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Stimulating entrepreneurship to increase food security in Africa

AAA Marketing Plan Training

Welcome

Day 1

Charles Gitau

August 2016

Kigali workshop


Introduction participants

• Please introduce yourself in 1 minute:

– Name– Company name– Sector– Reason why you are here– Expectations


Introduction to the training


Program

Day 1:

• 09.00-10.00: Introduction

• 10.00-18.00: Situation analysis + Marketing strategy

Day 2:

• 09.00-12.00: Marketing strategy + Financial + Controls

• 13.00-18.00: Branding


Goal

• Goal of the training:

1. Provide you insights and understanding of the marketing planning process

2. Provide you the marketing plan format and train you how to use it to make your own plan

3. Help you to kick-start making your own marketing plan and coach you further by email if so desired.


Structure

• Structure of the training:

– It follows the structure of a real-life marketing plan, step by step, throughout the two days

– In this way, marketing concepts are explained and practiced in the most practical way

– We will do exercises and have discussions throughout, to make it as practical as possible

– You will go home with new ideas and choices made, and ready to make your own marketing

– You will receive a format and example, and distance coaching to make your own


Components

• What will we do?

– Learn to capture and analyse market insights, to know “what is”,

– and learn to strategize, based on these insights, to know “what and how to do”

• Training follows the Marketing plan format:

– Executive summary– Situation analysis– Marketing strategy– Financial forecasts, budgets– Implementation controls


Marketing plan vs Business plan

• Business plan

– AAA provides BP trainings to members. – Goal is to help making members bankable for longer term

external financing– Requires very in-depth planning and 4-year choices– The Business plan is more strategic– It is about the ‘what and why’ of your business

• Marketing plan

– AAA also provides Marketing plan trainings. – Goal is to help members make solid choices to grow their

business, regardless of possible external financing– Branding is part of the Marketing plan trainings– The Marketing plan is more tactical, with 1-year choices– It is about the ‘how to execute’ of your business


Real-life need for Marketing plan

• Advise to 3 warehouse operators in Kenya:


Situation analysis


Marketing plan: section 1


1. Executive summary: section 1 - you will do this at the end, not part of this training

2. Situation analysis

3. Marketing strategy

4. Financial forecasts, budgets

5. Implementation controls




1. Executive summary

2. Situation analysis: section 2 – capture and analyze market insights

3. Marketing strategy




Situation analysis: components

• In our marketing plan, under section 2, we sum up the findings of our Situation analysis.

• We focus on the following components:

Introduction

– Summary: this you do at the end

Part 1– Macro environment– Demographics, Needs, Trends– Marketing environment, supply chain

Part 2– SWOT Analysis– Keys to Success, Critical Issues


Situation analysis: part 1


Macro environment

We are part of an exchange economy…– We buy resources and make products/services– Often through processors / middlemen– Consumers give labour to make the resources– Government collects tax, and provides public

goods/services

… and part of a simple marketing system– Sellers and buyers: connect through 4 flows– Inner loop: exchange of money for goods/services– Outer loop: exchange of information (adds and

customer needs)


Our place in a modern exchange economy

1

a

c

d

b


Structure of a simple marketing system


Mapping and analyzing demographics, needs, trends

Understand needs, wants, and demands

Target your markets, ensure good segmentation and positioning

Provide offerings, use good branding

Provide value and ensure satisfaction


Mapping and analyzing your marketing environment

Understand your marketing channels to act

Know your competition and act

Understand your place in the overall marketing environment

Understand your supply chain to professionalize


Procurement

Human Resource management

Technological Development

Infrastructure

Support Activities

Primary Activities

ServiceMarketingOutbound Logistics

OperationsInbound Logistics

Marg

in

Mapping and analyzing activities in your value chain

• Map your full chain, both primary and support level, looking at:

• sourcing producing distributing marketing after-sale


Situation analysis: part 2


Exercise

• For your company, do a brief:

– Mapping and analyzing demographics, needs, trends

– Mapping and analyzing your marketing environment

– Mapping and analyzing all activities in your value chain


SWOT analysis

• To define: ‘where do I stand as a company’

• Starting point is that you look through the eyes of your company to the outside world and map your SWOT

TThreatE

xternal

Internal

SStrengthWWeakness

OOpportunity


SWOT analysis

• Step 1: scan your External environment

• Is there a Marketing opportunity for my SME?

– An ‘area of buyer need & interest’ that I have a high probability of profitably satisfying

• Is there an Environmental threat to my SME?

