Marketing Communication Plan - Markstrat 673u64

Middlesex University Business School MBA 4646 Marketing

Markstrat Strategic Marketing Simulation Group Project

Ayyapa Rao Nitisha Sancheti Prachi Parasrampuria Shivani Arora Shoaib Khan Smitha Ghimire

Submission date: 29th April 2013 Word Count: 2496 (excluding references and appendices)

Executive summary The report describes the Communication plan developed for firm E in the Markstrat industry - A31970. Following key aspects were identified: 

Focusing on full market coverage using differentiated marketing strategy. This will help in increasing the total sales of the firm which will eventually result into high share price, market capitalisation and net contribution.

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Identifying the target audience on the basis of market size, market growth and profitability.

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Developing communication objectives on the basis of hierarchy of effects model in line with our business strategies to create a clear, consistent and competitive message for our products.

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Developing effective communication using AIDA Model and using celebrities as a credible source of communication to interact with our customers in a better way resulting in high brand loyalty.

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Selecting a combination of personal and non-personal media channels to communicate with our target audience. This will help in delivering communication message effectively, increasing brand recognition and building customer base.

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Developing various marketing measurements to analyse the effectiveness of the current marketing communication and decide on future marketing strategy changes.

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Setting total marketing communication budget using objective-and-task method to achieve the advertising objectives within the allocated budget.

Successful implementation of this communication plan will help us to increase our total sales and gaining huge market share in near future.

Contents

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Introduction Communication plan 1. Target audience 2. Communication objectives 3. Message 4. Media 5. Message source 6. Measurement 7. Promotion budget Conclusion Appendix References

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1. Introduction This report gives an outline of marketing communication plan developed for Firm E in Markstart Industry – A31970. The plan will focus on retaining and targeting new customers through existing products using differentiated marketing strategy (different products to different segments) (Kotler & Keller, 2012). Communication plan ensures that all activities are coordinated to the firm’s marketing and communication strategies and fit within the given budget 18,200K for next period (Hutchins Crang Marketing Group, 2011).

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2. Communication Plan 1. Target audience According to Product Level Customer-value hierarchy, all our brands fall under expected product level (Refer Appendix 1.1) where we deliver what the customer expects (Levitt, 1980). We will select our target audience on the basis of following factors (Kotler & Keller, 2012):  Size of market- We will target Singles and Others as they together comprise of 64% of the market share.

(Source: Markstrat)

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

Growth- Another reason for targeting Singles and Others is that they have a high estimated growth rate over next five periods (38.1% for Singles and 74.3% for Others) compared to other segments.

(Source: Markstrat) 

Profitability- SELF, SEEN and SEHI together generate approximately 80% revenues for our firm. Hence, targeting Buffs, High earners and Professionals would be profitable for us.

(Source: Markstrat)

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Below table lists different segments targeted and a wide range of products offered to them based on their needs, price and wants through preferred distribution channels: Segment

Buffs

Singles

Professionals

Hi-Earners

Others

Offered Brands and Characteristics SEEN  High performance  Less focus on convenience  Average priced SEXY  Average performance  Average convenience  Low priced SELF  High quality  Easy to use  High performance  Highly priced SEHI  Average performance  Average convenience  High priced SEMI  Less focus on performance  Average convenience  Low priced

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3. Communication objectives Developing communication objectives are essential in of marketing our products (Stafford, 2009).Moving generic objectives to more measurable gives a more realistic picture in of result (Cindy, 2011).Based on Hierarchy of effects model (Refer Appendix 1.2), we have identified four possible objectives (Rossiter, J. & Percy, L., 1997): 3.1

Brand awareness - Increase awareness about our existing products in order to retain and attract customers by 50% by end of the next period. Awareness of our products and specifying what makes us different from competitors, identifying our Unique Selling Point (USP) and marketing it would form the base of brand equity. E.g. SEEN is our USP, since it comprises of about 60% of revenues. Market it further by its high performance and average price as preferred by Buffs.

3.2

Category Need – Keeping target audience in mind, products have been designed and modified. Further, promoting it in such a way that it would satisfy the perceived notions. E.g. SEXY has been designed to cater Single’s need for average performance and convenience.

3.3

Brand Attitude- Evaluating our brands to satisfy current need of the consumers. Increase understanding by 75% by reinforcing the position of brand in the market. Brands provide positive orientation such as social status and intellectual stimulation. E.g. SEHI is a high priced product targeting High Earners who aim for social status.

3.4

Brand Purchase Intention- To consistently walk customers through the purchasing process, we will inform as follows    

(Armstrong, et al., 2012): Why our product should be bought Comparisons to the competitor’s product from our current clients. Offer deals and discounts

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This will help in attracting consumers to purchase our products, thus increasing revenues and market share by 20% by end of next period. E.g. SEEN provides better performance at low price as compared to SIBB (competitor’s product) for Buffs.

