interview prep - marketing club

8/3/2019 Interview Prep - Marketing Club

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Interview Specific Sales and Marketing Concepts

Interview Specific Salesand Marketing ConceptsSkills Development Council, Marketing Club

2012

(This document may need further refining, few corrections,

and improvements.

Hence, request you to discuss with the clubs council members

in case of any disagreement or if you would like to add more

material)


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CONTENTS

1. MUST KNOW..............................................................................................................................................................1

2. PRODUCT DEVELOPMENT PROCESS ..........................................................................................................................1

3. JOB OF A BRAND MANAGER/PRODUCT MANAGER ..................................................................................................1

4. Consumer Understanding..........................................................................................................................................2

5. Conjoint Analysis .......................................................................................................................................................2

5.1 Steps in Conjoint..................................................................................................................................................2

5.2 Mathematical Representation Example ..............................................................................................................3

5.3 Summary OF Steps in Conjoint Analysis Application ............ ........... ......... ........... ........... .......... ........... ........... .....4

5.4 Applying the choice Model to calculate share of mind .......................................................................................4

5.5 Choice Modeling: How to find total share of mind for a product ........... ........... .......... .......... ............ .......... .......5

5.6 Pros and Cons of Conjoint Analysis......................................................................................................................5

6. Segmentation - only need based!..............................................................................................................................5

6.1 segmentation model-1: Cluster Analysis .............................................................................................................5

6.2 segmentation model-2: Conjoint Analysis...........................................................................................................6

7. Segmentation Discriminators ....................................................................................................................................6

8. Positioning .................................................................................................................................................................7

8.1 MDS Analysis and Semantic Analysis ...................................................................................................................7

9. Competition Analysis Models ....................................................................................................................................8

9.1 Key Success Factor Model....................................................................................................................................8

9.2 Strategic Grouping...............................................................................................................................................8

9.3 Strategic Value-Chain...........................................................................................................................................9

9.4 PARTS...................................................................................................................................................................9

10. Market Analysis .....................................................................................................................................................10

11. Environment ..........................................................................................................................................................10

12. GO TO-Market Strategy .......................................................................................................................................10

13. Product differentiation ..........................................................................................................................................10


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14. Proposition ............................................................................................................................................................10

15. Brand .....................................................................................................................................................................11

16. Pricing ....................................................................................................................................................................11

17. Placement/distribution strategy............................................................................................................................11

17.1 Selecting Channels ...........................................................................................................................................11

17.2 Managing Channels .........................................................................................................................................13

17.3 Process of selecting distribution channels:......................................................................................................13

17.4 Store Selection Process....................................................................................................................................14

18. Critical elements to measure for sales manager ...................................................................................................14

19. Promotions Integrated Marketing Communications..........................................................................................15

19.1 How to calculate Share of Voice (% Ad-spend or GRP):...................................................................................15

20. Sizing the sales force..............................................................................................................................................16

21. Resource Allocation ...............................................................................................................................................19

21.1 Market Share Identity Model for allocating resources:...................................................................................20

22. Customer Lifetime Value .......................................................................................................................................23

23. Forecasting Product Category demand (Bass Model) ...........................................................................................24

24. Estimating Maximum Willingness to pay...............................................................................................................25

25. Perceived Service Quality ......................................................................................................................................26


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Page 1

1. MUST KNOW

Top 2 ads

In any advertisement:

o The evaluation steps are

Target Audience - Users or Decision makers, Demographic/Behavioral/Psychographic

Consumer Insights Brand Imperatives

Communication Objectives

Proposition or Selling Idea/Main Point/RTB

Creative Direction

o Positioning Functional, Symbolic, or Experiential

o Does it create Goose bumps

Top 2 brands

Top 2 logos

Top 2 taglines

Top 2 print ads

Top 2 products

2. PRODUCT DEVELOPMENT PROCESS

Two Funnel Model

Concept Generation and screening

o Analyze companys strength and related products that can be launched. Take those concepts. Need

gaps through primary and secondary research.

o Concept screening through confirmatory research.