– A ‘challenge posed by an unfavorable trend or development’ that, without a defensive marketing action, will lead to lower sales or profit


• Step 2: scan your Internal environment

• Can we, as a company, take advantage of the opportunities in the External environment?

• What are our Strengths to do so?

• What are our Weaknesses that stand in the way?

SWOT analysis


SWOT analysis

• Step 3: Market opportunity analysis

• Five key questions, based on the defined Marketing opportunity:

1. Can we articulate our benefits convincingly to a defined target market(s)?

2. Can we locate the target market(s) and reach them with cost-effective media and trade channels?


SWOT analysis

• (continue)

3. Do we possess (or have access to) the critical capabilities and resources we need to deliver the customer benefits?

4. Can we deliver the benefits better than any actual or potential competitors?

5. Will the financial rate of return meet or exceed our required threshold for investment?


Real-life SWOT: Kenya (1)Strengths

• Strong capital base hence ability to pay farmers on the spot• Delivery of consistent grain quality markets• Planning and timely purchasing from sellers and delivery to the buyers• Ability to purchase, store and sell large volumes• Highly competent and experienced staff especially in Quality Assurance unit• Certification by EAGC on WRS

Weaknesses

• Lack of own warehouses hence inability to expand or modify premises• Fewer number of farmers willing to store grains under WRS • Lack of partnership with farmers and groups during production stages hence affecting quality• High transport and logistics cost between Eldoret and main markets• Nature of business does not support WRS does

Opportunities

• Forging partnership with other organizations that support capacity enhancement to farmers (improve awareness and quality of grains delivered)

• Establishment of regional business hubs on grain trading (Tanzania, Uganda, Rwanda, Malawi, Zambia)• Collaboration and partnering with regional grain producers and traders on an e-platform such as Open

Book Trading (OBT)• Value adding on grains through commencement of a milling and packaging business

Threats

• Stiff competition from other grain traders • Warehouse owners could get better tenancy offer and demand the business to vacate• Inadequate awareness and support on WRS could make it unprofitable despite certification


Real-life SWOT: Kenya (2)

Strengths• Close linkages to farmers• Location in a grain-rich area• Strong membership base & management structure • Existence of an elaborate Business Plan that captures all aspects of business such as sustainability,

sourcing, technology, competitive edge, gender balance amongst others• Good infrastructure

Weaknesses• Low working capital• Lack of managerial skills in some committee members• Inability to handle large volumes of grain• Inability of members to meet WRS quality and volume requirements

Opportunities• New regional markets for grains• Increased revenues from storage and grading services• Opportunity to introduce mobile drying services to members and non-members• Increase revenue streams from farm inputs due to new facility and increasing demand

Threats• Competition from grain traders• Low production by members could render the facility dormant• Conflict amongst members• Low profitability if stakeholders do not support WR• Diversification to non-agricultural businesses (real estate) may derail grain business


SWOT analysis

• Towards implementation:

– Formulate goals

– Goals should be realistic

– Be specific, put in a time line

– Objectives per department/unit, arrange by priority

– Objectives should be quantitative

– Objectives must be consistent


SWOT analysis

• Use your SWOT to further analyze and describe your:

1. Competition

2. Services (that come with the product), to excel

3. Your keys to success

4. Your critical issues

5. Your macro environment issues


Exercise

• For your company, do a brief:– Scan of the external environment, defining marketing opportunities,

and the environmental threats to get there

– Scan of your company’s internal environment to take advantage of these opportunities, defining your strengths to do so and weaknesses that stand in the way.


Marketing strategy




1. Executive summary

2. Situation analysis

3. Marketing strategy: Section 3 - from analyze to strategize




Marketing strategy – section 3

from analyze to strategize:

putting it on paper


Marketing strategy: components

• Under section 3 of our marketing plan we put your marketing strategy on paper

• We focus on the following components:

Introduction– Summary: this you do at the end

Part 1– Mission statement– Objectives

Part 2– Target Marketing and Positioning– Marketing Mix: product, place, price, promotion


Recap: why a marketing plan?

