crash course in basic marketing sep 2011
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Recap workshopin
Marketing
Facilitated by
Prof. Suresh Vishwanath
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2
Prof. Suresh Vishwanath
Industry, Training and Teaching experience of over 34 yearsInternational experience including that of General Manager(Marketing) and as a Group Managing Director of an MNC;
Professional pursuits have entailed presence in number ofCountries & Cities in India, Middle East, Far-East, Africa, US,UK, The Continent and Scandinavia;
Continues to serve on the board of a number of companiesin Europe and Africa; and
He was Dean at SIBM & NICMAR. Currently he is a visitingfaculty at a number of B-Schools in India and abroad
B Sc (Hons), MA (Psy & SW), Post Graduate from XLRI & Fellow
Member-American Psychological Association & Worldwide Association of
Business Coaches
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Defining Marketing
for the 21
st
Century
1
Marketing Management
A South Asian Perspective, 13th
ed
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What is Marketing Management?
Marketingmanagement is the
art and science
of choosing target marketsand getting, keeping, and growing
customers through
creating, delivering, and communicatingsuperior customer value.
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What is Marketed?
Goods
Services
Events & Experiences
Persons
Places & Properties
Organizations
Information
Ideas
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Functions of CMOs
Strengthening the brands
Measuring marketing effectiveness
Driving new product development based oncustomer needs
Gathering meaningful customer insights
Utilizing new marketing technology
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Figure 1.5 The Four Ps
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Marketing Management Tasks
Develop market strategies and plans
Capture marketing insights
Connect with customers
Build strong brands
Shape market offerings
Deliver value
Communicate value
Create long-term growth
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Developing Marketing
Strategies and Plans
2
Marketing Management
A South Asian Perspective, 13th
ed
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Figure 2.7 The Business Unit
Strategic Planning Process
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SWOT Analysis
Strengths
Weaknesses
Opportunities
Threats
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Market Opportunity Analysis (MOA)
Can the benefits involved in the opportunity be
articulated convincingly to a defined target market?
Can the target market be located and reached with
cost-effective media and trade channels? Does the company possess or have access to the
critical capabilities and resources needed to deliver
the customer benefits?
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Market Opportunity Analysis (MOA) (cont.)
Can the company deliver the benefits better
than any actual or potential competitors?
Will the financial rate of return meet or
exceed the companys required threshold for
investment?
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Figure 2.8 Opportunity Matrix
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Figure 2.8 Threat Matrix
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Porters Generic Strategies
Overall Cost Leadership
Differentiation
Focus
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Marketing Plan Contents
Executive summary
Table of contents
Situation analysis
Marketing strategy
Financial projections
Implementation controls
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Evaluating a Marketing Plan
Is the plan simple?
Is the plan specific?
Is the plan realistic?
Is the plan complete?
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Gathering Information and
Scanning the Environment
3
Marketing Management
A South Asian Perspective, 13th
ed
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What is a
Marketing Information System (MIS)?
A marketing information system consists of
people, equipment, and procedures to gather,
sort, analyze, evaluate, and distribute needed,
timely, and accurate information tomarketing decision makers.
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Table 3.1 Information Needs Probes
What decisions do you regularly make?
What information do you need to make thesedecisions?
What information do you regularly get?
What special studies do you periodically request? What information would you want that you are
not getting now?
What are the four most helpful improvements
that could be made in the present marketinginformation system?
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Sources of Competitive Information
Independent customer goods and service review
forums
Distributor or sales agent feedback sites
Combination sites offering customer reviews andexpert opinions
Customer complaint sites
Public blogs
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Needs and Trends
Fad
Trend
Megatrend
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Trends Shaping the
Business Landscape
Profound shifts in centers of
economic activity
Increases in public-sector
activity
Change in consumer
landscape
Technological connectivity
Scarcity of well-trained
talent
Increase in demand for
natural resources
Emergence of new global
industry structures
Ubiquitous access to
information
Management shifts from art
to science
Increase in scrutiny of big
business practices
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Environmental Forces
Demographic
EconomicPolitical-Legal
Socio-CulturalTechnological
Natural
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Conducting
Marketing Research and
Forecasting Demand
4
Marketing Management
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What is Marketing Research?
Marketing research is the systematic design,
collection, analysis, and reporting of data and
findings relevant to a specific marketing
situation facing the company.
