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Part VIII-- Marketing Tactics

The first thing you should do when forming a marketing plan is define the structure in which it will be presented. The structure of the plan should allow the presentation of strategic information in a logical and progressive manner. This structure should be prepared in a written outline detailing the progression of topics and how they will appear in the marketing plan.

The structure of a marketing plan will usually vary according to the business, its product or service, and the objectives of the marketing plan. Generally, however, each marketing plan will include the following information:

Executive summary

Product description

Market analysis

Competitive analysis

Product development

Operations

Goals & objectives

Marketing tactics

Financial projections

Summary

Marketing Tactics

Through the analysis of your customers, competitors, industry, and company, you should have a good idea of your marketing strategies. Your strategies should primarily revolve around establishing the point of entry in the product life cycle and a distinct competitive advantage.

As we've already discussed, this involves defining the elements that will set your product or service apart from your competitors or strategic groups. You need to clearly establish this competitive advantage so the reader understands not only how you will accomplish your goals, but why your strategy will work. For example, a marketer can enter first, early, or late when attacking a new market. They can also penetrate vertically or horizontally, or through a market niche.

In the strategies section you should not only detail your market strategy, but how your competition will react. This is an area often overlooked in many marketing plans. Don't make the same mistake. For every action you take, there will be a countermove by your competitors in order to maintain their present position in the market or expand it. Provide the reader with an outline of how your competitors will react to your plans, and how you propose to counteract them.

In order to develop a clear understanding of the information you will need to include in the marketing tactics section, you should ask yourself a series of tactical questions and write your answers down in a notebook under the correct subject headings.

Product

1. How does your product or service differ from the competition's?

2. What are the main features of your product or service?

3. At what point is your product entering the life cycle?

4. What message will you include on your package?

5. What will be the size, shape, color and material of the package?

6. What is your sales and production forecast?

Distribution

1. What channels will you use to distribute your product or service?

2. How will you time your distribution?

3. Will your distribution be intensive, selective or exclusive?

Price

1. What are your pricing objectives?

2. What will be your basic per-unit cost of acquisition?

3. Will you offer a discount policy?

4. What will be your per-unit price?

5. What do you project your revenue and profit to be?

Sales Promotion

1. How large a budget will you have to work with?

2. How will you position your product or service?

3. Will your promotions be coordinated with distribution schedules?

4. What will your sales promotion objectives be?

5. Will you employ extensive personal selling?

6. How large will your sales staff be?

7. Will you define sales territories?

8. How will you compensate your sales force?

9. What type of publicity will you seek?

10. What are your publicity objectives?

Advertising

1. What will your campaign theme be?

2. What will your copy theme be?

3. What type of media do you plan to use?

4. How frequently will you use these avenues?

5. What will be the size of your commercials or ads?

6. What will their cost be?

7. What is your advertising budget?

After you've answered all these questions, review your answers and start forming your thoughts for the marketing tactics sections. Start each segment of this section with your marketing strategy and its objectives and explain the type of actions you will use to reach these objectives. Include supporting information whenever possible. This may be in written form; a graph, table, or illustration; or it may include all of these. The object is to be as clear and concise as possible so that the reader can grasp the tactics behind your objectives quickly and with a definite idea of what you believe it will take in terms of costs and timing to accomplish them.

Sample Marketing Tactics

In order for Softie Baby Care, Inc. to reach our projected objectives and goals, the following key items of our marketing strategy must be closely followed.

Product

The main emphasis of our product strategy will hinge on the added value of a biodegradable diaper. This fulfills one of the unmet needs of consumers of disposable diapers -- environmental safety. Bio-Diapers will eliminate the continued build-up of non-degradable waste as a result of disposable diapers. At the same time, all the key elements that have made disposable diapers so attractive to the modern generation of parents will still be firmly in place. Therefore, our product strategy is to enter the market strongly with an emphasis on creating brand loyalty through the benefit of our environmentally safe diapers.

In order to build the brand loyalty of Bio-Diapers, we will take advantage of this distinct feature by implementing the following:

*Obtain support from environmental protection groups (Sierra Club, EPA, and Greenpeace)

*Invite product testing from consumer groups to substantiate our claim

*Place one of our campaign slogans on the package: "The First Biodegradable Diaper."

