Part VIII-- Marketing Tactics

The first thing you should do when forming a marketing plan isdefine the structure in which it will be presented. The structureof the plan should allow the presentation of strategic informationin a logical and progressive manner. This structure should beprepared in a written outline detailing the progression of topicsand how they will appear in the marketing plan.

The structure of a marketing plan will usually vary according tothe business, its product or service, and the objectives of themarketing plan. Generally, however, each marketing plan willinclude 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 marketingstrategies. Your strategies should primarily revolve aroundestablishing the point of entry in the product life cycle and adistinct competitive advantage.

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

In the strategies section you should not only detail your marketstrategy, but how your competition will react. This is an areaoften overlooked in many marketing plans. Don't make the samemistake. For every action you take, there will be a countermove byyour competitors in order to maintain their present position in themarket or expand it. Provide the reader with an outline of how yourcompetitors will react to your plans, and how you propose tocounteract them.

In order to develop a clear understanding of the information youwill need to include in the marketing tactics section, you shouldask yourself a series of tactical questions and write your answersdown in a notebook under the correct subject headings.

Product

1. How does your product or service differ from thecompetition'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 thepackage?

6. What is your sales and production forecast?

Distribution

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

2. How will you time your distribution?

3. Will your distribution be intensive, selective orexclusive?

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 distributionschedules?

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 youranswers and start forming your thoughts for the marketing tacticssections. Start each segment of this section with your marketingstrategy and its objectives and explain the type of actions youwill use to reach these objectives. Include supporting informationwhenever possible. This may be in written form; a graph, table, orillustration; or it may include all of these. The object is to beas clear and concise as possible so that the reader can grasp thetactics behind your objectives quickly and with a definite idea ofwhat you believe it will take in terms of costs and timing toaccomplish them.

Sample MarketingTactics

In order for Softie Baby Care, Inc. to reach our projectedobjectives and goals, the following key items of our marketingstrategy must be closely followed.

Product

The main emphasis of our product strategy will hinge on theadded value of a biodegradable diaper. This fulfills one of theunmet needs of consumers of disposable diapers -- environmentalsafety. Bio-Diapers will eliminate the continued build-up ofnon-degradable waste as a result of disposable diapers. At the sametime, all the key elements that have made disposable diapers soattractive to the modern generation of parents will still be firmlyin place. Therefore, our product strategy is to enter the marketstrongly with an emphasis on creating brand loyalty through thebenefit of our environmentally safe diapers.

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

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

*Invite product testing from consumer groups to substantiate ourclaim

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

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

Packaging will also appeal to the upper-income groups byconsisting of a cardboard box with a convenient plastic handle. Theboxes will come in three colors to denote the size and quantity ofthe 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 diapersproduced by our competitors, we will be entering into competitionwith the major brand-name producers such as Pampers, Huggies andLuvs. Although many of these manufacturers have plans in the worksto create their own biodegradable diapers, they will try tocounteract Bio-Diapers through claims of poor quality. This willappear mainly in print ads attacking the pad absorbency ofBio-Diapers. We will counteract this strategy by commissioning padabsorbency tests between Bio-Diapers and our major competitors. Wewill then publish the results and send them out in a direct-mailcampaign.

Distribution

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

As our research has indicated, the most effective distributionstrategy for reaching the primary customers of Bio-Diapers isselling through large grocery and drugstore chains, independentbaby-goods stores, department stores with baby departments, majortoy-store chains, and membership warehouses.

Since Softie Baby Care Inc. is a small manufacturer incomparison to giants like Kleenex (the manufacturer of Huggies), wewill employ a three-tiered channel of distribution that will assurethe presence of Bio-Diapers in the right place at the right timeand in the right quantities. Our four-tiered approach will flowfrom manufacturer to wholesaler, from wholesaler to retailer, andfrom retailer to consumer.

To achieve our stated first-year sales goals, we will need tobuild national distribution in quarterly stages that will span theentire year.

During the first quarter, we will concentrate on distributionthrough all major grocery and drugstore chains, as well as thelarger independent baby-goods stores. This will produce thenational coverage needed to properly capitalize on the aggressiveadvertising campaign we will undertake in order to create consumerawareness. To meet initial production quotas, the production staffwill have to be increased at this point. To ensure sufficient stockon hand to meet expected consumer demand, retailers will be offeredstock allowances.

During the second quarter, we will expand our distribution frommajor grocery and drugstore chains to smaller independentbaby-goods retailers. Due to increased market coverage, we willneed to increase our marketing staff at this time and add morewholesalers.

During the third and fourth quarters, we will continue to expandour distribution to the remaining outlets such as departmentstores, membership warehouses, major toy-store chains, etc. Tohandle the increased distribution, more wholesalers will need to beadded.

Pricing

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

1. The distinct product differentiation between Bio-Diapers andother brands will warrant a higher price based on its premiumvalue.

2. Due to high research and development costs to produce thepatented agent responsible for the molecular breakdown of diapersupon prolonged exposure to the sun, initial prices will behigher.

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

4. Higher initial component costs will also demand a higherprice.

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

1. Lower material costs in the production stage due to highervolume.

2. Reduced costs of key components through continued researchand development.

3. Introduction of biodegradable diapers from major competitorsat a higher price. (Undercutting them will help increase sales andmarket share.)

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

Sales Promotion

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

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

During the first year of sales, 10 percent of projected saleswill be set aside for promotional purposes. This will total $15.5million. Of this total, 65 percent will be budgeted foradvertising, 30 percent for sales promotion, and the remaining 5percent 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 maintainthose customers through repurchases. Our sales promotion strategiesto achieve these objectives are:

1. Obtain in-store display and price-feature support fromretailers by implementing a merchandising allowance program. Wewill make contractual payments of $15 for a 10-package in-storedisplay. This merchandising allowance program will only beestablished at major grocery and drugstore chains, and largerindependent specialty baby-goods stores.

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

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

Competitors will react to our aggressive sales promotioncampaign by increasing their own efforts, mainly throughpoint-of-purchase displays. This will be done through merchandisingallowance programs designed to provide incentives for retailers toprovide more in-store display space. We feel this should be easilycounteracted by our own merchandising allowance programs in majorgrocery and drugstore chains.

Advertising

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

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

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

3. To generate product awareness and support among wholesalersand buyers, merchandisers, and store managers of retailoutlets.

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

Advertising support will be used aggressively throughout thefirst and second years with major pushes during the introductoryperiod and major sales promotion activity -- January to July of1995. From August to the end of the year, advertising will bereduced to evaluate results from earlier efforts.

We will concentrate our efforts on a print media. Our print adswill be full-page, four-color pieces that will emphasize thecomfort, absorbency, and "snugness" of the diaper and itsprimary advantage of being environmentally safe. The head willread: "Finally, a diaper that is truly disposable." Inthe bottom right hand corner of the ad, we will also include acoupon. Production expenses will be limited to one percent of thetotal advertising budget.

Our media strategy will be to purchase space in national andregional baby care magazines, which total 19 publications. We willpurchase a minimum of nine insertions in monthlies, six insertionsin bimonthlies, and four insertions in quarterly magazines in orderto generate frequency and provide support throughout the year.Whenever possible, we will try to secure preferred positions in themagazines in order to increase our total reach. Total exposure isestimated at 92.6 million with a net unduplicated coverage of 45percent 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 becovering Financial Projections. Tips are updated daily at 5:00a.m.PST.