Announcements• Reminders/Updates

– SI Workshops on Wed., 7-9, 1C18– Case deadline is looming! – Initial Idea for Marketing project due Feb. 7th!

Agenda• Review Cost-Volume-Profit Analysis• Marketing part of internal environment• Biggest challenges facing the Marketing Manager today?

Marketing trends?– The Marketing Relevance Imperative’

http://www.marketingtoday.com/marketing/0905/relevant_marketing.htm– ‘Here's to 2010: industry experts share predictions for the year ahead’

http://www.marketingmag.ca/english/news/marketer/article.jsp?content=20100111_150050_9384

Group Marketing Project• begin thinking about your idea as we work

through the marketing material

• http://www.ted.com/index.php/talks/view/id/70

• http://www.presentationhelper.co.uk/business/test_marketing_small_business_idea.htm

• http://sbinfocanada.about.com/od/businessopportunities/Business_Opportunities_Business_Trends.htm

• http://sbinfocanada.about.com/od/businessplans/a/quickbizplan.htm

Critical Success FactorsCritical Success Factors

StakeholdersStakeholders

Top Management

VisionVision

StrategyStrategy

MissionMission

Middle Management

First-Line Management

PlanningPlanning OrganizingOrganizing

DirectingDirectingControllingControlling

EXTERNAL INTERNAL

Economic

Social

Technological

Political

Marketing

Finance

Human Resources

Operations

Critical Success Factors (Indicators of Business Success)

Critical Success Factors (Indicators of Business Success)

• Achieving financial performance

• Meeting customer needs

• Building quality products and services

• Encouraging innovation and creativity

• Gaining employee commitment

What is Marketing?• Marketing is an “integrated system of activities designed to plan, price, distribute,

and promote, want-satisfying goods and services to present and potential customers.

“FIND A NEED A FILL IT”

Elements:Find a need Conduct researchDesign a product (including packaging, logo, CBP)Set a price and test Set up distribution systemDesign promotion Build relationships

How Marketing Creates Value

• Offer products/services that create utility** Ability of a product to satisfy a human need

• Four types of utility:– Time –– Place –– Ownership –– Form –

• Begins with understanding of customer wants and needs

Developing a Marketing Strategy1. Know the environment

• PEST + competition

2. Know the market – use market research to determine:• Market attractiveness• Market segmentation and target market

3. Develop marketing plan on basis of knowledge of target market• Marketing mix (product, place, promotion, price)

• must all send same message

4. Ensure entire organization shares Marketing Concept• customer orientation• training in customer service company-wide• profit orientation• total quality management

KNOW THE ENVIRONMENT/Market Attractiveness

• Economic & Technological Environment– Consumer spending - economic conditions – investment intensity - barriers to entry– industry capacity - access to suppliers– technology

• Political & Social Environment– regulation - social attitudes & values

• Competitive Environment– competitive structure - substitute products– price - competitor analysis

• Market Factors:– size/distribution - cyclicality– market gaps - consumer bargaining power– differentiation possibilities - growth

What un-met need are you satisfying?• Key to being successful is providing a want-satisfying

good or service.

• it must provide

Know the MarketWho is your customer and what does he

want?

Know your market – who is your customer?

Target Market– The– group that has

– the group of customers to whom

– a group of customers

Steps to defining Target Market:1. Market Segmentation2. Perceptual Mapping3. Preference Analysis

Market Segmentation– need to know what groups of customers exist

from which to choose a target market – involves splitting the market into meaningful

segments to determine what groups exist– Segments tend to be similar with respect to their

characteristics & what they want out of a product*...

• homogeneous needs

• homogeneous characteristics

• Bases for Segmentation:– state-of-being

– state-of-mind• psychographics –

– product usage• volume –

• purpose –

– benefits sought –

• Example:Ice Cream Market Benefit Segmentation

Segment Name

Benefit Sought

State-of-being

State-of- mind

Product Usage

Perceptual Mapping & Preference Analysis– how do the market segments perceive current

products– determine which of the segments will be the

target market– opportunity - find the biggest gap between how

the customer perceives the competition meets their needs…

• Steps:– draw axes that represent the relevant

dimensions by which people differentiate between product offerings

– locate the positions of competing products on the axes/dimensions according to customer perceptions

-– locate each segment’s ideal product

-– what is your target market?

Taste

Price

X Chapman’s

X Nestle

X Breyer’s

X Ben & Jerry’sX Haagen Dazs

X No Name Brand

Perceptual Map & Preference Analysis

Where is the greatest opportunity?

