Project of Strategic Marketing

On

Group Name: Opportunity Seizers

Company Name: GFK corporation. (Detergents)

Submitted to: Prof. Awais Khan

Submitted by:

M. Farhan Saleem. Reg. No. L1f09mbam1132

Hussain Zain ul Abiden. Reg. No. L1f09mbam1138

Syed Ali Kamran. Reg. No. L1f09mbam1165
 UNIVERSITY OF CENTRAL PUNJAB LAHORE
TABLE OF CONTENTS

1.0 Introduction...................................................................................2
1.2 Mission Vision...............................................................................3
1.3 Values...........................................................................................3
...........................................................................................................................................
2.0 Situation Analysis.........................................................................4
2.1 Market Summary..........................................................................4
2.2 Market potential............................................................................4
2.3 Demographic Trends.....................................................................4
2.4 Consumer Behaviour.....................................................................5
2.5 Competitive Environment.............................................................5
2.6 Economy.......................................................................................6
2.7 Legal and Political Issues..............................................................7
3.0 Objectives and Action Plans.......................................................9
3.1 Product........................................................................................10
3.2 Place...........................................................................................10
3.3 Price............................................................................................11
3.4 Promotion....................................................................................11
4.0 Microenviornment......................................................................12
5.0 Macroenviornment.....................................................................13
6.0 Distribution Strategy.................................................................15
7.0 Financial Aspects........................................................................17
7.1 Fixed Costs..................................................................................17
7.2 Product Launching Cost..............................................................17
7.3 Unit Cost (Variable Cost) .............................................................................17
8.0 Advertising Goals.......................................................................18
9.0 BCG, SWOT, PLC....................................................................20-22
10.0 Overall Assessment of Opportunity......................................23
11.0 Advertising Objectives............................................................24

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12.0 Advertising and Marketing Budget..................................25-26
Introduction:
We are launching a brand named “Spin n Clear” under the umbrella of
GFK corporation, Spin n Clear is very effective detergent agent by its
composition. Managers are expecting that it will make a sound image
in the consumers evoked set of mind.

A detergent (as a noun) is a material intended to assist cleaning. The

term is sometimes used to differentiate between soap and
other surfactants used for cleaning. As an adjective pertaining to a
substance, it (or "detersive") means "cleaning" or "having cleaning
properties"; "detergency" indicates presence or degree of cleaning
property.

A detergent powder which gives you a better cleaning power with

much less effort than the similar priced competitors.
Logo of Spin N Clear:

Tag line of Spin N Clear:

“Stains No More”

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The statement is showing the operativeness of the detergent. It’s
concise, achievable and realistic. Create a good sense in the mind of
reader.
Our Mission:
Our mission is to add vitality to life. We meet everyday needs for
hygiene, and personal care with brands that help people feel good and
get more out of life.
Our Vision:
To be leading firm in the detergent industry, by providing better
quality services to customers and gain larger customer base and
greater market share.
Our Values:
Integrity
• We always try to do the right thing.
• We are honest and straightforward with each other.
• We operate within the letter and spirit.
• We uphold the values and principles of GFK company in every
action and decision.
• We are data based and intellectuality honest in advocating
proposals, including recognizing risks.
Leadership
• We are all leaders in our area of responsibility, with a deep
commitment to delivering leadership results.
• We have a clear vision of where we are going.
• We focus our resources to achieve leadership objectives and
strategies.
• We develop the capability to deliver our strategies and eliminate
organizational barriers.
Ownership
• We accept personal accountability to meet our personal needs,
improve our systems and help others improve their
effectiveness.
• We all act like owners, treating the company’s assets as our own
and behaving with the company’s long term success in mind.
Passion for Winning
• We are determined to be the best at doing what matters most.
• We have a healthy dissatisfaction with the status quo.

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 • We have a compelling desire to improve and to win in the
marketplace.
Trust
• We respect our GFK colleagues, customers and consumers, and
treat them as we want to be treated.
• We have confidence in each other’s capabilities and intentions.
• We believe that people work best when there is a foundation of
trust

Situation Analysis

Market Summary

At GFK CORPORATION, we have detailed information about the kitchen

appliance market as well as a comprehensive understanding of
consumer needs. According to the 2003 survey of household energy
use produced by Natural Resources Pakistan, home owners account for
74.4% of Detergent owners. Based on this information, we have
decided to target current and new home owners during our first year
of launch, as they are most likely to either have a Detergent or will
need one installed. The market size (in households) is based on
information from Statistics Pakistan from 2003, it is estimated that
there are over 11 million households in Pakistan. Of these households,
approximately 8 million are owned, hence 3 million households are
rented. Conversely, approximately 6 million home owners (households)
own a Detergent.

