At the end of this lesson, the students will be able to: 1. explain target market and 3 aun .. different 5 Implementing the — Se “te : ar ee cuoee Marketing Plan mfp . 4. differentiate the types of 5. prepare 6 marketing uting marketing concepts and techniques, and: LET’S DISCOVER Digital Marketing Digital marketing is defined as the application of digital technologies that enable marketing channels to [Link] even exceed customer needs and expectations. It facilitates multiple communications at.a faster rate, and provides several channels that marketers and customers can use to. conduct business electronically. Digital marketing comes in different formats that can help organizations grow in terms of sales and customer base. Paid search refers to the sponsored result or ad that appears on a specific area in a search engine results page (SERP). Companies pay only when their paid search ads are clicked. Also, these ads are contextual; they appear only when an Internet user searches for particular keywords. Search engine optimization (SEO) involves improving or modifying the content, technical setup, and reach of a website so it appears at the top of the SERP, based on a set of keywords searched. SEO helps attract prospective customers to check out a company’s website when they look for related products or services. Content marketing refers to the use of informative, engaging, and valuable content to consumers without explicitly selling products and services to them. Videos, infographics, cheat sheets, and case studies are some forms of content marketing. Social media marketing gives marketers various opportunities to engage with consumers on platforms they use to acquire information and connect with the world. This also encourages customers to influence others to become customers as well,Email marketing provides the quickest and most direct way to reach the target market, considering how often people check their emails. It is the marketer’s task to make sure that marketing emails are trustworthy, relevant, conversational, strategic, and are coordinated across channels. Discussion Questions 1. How did digital marketing change the marketing landscape? 2. How can digital marketing benefit businesses and consumers? 3. What do you think is the most effective digital marketing format? Why? LET'S LEARN Implementation Phase . Marketers develop marketing strategiés for their product or services. Marketing strategy is defined asa plan of action directed to an identified target market. It utilizes the 4Ps of the marketing mix let Ho te to help the! company’s product or service offering gain’ a sustainable competitive advantage. Having a sustainable competitive advantage means that the product or service holds a steady position in the market because of an advantage that cannot be easily copied or emulated by its competitors. Segmentation, Targeting; and Positioning In order to best serve customer needs and wants, marketers divide the market into segments according to different categories. As mentioned earlier, Coca Cola has different ways of segmenting the market. It offers various drinks based. on target customers using »multi- ‘segmentation or multi-segment marketing. Using demographic and geographic segmentations, it offers variants such as Coke Zero and Diet Coke to health conscious drinkers. They are available in most countries of the world, Oasis Juice, which is popularin Great Britain and Ireland, is a drink marketed to young adults and is available in different flavors such as berry, lemon, and orange: Using demographic segmentation, it was determined that typical Coke drinkers are of ages between 15 to 25 and 40 onwards, It targets both male and female consumers. Coke is available in variants that can also be sold to people across all income levels, the cheapest of which is Coke Sakto. Coke is also available in 1.5-liter bottle and in can. Coca Cola also uses psychographic segmentation. Being the world’s number one brand of soft drink, people who are brand conscious will prefer Coke than any other soft drink. Targeting refers to the process of assessing the target market in-terms of the product’s perceived attractiveness and deciding how to reach the target market. For example, Coke Zero and Diet Coke both target health-conscious consumers. However, the strategy to target both males and females without allowing both variants to compete with one another is the task of the marketers. It resulted in marketing of Coke Zero to men and Diet Coke to women. Positioning is the process of letting the target customers have a clear and distinct understanding of what the product or service represents in comparison with its competitors. For example, the ride-hailing service Grab was created to solve critical transportation challenges faced by passengers and provide the convenience of calling or hailing a car or taxi using mobile- based technology. Marketing Strategies In building a sustainable competitive advantage, marketers may concentrate on any of the following general marketing strategies: 1, Customer exeellence. Marketers retain loyal customers by providing excellent customer service: Many companies use this strategy and have sustained excellent operations for many years. Starbucks is consistent in providing outstanding customer service and has become one of the leading global companies in the recent years. 2, Operational excellence. Marketers highlight the company’s excellent operations and human resources. 3M, the maker of audio tapes, Post-It Notes, and the like, is a successful billion-dollar company which boasts of its efficient operations brought about by excellent performance of its employees. 