Mini-Marketing Plan Development

This week was a huge learning opportunity.  Team 5 (my team) developed our Mini-Marketing Plan.  We're charged with improving Allround's brand and that begins with a good mini-marketing plan.

Before we developed our mini-marketing plan, our team took a good look at the results of our decisions from periods 0, 1, and 2.  Our Brand's awareness is still doing well, but our profitability and market share had decreased each of the three periods.  We know that the Marketing plan must focus on maintaining our high brand awareness and improving our brand's profitability.

In our marketing plan, we identified three key issues that are related to our goals:
1. High share of the cold market
2. Reduce costs of Goods Sold
3. Reduce perception of Allround's price.

We developed three main goals that we felt would lead to accomplishing our objectives.
1. Increase Revenues/ Units Sold by 8% ea. period
2. Increase Mkt Share by 5%
3. Maintain high level of Brand Awareness

We felt that the path to accomplishing our goals and objectives would be through segmenting the market and then implementing a target Market Selection group.
We segmented the market and then targeted Young families and mature families that purchase cold medicine at grocery stores and chain drug stores.  We felt that by advertising directly to these specific markets, we would maintain our high brand awareness.

In order to increase our profitability, all signs were pointing to hitting a new market that we aren't currently in because there is little room for improvement in our current markets.  We want to introduce a Children's cold medicine to strike into a new market.  We realize that this could cause some cannibalization of sales from our young family market, but overall, we think the move will be a good one.

Our Marketing plan was thorough and has lead to several decisions:
1. remove alcohol from our formula (survey showed a positive utility
2. produce new line: children's cold medicine
3. In the future, break into the cough market
4. target young and mature families that shop at grocery stores and chain drug stores for cold medicine.

See you next week!

SITUATIONAL ANALYSIS

This week, we’ve all been working pretty hard on our Situational Analysis and so I wanted to speak a little about some of the Metrics that I think should be used to evaluate team performance in PharmaSim.

 

Each of these Metrics help the marketing manager assess the health of the product / service.

1.  Unit Sales:  Unit sales seems to be a bench mark metric that is commonly used to guage how well ad company is doing.  If unit sales are high, but the company is not doing well, then that brings management and pricing into question.  If unit sales are low, the marketing must take action to determine the reasoning.  Unit sales drive the train.

2. Customer Satisfaction – Buyer dissonance. Do they regret purchasing our product?  How likely are they to buy again?  Customer satisfaction is the backbone of a successful business.  A high customer satisfaction might cause us to continue our steady course.  A low customer satisfaction will cause the company to go through every step of buyer dissonance and modify our approach until our customers have complete utility with our products.

3. Market Share -  knowing our level of control may be more valuable than knowing simply how many units we sold.  Market share let’s us know how much breathing room we have from the competition.  If our product controls the market, and yet we’re experiencing a loss, then we know that it may be a down market and out of our marketing controls.

4. Brand Awareness – Brand awareness is one of my favorite metrics.  I appreciate it contribution to the decision making process because this tool allows us gauge the popularity and reach of our product.   If future customers are aware of our product now, it could possible lead to future sales/growth.

5. STOCK PRICE – Don’t judge me for using this Metric. I understand that stock price isn’t a good measurement of how well the marketing strategy is doing, but share price is the metric that gets marketing managers fired! Or job security. So, we must always be aware of it.

WEEK6: ADVANTAGE ATTRACTIVENESS

Hello everyone. 

This week was very busy as we began our real group simulations and progressed through 2 periods.  We also started working on our Situation Analysis papers.  The upcoming papers will flow from using a Situational Analysis, to develop a Market Strategy, and then implement our plan. 

In the pharmasim program, my team performed well (in my opinion).  Our share price has dropped a little, but marketing managers should not measure success by the share price (that ‘s the CEOs job).  Marketing managers rate their product performance by measuring brand awareness, consumer satisfaction with the product and repeat customers. 

My group spent the first two periods really trying to assess market situation surrounding our product.  We bought every report that was available to us (which came out to about half of a million dollars).  We studied each report to assess where were had competitive advantages and where our competition was doing well. 

There were a couple of incidents that my team had to address in Pharmasim this week.  Since we had already vowed to pay more attention to the customer than the competition, when we were faced with the option of incorporating social media into our brand, we jumped at the opportunity.  Since our budget was very close to zero, especially after purchasing every report, we decided to go with the inexpensive options of using Facebook and Twitter.  Now, for almost no cost, we can connect with our consumers and truly assess how they feel about our product.  We received a favorable review because of using the Facebook and Twitter accounts and maintain the sites well. 

