The plan coalesces around SMART objectives and provides a trail of evidence from your
analysis of the environment, customers, competitors, and market through to the planned
activities, through the resources you deploy to deliver the objectives credibly.
At the beginning of the plan, you need to provide an executive summary.
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Executive Summary
This is a plan to (launch, extend, revitalise a specific product or service) and will
deliver the following key (SMART) results.
1.
2.
3.
4.
For example: This is a plan to introduce a chain of gelato bars to Mexico. By year three, the
plan calls for:
• Twenty-five bars operating in this geographical area (up from how many?).
• £15 M turnover and £2 Million profit (up from how much?).
• Aided awareness amongst the target group of 30% (up from how much?).
It will implement the following key strategies
1. Position the Gelato product as a premium, healthier treat versus ice cream
2. Locate 25 bars in heavily trafficked shopping districts in greater Mexico City as a foundation
for national expansion within 10 years
3. Offer more innovative flavours than competitive products (assessed how?) to encourage
families to seek it out on shopping trips
4. Price at 30% premium to competitors to support the positioning and cost of stores
It is based on our assumptions of our relative strength and market attractiveness in
our chosen segment(s):
Focus upon the segments that you are competing in and tell us how your relative
strengths take advantage of the opportunities in the environment.
It will require investments principally:
Use the data from the budget section of resource allocation and monitoring
The key assumptions, risks and contingencies are outlined below :
Strategic Objectives
A brief statement outlining the objectives and how they relate to the overall business mission
and or strategy of the organisation. Objectives should be SMART: Specific, Measurable,
Actionable, Realistic, Timed. These should be related to an overall organisational context and
strategy. For example:
This is a plan to introduce a chain of gelato bars to Mexico. By year three, the plan calls for:
• Twenty-five bars operating in this geographical area (up from how many?).
• £15 M turnover and £2 Million profit (up from how much?).
• Aided awareness amongst the target group of 30% (up from how much?).
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The rest of the plan organises around the logic of the adaptive organisation illustrated below:
Understanding Markets
• Macro Level
• Industry
• Micro Level
Understanding Customers
• Behaviour / Needs / Wants
• Segmentation
• Analytics Methods
Understanding Competitors
• Competitor Identification
• Competitive Intelligence
• Competitive Strategy
Measurement
• Customer Metrics
• Marketing
Effectiveness
Co-creating Value
• KAM
• ABM
Communicating with Customers
• Promotion / Communications
Mix
• Digital Marketing
Strategic CRM
• Strategy
• Analytic
• Operational
Customer Experience
• Channel Integration
• Technology
Honing Marketing Capabilities
• Culture & Leadership
• Resource Fit / Investment
Growth
• Growth Objectives
• Growth Strategies
• Targeting
Developing Value Propositions
• Brand Management
• Marketing Mix
Innovation
• Waterfall
• Design
Thinking
• MVP – Agile
Adaptive
Organisation
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Section One: Market Sensing
1.1 Understanding Markets
1.1.1 Macro Level Analysis
First, a word of warning. Too many plans have far too much of this – likely because it is in the comfort zone. Often, none of the macro level analysis remotely influences the rest of the plan and sits there as a mere descriptive activity. Such an approach will not generate a great score. The critical aspect of the analysis is the so what? Focus on the critical aspects of the environment and how that impacts the rest of your planning. You may choose your tool, or just write a concise narrative. We explored both a broad
environmental scanning tool (see Figure 1) and PESTLE in the module. Note that in the tool below PESTLE is part of the situation analysis in orange.
Figure 1: Market audit tool
1.1.2 Industry Level Analysis
Again, provide an industry analysis only if it contributes to your plan; this is a course on marketing and not economics! We covered three approaches to this: one a framework for identifying competitors, one an assessment of the level of competition (Porter’s five forces) and one an analysis of how mature the market is; the poorly named Product Life Cycle – although it refers to the market / industry.