Market potential

The household penetration of domestic electrical appliances is very

well developed in most sectors of the Pakistani market. Detergents are
a potential market for penetration, as they are convenient for young
families with two income earners.
Retail volume sales of Detergents are predicted to increase by 13%
over the 2003 to 2008 period. Household penetration of Detergents
increased over the review period, yet the relatively low penetration

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rate presents a continued opportunity for new sales over the
forecasted years.

Demographic Trends

The trend toward convenience is also largely driven by the shortened

time that households devote to household chores, as work placed
greater demands on time, thereby leaving remaining time during the
average day devoted to leisure rather than cooking and cleaning.
According Statistics Pakistan, the number of new constructions has
been consistent since 2002. In 2005, there were 135,461 new
constructions. This is an important market for GFK CORPORATION to
target as new appliances are sought items for these consumers.

Pakistan has a large informal economy, which the government is trying

to document and assess. Approximately 49% of adults are literate, and
life expectancy is about 64 years. The population, about 168 million in
2007, is growing at about 1.80%.

Relatively few resources in the past had been devoted to socio-

economic development or infrastructure projects. Inadequate provision
of social services, high birth rates and immigration from nearby
countries in the past have contributed to a persistence of poverty. An
influential recent study concluded that the fertility rate peaked in the
1980s, and has since fallen sharply. Pakistan has a family-income Gini
index of 41, close to the world average of 39.

Consumer Behaviour

With competition being prominent throughout the Detergent market

segment, there are many different types and styles of Detergents
available to own.
Built-in units accounted for 94% of retail volume sales in 2003, up from
91% in 1998. Although there are counter top and portable models
available, these are rarely found in Pakistani homes. With the size and

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design of most kitchens, built-in models are easily accommodated and
the added convenience of not having to manually hook the appliance
to the sink and the space-saving features of a built-in Detergent are
primary factors behind the decline of the freestanding model. In fact, it
is now difficult to find freestanding Detergents in retail outlets, as most
models on the sales floor are built-in.

Economy

The economy of Pakistan is the 27th largest economy in the world in

terms of purchasing power, and the 48th largest in absolute dollar
terms. Pakistan has a semi industrialized economy that mainly
encompasses textiles, chemicals, food processing, agriculture and
other industries. Growth poles of Pakistan's economy are situated
along the Indus River, diversified economies of Karachi and Punjab's
urban centers, coexist with lesser developed areas in other parts of the
country. The economy has suffered in the past from decades
of internal political disputes, a fast growing population, mixed levels of
foreign investment, and a costly, ongoing confrontation with
neighboring India. However, IMF-approved government policies,
bolstered by foreign investment and renewed access to global
markets, have generated solid macroeconomic recovery the last
decade. Substantial macroeconomic reforms since 2000, most notably
at privatizing the banking sector have helped the economy.

GDP growth, spurred by gains in the industrial and service sectors,

remained in the 6-8% range in 2004-06. Due to economic reforms in
the year 2000 by the Musharraf government. In 2005, the World
Bank named Pakistan the top reformer in its region and in the top 10
reformers globally. Islamabad has steadily raised development

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spending in recent years, including a 52% real increase in the budget
allocation for development in FY07, a necessary step toward reversing
the broad underdevelopment of its social sector. The fiscal deficit - the
result of chronically low tax collection and increased spending,
including reconstruction costs from the devastating Kashmir
earthquake in 2005 was manageable.

Inflation remains the biggest threat to the economy, jumping to more

than 9% in 2005 before easing to 7.9% in 2006. In 2008, following the
surge in global petrol prices inflation in Pakistan has reached as high
as 25.0%. The central bank is pursuing tighter monetary policy while
trying to preserve growth. Foreign exchange reserves are bolstered by
steady worker remittances, but a growing current account deficit -
driven by a widening trade gap as import growth outstrips export
expansion - could draw down reserves and dampen GDP growth in the
medium term.