A secondary emphasis will be placed upon the colored designs printed on the actual diapers. Many parents like to maintain a color scheme and motif throughout their nursery such as ducks, bears, kangaroos, etc. Bio-Diapers will be available in a number of colored prints that correspond to the popular colors and themes used in a child's nursery. This added feature to the actual product design is a crucial appeal for our primary consumers, who are mothers in upper-income households.

Packaging will also appeal to the upper-income groups by consisting of a cardboard box with a convenient plastic handle. The boxes will come in three colors to denote the size and quantity of the diapers:

*A pastel yellow will signify sizes of newborn to 14 pounds

*A pastel green will signify 14 pounds to 25 pounds

*A pastel purple will signify 25 pounds and up.

While Bio-Diapers will be vastly different from the diapers produced by our competitors, we will be entering into competition with the major brand-name producers such as Pampers, Huggies and Luvs. Although many of these manufacturers have plans in the works to create their own biodegradable diapers, they will try to counteract Bio-Diapers through claims of poor quality. This will appear mainly in print ads attacking the pad absorbency of Bio-Diapers. We will counteract this strategy by commissioning pad absorbency tests between Bio-Diapers and our major competitors. We will then publish the results and send them out in a direct-mail campaign.

Distribution

Bio-Diapers will be marketed primarily as a convenience item, just like regular disposable diapers. Distribution, therefore, is a critical element to obtaining the coverage we will need in order to effectively reach our primary customers.

As our research has indicated, the most effective distribution strategy for reaching the primary customers of Bio-Diapers is selling through large grocery and drugstore chains, independent baby-goods stores, department stores with baby departments, major toy-store chains, and membership warehouses.

Since Softie Baby Care Inc. is a small manufacturer in comparison to giants like Kleenex (the manufacturer of Huggies), we will employ a three-tiered channel of distribution that will assure the presence of Bio-Diapers in the right place at the right time and in the right quantities. Our four-tiered approach will flow from manufacturer to wholesaler, from wholesaler to retailer, and from retailer to consumer.

To achieve our stated first-year sales goals, we will need to build national distribution in quarterly stages that will span the entire year.

During the first quarter, we will concentrate on distribution through all major grocery and drugstore chains, as well as the larger independent baby-goods stores. This will produce the national coverage needed to properly capitalize on the aggressive advertising campaign we will undertake in order to create consumer awareness. To meet initial production quotas, the production staff will have to be increased at this point. To ensure sufficient stock on hand to meet expected consumer demand, retailers will be offered stock allowances.

During the second quarter, we will expand our distribution from major grocery and drugstore chains to smaller independent baby-goods retailers. Due to increased market coverage, we will need to increase our marketing staff at this time and add more wholesalers.

During the third and fourth quarters, we will continue to expand our distribution to the remaining outlets such as department stores, membership warehouses, major toy-store chains, etc. To handle the increased distribution, more wholesalers will need to be added.

Pricing

Our pricing strategy will correspond with our product strategy. Since Bio-Diapers will enter the market as a premium-brand product targeted toward the upper-income consumers of disposable diapers, we will employ a premium price for Bio Diapers due to the added value of a biodegradable agent that will make the diapers environmentally safe. The suggested retail price for the product will be an average of 20 percent higher than that for regular disposable diapers. A premium price will be applied to the product for these reasons:

1. The distinct product differentiation between Bio-Diapers and other brands will warrant a higher price based on its premium value.

2. Due to high research and development costs to produce the patented agent responsible for the molecular breakdown of diapers upon prolonged exposure to the sun, initial prices will be higher.

3. Since Bio-Diapers will be a new concept, there will be a need for considerable advertising support to introduce the product and the price will reflect that cost.

4. Higher initial component costs will also demand a higher price.

Through the first sales year, the prices for Bio-Diapers will remain stable due to lack of competition from the major disposable diaper producers. Starting in the second year of sales, the price for Bio-Diapers will drop by roughly five percent. We will incorporate this pricing strategy for several reasons:

1. Lower material costs in the production stage due to higher volume.

2. Reduced costs of key components through continued research and development.

3. Introduction of biodegradable diapers from major competitors at a higher price. (Undercutting them will help increase sales and market share.)