Try to identify competitors relevant to your planned activities (see figure 2). Some competitors are obvious and direct; they make very similar products, offer the same solutions. Others are competitors because they offer other ways of doing the same job. An obvious example was how mobile data devices supplanted other forms of personal computer while traditional computer makers defined their competitive context as other makers of PCs.
MARKET AUDIT
Key points from each
analysis
SITUATION ANALYSIS
Political
Economic
Social
Technological
Financial
Legal
Regulatory
Religious
Global
SITUATION ANALYSIS
Key points from situation
MARKET ANALYSIS
Size
Growth
Customer segments
Customer needs
Buyer behaviour
Intermediaries
Channels
MARKET ANALYSIS
Key points
COMPETITIVE ANALYSIS
Key points
COMPETITIVE
ANALYSIS
Objectives
Behaviour
Market share
Growth
Service quality
Positioning
Operations and resources
Marketing strategies
COMPANY ANALYSIS
Key points
COMPANY ANALYSIS
Our goals and objectives
Market share
Growth
Service quality
Operations and resources
Marketing strategies
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Figure 2: Classification of competitors
Another way of looking at the industry – the market – is by the extent to which it is mature.
Mature markets are notoriously difficult to enter and gain share within because competitors are entrenched and there is limited scope for innovation. Here we use the Product Life Cycle (PLC). Based upon the diffusion of innovation theory (Rogers, 1962), the PLC differentiates marketing implementation strategies according to the propensity for adopting innovation amongst the next cohort of customers: Where your offer sits in terms of market maturity affects all elements of the marketing plan: how expensive it is to build share, the distribution, pricing and communications strategies, the focus between new features and low prices (see table 1).
Remember the PLC is a bit of misnomer as it most often refers to the market, not an individual brand. So, if your plan is to launch, for example, a Ferrari smart phone, the branded product is totally new, but the smartphone market is now moving to maturity. Therefore, the correct use of the PLC is to tell us this and draw the implications of moving from one phase to the other in terms of marketing strategy. Do not say this is a new product, therefore it is selling to early adopters and is in the early stage of the product life cycle.
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Introduction
Phase
Growth Maturity Saturation Decline
How do you
compete
Features and
functions
Availability Brand Service Price
Target
customer
Early
adopters
Early
majority
Late majority Laggards Everyone
Product
(Offer) policy
Pioneering Proliferate
choice
Consolidate Consolidate Restrict
Pricing policy High margin Mass market Mass market Low, margin
erosion
Low
Promotion
policy
Explain how to use it
Differentiate Differentiate Values of the brand Values of the company Place (Distribution)
Specialty or direct Wider Mass Consolidate Consolidate
People There is nothing in the literature around these Ps and PLC and they are
very contextual but do consider in the case of service offers how maturity
affects the processes and people that drive them. For example, as a service
matures and simplifies maybe it is offered only online with no people
support? Whereas when something is new it requires direct human help.
Process
Physical
evidence
Table 1: Stages of the product lifecycle (PLC)
1.1.3 Micro (Firm) Level – SWOT
Only one third of all SWOTs are done correctly in strategic marketing plans – don’t lose marks needlessly.
Remember:
1. Opportunities and Threats exist in your environment and would exist if your business closed down. So, digitalisation of content is an O or a T if you are Apple, Microsoft, TimeWarner etc. If any of those firms folded, digitalisation would continue without them. Your new Chinese factory allowing you better access to that market is not written down as an Opportunity, it goes into the strength or a weakness quadrant of the SWOT.
2. Strengths and Weaknesses are attributes of your company and always exist in relation to competitors and as perceived by customers. A strong brand is nice to have but only a brand that is stronger than competitors is a strength. Rule of thumb: if you don’t have an “er” at the end of the first word, it is unlikely to be a strength (stronger, bigger, cheaper, wider distribution…).