• Why do a situation analysis? Why a SWOT? Why strategize?• ‘I know my business, I do it for so long, I don’t have time’• Yes, but society changes, new requirements come up• There are forces coming from society, they require new

capabilities

New Company Capabilities

Major Societal Forces

Information Technology

Globalization

Increased Competition

Consumer Information

Communicate with Customer

Collect Information

Differentiate Goods


HolisticMarketing

The 5 marketing concepts

• 5 marketing concepts (or philosophies)• They evolved over time…but not all companies change with

time...and many continue working under the ‘production concept’

• 1. Production concept: simply produce and distribute • 2. Product concept: invest in product, but not in market• 3. Marketing concept: know your market, produce accordingly• 4. Holistic concept: ultimate goal, be one with your market

• Still too many SME companies are trapped in 1 and 2

SellingProductProduction


The marketing plan

• Directs and coordinates your SME in its marketing effort

• At strategic and tactical level

• At product line or brand level


How do we write it

• Length and layout varies from SME to SME

• Most tactical marketing plans cover 1 year

• In a plan from 5 to 50 pages

• Small enterprises shorter or less formal

• Large enterprises more formal and structured


Strategic and tactical

• Strategic

• Do the situation analysis

• Plan for strategy

– Analysis of marketing opportunities

– Target the marketing decisions

– Create the mission and value proposition

• Tactical

• Use the situation analysis

• Plan for implementation

– Product features

– Promotion

– Merchandising

– Pricing

– Sales channels

– Service


Marketing planning

• Marketing planning steps:

• Create the longer-term basis (3-4 yrs) for the tactical (annual) implementation plan and its control

• Based on situation analysis outcomes: towards formulation and implementation


Marketing strategy: part 1


Mission statement

• Defining it: very simple yet very difficult questions…

• If you get this right the rest comes easy

• But get it right first!

What is our

business?

Who is the customer?

What is of value to the customer?

What should our business

be?

What will our business be?


Mission statement

• A good Mission statement gives you a shared sense of purpose, direction and opportunity. It is your ‘impossible dream’.

– Focus on a limited number of goals

– Stress the company’s major policies and values

– Define the major competitive spheres within which the company will operate

– Take a long-term view (your strategic or business plan)

– Make it as short, memorable, and meaningful as possible


• A vague not so good mission statement:

“To build total brand value by innovating to deliver customer value and customer leadership

faster, better, and more completely than our competition”

Mission statement


Mission statement

Company Product Market

Missouri-Pacific Railroad We run a railroad We are a people-and-goods mover

Xerox We make copying equipment We improve office productivity

Standard Oil We sell gasoline We supply energy

Columbia Pictures We make movies We market entertainment

• Don’t see yourself just as a product (or service) but as part of the marketing system

• Your products or services come and go, but basic needs and customer groups endure forever

• Ask yourself: ‘who am I in the customer satisfaction process?’ to guide you in this


Exercise

• Make a mission statement for your company


Setting objectives: tool 1

New

Products

Current

Mar

kets

Product Development

Curr

ent

New

• Marketing strategy planning:

• Product-market expansion grid

• Use one or more of the 4 types of marketing growth planning

1. Current product in current market

2. Current product in new market

3. New product in current market

4. New product in new market


SME business

Competitor

Supplier Wholesaler


• Marketing strategy planning:

• Integrated growth

• Jointly with marketing environment



• Marketing strategy planning 3:

• Diversification

• New opportunities, move in


Fine-tuning objectives

Rivals

New Entrants

Substitute Products

Buyer Power

Supplier Power

• Regardless of the tool you use:

• Always use the ‘5 Forces of Porter’ model to fine-tune

• Using next slide: double check feasibility of objectives and to target the market


Setting objectives: tool 4• Michael Porter identified five forces that determine the

long-run attractiveness of your market or market segment:

1. Threat of intense segment rivalry: a segment is unattractive if it

already contains numerous, strong, or aggressive competitors.

2. Threat of new entrants: the most attractive segment is one in

which entry barriers are high and exit barriers are low.

3. Threat of substitute products: a segment is unattractive when there are actual or potential

substitutes for the product. Substitutes place a limit on prices and on profits.

4. Threat of buyers’ growing bargaining power: a segment is unattractive if buyers possess

strong or growing bargaining power.

5. Threat of suppliers’growing bargaining power: a segment is unattractive if the company’s

suppliers are able to raise prices or reduce quantity supplied.

Rivals

New Entrants

Substitute Products

Buyer Power

Supplier Power


Exercise

• For your company:

– Indicate which tool(s) you would use to set your objectives, and explain why

– Briefly describe how Porter’s 5 forces relate to your company


Thank you for your attention

@AAAcademy1

www.aa-academy.org

Africa Agribusiness Academy

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