Marketing Definitions 1/2

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 What is Marketing?

It is science to sell more and better!

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MARKETING DEFINITIONS

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MAKKETING DEFINITIONS

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MARKETING DEFINTIONS

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MARKETING DEFINITIONS

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MARKETING DEFINITIONS

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MARKETING DEFINITIONS

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MARKETING DEFINITIONS

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MARKETING DEFINITIONS

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 Keys words

Segmentation Volume
Market share Value
Mix channel Marketing Mix4P
Mix product Average market price
Price Market knowledge
Competition

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 Segmentation
Industrial markets are very huge,and caracteristics for
each of them are very different.
To understand it, you need to split up into big sectors like
Food and beverage
Wood
HVAC
or (and) functional tools like
Pumping
Material handling
Packaging ....

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Segmentation
Why segmentation is a key word?

Because each case:

Technical needs
Price
Sales channel
Documentation
Standards or habits
.....are different

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 Example of segmentation

P a c k a g in g

B o tt lin g p l a s t i c f i lm

G la s s P la s t ic A lu m in iu m c a n b u t t c h e r y b lis t e r p la s t ic b a g s

C o n v e y o rs D e d ic a t e d m a c h in e s c le a n in g m a c h in e c o n v e y o rs d e d ic a te d m a c h in e P r in te d m a c h in e s

hoven b o t tle m a n u f a c t u r in g w a s h in g m a c h in e

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MARKETING DEFINITIONS

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 Market Share definition
Market share is the ratio between the total value or
(and) quantities of the analysed market and total
sales by actors.

Market share is defined by countries,or worldwide.

In industrial business, it is calculated annually or

sometimes more frequently (Japan)

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 Market Share
Example of calculation:

Market Value : 500M€

Turnover from competitor X : 150M€

Marketshare from X is :

(150M€:500)x100 = 30%

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 Market Share

Example of calculation in quantities:

Market value : 125 000 units

Sales from competitor X : 30 000 units

Market share from X is :

(30 000u:125 000)x100 = 24 %

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 Market Share
Traps of market share calculation!

Market value : exchange rate effect

Which market ? TAM or PAM

Périmeter of analysis must be the same example: same

power range or same voltage

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 Market share
Comments

Market share in value or quantities could be different, it

depends on mix quantities and sales prices.

In our case, market share is defined with PAM

reference.

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 Mix Channel
Two ways to sell on the industrial business
 Direct sales through our own sales forces.
 Indirect sales :

• Distribution network: partnership with

electrical distributor (it ’s possible to find
different level of distributor)
• Brand labeling

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 Volume (marketing criteria)

Volume is the most important criteria to analyse the

real market evolution if you want to compare
different years.

Are not included price evolution and currency

effect !

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 Value (financial criteria)
Value is amount payed by the market that means:

Are included:

Currency
Mix effect
Price evolution

This value is provided by bodies like Nema (USA) ZVEI

(Germany) Gambica (UK) or Gimelec (France) .

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 Marketing Mix

Are the whole marketing criterias necessary to

launch a product family.

To do so, you can use 4P method

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 What is 4 P Method?

It is mnemonic tool to define marketing mix

Product
Place
Price
Promotion

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 Product
All criterias who define product ranges like:

 Power range
 Voltage
 Mechanical sizes
 Main caracteristics
 Typical use

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 Place
Targeted applications

Technical Strength and Weakness (and why) in comparaison with competitors

solutions

Targeted customers

Sales channel

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 Price
Price positioning in accordance with :

Market price

Performances

Competition

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 Promotion

All tools to help sales network to promote the

product family like :

Sales leaflet
Catalog
Advertising
Launch event
Training

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MARKETING DEFINITIONS

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MARKETING DEFINITIONS

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 List Price

It’s the public price value depending on local

habits and local market price .

List price value has to be in accordance with

partners and distributors price policy.

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 Average Market Price (AMP)

It is a virtual price but key value!

Definition : AMP = list price - average discount

Except special discount for very big order, for

example Trane business in US(amount arround
15m€ ) - of course it is a special price.

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 Average Sales Price

It is possible to define ASP for each product or, for

product family. In this case it need to add another
criteria: mix product

Average sales price family:

list price x average discount x mix product

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 OEM
Original Equipment Manufacturer

Generally, they produce cataloged machines or

special machines.

Sometimes Pannel builders are included in the OEM

caterory.

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 Direct sales
Made by own sales forces

Discount policy in accordance with SE group policy and

the local habits and types of customer (OEM , End user ,
system integrator....)

On the M & D business one of the key success factor is to

have sales M&D experts and technical assistance team
near customers.

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 Indirect sales
Sales are made trough partners channels like :
Distributors
System integrator
Pannel builders
Brand labeling (competitors)
60% of VVD sales are made through distribution network.

Distibutor Channel is a very efficient low cost barrier !

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 Distributor

Two types:

 Exclusive: for SE very few (mainly in France)

 No-exclusive : majority of the cases

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 Distributors
Generalist Distributors :

They sell all electrical material like : cables, frigdes, air com
,building electrical material .

Automation product is a few part of turnover

Technical level is low !

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 Distributors
Automation Distributors

They sell mainly automation material PLC, drives,

sensors with good technical level and some of
them make a bit engineering and after sales
services.

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 Distributors

In some countries it’s possible to find different levels of

distributors:

first distributor sells to second who sells to third (typical in

Japan)

other name : retailer

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CUSTOMER SATISFACTION

Business
perenniality !!
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Margin /Cost /Profit

PRODUCTS/
SOLUTIONS

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 Margin
Its the key factor to make profit !

Margin definition = selling price - cost : cost

Remark: selling price depend of market price.

That means :
To make money, low product cost is key factor.

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