GROUP PROJECT EXPLANATION OF HEADINGS TO BE USED 1.0 EXECUTIVE SUMMARY The Executive Summary is a critical element of any Marketing Plan as it may be the only section of your plan that a busy senior manager from the firm may have time to read before you present it, in a work context. The Executive Summary must include a summary of the Marketing Plan, including key objectives, marketing strategy highlights and financial outcome. It should be one page length maximum. 2.0 INTRODUCTION The Introduction sets the scene for the whole plan. It introduces the firm, establishes the background to the international business venture to be undertaken, outlines the driving forces and opportunities justifying the venture, and the direction that will be taken. 3.0 SITUATION ANALYSIS A Situation Analysis reviews the success or otherwise of the firm’s current marketing activities, and presents an analysis of the various internal factors and external market and environmental factors which will influence how the firm will undertake its plan in the international market. It concludes with a SWOT analysis which identifies the problems the firm will face and the opportunities that the firm should capitalise upon. This is vital in establishing the firm’s objectives and recommended marketing strategy. INTERNAL FACTORS 3.1 Detailed Company Analysis • Assessment of the firm’s resources (financial, people, organisational, cultural etc.). • Review of the firm’s current domestic and (any) international marketing activity, technical/production and financial expertise etc. • Assessment of the image of the firm or brand: for example, how is the firm and/or brand currently perceived in the marketplace? What is its domestic market share? EXTERNAL FACTORS 3.2 Target Country / Area In this section you should analyse the international market you are targeting. As a guide, you should discuss the definition of the product/service market in which you will be competing; the market characteristics; the current size of the market ($ and units) and current and likely future trends. To help focus your analysis, you may choose an area within the country to concentrate your initial marketing activities upon. For example, very few companies targeting the USA would aim initially to launch their products/services across the whole country at the same time. Rather they might focus upon (say) California / San Francisco for their initial launch and so most of their initial market analysis would be based upon these areas. 3.3 Environmental Analysis (PLESCT) The ‘environment’ refers to various factors which are uncontrollable and can have major impacts on how marketing activities are undertaken. Clearly, this is especially important for the international -1- market place. This analysis should include an evaluation of any political, legal, economic, social, cultural and technological factors. How might each of these affect the new plan? A Risk Analysis associated with each of these points will be useful here for the identification of issues that need to be addressed in the plan. Concentrate only on the ways in which these issues in the ‘environment’ will potentially impact on your product/service. 3.4 Key Competitor Analysis Who are the key competitors and how and in what way(s) do they compete? Remember first of all that not all competitors compete with each other – Michael Porter’s Strategic Groups concept and second, many competitors do not only compete on price. There will often be a range of other factors such as service, quality, distribution, delivery, economy of use, warranty etc. that may be as important if not more so than price. Are there indirect as well as direct competitors, local as well as international? What marketing activities do they undertake? What are their market shares? You may find it useful to set up a matrix to bring together all of this analysis with (say) key competitor attributes on the vertical axis and the key competitor names on the horizontal axis. 3.5 Identification of Target Market Segment(s) Who are the customers that you want to win? What are their primary cultural traits? Who makes the decision to buy? When do they purchase? What factors influence their purchase? What are their buyer criteria and hierarchy? Do they make repeat purchases? Remember also that no company tries to ‘build’ their products/services for everyone – they tend to focus on special groups of customers with particular needs that we call ‘segments’. So in this section you will also need to ‘segment’ the market for your product/service and then evaluate each of those segments in order to find out which one(s) are the most attractive (= target market segments). Think about car companies building a new car – what groups of customers (segments) are they ‘targeting’ and what impact will that have on the design and capabilities of the car? The target segment(s) that you identify in this section will then become the ONLY FOCUS for your marketing plan. There are insights and examples of how to set up marketing segmentation ‘grid’ in lecture 2. 