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CHAPTER CONTENTS PAGE POWERPOINT RESOURCES TO USE WITH LECTURES...........................................A-1 KEY TERMS...........................................................................................................................A-1 LECTURE NOTES 

Marketing Plans and Business Plans............................................................................A-2

Sample Five-Year Marketing Plan for Paradise Kitchens, Inc.....................................A-7

POWERPOINT RESOURCES TO USE WITH LECTURES 1 PowerPoint Slide2

Textbook Figures

Figure A-1 Elements of a marketing and business plan both for internal and external audiences (p. 51)...........................................................................................................A-4 Figure A-3 Figure 2: Sales Revenues for Paradise Kitchens (p. 62)................................................A-12 Figure A-4 Figure 3: The Paradise Kitchens Organization (p. 62)..................................................A-13

Selected Textbook Images (Ads, People, Products, and Websites) Chapter Opener: Image Howlin’ Coyote Chili (p. 54).......................................................................A-2

KEY TERM business plan p. 50

1 For each PowerPoint resource listed, the page reference in the textbook (p. x) or [p. y] is where the figure or image is located. 2 The PowerPoint presentation (PPT) for this chapter is either available on the Instructor’s Resource CD-ROM or downloadable from the Marketing: 12/e website at http://12e.kerin.tv. The PPT slide number references are for this chapter only.

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Appendix A - Building an Effective Marketing Plan

LECTURE NOTES New ideas are a dime a dozen and so are new products and new technologies,” observes Art Kydd, CEO of St. Croix Ventures. 

His firm has provided seed money and venture capital to launch more than 60 startups in the past 25 years.

Kydd receives over 200 marketing and business plans annually to review and provides start-up financing for two or three.

According to Kydd, “The factors that set a potentially successful idea apart from all the rest are: 1. Markets and marketing. 2. A product with a point of difference that satisfies customers’ needs. 3. A well-written marketing or business plan.”

MARKETING PLANS AND BUSINESS PLANS Appendix A provides guidelines for writing a marketing plan. A. Meanings, Purposes, and Audiences 

A marketing plan is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years.

A business plan is a road map for the entire organization for a specified future period of time, such as one year or five years.

[Figure 2-B] There is no generic structure for a marketing or business plan.

The specific format for a marketing plan depends on: a. The target audience and purpose. 

Internal audience. –

Consists of board of directors, senior management, and other employees.

Seeks to point the direction for future marketing activities.

Is sent to all individuals in the organization who must implement or who will be affected by the plan.

External audience. –

Consists of friends, banks, venture capitalists, crowdfunding sources, and other potential investors. AppA-2

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Constitutes the principal sources for raising capital.

Is an important sales document.

Contains elements such as the strategic plan/focus, organizational structure, and biographies of key personnel that rarely appear in an plan for an internal audience.

Has financial information that: *

Is far more detailed because the plan is used to raise capital.

*

Tells prospective investors how they will get their money back, earning a profit on their investment.

b. The kind and complexity of the organization. 

A small, local business: –

Will have a relatively simple plan that…

Is directed at prospective customers in its local target market.

A large, hierarchical company in a tiered marketing plan. –

Will have various levels of detail…

Such as the entire organization, the strategic business unit, or the product/product line.

c. The industry. Small and large organizations: 

Analyze their competitors in the industry within which they compete.

Have geographic scopes that are different.

Have different complexities with respect to their offerings.

Have different time periods covered by their plans. –

One year for small businesses.

Five years for large organizations due to their product development cycles.

d. The difference between marketing and business plans. 

A business plan contains details on the R&D, operations, or manufacturing activities of the organization.

For a manufacturing business, the marketing plan is probably 60 or 70 percent of the entire business plan.

For a small business, the marketing and business plans are identical.

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Appendix A - Building an Effective Marketing Plan

B. The Most-Asked Questions by External Audiences 

An external audience, particularly prospective lenders and investors, is probably the toughest audience to satisfy.

The most-asked questions from an external audience are: a. Is the business or marketing idea valid? b. Is there something unique or distinctive about the product or service that separates it from substitutes and competitors? c. Is there a clear market for the product or service? d. Are the financial projections realistic and healthy? e. Are the key management and technical personnel capable, and do they have a track record in the industry within which they must compete? f. Does the plan clearly describe how those providing capital will get their money back and make a profit?

