Chapter 14: Putting It All Together | Powerhouse Marketing Plans(c) 14 Outstanding Real-Life Plans and What You Can Learn from Them to Supercharge [... ]aigns

Overview

After you have completed all of the research required for developing a clear understanding of the overall environment in which your marketing plan will be operating, it is time to begin putting the final plan together. At this point, you should have completed a market review that clearly outlines the size and nature of the market, the market s history and trends, and competitive activity in the market. You should have developed a good understanding of the practices, desires, and expectations of consumers in your product category. You should also have identified retailer practices related to your product category as well as their attitudes toward the methods of distribution specified by your marketing plan.

It is now time for you to draw your conclusions as to what you feel are the key points identified by this research, together with their strategic implications. As outlined in Part 1 of this book, you should look through your research findings to identify elements that match some of the key factors in other marketing plan success stories. Are there any consumer negatives or consumer problems that you might eliminate with your new venture? Are the benefits of your product or service important to your consumers? Can you create a plan that will be convenient for your consumers and retailers? Is your offering truly effective or preemptive?

After you have completed your analysis, drawn your conclusions, and made your planning assumptions, it is time to develop specific objectives for your marketing plan. These should be logical objectives that make sense based on your research findings and the conclusions you have drawn from these findings. Your marketing objectives should state specifically what you are trying to accomplish with your marketing plan. As the plan is implemented, you should judge the success of the plan on the degree to which it accomplishes these marketing objectives.

The elements of your marketing plan should now flow from your research findings, conclusions, and marketing objectives. Your marketing plan should include a description of each of the key elements. Examples of key elements that should be included are the product line, the brand name , packaging, pricing, sales and distribution methods, and marketing communications. A timetable for the implementation of your marketing plan should also be included.

This chapter focuses on a marketing plan for a new line of plastic laminates. This plan provides a good example of how the developer started with a review of the overall market for the different types of plastic laminates in the various channels of distribution. The plan then moves to a review of consumer attitudes toward the plastic laminate category, followed by trade attitudes toward the category. Conclusions are then drawn from this research, indicating that a retail venture for JPK Counter Top Corporation should be an excellent expansion opportunity. These conclusions are followed by specific marketing objectives, a description of all of the marketing plan elements, and then a set of financial projections.

Marketing Plan for: New Top Plastic Laminates JPK Counter Top Corporation ^[1] March 1, 2001

INTRODUCTION

The purpose of this document is to provide a comprehensive marketing plan for a line of plastic laminates to be sold through retail outlets in the United States. This document is divided into the following eight sections:

BACKGROUND. This section reviews the background of this project and outlines the steps that led to the development of this marketing plan.
MARKET REVIEW. This section reviews the growth and nature of the retail segment of the plastic laminate market. A detailed profile of the market for sheet laminates, post- formed countertops, and roll laminates through each of the principal retail trade classes is provided.
CONSUMER RESEARCH RESULTS. This section outlines present consumer practices, desires, and expectations regarding the concept of purchasing plastic laminates in retail stores.
TRADE PRACTICES AND ATTITUDES. This section reviews the retail trade s current involvement with plastic laminates and attitudes toward the product category.
CONCLUSIONS. These are thoughts based upon the facts presented in the previous sections.
MARKETING OBJECTIVES. This section provides the specific objectives of this venture over the next five years .
STRATEGIC PROGRAMS. This section presents the specifics of the various plans developed to accomplish the marketing objectives of this venture.
FINANCIAL PROJECTIONS. This section provides detailed calculations on the cost, volume, and payout of the venture from initial launch to full national expansion. A pro forma profitand-loss statement is also provided.

The information required to write this marketing plan was gathered in nine stages. These stages were designed to provide a systematic understanding of the overall retail market for plastic laminates and for the potential that this market may provide. The following specific steps were taken:

