Marketing plan project: Assuming that you are a group of junior consultants in a
ID: 350107 • Letter: M
Question
Marketing plan project:
Assuming that you are a group of junior consultants in a marketing consulting firm, your group is responsible for developing a marketing plan of a new product/service concept for a company. The expectations of your client on your proposed marketing plan include:
1. Analyze the company’s current marketing situation and identify potential opportunities and threats that may have impacts on the company,1.
2. Develop a new product/service concept that can create customer value, and
3. Recommend marketing strategy and program for your proposed new product/service to help the company stay profitable, competitive, and sustainable.
You are launching a new marketing campaign with some strategic goal (e.g., expand into X segment/market because your current segments are shrinking).
The goal is to create new marketing, not new technology, service, or a new product per se. (though there can be some new product to support your new marketing)
Think about areas of industry that are interesting to you, are meaningful to society, and can generate the most impact/utility/value creation.
Pick something that you can add a lot of new ideas too – just like having a core idea on which you can add additional marketing ideas. Picking something where you can build culture and beliefs will allow you to work at the highest level of value creation.
You don’t have to pick something that is new and techy – these things often seem cool and have a lot of potential for idea development, but can also be difficult to work with. It’s more interesting to pick up on changing tastes and needs of consumer segments.
E.g., you need to be able to do the 4p’s/c’s, STP, branding, etc. If you are having a hard time coming up with ideas on how specific ideas from core marketing apply, it is probably not a good project idea.
Explanation / Answer
I'm going to answer this question with an example from the dynamic field of Financial Services. Let's say my client is a large retail bank in a developing country (like India).
In developing countries, the large retail banks mostly cater to the middle and upper classes of society - the educated, salaried individuals mostly. However, this section of the society makes up only a small percentage of the total population. A vast majority of the population is such countries are made up of farmers, daily-wage labourers, etc. who are mostly unbanked.
As is the current trend in the such developing countries, our client (lets call them ABC Bank) finds that their present target segment (i.e. the upper and middle classes) is mostly saturated and witnesses stagnant growth and stiff competition. Increasing marketing spends here would be futile. Instead, the untapped unbanked population offers a tremendous opportunity for growth.
Hence, the strategic goal here is to expand ABC's banking products and services to the unbanked segment and shift A&P (Advertising and Promotion) focus away from the stagnating upper and middle class segment to the lower class segments.
But should the execution be a simple copy and paste of ABC's offerings in the existing segments? Most certainly not.
In order to design an effective marketing campaign for the expansion, we first need to have a better understanding of our target segment - namely, their income, occupations, geographic presence, etc. As stated earlier, in most developing countries lower class people are involved in activites like agriculture, animal husbandry, daily-wage labour, etc. and earn anywhere between $ 0-10,000 annually. They mostly live in rural and semi-urban establishments although some may also be living in urban cities.
Now that we have a basic idea of the target segment, we can use a framework such as STP (i.e. Segmentation, Targeting and Positioning) and 4P's of marketing to help us design our marketing plan.
Let's first perform an STP exercise to arrive at a broad approach -
Segmentation - We can segment the new market into rural, semi-urban and urban customers. (There could be other ways of segmenting the market such as as per income or occupation. However, I'm going to go with this and you'll see why in a bit!)
Targeting - This is where we decide which segment to target. Now, being a large retail bank already catering to upper and middle class customers, who reside mostly in urban cities, our client has limited presence in rural areas. And since connectivity to remote rural areas of a developing country cannot be built overnight, we suggest our client to target the urban and semi-urban segments.
Positioning - Now here comes the tricky part!. Positioning basically means how you plan to position your offering (i.e. product and/or service) in the minds of your target segment i.e.how will your target segments view your new offering. Being a retail bank already catering to upper and middle classes, the best way is to position our offering as something aspirational for our new customers. And in a developing country, lower class people in urban and semi-urban areas are indeed aspirational in nature. In fact most of them would have migrated from rural areas in search of a better life.
So now we know who are customers are and how we intend to make them see us. But what should our offerings be? And how do we reach our future customers with those products? How should we price them? And finally how do we promote them?
To answer all these questions, we shall use the 4Ps of Marketing - Product, Place, Price and Promotion.
Product - Being a retail bank catering to upper and middle classes, our client has a wide array of financial products ranging from simple savings accounts to complex investment products. However, for our new target segment who are not too financially savvy, the products need to be simple. Also, since their savings potential is lower, the range of offering should be savings accounts to simple deposit schemes. Loan products like Housing Loans, Education Loans and Small Business Loans would also be in the portfolio
Place - After designing a simple product portfolio, we now need to decide how to reach our new customers with the target products. ABC already has bank branches in prime locations in most urban and semi-urban cities. However, we might need to open a few more branches in less prime localities in order to reach our new target segment. Additionally, we can also use digital channels to our advantage. In developing countries like India, smartphones come as cheap as $50 nowadays and most lower sections of society are armed with one. This would be a cost-effective channel to reach our new customer base.
Price - Pricing is a tricky affair in the banking business as its highly regulated by the central bank of any country. There are limits to the interest rates one can offer however things like lower minimum balance in savings accounts can be offered to our new customers. Loans may be given at a higher interest rate given the income potential of the new segment however, longer repayment periods can be offered. Here, we must also be mindful of what our competition is offering as other banks would also be looking to tap into the segment.
Promotion - Finally, we come to the part of promoting our new offering. This depends a lot on the 'Place' i.e. the channels we've chosen through which to reach our new customers. Advertisements on hoardings, TV channels and newspapers are a good place to start. However, we talked about wanting to use the digital channels for greater penetration and cost effectiveness. We could send out messages with a link to download the ABC banking app and urge customers to start banking with a 'click'. Roadshows can also be arranged in certain parts of the cities where our new target segment reside.
A successful marketing campaign coupled with good quality products and service should allow ABC to penetrate this new segment and subsequently increase market share and revenue.