The Marketing Plan Handbook, Fifth Edition, Marian Burk – SM
Marketing Plan Handbook, 5th ed.
Discussion Questions and Sample Answers
Chapter 1 – Marketing Planning: New Pace, New Possibilities
1. How can a company hold marketing managers accountable for results when so many elements in the marketing situation are beyond their control?
Sample answer: Although marketing managers can’t control the economy or many other elements in the marketing environment, they can and should be alert to changes and trends and carefully analyze potential opportunities and threats as they create and implement their marketing plans. Marketing managers also have the advantage of being “close to the customer,” being in touch with customers’ needs and watching for changes in behavior and attitudes that drive shifts in purchasing and brand loyalty. Marketers must have the ability to notice, interpret, and react to changes in the marketing environment so they can adjust marketing plans and achieve their objectives despite the many uncontrollable elements they face.
2. In what ways might an internal marketing strategy benefit a nonprofit organization? A government agency that deals with the public?
Sample answer: A nonprofit would benefit from using internal marketing to solidify support and reinforce the loyalty of employees, volunteers, contributors, and others inside the organization. These groups need to stay informed about and maintain a positive attitude toward the nonprofit’s marketing activities and results. In turn, these groups would be encouraged to actively support external marketing programs through their personal connections and their behavior and communications. Similarly, a government agency could use internal marketing to build internal support for public contact programs, educate employees about the agency’s mission and marketing, and improve understanding of the people served by the agency.
3. A typical marketing plan covers a calendar year. Given the rapid pace of change in today’s environment, should companies switch to preparing marketing plans for shorter periods, such as three or six months?
Sample answer: Students who favor a shorter period may say that this will force marketers to reevaluate the marketing situation and results more often and give them momentum to move quickly in the event of significant changes. It will also force marketers to focus on the immediate consequences of their planned activities. Students who do not favor a shorter period may say that marketers need to balance short- and long-term results because building relationships and loyalty can take time. They may also say that a marketing plan must cover sufficient time to allow for situational analysis, research if needed, planning for implementation, and evaluation of interim results. Marketers who create a plan for a calendar year should be reassessing the situation on a regular basis and tracking results so they can apply marketing control at any point.
4. What role do key performance indicators play in preparing for marketing plan implementation?
Sample answer: To use key performance indicators, marketing managers select a few indicators that will show whether a marketing plan is effective in achieving the organization’s strategic goals and marketing plan objectives. For example, a company might determine that customer retention is a key performance indicator when the marketing plan is intended to reinforce customer loyalty; if retention goes up, the plan is having the desired effect—but if retention goes down, performance is not meeting expectations. Ask students to suggest other key performance indicators related to common marketing objectives.
Chapter 2 – Analyzing the Current Situation
1. What clues about strengths and weaknesses might you find in a competitor’s annual report to shareholders? Identify at least three specific types of information and explain how you would use such data in a competitive SWOT analysis.
Sample answer: Students may identify a variety of types of information, including: revenues and profits (changes over time can indicate financial strength or weakness); markets served (reduction in markets served can indicate insufficient resources or changes in strategy that can be exploited); product lines and mix of products (multiple introductions may indicate strength in product development, whereas elimination of multiple products may indicate weaknesses in market share).
2. Why do marketers need to understand business relationships (as part of the internal environment) when planning to address opportunities and threats in the external environment?
Sample answer: Although business partners are not, strictly speaking, inside the organization, the relationships with these partners (including suppliers and resellers) are an important part of the internal environment. Often a company’s ability to take advantage of an opportunity or defend against a threat depends, in large part, on the resources, products, staffing, or supply networks of its partners. If the company outsources certain functions (such as production), its marketing plan must take into account the capabilities and responsiveness of the partners that handle those functions. [Suggest that students refer to the discussion about alliances (in Chapter 1) for more about the importance of business relationships.]
3. Do companies that market products only in their home countries need to be concerned with the political-legal environment in other parts of the world? Explain your answer.
Sample answer: Such companies should monitor major political-legal developments in areas where their suppliers are located (or where their raw materials come from), to be prepared for changes that could affect their ability to obtain inputs. They should also be aware of political-legal movements that can potentially spread to other countries, such as increased regulation of environmentally sensitive activities. Finally, these companies should watch how political-legal trends elsewhere may be affecting other elements in the external environment that could eventually influence the home country.
4. From a marketing perspective, what do you think a company can do to correct inaccurate perceptions of greenwashing if, in fact, its products are ecologically friendly?
Sample answer: The company should be able to demonstrate, through tests or certification, that its products are truly green. Publishing the results of these tests and mentioning certification on product labels, on the brand’s website and/or in the annual report, will help refute inaccurate perceptions. The company can also use social media to discuss and showcase the product’s eco-friendly properties or enlist the assistance of influential opinion leaders in correcting misperceptions of greenwashing.
