The purpose of the annual product marketing plan is to provide top management with a concise marketing and financial summary of objec- tives and strategies along with the requirements to achieve the objectives.
There should be enough rationale to allow them to approve the neces- sary expenditures without the detail available in a product fact book.
Keep the plan as brief as possible, perhaps no more than six or eight pages (excluding charts and exhibits). Too much detail obscures the main issues involved.
On the other hand, do not use the desire for brevity as an excuse for not collecting information. If some information needed to support a recommendation is not available, mention it in the plan (at least as a
Worksheet 7.1 Marketing Objectives and Strategies
Division: Group: Product Line: Market:
General marketing objective(s):
Rationale for objective(s):
Positioning statement:
To ___________________________, _________________________is the brand of
(market segment) (your product name)
___________________________that _________________________
(frame of reference) (point of differentiation)
due to ___________________________.
(competitive edge)
footnote) to demonstrate that critical data are not being ignored, but that there is sufficient confidence with the other information to justify taking the risk.
If the product plan is to be presented orally as part of a meeting, be sure to come prepared to answer any questions that might arise.
Nothing is more frustrating to top management than to reschedule a meeting or make it longer than necessary because of a product man- ager’s lack of preparation.
The written plan consists of a summary of the product’s historical performance, a statement of problems and opportunities, sales fore- casts/goals and a summary table of the impact on profit and loss (P & L), marketing objectives for the product or product line, concise strategies for accomplishing the objectives, and a series of financial and other exhibits to permit a quick assessment of the product program and its impact.
Separate strategy documents might need to be prepared for oper- ational use by the product manager. Simply provide a concise summary of each as part of the annual product plan, perhaps in the format of list- ing the objective(s) for that element of the program and providing a brief overview of the strategy to accomplish that objective. Be careful, however, that the complete plan is coordinated. Do not work on the advertising strategy document, for example, without coordinating it with the other elements of the marketing mix.
There are several possible formats for a written product plan;
there is no one best approach. Figure 7.2 is only an example. Modify it as appropriate for a given product line, company, and circumstances.
The format of objectives/strategies for the various marketing compo- nents is quite typical for a written plan, with rationale or justification included.
Target Market(s)
The first part of the action plan is the description of the target mar- ket. There will very likely be a primary target market as well as sec- ondary targets developed from the market analysis in Chapter 5. The segments the product manager elects to target determine the market- ing strategy as well as the product positioning and communication approaches. For example, Marvin Windows isolated different needs
Two to three paragraphs summarizing the product’s performance relative to last year’s plan, along with explanations of variances from the plan. Any research conducted on product performance or quality can be included in this section as well.
Highlights from the background analysis, using bullet points as much as possible. It is useful to include the market analysis, competitive analysis, and/or performance history worksheets as attachments or exhibits.
A statement indicating the long-term direction for your product line and its long-term “fit” within the corporate strategic plan.
Problems that might make it difficult to achieve the objectives. List the steps to be taken to minimize the risk.
Opportunities that will help in achieving the objectives.
A statement of the product’s forecasted sales for the next fiscal year. If there are several products or product lines to be examined separately, use a tabular format.
Brief statements of objectives for the product or line for the next fiscal year. These can be stated in terms of revenue/profit, new-product trials, retention rates, etc.
Use the positioning statement from Worksheet 7.1. Make sure that it lists the unique selling feature(s) of the product (i.e., how the product is to be perceived in the customer’s mind relative to the competition). The positioning statement should be clear enough to be the
“glue” for coordinating the subsequent marketing mix variables.
Several paragraphs with a description of and rationale for the primary and secondary target markets.
Product Performance
Background
Long-Term Objectives
Problems/Opportunities
Sales Forecasts/Goals
Marketing Objectives
Marketing Program 1. Positioning
statement
2. Target market(s)
Figure 7.2 Marketing Plan Outline Topic Outline Description
Topic Outline Description 3. Product strategy
4. Pricing strategy
5. Advertising strategy a. National advertising
This section can contain several items, depending on the company and product requirements. There will be one or more objectives, each followed by a brief strategy statement.
The format will usually be as follows:
• Brief product description (such as one contained in a catalog) indicating the competitive differences, along with a table of the sizes and variety of products in the line.
• Product objectives, including new uses, repositioning, line extensions/modifications, programs to improve quality, or new-product introductions.
• Strategy
• Rationale
• Capacity utilization, including existing capacity along with manufacturing requirements of the marketing plan.