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Types of Marketing Research Firms
Syndicated-
serviceCustom
Specialty-
line
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The Marketing Research Process
Define the problem
Develop research plan
Collect information
Analyze information
Present findings
Make
decision
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Step 2: Develop the Research Plan
Data
Sources
Contact
Methods
Research
Instruments
Sampling
Plan
Research
Approach
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Research Approaches
Observation
Focus Group
Survey
Behavioral Data
Experimentation
Ethnographic
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Pros and Cons of Online Research
Advantages
Inexpensive
Fast
Accuracy of data, even
for sensitive questions
Versatility
Disadvantages
Small samples
Skewed samples
Technological problems
Inconsistencies
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What is a
Marketing Decision Support System (MDSS)?
A marketing decision support system is a
coordinated collection of data, systems,
tools, and techniques with supporting
hardware and software by which an
organization gathers and interprets
relevant information from business and
environment and turns it into a basis formarketing action.
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Barriers Limiting the Use of
Marketing Research
A narrow conception of the research
Uneven caliber of researchers
Poor framing of the problem Late and occasionally erroneous findings
Personality and presentational differences
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What is Marketing Metrics?
Marketing metrics is the set of measures that
helps marketers quantify, compare, and
interpret marketing performance.
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Table 4.4 Marketing Metrics
External Awareness
Market share
Relative price
Number of complaints
Customer satisfaction
Distribution
Total number ofcustomers
Loyalty
Internal Awareness of goals
Commitment to goals
Active support
Resource adequacy
Staffing levels
Desire to learn
Willingness to change Freedom to fail
Autonomy
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What is Marketing-Mix Modeling?
Marketing-mix models analyze data from a
variety of sources, such as retailer scanner
data, company shipment data, pricing, media,
and promotion spending data, to understandmore precisely the effects of specific
marketing activities.
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Marketing Dashboards
A customer-performance scorecardrecords how well the company is doingyear after year on customer-basedmeasures.
A stakeholder-performance scorecardtracks the satisfaction of variousconstituencies who have a critical interest
in and impact on the companysperformance including employees,suppliers, banks, distributors, retailers, andstockholders.
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Table 4.5 Sample Customer-Performance Scorecard
Measures
% of new customers to average #
% of lost customers to average #
% of win-back customers to average #
% of customers in various levels of satisfaction
% of customers who would repurchase
% of target market members with brand recall
% of customers who say brand is most preferred
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Figure 4.3 Example of a
Marketing Dashboard
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The Measures of Market Demand
Potential
Market
Penetrated
Market
Target
Market
Available
Market
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Vocabulary for Demand Measurement
Market demand
Market forecast
Market potential
Company demand
Company sales forecast
Company sales potential
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Figure 4.4 Ninety Types of
Demand Measurement
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Figure 4.5
Market Demand Functions
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Figure 4.5
Market Demand Functions
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Product Penetration Percentage
H C W E i
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How Can We Estimate
Current Demand?
Total market potential
Area market potential
Market buildup method
Multiple-factor index method
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Estimating Future Demand
Survey of Buyers Intentions
Composite of Sales Force Opinions
Expert Opinion Past-Sales Analysis
Market-Test Method
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Creating Customer Value,
Satisfaction,
and Loyalty
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Marketing ManagementA South Asian Perspective, 13th ed
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Figure 5.2 Determinants of
Customer Perceived Value
Image benefit Psychological cost
Personal benefit Energy cost
Services benefit Time cost
Product benefit Monetary cost
Total customer benefit Total customer cost
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Steps in a Customer Value Analysis
Identify major attributes and benefits thatcustomers value
Assess the qualitative importance of
different attributes and benefits Assess the companys and competitors
performances on the different customervalues against rated importance
Examine ratings of specific segments
Monitor customer values over time
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What is Loyalty?
Loyalty is a deeply held commitment to re-buy
or re-patronize a preferred product or service
in the future despite situational influences
and marketing efforts having the potential tocause switching behavior.
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Measuring Satisfaction
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor Competitive
Performance
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What is Quality?
Quality is the totality of features and
characteristics of a product orservice that bear on its
ability to satisfy
stated or implied needs.
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Estimating Lifetime Value
Annual customer revenue: Rs.500
Average number of loyal years: 20
Company profit margin: 10%
Customer lifetime value: Rs.1000
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What is Customer Relationship Management?
CRM is the process of carefully managing
detailed information about individual
customers and all customer touchpoints
to maximize customer loyalty.