Another incident that my team had to over-come was the negative attention that quickly expiring products were receiving from our distributors and vendors.  We had some product that was expiring within 6 months and it was making the product hard to sell.  Also, the quick expiration date was causing confusion with our return policy.  My group decided to take the responsible action in order to represent the brand well.  We chose to pull the product from our normal distributors and use special quick turnaround vendors to sell the product.  To do this, we had to pay a $50K premium, but in the end it all worked out.  The brand’s good name was maintained and we even turned a product because the special vendors were able to sell the discounted product.

Marketing is not advertising.  Marketing is more concerned with how a company represents a product in terms of quality and benefits.   Brand awareness is extremely important, and that does have something to do with advertising.  In class we discussed the price that the Washington Post sold for.  It was almost double what the company was valued at.  What caused that difference between price and value was the worth of the brand name (goodwill). 

The reading for this week was Cohen chapters 10 – 14.  The big takeaway for me from the reading was Drucker’s four questions that every company must answer when creating their future.  One of the questions was “What opportunities does the company want to pursue, and what risks is it willing and able to accept.”  I believe that this question is more for the CEO / CFO than the Marketing Manager.  I envisioned the Marketing manager would develop alternative courses of actions and the CEO / Manager would make the risk decisions.

As a real world application, my firm answered this question a long time ago when it was building its foundation of clients and we re-emphasize the decision each day.  The service my firm chose to deliver was that of Real Estate acquisition, bankruptcy, business law, commercial litigation, employment law and loan closings.  The managing partner (and everyone else) protects our brand like any other marketing manager.  We routinely turn away or refer out cases that are outside the scope of our Market plan.  The Managing partner knows exactly what kind of future he wants to create for the firm.

Chalk Talks were fascinating.  In the Advantages – Attractiveness video, the matrix at the end showed three markets, A, B, and C.  The Market Shares were 10%, 33%, and 5% respectively.  One of the questions I had was why is it prudent to take from Market ‘A’ to boost market ‘C’, instead of using Market ‘B’’s budget?  I understand that market ‘A’ is unattractive, but if Market ‘B’ is so strong, then taking from Market ‘B’ to give to market ‘C’ shouldn’t be that harmful.  Why should we harvest from Market ‘A’, which could extinguish it, if it is profitable?  I don’t understand the desire to leave a market if the product is profitable, even if it is unattractive?

WEEK 5: MARKET ANALYSIS - CONSUMER

Hello!

This week was fast paced and serious as it was the last week to get in good practice with Pharmasim before the team assignments started.  I tried my hand at Pharmasim and failed miserably the first couple of runs.  I was making too many drastic changes at once.  I was doing too much.  I learned a lot about how sensitive the effects of marketing could be from period to period.

Some of the lessons I learned were that quality of advertising counts.  The money saved from moving down to a less qualified advertising agency does not truly add anything to the bottom line.

I did some tweaking in the early periods of the first simulation this week with the percentage of marketing directed towards Independent Drug stores.  I thought that since the grocery stores were not that big for us, that our company should focus on the places where people go strictly for medicine. The scenario tells us that we do not have a problem bringing in customers, we have a problem keeping them.  My share price plummeted $3/sh by increasing this from 6% to 16%.  I obviously over did it.
I wised up and realized that since we commanded so much of the market, consumers want our product.  So why were they leaving.  I spent less on advertising and then I wondered if our price was a little too high so I lowered it by 25 cents. Worked like  charm.  The next period our share price rose by $2 back to a healthy $33.03/ share.
After this, I made a series of bad move that I learned from.  Most notably was my horrible decision to add a new line of product called All round +.  This tanked the mkt share price and placed me well over budget at the same time.  In the next period I tried to salvage the company by discontinuing the new line but it was too late.

In class this week, we focused on the consumer.  Market analysis is where marketing managers earn their bucks and figuring out the customer is a lot more important than learning about the competition.  One of the concepts discussed in class was the difference between product features and product benefits.  We also hit on this in our book.
In chapter five, Lehman and Winer talk about product features and product benefits.  Features need to provide a useful function for the customer, otherwise it is not a benefit.  In the book, the benefit simply seems like a description of what he feature can do (or the feature’s ability).  If this is the case, why don’t marketing managers promote the benefits first, and then back them up with the label of the feature once the customer asks how it’s possible?  Why doesn’t Lehman teach us to do this?  For example, instead of leading with ‘The car has a North star engine.’  The marketing manager could have the company lead with “The car will not need a tune-up for the first 100,000 miles.  That sounds a lot better to me.