Product Generation and Screening

o Internal Checks

o Take the selected products to external consumers for primary research

o Screen the product

Volume estimation

o Test Market

o Simulated Test Market

BASES

Input of Efficacy

o Product research Results (Product)

o Ad test results (Promotion)

Input of effort

o Relative price (Price)

o Distribution intensity (Place)

o Financial Bottom-line

3. JOB OF A BRAND MANAGER/PRODUCT MANAGER

BM is a mini-general manager responsible for the P&L of the brand

His job is to form a plan of action to allocate resources for maximizing value-cost leverage and gain

competitive advantage

Works across products and categories

o Common Trade-offs

Make vs outsourcing


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Intervi

Promotion vs a

New customer

Single product

Value-Cost Leveraging

Increase value to customer and

Focus on this graph: You have

4. CONSUMER UNDERSTANDI

Has three parts Preferences, Perc

Preferences are generally

Preferences lead to percep

Discuss above as much as you can

5. CONJOINT ANALYSIS

Tool used for estimating mind shar

5.1 STEPS IN CONJOINT

a. Attribute list forma

b. Data collection

c. Utility Calculation

d. Market Simulation

Conjoint (trade-off) analysis has

Research. It is used to measure th

Cost to

service

Value t

w Specific Sales and Marketing Concepts

Page 2

dvertising

vs existing

vs product line

decrease your cost. Give cost advantage to consu

o increase the gap. Thats the main motive.

G

eptions, and Behavior.

ore heterogeneous than perceptions

ions about different products

ith relevant examples.

through choice modeling (first choice/share of pr

tion

ecome one of the most widely-used quantitati

e perceived values of specific product features , t

Complexity

Customer

er in few cases.

ference).

e methods in Marketing

learn how demand for a


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Page 3

particular product or service is related to price, and to forecast what the likely acceptance of a product would be

if brought to market.

In contrast to simpler survey research methods that directly ask respondents what they prefer or the important

of each attribute, these preferences are derived from these relatively realistic tradeoff situations.

Each profile includes multiple conjoined product features (hence, conjoint analysis), such as:

There are different ways to show product profiles.

Respondents usually complete between 12 to 30 conjoint questions. The questions are designed carefully, using

experimental design principles of independence and balance of the features . By independently varying the

features that are shown to the respondents and observing the responses to the product profiles, the analyst can

statistically deduce what product features are most desired and which attributes have the most impact on

choice.

The result is usually a full set of preference scores (often called part-worth utilities) for each attribute leveincluded in the study. (This is obtained by running a regression). Summing up the part-worth utilities gives the

utility of the particular profile.

5.2 MATHEMATICAL REPRESENTATION EXAMPLE


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5.3 SUMMARY OF STEPS IN CONJOINT ANALYSIS APPLICATION

5.4 APPLYING THE CHOICE MODEL TO CALCULATE SHARE OF MIND

Converting utility scores for product alternatives to choice probabilities.

1. Maximum utility rule (deterministic): predict that an individual will always buy the option with the

highest fitted utility used in high involvement products

2. Logit Model (Probabilistic) predict that an individual will most likely buy the option with the highest

fitted utility, but that there is some uncertainty - used for low involvement products


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Approach:

Cluster analysis seeks to group objects such that segments are created that are as homogenous as possible

given the choices by the researcher

Cluster analysis works on the principle of maximizing the between-cluster variance while minimizing the

within cluster variance

Example: 3 clusters on 2 dimensions

6.2 SEGMENTATION MODEL-2: CONJOINT ANALYSIS

Also used for product planning, pricing decisions, and segmentation Its a model of consumer preferences

Works on the principle that Total Worth = Sum of part-worths = Utility

Now, from the data, attribute importance for different segments can be measured using conjoint analysis.

