Strategic Marketing Plan

Objectives

The following objectives will show how marketing and financial measures will be determined, as well as, Ann?s anticipated time frame for action.

 

Marketing Measures

Ann needs to develop some marketing savoir-faire. She is currently operating in a niche market that is developing into way of life (healthy living). The multisegment marketing strategy should instead be used. Although herbs and plants is a niche, she has selected more than one segment. For instance, one segment is the apple tree customers while another is kids lip balm. I think this strategy is best for Ann. Who she is selling to can be measured by their demographics.

 

Financial Measures

Ann will use ROI to determine her net profit starting this year. Previously no records were kept. This would best be accomplished by using a database and excel to track customers and their buying habits. A scorecard based on her goals as stated in the goals section are as follows (note that Internet goals are what she will use once online):

 

 

Time Frame

The time frames to make her business initiatives happen are well within reach. These initiatives are:

�� Quality control �� Increase number of plants sold �� Increase amount of land that can be planted

A better look at the initiatives and their frame are:

�� Quality control Continue to produce the finest organic plants to be used for medicinal purposes.  Develop standards that go beyond organic certification standards. �� Increase number of plants sold Develop interactive website Create a market presence using imaging �� Increase amount of land that can be planted Work the ground for 50 additional acres Fertilize future planting zones

 

 

Ann wants to start this plan at the beginning of next year. Ann is a reasonable woman. She knows she is going to need help and money. Part of her plan is to seek out experts in website design and e-commerce at the end of this year so she can be ready.

Competition

Ann needs to find a way to handle her competition. The first obstacle will be for her to figure out what the difference is between local and Internet competition. Online she can?t afford to have her play nice attitude.

Brand Competition

The first thing Ann should do is copy write her logo (as seen in the header of this page). She knows how she wants to be viewed as stated in her goals, but she needs to make sure she can cross the people skills she has now over to the web. Locally everyone knows who she is and thinks highly of her, but in the online world she has a strike against her. This strike is her previous web failure. Her previous customers can no longer e-mail her, or get to her site. They get a 404 error message if they try. This is a bad experience for most and one they will remember.

Generic Competition

Ann, even though everyone plays nice, has a lot of competition. Examples are:

• Grocery store
• Other farmers
• Internet
• Anyone with their own garden

There is so much competition all she can do is offer a superior product and wait for the return customers, which she has plenty of. Once online the game changes. Even the threat of the economy is fixed because the web reaches regions where the money may not be tight.

Macro Environments

In addition to the issues listed in the situation analysis, being online requires additional thought and insight.

Economic

Online she doesn?t have to worry so much about the overall economy because there is always an area with the financial means to buy. That market just has to be found.

Regulatory

In addition to the guidelines set to be organic, online there are regulations too. Because she operates mostly with plant material, she can not ship outside the United States.

Natural

In addition to natural disasters that could happen on the farm, the computer poses potential problems too. Sometimes they naturally just don?t work.

Technological

Ann needs to find a very good service provider and someone who can handle the net traffic for her.

Proposed Strategy

The following is a strategy for Ann based upon the analysis and the SWOT.

Target Markets

Online, her target market changes. As stated in the analysis she speaks to three different classes:

1.      Those who want to be in on the new trend, fad

2.      Fellow Herbalists

3.      Browsers

The first class is pretty web savvy and so she targets them the same. She uses nice baskets to get their attention and muted attractive colors.

 

The second class (unless a big organization) doesn?t really care for the Internet and I know several of them who don?t even have a computer. For the ones who are on-line, it will be very important to stress the practical uses of the product. They are not into flash and glitter. For this reason it will be important to have a separate link that says ?For fellow herbalists.? Here Ann can talk to them using the plants scientific name and make them feel welcome.

 

The third group is an interesting group. Just like at the farmers market, they just browsed in. The trick is to keep them. So they should be marketed like the first group.

Group Psychographics

The first group of customers consist, in part, of the flashy type. They want to be fist and have the best. These are the high end customers. They aren?t looking for a deal, just a great looking product they can have in the kitchen. Ann usually sells this group custom baskets.

The second group of customers are Ann?s friends and fellow herbalists. These are the back to nature types. They want the lowest price going and won?t settle for second best. This crowd isn?t interested in the product aesthetics, just what it can do. They are kindly critical and are very careful not to take somebody else?s product.

 

Then we have the third group. I call them the browsers because they just happen by the farm or farmers market. They look around and buy something that seems like a good deal to them. They care how the product looks, though not as much as the first group, but require a moderate (fair) price.

Demographics

The customers come from all over the United States. The trendy (and want to be trendy) ones tend to come from the more populated areas while the back to nature lovers can come from anywhere. The middle of the road group tends to be economically worse off than the others, but want the product. The customers tend to middle aged.

Social Class

All of these women are educated, yet form different classes. Most would consider the nature group to be of a lower class than the trend setters and followers, but they are actually quite well versed in the passion of their choice and genuinely believe� that the products are better for them and for the earth.

Per Capita Consumption

 

For the industry, sales are surging forward at a rapid pace and no decline is in site. We are becoming a very health conscious country. This statement is echoed by U.S. Department of Agriculture. ?Industry estimates put retail sales of organic products at $5.5 billion in 1998, up from $1 billion in 1990. Organic users? demographics: 40% are 36 to 55 years old with 25% likely to have a college degree. (Lamancusa, 2002).? This industry is growing has been and will continue to grow by 24% a year (Colberg, 2000).

