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Marketing Process Short - Grp4reporting
Marketing Process Short - Grp4reporting
1
The Marketing PLAN PREPARATION
SWOT ANALYSIS
STRATEGIC OPTIONS
STRATEGIC DECISIONS
MARKETING PROCESS
2
BRAND COMMUNICATION
CONSUMER INSIGHT
VALUE PROPOSITION
BRAND DNA
BRAND POSITIONING
BRAND TAGLINE
3
For me, this is the best definition of Marketing…:
What Is Marketing ?
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MARKETING IS MUCH MORE THAN SELLING
“There will always, one can assume, be need for some selling.
But the aim of marketing is to make selling superfluous
(unnecessary). The aim of marketing is to know and
understand the customer so well that the product or service fits
him and sells itself. Ideally, marketing should result in a
customer who is ready to buy. All that should be needed then is
to make the product or service available.”
Peter Drucker
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MARKETING VS. SELLING
Selling
Product-centered
Marketing
Pre-occupied with
Customer-centered
converting the product Pre-occupied with
into cash satisfying the customers
Persuading Convincing
Can only start when the Starts even before the
product becomes available product exist
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THE MARKETING SYSTEM
1) Gather information
Marketer Market
2) Provide Information
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MARKETING SUCCESS =
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Targeting Consumer
Segmenting Profiling
(PTM) Insighting
Brand
Promotion
Positioning
Branding Pricing
Placement
The Marketing Process
Traditional Organization Chart
Top CUSTOMERS
Manage-
ment C
C
U
Middle Frontline People U
Management S
S
T T
Middle
O Management O
Frontline People
M M
Top
E Manage- E
R ment
CUSTOMERS R
S S
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WHO SHOULD BE YOUR MARKET?
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ESTIMATING MARKET SIZE
Industry data audit (IMS, Pulse, AC Nielsen,
SEC, etc.)
Extrapolation
Using internal data
Using store off-take data
Using population size and assumed usage volume
potential
Example:
10 million teenagers consuming 4 times a year a 200mL
bottle shampoo that is priced at 100 pesos for bottle.
Total market size is?
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SEGMENTATION: MARKET FOCUS
Definition: Dividing the total market into different
groups that have their respective homogenous
character traits
Market Segment: consists of a group of customers
who share a similar set of needs and wants.
The computer manufacturer Dell, for instance, does not organize its website by
product groups (desktops, notebooks, servers, printers etc), but by customer
groups (privates, small businesses, large businesses, public/state
organizations).
Geographic Segmentation
Nation, states, regions, cities, neighborhood
Demographics
gender, age, income, occupation, education, religion, race,
social class
Psychographics/personality
Attitude, behaviors
Introvert, extrovert, pessimist, optimist
Active, adventurous, outgoing, experimental
Naïve, conservative, cautious, studious
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IN CHOOSING THE PTM/SEGMENT
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MORE EXAMPLES
Luxury Cars
Mercedez Benz
Senior Top Executives
BMW
Young Achievers/Businessmen
Volvo
Conservative Senior Executives/Businessmen
Axe Deocologne
Young men
Secret Deodorant
20
CONSUMER INSIGHT IS THE KEY
What is Customer insight ?
Next time you think you’ve got an insight, check it againsst this definition :
Achieving that kind of reaction is not easy. It means you have to think of something
that no one has thought of before. Or. More accurately, that no one else in your
market has thought of before.
It requires that you look at things differently. For that reason, most of the great
sources of ‘insight inspiration’ are from outside of your category, and often outside
of your (geographic) marketplace
SOURCE OF CONSUMER INSIGHT
Need
Want What is lacking in a
Desire current product/service?
Aspiration
Perfection
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The Marketing research Process.
Marketing research is gathered using a systematic approach. An
example of one follows:
Define the problem. Never conduct research for things that you would 'like' to
know. Make sure that you really 'need' to know something. The problem then
becomes the focus of the research. For example, why shoppers are not buying in
our stores?
How will you collect the data that you will analyze to solve your problem? Do we
conduct a telephone survey, or do we arrange a focus group?
Select a sampling method. Do we us a random sample, stratified sample, or
cluster sample?