3.6 SWOT Analysis You will need to complete a Strengths and Weaknesses analysis of the firm (internal factors) and an analysis of Opportunities and Threats in the market (external factors). This analysis should be drawn from the analyses you have undertaken in the earlier sections of the Situation Analysis. The SWOT can be presented in table format, but needs to be further analysed and a conclusion made about the implications for the international venture. Please make sure that you “weight” the SWOT analysis and what we mean by that is that you give a mathematical level of importance (out of 100 or 10 or 1) to each entry in the S,W,O and T sections. What this allows you to do is identify the most important elements in each section and that will have MAJOR IMPLICATIONs for your analysis and conclusions. Also remember that the foundation of ANY MARKETING PLAN is based on (1) the most important strengths being aligned with the most important opportunities and (2) how you are going to manage the possibility of the most important weaknesses somehow becoming aligned with the major threats and potentially damaging your plans. This latter point was the basis and major cause of the recent global financial crisis, which so badly hurt so many firms and their employees. See lecture 2 for a worked example of a weighted SWOT analysis. -2- 3.7 Company “Gap” Analysis When a company undertakes any international venture, it needs to consider whether it has the “expertise and experience” required to (at least on paper) make the venture successful. This analysis very often results in the company identifying “gaps” in its capabilities – which obviously then need to be planned for. For example, the company might identify that to fund an international expansion it needs $11m of working capital, which it does not currently have and so the ‘gap’ would be the $11m required and how to get it. Other ‘gaps’ might be foreign language capabilities, or detailed knowledge of ‘local’ laws and regulations, or senior management with international experience in that particular market etc. So, evaluate what you consider to be the important ‘gaps’ and make sure that you plan for them in your project. 4.0 BUSINESS OBJECTIVES (What does success look like?) Set specific goals (targets) for the project. This is an important part of any marketing plan because it forces you to think about what a ‘good’, ‘acceptable’ or ‘bad’ result may look like. So if we are planning to set up a new business operation in say, Ho Chi Minh City in Vietnam, what goals (targets) should we build into our marketing plan? It’s usual to break these goals (targets) into at least 4 categories:- - finance (profit, say by Y3 - $12.3m) and quality of profit (say ROA by Y3 – 18.3%) - marketing (say by Y3, number of customers, market share, gross margin) - operations (say by Y3 – cost to income ratio (expressed as a percentage – this is a measure of efficiency and productivity) - key personnel (identify the senior management structure that should be running the project and identification of any key personnel that need to be recruited, trained etc.) 5.0 MARKETING STRATEGY EVALUATION The Recommended Marketing Strategy should flow directly from the SWOT Analysis and objectives that have been established earlier. Considerable detail is required here – this is the “engine room” of the International Marketing Plan – the “what, how, when, where and how much” section. It is also the section in the plan that will clearly demonstrate your team’s knowledge of marketing concepts and ability to apply them in an international marketing context. 5.1 Market Entry Strategy You must first complete an evaluation of alternative market entry strategies open to the company. 5.1.1 Alternative Market Entry Strategies A brief evaluation of all realistic market entry options is required (typically at least three, including your preferred option). These options should be discussed, covering advantages and disadvantages, how they might work and reasons for adopting or discarding each one. 5.1.2 Final Market Entry Strategy You should identify the option that you think meets your business needs best. Explain this decision in detail – how and why will it work best for your firm? 5.2 Competitive Advantage and Market Positioning Evaluation 5.2.1 Competitive Advantage This section allows you to consider how and in what ways you are going to compete in the chosen international market. You have already analysed the market, the competitors, the (target) customers that you want to win and so now you need to evaluate the product/service options that you need to -3- ‘build’ in order to achieve your business objectives. One of the simplest ways to do this is to use the ‘differential importance matrix’ process, which you will study in lecture 2. This process will enable you to consider what the best ‘options’ might be in order to create an ‘offer’ that at least matches, if not outperforms your key competitors. 5.2.2 Market Positioning Options Now that you have done some analysis and thinking about competitive advantage, you now need to consider how the option(s) (that you have evaluated) might best be positioned in the market. Typically, companies consider at least two options. This does not require a lot of analysis and what analysis you do is best illustrated on a ‘perceptual map’. The ‘map’ and its explanation should show your groups understanding of the concepts involved and your ability to think through and express the relevant strategy implications. Once you have completed this analysis, decide upon which positioning option best meets your strategy requirements. There is an example of a ‘perceptual map’ in lecture 2. 