In the discussion post, one of our classmates made a comment that I felt that I should comment on.  Randall posted "The buying decisions video discussed the decision making continuum.  After watching the video it seemed that keeping the customer in the normal range to ensure repeat purchases.  Doesn’t this suggest that quality to ensure customer retention is more important that mass marketing campaigns?"  Yes Yes Yes Randal.  Mass advertising can only get you so far.  True marketing will focus on the consumer.  The consumer wants benefits and the consumer wants those benefits to be of the highest quality.  I think that is why we're going through so much in pharmasim simulation.  Our product is well known (I think our advertising department is doing very well... so well, that I tend to take money from them), but something must be wrong with our product (or it could be price) that is causing consumers to leave.

This brings me to the 'Try This' for this week. 
I spoke to a family member about what type of Cold medicine they use.  I asked them a series of questions about cognitive dissonance, but did not tell them what Cognitive dissonance was nor did I use that term in the
Cognative Dissonance is the uncomfortable tensions or feelings that occur when we make decisions that conflict with our beliefs. Basically, I told them have they ever bought cold medicine and then wished that they had bought a different type / brand.  So, I basically told the about post purchase dissonance because I believe that when someone is sick or hurting, they are making a high involvement decision.
My Mom informed me that she just uses the store brand (whatever store she happens to go to) Nyquil.  This means that she does not buy Nyquil, she buys the generic drug that is produced by the drug store she goes to (most likely Walgreens).  She told me that she never feels any guilt about the purchase.  She is satisfied with it.  Most of the time, she takes it at night, she goes to sleep, she wakes up and her cold is gone.
I explained to her that the most likely reason that she never feels any post purchase dissonance is because this is not a high involvement decision for her.  This is because of her associations that she has created between her and the drug over the span of 50 years.
1. My Mom believes in Nyquil to cure all of her cold symptoms (even if it’s not specifically made for that).   I’m sure that because she sleeps an entire night after taking it, her body does most of the healing on its own.
2. My mom has financial limitations, so she picks a cheaper brand (store brand) and this reduces the amount of dissonance that she feels.  If she had purchased the actual Nyquil brand, she might feel bad because she is not in a great financial situation.
3.  My mom thinks that the store brand is just as good as the ‘name brand’ because in order for the medicine to be of the same type, it has to have the same ingredients.  She’s mostly accurate.   Her knowledge also lowers the amount of dissonance she feels.
I told her that the combination of those three associations is why she can purchase her Nyquil knock off and feel good about it.
Advertising and Marketing by Nyquil actually hurt the brand in this case b/c it made her want Nyquil, but not pay that price… so ‘she had no choice’ but to go with a cheaper option.

In conclusion this week was blur.  I was able to advise my Mom purely by watching the Week 5 videos on Cognitive dissonance.  It was very helpful  and I explained most of the concepts in the above paragraph.  Being that this is the last opportunity to practice Pharmasim, I'm going to stay up late to work on it.  It has become very addictive. 

Week 4: COMPETITOR ANALYSIS

This week was especially interesting.  We moved into discussion on Market Potential, Market Demand, and Forecasting.   When we think about Market competition, many managers simply look at product form and product category competition.   Managers compare their products to other products that are the same and the also look at the category of goods.  This leaves out many other potential forms of competition though.  Managers should take a broader approach to defining the competition for a product’s good.  Simply put, If a product can be substituted for your product (whether it’s similar or not, or whether it’s in the same category or not) then it should be viewed as competition. 

Here’s a practical application of what I’m talking about.  Let’s say that your company is called Florida Sweet Cane and  you produce sugar.  Your competition aren’t just the other companies that produce Sugar in Fl, but your competition is also the companies that produce sugar out side of the state and makes its way into Florida.  Furthermore, your competition is also the producers of Honey, corn syrup, and low fat sweeteners such as Splenda.  This is because all of these producers can take away customers and pieces of the market away from your company. 