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4. Message We will use AIDA model to develop effective communication strategies and messages that will help in interacting with customers in a better way. This will enable us to target a particular segment in an efficient way (Functional Marketing, 2012). The message for all our brands are designed in such a way that it helps in:  

 

Gaining customer’s attention, Arousing their interest by specifying the benefits and features of our brand o E.g., Performance and convenience using multidimensional scaling, Creating a desire among customers to buy the product. Finally, encouraging them to purchase the product (Functional marketing, 2012).

4.1 Message Content:  We plan to use rational appeal method relating to the self-interest of target markets to produce the desired response (Mukesh et. al, 2007). o A message showing performance and convenience will help in 

attracting Singles for our new product SEXY The messages are also designed in order to stir up positive emotions

of customers to motivate them to purchase (Solomon, 2007). o A message showing an expensive good quality product will help in motivating high earners to purchase the product as a symbol of their social status 4.2 Message Structure: As a part of message structure strategies: a.For High Earners:  We will give end conclusion in our message to this market segment for our product SEHI through use of perceptual objectives such as quality 

and performance (Engel et. al, 1997). As high earners prefer to hear positive messages, a one-sided message with strong argument at first will be designed describing qualities of SEHI (good design). This will lead to increase in customer

base hence, increasing the brand loyalty (Sternthal and Craig, 1982). b.For Buffs and Professionals

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We will allow these customers to form conclusions according to them for existing product SEEN as they are well educated about the brand

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(Engel et. al, 1997). A two sided argument will be designed for critical audiences like Buffs and Professionals describing both positives and negatives of the product. This will increase their confidence and belief in SEEN thus making them more loyal to the brand (Reed, 2006).

4.3 Message Format: For all our products, we will  Create a strong message format using print ads with proper heading, illustrations and colours making the message look more attractive 

(Pieters et. al, 2004). Carry message in-person (sales force) so the proper gestures, face expressions and posture of the person helps to deliver message effectively (Kotler et. al, 2012).

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5. Media The below figure lists different channels that we will use to communicate with our targeted customers:

5.1

DIRECT MAIL– It is the most cost effective way of reaching the customer by sending personalized message through mail to them individually (Kotler & Keller, 2012). We will use direct mail to provide information about our newly launched products like our product SEXY as an Informative advertising.

5.2

SOCIAL MEDIA –We will use highly effective medium like Facebook and twitter to reach a wider group of customers to communicate our existing, new and modified products and offers (Kotler & Keller, 2012). We will upgrade our social media pages regularly through dedicated social media experts. We will be benefited most by SELF, SEEN and SEHI as Professionals, Hi-earners and Buffs access internet the most.

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5.3

WEBSITES & E-MAIL – Another inexpensive and effective way of advertising our products is by creating websites and sending emails to the customers. We will use internet publishers (advertising agents) to the website link to customers by ‘pay per click’ method (Hochman, J). E-mail is another way of keeping customers up-to-date about our products, offers and services (Armstrong et. al, 2012). Social media even websites and E-mails will target mostly buffs, Hi-earners and professionals.

5.4

SALES FORCE – We will use in stores sales people effectively to market our products to customers (Ross et.al, 2001) through face to face interactions. Unlike other personal communication channels, sales force allocated in various stores will market all our products depending on customer requirements.

5.5

ADVERTISING – It can reach geographically dispersed buyers building a long-term image for the product and trigger quick sales. We will classify advertising as below for our products, (Kotler & Keller, 2012) 

Informative ment: Newly launched products i.e. SEXY and SEHI need to be d in such a way that target

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audience will be able to understand the product information. Persuasive ment: We will product SEEN by providing comparison with the competitor’s product in market so as to persuade Buffs to develop liking and conviction towards our product and prefer it over others.

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Reminder ment: By continuous advertising we will remind customers about our existing mature products SEMI and SELF thus helping to increase their purchase intentions.

The key aspect in advertising is to choose the right medium of advertising for right product depending on the profitability of products (Armstrong et al., 2012). For example, TV advertising is appropriate for so high end products like SEHI, SELF and SEEN as TV is expensive whereas, Newspaper advertising, a cheaper way to reach greater audience for SEMI and SEXY as these two products will fetch us low profit margins. 5.6

SALES PROMOTION – We will use sales promotion tools like free product delivery (for our Sonite products), loyalty cards, free gifts, product warranty etc. to persuade customer using pulling method to create customer loyalty and increase brand value (Kotler & Keller, 2012).

5.7

EVENTS& SPONSORSHIPS – We will invest on events and sponsorships in a way that it explains our brand attitude and beliefs (Armstrong et.al, 2012). For example, product designed for  Hi-earners (SEHI): o Target luxury events ( GOLF, Luxury Parties)  Professionals (SELF): o Knowledge based events (e.g. Quiz competition)  Others & Singles (SEMI & SEXY) : o Entertainment events (sports, movies, theatre etc.)

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6. Message source We will use celebrities such as athletes, actors, and cartoon characters etc. as spokespersons as messages delivered by these creditable sources are highly persuasive. These celebrities have high expertise (specialized knowledge to back the claim), are trustworthy and likable (attractive, humorous, natural etc.) (Kelman, 1953). One important factor to be considered while using celebrities is maintaining the principle of congruity where the consumer might start disliking the brand or the celebrity if he sees his favourite celebrity praising the brand he dislikes (Tannenbaum, 1955).