7. SEGMENTATION DISCRIMINATORS

1. Observables (model free)

Demographic Age, income, Sex, education, marital status

Geographic

2. Unobservable (need marketing model cluster analysis & conjoint for identification)

Values and Lifestyle (VALS)

Psychographic: SEC, Personality, Lifestyle

Behavioral: Occasional, Benefits, Loyalty Status, attitude towards product etc.


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9. COMPETITION ANALYSIS MODELS

Three models can be used:

1. Key Success Factors

2. Strategic Grouping3. Strategic Value Chain

4. PARTS

9.1 KEY SUCCESS FACTOR MODEL

Put name of companies along row and success factors of product (can be an output of factor analysis) along

column.

Rate each company on these success factors from 1 to 10, and find weighted average

KSFs Maruti Hyundai Honda Toyota

Pick-up

Mileage

Noise

AVERAGE

9.2 STRATEGIC GROUPING

Cluster of companies in an industry with similar competitive approach or strategic position


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Page 9

Strategic Maps of the United States Airline Industry

Braniff

TWA

Eastern

United

American

Delta

WesternRepublicOzark

USAir Piedmont

FrontierAirCal

PSA

South-

west

Texas Intl

United

South-

west

America

West

InternationalInternational

NationalNational

Regional Regional

No Frills No FrillsFull Service Full Service

Quality of Service Quality of Service

GeographicScope

The Late 1970s The Early 1990s

Reno

Air

Continental

Pan

Am

North

west

Laker

WorldAmerican

TWA

Delta

USAir

NorthwestConti-

nental

Kiwi

Others

Talk about profits, intensity of competition, marketing channels etc. for above clusters

9.3 STRATEGIC VALUE-CHAIN

Compare companies on elements of primary value chain

9 .4 PARTS

Players: customers, suppliers, substitutors and complementors

Added values

o what each player brings to the game

o make your firm a more valuable player

Rules: could arise from law, custom, practicality, or contracts


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Page 10

Tactics: moves used to shape the way players perceive the game and hence how they play -

Perception is Reality

Scope: describes the boundaries of the game

10. MARKET ANALYSIS

Market Potential Do market sizing and growth Porters 5 force analysis

11. ENVIRONMENT

PEST (Political, Economical, Social, and Technological factors) model

12. GO TO-MARKET STRATEGY

External Internal

Will Give

13. PRODUCT DIFFERENTIATION

A successful differentiation should: Generate customer value

Provide perceived value

Difficult to copy

How?

Brain-storm and find out three product/packaging/proposition parameters MOST IMPORTANT for

consumer

Brain storm and put across ways in which differentiation can be done in each parameter in most

profitable way

14. PROPOSITION Selling story of the brand to the consumer

Sell 4S to consumer

o Survival

o Security

o Sex

o Status

Insight

o Why behind the what?

SWOT Analysis

Business Value Chain

Analysis

Consumers STP

Competition

Market

Environment

4 Ps (Do some

differentiation

here)


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o The reason behind the observations. E.g.

Hutch Pug dog Dog is most faithful animal

Axe Every man wants to have an edge in mating game

15. B RAND

Brand key model Root Strength

Competitive Environment

Target

Insight

Benefit

Values, Beliefs, & Personality

RTB (Difficult)

Discriminator

Essence

16. PRICING

Three types Cost based, Competition based, and Value based

In case of strategic pricing, all three are taken into consideration.

Choice Share is calculated for a set of product attributes at different prices (using conjoint data and part -

worths)

Graph of Price vs Choice Share is made

Choose price to maximize profit potential as = (Price-Retail Margin-Cost) X Choice Share

17. PLACEMENT/DISTRIBUTION STRATEGY

All about Selecting and Managing channel members

17.1 SELECTING CHANNELS

Depends on Focus on pull strategy - Funds

Channel objective will give channel design 0-level vs 2-level

Service level requirement of consumer i.e., lot size, waiting and delivery time etc. to be decided

Steps:

1. Importance of channels Push vs Pull Depends on your dependence on pull

In managing channels, first decision that company has to take is how much they have to allocate resources for

Push vs Pull marketing.