Make a positive impression in the first five minutes or the plan will be rejected!

C. Writing and Style Suggestions 

There are no magic one-size-fits-all guidelines for writing successful marketing and business plans.

[ICA 2-1: Calculating a “Fog Index” for Your Own Writing] 

Still, the following writing and style guidelines generally apply: a. Use a direct, professional writing style. 

Use appropriate business terms, not jargon.

Use active voice with present and future tenses: –

“I will write an effective marketing plan” versus…

“An effective marketing plan will be written by me.”

b. Be positive and specific to convey potential success. 

Avoid superlatives (terrific).

Specifics are better than glittering generalities.

c. Use numbers for impact. 

Where possible, justify projections with…

Reasonable quantitative assumptions. AppA-4

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d. Use bullet points for succinctness and emphasis. They enable key points to be highlighted effectively. e. Use A-level and B-level headings. 

Helps readers to make easy transitions from: –

One section to another.

One topic to another.

Forces the writer to organize the plan more carefully based on the sequence and level of topics covered in the plan.

The size of headings should give a professional look to the report and not overwhelm the reader.

A heading should be spaced closer to the text that follows (and that it describes) than the preceding section to avoid confusion for the reader.

Use liberally: One every 200 to 300 words.

f. Use visuals where appropriate. 

Photos, illustrations, graphs, and charts enable massive amounts of information to be presented succinctly.

Photos or sample ads can illustrate key points effectively, even if they are not in color.

A brief caption on photos and sample ads ties them to the text and highlights their reason for being.

A graph shows more clearly the effect of a trend (such as sales growth) than data presented in a table would do.

Sometimes short tables are woven into the text rather than given a figure number and a title.

g. Shoot for a plan 15 to 35 pages in length. 

Excludes financial projections and appendices.

An uncomplicated small business may require only 15 pages.

A high-technology start-up may require more than 35 pages.

h. Use care in layout, design, and presentation. 

Laser printers give a more professional look than ink-jet printers do.

Use 11- or 12-point type (you are now reading 10.5-point type) in the text.

Use a serif type (with “feet,” like that you are reading now) in the text because it is easier to read.

Use sans serif (without “feet”) in graphs and charts like Figure A-1. AppA-5

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Appendix A - Building an Effective Marketing Plan

Use a bound report with a nice cover and a clear title page adds professionalism.

Use a bound report with a nice cover and a clear title page adds professionalism.

When creating a list:

Use parallel construction to improve read ability.

In this case, a series of infinitives starting with “To….”

To improve readability: –

Each numbered section usually starts on a new page.

This is not done in this plan to save space.

Each long table, graph, or photo is given a figure number and title. –

It appears as soon as possible after the first reference in the text, accommodating necessary page breaks.

This avoids breaking long tables in the middle.

Short tables or graphs:

*

Are often inserted in the text without figure numbers because…

*

They don’t cause serious problems with page breaks.

Effective tables seek to summarize a large amount of information in a short amount of space.

Most readers find that indented paragraphs in marketing plans and long reports are easier to follow.

An “introductory overview” sentence tells the reader the topics covered in the section. –

While this sentence may be omitted in short memos or plans…

It helps readers see where the text is leading.

i. Walk the reader through a figure when presented in a plan.

Elaborate on its important elements.

Discuss from the vantage point of the plan’s writer.

These guidelines are used, where possible, in the sample marketing plan that follows.

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SAMPLE FIVE-YEAR MARKETING PLAN FOR PARADISE KITCHENS, INC. To help interpret the marketing plan for Paradise Kitchens, Inc., that follows, we will describe the company and suggest some guidelines in interpreting the plan. A. Background of Paradise Kitchens, Inc. 

Co-founder Randall F. Peters spent 15 years working for General Foods and Pillsbury with a number of diverse responsibilities: plant operations, R&D, restaurant operations, and new business development.

Co-founder Leah Peters held various Pillsbury executive positions in new category development, packaged goods, and restaurant R&D.

In the company’s start-up years, Paradise Kitchens survived on the savings of Randy and Leah.

Randy was president and CEO and Leah focused on R&D and corporate strategy.

B. Interpreting the Marketing Plan 

The Paradise Kitchens marketing plan: a. Is based on an actual plan. b. Is directed at an external audience. c. Has some details and dates have been altered to:

Protect proprietary information about the company…

But the basic logic of the plan has been kept.