3M supports innovation and provides employees with formal learning and knowledge management systems to help them grow and improve in their careers. Employees can share news articles, videos, and other useful materials to complete their projects. They also share best practices through the expertise of employees from research and development, manufacturing, and other members of the supply chain. 3.) Product excellence. The product or servicemay have effective branding and great positioning which result in good brand recall. among consumers. Apple, for instance, has a [Link] brand recall. Its products are also known for their high quality and excellent performance.4,» Location excellence. Marketers bank ona good location and Internet presence. For example, Jollibee always ensures that its branches are strategically located in places with high customer traffic. Marketing Mix The 4Ps of marketing are the primary bases for the development of a marketing plan, Apart from these, there are additional concepts and strategies that can help marketers in formulating the marketing mix program decisions. Product Decisions Marketers are faced with product decisions which they need to consider to attract a larger numberof layal customers. A product decision can be defined as.a conscious and significant decision made by [Link] for a product. Its components include product attributes, branding, packaging, labels, and support services. 1... Product attributes include the design, features, quality, and performance of the product, To ‘be competitive, the product must possess unique characteristics. that will set it apart from its competitors and be free from any damage or defect. Marketers can enhance the product attributes and ask customers for their feedback and suggestions to improve, the product's marketability. : 2. Branding refers to a symbol, name, design, or a combination of these that identifies the product distinctly from its competitors. Marketers protect the brands they carry by ensuring good product quality and performance. A product's good brand image and high customer recall guarantee high profits, 3: Packaging includes the product's physical features, the customers’ preferences, and the packaging’s materials and design. 4. Labels indicate the manufacturer’s name, the expiration date, the ingredients or composition of the product, the instructions ‘on how to use the product, and other essential information, 5, _ Support services for new customers may include free insurance and free check-ups for the first 5,000 kilometers covered by a new car. Marketing Communication for Promotion Decisions Several steps are involved in developing effective communication between marketers and consumers. First, marketers should identify the target audience or would-be receivers of the message: The target audience may include the target customers or those who will actually purchase the product; the people who may influence the customers to buy the product; potentialbuyers who will eventually buy the product in the near future; and lastly, those who make the buying decisions. Next, marketers should lay out the marketing commynication objectives. It is important that they know at which stage of awareness the customers are in with regard to the product. Are they already aware of the product? How well do they know the product? How extensive is their knowledge of the product or brand? What is their current product preference? Ultimately, marketers should persuade the target audience to buy the product. After determining the objectives, marketers then create the message. A convincing message draws and holds attention. It also arouses the desire to buy the product. Thus, marketers should formulate a good and clear content and develop an effective way of saying it. Marketing content can appeal to either rational thinking or emotion. Some promotional materials contain essential information about the product (eg., effectiveness, edge over the competitors). Others associate the product with a positive concept (e.g., family values, inclusiveness, success). The way the contentwill be delivered is also carefully planned. Marketers plan the effective format, tone of voice, channels, frequency, and timing for their content, with the highest consideration for what their target markets want. Pricing Strategies Marketers should know thé ‘different pricing strategies that can help sustain sales and eventually retain customer loyalty. 1. Discounts and allowances. Firms may offer various conditional discounts to customers. Volume discounts can be given for those who buy in bulk. There:can be cash discounts for customers who pay in cash or in full. Companies can likewise offer trade discounts to dealers who perform well in selling their products. Off-season discounts are also common for products that are slow moving when not in season. ; 2. Pricing by segments. Prices may be different for the same product or service. For example, airline fares and concert or movie tickets are priced depending on the location of the seats. 3. Perceived qualify pricing or p¢ychological pricing. A high price may connote high quality to a consumer. For example, a bottle of perfume priced at 3,000 may have the same scent as a 1,000 perfume but the one with the higher price may be perceived as the better choice. 4. Promotional pricing. Marketers may temporarily offer lower prices to promote a new product or service or cater to cost-sensitive consumers. For example, newly-released items are in introductory prices to attract potential customers. 