The Bio-Diaper price will remain steady at this point for the second and third sales years.

Sales Promotion

The promotional strategy Softie Baby Care Inc. will use is to obtain maximum reach within our target market group to promote initial purchases and sustain repurchases.

Our strategy to stimulate initial purchases will revolve around in-store displays in major grocery and drugstore chains, coupon programs initiated through print advertising and direct mail, and a giveaway program targeted toward existing and prospective parents, hospitals, and baby-care education classes.

During the first year of sales, 10 percent of projected sales will be set aside for promotional purposes. This will total $15.5 million. Of this total, 65 percent will be budgeted for advertising, 30 percent for sales promotion, and the remaining 5 percent will be held in a contingency fund.

Through our sales promotions, the objective of Softie Baby Care, Inc. is to stimulate initial purchases of the product and maintain those customers through repurchases. Our sales promotion strategies to achieve these objectives are:

1. Obtain in-store display and price-feature support from retailers by implementing a merchandising allowance program. We will make contractual payments of $15 for a 10-package in-store display. This merchandising allowance program will only be established at major grocery and drugstore chains, and larger independent specialty baby-goods stores.

2. A coupon program will be instituted through advertisements in local newspapers and baby magazines, a direct-mail campaign, and through Lamaze classes. The coupons will offer a discount of 75 percent off the regular price. Twenty million coupons will be distributed through newspapers, magazines, and the mail.

3. Along with the coupon program, we will initiate a giveaway program to existing and prospective parents of babies. They will receive a free sample of the diaper along with their coupons. In addition, we will supply hospitals and baby-care education classes with free samples. This giveaway program will create greater product awareness and stimulate product use.

Competitors will react to our aggressive sales promotion campaign by increasing their own efforts, mainly through point-of-purchase displays. This will be done through merchandising allowance programs designed to provide incentives for retailers to provide more in-store display space. We feel this should be easily counteracted by our own merchandising allowance programs in major grocery and drugstore chains.

Advertising

Our advertising strategy will be an aggressive campaign that will be geared toward accomplishing the following objectives:

1. To effectively reach our primary purchase group of married women between the ages of 26 and 34 with one or more children still in the diapering stages and household incomes above $30,000. These customers are both the decision-makers when it comes to diapers, and the purchasers.

2. To increase awareness by attaining a 60-percent penetration level among our target market. We will commission a penetration study one year after the introduction of Bio-Diapers.

3. To generate product awareness and support among wholesalers and buyers, merchandisers, and store managers of retail outlets.

The total advertising budget for the first year will be $10 million.

Advertising support will be used aggressively throughout the first and second years with major pushes during the introductory period and major sales promotion activity -- January to July of 1995. From August to the end of the year, advertising will be reduced to evaluate results from earlier efforts.

We will concentrate our efforts on a print media. Our print ads will be full-page, four-color pieces that will emphasize the comfort, absorbency, and "snugness" of the diaper and its primary advantage of being environmentally safe. The head will read: "Finally, a diaper that is truly disposable." In the bottom right hand corner of the ad, we will also include a coupon. Production expenses will be limited to one percent of the total advertising budget.

Our media strategy will be to purchase space in national and regional baby care magazines, which total 19 publications. We will purchase a minimum of nine insertions in monthlies, six insertions in bimonthlies, and four insertions in quarterly magazines in order to generate frequency and provide support throughout the year. Whenever possible, we will try to secure preferred positions in the magazines in order to increase our total reach. Total exposure is estimated at 92.6 million with a net unduplicated coverage of 45 percent of the primary target group.

Advertising In Baby Magazines

Magazine--No. Inserts

American Baby-- 9

Baby Talk-- 9

Baby Times-- 6

Baby!-- 3

Chatelaine's New Mother-- 4

Chicago Parent News-- 6

Child-- 6

Dallas Child-- 9

Expecting-- 4

Lamaze Parents' Magazine-- 2

Metro Parent-- 6

Mothers Today-- 6

Parenting-- 9

Parents' Magazine-- 9

Rodale's Children-- 6

Today's Parent-- 6

Twins-- 6

Working Mother-- 9

Working Parents-- 6

In part nine of our Marketing Plan series, we'll be covering Financial Projections. Tips are updated daily at 5:00a.m. PST.

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