Technology
The Spin n Clear Detergent uses cryogenic technology to clean your
Stains in a way that is economically and ecologically viable. The use of
dry ice pellets allows for a clean method of removing dirt and grime,
while at the same time it does not produce any secondary wastes.
The dry ice medium is chemically neutral, electrically non-conductive
and totally non-abrasive. There are absolutely no secondary wastes
and the material being removed generally becomes light dry dust that
is captured in filters. The dry ice blocks, pellets, and powders are
shown in the diagram below.
Upon impact, the dry ice pellets sublimate immediately to gaseous
carbon dioxide. The dwell time of the dry ice pellets on the surface
material is minimal and other than very slight sub-cooling of the
surface significant heat transfer does not take place. The surface being
cleaned will have an un-appreciable drop in temperature. Contrary to

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popular opinion, the surface is not frozen. This would cause a brittle
state and shattering would be possible.
The majority of the removed material falls to the bottom steel
receptacle. The dirt, being food residue, can simply be composted or
alternatively, the dirt can be vacuumed into your home vacuum
cleaner. The term “ice” is an idiom for dry ice. There is no water in
carbon dioxide. Since the dry ice sublimates from a solid directly to a
gas upon impact, it is a virtual impossibility to leave moisture from the
dry ice itself. The duration of the cleaning process depends upon the
size of the load in the Detergent. A typical run during the scientific
studies showed 20 minutes required.

Legal and Political Issues

As a general trend in legal and political implications relevant to

Detergents, among other home electrical appliances, water and
energy efficiencies are major preoccupations.
As an example, the Energy Star programme is a nationally developed
rating system for energy efficiency for large domestic electrical
appliances, which assigns an Energy Star rating in the form of a sticker
on the appliance at the retail level. Promotion of the Energy Star
program by the Federal Government is supported by national
mandates to increase the efficiency of resource utilization in the
consumer market.
Moreover, there is the regulation of all electrical appliances with a
power supply of more than 30 volts RMS, they must comply with the
Pakistani Electrical Code as stated in the federal Electrical Safety Act.
The industry took a number of corrective measures to comply with
increasingly stringent federal, provincial and local regulations
concerning pollution control. During the 1980s, CSA developed
approximately 30 Energy Efficiency Standards covering a wide array of
appliances, including Detergents.

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In 1993, a new EnerGuide label was introduced to provide the
estimated annual energy consumption rating for each appliance. It also
includes a scale that shows how energy-efficient an appliance is
relative to similar models in an effort to help the consumers select a
model to meet their needs.

Since these regulations were enforced, there have been significant

improvements in the energy efficiency of all new kitchen appliances
introduced to the market. With reference to Detergents, this translated
into an average annual energy use reduction of 37%. The SPIN N
CLEAR Detergent will further reduce energy consumption by 50% as
compared to current products on the market.

Objectives and Action Plans

The primary target for our first year on the market is residential
homeowners as they are environmentally conscientious individuals
and are attracted by new innovative products. They were also the
essence for developing this product so it is important that they be the
first to have the opportunity of using our product.

Idea generation: The concept of this energy efficient, low cost

Detergent arose from customer complaints based on feedback
conducted in July 2009.

Idea screening: GFK CORPORATION, a company which is concerned

with the comfort and convenience of its customers considers that the
new SPIN N CLEAR Detergent is in-line with the company's objectives,
strategies and resources. This was confirmed in September after a
meeting held with GFK CORPORATION executives.

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Concept development and testing: Development took one year
with a final prototype available and ready for testing in November
2009.

Marketing strategy development: In January 2010, the penetration

business strategy was agreed upon as being a cost effective and
affordable strategy for launching the new SPIN N CLEAR Detergent.

Business analysis: Following the business analysis completed in

December 2009, which was included in the marketing plan, it was
determined that a return on investment will be achieved after 5 years
with only the first year showing yearly losses. Following the fifth year,
it is forecasted that GFK CORPORATION will make approximately $7
Million profit on their new product, SPIN N CLEAR.

Product development: The final prototype was completed in October

2009.

Commercialization: The product will be launched in January 2010.

4 P’s of Marketing:
Product:
The product was developed based on customer feedback and market
research conducted on Pakistani consumers. To do so, we have not
only taken into account consumer concerns about environment,
energy, water, pollution, detergents and noise, we have anticipated
these expectations, and have now surpassed them by designing the
only detergent that addressed all these issues simultaneously.