3. SWOT can be done by segment (and used as a tool for targeting) as well as the market and perhaps is more relevant in the latter context.
Strengths relative to competitors in your
segment
Weaknesses relative to competitors in your
segment
Opportunities in the environment Threats in the environment
Figure 3: SWOT analysis
You are not obligated to use a SWOT (see figure 3). If you use a SWOT, tell us what it means – the so what! Look at your relative strengths and opportunities to identify strategies; for example, the market is growing, and your brand is the strongest, suggests you will seek to dominate that market by investing in the brand. If you are a start-up and the environment is getting harder (threats), then it suggests maybe you need a partner with stronger resources, more funding etc… SWOT must move beyond the descriptive. If there is nothing you can do with SWOT, don’t use it!
1.2 Customer Analysis
1.2.1 Customer behaviour
For B2B, we refer to this as “business buying process” and for B2C we refer to “consumer behaviour”. Consumer behaviour is a vast field and you cannot do it justice in the confines of a marketing plan. However, we are looking for some insight that suggests consumers will appreciate your offer. Under consumer behaviour, we considered four areas: affect, cognition, environment and behaviour. It is almost always relevant to consider consumer behaviour in a B2C marketing plan, or at least be explicit about your assumptions as to why people buy. This discussion of behaviour inevitably bleeds into market segmentation and targeting. In the B2C
world, we describe the types of customers in the market and or the type of customer who buys from us, we wish would buy from us. For B2B we explored two frameworks: the Decision Making Unit (DMU) and type of purchase
(New Buy, Rebuy, Modified Rebuy). You should choose one or both to identify what sort of selling-purchase process yowish to engage with, and with whom in the buying organisation you need to engage. Again, the analysis in this section must have some consequences in the development of your marketing mix. For example, if the DMU analysis suggests that the DMU for your Big Data/IT solution has changed from being an IT exclusive issue to one that is only recommended by IT but authorised by the marketing director, then your marketing mix needs to have strategies that address both groups in the organisation. If your company traditionally sells to IT people, then the change in the DMU requires new people who can sell to marketing,
perhaps new features (usability), different pricing etc.
1.2.2 Market Segmentation
Kotler reportedly said that “if you are not talking segments, you are not talking marketing.”
Your plan is based upon the segment(s) that you target. It defines the addressable market, the marketing mix needed to win that target and how much you need to spend. Segmentation is often the weakest part of the plans, and it is tough to do. However, demonstrate that you are thinking about it beyond a surface level. You will find some interesting opportunities if you
think creatively about segmentation.
You should not segment on the basis of the offer (product, service, product service bundle),
but based on customer characteristics. Product types are not really segments. Again, we
refer to the personal computing market being blind-sided by mobile data devices (but they
aren’t computers!). Similarly, if you are selling in B2B, SMEs are not a segment as not all
small businesses have the same needs and capabilities. Company size might be a first cut
in segmentation, but go one more level down to identify different SMEs according to their
strategies, location, type of customer they have, the role your solution plays in their business
(critical or not). In segmentation, we talk about “bases” and methods. In this module, we do
not cover the details about methods, because it is assumed that as you progress in your
careers, you will have access to specialist resources with the appropriate statistical/data
science capabilities. However, it is incumbent on management to think profoundly on the
bases of segmentation; what are the dimensions of customer need, behaviour, attitude that
discriminate. For example, the level of financial assets is likely a basis (not the only one) for segmenting retail financial services, attitude to fashion is a basis for segmenting clothing and family size a basis for segmenting retail food. We reprise from the module some bases for
segmentation in both B2B and B2C (see table 2). Overall, in your segmentation consider the
following questions:
• “Why” do customers seek the specific experience? What are the important benefits
they consider when making their selection?
• Then consider the “Who” are the customers? Here you may consider demographics,
lifestyle etc. that can further help you build the segment
• “What” do customers do? The “what” is critical in capturing their behaviour in terms of
some of the behavioural bases: loyalty, usage, profitability that may also link with what
value the segment brings to the firm over their lifetime (CLV).
