Chapter 15: THE MARKETING PLAN

CHAPTER 15

The Marketing Plan

Take time to deliberate . . . stop thinking and go in.

– NAPOLEON BONAPARTE

THE FOLLOWING is an outline for developing a basic international marketing plan. While such a plan requires a good deal of research, the marketeer is cautioned against “overplanning” and thereby missing an opportunity at market entry that may not come again. Conversely, while not every aspect of this outline will be relevant for every size project, don’t take too many shortcuts. As Napoleon admonished: Think it through, but be prepared to act.

Guideline for Marketing Success

I. INTRODUCTION

A summary of the long-term and shortterm objectives of the marketing plan as well as a brief description of the target market II. PRODUCT DESCRIPTION

Evaluate the product/product-line from the perspective of the target market based on the following categories: 1.Marketplace advantage 2.Innovation 3.Cultural compatibility 4.Perceived complexity 5.Willingness to adapt 6.Current familiarity 7.Potential resistance 8.Potential share size III.TARGET MARKET

A.Summarize the cultural and economic research of the target market for the following areas: 1.History 2.Geography 3.Politics 4.Current government

5.Family roles 6.Education levels 7.Legal environment 8.Philosophy and religion 9.Language 10.Culinary 11.Housing 12.Labor 13.Health 14.Economics 15.Population profile 16.Income distribution 17.Agriculture and industry 18.Technological development 19.Transportation 20.Energy 21.Communications 22.Environmental concerns 23.Distribution channels 24.Advertising Media B.Profile local consumer buying habits 1.Usage patterns for similar products if available 2.Shopping habits (place, time, frequency) 3.Methods of payment

4.Product differentiation and feature choice

C.Describe local pricing strategies 1.Markup techniques 2.Availability of discounting promotions 3.Levels of retailer discretion 4.Estimation of governmental intervention on pricing 5.Influence of taxation

D.Estimate the size of the target market 1.Determine industrywide sales specific to the product for the national market 2.Estimate the amount of sales of the product during its first year 3.State reasons for the level of initial market penetration IV.COMPETITION ANALYSIS

For each direct or indirect competitor, compile the following information: 1.Competitor name 2.Country of origin 3.Presence in target market 4.Presence in neighboring markets 5.Overseas operations a)Total number b)Estimated revenues 6.Domestic operations a)Total number b)Estimated revenues 7.Directly competitive products a)Pricing b)Features c)Packaging 8.Indirectly competitive products a)Pricing b)Features c)Packaging 9.Local advertising 10.Local promotional efforts 11.Local distribution channels 12.International distribution channels 13.Governmental connections 14.Strategic partnerships 15.Joint ventures 16.Importer relationships 17.Estimate of current market share 18.Potential for future competition V. GOVERNMENT REGULATION

AND AGENCIES

A.Role in domestic commerce 1.Internal tariffs 2.State-owned enterprises

B.Role in foreign trade 1.Import/export controls 2.Tariffs 3.Quotas 4.Customs process 5.Licensing process 6.Embargo restrictions

C.Trade finance assistance 1.Access to public and private funding sources 2.Usage rates

D.Foreign investment policy 1.Property ownership rights 2.Business ownership rights 3.Entry/exit visa policies 4.Permanent resident policies 5.Taxation rates 6.Foreign-owned businesses 7.Expatriate workers 8.Profit repatriation rates 9.Expropriation and domestication risks VI.SEGMENT SUMMARY

Summarize the potential market segment problems that will require attention prior to market entry. (A great deal of this information can be derived from the experience of other foreign operators in the target market.)

VII.PRODUCT STRATEGIES

A.Objectives 1.Sales projections over five years (monthly or period breakdown) 2.Initial market share for one year after penetration by period and four successive years by quarter 3.Operating profits over five years (monthly or period breakdown)

B.Adaptation Describe how the product will be adapted for the new market in the following categories: 1.Product content 2.Product name 3.Product label 4.Service component 5.Packaging design 6.Local usage

C.Advertising Describe how the advertising for the product will be designed for the new market in the following categories: 1.Design 2.Media mix 3.Reach 4.Frequency 5.Impact/message 6.Estimated costs

D.Promotional effort Describe how the promotional effort will be implemented for the new market in the following categories: 1.Public relations 2.Personal sales 3.Industrial sales 4.Sponsorships 5.Sweepstakes 6.Coupons/discounting 7.Telemarketing 8.Other direct marketing

E.Strategic partnerships List possible partnerships and their influence on the marketing strategy.