Composition:

A detergent typically consists of ionic and anionic surfactants which

act as the detergent to remove the dirt from the clothes, perfume,

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phosphors which make clothes appear whiter (it is these that show up
under ultraviolet light), and for powders anticaking agents to prevent
the powder becoming one large lump in the presence of moisture. For
liquid detergents, the bulk of the product is water; for concentrated
liquids, somewhat less water, but still the product is mostly water.
Biological laundry detergents contain enzymes which act
as catalysts to "eat" the dirt off of the laundry; these function best at
the kinds of body temperatures found in warm-blooded creatures
(30 °C (86 °F) to 50 °C (122 °F)) and will perform no better, and
sometimes worse, at higher temperatures. Detergents may have other
additives such as bleaches and fabric softeners and these are usually
advertised clearly on the packets as selling points.

Place
We plan to launch this product in the major urban cities in Pakistan,
namely Lahore, Karachi, Islamabad and Multan. The launch will
coincide with the National Home show occurring in each of these cities.
The National Home Show provides GFK CORPORATION with the
opportunity of bringing awareness to the marketplace. The National
Home Shows all take place in the spring season amongst these 4
different cities. GFK CORPORATION will continue to maintain product
availability through their key retailers.

Price

The prices of spin n clear detergent powder for various sizes of

packages are as follows;

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2Kg -------------------------------- Rs 199.00
1 Kg -------------------------------- Rs 99.00
500g -------------------------------- Rs 59.00
200g -------------------------------- Rs 29.00
65g -------------------------------- Rs 9.00

Promotion

We have different promotional campaigns that will help to bring

awareness to this new product. The Statistics Pakistan 1996 Census
found that only 22% of Pakistan's population (6.4 million) live in rural
areas. Therefore, as mentioned above, we will concentrate our launch
in the urban areas. As we plan to launch in major cities in Pakistan,
namely, Lahore, Islamabad, Karachi, and Multan, our launch in each of
these cities will follow the same pattern.

MICROENVIRONMENT:
The factors of this environment are explained below:
Suppliers:
Suppliers are an important link in the company’s overall customer “value delivery
system.” All GFK corporation approved agencies handled by commercial department.
Marketing Intermediaries:
Marketing intermediaries help the company to promote, sell, and
distribute its goods to final buyers. They include resellers, physical
distribution firms, marketing services agencies and financial
intermediaries.
It is very difficult to deal with all the wholesalers and retailers
individually so GFK corporation has a sole distribution system.
Customers:

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Consumer markets consist of individuals and households that buy
goods and services for personal consumption. In the case of our
chosen product “SPIN N CLEAR” , a detergent , the main customers
our house-wives because they are the ones who buy detergents.

Competitors:
There are 3 main players in the detergent industry of Pakistan.
1) Colgate-palmolive corporation ( Brite , Express power , Bonus )
2) Lever Brothers ( Surf , Wheel )
3) Proctor & Gamble ( Ariel )
Publics:
The company’s marketing environment also includes various publics
such as , Financial publics , Media publics , Government publics ,
Citizen action publics , Local publics , Internal publics and the general
public. Amongst all the publics the most important is the general
public , because they are the ones that but the product so the
company needs to be concerned about their attitudes toward its
products.

MACRO ENVIRONMENT:
The factors of this environment are explained below:

Demographics:
In the case of “SPIN N CLEAR” the demographics that we have
found out are , that any housewife who is both price sensitive as well
as quality conscious , belongs to any class, any occupation , if can
afford Spin N Clear will buy it.

Psychographics:
People who are ambitious, hygiene conscious, those who want to be
authoritative are Spin N Clear buyers, because when it comes to
personality values than no compromise.

Technology:

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GFK corporation was the first one to launch in “polythene bags.” This
was a change in technology the poly packs don’t get torn off after
getting wet like the carton boxes, so this change found a ready
market.

Economy:
Spin N Clear is a premium quality detergent at a relatively low price
than other detergents of same quality. This was made possible by
launching it in polythene bags so as to cut down cost price.
Market size:
Due to the launching of different detergents in sachets , a large number of soap users are
converting into detergent users because now they can afford to buy a detergent at the
price of soap. Total per annum sale of detergents in Pakistan is upto 40,000 tons. This
market is growing at a rate of 4.25% per annum.