Notes in the margins next to the Paradise Kitchens plan fall into two categories: a. Substantive notes are in blue boxes. These notes: 

Elaborate on the significance of an element in the marketing plan.

Are keyed to chapter references in this textbook.

b. Writing style, format, and layout notes are in red boxes. They:

Give writing style format, format, and layout guidelines.

Explain the editorial or visual rationale for the element.

Writing an effective marketing plan: a. Is hard but also… b. Is challenging and satisfying work. AppA-7

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Appendix A - Building an Effective Marketing Plan

Dozens of the authors’ students have used effective marketing plans they wrote for class in their interviewing portfolio to: a. Show prospective employers what they could do. b. Help them get their first job.

C. Five-Year Marketing Plan for Paradise Kitchens, Inc. Table of Contents The Table of Contents provides quick access to the topics in the plan, usually organized by section and subsection headings. 1. Executive Summary 

Many experts see the Executive Summary as the single most important element in the plan.

The two-page Executive Summary “sells” the plan to readers through its clarity and brevity.

For space reasons, the Executive Summary is not shown in Appendix A.

The Building Your Marketing Plan exercise at the end of Chapter 2 asks the reader to write an Executive Summary for the Paradise Kitchens plan. 2. Company Description

The Company Description highlights the recent history and recent successes of the organization. 

Paradise Kitchens was: a. Started by co-founders Randall F. Peters and Leah E. Peters to develop and market Howlin’ Coyote® Chili. b. A unique line of single serve and microwavable Southwestern/Mexican style frozen chili products. c. First introduced into the Minneapolis-St. Paul market and expanded to Denver two years later and Phoenix two years after that.

To the Company’s knowledge, Howlin’ Coyote: a. Was the only premium-quality, authentic Southwestern/Mexican style, frozen chili sold in U.S. grocery stores. b. Gained fast, widespread acceptance in its targeted markets due to its high quality. AppA-8

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c. Same-store sales doubled in the last year for which data are available. d. The Company believes the Howlin’ Coyote brand can be extended to other categories of Southwestern/Mexican food products, such as tacos, enchiladas, and burritos. 

Paradise Kitchens believes its high-quality, high-price strategy has proven successful.

This marketing plan outlines how the Company will extend its geographic coverage from 3 markets to 20 markets by the year 2016. 3. Strategic Focus and Plan

The Strategic Focus and Plan sets the strategic direction for the entire organization, a direction with which proposed actions of the marketing plan must be consistent.

This section is not included in all marketing plans. See Chapter 2.

Three key aspects of the company’s corporate strategy are: a. Mission/Vision. 

The qualitative Mission statement focuses the activities of Paradise Kitchens for the stakeholder groups to be served. See Chapter 2.

Paradise Kitchens intends to market Howlin’ Coyote Chili: –

As the highest-quality line of single serve and microwaveable Southwestern/Mexican-style frozen chili products.

At premium prices that satisfy consumers in this fast-growing food segment…

While providing challenging career opportunities for employees and above-average returns to stockholders.

b. Goals. 

The Goals section sets both the nonfinancial and financial targets—where possible in quantitative terms—against which the company’s performance will be measured. See Chapter 2.

There are two types of goals in a plan: –

Nonfinancial goals. 1. To retain its present image as the highest-quality line of Southwestern/Mexican products in the food categories in which it competes. 2. To enter 17 new metropolitan markets. AppA-9

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Appendix A - Building an Effective Marketing Plan

3. To achieve national distribution in two convenience store or supermarket chains by 2014 and five by 2015. 4. To add a new product line every third year. 5. To be among the top five chili lines—regardless of packaging (frozen or canned)—in one-third of the metro markets in which it competes by 2015 and two-thirds by 2017. –

Financial goals. 1. To obtain a real (inflation-adjusted) growth in earnings per share of 8 percent per year over time. 2. To obtain a return on equity of at least 20 percent. 3. To have a public stock offering by the year 2015.

c. Core Competency and Sustainable Advantage. 

Core Competencies. –

Provide distinctive, high-quality chilies and related products using Southwestern/Mexican recipes that appeal to and excite contemporary tastes for these products.

Deliver these products to the customer’s table using effective manufacturing and distribution systems that maintain the Company’s quality standards.

