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Top-Down Marketing
by
Charles Lamson
The traditional top-down marketing plan is still the most common format. It has been used for over 30 years and fits the hierarchigal organization of most companies. It is often appropriate for companies planning to launch completely new products. As Exhibit 1 shows, the top-down plan has four main elements: situation analysis, marketing objectives, marketing strategy, and tactics (or action programs). Large companies with extensive marketing plans sometimes include additional sections.
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Exhibit 1
Traditional top-down marketing plan
Situation Analysis
The situation analysis section is a factual statement of the organization's current situation and how it got there. It presents all relevant facts about the company's history, growth, products, and services, sales volume, share of market, competitive status, markets served, distribution system, past advertising programs, results of marketing research studies, company capabilities, strengths and weaknesses, and any other pertinent information. To plan successfully for the future, company executives must agree on the accuracy of the data and their interpretation.
Once the historical information is gathered, the focus changes to potential threats and opportunities based on key factors outside the company's control---for example, the economic, political, social, technological, or commercial environments in which the company operates.  Look at the situation Mountain Dew faced in the mid-1990s. Whereas the 1980s had been the decade of the diet colas, the 1990s were turning into the decade of the big-flavored brands. The soft drink category was still dominated by the two mainstream colas with the most marketing muscle Coca-Cola and Pepsi-Cola, and they were followed fairly closely by Diet Coke. But noncola drinks such as Sprite, Dr. Pepper, and Mountain Dew were producing consistent gains. In fact, the noncolas were growing faster than the colas; and the folks at Mountain Dew were celebrating because with scant resources and extraordinary competitive pressure, their little niche brand had reached the number six position overall and was the number two noncola brand behind Dr. Pepper. They were still some distance away from Diet Coke, but the brand was emerging as a growth leader even while being outspent by Dr. Pepper. In a nutshell, that was the situation. And it spelled opportunity. Marketing Objectives The organization's next step is to determine specific marketing objectives. These must consider the amount of money the company has to invest in marketing and production, its knowledge of the marketplace, and the competitive environment. Mountain Dew budgets far less for advertising than Pepsi or Coke. As a result, Dew has to set less ambitious marketing objectives in terms of total volume, but not in terms of growth.  Marketing objectives follow logically from a review of the company's current situation, management's prediction of future trends, and the hierarchy of company objectives. For example, corporate objectives are stated in terms of profit or return on investment, or net worth, earnings ratios, growth, or corporate reputation. Marketing objectives, which derive from corporate objectives should relate to the need of target markets as well as to specific sales goals. These may be referred to as general need-satisfying objectives and specific sales target objectives. To shift management's view of the organization from a producer of products to a satisfier of target market needs, companies set need-satisfying objectives. These have a couple of important purposes. First, they enable the firm to view its business broadly. For example, Revlon founder Charles Revson once said a cosmetic company's product is hope, not lipstick. An insurance company sells financial security, not policies. Because customer needs change, maintaining a narrow view may strand a company in a market where its products are no longer relevant. For example, if a button manufacturer thought his need-satisfying objective was to satisfy people's need for buttons, he might have completely missed the opportunity presented by new products such as Velcro and zippers, which satisfy a similar but broader need---fastening clothes.  Second, by need-satisfying objectives, managers force the company to look through the customer's eyes. They have to ask, "What are we planning to do for the customer?" and "What is the value of that to our customer?" One of the best ways to define a market is to think about customer needs first and then identify the products that meet those needs. The second kind of marketing objective is the sales target objective. This is a specific quantitative, realistic marketing goal to be achieved within a specified period of time. A sales target objective could be phrased as "What are we planning to do for ourselves?" They may be expressed in several ways: total sales volume; sales volume by product, market segment or customer type; market share in total or by product line. Mountain Dew, for example, uses a number of measures for its sales target objectives: case volume, share of market, growth, and share of growth. Marketing Strategy The marketing strategy describes how the company plans to meet its marketing objectives. Marketing strategies typically involves three steps: (1) defining the particular target markets; (2) determining the strategic position; and (3) developing an appropriate marketing mix for each target market. A company's marketing strategy has a dramatic impact on its advertising. It determines the role and amount of advertising in the marketing mix, its creative thrust, and the media to be employed. Selecting the target mix In top-down marketing, the first step in strategy development is to define and select the target market.  