Target market:
Normally speaking detergent is a product which is purchased by the
housewives but still there is a big target market.

Demographics:
Age:
People of all ages like to wear clean clothes.
Gender:
Male and Female.
Family size:
No limit of members, clothes are to be washed.
Family life cycle:
Young or old, married or single.
Income:
3,400 and above ( because Spin N Clear is not marketed in sachets so
a person has to earn this much so that he can spend atleast 1% of his
income to buy a small pack of Spin N Clear.)

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Occupation:
Students , Working people and Housewives.
Social class:
Upper class , Middle class and working class.

Psychographics:
Lifestyle: Achievers , Strugglers and Ambitious people.

Personality: Hygiene conscious , Strong and Authorative.

Promotional Target Market:
Promotion of the product in the target market is very important to
create sales.
SPIN N CLEAR was promoted among the following age group
customers.
Matured age group:
By launching the 1st ever pakistani detergent in polythene pack.
Young age group:
By launching it in a colorful and attractive pack.

Distribution Strategy:

The distribution of SPIN N CLEAR is done by a distributing agency

The company has divided Pakistan into 2 parts:

1) Sindh
2) Punjab
Sindh is further divided into 4 zones:

1) Karachi
2) Hyderabad
3) Sukkur
4) Quetta
Punjab is further divided into 5 zones:

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1) Lahore
2) Faisalabad
3) Islamabad
4) Multan
5) NWFP
Each zone is fed by a warehouse , which feeds 60 towns around each
zone.

Everyday sales persons of all particular zones visit shops of their

related area , collect sales reports and next orders from the
shopkeepers on order taking cards.

The order taking card has the following information:

Name of the shop

Name of the shopkeeper

Name and signature of the person ordering

Address of the shop

Quantity and sizes of the product

After collecting this information, at the end of the day all the sales
persons submit the daily sales report and the order cards to the
distributor so as to arrange for the delivery for the next day. Then the
next day the vehicles of distributor deliver the quantity required by
every shopkeeper at his shop.

Selecting the Right Advertising Approach

Once a company decides what type of specific advertising campaign it

wants to use, it must decide what approach should carry the message.
A company is interested in a number of areas regarding advertising,
such as frequency, media impact, media timing, and reach.

Advertising Evaluation

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Once the advertising campaign is over, companies normally evaluate it
compared to the established goals. An effective tactic in measuring the
usefulness of the advertising campaign is to measure the pre-and post-
sales of the company's product. In order to make this more effective,
some companies divide up the country into regions and run the
advertising campaigns only in some areas. The different geographic
areas are then compared (advertising versus nonadvertising), and a
detailed analysis is performed to provide an evaluation of the
campaign's effectiveness.

Summary

Advertising is the paid, nonpersonal promotion of a cause, idea, product, or service by an

identified sponsor attempting to inform or persuade a particular target audience.
Advertising has evolved to take a variety of forms and has permeated nearly every aspect
of modern society. The various delivery mechanisms for advertising include banners at
sporting events, billboards, Internet Web sites, logos on clothing, magazines,
newspapers, radio spots, and television commercials. While advertising can be successful
at getting the message out, it does have several limitations, including its inability to (1)
focus on an individual consumer's specific needs, (2) provide in-depth information about
a product, and (3) be cost-effective for small companies. Other factors, such as
objectives, budgets, approaches, and evaluation methods must all be considered.

Financial Aspects
In order to determine the cost to manufacture and ultimately the
selling and retail price, the following analysis of the fixed costs,
product launching costs, and unit costs (variable costs) are analyzed.

Fixed Costs

As is the case with every product launched at GFK CORPORATION, we

include in our budget money allocated for employee satisfaction. We
believe satisfied employees will lead to better products that are
designed and manufactured in a more efficient way. Furthermore, at
GFK CORPORATION, we ensure that all our manufacturing processes
are environmentally safe, and that any manufacturing by-product is

18
properly disposed. Therefore, budget is also set aside for the
environment. The executive and office staff salaries are averaged and
accounted. Twenty percent is added to their salary to account for their
benefits. Office supplies include items such as computers, software
licenses or paper.

Product Launching Cost

The product launch costs will be added to the fixed costs. These,
however have been separated out because they only apply to the
product launch (i.e. the first year). Our unit price will be set, to ensure
the product launching costs are zero in the second year. The table
below lists the extra cost associated with launching the new product.