INFORMATION GATHERING. A careful review of technical and marketing information available in company files was conducted . In addition to this information, a screening of virtually every available secondary resource related to the plastic laminate market was done. This information was provided by an outside research organization that was hired to conduct a specific study of this market category. A clipping service was retained to obtain copies of advertisements placed by retailers in selected areas throughout the United States.
INDUSTRY CONTACTS. Interviews were conducted with seven manufacturers of plastic laminates, with the research departments of related trade associations and government agencies, and with the editorial staffs of a number of industry publications .
FIELD TRIPS. Store checks and in-store interviews were conducted in key geographic areas throughout the United States. These store checks were conducted in thirteen cities that represent a cross section of the U.S. market. A total of 135 stores in various trade classes were personally visited.
TELEPHONE SURVEYS. In order to broaden the base of the store checks conducted during this study, additional telephone surveys were conducted. Telephone interviews were conducted with a total of 323 retail outlets. These included 81 hardware stores, 67 lumberyards, 51 home improvement centers, and 124 discount stores.
MARKET PROFILE. Based on an analysis of the information gathered from the 458 telephone surveys and store checks, a statistical profile of the U.S. market for plastic laminates sold through retail outlets was developed. This model was designed to provide a complete picture of the total market and all of its logical segmentations.
CONSUMER RESEARCH. A series of six focus group sessions was held with consumers regarding various aspects of the plastic laminate market, as well as specifically with the concept of purchasing plastic laminates in retail stores.
TRADE VISITS . Meetings were held with retail buyers throughout the United States. The purpose of these meetings was to identify the buyers current practices and attitudes toward the plastic laminate category, as well as their willingness to accept distribution of a new venture in this category.
PREPARATION OF CONCLUSIONS AND MARKETING OBJECTIVES. Based on an analysis of the market profile, consumer research, manufacturer and trade practices, and trends in the industry, specific conclusions and marketing objectives concerning the opportunities that this market could offer, as well as what would have be done to capitalize on these opportunities, were prepared.
MARKETING PLAN. All of this research was summarized in this marketing plan, together with the strategic programs and financial projections necessary to launch the venture.

BACKGROUND

The JPK Counter Top Corporation currently sells the bulk of its products to the traditional market for high-pressure laminates, including builders and fabricators. JPK believes, however, that there may be a larger market for plastic laminates through retail channels of distribution. This project was commissioned to determine whether JPK could be successful in finding a significant incremental market for its products through retail channels of distribution.

Because of its concentration in traditional market segments, JPK has very little information on the exact size or nature of the market for plastic laminates through retail trade classes. The decision was made, therefore, to conduct a study that would determine the scope of the retail market, the success that manufacturers of plastic laminates had had in selling their products through retail channels of distribution, and what JPK would have to do to achieve significant incremental volume through that market segment.

In order for JPK to develop a full understanding of the retail market for plastic laminates, it was decided that this study should include an evaluation of all retail trade classes participating in this market. In addition, this study was to include a detailed analysis of the market for highpressure laminate sheets as well as for post-formed countertops and low-pressure laminate rolls. Finally, this study was to examine sales through retail outlets to do-it-yourselfers ( homeowners) as well as to professional users (contractors, builders, and so on).

MARKET REVIEW

The primary retail channels of distribution for plastic laminates are discount stores, home improvement centers, hardware stores, and lumberyards. There are significantly more hardware stores than any other of these types of retail outlets in the United States. Lumberyards rank second in terms of the number of outlets, and home improvement centers and discount stores rank third and fourth, respectively. Table 14-1 provides a breakdown of the number of retail outlets in each of these four trade classes by geographic region in the United States.

Table 14-1. Number of Selected Retail Outlets by Type and Geographic Region
Region	Discount Stores	Home Improvement Centers	Hardware Stores	Lumberyards
Northeast	1,486	1,145	5,252	2,850
North Central	1,845	2,877	8,671	4,357
South	2,047	2,079	6,862	4,663
West	999	1,443	3,641	1,888
Total	6,377	7,544	24,426	13,758
Source: Estimates based on data from directories ( Discount Merchandiser, National Retail Consumer Reports , Chain Store Age ), and U.S. Census Bureau publications.

Home improvement centers and lumberyards tend to stock plastic laminates to a significantly greater degree than discount stores or hardware stores. Approximately 91 percent of home improvement centers and 45 percent of lumberyards stock plastic laminates. Only 7 percent of discount stores and 3 percent of hardware stores stock this product category.
Retail outlets also vary in the type of plastic laminates they stock. Approximately 80 percent of home improvement centers stock sheet laminates, 70 percent stock post-formed tops, and 45 percent stock roll laminates. Lumberyards also tend to stock sheet laminates to a greater degree than post-formed tops or roll laminates. Hardware stores carry only sheet laminates, and discount stores primarily carry roll laminates.

The amount of annual movement of plastic laminates through retail outlets varies dramatically from one trade class to another, and between the various product types. Home improvement centers and lumberyards generally sell significantly more sheet laminates than any other type of plastic laminate. Discount stores tend to move more roll laminates than any other product type. Hardware stores generally sell only sheet laminates. Table 14-2 provides a breakdown of the average annual movement of a typical retail outlet in each trade class.