PharmaSim:  In class we discussed our Pharmasim simulations.  The teacher asked a very basic question, “What is our mission?”  As predicted, a few students had a concept of a company mission that was too narrow.  Missions are broad and should encompass what the company is trying to do.  Sell ‘x’ product.  Target ‘x’ population.  Market visions are when the managers should begin to narrow their focus.

            From the reading, Lehmann and Winer believe that one of the most underutilized sources of information in companies is the sales force, but I think a lot of that has changed.  Companies have become very efficient and marketing conscious recently.  I believe that most companies are using their sales force to submit data and analysis on a regular basis.  Salesmen now travel around with laptops.   They input data as soon as they get back to their car about who they sold to (and all of the demographics that made up the customer), what they sold, when they sold it and where they sold it.  Some of the salesmen actually come with laptop in hand to the site of the transaction.  I think the industrialized world has grown savvy to Lehmann’s and Winer’s theories.

During class, we once again refereed to the five C’s.  The five C’s are Customers, Competitors, Collaborators, Company (internal analysis), and Context.  Note, that Company is the only ‘C’ that has internal analysis.  The other 4 ‘C’s all rely on external analysis.  When it comes to marketing, all five ‘C’s should be engaged to develop the best marketing plan.

My favorite part of the reading was in chapter four when Lehman and Winer talked about reverse engineering as a way to conduct competitor analysis.  Reverse engineering is when a company purchases a competitor’s product and takes it apart so that the company can assess the product’s strengths and weaknesses.  It is wise to become a customer of a competitor.  This is especially true in my military profession.  Enemy military forces are always trying to get their hands on America’s weapons systems to see if they can reverse engineer them.  This is why pilots are trained and equipped to disable or destroy their aircraft if they crash behind enemy lines.  Reverse engineering has been known to the military for centuries, it’s about time the marketing world caught up.

Questions from classmates: In the discussion board, Daniel asked; “Throughout Lehmann and Drucker, there is a lot of discussion about both assessing competitive threats and assessing perception of customer value.  Which of these two approaches (if one) is the higher priority and why?”

I would say that assessing perception of customer value is the higher priority.  Focusing on the competition can make you forget to pay attention to your own product.  By focusing on customer perception forces you re-evaluate your product constantly and to make it better.  Oddly enough, this question was also picked by the professor to speak on.  And of course, he agreed with me!

Megan asked a question that was very important.  Megan asked: “Is it possible for a company to know all of their competitors without spending too much time and money that could be better used in other areas (such as R&D)?”  I think she is spot on with these questions.  There is no way to know ALL of your competitors without spending too much time focusing on them.  I have spoken about this on my blog at least twice.  In my opinion, companies should focus on their biggest competitors, and ensure the company is spending the majority of time on their own product and their own customers.  If the company is big enough, they can just buy out the smaller competition’s product (like Apple does) as they spring up.

 

Student Blogs: I read a couple of student blogs this week that posted before mine (obviously).  Megan’s caught my attention.  Her comments on the articles from this week were practically the same takeaways that I had.  Basically, companies should do a little research on competitors, but more important is the CUSTOMER. 

 

             

Week 3: The Customer Decides Value!

This week's blog is a little all over the place.  The most important thing I learned from the lecture this week is that Marketing managers should understand the market and understand how value feeds into the market place.  The need to figure out what value consumers and customers want. 

“Drucker teaches us that The customer decides value and that marketers, but in a depression or down period, companies will fight for their products or services to stay with how the define it verse allowing learning it from customers definition…

Are marketers now more open minded with how the customer defines their product or service verse how the marketers would define it?

I believe that e/thing is budget driven vs quality driven.  Quality = giving the customer what they desire.  Budget = producing what the company can afford to make.

Education Portals and class:

One of the biggest mistakes made in marketing planning is that the focus is put on the product or service, but not the market that the product is being sold to. Companies should always focus is on the market.  ID market segments and focus on that segment that you’re going to pursue.

The educational portal that I focused on the most centered around what is a marketing strategy.  External factors influence marketing strategy

SLEPT Theory

1. Social

2. Legal

3. Economical

4. Political

5. Technological. 

And a 6^th one would be competition. 

A lot of these factors and characteristics that are external influences on the marketing strategy seem like common sense to me.  Think about the legal ramifications of marketing alcohol to minors.  In the end, businessnes need to adapt to external influences that can affect the company’s goals.