Unit Cost (Variable Cost)

Some manufacturing materials are expandable during the

manufacturing process. The cost of these types of materials depends
on the number of units produced. To minimize the mileage, two trucks
will be in each of the four cities specified earlier, and the merchandise
will arrive by train to each city leaving from Lahore.

Advertising Goals:

Once a company decides what type of specific advertising campaign it

wants to use, it must decide what approach should carry the message.
A company is interested in a number of areas regarding advertising,
such as frequency, media impact, media timing, and reach.

Frequency refers to the average number of times that an average

consumer is exposed to the advertising campaign. A company usually
establishes frequency goals, which can vary for each advertising
campaign. For example, a company might want to have the average
consumer exposed to the message at least six times during the

19
advertising campaign. This number might seem high, but in a crowded
and competitive market repetition is one of the best methods to
increase the product's visibility and to increase company sales. The
more exposure a company desires for its product, the more expensive
the advertising campaign. Thus, often only large companies can afford
to have high-frequency advertisements during a campaign.

Media Impact Media impact generally refers to how effective

advertising will be through the various media outlets (e.g., television,
Internet, print). A company must decide, based on its product, the best
method to maximize consumer interest and awareness. For example, a
company promoting a new laundry detergent might fare better with
television commercials rather than simple print ads because more
consumers are likely to see the television commercial. Similarly, a
company such as Mercedes-Benz, which markets expensive products,
might advertise in specialty car magazines to reach a high percentage
of its potential customers. Before any money is spent on any
advertising media, a thorough analysis is done of each one's strengths
and weaknesses in comparison to the cost. Once the analysis is done,
the company will make the best decision possible and embark on its
advertising campaign.

Media Timing Another major consideration for any company

engaging in an advertising campaign is when to run the
advertisements. For example, some companies run ads during the
holidays to promote season-specific products. The other major
consideration for a company is whether it wants to employ a
continuous or pulsing pattern of advertisements. Continuous refers to
advertisements that are run on a scheduled basis for a given time
period.

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The advantage of this tactic is that an advertising campaign can run
longer and might provide more exposure over time. For example, a
company could run an advertising campaign for a particular product
that lasts years with the hope of keeping the product in the minds of
customers. Pulsing indicates that advertisements will be scheduled in a
disproportionate manner within a given time frame. Thus, a company
could run thirty-two television commercials over a three-or six-month
period to promote the specific product is wants to sell. The advantage
with the pulsing strategy is twofold. The company could spend less
money on advertising over a shorter time period but still gain the same
recognition because the advertising campaign is more intense.

Reach Reach refers to the percentage of customers in the target

market who are exposed to the advertising campaign for a given time
period. A company might have a goal of reaching at least 80 percent of
its target audience during a given time frame. The goal is to be as
close to 100 percent as possible, because the more the target
audience is exposed to the message, the higher the chance of future
sales.

The Boston Consulting Group (BCG) matrix provides a firm an

opportunity to assess how well its business units work together. Each
business unit is evaluated in terms of two factors: market share and
the growth prospects in the market. Generally, the larger a firm’s
share, the stronger its position, and the greater the growth in a
market, the better future possibilities. Four combinations emerge:

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 • A star represents a business unit that has a high share in a
growing market. For example, Motorola has a large share in the
rapidly growing market for cellular phones.
• A question mark results when a unit has a small share in a
rapidly growing market. The firm’s position, then, is not as
strong as it would have been had its market share been greater,
but there is an opportunity to grow. For example, Hewlett-
Packard has a small share of the digital camera market, but this
is a very rapidly growing market.
• A cash cow results when a firm has a large share in a market
that is not growing, and may even be shrinking. Brother has a
large share of the typewriter market.
• A dog results when a business unit has a small share in a market
that is not growing. This is generally a somewhat unattractive
situation, although dogs can still be profitable in the short run.
For example, Smith Corona how has a small share of the
typewriter market.

Firms are usually best of with a portfolio that has a balance of firms in
each category. The cash cows tend to generate cash but require little
future investment. On the other hand, stars generate some cash, but
even more cash is needed to invest in the future—for research and
development, marketing campaigns, and building new manufacturing
facilities. Therefore, a firm may take excess cash from the cash cow
and divert it to the star.