Table 14-2. Average Annual Movement in Square Feet for Each Retail Outlet Stocking Plastic Laminates
Retail Trade Class	Post-Formed Tops	Sheet Laminates	Roll Laminates
Discount stores	3,000	2,400	4,800
Home improvement	4,200	7,800	2,700
Hardware stores	”	600	”
Lumberyards	2,100	5,400	600
Source: Estimates based on national store checks and a telephone survey.

The retail trade sells a combined total of 122 million square feet of plastic laminates annually. Approximately 66 percent of these sales are sheet laminates, 24 percent are postformed tops, and 10 percent are roll laminates. Home improvement centers generate the greatest movement in all product types; they sell a total of approximately 78 million square feet of plastic laminates.

The average retail prices of plastic laminates vary considerably between post-formed tops, sheet laminates, and roll laminates. To provide uniform comparisons, we have used price per square foot as a common denominator. The price per square foot of post-formed tops varies from $1.69 in discount stores to $2.78 in lumberyards. Sheet laminates range from $0.82 to $0.89, and roll laminates sell for from $0.59 to $0.74 per square foot . Table 14-3 provides a breakdown of the average prices charged by retailers for plastic laminates.

Table 14-3. Average Retail Prices (per Square Foot) Received on Plastic Laminates by Retail Trade Class
Retail Trade Class	Post-Formed Tops	Sheet Laminates	Roll Laminates
Discount stores	$1.69	$0.82	$0.59
Home improvement	1.89	0.82	0.74
Hardware stores	”	0.82	”
Lumberyards	2.78	0.89	0.74
Source: Estimates based on an average of all price points obtained during national store checks.

Retail channels of distribution sell a combined total of $138 million (at retail prices) of plastic laminates. Sheet laminates and post-formed tops account for the bulk of these sales, and both product categories are equally important segments of the plastic laminate business. Home improvement centers are by far the most important trade class in terms of annual retail sales. Table 14-4 provides a detailed breakdown of sales volume by product type and trade class.

Table 14-4. Plastic Laminate Sales at Retail Prices by Trade Class (000)
Retail Trade Class	Post-Formed Tops	Sheet Laminates	Roll Laminates	Total Plastic Laminates
Discount stores	$ 761	$ 114	$1,325	$2,200
Home improvement	41,920	38,600	6,784	87,304
Hardware stores	18,473	361	-0-	361
Lumberyards	-0-	29,754	244	48,471
Total	$61,154	$68,829	$8,353	$138,336
Source: Estimates based on a comparison of annual movement in square feet times the average retail price identified during store checks and telephone surveys, times the percentage of stores in each trade class that carry the product.

The average retail margin (percentage off retail) received by the trade on plastic laminates varies from 30 to 44 percent. Although many retailers would like to receive higher margins, discounting practices tend to drive the margins down to these averages. The variances in margin between trade classes and product types are primarily a function of discounting practices. Table 14-5 provides a breakdown of retail margins by trade classes and product types.

Table 14-5. Average Retail Margins Received by Alternative Trade Classes
Retail Trade Class	Post-Formed Tops	Sheet Laminates	Roll Laminates
Discount stores	39%	36%	30%
Home improvement	44%	36%	38%
Hardware stores	”	36%	”
Lumberyards	40%	35%	40%
Note: Margins are percentages taken off retail price received. Source: Estimates based on telephone discussions with trade headquarters personnel and national store checks.

Most plastic laminates sold by retail channels of distribution are purchased through distributors . Approximately 90 percent of sheet laminates, 88 percent of post-formed tops, and 70 percent of roll laminates are purchased through distributors.

The average margins received by distributors on plastic laminates are from 28 (percentage off wholesale) to 43 percent. The margins charged by distributors for post-formed tops tend to be the highest, and those on roll laminates tend to be the lowest . Table 14-6 describes the margins received by distributors on plastic laminates.

Table 14-6. Average Margins Received by Distributors on Alternative Types of Plastic Laminates
Plastic Laminate Type	Average Distributor Margin
Post-formed tops	43%
Sheet laminates	28%
Roll laminates	20%
Source: Estimates based on discussions with the retail trade.