 1. Classmate’s question: In the education portal video titled "establishing a market research project" it discussed the major advantages of conducting a market research project: improving quality of decision-making, tracing problems, keeping current customers happy, and having an update on the current market. What about making sure that your organization is keeping up with the competition? Wouldn't you want to do market research to find out what advantages your competition has over you in order to begin marketing new projects which would bring those customers to your business instead?

This question is one that I had been contemplating as well.  My answer would be that businesses need to worry about their own ‘house’ first.  Competition is assuredly something to be worried about, but if the quality of the product/service that your business is offering isn’t’ meeting YOUR customer’s needs, then your marketing strategy to steal another’s customers won’t matter.

 2. Classmate’s question: When we look at SLEPT, do some influences carry more weight than others or is this dependent on the organization and industry marketers work in?

 Yes, some factors absolutely carry more weight than others and it is all dependent on the business’ marketing environment.  For example, a fast food business in California has more legal and political obligations than a fast food restaurant in Georgia does.  California restricts specific aspects of the food industry like how many calories can a meal have that also includes a toy?  Basically this was aimed at McDonalds in an attempt to lessen the calories of Happy Meals.

One of my classmate’s blogs that I would like to comment on is Briana’s blog.  She hit on some key points about certain statistics in the Phramasim module. After playing with the simulation and purchasing all of the reports, she saw that the Talley came up to $440K.  I like this aspect of pharmasim.  It can be very realistic.  The cost of information is high, but very necessary.  Pharmasim is a great tool.

Tune in Next Week!

Week 2: The Marketing Plan

This week focused on how important Market plans are to every business.  Developing a Marketing plan is often times the most important activity that a CEO will conduct during the year. 

“A marketing plan is a written document containing the guidelines for the business center’s marketing programs and allocations over the planning period” (Lieman and Winer, 1).

For the purposes of this blog, I will direct the concepts that I learn throughout the week towards the legal field.  I will not be the CEO of a company (at least not right now), instead I am earning an MBA to assist in client relations in the field of Business Law.  Marketing planning is a tough concept for most traditional law firms because the typical law firm does not advertise.  Since advertisement is not included in the marketing plan for my law firm, then we have to find other ways to expose our services and work product to the market.

 

This week, I learned that the marketing plan is an operational document and it usually begins at a high level of an organization.  My organization is an 8 person law firm.  The Managing Partner is the strategic marketing planner.  He has a heavy burden because he needs to promote the law firm’s services, while remaining true to a traditional firm’s standards.

 

Now, be careful.  In the previous sentence I made a huge error by grouping Marking and advertising together.  This may be wrong, but the truth is most companies still do it.  For clarification, let me try to differentiate between Selling and Marketing.  “Selling focuses on the needs of the Seller and the need to convert products to cash, while Marketing focuses on the needs of the buyer and the need to satisfy the customer.”  So in truth, even I was a little confused at first.  Based on this definition, when the managing partner writes policy about how to treat clients and how to handle client files, that is marketing.  

 

I’ve watched the managing partner strategically price hourly rates for the senior partners, associates and paralegals at competitive rates with the market.  My firm routinely takes clients to golf tournaments and dinners.  The managing partner regularly attends City and State dinners held by the Mayor and Governor. Also, my firm treats each client exceptionally well.  All of these actions constitute marketing for a firm.  I do not know if there is a ‘plan’ written down anywhere, but I am 100% positive that all of these actions are carefully considered and planned by the Managing partner before they are undertaken.  There is a cost associated with marketing plans so each action should lead to some profit in the long term.

 

Another important concept that I learned and discussed this week was Drucker’s view marketing.  As I was reading Chapters 4 and 5 in the book, ‘Drucker on Marketing’ by William A. Cohen, I couldn’t help but feel like I was being lectured by my boss.  Some of these same principals were uttered to me before and I wonder if he’s read this book (or an earlier version or may one of Drucker’s own papers).  Drucker believed that marketing was a commitment that had to be undertaken by everyone in the organization that has anything to do with customers.  This echoes my boss’ lectures on how everyone needs to address clients and how client’s files should be handled with the utmost care.  Drucker came up with the “5 Most Important Questions you Will Ever Ask About Your Organization.” 

1. What is our mission?

2. Who is our customer?

3. What does our customer value?

4. What are our results?

5. What is our plan?

 

Once a company can effectively answer these questions, they have started their marketing plan.  I think this is a good place to stop and try to understand how our company that we are currently involved in would answer these 5 questions.  If you've read this far in my blog, try to answer these questions in the comments section.  Thanks.  See you next week!