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Business to Consumer Marketing Business to Business Marketing
• Demographics (age, location, income,
education)
• Psychographic – attitudinal, how
consumers feel about their lives, identity
etc.
• Usage characteristics – when, how they
use, how expert they are. How they
extract value from your offer.
• Perceived risk (functional, emotional,
social)
• High versus low involvement in the
category
• Purchase process or occasion –
chocolates bought to eat versus gift
• Webographics – online behaviour (sites
visited, liked, abandoned carts)
• Analysis of the decision-making unit
(DMU) Risk
• Value in use, application. How firms
extract value from your offer
• Purchasing – supply chain strategy
(partnership, market based)
• Firm characteristics: size, geographic
spread, complexity
• Geography
• Industry type
Table 2: B2C vs. B2B marketing
See Appendix D for sources of demographic, psychographic and webographic information to
build and describe your segments.
You might want to use different bases of segmentation in stages to build your segments.
Consider a major grocer planning to launch a new store in Milton Keynes. It might take a first
cut at segmentation by distance to the store (5 minutes by car, 15 by transport and 20 on foot
for example). Then the next slice might be by household size, then another slice by presence
or not of very young children and then perhaps attitude to food health… This helps you
develop more detailed descriptions of the segments.
If you don’t find that helpful for your plan, another way of approaching segmentation is “jobs
to be done”. Put yourself in the customers’ shoes and think about jobs the customer wants to
do. For example, a job to get done might be to have a break on the weekend from cooking
and you can solve this by buying excellent ready (partially ready) meals, ordering in, cooking
(staple or exotic). Remember to think about market segments on the basis of customer needs,
not what we have to sell.
Let us talk about B2B as well and use the case of Dow Corning that made silica-based
products as an example. Faced with low-priced competition, it segmented its market into
three types of customer by job to be done – value to be achieved. One segment wanted all
the science (product innovation and engineering support) and were willing to pay for it, the
other end is characterised by low price commodity purchasing of standard, old products. The
third segment wanted logistics excellence – on time, just in time, in full etc…
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Section Two: Market Design
2.1 Growth
2.1.1 Growth Objectives
We define this as growth across domains of cost reduction, revenue, margin, share of market.
It is for you to determine your SMART objectives, but they must be SMART. Not all marketing
plans are for growth, but 99% of those our students prepare are. There are exceptions: you
might plan to defend share as competition intensifies, or you may have social objectives in
the not for profit. Albeit in the latter case, we would advise you to identify them as growth
objectives, for example, reduce the level of obesity in this target market from 25% to 20% by
2025.
The growth objectives are stated up front in the executive summary AND YOU NEED NOT
REPEAT them here in the plan unless you have a specific reason or wish to elaborate on
them in light of the analysis in section one.
2.1.2 Strategy to Achieve the Growth Objectives
The strategies are also stated up front in the executive summary – AND YOU NEED NOT
REPEAT them unless there is some elaboration to be made. You may skip sections 2.1 and
2.2 and go directly to section 2.3 (target market selection) as it is a natural follow-on from
segmentation in section one.
If you discuss strategy, we have three primary tools (all two-by-two matrices) discussed in
the course: Ansoff – Gap Analysis (see figure 4), BCG (Boston Consulting Group – Profit-
Growth-Matrix) and the DPM (Directional Policy Matrix). Please note that these tools are all
designed for PORTFOLIOs of products / services rather than single new products. However,
you might find placing your planned activity on the two-by-two instructive. If you use them,
please tell us the implications. These tools must go beyond the descriptive.
Figure 4: Ansoff matrix
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Recall that the Ansoff categorises innovation by category of risk. In the context of the plan,
what is important is the four generic strategies that make up a gap between the time you write
the plan (year 0) and the planning period (n years) (see figure 5). How much of the overall
growth objective comprises penetration, product development, market development and
diversification? What are the implications for the plan?
