Strategy Assignment: Marketing Strategies and Sales
Using the provided information, write a market strategy for the attached business description. Note that this strategy need to reflect the business location in Miami.
The Marketing and Sales section of your plan will make or break the prospects for your venture. A great idea is meaningless if you cannot find customers. Carefully drafted and logical financial projections are irrelevant if nobody buys your product/service. In this Marketing Strategy section you must convince potential investors and loan officers that there is indeed an eager market for your product. The Marketing Strategy section is where you show how you are going to fit into the market structure you just finished describing. What are unmet needs in the marketplace and how are you going to fill them? How will you differentiate your product/service from your competitors? What unique features, benefits, or capabilities will you bring to the marketplace? Who are your customers? Research you do for this subsection will be with customers, potential customers, plus any necessary secondary data. It is imperative that you do sufficient customer research to convince potential investors (and yourself) that customers will indeed come flocking to buy your product or service. Customer research can include simply talking with potential customers to get reactions to your product idea, conducting focus groups, undertaking walk-up or mailed surveys, putting up a mock demonstration of your concept and soliciting customer feedback, and so on. Be creative in finding ways to get honest customer input about your product or service. Finally, do not inadvertently cook the books here. Since you are enthusiastic about your concept, customers will notice your enthusiasm and often reflect it back to you, leading to erroneous conclusions about customer acceptance. It is therefore preferable to be neutral and factual as you collect data.
The Market Strategies and Sales section should include the following subsections:
I. Introduction
Begin with the fundamentals of your marketing plan. State target market segments you wish to penetrate, how you plan to achieve this (e.g. through retail, mail order, multi-level marketing, the Internet) and the period for capturing a specific percentage of the market share.
II. Market Segmentation Strategy
Explain your strategy for each segment you have described in section 3.2 (Market Segmentation and Target Market). Describe the unmet need of your target consumers that your product/service fulfils or the problem it solves. The main types of segmentation strategies are as follows (you may also choose a combination of strategies):
• Geographic segmentation: segmenting customers based on geographic area (city, country, ZIP code, metropolitan statistical areas, time-zone, etc.)
• Product-user segmentation: segmenting customers based on product usage (amount and/or consumption patterns of a product category or brand)
• Lifestyle segmentation: segmenting customers based on lifestyle (which includes: values, beliefs, perceptions, leisure activities, preference for social events, sports interest, media usage, political views, etc.)
III. Targeting Strategy
Identify the targeting strategy to implement. This will determine which market segments you will focus on. The three main targeting strategies are:
1) Mass Marketing: go after the market as a whole with one offer that answers common needs
2) Differentiated Marketing: go after several market segments with offers tailored to each
3) Target (Niche) Marketing: go after a small segment or sub-segment with a tailored offer
IV. Positioning Strategy
Here you will include the strategy you will use to position your product vis-à-vis competitors. Some of the common product positioning strategies includes:
1) Positioning in relation to competitor (head-to-head comparisons, differential advantage)
2) Positioning in relation to a product class or attribute (e.g. low energy consumption, environmentally friendly, efficient, time saver)
3) Positioning in relation to target market
4) Positioning by price and quality (high-quality, low-price leader, luxury)
5) Repositioning (gives old product new image)
Corporate Message and Image
1) The message you portray through all your marketing efforts should be clear, consistent, and reflect your corporate image
2) Image can be portrayed directly (through a description of products, pricing, services, etc.) or indirectly (through suggestive design elements, logos, or uniforms, etc.)
V. Product/Service Strategy
Describe how your product/service has been designed and tailored to meet the needs of your target customer and how it will compete in your target market:
1) What specific product/service features meet the needs of your customers?
2) What differentiates your product in your target market?
3) How does it differ from that of your competitors?
4) What are the strengths of your product/service? Its weaknesses?
5) Why will customers in your target market buy your product rather than the competition's?
6) How will you differentiate yourself from your competitors?
7) Why will customers switch to or select your product?
8) How quickly and how effectively can competitors respond to your business?
VI. Pricing Strategy
Your pricing strategy is a marketing technique that is part of your overall marketing/positioning strategy. Upon examining the pricing strategy your competition is currently using, explain your pricing strategy and why it will be effective with your target customers.
Begin by stating your pricing strategy. Explain how you arrived at your pricing strategy (e.g. based on cost, gross margin objectives, market prices, perceived value). Point out how your pricing strategy compares to the competition. Be sure to include when you will review your pricing strategy, i.e. monthly, quarterly, annually.
Some common pricing strategies include:
1) Retail cost and pricing
2) Competitive position
3) Pricing below competition
4) Pricing above competition
5) Price lining
6) Multiple pricing
7) Quantity discounts
8) Cash discounts
9) Seasonal discounts
In structuring your pricing plan, make sure you have considered all of the following:
1) Competitor pricing
2) Direct/indirect costs
3) Prices you plan to charge, typical gross and net margins for each product and service
4) Credit arrangements, returns policy, etc.