How will we analyze any data collected? What software will we use? What
degree of accuracy is required?
Decide upon a budget and a timeframe.
Go back and speak to the managers or clients requesting the research. Make
sure that you agree on the problem! If you gain approval, then move on to step
seven.
Go ahead and collect the data.
Conduct the analysis of the data.
Check for errors. It is not uncommon to find errors in sampling, data collection
method, or analytic mistakes.
Write your final report. This will contain charts, tables, and diagrams that will
communicate the results of the research, and hopefully lead to a solution to your
problem. Watch out for errors in interpretation.
Primary - Marketing Research
1. Interviews
2. Mystery shopping
3. Focus groups
4. Projective techniques
5. Product tests
6. Diaries
7. Omnibus Studies
Secondary - Marketing Research.
Trade associations
National and local press Industry magazines
National/international governments
Websites
Informal contacts
Trade directories
Published company accounts
Business libraries
Professional institutes and organisations
Omnibus surveys
Previously gathered marketing research
Census data
Public records
MARKET RESEARCH HELPS YOU TO:
Know about your market size, segmentation and industry drivers
Determine which way the market is heading
Be aware of recent industry trends or key events
Reach the most suitable target market
Learn about your competitors and their market strategies
Increase sales by in-depth into your clients’ needs, values, lifestyles,
or your consumers’ buying behavior, or demographics
Screen new market niches for business opportunities
Decide on diversification, expansion in other countries or new
distribution channels
Gain crucial, customized information so as to make firm decisions
VALUE PROPOSITION
VALUE = BENEFIT/COST
VALUE
RELEVANT UNIQUE/DISTINCT
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PART 6: BRAND DNA
Characteristics of Brand DNA
Brands seem like complex organisms, partly because each
one of these basic attributes can act in a different way on
each customer or group in the brand's environment (the
Brandscape.)
But, like a biological organism, Brand DNA must exhibit a
certain baseline simplicity in order to be intelligible to
customers and to evolve by rapid transmission from host to
host.
In other words, there must be a compelling story to be told
about the brand if people are gong to talk about it.
BrandSequencing™ makes sure not only that the story is
compelling, but that it's the right story in the first place.
Brand DNA attributes are inextricably
linked and constantly replicate and mutate -
in a way, a brand is always a moving target.
But since Brand DNA attributes come
exclusively from the minds of customers,
you need to get accurate customer feedback
in order to evolve your brand competitively.
Brand Sequencing helps you exert greater
control over this seemingly random process
of replication.
BRAND DNA
Category
Difference Character
Brand
Credibility Benefit
A Typical Brand DNA Diagram
Category
Luxury
Car
Difference Character
Powerful Sleek &
Engine
? Sporty
Credibility Benefit
German Status
Technology Symbol
INDIVIDUAL EXERCISE 1:
DESCRIBING THE BRAND DNA FOR A POSSIBLE
NEW PRODUCT
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Exercise:
39
POSITIONING
Brand Position in the mind. What step in the
brand ladder in the mind?
Top-of-mind exercise
Soft drinks
Cellphone
Search engine
Alcohol
Lap top computer
Airline
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POSITIONING
What you want your target market to perceive about
your product.
42
HOW TO POSITION YOUR PRODUCT
According to
target segment
According to
Product Benefit
(USP)
Versus Competition
(Repositioning)
BRAND POSITIONING
REFERENCE: SCOTT M. DAVIS,
BRAND ASSET MANAGEMENT : DRIVING PROFITABLE GROWTH THROUGH YOUR BRANDS
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EXAMPLES
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TARGET SEGMENT QUESTIONS
Would the customers we seek recognize
themselves as part of this target market?
Is the target market both identifiable and
reachable?
Is it clear why this target market would be
interested in our point of difference?
If we have not served this target market
before, why do we want to serve them
now?
DEFINITION OF BUSINESS QUESTIONS
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PRODUCT LEVELS
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PRODUCT DECISIONS
Product type (what need to address/satisfy?)
Product line (what form or category?)
Product depth (what variances?)