Chapter 3 – Understanding Markets and Customers
1. How might a company define the market for a pioneering, innovative product that is unlike anything previously available?
Sample answer: The company can focus on broad but specific customer needs and interests in initially defining the potential market, then narrow the definitions for the available and qualified market prior to defining the target market. Also, the marketer might consider modeling the market definition partly on an existing product that addresses similar needs or interests. As an example, for an innovative electronic gadget that delivers entertainment content, the marketer might use the market definitions for an iPad as a starting point for thinking about the potential, available, and qualified available market definitions.
2. In what ways are social media such as Facebook and YouTube likely to affect a consumer’s social connections, cultural considerations, and personal factors, all of which influence individual buying behavior?
Sample answer: Clearly, social media can have a very direct effect on social connections through friending and status updates (Facebook), following individuals and lists (Twitter), forwarding links to amusing or informative videos/commercials (YouTube), etc. Even people who rarely see each other in person may be in touch via social media on a regular basis and can potentially influence how their contacts view favored or disliked brands, make recommendations about brands to buy, and so on. Social media are also helping to shape and change culture (think of all the news references to Twitter, for instance), which in turn affects buying behavior. Finally, social media are reshaping lifestyle patterns and attitudes as people become accustomed to checking for friends’ updates, posting their own updates, watching videos posted by friends, and seek out social media content regarding products they’re thinking of buying.
3. During the planning process, how can B2B marketers determine specific ways in which the principle of derived demand applies to their marketing situations?
Sample answer: First, B2B marketers should list every product in which their own goods or services is a component, tracing forward through the value chain until a comprehensive listing of consumer products has been prepared. Next, consider how changes in demand for each of those consumer products will affect demand for the B2B product being marketed. Then project the likely course of demand and supply for each of the consumer products for the period covered by the marketing plan. Based on this information, B2B marketers can estimate shifts in demand for their business products and plan accordingly.
4. Why would a marketer find online behavioral tracking useful in understanding consumer behavior and decision-making priorities?
Sample answer: Behavioral tracking allows marketers to see what consumers do when they visit a website, including what they click on and how long they remain on a page before clicking away. This kind of research helps marketers understand what consumers research, how much time they spend researching, what kinds of information they look at, and so forth. Online retailers can use behavioral tracking to see which products consumers view before they make a purchase—and whether, in fact, consumers actually make a purchase after viewing products. [Ask students about their reaction to behavioral tracking: Is it an invasion of privacy or is it a good idea if marketers use the information to tailor offerings to what consumers want and look for?]
Chapter 4 – Segmenting, Targeting, and Positioning
1. What should marketers take into consideration when targeting a niche versus targeting a larger segment?
Sample answer: Marketers should evaluate niches just as carefully as they evaluate segments when planning for marketing attention, in particular seeking to avoid targeting niches that are too small to be profitable or are unsuitable because of slow growth or other issues related to size and composition. Also, they should consider whether a niche will respond to marketing attention in the same way as a larger segment; if so, the niche need not be targeted separately. Moreover, it’s important to consider whether targeting the niche will be more costly or result in a lower return on investment because of limited size or because of another factor.
2. Do you think social class is a meaningful variable for segmenting consumer markets? Why or why not?
Sample answer: Students who say social class is a meaningful variable for segmentation may argue that people in different social classes sometimes exhibit distinctly different behavior, needs, attitudes, or motivation. For example, someone from a high social class may avoid shopping in dollar stores. People who aspire to a higher social class may act differently from those who have no such aspirations; marketers may be able to appeal to these aspirations as part of their marketing communications when targeting certain segments. Students who take the opposite view may argue that social class has less influence over consumer attitudes, needs, motivation, and behavior than in the past. As an example, during the recent economic crisis, consumers from high social classes who rarely shopped in discount stores began to change their behavior; to save money, a growing number shopped at Walmart and other discounters for staple items. Students may also say that other variables would be more effective for segmenting markets than the variable of social class.
3. In addition to the factors identified in Exhibit 4.5, what other elements would you suggest that marketers analyze when assessing a segment’s attractiveness?
Sample answer: Students may suggest a number of other elements, including the estimated cost of communicating with customers in each segment and the estimated cost of acquiring or retaining customers in each segment. [Ask students to explain how the elements they suggest would help a marketer determine which segments are most attractive and the order in which they should enter segments.]
4. How would you suggest that marketers go about creating a segment persona?
Sample answer: The different attributes represented in a persona should be based on what marketers know about consumers in each targeted segment. A segment persona might represent the kinds of media typically enjoyed by that segment and the clothing brands preferred by that segment, for instance. If research indicates that consumers in that segment are tech-savvy, the persona might include the use of certain digital gadgets. [Consider asking students to refer to Exhibits 4.3 and 4.4, asking them how specific variables might be researched and represented via a segment persona.]