Push Strategy


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Sales Force and Trade Promotions to induce intermediaries to carry, promote, and sell the produc

to end users

Appropriate when there is:

low brand loyalty in a category

brand choice is made in the store

impulse purchases in category product benefits are well understood

Pull Strategy

Manufacturer uses advertising, promotion, and other form of communications to persuade

consumers to demand the product from intermediaries, thus inducing intermediaries to keep it

Appropriate when there is:

High brand loyalty

High involvement in category

Consumers are able to perceive differences between brands

Consumers choose brand before they go to the store

Marketers have to employ both push and pull marketing in most cases.

Hybrid channels: Different channels for different consumer segment

2. Role of marketing channels Depends on objectives of channel

Channel levels based on the role of channels such as gathering information about customers, competitors,

communications etc.

0- level manufacturer to consumer

1-level manufacturer-retailer-consumer

2-level manufacturer-wholesaler-retailer-consumer

3. Channel Design Decisions Depends on consumer requirement

Customer desired output levels to be achieved

Service output levels that consumers want

Lot size

Waiting and delivery time

Spatial convenience

Product Variety level of assortment

Service Breakup

Evaluating the major alternatives

o Economic Criteria: Each channel will produce different level of sales and costs as shown in figure

below.

o Align customers and channels to generate maximum demand at lowest cost

E.g a Delhi based furniture seller wants to sell furniture in southern cities Bangalore

Hyderabd, and Cheennai Control and adaptive criteria


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17.2 MANAGING CHANNELS

Marketing Flows in Channels

17.3 PROCESS OF SELECTING DISTRIBUTION CHANNELS:

Level of channels as per the industry

o FMCG: Producer, Wholesaler, Retailer, Consumer

Purpose of channels

o Sales Volumes

o Growth

o Brand Equity

o Customer feedback

Marketing Flows Model Rank channel partners to deliver values

o From Producer to Consumer

PPO Physical Possession, Promotion, Ownership

o From Consumer to Producer


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NFR Negotiation, Financing, , Risking

OP Ordering, Payment

Additionally, use common market understanding as follows

o For our target segment which is identified by clustering, which channels do they most visit

o Through which channels are the category products most sold

o Select top Grocery Stores for category sale wise

o Also select those in which our brand is strong

o Sum the two to find total no of stores

o Decide ideal pack size

17.4 STORE SELECTION PROCESS

Elements to consider while taking decision between different store types (e.g. Grocery vs MT):

Market Dynamics

Target Shopper

Key Understanding

Solutions

Evidence Values and Personality

Differentiator

Store in a purchase

18. CRITICAL ELEMENTS TO MEASURE FOR SALES MANAGER

Sales manager handles three things:

People

Stock

Money

Critical Elements in Retailing

X

Gross Margin

-------------------

Net Sales

Net Sales

-----------------

Employees

Selling Feet

--------------------Employees

Net Sales

------------------

Selling Feet

Inventory

-------------------

Selling Feet

Net Sales

------------------

Inventory

Gross Margin

----------------------------

Employees

Gross Margin

--------------------------

Selling Feet

Gross Margin

--------------------

Inventory

GMROL

GMROS

GMROI

=

X

X

X

=

=

=

=X


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Intervi

Bullwhip effect

19. PROMOTI ON S I NTEGRAT

Process of selecting IMC:

Through segmentation, w

known

IMC is allocating resourc

maximum awareness (shar

Channels are TV, Radio, Pr

Sony inside TV as channel

As brand manager, I kno

watch? What do they wat

I know the cost per slot for

I also know the reach and

category GRPs, equivalent

I can now find out cost per

Also find out how effectiv

understanding

Plot effectiveness vs cost a

19.1 HOW TO CALCULATE SHA

Share of Voice: % share of total advertisin

SOV = Dove Soap GRPs/Ski

Share of Spend:

Share of Spend (SOS): % sh

brand.

