Page 560 - Business Principles and Management

Chapter 20 • Nature and Scope of Marketing

20.3 Marketing Plan

Goals Terms
• Explain the four stages of the • marketing plan • industrial goods
product life cycle. • product life cycle • consumer goods
• Identify the consumer goods • introduction stage • convenience goods
classifications. • growth stage • shopping goods
• maturity stage • specialty goods
• decline stage • unsought goods

ll the marketing decisions for a particular product must work together for the
product to succeed. For example, advertising may be timed to coincide with
Aa product’s introduction. To help coordinate marketing activities, businesses
develop marketing plans. The marketing plan is a detailed written description of all
marketing activities that a business must accomplish in order to sell its products. It
describes the goals the business wants to accomplish, the target markets it wants to
serve, the marketing mixes it will use for each product, and the tactics that make up
the marketing strategy. It identifies the ways in which the business will evaluate its
marketing to determine if the activities were successful and the goals were accom-
plished. The marketing plan is written for a specific time period (often one year).
The top marketing executive develops the marketing plan, based on informa-
tion from many other people. Market research is very important in developing a
marketing plan. Once a written plan is completed, all of the people involved in
marketing activities can use it to guide their decisions about each marketing mix
element and to coordinate their efforts as they complete the planned activities.
The marketing plan is influenced by a product’s life cycle stage and the nature
of the competition. These factors influence the development of a marketing mix.

The Product Life Cycle

Successful products move through fairly predictable stages throughout their
product lives. They are introduced, and then their sales and profits increase
rapidly to a point at which they level off. Eventually, both profits and sales de-
cline as newer products replace the old ones. The product life cycle consists of
the four stages of sales and profit performance through which all brands of a
product progress: introduction, growth, maturity, and decline. The product life
cycle usually describes an industry’s progression. Figure 20-3 (see p. 548) is a
graphical depiction of sales and profits at different stages of the product life cycle.

INTRODUCTION

In the introduction stage, a brand-new product enters the market. Initially,
there is only one brand of the product available for consumers to purchase.
The new product is quite different from, and expected to be better than, prod-
ucts customers are currently using. Examples of products that were recently in

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