• Key to being successful is to convince consumers that the product provides that unique benefit

– Accomplished through your marketing mix

– Core Benefit Proposition/CBP

– clear concise statement of to ensure all elements of the marketing mix deliver same message

Marketing Plan/StrategyDetermining the marketing mix

Product• the creation of a good or service that provides greater value

to customers than previously existed

• Total Product Concept/ Value Package– features necessary to support CBP; value-adding

attributes– total package of benefits as seen from the eyes of the

consumer - everything they evaluate before deciding to buy something

• brand name, package, service, delivery, credit, atmosphere, image, reputation, accessibility, price

• Elements to consider:

Product Classification• Convenience goods -

– staples – – impulse -– emergency -

• Shopping goods -– homogeneous goods -– heterogeneous goods –

• Specialty goods -• Unsought goods –

* different markets classify products differently* important to see your product as customer does

Product Life Cycle – impacts marketing mix decisions

Sales

Time

Introduction

Growth

Maturity

Saturation

Decline

Intro. Growth Maturity Saturation Decline

Comp’n

Product

Price

Promotion

* new uses, new users - market modification* can also speed up cycle “planned obsolescence” - fashion/style, quality, (functional)

Product Development

• 5 types of product development– New-to-world– New product line– New product added to existing line– Improved product (product modification)– Lower-priced version of existing product

• Extending product life– Product extension – – Product adaptation –– Reintroduction –

Branding• “using symbols to communicate qualities of a product”

• communicate CBP

• Brand equity – degree of consumer loyalty & awareness

• move customer through stages of recognition» Non-recognition

» Brand recognition

» Brand recall

» Brand preference

» Brand loyalty

• Types of brand names– National - Private

Price

• cost-based, target profit– CVP Analysis!

• competitive-based

• value-based - “price-led”

• most important

Specific Strategies/Approaches– introductory pricing -

skimming/penetration

– market protection, or market domination– market stabilization - “follow-the-leader”– product line promotion, and price lining– customer attraction (building traffic)

– image enhancement - “psychological pricing”

Promotion

Promotional Tools:AdvertisingPersonal SellingSales PromotionPublicity

Integrated Marketing Communication / IMC

Any technique designed to sell a product Promotional Objectives:

- Communicating information, including CBP- Positioning products- Adding value- Controlling sales volume

Advertising• Objectives:

– communicate CBP– create AIDA (move customer through decision process)– Remind

• Advertising Strategies:– Informative advertising– Persuasive advertising– Comparative advertising– Reminder advertising

• Advertising Media:– Television - direct mail– Radio - magazines

How Advertising WorksHigh Involvement Low Involvement

Awareness - recall

Awareness - recognition

Attitude

Trial Behaviour

Trial Behaviour

Attitude

Repeat Behaviour Repeat Behaviour

Need recognition

Informationseeking

Eval. ofalternatives

Purchase decision

Post-PurchaseEvaluation

How Buyers Behaves

Advertising Communication

• Failure due to:– lack of source credibility

– message not encoded well

– message/medium inappropriate

Factors to Consider in Media Selection

geographic selectivity target selectivity flexibility/timeliness absolute cost length of life quality of reproduction creative ability capacity for detail

Personal Selling– more effective but more expensive– combine with advertising to:

– factors to consider in budget decision

Sales Promotion– short term incentives to induce purchase

• free samples, trial period

• cents off coupons, cash rebates

– support personal selling and advertising– support CBP

Public Relations & Publicity

• power of the Internet– http://www.canadianbusiness.com/technology/trends/article.jsp?

content=20060213_74332_74332

• online viral marketing– http://business.timesonline.co.uk/tol/business/industry_sectors/media/

article2138718.ece

• mobile devices– http://articles.moneycentral.msn.com/Investing/Extra/

TheRealThreatToGoogle.aspx

Promotion Trends

ManufacturerManufacturerAgentAgent

WholesalerWholesalerRetailerRetailer

CustomerCustomer

Place• purchase is a function of desire and availability

– logistical decisions costly, time consuming and not easily changed

– choice of location must fit with CBP– critical decision

• use of marketing intermediaries / channel of distribution

Decision determined by:• company

• market

• product

• Advantages

– provide information on market

– cash flow, credit risk

– convenient locations

– opportunity for comparisons

• Disadvantages

– M.S. R.P.

– reduced marketing effort

Using a Wholesaler

Overcoming the Disadvantages of a Wholesaler

– Push strategy• focus on

– volume, contribution» case allowances, volume discounts» contests

– Pull strategy

Relationship Marketing

– emphasizes lasting relationships– get more than product/service

Strategic significance?

Examples:

International Marketing

• Product – what needs to change?

• Price – domestic competitors? domestic costs?

• Promotion – consider

• Place– difficult to begin new network