Share of Audience:

% share of audience held b

Also referred as:

w Specific Sales and Marketing Concepts

Page 15

ED MARKETING COMMUNICATIONS

hich is done by cluster analysis, habits and pref

es, budget, at different channels through selec

e of mind)

int, OOH, and Digital, and vehicle inside each chan

that what the habits of watching TV of my cons

h?

different vehicles

can multiply it by frequency to calculate Target G

to share of voice or awareness

GRP to find out the most and least effective chann

is each of the medium for target segment for con

nd allocate budget accordingly

E OF VOICE (% AD-SPEND OR GRP):

weight in a product category held by a particular b

Cleansing Category GRPs

re of total advertising spend in a product category

a particular program, station or network during a

rences of consumers are

ted vehicles for creating

el could be Start Plus and

mers are. Where do they

Ps for brand as % of tota

ls

version based on category

rand

held by a particular

given time


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Page 16

o Viewership Share (TV Station Share)

o Listenership Share ( For listeners of radio station )

o Readership Share ( for readers of a Print title)

Why?

o Helps compare share of viewership* between stations within a given market, given time

period, given daypart, given TG

o A trend analysis across time can help know performance of one station vs. others

o Audience share can be with respect to all channels or to all channels within a given genre

o For example: Share of Star Movies in Movie Channel

20. SIZING THE SALES FORCE

Four-Step Market-Based Process for sizing the sales force:

1. Customer Understanding: a) Identification b) Needs c) Buying processes

2. Customer Segmentation.

3. Segment Coverage& Assessment of segment value for the firm.

4. Sales Force Sizing.

Approaches to Sales Force Sizing:

1. Financial approaches: (frequently used)

a. Percentage of sales

b. Affordability

2. Workload buildup approaches:

a. Coverage Strategy Definition: Develop the most appropriate workload for each market segment; and

b. Sales Force Sizing: Add up the effort required to cover each of the market segments


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3. Sales response approach:

How to measure response functions:

Use market data (empirical): Obtained from syndicated sources or collected in-house

Use survey data (experimental): Like a conjoint survey

Use discussions (judgments):

o example: use a structured discussion to elicit or collect managements intuitions

quantitatively

o reiterate to obtain consensus estimate

Adbudg method of judgement

Used to measure market response to advertising& sales force Uses judgments-structured survey among managers to harvest the collective wisdom about market

responsiveness

Uses soft data to quantify market responses i.e puts equation to intuition

Upside

very useful in scenarios with no data quickbuilds consensusencourages systematic thinking;

Implementation:

What do you expect the sales level (relative to current levels) to be in response to

no sales force

50% of current sales force



saturation level sales force

Answering these questions is usually done by forcing a consensus estimate from a team of managers al

members of the team first answer the questions privately results are revealed & discussed adjustments are

made & discussed until a single set of answers to the 5 questions remains.

After the calculations are made, Sales Response is calculated as:

Sales response = min + (max min) SFc/ (d + SF

C); d = Competition Parameter, c = shape parameter.


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Page 19

Remember, sales force is only one way of reaching consumers:

21. RESOURCE ALLOCATION

Resources among different brands in a category, different categories, and different products need to be

allocated.

Allocating Resources across marketing inputs

Share of Mind Product and Price Conjoint analysis->Total worth=sum of part worths -> Logit Mode

to find preferences among products->Mind Share Calculation

Share of Voice Promotion

Share of Distribution Place


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21.1 MARKET SHARE IDENTITY MODEL FOR ALLOCATING RESOURCES:


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From Elasticity to Allocation:

Like US/(US+THEM)

Allocating resources across multiple products within an SBU

Without interdependent demand:

With interdependent demand :

Examples:

o Gillette Sensor and Gillette Sensor Prestige

o Detergents (Tide and Cheers) by P&G

o American Express Green, Gold and Platinum cards


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Empirical Generalizations on Elasticities

Allocating Resources across Segments

BCG Matrix Approach:

Classify Product/Business Groups on two dimensions:

market/industry attractiveness [how good is the market]

company/business strength [how strong am I]

Business strength is measured as Relative Market Share The larger I am, the greater is the likelihood that I can generate cash

Industry Attractiveness is measured as % age growth rate of the market

Growing industries are more attractive

Growing industries require cash

Healthy Portfolio:


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Sick Portfolio:

Strengths

easy to use

diverse applications

o Resource allocation

o Effect of mergers on strategy

Weaknesses Questions about share profitability link

Assumptions about finite cash flow

Subject to Moral Hazard

Often misapplied as they appear to be easy to use

Assumes independence across SBUs.