5.3 Marketing Mix Strategy: The Marketing Mix Strategy should include a considerable amount of detail, sufficient to allow robust economic evaluations to be made. The following information should be clearly presented and strongly supported and justified: 5.3.1. Product/Service Specification(s) Now that you have identified the ‘best’ product/service ‘options’ for your marketing plan (in the competitive advantage section above), you now need to specify the final / recommended option. This requires a full description of the product/service to be launched, together with an explanation for any ‘adaptations’ that are required for local market conditions. 5.3.2 Competitive Strategy Consider how and in what way(s) you are going to ‘market’ this product/service. For example, you may decide to launch the product/service with a ‘loss leader’ strategy – but how are you going to manage this and for how long? You should consider other strategy options as well. Explain (briefly) then, how you expect your key competitors to respond and what you will do then? So give an outline of what the main elements of your competitor strategy will be and how you plan to manage it. The reason that these considerations are important is because in the financial analysis that you will do in section 6, you are required to consider issues of (say) pricing and promotions over a 3 year period. So how you manage this issue of competitor strategy will have a big impact upon not only revenue (unit sales x price) but expenses (say promotions) over that 3 year period. 5.3.3. Distribution and Logistics Distribution takes place in (and around) the chosen market. You should include a channel diagramme (from manufacturing point to end user) as well as some explanation and justification of the specific end user channel choices, channel management strategies, key logistics details and outline COSTS associated with establishing and maintaining the channels. Note that the diagramme that you set up (from the manufacturing point to the end user) can also help you comprehensively assess the various channel risks involved as well as providing a useful template for calculating costs in the pricing evaluation section -4- 5.3.4. Pricing Evaluations Describe the pricing environment in the market (i.e. consumer demand influences and competitor prices) and then describe and justify your chosen pricing strategy. In doing so it is vital to calculate and detail your COSTS (show calculations), determine the terms of sale and your sales and profit objective. Use estimates if exact costs are unknown, and justify these estimates. 5.3.5. Promotions Program Describe and justify the overall promotional theme and the campaign components (eg tv, press, radio, digital marketing, direct marketing, special events, sales promotions etc.) Do you have any big ideas/communication concepts? An outline media plan is required as well as a detailed promotion budget (broken down by major) component. 6.0 Financial Analysis (Yumeng) 6.1 P/L to be for 3 years – with separate data for Y’s 1, 2 and 3. 6.2 Major headings within the P/L will be:- - Revenue - Fixed Costs (major categories only) - Variable Costs (major categories only) - All other costs (balancing item) - Total costs - Resultant P/L Explanatory Notes: 1. Explain Y1 revenue calculation 2. Explain Y1 to Y2 and Y2 to Y3 revenue escalation 3. Explain any major changes to FC’s Y1 through to Y3 4. Explain and major changes to VC’s Y1 through to Y3 5. Comment briefly on the resultant profitability over the 3 year period 7.0 IMPLEMENTATION AND CONTROL The Action Plan to implement the activities detailed in the Marketing Plan should show the major activities commencement and completion dates, a monitoring and review program, and discussion of unexpected contingency events that may take place to impede the plan and what action will be taken to overcome these contingencies. Review stages (including market research activities and the participants involved) should be identified. You may find the best way to illustrate all of the above is with a ‘Gantt’ or project chart 8.0 CONCLUSION The conclusion briefly summarises the main points of the plan and encourages its successful implementation. If the plan results in a poor commercial result, comment on what external / internal factors would need to change in order for it to be a success. -5- 9.0 BIBLIOGRAPHY A comprehensive bibliography/reference list MUST be included. All facts quoted in the body of the report MUST be referenced both in the text and in the bibliography/reference list. Poor referencing will result in a reduction of marks, while failure to include a bibliography will result in the report not being marked. 10.0 APPENDICES Content that is important in this section is as follows:- (1) Company Reports, product / service information, brochures etc. (2) Copies of any market research questionnaires, analysis etc that you have done. (3) An International Market Research brief – for example, if you had the time and the funds, explain the basis for and content of a research brief that you would give to an agency. Headings only. -6-