A SWOT (“Strengths, Opportunities, Weaknesses, and

Threats”)
For example: A strength could be:
• Your specialist marketing expertise.
• A new, innovative product or service.
• Location of your business.
• Quality processes and procedures.

22
 • Any other aspect of your business that adds value to your
product or service.
A weakness could be:
• Lack of marketing expertise.
• Undifferentiated products or services (i.e. in relation to your
competitors).
• Location of your business.
• Poor quality goods or services.
• Damaged reputation.
: An opportunity could be:
• A developing market such as the Internet.
• Mergers, joint ventures or strategic alliances.
• Moving into new market segments that offer improved profits.
• A new international market.
• A market vacated by an ineffective competitor.
A threat could be:
• A new competitor in your home market.
• Price wars with competitors.
• A competitor has a new, innovative product or service.
• Competitors have superior access to channels of distribution.
• Taxation is introduced on your product or service.
A word of caution, SWOT analysis can be very subjective. Do not rely
on SWOT too much.

THE PRODUCT LIFE CYCLE

Products often go through a life cycle. Initially, a product is introduced.

Stage in the Product Life Cycle New product offerings require

considerably more advertising to make customers aware of their
existence. As a product moves through the product life cycle, fewer
and fewer advertising resources are needed because the product has
become known and has developed an established buyer base.

23
Advertising budgets are typically highest for a particular product
during the introduction stage and gradually decline as the product
matures.

Since the product is not well known and is usually expensive (e.g., as microwave ovens
were in the late 1970s), sales are usually limited. Eventually, however, many products
reach a growth phase—sales increase dramatically. More firms enter with their models
of the product. Frequently, unfortunately, the product will reach a maturity stage where
little growth will be seen. For example, in the United States, almost every household has
at least one color TV set. Some products may also reach a decline stage, usually
because the product category is being replaced by something better. For example,
typewriters experienced declining sales as more consumers switched to computers or
other word processing equipment. The product life cycle is tied to the phenomenon of
diffusion of innovation. When a new product comes out, it is likely to first be adopted by
consumers who are more innovative than others—they are willing to pay a premium
price for the new product and take a risk on unproven technology. It is important to be on
the good side of innovators since many other later adopters will tend to rely for advice on
the innovators who are thought to be more knowledgeable about new products for advice.
At later phases of the PLC, the firm may need to modify its market strategy. For
example, facing a saturated market for baking soda in its traditional use, Arm & Hammer
launched a major campaign to get consumers to use the product to deodorize
refrigerators. Deodorizing powders to be used before vacuuming were also created.

Overall Assessment of Opportunity

We can summarize from the findings provided in the Situation

Analysis, that there is a significant opportunity that can be capitalized

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on when looking at the current dishwashing market. To prove this
point, let us summarize the key findings of the Situation Analysis,
namely: the focus of improvements to Detergents; the forecast growth
in the Pakistani economy; coupled with the proliferation of home
improvements. These three main areas constitute the opportunity, to
which our innovative new technology shall only be improved.

In conclusion, these three factors are the perfect blend of opportunities

on which our idea can flourish. The area of greatest opportunity for
growth and innovation, within the existing Detergent market, lies in
the diffusion of the cryogenic cleaning technology. This cutting-edge
technology, currently in-use in the aerospace industry, and patented
for in-home cleaning, refers to the art of water-and-detergent-free
dishwashing. We are then left with spotless and bacteria-free Stains
every time, without having to pre-soak before actually washing. This
technology is the answer to noise-reduction demands, as noise is
eliminated, as well as water, energy and conscience use. All in all, the
perfect combination between consumers demands of possible
upgrades to the existing Detergents and a way to capitalize on market
maximization. This will evidently take the market by storm.

Advertising Objectives:

Advertising objectives are the communication tasks to be

accomplished with specific customers that a company is trying to
reach during a particular time frame. A company that advertises
usually strives to achieve one of four advertising objectives: trial,

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continuity, brand switching, and switchback. Which of the four
advertising objectives is selected usually depends on where the
product is in its life cycle.

Trial The purpose of the trial objective is to encourage customers to

make an initial purchase of a new product. Companies will typically
employ creative advertising strategies in order to cut through other
competing advertisements. The reason is simple: Without that first trial
of a product by customers, there will not be any re peat purchases.

Continuity Continuity advertising is a strategy to keep current

customers using a particular product. Existing customers are targeted
and are usually provided new and different information about a
product that is designed to build consumer loyalty.