22. CUSTOMER LIFETIME VALUE

Creation and sustenance of long-term relationships with the customers has become focus of companies. In such

an environment, marketing serves the purpose of maximizing customer lifetime value (CLV) and custome

equity, which is the sum of the lifetime values of the companys customers.

Why CLV?

1. Traditional marketing metrics such as brand awareness, attitudes, or even sales and share are not

enough to show a return on marketing investment. In fact, marketing actions that improve sales or

share may actually harm the long-run profitability of a brand.

2. Financial metric such as stock price and aggregate profit do not solve problem wither. Although these

measures are useful, they have limited diagnostic capability. Recent studies have shown that not all

customers are profitable. Therefore, we need to target-in and target-out (fire) customers based on CLV

calculations.

CLV for a customer can be measured using following:


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23. FORECASTING PRODUCT CATEGORY DEMAND (BASS MODEL)

Introduction:

The Bass model as it has come to be known is undoubtedly one of the most widely used, frequently

referenced and thoroughly researched marketing models in the world. First published in 1969, the model has

withstood the test of time and technicians who have added numerous bells and whistles designed to extend it,

expand it, add more variables and more complexity. Yet the basic three parameter model continues to deliveaccurate useful forecasts and insights for executive decision about innovations that are opening new and

emerging markets.

What is so unique about the model? It is amazingly versatile. It can represent distinctly different patterns of

adoption from slow growth sleepers to instant hits blockbuster for distinctly different products from state of

the art consumer electronics to such common tools as the toaster and the hair dryer. And, distinctly different

fields from medical breakthroughs like artificial insemination and rural innovations as bale hay.

It is a predictive model that allows us to forecast future adoptions, even when no data exists for our innovation.

We can use the parameters from the data base of products that had similar characteristics when they were

adopted.

The Model:

The model is built on two basic assumptions, that potential adopters of an innovation are influenced by two

types of communication channels. Broadcast media and interpersonal channels. Individuals adopting a new

product because of what they see or hear from mass media advertising messages occur continually, but peak

early in the product life cycle. And individual adopting based on what they see or hear from prior adopters.

If M is the upper bound on sales, the Demand from Innovators in time period t is:

(2.1)

Where, p is the coeff of innovation and At is the number of adopters by time t

The Demand from Adopters is:

(2.2)

Thus the total demand is,

St = D1 + D2 (2.3) Where, At = St-1 + St-2 (2.4)


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24. ESTIMATING MAXIMUM WILLINGNESS TO PAY

Steps:

1. Calculate the Exchange Rate

2. Using the Regression Data, find the Sum of all Utility From Non-Price Attributes

3. Multiply the Exchange Rate with the sum calculated in step 2 to obtain the Maximum WTP.

Example:

4. Sum of Non Price Attributes can be calculated as below:


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5. We get the Maximum WTP by multiplying Exchange Rate in Column 1 with the sum in Column 8.

25. PERCEIVED SERVICE QUALITY

Gap between expected and perceived service

GAPS Model

Service Quality GAPS Model

GAP 1

GAP 4

GAP 3

GAP 2

CUSTOMER

Personal Needs Past Experience

Expected Service

Perceived Service

GAP 5

External

Communications

to Customers

Service Delivery

(incl. pre-& post-contacts)

Translation of Perceptions

into Service Quality

Specifications

Management Perceptions

of Customer Expectations

MARKETER

Word of Mouth

Communications

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