Plan

The following model is provided to assist in understanding where Ann is and wants to go:

 

 

Product Strategy

Ann will sell merchandise only on her website. She won?t sell advertising because her ethics would only allow her to advertise certain companies. Those companies are also her competition.

 

She already participates in product customization for the high end target market. But online this could be much more sophisticated. She could have a fill your own basket discount structure, as well as, a pre-organized basket selection.

Distribution Strategy

Ann would be most profitable using the direct marketing approach. Ann wouldn?t be able to sleep at night if she had an intermediary distributor because of her high standards (she won?t even shop at Wal-Mart because she believes they drive out small businesses). This method will also allow her to keep her prices down.

Pricing Strategy

Once Ann has her database completed she should participate in dynamic pricing. This will be especially important to the browser segment that has made a few purchases. This group in particular would like to receive benefits for a high level of ordering. It will also enable her to keep her customers. I believe it is the browsers that will make up the most of her sales (based on 80/20 rule) if this strategy is implemented.

Promotion Strategy

Ann is best participating in personalized promotions that target each of her three customer profiles differently. The high end customers won?t be as interested in sales as they are in trendy new products and the browsers will tend to buy more if they get a bonus.

 

Another way to promote online could be to offer virtual herb walks or a question period for others in a chat room she is in.

Resource Estimation / Allocation

Division Support

Ann is an herbalist with 10 years experience

Interns come from all over and have various experiences and backgrounds

 

Ann has serious personnel issues. It is very hard to attract an intern and then they only stay for a short time. Once they see how small the town is and how hard the work is, they leave. Interns and apprentices, however, are cheap if you can get them. Usually they get paid $100 a week and free room and board is provided.

Financial

Ann is in good shape financially. She owns her entire business and owes no one. She is very tight with her money. Her biggest purchases were a green house and a tractor. This means she buys her materials every year with cash on hand (hates credit).

Physical Facilities

Ann is trying to expand as demand for her product is overwhelming her. She already has the land and equipment so just needs the time.

Time

Her greatest limitation is time. She works at four jobs in addition to running her business. If she is going to succeed, she has to concentrate on Oxbow Herbs & Heirlooms only.

Technology

Ann also has a very limited expertise in the field of technology. She needs to take a computer class, but I believe she should outsource the whole job. This is because she not only doesn?t have the technical expertise, she doesn?t like it.

Implementation

So, how is Ann going to accomplish all of� this?

 

Set Priorities

Ann keeps total customer satisfaction as her number one priority. Because of this she will perform the following steps:

1.      Get the 404 page not found links on the Internet to go away.

2.      Start asking what customers want when they come to the market or the farm.

 

Although a priority is to participate in e-commerce, it is on the low end. She realizes she one of the 75% who failed the first time due to lack of planning and knowledge. Also, she knows she didn?t make it easy for a customer to buy from her:

1.      Doesn?t accept credit cards

2.      Site not interactive (no basket)

3.      Had to print of an order from and mail it to her

4.      Site was boring - static

 

This also meant that her business didn?t reap any rewards for having an on-line environment. She didn?t save on shipping because she had to mail out brochures all the time.

So, if priority one is customer service and the last priority is getting on the web, than the second priority is to continue to have the highest quality standards, and the third priority is to hire an expert to help her with site design and maintenance.

�Schedule for implementation

This schedule is taken from the analysis section under time frame and the objectives section of the analysis. It is a very aggressive schedule, but Ann believes she can do it.

ID	Project	Duration	Start	Finish	Person Assigned	Jan	Feb	Mar	Apr	May	June	July	Aug	Sept	Oct	Nov	Dec
1	Quality	365 days	Jan 1	Dec 31	Ann	-	-	-	-	-	-	-	-	-	-	-	-
2	Website	60 days	Jan 1	Mar 1	Ann	-	-	-
3	Presence	120 days	Jan 1	Apr 30	Ann	-	-	-	-
4	Tractor Job	150 days	June 1	Oct 29	Intern						-	-	-	-	-
5	Fertilization	30 days	Nov 1	Nov 30	Intern											-

�        To have 100 acres of farm planted by 2010

�        Be one of the top 10 mail order companies for organic herbal plants by 2006.

�        Create a web site that uses e-commerence by 2005 to boost market share.

Monitoring Measures

Most of these goals are quite tangible and so easy to track. The only one I feel she needs sophisticated software for is the market share goal. I would recommend a tracker be put on her site so she can see exactly how many of her customers are buying or browsing.

Feedback Mechanism

There are many ways Ann can get feedback. Surveys of customers, asking, or just to see them smile (when in person of course) are all methods of feedback. This section also supports my decision to put a tracker on her web-site. If she sees someone logging on, but not buying, a survey can be sent out with a discount for their time.

 

 

 

Unclous Camps in Oxbow, Maine http://www.umcolcus.com/

 

The Oxbow Lodge in Oxbow, Maine http://www.oxbowlodge.com/

 

 

World Atlas for a map of Maine http://www.worldatlas.com/webimage/countrys/namerica/usstates/me.htm

 

Lamancusa, Kathy, Organic Product Sales Grow, http://realtytimes.com/rtnews/rtapages/20020711_trendtalk.htm, Available online June 18, 2003, Reality Times.

 

Colberg, Sonya, Organic Farming Gains Momentum as Food Sales Draw Profits, http://www.pmac.net/momentum.html, Available online June 18, 2003, Knight-Ridder Tribune