Figure 5: Strategies to fill the “marketing gap”
The course and attendant materials describe both the BCG and DPM tools. Use them
carefully as they are designed for portfolios and they provide four generic strategies: harvest,
divest, invest and decide to invest or divest.
2.1.3 Target market selection
Once you have segments, then you need to assess how attractive they are to you. Is it a
target that is readily addressable (you can effectively reach them by media)? Is it large
enough to be interesting? Do you have the resources to go after that? Use the Market
Attractiveness Factors (MAF) and the Critical Success Factors (CSF) discussed in class in
the context of the Directional Policy Matrix (DPM) to aid you with the selection of your target
market. The SWOT analysis can be used here with the focus being on the target segment.
A tip. Often a realistic SWOT or CSF analysis will determine that you are weaker than
competitors in the market you wish to enter. Too many plans identify the issue and then
practically ignore with a plan for growth based on limited spending; no real justification. Or
your analysis leads you to compete head to head with much larger, better funded competitors
with whom you cannot possibly match marketing investment; but the student ploughs on. This
is possibly because you have invested so much time and emotion in your idea, you won’t
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start over again. One resolution to this problem is re-segment that market to find niches where
you are stronger than rivals and go for those. So, instead of launching your new cash
management system for all SMEs in the USA, you determine that your solution works really
well for construction and professional services (law offices, accountants). So, you target those
SMEs only, build reputation and competence. Then, in the next planning cycle, you might
expand from your niche until eventually you can compete head to head with the market
leaders. These decisions are what makes it a strategic marketing plan.
2.2 Value Proposition
2.2.1 Brand Positioning
Kotler (2003) defines brand positioning as “the act of designing the company’s offering and
image to occupy a distinctive place in the mind of the target market”.
The main tool we discussed in the module is called “perceptual mapping”. But please
remember that we used perceptual maps twice – once to plots segments and once to plot
brands. In the latter case, we call it a positioning map (see figure 6) Of course, presenting
segmentation as two dimensional is limiting, but it conveys a sense of what positioning is all
about. Once you have an idea of at least two dimensions the target segment cares about,
you create a two-by-two and place where you are/wish to be and with whom do you think you
compete. An example is illustrated below (you may disagree with the perceptions reflected in
it).
Figure 6: Positioning map
We talk about positioning normally when we wish to enter a market or reposition an existing
brand. So, we look for empty space: is there room for a healthy all-family restaurant? Or
maybe Wagamama (noodle bar really) wants to reposition as a healthy adult chain and move
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to the right of the diagram. Positioning is achieved by managing the marketing mix (7Ps);
described in the next section.
2.2.2 Marketing Mix
The marketing mix represents a coherent set of policies that effectively positions the offer
and assures the achievement of the marketing plan. The 7Ps are not a description of your
wishes, but a prescription of the plan, a set of specific policies that are costed and reflected
in your P&L. A mere summary chart is frankly not an effort commensurate with a Master’s
level study. For example, too many plans merely say: Price – premium price. That does not
help. Identify the price relative to the important competitors. Promotion – merely telling us
that you will be online and use social media is not sufficient. The table below can be used as
a summary and then expanded below with detail under each P or as a detailed plan.
We use the full 7Ps (Booms and Bitner, 1980) shown in table 3. The marketing mix MUST be
supported by separate detail as illustrated here.
Marketing Mix
Element
Specific strategies
Product / Offer Which products, services, bundles – be specific.
Price Price versus competitors or benchmarks (separate
table of prices helpful)
Place Channels of distribution – if multiple channels, indicate
the mix between, for example, retail, online and third
parties
Promotion Be specific: which media, how much spend versus
competitors
Physical Evidence Clues the customer will hopefully notice before buying
and during use
People Normally customer facing employees
Processes The processes that support the customer facing people
Table 3: Strategies relating to the marketing mix
For purposes of this plan, the 7Ps framework will comprise elements of the fourth quadrant
of the Cranfield marketing circle – i.e. communicating with customers and sales/key account
management. Describe any relevant activities for sales and account management as well as
media in the promotion P. If sales is to be re-engineered, then there will be sales/key account
management implications under people and processes as well.
Product / Price:
A really simple way of building this part of the mix is through a table with your offer, prices
and competitors (see table 4).
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Our Offer Competitor A (in
our segment)
Competitor B (in
our segment)
Core product 2 MBS leased line
£50 per month
2 MBS leased line
£50 per month
2 MBS leased line
£40 / m
4 MBS leased line
£75 /m
SLA Line plus 99.5%
uptime, maximum 8
hour outage £75 /m
Line plus 99.5%
uptime, maximum 8
hour outage £75 /m
Line plus 99.5%
uptime, maximum 8
hour outage £100 /m
for 2 MBS, £125 for 4
MBS
Managed desktop
contract
Agreed desktop
performance, 99.9%
uptime, no outage at
£5 /m per desktop
Agreed desktop
performance, 99.9%
uptime, 4 hour
outage maximum at
£3.5 /m per desktop
No managed
contract
Table 4: Delineating product and price
Place:
You can find a simple means of illustrating your channel policy in table 5..
Channel % Revenue
Third party retailers (online and offline) 40%
Direct online sales 35%
Company retail channel (online and
offline)
10%
Bundled with third party offers 15%
Table 5: Splitting up distribution channels
Promotion:
You really need to do this to do the P&L. It comprises advertising, online activities and offline
promotion. Promotion exists to achieve communication aims, such as building awareness of
your offer (if it is new), establishing in the minds of your target audience some new information
about your offer or reinforcing your message at a key point in the purchase cycle. This must
be discussed.
The level of promotion is difficult to set in the context of the short-term project. Promotion as
a fixed % of turnover is not good policy. You don’t spend almost nothing in launch year and
expect to miraculously build share year-on-year so that by year five your spending
approaches the industry norms. Spending comes upfront to communicate to your target
group and is maintained thereafter most often in line with competitor spending. We use a
term called “share of voice” in this regard to estimate how much your spending represents of
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all promotional spending by all players in that category or market. You can look at spending
of competitors directly to get a benchmark. What is not credible is a plan with one line in the
P&L for promotion at 100K per annum against revenue of tens of millions. The promotion
planner in table 5 helps to guide your thinking.
Promotion Planner – Estimates for Year One
Activity Our Spend Competitor A
Spend
Segment /
Market
spending (est.)
Paid for advertising (TV,
Radio, Print)
Offline promotion (e.g.
events, in store)
Search marketing
(Google, Bing, Baidu)
Email marketing
Social Media advertising
and content (inclusive of
people needed)
Total Promotion
Spend per new customer
Table 5: Promotion planner
You might not be able to deconstruct spending so finely but you should have an idea of
promotion spending versus key competitors and what that does for customer acquisition costs
(CAC).
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Section Three: Aligning to Customers
3.1 Strategic CRM and Channel Integration
In addition to a marketing mix, you might have a customer-centric or customer experience
growth strategy. Of course, your marketing mix is created on the basis of customer insight,
segmentation and targeting so by definition is customer-centric. However, you might also
wish to explore a customer development strategy.
• Increase the product penetration of your existing customers. You write a plan for a bank
to increase the number of its customers buying a pension product for which you wrote
your 7P marketing mix above.
• Upsell your current customers who buy IT systems support from you to buy higher value
systems design and integration services for which you have written a 7P marketing mix.
• Or maybe your entire plan is based on decreasing customer defection. For example, you
work for a mobile phone company and you write a plan to reduce customer churn from
20% to 18%.