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7. Measurement Marketing measurements provide clear and quantifiable evidence to the management on how our marketing expenditure helps to achieve the goals and financial objectives (Kotler & Keller, 2012). MARKETING METRICS: To analyse the marketing plans effectiveness, we will use marketing metrics which helps to quantify, compare and interpret the marketing performance using external and internal metrics (Kotler & Keller, 2012). For example, we have built a marketing metrics for our product SEEN: EXTERNAL Awareness

INTERNAL (77.8%)

Awareness of goals

Market Share (5.1%)

Commitment to goals

Relative Price($ 410)

Active innovation

Marketing Expenses($ 2850K)

Staffing or skill levels

Product Sales (128,882)

Willingness to change

Sales cost ($646K)

Autonomy

From the above metric we can analyse the Return on investment (ROI) (Refer Appendix 1.3) through which we can judge the effectiveness of marketing plan (Taking the mystery out of marketing metrics, 2009).

MARKETING ROI MANAGEMENT PROCESS:

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(Source: Adapted from Marketo, 2012) From the above Measurement ROI management process we will:  Use the calculated ROI which will help to shape the future objectives, 

strategies and tactics. Measurement process will also help us to find weaknesses and guide us to improve the effectiveness of marketing plan (Marketing Measurements, 2012).

To measure the effectiveness of marketing plan through ROI process we follow the following steps: 

How well the marketing investments connect to the incremental

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revenues and profits. What impact would a small change in the marketing budget has on the



profit margins in future. Research on customer behaviour, awareness, satisfaction and perceived quality (Marketing Measurements, 2012).

From the measurement process, we can understand how successful we are in communicating our product to customers and it also shows us on what changes to be made in strategies for an effective marketing plan

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8. Promotion budget Objective-and-Task method will be used to set the total marketing communication budget (Kotler, P., & Keller, K., 2012). As things appear to be going well for our firm and there is no requirement to take big risks, we have selected this method (West, D., & Prendergast, G., 2009). We will be able to achieve targeted objective levels by using this market-based and researched sophisticated budgeting technique (West, D., & Prendergast, G., 2009). The various advantages of Objective-and-Task method are as follows: 

It will help us to clearly state the advertising objectives and identify the



relationship in between them (Carlson, D., & McDevitt, P., 2007). It also highlights the size of budget allocated for achieving those advertising objectives (Carlson, D., & McDevitt, P., 2007). Thus, it increases our firm’s probability of covering the overall marketing costs



by setting aside sufficient amount of money. It relates the advertising effect theory to the budgeting decisions made (Artzt, E., 2010). For e.g., there are fewer requirements of influencing customers through advertising if the purpose is to only build product awareness. But these requirements are increased in case the main advertising goal set is to achieve consumer preference for the product.

Even though this method has various advantages; there are several challenges to be taken care of by us: 

Determining and prioritising the tasks to be accomplished in order to achieve the set advertising objectives (Carlson, D., & McDevitt, P.,

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2007). We will be required to set accurate and realistic costs to each of the tasks. Thus, the overall promotion budget is determined from specific costs allocated to each of these activities (Kotler, P., 1997).

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Below table lists the total marketing budget allocated towards different marketing communication channels:

Following figure lists the percentage distribution of marketing budget towards different communication channels:

Budget Allocation(%) of Advertising and Digital Marketing Communication for Next Period Events & Sponsorship Salesforce Television Sales Promotion Newspaper Direct Mail Social Media Display Marketing E-mail Marketing

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9. Conclusion The key conclusions that can be drawn from the above communication plan are as follows:  An integrated marketing communication plan has been created that will help in matching budget with the most effective means of distributing 

the message. Our firm’s focus is on full market coverage using differentiated marketing strategy. This will help in increasing the total sales of the firm which will eventually result into high share price, market capitalisation



and net contribution. We will segment the target audience based on market size, market



growth and profitability. The four communication objectives: Brand awareness, brand attitude, category need and brand purchase intention will help us to create a



clear, consistent and competitive message for our products. Using AIDA model to develop an effective message and celebrities as a credible source of message communication with a correct state of congruity will help us to interact with our customers in a better way



resulting in high brand loyalty. In order to deliver a strong message to our customers in an efficient manner, we will use a combination of personal and non-personal communication channel. This will also increase brand recognition, and



build customer base. The measurement process will help us in analysing the effectiveness of current marketing communication and also, provide us with changes to



be made in the future marketing strategy. Using sophisticated budgeting tool i.e., objective-and-task method will help us in achieving our communication objectives efficiently within the allocated budget.

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Appendix1 1.1 Product Level: Customer-value hierarchy

1.2 Hierarchy-of-effects model:

(Source:http://gimmecca.wordpress.com) 1.3 Return on Investment (ROI): ROI = (Product Sales x % Gross profit) - Marketing & sales Expenses

References 22

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