Branding
Packaging
Container/Pack Design
Container/Pack Shape and Size
Container Material
Label Design/Text/Color
57
TYPES OF PRODUCTS
Consumer: used/consumed directly by the
customer
Durable
Non-durable
Fast moving consumer goods
Commodities: price and availability
Can you brand commodity
Industrial: use to produce consumer goods
58
WHAT IS A BRANDNAME?
Product name
Product Identity
Equity
Franchise
Company/Organization
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CONSIDERATIONS IN BRANDING
Easy to pronounce
Easy to remember
Easy to write
No “bad” meaning in other language
Should convey or connote the product’s:
Use (Mr. Clean)
Advantage (Havit All)
Benefit (Safeguard)
60
BRANDING STRATEGIES
Uni-branding - One brand for several products
Company name branding
Family/Mother Branding
Brand Extension
Multi-branding
Distinct brand per product
61
WHICH IS BETTER?
Uni-branding
Effective if there is a strong common attribute among
the products
Multi-branding
Different product line
Different attribute or benefit
Different image
62
EXAMPLES
Effective Uni-branding
Johnson & Johnson (Baby-care line)
San Miguel (beer line)
Dove (mild personal care product line)
Betadine?
63
PART 5:
SPTPC EXAMPLES: FAST-FOOD CHAIN RE-LAUNCH
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SPTPC: A SHORT CUT TO MARKETING PROCESS
SEGMENTING
PROFILING
TARGETING
POSITIONING
COMMUNICATING
65
SPTPC PROCESS
Segmenting
Identifying all possible segments
Profiling
Ranking segments according to Usage Volume, Usage Frequency,
Attitude
Targeting
Selecting the most profitable target segment (primary target market -
PTM)
Consider the market trend and competition
Positioning
Developing the most powerful message
The most significant consideration in preferring the brand
Communicating
Target audience
Theme/Message
Media to be used
66
SPTPC FOR A FAST-FOOD CHAIN
Segments Volume Frequency Attitude Total
Kids/GS
Teens/HS
College
Yuppies
Executives
Family
Elderly
67
WHICH SHOULD BE THE PRIMARY TARGET
MARKET (PTM) FOR THE FAST-FOOD CHAIN?
LET’S REVIEW.
68
PRICING
WHY DO WE PRICE A PRODUCT?
To maximize profit
70
WHAT IS PRICING?
The amount we pay for the over-all value we
derived from consuming/using the product or
experiencing the service
Why is it that the a glass of coke in the cafeteria
is much cheaper than the glass of coke in a 5-star
hotel? Isn’t it the same cola?
71
MAJOR PRICING METHODS
Cost Plus Pricing
Cost + Margin
Profit Objective Pricing
Market Demand
Competitive Advantage
Price Skimming
Distinctiveness
Demand Size and Potential
72
MAJOR PRICING STRATEGIES
Higher Pricing: better quality
Premium Pricing (Signature Brands; Mercedez)
Image Pricing, ex.?
Parity Pricing: same price
At least one added value
Lower Pricing:
At least the same quality
73
MARK-UP PRICING
Unit cost = Variable Cost + (Fixed Cost/Unit Sales)
Markup Price = Unit Cost/(1-Desired Return on
Sales)
Example:
Variable Cost Per Unit: P10.00
Fixed Costs : P300,000.00
Expected Unit Sales :50,000
Markup Target :20%
Unit Cost = 10 +(300,000/50,000) = P16.00
Mark-up Price = 16/(1-0.2) = P20.00
74
TARGET-RETURN PRICING
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BREAK-EVEN VOLUME
Total Revenue = Total Cost
Break-even Volume Formula = Fixed Cost/(Price-
Variable Cost)
Example
FC: P300,000
Price: P20.00
Variable Cost: p10.00
Break-even Volume = 300,000/(20-10) = 300,000/10 =
30,000 units
76
INDIVIDUAL EXERCISE 2: COMPUTING FOR BREAK-EVEN
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PERCEIVED VALUE PRICING
Customer’s perceived value is made up of several
elements:
Product Performance Image
Channel Deliverables
Warranty Quality
Customer Support
Softer Attributes (supplier’s reputation, trustworthiness and
esteem)
Companies must deliver the value promised by their
value proposition
Marketing-mix elements, such as advertising and
sales force, are used to communicate and enhance
perceived value
78
PERCEIVED VALUE PRICING
Example: Sony Television Pricing is P20,000 vs. P15,000
price of TLC
Rationale:
15,000 is the Sony TV’s price if it is only equivalent to TLC TV
3,000 is the price premium for Sony’s superior durability
2,000 is the price premium for Sony’s superior reliability
1,500 is the price premium for Sony’s superior service
1,000 is the price premium for Sony’s longer warranty on parts
22,500 is the normal price to cover Sony’s superior value
- 2,500 discount
20,000 final price
The customer actually only pays 5,000 for 7,500 extra
value
79
VALUE PRICING
MOST IDEAL PRICING STRATEGY
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GOING RATE PRICING
Price is based largely on competitor’s price, charging the same,
more or less than major competitor(s)
In oligopolistic industries that sell a commodity such as paper,
fertilizer, LPG, etc., all firms normally charge the same price.