A general statement of the pricing strategy used for the product(s). Include any planned changes in price, discounts, warranties, and terms and conditions of sale, along with a table indicating the expected impact on selling and profit performance. The format will be as follows:
• Brief description
• Objective
• Strategy
• Rationale
• Impact table
This section will have three components:
1. The competitive product differentiation to include in the advertising message.
2. The media plan along with a calendar of expected insertions.
3. Cost /spending information:
• Brief description
• Objective
• Strategy
Figure 7.2 Marketing Plan Outline (continued)
Topic Outline Description
b. Cooperative advertising
c. Trade advertising
6. Promotion strategy
7. Field sales plan
8. Distribution strategy
9. Product support
• Rationale
• Implementation
• Supporting tables
A statement of the goals and general program description of cooperative advertising programs with channel members.
If advertising to intermediaries who resell the product, the message and media plan should be summarized in this section.
There are several types of sales promotions, support materials, trade show plans, and other nonadvertising promotions that may be part of the marketing plan. These may be part of separate plans or strategy documents but should at least be summarized in this section. The format should be consistent with the others:
• Objective
• Strategy
The field sales plan is almost always a separate planning document. Nevertheless, include any information that directly impacts the product or its marketing plan. For example, any training or incentive programs that are part of the budget or that are recommended in addition to the standard field sales plan should be included here.
Any recommendations regarding changes to the channel of distribution, including adding or deleting intermediaries, should be included. Also incorporate any programs necessary to motivate channel members or to collect information about the end-user from them. The format is as follows:
• Objective
• Strategy
Any recommendations regarding the warranty/guarantee for the product, customer service changes, or any other product support issues that affect the achievement of the product objectives. Maintain the format used earlier:
Figure 7.2 Marketing Plan Outline (continued)
among different segments of window buyers and advanced its position from eighth to third in the industry by stressing the most relevant ben- efits to each group. (See feature Segmentation at Marvin Windows.)
Part of the target market decision will also include the marshalling of resources to get the greatest impact for the marketing investment and to accomplish an objective such as being an industry leader. Indus- try leadership in the past meant being the biggest and having the most visible brands. Now, with markets fragmenting, leadership can be defined with a niche concept. By focusing a firm’s resources on smaller segments, the firm becomes more visible and gains a perception of leadership in that segment.
The most important insight . . . is the degree to which this whole concept validates the merits of a “niche” or “focus” strategy—seek- ing to become a large fish in a small pond. A brand of ice cream or beer carried in 500 retail outlets will benefit disproportionately . . . if all those outlets are in Iowa, not spread over the Midwest, and even more if they are in Des Moines. A business-to-business marketer can achieve the same level of visibility and “leadership position” by focus- Topic Outline Description
Training Requirements
Marketing Research
Financial Summary
Schedules
• Objective
• Strategy
Any training requirements (e.g., for customers) not included elsewhere in the marketing plan.
Any planned research for the fiscal year, providing the proposal as an attachment.
A pro forma profit and loss statement for the product(s).
(See Figure 7.3.)
An action schedule indicating who does what by when.
Allow space for the appropriate individuals to sign and date their agreement to the stated tasks.
Figure 7.2 Marketing Plan Outline (continued)
Figure 7.3 Profit and Loss Statement
ing on one industry. Becoming the leading supplier of inventory soft- ware for meatpackers may be not only a feasible objective, but also one that confers all the “snowball” benefits of brand leadership within that industry.1
Product Strategy
Several objectives in the product plan may be necessary to accomplish a stated sales forecast. For example, a product objective could be to attain sales of $X for each of three major products. The supporting
Previous Year Product sales revenue
Less price adjustments Cost of goods Gross margin
Controllable marketing expenses Advertising
Trade allowances Promotions Trade shows Sales support Training
Total controllable marketing expenses
Product manager contribution margin
Other product expenses Sales force cost Distribution Administration Miscellaneous
Total other product expenses Total expenses
Product contribution to overhead Increase/decrease
Percent Sales
Current Year
Percent Sales
Next Year
Percent Sales
$ $ $
% % %
% % %
% % %
% % %
% % %
__ __ __
__ __ __
__ __ __
__ __ __
strategy would explain what modifications this would require in terms of quality improvements, “bundling,” or new uses. The rationale would explain why this is possible given the background analysis.
Branding and packaging might or might not be a crucial part of the plan, but they should at least be considered. Be sure that the customer need is addressed and explain why a specific product satisfies this need better than the competition does. Also, mention the effect of other products on the product line and/or the effect of the line on the com- pany product mix.
New-product plans might be separate because they usually cover a different time period from the annual plan. However, because they impact a product manager’s bottom line, they should probably be sum- marized here. New-product specifications, positioning, budget, and event schedules can be included. (See Part III for more information on product strategies and tactics.)