Appendix A – Building an Effective Marketing Plan
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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
CONNECT EXERCISES …………………………………………………………..………A-24
• Situation Analysis Click and Drag*
• Consumer Analysis Click and Drag*
• Information Sources and Priority Case Analysis
KEY TERM
business plan
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LECTURE NOTES
“If you have a real product with a distinctive point of difference that satisfies the needs of
customers, you may have a winner,” observes Art Kydd, who has helped launch more
than 60 start-up firms.
MARKETING PLANS AND BUSINESS PLANS
Appendix A provides guidelines for writing a marketing plan.
A. Meanings, Purposes, and Audiences
• [Figure A-1] 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.
• 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.
• External audience.
– Consists of friends, banks, venture capitalists, crowdfunding sources,
and other potential investors.
– 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:
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b. The kind and complexity of the organization.
• A small, local business:
• A large, hierarchical company in a tiered marketing plan.
c. The industry. Small and large organizations:
• Analyze their competitors in the industry within which they compete.
• Have geographic scopes that are different.
d. The difference between marketing and business plans.
• A business plan contains details on the R&D, operations, or manufacturing
activities of the organization.
B. The Most-Asked Questions by Outside 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 plan or marketing plan 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?
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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.
b. Be positive and specific to convey potential success.
c. Use numbers for impact.
• Reasonable quantitative assumptions.
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:
• Forces the writer to organize the plan more carefully based on the
sequence and level of topics covered in the plan.
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f. Use visuals where appropriate.
• Photos, illustrations, graphs, and charts enable massive amounts of
information to be presented succinctly.
g. Shoot for a plan 15 to 35 pages in length.
• Excludes financial projections and appendices.
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 bound report with a nice cover and a clear title page adds
professionalism.
• When creating a list:
• To improve readability:
• Each long table, graph, or photo is given a figure number and title.
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– 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:
– 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.
• These guidelines are used, where possible, in the sample marketing plan that
follows.
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-founders Leah and Randall Peters have more than 40 years of food industry
experience.
• Paradise Kitchens produces and markets a new line of high-quality frozen chili
products.
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.
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• Notes in the margins next to the Paradise Kitchens plan fall into two categories:
• Writing an effective marketing plan:
• Dozens of the authors’ students have used effective marketing plans they wrote
for class in their interviewing portfolio to:
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.
2. Company Description
The Company Description highlights the recent history and recent successes of the
organization.
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• Paradise Kitchens was:
a. Started by co-founders Randall F. Peters and Leah E. Peters to develop and
market Howlin’ Coyote® Chili.
• 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.
• 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 2022.
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
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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
3. To achieve national distribution in two convenience store or
supermarket chains by 2018 and five by 2019.
5. To be among the top five chili lines—regardless of packaging
1. To obtain a real (inflation-adjusted) growth in earnings per share of
8 percent per year over time.
3. To have a public stock offering by the year 2019.
c. Core Competency and Sustainable Advantage.
• Core Competencies.
– Provide distinctive, high-quality chilies and related products using
• Sustainable Advantage.
– Will work closely with key suppliers and distributors to…
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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:
• [Figure 1] SWOT Analysis for Paradise Kitchens
a. Strengths.
• An experienced management team and board of directors.
• Unique, high-quality, high-price products.
b. Weaknesses.
• Small size can restrict options.
• Many lower-quality, lower-priced competitors.
c. Opportunities.
• Upscale market, likely to be stable; Southwestern Mexican food category
is fast-growing segment due to growth in Hispanic-American population
and desire for spicier foods.
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d. Threats.
• Premium price may limit access to mass markets; consumers value a
strong brand name.
• 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:
• Total sales of frozen food in supermarkets, drugstores, and mass
• Prepared frozen meals:
– Defined as meals or entrees that are frozen and require minimal
• Sales of Mexican entrees now exceed $600 million.
• Heavy consumers of frozen meals:
– Are those who eat five or more meals every two weeks.
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d. Mexican Foods.
• Mexican foods such as burritos, enchiladas, and tacos are used in two-
thirds of American households.
• Hispanics have:
– A population over 57 million.
• 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%):
• Dry chili (25%):
– Is sold by Lowry’s, Stagg, etc.
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…
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b. Will enable it to achieve the mission and goals identified earlier. See Chapters
2 and 8.
• 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:
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.
• 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.
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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.
• Some Mexican frozen-food competitors:
– Such as Don Miguel, Mission Foods, Ruiz Foods, and José Olé…
• Howlin’ Coyote:
– Is not stressing these qualities in its 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.
• Marketing and Product Objectives
a. The chances of success for a new product significantly increase if:
b. Diversification analysis helps identify the market segments to target.
d. See Chapters 2, 9, and 10.
e. Howlin’ Coyote’s marketing intent: