Think of an idea for a product or service that you think you might be able to sell in your area. Create a general marketing plan, based upon the readings from this unit, and complete some basic market research. Include information about who your customer is, how you attract their attention, and how to determine the pricing of your product or service. Your journal entry should be at least 500 words in length.

Answer:

Star Software, Inc. Marketing Plan:

I. EXECUTIVE SUMMARY: Star Software, Inc., is a small, family-owned corporation in the first year of a transition from first-generation to second-generation leadership. Star Software sells custom-made calendar programs and related items to about 400 businesses, which use the software mainly for promotion. Star’s 18 employees face scheduling challenges, as Star’s business is highly seasonal, with its greatest demand during October, November, and December. In other months, the equipment and staff are sometimes idle. A major challenge facing Star Software is how to increase profits and make better use of its resources during the off-season. An evaluation of the company’s internal strengths and weaknesses and external opportunities and threats served as the foundation for this strategic analysis and marketing plan. The plan focuses on the company’s growth strategy, suggesting ways in which it can build on existing customer relationships, and on the development of new products and/or services targeted to specific customer niches. Since Star Software markets a product used primarily as a promotional tool by its clients, it currently is considered a business-to-business marketer.

II. ENVIRONMENTAL ANALYSIS:

Founded as a commercial printing company, Star Software, Inc., has evolved into a marketer of high-quality, custom-made calendar software and related business-tobusiness specialty items. In the mid-1960s, Bob McLemore purchased the company and, through his full-time commitment, turned it into a very successful family-run operation. In the near future, McLemore’s 37-year-old son, Jonathan, will take over as Star Software’s president and allow the elder McLemore to scale back his involvement.

A. The Marketing Environment :

1. Competitive forces: The competition in the specialty advertising industry is very strong on a local and regional basis but somewhat weak nationally. Sales figures for the industry as a whole are difficult to obtain since very little business is conducted on a national scale. The competition within the calendar industry is strong in the paper segment and weak in the software-based segment. Currently paper calendars hold a dominant market share of approximately 90 percent.

2. Economic forces: Nationwide, many companies have reduced their overall promotion budgets as they face the need to cut expenses. However, most of these reductions have occurred in the budgets for mass media advertising (television, magazines, newspapers). While overall promotion budgets are shrinking, many companies are diverting a larger percentage of their budgets to sales promotion and specialty advertising. This trend is expected to continue as a weak, slowgrowth economy forces most companies to focus more on the “value” they receive from their promotion dollar.

3. Political forces:There are no expected political influences or events that could affect the operations of Star Software.

4. Legal and regulatory forces: In recent years, more attention has been paid to “junk mail.” A large percentage of specialty advertising products are distributed by mail, and some of these products are considered “junk.” Although this label is attached to the type of products Star Software makes, the problem of junk mail falls on the clients of Star Software and not on the company itself.

5. Technological forces: A major emerging technological trend involves personal information managers (PIMs), or personal digital assistants (PDAs). A PDA is a handheld device, similar in size to a large calculator, that can store a wide variety of information, including personal notes, addresses, and a calendar. Some PDAs even have the ability to fax letters via microwave communication.

B. Target Market(s):

By focusing on commitment to service and quality, Star Software has effectively implemented a niche differentiation strategy in a somewhat diverse marketplace. Its ability to differentiate its product has contributed to superior annual returns. Its target market consists of manufacturers or manufacturing divisions of large corporations that move their products through dealers, distributors, or brokers. Its most profitable product is a software program for a PC-based calendar, which can be tailored to meet client needs by means of artwork, logos, and text. Clients use this calendar software as a promotional tool, providing a disk to their customers as an advertising premium. The calendar software is not produced for resale. The calendar software began as an ancillary product to Star’s commercial printing business. However, due to the proliferation of PCs and the growth in technology, the computer calendar soon became more profitable for Star than its wall and desktop paper calendars. This led to the sale of the commercial printing plant and equipment to employees. Star Software has maintained a long-term relationship with these former employees, who have added capabilities to reproduce computer disks and whose company serves as Star’s primary supplier of finished goods. Star’s staff focuses on the further development and marketing of the software.

C. Current Marketing:Objectives and Performance:

Star Software’s sales representatives call on potential clients and, using a template demonstration disk, help them create a calendar concept. Once the sale has been finalized, Star completes the concept, including design, copywriting, and customization of the demonstration disk. Specifications are then sent to the supplier, located about a thousand miles away, where the disks are produced. Perhaps what most differentiates Star from its competitors is its high level of service. Disks can be shipped to any location the buyer specifies. Since product development and customization of this type can require significant amounts of time and effort, particularly during the product’s first year, Star deliberately pursues a strategy of steady, managed growth.