Retail channels of distribution generate over $59 million in factory dollar sales on plastic laminates. These sales figures represent net dollars received by manufacturers after subtracting retail and distributor margins. Approximately 65 percent of plastic laminate sales are concentrated in the north central and southern regions of the United States. The sales concentration in each geographic region is roughly the same from one product type to another.
Plastic laminate sales through retail channels of distribution are fairly evenly divided between sales to do-it-yourselfers (homeowners) and sales to professionals (contractors, builders, developers, and so on). Sheet laminates tend to be purchased by professionals to a slightly greater degree than by do-it-yourselfers. Roll laminates are clearly a do-it-yourself item. Approximately 94 percent of all roll laminates sold through retail outlets are bought by do-it-yourselfers.
Discount stores tend to cater to the do-it-yourselfer to a significantly greater degree than any other type of retail outlet. Approximately 83 percent of plastic laminate sales through discount stores are to do-it-yourselfers. This compares to 54 percent in home improvement centers, 46 percent in hardware stores, and 41 percent in lumberyards.
Approximately 20 percent of the total plastic laminate market (in terms of factory dollar sales) is sold through retail channels of distribution. Approximately 15 percent of industry sales in square feet is sold through retail channels of distribution. The percentage of factory dollar sales through retail outlets is higher than the percentage of square feet because of slightly higher pricing in the retail segment.
The market for plastic laminates sold through retail channels of distribution is increasing at the rate of 15 percent annually. At this rate of increase, the retail market will more than double in the next five years. Factory dollar sales are expected to increase from $59.5 million in 2000 to over $119 million in 2005.

CONSUMER RESEARCH RESULTS

During focus groups, consumers provided a number of different reasons for doing home improvements themselves rather than having them done for them by professionals. Economic factors play a major role in the do-it-yourself decision. In most cases it simply costs less to do it yourself than to hire a professional. Pride and the satisfaction of doing a good job was another important reason. Some consumers felt that doing home improvements was a positive therapeutic change from their normal routine.
Respondents indicated that plastic laminates are used throughout the house. There were many examples given of consumers use of plastic laminates. These included kitchen countertops, bathroom vanities, bar tops, table tops, children s rooms, and many other applications.
Consumers listed many benefits of the use of plastic laminates. Many respondents felt that plastic laminates were durable, chip resistant, and strong. Plastic laminates were generally felt to be stain resistant and easy to clean. Consumers liked the fact that plastic laminates come in many colors and patterns. They also felt that plastic laminates require fairly low upkeep, are heat resistant, and will not burn easily. Plastic laminates were felt to be easy to select and purchase, and were less expensive than the items they simulated (such as wood). Consumers liked the fact that plastic laminates are waterproof and good to prepare food on. The look of plastic laminates was generally felt to be acceptable to others, and easy to match for replacement or additions.
The major improvement requested by consumers was that plastic laminates be made easier to work with. They would like plastic laminates to be easier to get home, easier to cut and install, and easier to remove and change. They would like plastic laminates to be made available in a variety of sizes, and to be more pliable and moldable. Finally they would like the manufacturer to provide ˜ ˜how to apply tips to make the do-it-yourself process easier.
There were several additional general improvements suggested by focus group respondents. Many respondents asked for an adhesive that was easier to work with. Some wanted the material to be made even harder, more scratchproof, and more chipproof. Some asked for a material that was more heat resistant and easier to seam. Some respondents asked for new patterns and colors. Some wanted to see less expensive plastic laminates. An interesting request by several respondents was for a plastic laminate repair kit.
In the majority of the households represented in this research, the wife typically conceived the project. In many cases it was indicated that she was interested in developing home improvement ideas, and was willing to collect patterns, get costs, and do some of the preparation work. Many of the wives included in this research said that it took them from a month to a year to get their husband started on the project.
In the households represented in these focus groups, the husband typically made the actual purchase of plastic laminate. He typically evaluated the quality differences in products and looked for dollar savings from alternative products. In most cases he selected the actual product and sought out installation guidance.
These focus groups indicated that advertising and promotions were not significant in the plastic laminate category. Some respondents remembered advertising by the major brand, although they generally forgot the message. Advertising for other brands was not recalled.

Retailer sale advertising was remembered by some respondents. For this category, however, sales were not typically viewed as important. Many respondents were suspicious of sale merchandise and would respond to a sale only if a project was already planned.
The most popular new product concept, based on this research, was a plastic laminate that would be easier to work with. Consumers were presented with a series of alternative concepts. These included an inexpensive low-pressure laminate, compact two- by four-foot sheets, precut kits, and a purchase by mail concept. The plastic laminate concept they liked best was a product that was easier to get home, easier to cut and install, and easier to remove and change.

