F ORMAT Raw materialManufacturerRetailerConsumer Seniors: before 1946/ 63+, complain, need special attention, travel, $

Baby Boomers: 1946-1964/ 44-62, youthful, individualistic, leisure

Base case analysis Generation X: 1965-1976/32-43, debt, cynical, more spending power
MIS SION S TATEMENT
o Operating performance Generation Y: 1977-1995/13-31, celebrate diversity, “too hard”, techie
 What we are doing? -what type of business we are in? Tweens: 1996-2000/8-12, buying power, food + drinks + games
o Strategic performance -what do we need to do to meet goals + objectives?
 What do we (did we) want to do? -sustainable competitive advantage
MARKET RESEARCH & INFORMATION SYS TEMS
o Organizational health
o Prospects for future performance S EGMENT AT IO N, TARGET IN G, POS IT IO NING (O VERVIEW) Data mining- use stats. analysis to find previously unknown patterns
o Need, nature, urgency for change 1 2 3 4 5
Issues -Segmentation: market segment who responds similarly to marketing
o What are the issues -demographics, psychographics, behavioral, socio-cultural
-Targeting: evaluating each segment’s attractiveness
o Why have they arisen
-Positioning: defining the 4P’s so that customers have a clear, 2. Type of data needed – Secondary / Primary
o Why are we involved
understanding of the Product compared to competitor 3. Exploratory Research: begin to understand something, initial info
o When do we need to resolve
o What is the action trigger in the case Observation + Ethnography / In-depth Interviews / Focus
Analysis MARKETING MIX Group Interview / Projective Technique (scenarios)
o Internal(stakeholders, skills, problems), external (trends), Conclusive Research: confirm preliminary insights
Product
Survey [(un)structured Questionnaire] / Experimental
consumer, competitor  Product, service, idea (manipulate 1 variable) / Scanner (UPC Codes) / Panel
o Resources, capabilities, preferences  Create products that’s perceived as valuable enough to buy
o SWOT & PEST (Political, Economic, Social, Technological) Price
o Industry trends, changes  Cost-based: Cost + margin = selling price CONSUMER DEC IS ION PROC ES S
o Immediate issues, basic issues  Competitive-based: below/above competitor’s price 1 2 3 4 5
o Urgency vs. importance  Value-based: find the perceived value from customers POV
o Listing case facts under analysis is not an analysis  ask “so Place
what?”  Actual location (retail/wholesale)
o Financial Analysis (breakeven, payback period)  Online 1. Functional (performance) / Psychological (personal gratification)
Alternatives & Decision Criteria  Easily accessible by target market 2. Internal (own memory) / External (outside personal knowledge)
o Where do they come from? Promotion 3. Decision Criteria (consumer, compensatory)
 Decision paths (buying behavior, market size, etc.)  Internet, Personal Selling, TV, Radio, Print, Sample, Coupon, etc. Heuristics (mental shortcuts): Price, Brand, Product Presentation
o Mutually exclusive 4. Ritual consumption
o Evaluating alternatives GRO WT H ST RATEGIES 5. Reduce post-purchase dissonance
 Consistent decision criteria
 Pros / cons (do not be biased!) CONSUMER B UYING BEH AVIOR
 Matrix / chart
Implementation
o Detailed recommendation based of preferred alternatives
o Action plan
o Timetable Market Penetration: existing mix, focus on existing customers
o Forecast of future performance predicted outcome Market Development: existing mix, reach new target segments
Product Development: offer new P/S to current target market
Diversification: new P/S to a new target market
EX TERN AL FAC TORS AFF ECT IN G T HE 4 P’ S (C DS TEP) Macro Strategies: (“Excellences”)
Political / Regulatory Economic Customer (loyalty), Operational (Supply Chain), Product (Quality)
Competitors Technology Factors Affecting Buying Behavior:
Demographics Social / Cultural Trends ETH ICS Psychological: motives, attitudes, perceptions, learning
Situational: purchase, temporal, shopping
-Identify the Issues Social: family, reference group
H OW DO F IRMS BEC OME VAL UE DRIVEN ? -Gather Information & Identify Stakeholders Cultural: culture, subculture
Sharing Information (internally + externally) – KSF, -Brainstorm & Evaluate Alternatives
Balance Benefits + Costs – perceived benefit -Choose a course of action
B USINESS-TO-B USINESS MARK ETIN G
Build Relationships with Customers Tests: Publicity, Moral Mentor, Admired Observer, Transparency,
– Customer Relationship management (CRM)  Loyalty Person in the Mirror, Golden Rule Markets: Reseller, Manufacturer, Institution, Government
Differences from B2C:
GEN ERAT IO NAL COH ORTS -fewer customers -direct selling is key
S UPPL Y CH AIN
-emphasis on delivery time -advertising is technical
-more complex -demand is more inelastic PRO DUCT ASS ORTMEN T -knowledge: difference in firm vs consumer perceptions
-many decision-makers -reciprocal arrangements -standards: difference in firm vs. consumer’s service standards
Assortment: all products offered by a company -delivery: difference in firm’s service standards vs. actual service
Product line: groups of associated/similar items -communication: difference in actual service vs. what is promoted
B2B BUYING PROC ES S
PL Breadth: # of product lines How to reduce Gaps?