Sustainable Advantage. –

Will work closely with key suppliers and distributors to…

Build the relationships and alliances necessary to satisfy the high taste standards of our customers. 4. Situation Analysis

A Situation Analysis is a snapshot to answer the question, “Where are we now?” See Chapter 2.

A situation analysis of Paradise Kitchens starts with a snapshot of the current environment in which the firm finds itself in.

The SWOT analysis: a. Identifies strengths, weaknesses, opportunities, and threats to provide a solid foundation, which… b. Is the springboard to identify subsequent actions in the marketing plan.

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[Figure 1] SWOT Analysis for Paradise Kitchens a. Strengths. 

An experienced management team and board of directors.

Excellent acceptance of its product line in the three metropolitan markets within which it competes.

A strong manufacturing and distribution system to serve these limited markets.

b. Weaknesses. 

The limited size of Paradise Kitchens relative to its competitors in terms of the depth of the management team.

The available financial resources.

The national awareness and distribution of product lines.

c. Opportunities. 

The increasing appeal of Southwestern/Mexican foods.

The strength of the upscale market for the Company’s products.

The food-processing technological breakthroughs that make it easier for smaller food producers to compete.

d. Threats.

The danger that the Company’s premium prices may limit access to mass markets.

The competition from the “eating-out” and “take-out” markets.

Industry Analysis: Trends in Frozen and Mexican Foods a. The Industry Analysis section provides the backdrop for the subsequent, more detailed analysis of competition, the company, and the company’s customers. b. Without an in-depth understanding of the industry, the remaining analysis may be misdirected. See Chapter 2. c. Frozen Foods. 

Consumers are flocking to the frozen food section of grocery retailers. The reasons: –

Hectic lifestyles demanding increased convenience.

An abundance of new, tastier, and nutritious products.

Total sales of frozen food in supermarkets, drugstores, and mass merchandisers, such as Target and Costco (excluding Walmart), reached $29 billion in 2007, the latest year for which data are available. Prepared frozen meals: AppA-11

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Appendix A - Building an Effective Marketing Plan

Defined as meals or entrees that are frozen and require minimal preparation…

Accounted for $8.1 billion, or 26 percent of the total frozen food market.

Sales of Mexican entrees totaled $506 million in 2007.

Heavy consumers of frozen meals: –

Are those who eat five or more meals every two weeks.

Tend to be kids, teens, and adults 35 to 44 years old.

d. Mexican Foods. 

Mexican foods such as burritos, enchiladas, and tacos are used in twothirds of American households.

These trends reflect a generally more favorable attitude on the part of all Americans toward spicy foods that include red chili peppers.

The Hispanic population is growing in the United States.

In 2012, Hispanics had:

 

A population over 50 million.

Almost $1.2 trillion in purchasing power.

Which partly explains the increasing demand for Mexican food.

In 2017, Hispanic purchasing power is projected to be over $1.7 trillion.

Competitor Analysis: The Chili Market a. The Competitor Analysis section demonstrates that the company has a realistic understanding of its major chili competitors and their marketing strategies. b. A realistic assessment gives confidence that subsequent marketing actions in the plan rest on a solid foundation. See Chapters 2, 3, 8, and 9. c. The chili market represents over $500 million in annual sales. d. On average, consumers buy five to six servings annually. e. The market is divided into two segments: 

Canned chili (75%): –

Is sold by Hormel, Dennison, Campbell’s, and others.

Is now sold chili in a glass jar by Bush, a major marketer of beans.

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Dry chili (25%): –

Is sold by Lowry’s, Stagg, etc.

Requires consumers to add their own meat, beans, and tomatoes, taking more preparation time.

f. Canned chili does not taste very good according to a study. 

Company Analysis a. The Company Analysis provides details of the company’s strengths and marketing strategies that… b. Will enable it to achieve the mission and goals identified earlier. See Chapters 2 and 8. c. The co-founders of Paradise Kitchens, Inc, have 44 years of experience between them in the food-processing business. d. Both have played key roles in the management of the Pillsbury Company. e. They are being advised by a highly seasoned group of business professionals, who have extensive new-product development experience. f. The Company now uses a single outside producer with which it works closely to maintain the consistently high quality required in its products. g. The greater volume has increased production efficiencies, resulting in a steady decrease in the cost of goods sold.