TRADE PRACTICES AND ATTITUDES

Most retailers who carry plastic laminates believe that it is a profitable product line and an essential segment of their overall line of home improvement products. Home improvement centers strongly believe that they must offer their customers a product that can cover countertops, kitchen cabinets , and so on. This trade class has reached a point where it feels that it must carry plastic laminates in order to be fully in the home improvement business. Those lumberyards that carry plastic laminates (45 percent) feel similarly about the product category.
Most discount stores and hardware stores do not consider plastic laminates a necessary part of their product line. Hardware stores that now carry plastic laminates (3 percent) feel that plastic laminates are simply a minor product line that they carry to satisfy a small number of their customers. Most of the discount store managers interviewed during this study had not really considered plastic laminates as a logical part of their home improvement lines. Those discount stores that do carry plastic laminates (7 percent), however, find that the product category moves very well and has found a permanent home in their stores.
Most retailers who carry plastic laminates put either the product itself or samples of the product on display to enable their customers to find the correct product type and pattern for their needs. In some cases, primarily in home improvement centers, retailers construct massive displays to create an entire plastic laminate section. In addition, these outlets will generally also have a wallboard that contains samples of additional patterns available to the consumer.
Discount stores that carry plastic laminates generally have a display with product available right on the floor. Discount stores generally do not have an additional wallboard; however, they generally have sample chips available should the consumer desire patterns that are not available on their displays. Lumberyards follow practices similar to those of home improvement centers. Hardware stores generally have no display, but have sample chips available should their customers ask about plastic laminates. The following specific display practices apply to each different type of plastic laminate:
1. Sheet laminates. Retailers prefer to sell sheet laminates by providing their customers with samples of patterns rather than actually displaying the physical product. Retailers feel that sheet laminates are difficult to handle and easily damaged, and that it is hard to predict the patterns and sizes that will meet their customers needs. Because of this, lumberyards, hardware stores, and approximately half of the home improvement centers do not physically stock sheet laminates. Discount stores generally do stock sheet laminates because they want each sale to be a carry-out item.
2. Post-formed countertops. Retailers who sell post-formed countertops normally have one or two patterns displayed on the floor in several sizes. The two most popular patterns in this category are butcher block and white with gold flakes. Retailers generally also have sample chips for custom orders.
3. Roll laminates. Roll laminates, when sold, are always displayed in a special merchandiser. Retailers do not special-order roll laminates. The merchandisers are always provided by the manufacturer.
The plastic laminate market through retail outlets is clearly dominated by a small number of manufacturers. Two manufacturers account for almost all of the retail sales of lowpressure laminate rolls. Two other manufacturers account for almost half of the sales of high-pressure laminate through retail outlets. Yet another two manufacturers account for an additional 25 percent of high-pressure laminate sales through retail outlets.
Most retail outlets offer several brands of high-pressure laminates and only one brand of low-pressure laminate rolls. Retailers who stock plastic laminates will generally have one brand in stock and will offer additional brands on a special-order basis. In sum, manufacturers of plastic laminate do not have exclusive distribution through retail outlets for products other than low-pressure laminate rolls.
Discount stores are a notable exception to the multiple-brand policies of retail outlets. Discount stores would prefer to sell only plastic laminates that they have in stock on a merchandiser. Discount stores do not like to special-order plastic laminates (or any other product) for their customers. Because of this, most discount stores carry only one brand of each of the different types of plastic laminates.
Retailers believe that their customers generally are not loyal to a single brand of plastic laminates. They feel that most consumers are aware of the major industry brand name. Many consumers will actually use this name as a generic term for the plastic laminate category. When actually making the purchase, however, these consumers will readily shift to whatever brand is in stock or comes in the pattern that they prefer. Consumers do not insist on any particular brand of plastic laminate.
The primary functions of in-store personnel are to provide information, take orders, and assist in the actual purchase transaction. The degree of service varies dramatically from one type of retail outlet to another. In-store personnel in home improvement centers are generally fairly knowledgeable about plastic laminates. They take the time to assist customers in selecting patterns and placing orders, and then they help in moving the merchandise out to the customer s car. Additionally, many home improvement centers will arrange for a customer to have a plastic laminate countertop actually installed in the home. Lumberyards and hardware stores will also provide customers with a fair amount of service. Discount stores provide the least amount of service to customers. These organizations are not as well staffed as the other trade classes, and their employees are not as well informed about technical products such as plastic laminates.
A primary consideration for retailers selecting a supplier of plastic laminates is service. The price offered to retailers is obviously an important consideration, and it must be competitive. A major consideration is whether the retailer believes that the manufacturer or distributor can provide quick, dependable service and a broad enough line of patterns to supply consumers needs. Once a retailer selects a supplier of plastic laminates, that retailer is very reluctant to change suppliers as long as the service remains dependable. In sum, the retail trade is not constantly shifting suppliers to obtain the best price at any given time.
Retailers frequently promote plastic laminates throughout the year. Some promotions are used to build store traffic, which helps retailers build their volume on their other product categories. Other promotions discount a few plastic laminate items in the hope that consumers will trade up to more expensive products in the plastic laminate category. The following promotion practices are typically employed in the retail channels of distribution:
1. Popular patterns. Home improvement centers will frequently advertise discounts on two or three popular patterns of post-formed countertops. The objective of this promotion technique is to shift customers from these low-priced limited patterns to higher-priced special-order patterns.
2. Remnants and cutoffs. Home improvement centers will frequently advertise sales on a limited selection of remnants and cutoffs at prices as low as $0.29 per square foot. Because the sizes and patterns of these products are very limited, retailers are generally successful in upgrading the customer to a more expensive brand that they carry.
3. Laminate rolls. Home improvement centers will frequently place low-pressure laminate rolls on sale in their newspaper advertisements. Their objective is to shift customers into high-pressure laminates at a higher price and profit. Discount stores will also promote laminate rolls with the objective of building store traffic.
4. Lumberyards and hardware stores. These trade classes rarely participate in promotions on plastic laminates.
5. Discount stores. Discount stores are the most frequent promoters of plastic laminates. This trade class generally has seven sales per year, and each sale generally lasts a week. Discount stores always promote sales in their newspaper ads.
6. Home improvement centers. Approximately 42 percent of home improvement centers launch promotions on plastic laminates. Those outlets that do promote this category follow practices similar to those of discount stores.