III. SWOT ANALYSIS :

A. Strengths: Star Software’s product differentiation strategy is the result of a strong marketing orientation, commitment to high quality, and customization of products and support services.

B. Weaknesses:The highly centralized management hierarchy (the McLemores) and lack of managerial backup may impede creativity and growth. Too few people hold too much knowledge.

C. Opportunities:Advertising expenditures in the United States exceed $132 billion annually. More than $25 billion of this is spent on direct-mail advertising, and another $20 billion is spent on specialty advertising. The potential for Star Software’s growth is significant in this market.

D. Threats: Reengineering, right-sizing, and outsourcing trends in management may alter traditional channel relationships with brokers, dealers, and distributors or eliminate them altogether.

IV. MARKETING OBJECTIVES:

Star Software, Inc., is in the business of helping other companies market their products and/or services. Besides formulating a marketing-oriented and customerfocused mission statement, Star Software should establish an objective to achieve cumulative growth in net profit of at least 50 percent over the next five years. At least half of this 50 percent growth should come from new, nonmanufacturing customers and from products that are nonseasonal or that are generally delivered in the off-peak period of the calendar cycle.

V. MARKETING STRATEGIES:

Target market: Large manufacturers or stand-alone manufacturing divisions of large corporations with extensive broker, dealer, or distributor networks.

Example: An agricultural chemical producer, such as Dow Chemical, distributes its products to numerous rural “feed and seed” dealers. Customizing calendars with Chicago Board of Trade futures or USDA agricultural report dates would be beneficial to these potential clients.

Marketing Mix:

1. Products: Star Software markets not only calendar software but also the service of specialty advertising to its clients. Star’s intangible attributes are its ability to meet or exceed customer expectations consistently, its speed in responding to customers’ demands.

2.Price: Star Software provides a high-quality specialty advertising product customized to its clients’ needs. The value of this product and service is reflected in its premium price.

3. Distribution: Star Software uses direct marketing. Since its product is compact, lightweight, and nonperishable, it can be shipped from a central location direct to the client via United Parcel Service, FedEx, or the U.S. Postal Service. The fact that Star can ship to multiple locations for each customer is an asset in selling its products.

4. Promotion: Since 90 percent of Star’s customers reorder each year, the bulk of promotional expenditures should focus on new product offerings through direct-mail advertising and trade journals or specialty publications. Any remaining promotional dollars could be directed to personal selling (in the form of sales performance bonuses) of current and new products.

VI. MARKETING IMPLEMENTATION:

Marketing Organization: Because Star’s current and future products require extensive customization to match clients’ needs, it is necessary to organize the marketing function by customer groups. This will allow Star to focus its marketing efforts exclusively on the needs and specifications of each target customer segment. Star’s marketing efforts will be organized around the following customer groups: (1) manufacturing group; (2) nonmanufacturing, business-to-business group; (3) consumer product licensing group; and (4) industry associations group. Each group will be headed by a sales manager.

VII. EVALUATION AND CONTROL:

A. Performance Standards and Financial Controls: A comparison of the financial expenditures with the plan goals will be included in the project report. The following performance standards and financial controls are suggested:

• The total budget for the billing analysis, new-product research, and the customer survey will be equal to 60 percent of the annual promotional budget for the coming year.

• The breakdown of the budget within the project will be a 20 percent allocation to the billing cycle study, a 30 percent allocation to the customer survey and marketing information system development, and a 50 percent allocation to new-business development and new-product implementation.

B. Monitoring Procedures: To analyze the effectiveness of Star Software’s marketing plan, it is necessary to compare its actual performance with plan objectives. To facilitate this analysis, monitoring procedures should be developed for the various activities required to bring the marketing plan to fruition. These procedures include, but are not limited to, the following:

• A project management concept will be used to evaluate the implementation of the marketing plan by establishing time requirements, human resource needs, and financial or budgetary expenditures.

• A perpetual comparison of actual and planned activities will be conducted on a monthly basis for the first year and on a quarterly basis after the initial implementation phase. The business analysis team, including the marketing director, will report their comparison of actual and planned outcomes directly to the company president.

• Each project team is responsible for determining what changes must be made in procedures, product focus, or operations as a result of the studies conducted in its area.