5. International Pricing. Products that are sold in different countries have different prices, based on the country where they are sold. 161Distribution Channel Conventional marketing channels include wholesalers and retailers that distribute the products. The finished goods go to the wholesalers who pass them to the retailers then finally to the consumers. Vat i Typical Marketing Channel The vertical marketing system (VMS) is the improved version of the typical marketing system. The VMS has producers, wholesalers, and retailers working together, An,example is a system in which the producer owns the wholesalers and the retailers so they effectively cooperate with each other. On the other hand, a horizontal marketing system (HMS) involves two or more companies who cooperate to take advantage ofa marketing opportunity. For example, a movie producer will join forces with a TV network to produce and distribute a film. Control Phase Control in marketing is implemented by setting performance standards based on the established marketing objectives. The performance and execution of strategies are monitored and then compared with the standards set. If deviations occur, corrective actions are done. Marketing control methods include strategic control, marketing effectiveness review, marketing audit, annual plan control, profit control, and efficiency controls. Strategie control. It helps the organization in evaluating its activities and determine whether the company is taking advantage of the best opportunities in terms of target markets and marketing channels. There are twe tools available for strategic control—marketing effectiveness review and marketing audit. The top management and the marketing auditor are responsible for implementing this control.Marketing effectiveness review. This marketing control ‘tool evaluates customer orientation, the integration of other functions with the marketing function, and coordination of functions with one another: It also assesses the extent 6f the marketing information system and the quality of the current marketing strategies as well as how the marketing plans are communicated ’to the lower levels. It also evaluates the effective use of marketing resources and the responsiveness of the company to new marketing developments. Marketing audit. It isa detailed and systematic analysis of the present and past marketing activities of the organization. It also forecasts market growth in consonance with the changing market conditions and gives suggestions on how to improve sales performance. It evaluates the total marketing operation including its objectives, policies, procedures, and employees assigned to achieve marketing objectives. Marketing audit is done periodically depending on the need of the organization. Managers conducting marketing audit conduct SWOT analysis and environmental scanning. Annval plan control. [t determines whether the planned results or outcomes were achieved by using marketing targets as performance standards. This task is normally the responsibility of middle and top managements. The different tools used are sales analysis, market share analysis, marketing expense-to-sales ratios, and customer tracking. . Sales analysis involves the study of a company’s sales data, This helps managers plan and direct the sales efforts. The performance of sales personnel is evaluated, and any discrepancy or variance with the overall sales targets is noted. The company then determines the reasons for the discrepancies. Market share analysis determines the overall standing of the company against its competitors. The company looks into changes in its sales volume and market share and develops solutions to address any challenges in their marketing plan. Marketing expense-to-sales ratios. This type of évaluation focuses on the analysis of the marketing budget. The budget details the planned expenditures of a company to achieve target sales. The most common expense areas are sales force expenses, promotional expenses, distribution expenses, and market research expenses. Managers measure and control the ratio of total marketing expenses to sales. When the expenses _ deviate from the control limits, managers determine the reasons for such change, _ Customer tracking. Itis a systematic way of evaluating customers’ attitudes, feedbacks, and reactions to marketing activities. Included in customer tracking are consumer panel information, returns and complaints, customer surveys, and sales force reports. Customer tracking can be done on a monthly basis, especially on returns, complaints, and sales force reports, These are sources of direct consumer feedback which indicates customer satisfaction.Profit Control. It determines the areas where the company is. making ar losing. money. Profitability can be gauged through any of the following categories—product, segment, territory, customer, order size, and trade channel. This evaluation is the responsibility of the finance officer for marketing activities. For example, a company offering just. one product may have two different customer types: industrial buyers and. ordinary consumers. Which of the two generates higher profits? The answer will help managers develop strategies to increase the profitability of one group and maintain high sales from the other group. An income statement can provide details of the company’s profitability. Efficiency Control, This type of marketing control keeps track of the efficiency of marketing expenditures such as cost of sales force, advertising, sales promotion, and distribution. This is also the responsibility of the finance officer for marketing activities and the marketing department. This control mechanism keeps track of each element of the