CONCLUSIONS

Plastic laminate sales through retail channels of distribution are an important segment of the total industry. Approximately 20 percent of total industry sales of plastic laminates move through retail channels of distribution. This represents over $59 million in factory dollar sales. In addition, sales through retail channels tend to be more profitable for manufacturers than sales through the traditional channels of distribution. Finally, the retail market for plastic laminates is growing at the rate of 15 percent annually, which means that this market will more than double in the next five years.
The retail segment of the plastic laminate market is a very stable business that does not fluctuate very dramatically from one selling season to another. Sales through retail stores are made to a broad base of customers, and therefore they do not have wide fluctuations. Retailers do not tend to shift suppliers frequently, which results in fairly even sales cycles for manufacturers and distributors.
It would be difficult for JPK to achieve broad-scale distribution in those outlets that are now the principal sellers of plastic laminates. Home improvement centers and lumberyards currently dominate the sales of plastic laminates. These retail organizations are very satisfied with their current suppliers, and would be very reluctant to take on a new supplier. Their current suppliers provide them with competitive pricing and with excellent service through their large network of distributors. . . .
If JPK were to be successful in gaining distribution through home improvement centers and lumberyards, this would result in only minor incremental volume. These trade classes generally carry several brands of plastic laminates. If they were to agree to take on the New Top brand, this would be likely to be in addition to their present brand. Because of this, New Top would be forced to share the sales from these outlets with several other manufacturers, resulting in only minor increases in volume to JPK.
Discount stores could provide an excellent opportunity for JPK to penetrate the retail market for plastic laminates. We believe that although discount stores are currently a minor factor, they could rapidly become a major segment of the retail plastic laminate business. Our conclusions regarding discount stores potential are based upon the following observations:
1. Discount stores are rapidly moving into the home improvement business. During visits to discount stores throughout the United States, we noticed a number of product lines that were clearly in the home improvement area. These products included wood paneling and lighting fixtures. During discussions with headquarters personnel at a number of leading discount stores, we were told that their objective is to take on those home improvement product lines that will fit into their merchandising policies and add significantly to their profits.
2. Most discount stores are not now in the plastic laminate business. Only 7 percent of discount stores presently carry any plastic laminates. Over 5,900 discount stores have not yet entered the market.
3. Those discount stores that are currently selling plastic laminates are generating excellent volume and profits. Discount stores that now carry plastic laminates generate an annual volume at retail prices of $4,700 per store per year.
4. The success of those discount stores that are now in the plastic laminate business could serve as an excellent example to motivate other discount stores to enter the business. Our interviews with nonparticipating discount stores have indicated that they are simply not aware of the potential of plastic laminates for their organizations.
A discount store program on plastic laminates could provide an excellent opportunity for JPK to generate substantial incremental volume and profits. For example, if JPK were to obtain exclusive distribution in 1,500 outlets, and if each outlet generated factory dollar sales of $2,000 per store per year, this would result in incremental sales to JPK of over $3 million annually. This would seem to be a reasonable forecast because of the small percentage of stores requiring distribution and the modest annual volume projections.
In order for JPK to successfully launch a discount store program for plastic laminates, it will be necessary to develop a comprehensive program for the discount store channel. Because this channel is currently not in the plastic laminate business, it will be necessary for JPK to show them how to enter the business and to provide them with all of the products that they will need in order to be successful competitors . Specifically, the following will be necessary:
1. Presentation of the opportunity. JPK will need to put together a presentation that clearly demonstrates to the discount store trade the opportunity for discount stores in the plastic laminate market.
2. Merchandising plan. Because discount stores do not have the experience that other retail outlets in the plastic laminate market have, it will be necessary for JPK to provide them with a background of successful promotion techniques, pricing policies, and other elements of a successful merchandising program such as those employed by other retail channels of distribution.
3. A full product line. Discount stores will be primarily catering to do-it-yourselfers. Because of this, JPK will need to arrange for them to obtain low-pressure laminate rolls as well as high-pressure sheets and post-formed countertops.
4. Excellent distributors. It will be necessary for JPK to launch such a program in an area where JPK has distributors that can adequately service discount stores.
A retail program launched by JPK through discount stores could serve as a basis for JPK s obtaining distribution in other types of retail outlets and through incremental distributors. Marketing plans and experience gained by JPK in operating through discount stores could be used in developing presentations to home improvement centers and lumberyards. This could enable JPK to gradually expand its retail program. As discount store distribution is expanded across the United States, JPK could use this as a vehicle to obtain new distributors.
JPK could launch a retail program through discount stores with a minimum of risk. Such a program should be able to be launched without any large up-front expenditure (e.g., national advertising) and therefore would not require any up-front losses. Because of the concentration of this market, JPK could gradually implement and expand such a program on a chainby-chain basis and constantly expanding geographic regions. Additionally, it should be very easy for JPK to identify whether or not such a venture would be viable simply by exploring the concept with a number of discount chains. In sum, JPK should be able to enter this market on a step-by-step, pay-as-you-go basis.