Customer Analysis a. Satisfying customers and providing genuine value to them is why organizations exist in a market economy. See Chapters 5, 6, 7, 8, and 9. b. This section describes: 

The characteristics of customers expected to buy Howlin’ Coyote products.

The health and nutrition concerns of Americans today.

c. Customer Characteristics. 

Demographically, chili products in general are purchased by consumers representing a broad range of socioeconomic backgrounds.

These consumers represent 50 percent of canned and dry mix chili users.

Howlin’ Coyote chili is purchased chiefly by consumers: –

Who have achieved higher levels of education.

Whose income is $50,000 and higher. AppA-13

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Appendix A - Building an Effective Marketing Plan

Whose households have one to three people in them.

Whose households have both spouses working.

While women are a majority of the buyers, single men represent a significant segment.

Howlin’ Coyote’s customers: –

Tend to be those most pressed for time.

Are skewed toward the higher end of the income range because of the premium pricing it charges.

Range in age from 25 to 54 years old.

Often live in the western U.S. where spicy foods are eaten more.

d. Health and Nutrition Concerns. 

Food issue coverage by U.S. media is often erratic and occasionally alarmist. –

Americans are concerned about their diets.

The major news organizations cover studies that vary widely in terms of their credibility. *

Studies on the healthfulness of Mexican food have received prominent play in print and broadcast reports.

*

The high caloric levels of much Mexican and Southwestern-style food have been widely reported and often exaggerated.

Some Mexican frozen-food competitors: –

Such as Don Miguel, Mission Foods, Ruiz Foods, and José Olé…

Offered more “carb-friendly” and “fat-friendly” products in response to this concern.

Howlin’ Coyote: –

Is not stressing these qualities in its promotions.

Is stressing taste, convenience, and flexibility in the space and time available for promotions. 5. Market-Product Focus

This section describes Paradise Kitchens’ Howlin’ Coyote: 

Five-year marketing and product objectives.

Target markets, points of difference, and positioning of its line of chilies.

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Marketing and Product Objectives a. The chances of success for a new product significantly increase if: 

Objectives are set for the product itself.

Target market segments are identified for it.

b. Diversification analysis helps identify the market segments to target. c. The objectives also serve as the planned targets against which marketing actions are measured in program implementation and evaluation. d. See Chapters 2, 9, and 10. e. Howlin’ Coyote’s marketing intent: 

Is to take full advantage of its brand potential while…

Building a base from which other revenue sources can be mined…

Both in and out of the retail grocery business.

e. These markets and products are detailed in four areas below: 

Current markets. –

Will be grown by expanding brand and flavor distribution at the retail level.

Will grow same-store sales by: Increasing consumer awareness and repeat purchases, thereby…

*

Leading to the more efficient broker/warehouse distribution channel.

New markets. –

– 

*

By the end of Year 5, the chili, salsa, burrito, and enchilada business will. *

Be expanded to a total of 20 metropolitan areas.

*

Represent 53 percent of the 38 major U.S. metropolitan markets.

This will represent 70 percent of U.S. food store sales.

Food service. –

Will include chili products and smothering sauces.

Sales are expected to reach: *

$693,000 by the end of Year 3.

*

$1.5 million by the end of Year 5.

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Appendix A - Building an Effective Marketing Plan

New products. –

Howlin’ Coyote’s brand presence: *

Will be expanded at the retail level through …

*

The addition of new products in the frozen-foods section.

This expansion will be accomplished through new-product concept screening in Year 1 to identify new potential products.

These products will be brought to market in Years 2 and 3.

Target Markets a. This section identifies the specific niches or target markets toward which the company’s products are directed. b. When appropriate and when space permits, this section often includes a market-product grid. See Chapter 9. c. The primary target market for Howlin’ Coyote products is households: 

With one to three people.

Where often both adults work.

With individual income typically above $50,000 per year.

d. These households contain more experienced, adventurous consumers of Southwestern/Mexican food and want premium quality products. 

Points of Difference a. An organization cannot grow by offering only “me-too products.” b. The greatest single factor in a new product’s failure is the lack of significant “points of difference” that set it apart from competitors’ substitutes. c. This section makes these points of difference explicit. See Chapter 10. d. The “points of difference”— characteristics that make Howlin’ Coyote chilies unique relative to competitors—fall into three important areas: 

Unique taste and convenience. –

No known competitor offers a high-quality, “authentic” frozen chili in a range of flavors.