marketing mix to ensure that it is being utilized efficiently for the attainment of company objectives. Thus, the sales force can be evaluated on the basis of the number of sales calls per day, Humber of orders, Success rate, expense targets, sales skills, and customer relationships. The efficiency evaluation of the entire selling effort is the sum of all contributions of the sales personnel, The Marketing Plan The marketing mix efforts are integrated in the development of the marketing plan. The marketing plan contains a summary of the objectives and strategies of the firm ‘with regard to launching, re-launching, or improving a product or service. For example, the ¢réation of a dandruff shampoo identifies the value that it can provide. For one, if a dandruff shampoo can. remove dandruff and at the same time maintain healthy and shiny hair, its creation will surely bring profit to its manufacturers. Inanother example, the promotion of a germicidal soap by a well-known medical practitioner can make a difference in terms of sales. The credibility of the professional endorsing the product means a lotin product sales. Sample Content of a Marketing Plan ‘The following is a hypothetical example of a marketing plan for Starbucks. The takeaway from this discussion is to understand how to create a marketing plan. rerIntroduction Starbucks Coffee Company is the largest coffee company worldwide operating in more than 50 countries. Itis considered as the premier retailer of specialty coffee andis also known for offering a one-of-a-kind experience in drinking coffee. It was founded by Jerry Baldwin, Zev Siegel, and Gordon Bowker in Seattle, Washington in 1971. Overall, Starbucks employs customer excellence, product excellence, Operational excellence, and locational excellence. Mission Statement Starbucks aims to inspire and nurture the human spirit—one person, one cup, and one neighborhood at a time. SWOT Analysis Strengths excellent customer service strong brand identity and brand recall largest coffee company in the world multiple demographic market segments Weaknesses * fast growth can make the company complacent in terms of customer service + high cost to maintain excellent customer service Opportunities + continuous patronage of coffee drinkers «strong preference of millennials to drink coffee than any other drink Threats * influx of coffee companies with unique tastes and flavors around the world * countries where Starbucks is not allowed to operate, like Italy Marketing Objectives *-to launch mobile order and pay and delivery in the US * to achieve $30 billion revenue in 2019 worldwide * todouble its store count to about 500 stores in 2016 and over 3,000 stores in China by 2019 * to retain global leadership in the coffee market iors)166 Target Market Starbucks has the following worldwide geographic segments: the Americas, China and the Asia-Pacific, Europe, the Middle East, and Africa, In terms of demographics, Starbucks is marketed to members of the upper class in the coffee market. The closest competitors are Dunkin Donuts and McDonald's. Marketing Mix Starbucks executes the following strategies for each of the 4Ps: Product + Starbucks will continue to offer the following products: coffee, tea, pastries, Frapuccino beverages, and smoothies. * Starbucks will offer the following merthandise: mugs, instant coffee, etc. Starbucks will offer the following juice blends through its subsidiary Evolution Fresh: Coconut Water and Greens, Smooth Greens, and Organic Sweet Greens and Ginger. » — Coconut Water and Greens is a combination of coconut water, cucumber, leafy greens, and pineapple. » Smooth Greens consists of leafy greens, cucumber, pineapple, apple, and mint. » Organic Sweet Greens and Ginger is a combination of green vegetables, apple, lemon, and ginger * — Starbucks will offer ready-to-drink brewed iced coffees. * Starbucks will introduce a new holiday beverage: Chestnut Praline Latte, which is a combination of fresh espresso, caramelized chestnuts, fresh milk, whipped cream, and praline chocolate. Price Starbucks will continue to use the customer's perceived pricing strategy where the . customers put a high value on the product, * Compared to coffee from Dunkin Donuts and McDonald's, Starbucks products are more expensive. Starbucks will still be priced higher than its competitors.Placement + Starbucks offers its products in their cafés, retailers, online stores, and Starbucks app. : * Single-origin coffees from Guatemala, Rwanda, and Timor will be available in groceries and supermarkets, * — Ready-to-drink brewed iced coffees will be available in supermarkets and groceries. + Starbucks will launch mobile order and pay where customers can order in advance aiid pick their items at their chosen Starbucks café. * Starbucks will introduce mobile service through mobile trucks in selected colleges and offer food similar to what is offered in Starbucks cafés. Promotion * Starbucks will continue to use advertising (print, Internet, billboards), public relations, and sales promotions. * — Starbucks will introduce Starbucks For Life with 14 customers to be declared as winners. The prize will be a 10-karat hammered gold card, engraved with the customer's name and a free Starbucks beverage or food item every day for the next 30 years. Marketing Control Starbucks will use profit control to monitor its performance. In 2009 and 2010, the following figures indicated the sales and profit of Starbucks. 2009 2010 Difference Sales $9.8B $10.7B 9% Profit $894M $1,472B 53.5% Sales increased by 9%, while profit increased at an all-time high of 53.5%. Starbucks’ performance is consistently high.