In these circumstances, you should leverage some of the learning on customer management:
• Loyalty
• Customer Lifetime Value
• Customer Acquisition Cost*
• Channel Integration
• Customer Experience
*Customer Acquisition Cost (CAC) is normally a key metric in a growth-based marketing plan.
It is a great sense check. If we see a plan where for a small investment, hundreds of
thousands new customers sign up, we look carefully at the figures. It is hard to get validated
data on CAC, but web sites suggest for consumer services in the US somewhere between
$200 and $400 per customer. Most marketing plans by students dramatically underestimate
how much it costs to find, sell to and onboard new customers.
3.2 Technology and Capability Development
Plans often imply that a company will do something new and different: sell to different buyers,
enter a new market, expand overseas. Inevitably, the company needs to hone its marketing
capabilities to achieve the plan. This involves some change management. For purposes of
the plan, it is sufficient to identify this, assess intuitively if it is a big change or not, and allow
some figure for change management in the P&L. Some changes require major investments
in technology for which many of you will find it hard.
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Section Four: Results
4.1 Measurement
Your plan may have more measurements than captured by results and financial analysis
below and you are free to include them here. Some metrics you might draw on are featured
in appendix E.
4.2 Results and Financial Analysis
The financial implications of your plan represent the component of the plan covering the
Accounting and Finance module and you will need to follow the instructions as laid out by the
respective module leaders.
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Appendix A: Directional Policy Matrix (DPM)
The Directional Policy Matrix (DPM) is a portfolio planning tool that helps you decide which
projects merit most investment. It assumes that you can invest in different market segments.
The DPM matches the attractiveness of the market segment to the competitiveness of your
offer. It is presented as a two-by-two and the solutions represent the generic strategies we
covered in the course: invest, decide, divest, maintain.
As a preamble to creating a DPM, one must decide on a definition of the market and segments
because market attractiveness is really about segment attractiveness and strength relative to
competitors is within the segment. There are two axes to the DPM; market attractiveness and
strength relative to competitors.
You can use the tools independent of the overall DPM to assess a single offer.
Market Attractiveness Factors (MAFs)
Markets are attractive to companies for many reasons such as size of the market, growth,
margin or type of customer. It is for the company or SBU to determine the criteria and their
importance – there is no general formula. However, the criteria should be the same across
the portfolio so that one is making valid comparisons. Identifying criteria and agreeing their
weighting, provides strategic discussion and objectivity to the process. You should identify
the market attractiveness factors and their weights (out of 100%) to create a score. See
appendix B for a completed example. Ideally, you stick to no more than 5 factors.
MAF Weight
(%)
Segment A Segment B Segment C
Score Total Score Total Score Total
Total
Strength Relative to Competitors – Critical Success Factors (CSFs)
One assesses relative strength by first identifying, from the customers’ perspective, the
market segment’s critical success factors. Then obtain the customers’ assessment of how
important each criterion is and how well you perform relative to your best competitors in that
area. A completed example is in appendix C.
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CSF Weight
(%)
You Competitor A Competitor B
Score Total Score Total Score Total
Total
• Critical Success Factors normally are given by customers through research. You will likely
have to make an educated guess for the plan you submit. A very brief justification of the
chosen factors might be useful. Try to stick to no more than 5 or 6 factors.
• Importance weighting is a score out of 100%.
• Company rating is how the firm performs against that criterion. Normally we use a scale
between 1 and 10 for each critical success factor. The ratings are normally also generated
by customer research. However, you might have to make an educated guess at times.
Again, a justification (brief) of your rating scores might be useful and these would link to
your Market Sensing pieces.
• Company score is the company rating times the weight.
• Best competitor rating and score is calculated as per customer score. Best competitor is
the best in the target market (segment).
• There are two options to calculate relative business strength as discussed in class:
o Option 1: The company score subtracted by the best competitor. à In this case,
the dividing line on the x-axis of the DPM is 0.
o Option 2: The company score divided by the best competitor. à In this case, the
dividing line on the x-axis is 1.
o Be clear on which approach you’re using, make it clear in the plan and be
consistent!