F.Brand Equity List information regarding the current brand recognition in the market and plans for its development. Additionally, list any information that would interfere with the establishment of copyright or trademark rights within the target market. VIII.DISTRIBUTION STRATEGIES

A.Modes for distribution List modes of transport available, most suitable and respective costs for the various modes of import, export and internal shipping.

B.Ports of entry Describe the available ports and their respective cost benefits or problems.

C.Packaging requirements Review the regulations and cultural standards that will affect packaging along with the effect such requirements will have on cost.

D.Shipping requirements Define the regulations that will affect the shipping and internal transport of the product in bulk format and the accompanying costs.

E.Insurance needs List information about the availability of insurance in the local market and the projected costs for insuring the distribution effort.

F.Documentation Catalog all documentation, method of acquisition, and processing costs that will be required for import, export, or internal transport of products or their components in the new market (bills of lading, air bills, pro forma invoices, etc.). Also, note the proper government agencies that must be contacted, along with their location.

G.Freight forwarding Review all freight forwarders available for use in the new market along with their price proposals. If internal freight management will be utilized make note of the regulations regarding their performance in the new market and all necessary licensing.

D.Warehousing Include information about the availability and suitability of local warehousing with an emphasis on cost and quality control. Also note any regulations that prevent or discourage foreign ownership.

E.Inventory controls Delineate plan for controlling inventory from raw materials through finished product to end-user. Make note of local rates of and attitude toward pilferage.

F.Distribution channel design List all required and contractual intermediaries (agents, retailers, wholesalers, distributors, etc.) along with a cost-benefit analysis for their usage. Make note of other potential disadvantages beyond direct cost of operating the distribution channel as an internal process.

G.Taxation Provide information on the current tariffs, customs duties, local transportation taxes, documentation fees, handling charges, levies, value added taxes or other fee structures enforced by local government regulation. IX.PRICING STRATEGIES

This section is used to elaborate on the company’s projections and methodology for setting its prices in the local market.

It should include: 1.Wholesale markups 2.Retail markups 3.Discounts 4.Rebates 5.Bulk purchase rates 6.Projected market entry price schedule X. REVENUE STRATEGIES

This section will define the methods by which the company will accept payment for its products in the new market.

Methods to consider are: 1.Cash (local currency and foreign substitutes) 2.Exchange rate risk 3.Banking facilities and rates 4.Credit extension to customers 5.Credit card usage and terms 6.Bartering 7.Mixed compensation 8.Buy-back strategies 9.Build-Operate-Transfer XI.FINANCIAL STATEMENTS

The following documents should be prepared as part of the marketing plan:

A.Marketing budget (five-year projection) 1.Product cost 2.Selling expenses 3.Regulatory costs (applied to marketing effort) 4.Advertising expense 5.Promotions expense 6.Distribution costs 7.Auditing costs

B.Pro Forma Income Statement (P&L) (five-year projection) XII.FINANCIAL RESOURCE

REQUIREMENTS

This section should provide detailed information about the amount and source of financing that will be required to penetrate the new market. Since the marketing plan will eventually be included in the overall business plan for a company, this section may be a sub-section of the overall financial projections.

XIII.PERSONNEL REQUIREMENTS

All general and specialized requirements for personnel needed to implement the marketing plan and staff overseas offices should be listed here. A schematic (flow chart) of the project’s organizational chart along with lines of communication and authority should be included. Each position listed is best accompanied by a brief job description and wage scale.

Housing and transfer benefits may also be listed here. XIV.SECURITY ISSUES

All concerns about the security needed for personnel, product, buildings, equipment, and other assets of the company to be sent overseas as part of the marketing effort can be stated in this section.

Security issues for intangible assets such as goodwill, brand rights, and public relations can also be included. XV.MARKETING PLAN SUMMARY

Plan designers should summarize the main points of the plan and make concrete recommendations for its implementation, as well as both short-term and long-term ramifications. Its projected effect on other current company marketing schemes (foreign and domestic) ought to be included. Finally, projections about its effect on future marketing efforts, both in the target market and otherwise can be stated here.

This summary is often placed at the beginning of the plan and designated as the Executive Summary.