PL Depth: # of categories in a product line -empowering employees, use of technology, provide support
Category depth: # of SKU’s in a category
PRICING CONCEPTS
B RAND ELEMENT
Factors affecting Buying Process: 5 c’s of pricing:
Buying Center: initiator, influencer, decider, buyer, user, gate-keeper Brand name, Logo, Characters, Slogans, Jingles -Company objectives: profit / sales/competitor/customer orientation
Org. Culture: Democratic, Autocratic, Consultative, Consensus Brands: Brand Equity/Brand Ownership Strategy/Brand Name Strategy +customers, channel members, costs, competition
Situation: New buy, Modified Re-buy, Straight Re-buy -Facilitate purchasing Costs:
-Impact market value -variable costs: vary with production
-Establish loyalty -Fixed Costs: remain the same regardless of production level
S TP
-Are Assets Break-even analysis:
1 2 3 4 5 -Reduce marketing costs B-E point = Fixed Costs .
-Protect from competition Contribution/unit (price-variable)
Brand Equity: (assets that +/- from the value of the P/S) Pricing Strategies:
Brand awareness, perceived value, brand associations, brand loyalty -Cost-Based, Competitor-Based (premium pricing), Value-based
Brand Ownership: New Product Pricing:
2. Psyho = personality, Behavior = benefits sought (convenience, etc.) Manufacturer brand, Store/Private label, Generic -Price Skimming: sell @ high, slowly skim, BREAKING NEW GROUND
Psychographic Segmentation  VALS: Brand Name: -Penetration: sell @ low, gain most market share + sales
-Innovators -Strivers Corporate/Family brand, Corporate + PL brand, Individual Psychological Factors:
-Thinkers -Experiencers -easy, descriptive, easy to pronounce -Reference prices, Everyday low pricing, Odd prices, Price-Quality
-Believers -Makers Brand Extension: using same brand for new products being introduced B2B Pricing strategies:
-Achievers -Survivors Co-branding: marketing 2/+ brands together, on the same package Seasonal discounts, quantity discounts, cash discounts, allowances
3. Attractiveness: Brand Licensing: agreement to use someone else’s brand
Identifiable, Reachable, Substantial + Profitable, Responsive
DIS TRIB UTION
ADO PT IO N OF INN OVAT IO N
Segment profitability -Direct / Indirect
Innovators: 1st to buy the new product, risky (2.5%) -intensive, exclusive, selective
= segment size*segment adoption % * purchase
Early Adopters: 2nd, not a risky as innovators (13.5%)
behavior * profit margin % - fixed costs
Early Majority: do not like risk, wait until “bugs are worked out) (34%)
RETAILING
Late Majority: last to enter a new product market (34%)
Segment Size = # people in segment
Laggards: avoid change use traditional P’s until they are obsolete (16% Direct marketing
Adoption % = % in segment likely to adopt the product
Factors affecting Diffusion Speed: Online, personal selling, direct mail, catalogue, kiosk, DR TV,
Purchase Behavior = purchase price * # purchases/customer
-Compatibility: how it fits with culture / preference of target market telemarketing
@ given time
-Observability: ease of observing (depends on product)
Profit Margin = Selling Price – Variable Costs
-Relative advantage: clearly better than substitutes IMC (PROMOTION ASPEC T OF THE 4 P’S)
Selling Price
-Complexity: learning curve, less complex are easier to try
Fixed Costs = Fixed Costs (eg. Advertising) Communication Process: (be careful of NOISE)
TransmitterEncodingChannelReceiverDecoding
4.Segment Strategies DEVEL OPIN G NEW PRO DUCT S
IMC tools:
-Mass / Undifferentiated -Concentrated
Advertising (paid), Personal Selling, Sales Promotion, Direct Response
-Differentiated -Micromarketing
Marketing, PR (cause-related marketing, sponsorship), Electronic
5. Perceptual Map: Cost (x-axis) vs. Value (y-axis)
media (blogs, online, texts, social media FB)
Repositioning: change the current position
Push = Retailers /// Pull = Consumers
1. Brainstorm, license, internal R&D, reverse engineering (competitor) -Advertising: Attention  Interest  Desire  Action
POS ITIONING STATEMEN T 3. Alpha(occurs in R&D) + Beta Testing (occurs with potential buyers) -reminder, persuasive, informative , VIRAL MARKETING
For(target customers) 4. Premarket tests, test marketing Personal Selling: Qualify leads, pre-approach, sales presentation +
Who(statement of the need or opportunity) 5. Promotion, Price, Place, Time Steps in IMC: overcoming objections, closing the sale, follow-up
The(product name) is a (product category)
That(statement of key benefit-compelling reason to buy) INT AN GIBLE SERVICE
Unlike (primary competitive alternative)
-intangible, inseparable, variable, perishable
Our Product (statement of primary Difference GLOB AL MARKETING
GAPS Model
-Export, Franchise, Strategic Alliance, Joint Venture, Direct Investment
-Culture: power distance, uncertainty avoidance, individualism,
masculinity, time orientation