Planning Evaluating the

Marketing Efforts
Baby Nina Alfonso
Marketing Planning, Forecasting &
Evaluation

 Preparing for Marketing Planning

 Primary Marketing Tools
 4 Ps
 Supporting the Marketing Mix
 Guiding Principles
 Expect Change
 Emphasize Relationships
 Involve Everyone
 Seek Alliances
 Be Innovative
Marketing Planning, Forecasting &
Evaluation

Overview of Marketing Planning

A marketing plan is a written set of
statements for efficiently moving those
things to the user. The plan is a blueprint and
a picture of your success.
Marketing Planning, Forecasting &
Evaluation

Overview of Marketing Plan

Marketing Planning, Forecasting &
Evaluation

Main Sections of a Marketing Plan

 Executive Summary
 Current Marketing Situation
 Objectives and Issues
 Target Market
 Marketing strategy
 Marketing programs
 Financial plans
 Implementation Controls
Marketing Planning, Forecasting &
Evaluation
Research and Analyze
the Current Situation
 Starbucks (Joe magazine)
 Sony (New Competition
from new rivals)
 Michaels Stores
(Scrapbooking near term
sales increasing 40% a
year)
Marketing Planning, Forecasting &
Evaluation

Understand markets and Customers

 Segmentation
 Targeting
 Positioning
Marketing Planning, Forecasting &
Evaluation

Objectives and marketing Support

 What makes a good objective?
 Sustainable Marketing
 The establishment, maintenance and enhancement of customer
relationships so that objectives of the parties involved are met without
compromising future generations
 Fed Ex cutting air pollution 30,000 low-emission diesel-electric vans over
the next decade.
Marketing Strategies and Programs
Marketing Control

 On going process continuous process

 Living.com upscale furniture store on-line
 Few upscale manufacturers wanted to sell on-line
 Thought customers would browse in store and buy
on-line (opposite happened)
 Failed to account for returned merchandize (just
threw it away)
Marketers need to develop

 Knowledge of markets and customers

 Core Competencies
 Relationships
Primary Marketing tools
Supporting the Marketing Mix

 Service is the key

Managing the Marketing System

Vertical Marketing Systems

 Conventional Marketing Channel - consists of an independent producer,
wholesaler(s), and retailer(s).
 A vertical marketing system (VMS), by contrast, includes the producer,
wholesaler(s), and retailer(s) acting as a unified system.
Managing the Marketing System

Channel Integration and Systems

 Vertical Marketing Systems
 Horizontal Marketing Systems
Managing the Marketing System

Vertical Marketing Systems

 Channel captain- owns or franchises the others
or has so much power that they all cooperate.
Managing the Marketing System

Vertical Marketing Systems

 Channel captain- owns or franchises the others
or has so much power that they all cooperate.
Managing the Marketing System

Vertical Marketing Systems

 CORPORATE VMS A corporate VMS combines successive stages of production
and distribution under single ownership.
 ADMINISTERED VMS An administered VMS coordinates successive stages of
production and distribution through the size and power of one of the members.
 CONTRACTUAL VMS A contractual VMS consists of independent firms at different
levels of production and distribution, integrating their programs on a contractual
basis to obtain more economies or sales impact than they could achieve alone.
Managing the Marketing System

Horizontal Marketing Systems

 Two or more unrelated companies put together resources or programs to exploit
an emerging marketing opportunity.
 Each company lacks the capital, know-how, production, or marketing resources
to venture alone, or it is afraid of the risk.
 Managing the Marketing System

Horizontal Marketing Systems

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every Tuesday with Pick of the Week.
 Instructions:
 Come into one of our stores and log on our free
Wi-Fi
 Click into the Starbucks Digital Network
 Find the Entertainment section
 Locate iTunes Pick of the Week and Download it
Managing the Marketing System

Integrating Multichannel Marketing Systems

An integrated marketing channel system is one in which the strategies and tactics of
selling through one channel reflect the strategies and tactics of selling through one
or more other channels.
Managing the Marketing System

Integrating Multichannel Marketing Systems Benefits

 Increased market coverage.
 lower channel cost—selling by phone is cheaper than personal selling to small
customers.
 More customized selling—such as by adding a technical sales force to sell
complex equipment.
Managing the Marketing System

Types of Conflict and Competition

 Horizontal channel conflict occurs between channel members at the
same level.
 Vertical channel conflict occurs between different levels of the channel.
 Multichannel conflict exists when the manufacturer has established two or
more channels that sell to the same market.
Managing the Marketing System

Causes of Channel Conflict

 Goal incompatibility
 Unclear roles and rights
 Differences in perception
 Intermediaries dependence on the manufacturer
Managing the Marketing System