When General Motors introduced its new Saturn SCI model, for instance, it defined its target market as "college-educated import owners and intenders"---highly educated young adults (18 to 34) considering their first or second car purchase. They were further defined as 60 percent female, living in one- or two-person households, and seeking a vehicle with sporty styling, fun performance, fuel economy, a good warranty, and sound quality/reliability/dependability. They typically drive a Honda Civic, Toyota Corrolla, or Nissan 240SX. Similarly, Mountain Dew defines its target market as active, young people in their teens as well as young adults 20 to 39 years old. In addition, the brand aims a significant portion of its marketing activities at urban youth, especially African Americans and Latinos. To Mountain Dew, the prototypical consumer is an 18-year-old, street-smart, male teen. Positioning the product The famous researcher and copywriter David Ogilvy said one of the first decisions in marketing and advertising is also the most important: how to position the product. Positioning refers to the place a brand occupies competitively in the minds of consumers. Every product has some position---whether intended or not---even if the position is "nowhere." Positions are based on consumer perceptions, which may or may not reflect reality. Strong brands have a clear, often unique position in the target market. Ogilvy's agency (Ogilvy & Mather), for example, differentiated Dove soap in 1957 by positioning it as a complexion bar for women with dry skin. Now, a half century later, every commercial still uses the same cleansing cream demonstration, and Dove is consistently the number one brand, spending some $153.6 million in advertising annually to maintain its 24 percent share of the multibillion-dollar bar soap market.  Many positions are available in a market. The big mistake many companies make is not staking out any position. They cannot be everything; but they do not want to be nothing. A company might pick a position similar to a competitors and fight for the same. Or it might find a position not held by a competitor---a hole in the market---and fill it quickly, perhaps through product differentiation or market segmentation. Professor Ernest Martin proposes seven distinct approaches to developing a positioning strategy:
The writers of Contemporary Advertising add an eighth approach: by category---positioning by defining or redefining the business category. A simple way for a company to get the number one position is to invent a new product category.
Xerox, for example, was originally known as the copier company; but with increased competition, the copier market became glutted, so Xerox tried to reposition itself as a problem solver. Now calling itself "The Document Company," it offers to use technology to find ways for everyone in an organization to manage and share useful information. But what it has really done is create a new business category occupied by one company: Xerox. With all its high energy and exhilaration, "youth" is not only the positioning of Mountain Dew, it is the heartbeat of the brand. PepsiCo defines the Dew positioning this way: To 48-year-old males who embrace excitement, adventure, and fun, Mountain Dew is the great-tasting soft drink that exhilarates like no other because it is energizing, thirst-quenching, and has a unique citrus flavor.
Determining the marketing mix The next step in developing the marketing strategy is to determine a cost-effective marketing mix for each target market the company pursues. The mix blends the various marketing elements the company controls: product, price, distribution, and communications.
 Mountain Dew was blessed with a broad marketing toolbox to draw upon. First, it offered consumers an energizing, thirst-quenching soft drink product with a unique citrus flavor and an image of youthful exuberance, exhilaration, and adventure. Then to build distribution, it used a variety of promotions to the trade that would enable grocers and other resellers to increase both volume and profits. While its price was competitive with other soft drinks, Mountain Dew promoted itself aggressively with free samples, premiums, and prizes at various street and sporting events---which effectively lowered the price to consumers. Finally, Mountain Dew initiated an integrated communications program that included extensive advertising on TV, radio, outdoor and print media, and the Internet; sports and event sponsorships; appearances at grass-roots geographical events; plus a host of public relations activities---all designed to develop and promote the distinct Mountain Dew personality. Companies have a wide variety of marketing strategy options. They might increase distribution, initiate new uses for a product, change a product line, develop entirely new markets, or start discount pricing. Each opinion emphasizes one or more marketing elements. The choice depends on the product's target market, its position in the market, and its stage in the product life cycle.  Marketing Tactics (Action Programs) A company's objectives indicate where it wants to go; the strategy indicates the intended route; and the tactics (or action programs) determine the specific short-term actions to be taken, internally and externally, by whom, and when. Advertising campaigns live in the world of marketing tactics, which will be discussed in more detail in the next few posts. To be continued. . .
*SOURCE: CONTEMPORARY ADVERTISING 11TH ED., 2008, WILLIAM F. ARENS, MICHAEL F. WEIGOLD, CHRISTIAN ARENS, PGS. 237-243*
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