Basic Marketing: A Global Managerial Approach

Perreault−McCarthy: Basic

Marketing: A

Global−Managerial

Approach, 14/e

21. Developing Innovative
    Marketing Plans

Text © The McGraw−Hill

Companies, 2002

Once the manager has selected the target market, decided on the (integrated)

marketing mix to meet that target market’s needs, and developed estimates of the

costs and revenue for that strategy, it’s time to put it all together in the marketing

plan. The plan basically serves as a blueprint for what the firm will do.

622 Chapter 21

happen to profit?” To look at how a spreadsheet program might be used to help

answer this what-if question, let’s take a closer look at Mix C in Exhibit 21-7.

The table involves a number of relationships. For example, price times total units

equals sales revenue; and total revenue minus total cost equals total profit. If these

relationships are programmed in the spreadsheet, a marketing manager can ask ques-

tions like: “What if I raise the price to $20.20 and still sell 7,000 units? What will

happen to profit?” To get the answer, all the manager needs to do is type the new

price in the spreadsheet and the program computes the new profit—$26,400.

In addition, the manager may also want to do many what-if analyses—for exam-

ple, to see how sales and profit change over a range of prices. Computerized

spreadsheet analysis does this quickly and easily. If the manager wants to see what

happens to total revenue as the price varies between some minimum (say, $19.80)

and a maximum (say, $20.20), the program can show the total revenue and profit

for a number of price levels in the range from $19.80 to $20.20. The results are

shown in the Excel spreadsheet table in Exhibit 21-8.

In a problem like this, the marketing manager might be able to do the same cal-

culations quickly by hand. But with more complicated problems the spreadsheet

program can be a big help—making it very convenient to more carefully analyze

different alternatives.

Exhibit 21-7 A Spreadsheet Comparing the Estimated Sales, Costs, and Profits of Four “Reasonable” Alternative
Marketing Mixes

The Marketing Plan Brings All the Details Together

Marketing plan
provides a blueprint for
implementation