Brand Switching Companies adopt brand switching as an objective

when they want customers to switch from competitors' brands to their
brands. A common strategy is for a company to compare product price
or quality in order to convince customers to switch to its product
brand.

Switchback Companies subscribe to this advertising objective when

they want to get back former users of their product brand. A company
might highlight new product features, price reductions, or other
important product information in order to get former customers of its
product to switchback.

Advertising Budget:

Once an advertising objective has been selected, companies must then

set an advertising budget for each product. Developing such a budget

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can be a difficult process because brand managers want to receive a
large resource allocation to promote their products. Overall, the
advertising budget should be established so as to be congruent with
overall company objectives. Before establishing an advertising budget,
companies must take into consideration other market factors, such as
advertising frequency, competition and clutter, market share, product
differentiation, and stage in the product life cycle.

Advertising Frequency

Advertising frequency refers to the number of times an advertisement

is repeated during a given time period to promote a product's name,
message, and other important information. A larger advertising budget
is required in order to achieve a high advertising frequency: Estimates
have been put forward that a consumer needs to come in contact with
an advertising message nine times before it will be remembered.

Competition and Clutter

Highly competitive product markets, such as the soft-drink industry,

require higher advertising budgets just to stay even with competitors.
If a company wants to be a leader in an industry, then a substantial
advertising budget must be earmarked every year. Examples abound
of companies that spend millions of dollars on advertising in order to
be key players in their respective industries (e.g., Coca Cola and
General Motors).

Market Share

Desired market share is also an important factor in establishing an

advertising budget. Increasing market share normally requires a large

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advertising budget because a company's competitors counterattack
with their own advertising blitz. Successfully increasing market share
depends on advertisement quality, competitor responses, and product
demand and quality.

Product Differentiation

How customers perceive products is also important to the budget-

setting process. Product differentiation is often necessary in
competitive markets where customers have a hard time differentiating
between products. For example, product differentiation might be
necessary when a new laundry detergent is advertised: Since so many
brands of detergent already exist, an aggressive advertising campaign
would be required. Without this aggressive advertising, customers
would not be aware of the product's availability and how it differs from
other products on the market. The advertising budget is higher in
order to pay for the additional advertising.

Marketing Budget

Financial Statements for Marketing

Failure to properly cost and budget your marketing plan could lead
to problems. While insufficient funding for such items as equipment
or staffing may immediately come to mind when budgeting for the
whole business, it's the lack of a properly constructed marketing
budget that dooms many marketing plans and campaigns. A
marketing budget is the marketing plan written in terms of costs.

Marketing Budget
A marketing budget is an estimate of projected costs to market your
products or services. A typical marketing budget will take into
account all marketing costs e.g. marketing communications, salaries

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 for marketing managers, cost of office space etc. However much of
the budget is concerned with marketing communications e.g. public
relations, website, advertising, etc. Both are considered here.
The costs in a marketing budget will be allocated according to the
campaign and the media to be utilized. Some prior research will be
necessary for the cost estimates to be as realistic as possible. This is
called advertising or marketing communications research.

Helpful Pre-budgeting Research

• Industry and Market Research
• Competitor Analysis/SWOT
• Internal marketing performance records e.g. marketing
metrics, marketing controls.
• Marketing Audit.
Typical general marketing expenses:
• Advertising agency commissions
• Salaries for marketing managers
• Salaries for marketing support e.g. marketing assistants.
• Office space
• Fixtures and fittings
• Travel costs
• Other direct and indirect marketing costs, including marketing
communications costs.

Typical marketing communications costs:

• Personal Selling
• Public Relations
• Printing
• Mailing
• Website Development & Hosting
• Brochure Design

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 • Advertising
• Television Advertising
• Radio Advertising
• Direct Marketing
• Newspaper Advertising
• Proposal Development/bid submittal
• Networking
• Event Attendance
• Sales Promotion
• Many other marketing communications tools.

Summary of the Marketing Budget

Marketing budgets ensure that your marketing plan or campaign is

realistically costed. Some pre-budget research into your industry
and market, your competitors and your business's historical
marketing metrics helps marketing managers make a more
informed calculation. You should cost out all general marketing and
marketing communications expenses. You could also work in
conjunction with an accountant to make sure that the figures are
complete and realistic.

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