Managing Channel Conflict

 Strategic justification
 Dual compensation
 Superordinate goals
 Employee exchange
 Joint memberships
 Co-optation
 Diplomacy, mediation, or arbitration
 Legal recourse
Managing the Marketing System

Managing Channel Conflict

 Strategic justification
 Dual compensation
 Superordinate goals
 Employee exchange
 Joint memberships
 Co-optation
 Diplomacy, mediation, or arbitration
 Legal recourse
Estimating Current Demand

TOTAL MARKET POTENTIAL is the maximum sales available to all firms in

an industry during a given period, under a given level of industry
marketing effort and environmental conditions.
Estimating Current Demand

Total Market Potential

Example:
If 100 million people buy books each year, and the average book buyer buys three books a
year at an average price of $20 each, then the total market potential for books is $6 billion
(100 million 3$20).
Less:
Illiterate people and children under 12 = 20%
Then, Potential pool = 209 million
Low income and low education – 30%
Then, 146.3 million book buyers = total market potential
Estimating Current Demand

Chain Ratio Method

Estimating Current Demand

Market-Buildup Method
The market-buildup method calls for identifying all the potential
buyers in each market and estimating their potential purchases.
Estimating Current Demand

Multiple-Factor Index Method

 Like business marketers, consumer companies also need to estimate area market
potentials, but since their customers are too numerous to list they commonly use
a straightforward index.
 If the state of Virginia has 2.55 percent of the U.S. population, Virginia might be a
market for 2.55 percent of total drugs sold.
Estimating Current Demand

Multiple-Factor Index Method

 Like business marketers, consumer companies also need to estimate area market
potentials, but since their customers are too numerous to list they commonly use
a straightforward index.
 If the state of Virginia has 2.55 percent of the U.S. population, Virginia might be a
market for 2.55 percent of total drugs sold.
Estimating Future Demand

 Survey of Buyer’s Intentions

 Composite of Sales Force Opinions
 Expert Opinion
 Past-sales Analysis
 Market-Test Method
Evaluating Marketing Performance

 Sales analysis
 Market-share analysis
 Marketing cost and profitability analysis
 Efficiency ratios
 Marketing-effectiveness rating review
 Marketing audit
Analysis of Sales Volume

 Sales analysis
 Market-share analysis
 Marketing cost and profitability analysis
 Efficiency ratios
 Marketing-effectiveness rating review
 Marketing audit
SALES VOLUME ANALYSIS

Two approaches:
Hierarchical Sales Analysis
Effectiveness Analysis
SALES VOLUME ANALYSIS

HIERARCHICAL SALES ANALYSIS

A multistage analysis which proceeds from one sales organization level to the
next by
 identifying major deviations
 investigating these in more detail at the next lower level.
SALES VOLUME ANALYSIS

EXAMPLE OF HIERARCHICHAL SALES ANAYSIS

Main Office

Region 1 Region 2 Region 3

$40,000,000 $ 45,000,000 $ 35,000,000

District 1 District 2 District 3 District 4

$ 7,000,000 $ 8,000,000 $ 7,500,000 $ 4,000,000

Territory 1 Territory 2 Territory 3 Territory 4 Territory 5

$ 700,000 $ 800,000 $ 750,000 $ 850,000 $ 200,000

Additional Analysis
SALES VOLUME ANALYSIS

EFFECTIVENESS INDEX
Examine territory performance relative to potential
SALES VOLUME ANALYSIS

STEPS IN AN EFFECTIVENESS ANALYSIS

 Select a market index that indicates what percentage of total sales should be obtained
from each sales territory.
 Determine the company’s actual total sales in dollars or units during the period being
studied.
 Multiply the territorial index by the total sales figure to determine the goal in each district.
 Compare actual regional sales with the regional goals to see how much variation has
occurred.
SALES VOLUME ANALYSIS

Example Effectiveness Analysis

 SALES VOLUME ANALYSIS

HIERARCHICAL AND EFFECTIVENESS ANALYSIS

 Territories
 Different products
 Sales by accounts
 Channels of distribution
 MARKETING COST ANALYSIS

MARKETING COST ANALYSIS

 A study of marketing expenses to determine profitability of marketing
segments in the firm.
 Two Approaches
 Variance Analysis
 Percentage of Sales
MARKETING COST ANALYSIS

VARIANCE ANALYSIS
 Variance represents the difference between actual costs and
budgeted costs.
 High variances should be examined further.
MARKETING COST ANALYSIS

PERCENTAGE OF SALES
Examines costs as a percentage of sales.
MARKETING COST ANALYSIS