The smaller firms follow the leaders changing their prices
when the market leader’s prices change rather than when their
own demand or costs change.
Some firms might change a slight premium or discount but
they contain the amount of difference, e.g. oil dealers
The key in going rate pricing is of course managing the cost
via efficient production and/or good sourcing
81
AUCTION-TYPE PRICING
Primary purpose is to dispose of excess inventories or used goods
It is growing more popular especially with the growth of internet
English Auction (ascending bids)
One seller, many buyers.
Starts with low price
On sites such as yahoo and ebay
Dutch Auction (descending bids)
One seller, many buyers or one buyer many sellers
Starts with high price
On sites such as FreeMarket.com
Sealed Bid Auction
Would be suppliers can submit only one bid and cannot know the other
bids.
A supplier will not bid below its cost but cannot bid too high for fear of
losing the sale.
Highly advantageous for the seller since it can choose the price for
maximum profit
Effective for contract selling
82
ANALYZING COMPETITOR’S PRICING
Demand
Worth to the customers
Superior or inferior value
Price cut objectives:
Steal the market
Company is doing poorly and wants to boost its
sales
Reduce price to stimulate total demand
83
PRICING STRATEGY
Pricing Strategies for New Products
Pricing Strategies for Established Products
Price Flexibility Strategy
Price Leadership Strategy
1. PRICING FOR NEW PRODUCTS
103
PLACEMENT
Placement or Distribution
104
CHANNELS OF DISTRIBUTION
Third-party Distributor
Wholesalers
Key Accounts (Chained Outlets)
Retailers
Supermarkets
Department Stores
Convenience Stores
Market Stalls
Variety Stores
105
STRATEGIC DISTRIBUTION
106
NEW CONCEPTS
Channel Marketing
Accessibility to the product
Making the product readily available when needed
Ex. Soft drinks distribution
Trade Marketing
Availability (Trade Inventory Management)
Visibility (Trade Merchandising)
Movement (Trade/In-store Promotion)
107
PROMOTION
108
OBJECTIVES OF PROMOTION
To inform the market about the brand/product
To convince the market to prefer the
brand/product
To create recall about the product
To influence the market to make on the spot
buying decision
To establish good company/brand goodwill or
image
109
PROMOTION MIX
Personal Selling
Industrial or Durable products
Advertising
Fast moving consumer goods (FMCG)
Sales Promotion
Public Relations/Publicity
Direct Marketing
Special Events
110
6 MS IN ADVERTISING
1. Message
2. Market
3. Material
4. Media
5. Money
6. Measure
111
MESSAGE
The most important element in the advertising
campaign
It is what the audience should comprehend and
believe after getting exposed to the ad
Product Positioning
What you want your target market to
perceive about your product
The most significant consideration in
preferring your brand or product over
competitor(s)
112
MARKET
The target audience for the ad who should
comprehend and believe your message and
influence the decision to buy
The target can be any or combination of the
following:
Product user
Decision maker
Decision influencer
Buyer
113
MATERIAL
How the advertisement should be executed
Story line
Copy/Text
Design/Lay-out
Over-all aesthetics
Should creatively convey the message to
achieve AIDA
Should be appealing to target audience
Should consider celebrity endorser only if
“necessary”—stress a message
114
AIDA
115
MEDIA
116
EXERXCISE:
CHOOSING THE MEDIA MIX EFFICIENTLY & APPROPRIATING MEDIA BUDGET
117
MONEY
Budget Decision:
As percentage of sale
Established brand
5%; 10%
Share-of-voice
Head-oncompetition
Example?