MARKETING OBJECTIVES

The primary objective of this marketing plan is to establish JPK Counter Top Corporation as a major source of plastic laminates sold through retail stores. This will be done by providing the industry with a totally new consumer product that is much easier to work with than existing products in the plastic laminate category. The following are additional specific objectives of this marketing plan:

Expand the overall do-it-yourself market. The introduction of an easier to work with plastic laminate should broaden do-it-yourself consumers interest in the category.
Provide a preemptive retail merchandising program. The goal is to get retailers to use a merchandising system from JPK that will stimulate sales of plastic laminates to consumers.
Target the thrust of the program toward discount stores. The specific goal is to obtain distribution in 4,312 retail outlets and to generate $40 to $50 in retail sales per store per week. This will result in JPK s capturing 8 percent of the home center/discount store market.

STRATEGIC PROGRAMS

A plastic laminate product line that is easier to work with should be developed. The plastic laminate product line should be offered to consumers in two sizes: four feet by four feet and four feet by eight feet. The plastic laminate should be offered in the four most popular patterns: butcher block, white, walnut, and almond. New patterns should be rotated in periodically.
New Top should be used as the brand name for the new line of plastic laminates. This unique name has the following qualities: It is preemptive and proprietary. It is applicable to public relations and promotional activities. It was found in consumer research to be meaningful and memorable to the target market, and it is timeless. This name should be used in all references to the new product, including packaging and displays, point-of-purchase material, and sales and public relations materials.
Packaging should be developed for New Top that communicates the necessary consumer information. Specifically, the new packaging should communicate the brand name, the product size and pattern, various product applications, application instructions, and the unique advantages of New Top compared to other plastic laminates.
A merchandiser should be developed to display New Top at store level. The display should have a dramatic visual impact, and should be flexible for in-line, freestanding, or end-aisle use. The display should hold the product safely. It should include a dramatic header sign (with permanent chips) and should dispense brochures that include sample patterns. The display should have a use life of three to five years, should be affordable, and should be provided free to the trade.
An extensive in-store promotion program should be launched with the program. This should include point-of-purchase material on the display, consumer brochures with usage information, a demonstration movie for store equipment, and advertising artwork for store usage.
The New Top program should be launched with a major public relations program. The public relations program should include national press releases to generate local feature print articles, as well as local and national radio and television appearances . A demonstration movie should be created for television broadcasts.
A manager should be appointed as the national program coordinator . This individual should create and implement the annual marketing plan. He or she should interface with all marketing suppliers, hire and supervise the zone managers, and coordinate all internal efforts. This manager should also monitor the overall progress of the program and make periodic reports to senior management.
Zone managers should be appointed to hire and supervise manufacturers representatives. These people should also line up and coordinate distributors, sell and maintain retail accounts, and implement all zone aspects of the marketing plan. They should monitor all progress within the zone and provide periodic reports to the national coordinator.
Manufacturers representatives should be used to gain initial retail account distribution. These individuals or organizations should also maintain a constant sales effort at retail headquarters, provide frequent retail store service, and interface with JPK distributors when necessary. They should implement the district aspects of the marketing plan and should report progress in their districts to the zone manager.
Distributors should receive, warehouse, and ship all New Top product from the JPK factory. These distributors should receive all shipping orders from the JPK factory, pick-pack individual store shipments, and drop-ship all orders to retail outlets via UPS. Invoicing should be handled by the JPK factory.
New Top should be launched with competitive pricing and margins. The retail price of the large size should be $24.99, and the price of the small size should be $13.99. Retailers should be allowed a suggested 45 percent margin. There should be a 2 percent cash discount, and the product should be sold on a guaranteed sale basis for the initial order.