PROFITABILITY ANALYSIS
 Return on Assets Managed (ROAM)
MARKETING COST ANALYSIS

RETURN ON ASSETS MANAGED (ROAM)

 Measures how productively the assets in each segment of the
business have been employed.
ROAM = Profit contribution/Assets Managed
MARKETING COST ANALYSIS

ROAM EXAMPLE
District 1 District 2 District 3
Sales $ 12,000,000 $ 12,000,000 $12,000,000
COGS 6,000,000 6,000,000 7,000,000
Gross Margin 6,000,000 6,000,000 5,000,000
Selling Expenses 3,600,000 4,800,000 2,600,000
Profit Contr’n 2,400,000 1,200,000 2,400,000
Acc’ts Receivable 4,000,000 2,000,000 8,000,000
Inventory 4,000,000 2,000,000 8,000,000
Assets Managed 8,000,000 4,000,000 16,000,000
Profit Contr’n % 20% 10% 20%
Asset Turnover 1.5 3.0 .75
ROAM 30% 30% 15%
 MARKETING COST ANALYSIS

PRODUCTIVITY ANALYSIS
 Additional productivity analysis may be required to get a fuller picture of
organizational effectiveness.
 Measured in terms of inputs and outputs.
MARKETING COST ANALYSIS
EXAMPLE OF PRODUCTIVITY ANALYSIS
District 1 District 2 District 3
Sales $ 10,000,000 $ 12,000,000 $ 10,000,000
Expenses 1,000,000 1,200,000 1,500,000
Sales Calls 5,000 4,500 4,500
Proposals 100 105 120
Salespeople 10 15 10
Sales/Person 1,000,000 800,000 1,000,000
Expenses/Person 100,000 80,000 150,000
Calls/Person 500 300 450
Proposals/Person 10 7 12
CONSUMERISM

 Consumerism, the "social movement seeking to augment the rights

and power of buyers in relation to sellers," (Kotler, 1972)

 It is manifest in new laws, regulations, and marketing practices, as

well as in new public attitudes toward government and business.
CONSUMERISM

 Consumers are disenchanted with the marketing system.

 Symptomatic of consumers' malaise are complaints about rising
prices, demands for improved products and services, suggestions
for improving the adequacy of product information, and
concern for the physical environment
CONSUMERISM IN INDIA

 India is a developing economy.

 Not all Indian consumers are well educated.
 Consumers are often exploited, misled by deceptive
advertisements, packaging poor after sales service, adulteration,
price collusion and so on.
 Liberalization and competition
 Survival of the fittest
CONSUMERISM

Situational Factors that aided unethical marketing:

 Vastness of the country
 Imbalance in income distribution
 Backwardness, illiteracy , ignorance
 Lack of education and information
 Indian consumers get carried away by clever advertising
CONSUMERISM

Reasons behind the rise of consumerism in India:

 Imbalance in demand and supply of commodities --- leading to
hoarding, black marketing, profiteering
 Low literacy levels and lack of awareness of rights encourages
businessmen to be indifferent to consumers
CONSUMERISM

Reasons behind the rise of consumerism in India:

 Lack of effective competition
 Consumerism is still in its infancy
 Legal framework is time consuming and tiresome
 Lamentable state of public sector monopolies
CONSUMERISM

Remedies:
 Active participation from the business, Government and
consumers.
 Business must ensure efficiency in production and quality of
output and must refrain from Unfair Trade Practices
 Government through legislations, statutory bodies etc prevent
exploitation of consumers.
 Consumers should assert their rights and protect themselves from
business malpractices
Consumer protection in India

 Marketing concept has to be broadened to include the societal

marketing concept.
 Lifebuoy's “Swasthya Chetna”
 Tata Tea's Jaago Re! campaign
 The goal of the program is to educate 200 million people in India,
approximately 20% of the population, on the importance of hand
washing with soap.
 In order to help consumers on low incomes effectively participate in
swasthya chetna, the company has introduced a smaller, 18-gram
bar of Lifebuoy, enough for one person to wash their hands, once a
day, for 10 weeks.
Tata Tea launches new
Jaago Re campaign
against corruption
Jaago Re campaign was
initiated in the year 2007. The
objective of this campaign was
to transform tea from a
medium of mere physical and
mental rejuvenation to a
medium of social awakening.
Changes in the attitude of Indian
consumers

 The attitude of Indian consumers has undergone a major transformation

over the last few years.
 He wants to lead a life full of luxury and comfort.
 He wants to live in present and does not believe in savings for the future.
 He is open to the idea of consumption and a better lifestyle.
 An increase in their income level due to high rate of industrialization,
growth of services sector and better employment opportunities
Consumer Awareness
Consumer Awareness
Consumer Awareness
THANK YOU FOR LISTENING!