5) Profitability
6) Financial justification
7) Customer needs and what they are willing or not willing to pay for
8) How customers view additional features and benefits
9) What kind of cost savings might interest customers
VII. Distribution Channels
A distribution channel consists of the set of people and processes involved in the transfer of a product from producer to ultimate consumer. Describe your distribution strategy and explain why it is the best for your marketplace.
Begin by providing the distribution channels your business will use [wholesalers, cataloguers, mass merchant retailers, consolidators, DISTRIBUTORS] and how they are good fits for your end users because of [customer profile, geography, seasonal swings, other factor]. Then point out the distribution channels used by your competition and the reasons why your choice of distribution channels is advantageous for you.
1) List your major current customers or consumer groups including a one or two sentence description for each and demonstrate how your product reaches the end user. A chart or diagram may be useful.
2) Identify geographical or sales territories to be covered
3) Specify whether middlemen are:
a. Gathering marketing information
b. Providing marketing research information down and up the supply chain
c. Promoting your product
d. Adding a price markup
e. Transporting and sorting goods
f. Negotiating with customers and/or other middlemen
VIII. Promotion and Advertising Strategy
How you advertise and promote your goods and services is crucial to gaining acceptance in the market and successfully generating a profitable sales volume. Having a good product or service and poor advertising is like not having a business at all. Many business owners operate under the mistaken concept that the business will promote itself, and channel money that should be used for advertising and promotions to other areas of the business. Advertising and promotions, however, are the lifeline of a business and should be treated as such. Your purpose is to introduce, promote, and support your products in the marketplace. Although considered a cost, a properly designed and executed campaign is an investment.
Explain your advertising and promotion strategy. It is critical that you educate your target market about your product or service, inform it about its availability, and regularly communicate your benefits to that market.
1) How will the business advertise and promote its product or service?
2) How will the business communicate with its customers? Advertising? Public relations? Personal selling? Printed materials? Other means of promotion?
3) Why will this strategy be effective in reaching your target customer?
4) If you have identifiable repeat customers, do you have a systematic contact plan?
5) How do you get the word out to customers?
6) Why this mix of advertising channels and not some other?
Marketing Vehicles
You must decide how you will generate awareness of your product or service among potential customers. Employing the following promotional activities can generate awareness:
1) Brochures, flyers, leaflets
2) Print media - newspapers, magazines, specialty publications, Yellow Pages
3) Direct mail, (e)mailing lists
4) Broadcast media/electronic - television, radio, Internet, movie theaters
5) Promotions (2 for 1), dining clubs, credit card discount programs
6) Signs - on store, billboards, public transport, blimps
7) Hotel - in-house publications, video guides, concierge relations, services
8) Charity events
9) Samples, coupons
10) Specialties - packaging, T-shirts, stickers, mugs, etc.
11) Trade shows, networking
12) Point of sale devices, promotions, and employee practices
13) Public relations
Promotional Budget
There are four common promotional budget methods:
1) Percentage of sales
2) All available funds
3) Following the competition
4) Budgeting by task or objectives
State and give details of the method you will apply to your marketing strategies. Be sure to consider the following questions when completing your promotional budget:
1) How much will you spend on the marketing vehicles listed above
2) Should you consider spending less on some promotional activities and more on others?
3) What is the budget for all phases of the marketing effort?
IX. Sales Strategy
Depending on your business, a strong sales team may be a critical component of your success. Remember: "nothing happens until the sale is made." An effective sales strategy is critically important for most manufacturers, publishers, software firms, and many service providers. Do not overlook the importance of formulating an effective sales strategy.
1) Discuss how and where you plan to sell and distribute your product or service
2) How will your product or service be sold? Personal selling? TV infomercials? Direct mail?
3) Who will do the selling? An internal sales force? Manufacturer's representatives? Telephone solicitors, call-centers? Internet Marketing?
4) How will you recruit, train, and compensate your sales force?
5) How will you support your sales effort? (e.g. internal staff, service operations, motivators, etc.)
X. Sales Forecasts
Now that you have described your products, services, customers, markets, and marketing plans in detail, it is time to attach some numbers to your plan. Prepare a month-by-month sales forecast for a projected twelve-month period. The forecast should be based upon your historical sales, the marketing strategies that you have just described, market research, and industry data if available.
It is preferable to do three forecasts: 1) "best case", 2) "expected case", and 3) "worst case" (a low estimate that you are confident you can reach no matter what happens).
For this section, please refer to the Sales Forecast in the appendix.
Remember to keep notes on your research and assumptions as you build this sales forecast and all subsequent spreadsheets in the plan. Relate the forecast to your sales history, explaining the major differences between past and projected sales. This is critical if you are going to present it to funding sources.
Format your assignment according to the following formatting requirements:
(1) The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
(2) The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
(3) Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.