Manufacturers representatives should receive a 5 percent commission, and distributors should receive a 15 percent warehouse fee. The product should be consigned to distributors.
A formal desktop presentation should be used to generate new accounts. This should be a flip chart booklet telling the New Top story. There should also be leave-behind brochures for the trade. Product samples should be given to each prospective account. A display setup sample should be available when requested. A product fact sheet and press kit handouts should also be available for prospects.
Sales presentations should be made by manufacturer s representatives. These people should be assisted by zone managers and the national coordinator. The sales presentations should be made at an off-site location whenever possible, and otherwise at the buyer s facility. Presentations should be targeted to the buyer level.

The New Top program should be launched according to the following timetable. Assuming that the program is approved on March 1, 2001, the national expansion should be able to begin on January 1, 2002. Table 14-7 gives the proposed timetable for the New Top plastic laminates venture.

Table 14-7. Timetable for New Top Venture
Management presentations for approval	3/1/01
Select national program coordinator	5/1/01
Finalize product design	6/1/01
Brand name legal registration	7/1/01
Finalize package construction and graphics	8/1/01
Finalize display design and graphics	9/1/01
Finalize marketing communications	10/1/01
Secure initial distribution commitments	11/1/01
Produce initial product and materials	11/1/01
Ship initial product	12/1/01
Begin national expansion	1/1/02

FINANCIAL PROJECTIONS

The costs of developing the New Top venture in 2001 are projected to be $311,320. This includes package and display design costs, the development of brochures, sell-in sales materials, and travel expenses.
Sales during the first year of national expansion (2002) are forecasted to be $2.2 million. This represents sales of 4.8 million square feet of plastic laminate. Sales are expected to increase to $5.2 million in 2003 and $5.9 million in 2004. These dollar figures are for net factory sales.
The operating costs, product costs, and strategic costs for 2002 are forecasted to be $2,054,000. These costs are expected to increase to $4,315,000 in 2003 and $4,662,000 in 2004. The largest portion of these costs is the cost of the product (factory cost), followed by the distributor warehouse fees and packaging costs.

Income before tax is expected to be $166,000 for the first year of national expansion. This is forecasted to represent 7.5 percent of sales. The income before tax for 2003 is expected to be $866,000, which is forecasted to represent 16.7 percent of sales. The income before tax for 2004 is forecasted to be $1,259,000, or 21.3 percent of sales. Table 14-8 gives the forecasted three-year income statement for the New Top venture.

Table 14-8. Forecasted Three-Year Income Statement (in 000s)
	2002	2003	2004
Units (square feet)	4,848	11,312	12,928
Net factory sales	$2,220	$5,181	$5,921
Operating and Product Costs
Transportation (6%)	133	311	355
Cash discount (2%)	45	104	118
Factory cost (0.14 S.F.)	679	1,584	1,810
Package cost (0.045 S.F.)	218	509	582
Product warranty (1%)	22	52	59
Compensation on sales (5%)	111	259	296
Distributor warehouse fees (15%)	333	777	888
Operating managed cost	197	252	252
Committed cost (4%)	89	207	237
Strategic Costs
Displays & materials	127	160	65
Public relations	50	50
Introductory sales expense	50	50
Total costs	$2,054	$4,315	$4,662
Income before tax	$ 166	$ 866	$1,259
% sales	7.5%	16.7%	21.3%

^[1] Disclaimer: The specific information in this sample marketing plan was compiled for intended use as an example only. Although this marketing plan is based on actual products from a real company, the specific information in the plan is hypothetical and is not intended to compete with or to divulge proprietary ideas, company structure, or the financial status of any company. The names , numbers , and some of the facts in this marketing plan have been changed because of the confidential nature of the information. The information is intended to be used as a guide only.