Advertising Objective
New product; re-launch product
Pre-emptive marketing assault
118
MEASURE
Awareness level
Brandname survey
Message survey
Recall level
Brandname survey
Message survey
Attitude level
Survey, FGD, observation
Sales and Profit
Internal figures
Shelf off-take
Industry Sales Audit (Vs. competition)
119
ASSESSMENT OF TV ADS
Winner corned beef
Family Sardines
Bench (Richard Gomez)
Solmux
Fibisco
120
SALES PROMOTIONS
Consumer promotion
Benefits the consumers
On-pack promo; dry sampling; discount coupons; raffle
promo, etc.
Trade promotion
Benefits the trade channels
Volume discount; Off-take contest; etc.
121
WHEN TO DO SALES PROMOTIONS?
Product Launch (part of integrated marketing
communication)
When there is strong challenger
To pre-empt any strong competitive move
To capture in-store buying decision
122
TRADE MARKETING
Availability
Stock inventory monitoring
Visibility
Merchandising
Facing; display; collaterals
Movement
In-store promo
Push program (push girls; promodizers)
123
PUBLICITY
To create company/brand goodwill with the customers
To establish favorable company/brand image
To develop customer emotional attachment with the
company/brand
To sustain company/brand patronage
To indirectly solicit government/public support
What to publicize:
CSR activities
Sports sponsorships
Company advocacies (R&D, Clean Environment, Green Marketing)
124
INTEGRATED MARKETING
COMMUNICATION (IMC)
Promo Mix done under one theme
Advertising message :
Publicity :
Special Events :
Sales Promo :
Personal Selling :
Employee Communication and Attitude :
125
PRODUCT LIFE CYCLE
AND THE
4 PS
126
Sales
Profit
128
NEW MARKETING REALITIES
Network information technology (e-marketing)
Globalization (international marketing)
Deregulation
Privatization
Heightened competition (national vs. multinational brands;
brands vs. generics; concessionaire brand vs. house brands)
Industry convergence (communication and entertainment)
Consumer resistance (negative opinion about advertising and
marketing)
Retail Transformation (mega retailers, specialty retailers,
direct-mail firms, home shopping TV, e-commerce on the
Internet)
129
NEW CONSUMER CAPABILITIES
131
INTERNET AND MOBILE PHONES
Selling media
Advertising media
Sales promo media
Market research media
Network marketing media
Marketing strategy feedback media
132
BASIC MARKETING PLAN OUTLINE FOR NEW PRODUCT
STV
Market Segments and Corresponding Profile
Primary target market segment (PTM)
Estimated Market Size
Strategic insight about the PTM
Competitive Offering
Value Proposition
Base P
Product concept, description and attributes
Packaging (size, container, label design and copy)
Brand name
Brand DNA
Brand Positioning
Support Ps
Pricing strategy
Distribution strategy
Promotion strategy
Action Plans
Financial Outlook
133
BASIC MARKETING PLAN OUTLINE FOR EXISTING PRODUCT
Performance Review
Sales Growth; Market Share; Gross Profit; Marketing Contribution
STP Review
Primary target market penetration rate
Consumer brand perception vs. positioning strategy
Base P
PTM product acceptance
Performance vs. competitors
Support Ps
Pricing competitiveness
Distribution level
PTM product awareness and understanding
Objectives
Growth Opportunities/Issues/Action Plans
Action Plans and Results
Financial Outlook
134
Competitor Competitor Competitor
1 2 3
Product
Competitive
Analysis Packaging
Price
Promotion
Placement
Target Market
135
Growth Growth Action
Area Opportunities Issues Plan
Usage Frequency
New Usages
New Users
New Channels
New Products
136
ACTION PLANS AND EXPECTED RESULTS
2010 2011 2011/2010
Projection Carry-Over Budget Increment Increase
87,447 45,472 90,459 44,987 3,012