No existing chili has the same combination of quick preparation and home-style taste that Howlin’ Coyote does.

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Taste trends. –

The American palate is increasingly intrigued by hot spices.

In response to this trend, Howlin’ Coyote brands offer more “kick” than most other prepared chilies.

Premium packaging. – Howlin’ Coyote’s packaging graphics convey the unique, high-quality product contained inside and… –

The product’s nontraditional positioning.

Positioning a. A positioning strategy helps communicate the unique points of difference of a company’s products to prospective customers in a simple, clear way. b. This section describes this positioning. See Chapters 8 and 9. c. In the past, chili products have been either convenient or tasty, but not both. d. Howlin’ Coyote pairs these two desirable characteristics to… 

Obtain a positioning in consumers’ minds as very high-quality “authentic Southwestern/Mexican tasting” chilies that…

Can be prepared easily and quickly. 6. Marketing Program

Everything that has gone before in the marketing plan sets the stage for the marketing mix actions—the four Ps—covered in the marketing program. See Chapters 10 through 21.

The four marketing mix elements of the Howlin’ Coyote chili marketing program are detailed below.

Product Strategy a. This section describes in detail three key elements of the company’s product strategy: 

The product line.

Its quality and how this is achieved.

Its “cutting edge” packaging.

See Chapters 10 and 11.

b. After first summarizing the product line, the approach to product quality and packaging is covered. AppA-17 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.


Appendix A - Building an Effective Marketing Plan

c. Product Line. Howlin’ Coyote chili: 

Retails for $3.99 for an 11-ounce serving.

Is available in five flavors: –

Green Chile Chili.

Chicken Chunk Chili.

Red Chile Chili.

Mean Bean Chili.

Beef and Black Bean Chili.

d. Unique Product Quality. 

The flavoring systems of the Howlin’ Coyote chilies are proprietary.

The products’ tastiness is due to extra care lavished upon the ingredients during production.

The ingredients used are of unusually high quality.

To preserve cell structure and moistness, meats are… –

Low-fat cuts.

Fresh.

Not frozen.

Chilies are fire-roasted for fresher taste.

Tomatoes and vegetables are of select quality.

No preservatives or artificial flavors are used.

e. Packaging. Howlin’ Coyote:

Bucks conventional wisdom in its packaging.

Avoids placing predictable photographs of the product on its containers.

Shows a Southwestern motif that communicates the product’s out-of-theordinary positioning.

Price Strategy a. This section makes the company’s price point very clear, along with its price position relative to potential substitutes: b. When appropriate and when space permits, this section might contain a breakeven analysis. c. See Chapters 13 and 14. d. Howlin’ Coyote Chili’s price: 

Is $3.99 for an 11-ounce package.

Is priced comparably to the other frozen offerings but…

Is priced higher than the canned and dried chili varieties. AppA-18

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e. Howlin’ Coyote Chili’s price is justified because of:

The significant taste advantages it has over canned chilies.

The convenience advantages over dried chilies.

Promotion Strategy a. Three key promotional activities are emphasized: 

In-store demonstrations. –

Enable consumers to try Howlin’ Coyote products and discover their unique qualities.

Will be conducted regularly in all markets to increase awareness and trial purchases.

Recipes. –

Are offered to consumers to stimulate use.

Are given at all in-store demonstrations.

Are on the back of packages.

Are sent through a mail-in recipe book offer.

Are in coupons sent by direct-mail.

Are printed on freestanding inserts in newspapers.

Cents-off coupons. Are distributed in four ways to generate trial and repeat-purchase of Howlin’ Coyote products: –

In Sunday newspaper inserts. These inserts: *

Are widely read.

*

Help generate awareness.

In-pack coupons. To encourage repeat purchases by new buyers: *

Will contain coupons for $1 off two more packages of the chili.

*

Will be included for the first three months the product is shipped to a new market.

Direct-mail chili coupons. Those households that fit the Howlin’ Coyote demographics described previously will be mailed coupons.

In-store demonstrations. Coupons will be passed out at in-store demonstrations to give an additional incentive to purchase.

b. For space reasons, the company’s online strategies are not shown in the plan. c. See Chapters 17, 18, and 19.

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Appendix A - Building an Effective Marketing Plan

Place (Distribution)Strategy a. Described in this section are: 

The present method of distribution.

The new method of distribution to be used when the increased sales volume makes it feasible.