The MAFs and CSFs generated for each business unit, product, customer or other unit of
analysis give the scores for the y- (in the case of MAF) and x-axes (in the case of CSF) of
the Directional Policy Matrix. The circle size is normally scaled to current turnover (sales
revenue). It might be worth including projections for turnover if your plan is successfully
implemented.
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The Directional Policy Matrix (DPM)
High
Low High
less than one 1.0 less than one
Business strength relative to competitors Low
Market
attractiveness
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Appendix B: Market Attractiveness Factor analysis example
Appendix C: Critical Success Factor analysis example
Critical
Success
Factor
Importance
Weighting
Company
Rating
Company
Score
Best
Competitor
Rating
Best
Competitor
Score
Relative
score
Price 50 6 3.0 8 4.0
Features 25 8 2.0 7 1.8
Service 15 7 1.1 12 1.8
Reliability 10 6 0.6 5 0.5
Total 100% 6.7 8.1 0.83
Total 100 6.45 6.0 7.0
Cyclicality 10 2.5 0.25 3 0.3 2.5 0.25
Competition 10 8 0.8 8 0.8 4 0.4
Vulnerability 15 5 0.75 6 0.9 6 0.9
Size 15 6 0.9 5 0.75 8 1.2
Profitability 25 9 2.25 8 2.0 7 1.75
Growth 25 6 1.5 5 1.25 10 2.5
Score Total Score Total Score Total
Weight Segment A Segment B Segment C
(%)
Attractiveness
Source: M McDonald
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Appendix D: Sources to Build and Describe Segments
Research sources to capture Demographic and Psychographic insights
United Nations Statistics Division https://unstats.un.org/home
World Bank https://data.worldbank.org/
European Commission https://ec.europa.eu/info/statistics_en
Office for National Statistics https://www.ons.gov.uk/ (includes internet stats and BUSINESS
data)
CIA Factbook https://www.cia.gov/library/publications/the-world-factbook/
National Bureau of Statistics of China http://www.stats.gov.cn/english/
UK Office of National Statistics https://www.ons.gov.uk/
Mintel or similar through the library
Research sources to capture Webographics
Internet, digital and social statistics https://www.statista.com/
Digital statistics https://wearesocial.com/blog/2020/01/digital-2020-3-8-billion-people-usesocial-
media
Internet statistics https://www.internetlivestats.com/
European statistics https://ec.europa.eu/digital-single-market/en/use-internet
UK statistics https://www.ofcom.org.uk/research-and-data
Statistics on apps https://www.appannie.com/en/insights/
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Appendix E: Marketing Metrics Examples
Metric type Traditional Digital
Financials • Sales
• Return on investment
• Sales
• Return on investment
• Conversion rate
• Cost per action
• Cost per lead
• Cost per customer
• Customer Lifetime Value
Customer
volume
• Total number of customers • Number of views (posts, videos, ads)
• Fans, likes, followers
Customer
behaviour
• Loyalty/retention • Volume/value of repeat sales
• Willingness to recommend
Customer
satisfaction
• Number of complaints (level of
dissatisfaction)
• Net Promoter Score/Customer
Satisfaction Index
• Sharing, re-tweets
• Favourites
• Feedback to your business
• Comments on the site
• Ratings/Reviews
• Advocates positively promoting your
business
Product
quality
• Relative perceived quality • Number of returns
• Review scores
Market share • Volume or value • Number of visitors to owned media
Market
growth rate
• The percentage at which your
market is growing (or declining)
offline
• The percentage at which your market
is growing (or declining) offline and
online
Awareness • Unprompted recall • Share of voice
• Brand sentiment
• Talking about you off site
Engagement • Mailing list • Email subscriptions
• Group membership
• Downloads
• Love/Like this
Distribution/
availability
• Number of stockists • Online availability
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