneurs often create new products Entrepreneurs often create new products and services by focusing their efforts on and services by focusing their efforts on one area and by using their size and one area and by using their size and flexibility to their advantage.flexibility to their advantage.

2828

Dedication to ServiceDedication to Service

Listen to customers.Listen to customers.Define Define ““superior service.superior service.””Set standards and measure Set standards and measure performance.performance.Examine your companyExamine your company’’s service s service cycle.cycle.Hire the right employees.Hire the right employees.Train employees to deliver superior Train employees to deliver superior service.service.

GoalGoal: to achieve : to achieve customer astonishmentcustomer astonishment!!

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Dedication to ServiceDedication to ServiceGoalGoal

Empower employees to offer superior Empower employees to offer superior service.service.Use technology to provide improved Use technology to provide improved service.service.Reward superior service.Reward superior service.Get top managersGet top managers’’ support.support.View customer service as an View customer service as an investment, not an expense.investment, not an expense.

: to achieve : to achieve customer astonishmentcustomer astonishment!!(continued)(continued)

3030

Emphasis on SpeedEmphasis on Speed

Use principles of time compression Use principles of time compression management (TCM):management (TCM):

Speed new products to market.Speed new products to market.Shorten customer response time in manufacturing Shorten customer response time in manufacturing and delivery.and delivery.Reduce the administrative time required to fill an Reduce the administrative time required to fill an order.order.

Study: Most businesses waste 85 to 99% of the Study: Most businesses waste 85 to 99% of the time required to produce products or services!time required to produce products or services!

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Emphasis on SpeedEmphasis on Speed(continued)(continued)

ReRe--engineer the process rather than try engineer the process rather than try to do the same thing to do the same thing -- only faster.only faster.Create crossCreate cross--functional teams of workers functional teams of workers and empower them to attack and solve and empower them to attack and solve problems.problems.Set aggressive goals for production and Set aggressive goals for production and stick to the schedule.stick to the schedule.

3232

Emphasis on SpeedEmphasis on Speed(continued)(continued)

Rethink the supply chain.Rethink the supply chain.Instill speed in the company culture.Instill speed in the company culture.Use technology to find shortcuts Use technology to find shortcuts wherever possible.wherever possible.Put the Internet to work for you. Put the Internet to work for you.

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Benefits of Marketing on the Benefits of Marketing on the World Wide WebWorld Wide Web

Even the smallest companies can Even the smallest companies can market their products and services market their products and services around the globe.around the globe.SBA study: 67% of small businesses SBA study: 67% of small businesses that established Web sites said their that established Web sites said their sites brought in new customers. sites brought in new customers. The Web can be the The Web can be the ““Great Great EqualizerEqualizer”” in a small companyin a small company’’s s marketing program.marketing program.

3434

Benefits of Marketing on the Benefits of Marketing on the World Wide WebWorld Wide Web

(continued)(continued)

Only 24% of small companies with Only 24% of small companies with Web sites actually generate revenues Web sites actually generate revenues from online sales. from online sales. Web customers are demographically Web customers are demographically attractive: They are young, attractive: They are young, educated, and wealthy.educated, and wealthy.

Average household income = $52,300Average household income = $52,30039% have college degrees39% have college degrees

3535

The Marketing MixThe Marketing Mix

PProductroductPPlacelacePPricericePPromotionromotion

$

3636

Stages in the Product Life CycleStages in the Product Life Cycle

Introductory stageIntroductory stage

HighCosts

3737

Stages in the Product Life CycleStages in the Product Life Cycle

Introductory stageIntroductory stageGrowth and acceptance stageGrowth and acceptance stage

HighCosts

HighCosts

HighCosts

SalesClimb

3838

Stages in the Product Life CycleStages in the Product Life Cycle

Introductory stageIntroductory stageGrowth and acceptance stageGrowth and acceptance stageMaturity and competition stageMaturity and competition stage

HighCosts

SalesClimb

ProfitsPeak

HighCosts

SalesClimb

ProfitsPeak

3939

Stages in the Product Life CycleStages in the Product Life Cycle

Introductory stageIntroductory stageGrowth and acceptance stageGrowth and acceptance stageMaturity and competition stageMaturity and competition stageMarket saturation stageMarket saturation stage

HighCosts

SalesClimb

ProfitsPeak

SalesPeak

HighCosts

SalesClimb

ProfitsPeak

SalesPeak

4040

Stages in the Product Life CycleStages in the Product Life Cycle

Introductory stageIntroductory stageGrowth and acceptance stageGrowth and acceptance stageMaturity and competition stageMaturity and competition stageMarket saturation stageMarket saturation stageProduct decline stageProduct decline stage

HighCosts

SalesClimb

ProfitsPeak

ProfitsPeak

SalesPeak

Sales &ProfitsFall

Sales &ProfitsFall

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Channels of DistributionChannels of DistributionConsumer GoodsConsumer Goods

ManufacturerManufacturer

ManufacturerManufacturer

ConsumerConsumer

RetailerRetailer ConsumerConsumer

ManufacturerManufacturer RetailerRetailer ConsumerConsumerWholesalerWholesaler WholesalerWholesaler

ManufacturerManufacturer RetailerRetailer ConsumerConsumerWholesalerWholesaler

4242

Channels of DistributionChannels of DistributionIndustrial GoodsIndustrial Goods

ManufacturerManufacturerIndustrial UserIndustrial User

ManufacturerManufacturer WholesalerWholesaler Industrial UserIndustrial User