See Chapters 15 and 16.

b. Howlin’ Coyote is distributed in its present markets through a food distributor. 

The distributor: –

Buys the product.

Warehouses the product.

Resells and delivers the product to grocery retailers on a store-by-store basis.

c. As sales grow, we will shift to a more efficient system using a broker who sells the products to retail chains and grocery wholesalers. 7. Financial Data and Projections 

All the marketing mix decisions covered in the marketing program have both revenue and expense effects.

These are summarized in this section of the marketing plan.

[Figure 2] The marketing plan provides past sales revenues for 2005-2013 along with five-year financial projections for 2014-2018.

Past Sales Revenues a. Historically, Howlin’ Coyote has had a steady increase in sales revenues since its introduction in 2005. b. In 2009, sales jumped spectacularly, due largely to new promotion strategies. c. Sales have continued to rise, but at a less dramatic rate.

Five-Year Projections a. The Five-Year Projections section starts with the judgment forecast of cases sold and the resulting net sales. b. Gross profit and then operating profit—critical for the company’s survival— are projected. c. An actual plan often contains many pages of computer-generated spreadsheet projections, usually shown in an appendix to the plan. AppA-20

Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.


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d. Five-year financial projections for Paradise Kitchens appear in the table below Figure 2. e. These projections reflect the continuing growth in the number of cases sold (with eight packages of Howlin’ Coyote chili per case). f. Because the plan: 

Proposes to enter 17 new metropolitan markets in the coming five years (for a total of 20), it…

Is not possible to simply extrapolate the trend in Figure 2.

g. Instead, management’s judgment must be used. h. Methods of making sales forecasts—including the “lost horse” technique used here—are discussed in Chapter 8. 8. Organization 

[Figure 3] The organization chart and staffing plan for Paradise Kitchens appears here.

It reflects the barebones organizational structure of successful small businesses.

Often a more elaborate marketing plan will show the new positions expected to be added as the firm grows.

Paradise Kitchens: a. Operates with full-time employees in only essential positions. b. Augments its full-time staff with key advisors, consultants, and subcontractors. c. Will add people with special expertise to the staff as the firm grows. 9. Implementation Plan

The Implementation Plan shows how the company will turn its plan into results.

Charts are often used to set deadlines and assign responsibilities for the many tactical marketing decisions needed to enter a new market.

AppA-21 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.


Appendix A - Building an Effective Marketing Plan

[Figure 4] Introducing Howlin’ Coyote chilies to 17 new metropolitan markets: a. Is a complex task. b. Requires that creative promotional activities gain consumer awareness and initial trial.

Paradise Kitchens: a. Will be in 20 metropolitan markets by 2018, including the three existing ones. b. Is in 53 percent of the top 38 U.S. metropolitan markets.

The anticipated rollout schedule to enter these metropolitan markets appears in Figure 4.

The diverse regional tastes in chili: a. Will be monitored carefully to… b. Assess whether minor modifications may be required in the chili recipes.

As the rollout to new metropolitan areas continues, Paradise Kitchens… a. Will assess manufacturing and distribution trade-offs to… b. Determine whether to start new production with selected high-quality regional contract packers. 10. Evaluation Plan

The essence of evaluation is: a. Comparing actual sales with the targeted values set in the plan. b. Taking appropriate actions.

Note that the section: a. briefly describes a contingency plan for alternative actions… b. Depending on how successful the entry into a new market turns out to be.

Monthly sales targets in cases have been set for Howlin’ Coyote chili for each metropolitan area.

Actual case sales will be compared with these targets and tactical marketing programs modified to reflect the unique sets of factors in each metropolitan area.

AppA-22 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.


Full file at http://testbank360.eu/solution-manual-marketing-12th-edition-kerin

Appendix A. Biographical Sketches of Key Personnel Appendix B. Detailed Financial Projections 

Various appendices may appear at the end of the plan, depending on the plan’s purpose and audience.

For example, résumés of key personnel or detailed financial spreadsheets often appear in appendices.

For space reasons these are not shown here.

[See the Student Marketing Plan for Bagels by the Bay —MP-Appendix B— Located in the Instructor’s Manual]

AppA-23 Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.

Solution manual marketing 12th edition kerin  

solution manual marketing 12th edition kerin. Full file at http://testbank360.eu/solution-manual-marketing-12th-edition-kerin

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