Chapter 5 – Planning Direction, Objectives, and Marketing Support
1. When a company decides to grow through diversification, what are the implications for the marketing planning process?
Sample answer: The company will have to plan for all the additional products it acquires through diversification. This means evaluating demand, customer needs, and competition for a larger number of products; scanning the internal and external environments and interpreting the results in the context of additional products; setting specific objectives for a larger group of products; and spreading the marketing budget and management attention over more products than in the past. At the same time, despite the complications, diversification also takes some of the pressure off individual products, so that if one doesn’t achieve its objectives, the company can look to other products to make up the shortfall.
2. Are there any disadvantages to setting societal objectives when preparing a marketing plan?
Sample answer: One potential disadvantage is that a company will overemphasize societal objectives or put too many resources toward societal objectives compared with marketing and financial objectives. Other potential disadvantages: one or more societal objectives will conflict with financial or marketing objectives; societal objectives may prove difficult to quantify for measurement purposes.
3. Why should marketers keep metrics in mind as they set objectives?
Sample answer: Metrics help marketers determine whether actual results are taking the company toward its objectives. If marketers have no way to measure progress toward the objective, they’ll have difficulty evaluating performance in achieving it. This is why the chapter emphasizes that objectives be specific, time-defined, and measurable. [Metrics are covered in detail in Chapter 10.]
4. What kinds of questions should a company ask as it develops a plan for cause-related marketing? Suggest at least three specific issues or questions to be investigated during the planning process.
Sample answer: How well does the cause relate to the company’s mission or its brand image? What do customers think and feel about the causes being considered? How will the cause-related donation actually operate? Will the company make a donation for each product purchased or when customers enter a code on a website or social media site, for example? How can the company and the cause coordinate marketing to make the most of this strategy? [Students may offer other questions, as well.]
Chapter 6 – Developing Product and Brand Strategy
1. Of the four aspects of a service offering (shown in Exhibit 6.3), on which should marketers put special emphasis when planning for service recovery?
Sample answer: Students will recognize that variability is a major issue for service delivery. Customers expect the same quality every time they experience a service. As a result, marketers should put special emphasis on reducing variability when they plan for service recovery. Inseparability is another important factor that requires planning for service recovery, particularly to ensure a good experience when customers interact with service personnel.
2. What should a marketer consider when determining whether a product is suited to mass customization?
Sample answer: One issue is whether the product can actually be produced with individual variations for specific customer needs (such as different sayings on personalized M&Ms). Another is whether mass customization can help the company meet its objectives, such as profitability or market share. Finally, consider whether mass customization is necessary to meet the needs of the target market in a meaningful way.
3. Should your marketing plan strive to eliminate all customer churn? Explain your answer.
Sample answer: Given financial and marketing constraints, it may not be practical to try to eliminate all customer churn. It’s important to balance all objectives so they don’t conflict. Eliminating churn may be desirable from the perspective of supporting market share and customer relationship objectives, but it may require a disproportionate amount of spending and marketing attention and therefore conflict with financial objectives. Students may want to consider how to counter churn instead of completely eliminating it.
4. Do you agree or disagree with companies that are willing to cannibalize their own products? Explain your answer.
Sample answer: Two arguments in favor of cannibalizing are (1) that firms may be able to retain a customer who purchases the new product, rather than lose that customer to a competitor, and (2) that firms may expand the customer base and therefore have the potential for additional sales to customers who buy the new product. Two arguments against cannibalizing are (1) that the firm may be increasing its costs without improving revenue or the bottom line, and (2) that customers may be confused by the proliferation of products within the line.
Chapter 7 – Developing Pricing Strategy
1. Of the total price elements in Exhibit 7.2, which one or two do you think customers pay the most attention to? What are the implications for a marketing plan?
Sample answer: In general, customers are likely to pay the most attention to purchase price, because that’s the most obvious of the elements that contribute to total price. Students may also observe that some customers who buy online pay close attention to shipping and handling fees; customers making major purchases such as buying a home or car are likely to pay close attention to financing. One implication for a marketing plan is that the marketer should plan to use communications to explain the most salient pricing elements and counter potentially negative attitudes and responses. Another implication is that where the marketer’s pricing is competitively superior on purchase price, financing, or another element that customers are particularly interested in, the marketing plan should call for highlighting that element to showcase its superiority.
2. Under what circumstances of price elasticity might an increase in price result in higher demand?
Sample answer: An increase in price might lead to higher demand in the case of a status product such as a very high-end car or luxury jewelry. This is because customers who seek products that express exclusivity and communicate high status are likely to find a price increase makes the product even more desirable. A price decrease, on the other hand, would probably make status-seeking customers less interested in such products but increase demand among customers who otherwise couldn’t afford these products. If a wider customer base adopts a status product due to a price reduction, it is likely to be less in demand among the original customer base, which would affect the brand’s image in the long term.