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Framework for CRM
Identify prospects and customers
Differentiate customers by needs
and value to company
Interact to improve knowledge
Customize for each customer
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Customer Retention
Acquisition of customers can cost five times more
than retaining current customers.
The average customer loses 10% of its customers
each year. A 5% reduction to the customer defection rate can
increase profits by 25% to 85%.
The customer profit rate increases over the life of a
retained customer.
Fi 5 5 Th C
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Figure 5.5 The Customer
Development Process
Prospects
Suspects
Disqualified
First-time
customersRepeat
customersClients Members
PartnersEx-customers
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Analyzing
Consumer Markets
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Figure 6.1
Model of Consumer Behavior
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Analyzing
Business Markets
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Characteristics of Business Markets
Fewer, larger buyers
Close supplier-customer
relationships
Professional purchasing Many buying influences
Multiple sales calls
Derived demand
Inelastic demand
Fluctuating demand
Geographically
concentrated buyers
Direct purchasing
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Buying Situation
Straight rebuy
Modified rebuy
New task
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The Buying Center
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
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Identifying
Market Segments
and Targets
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What is a Market Segment?
A market segment consists of a group of
customers who share a similar set of
needs and wants.
Segmenting Consumer Markets
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Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral
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Demographic Segmentation
Age and Life Cycle
Life Stage
Gender
Income
Generation
Social Class
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Behavioral Segmentation
Decision Roles
Initiator
Influencer
Decider
Buyer
User
Behavioral Variables
Occasions
Benefits
User Status
Usage Rate
Buyer-Readiness
Loyalty Status
Attitude
Figure 8.3 Behavioral
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g
Segmentation Breakdown
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Segmenting for Business Markets
Demographic
Operating Variable
Purchasing Approaches
Situational Factors
Personal
Characteristics
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Steps in Segmentation Process
Needs-based segmentation
Segment identification
Segment attractiveness
Segment profitability
Segment positioning
Segment acid test
Marketing-Mix
Strategy
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Effective Segmentation Criteria
Measurable
Substantial
Accessible
Differentiable
Actionable
Figure 8.4 Patterns of
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Target Market Selection
Figure 8 4 Patterns of
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Figure 8.4 Patterns of
Target Market Selection
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Dealing
with Competition
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Figure 9 1 Five Forces Determining Segment
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Figure 9.1 Five Forces Determining Segment
Structural Attractiveness
Figure 9 6 Six Types of
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Figure 9.6 Six Types of
Defense Strategies
G l k S i
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General Attack Strategies
Frontal Attack
Encirclement
AttackBypass Attack
Flank Attack
Guerrilla Warfare
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Specific Attack Strategies
Price discounts
Lower-priced goods
Value-priced goods
Prestige goods
Product proliferation
Product innovation
Improved services
Distribution
innovation
Manufacturing-cost
reduction
Intensive advertising
promotion
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Creating
Brand Equity
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Wh i B d?
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What is a Brand?
A brand is a name, term, sign, symbol ordesign, or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them fromthose of competitors.
The Role of Brands
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The Role of Brands
Identify the maker
Simplify product handling
Organize accounting
Offer legal protection
The Role of Brands
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The Role of Brands
Signify quality
Create barriers to entry
Serve as a competitive
advantage
Secure price premium
Wh t i B di ?
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What is Branding?
Branding is endowing products
and services with the power of
the brand.
Wh t i B d E it ?
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What is Brand Equity?
Brand equity is the added value endowed onproducts and services, which may be reflected
in the way consumers, think, feel, and act with
respect to the brand.
Ad t f St B d
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Advantages of Strong Brands
Improvedperceptions ofproduct performance
Greater loyalty Less vulnerability to
competitivemarketing actions
Less vulnerability tocrises
Larger margins
More inelasticconsumer response
Greater tradecooperation
Increased marketingcommunications
effectiveness Possible licensing
opportunities
Wh t i B d P i ?
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What is a Brand Promise?
A brand promiseis the marketers vision ofwhat the brand must be and do for
consumers.
Wh t i P iti i ?
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What is Positioning?
Positioning is the act of designing thecompanys offering and image to occupy a
distinctive place in the mind of the target
market.
Defining Associations
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Defining Associations
Points-of-difference(PODs)
Attributes or benefitsconsumers strongly
associate with a brand,positively evaluate, andbelieve they could notfind to the same extent
with a competitivebrand
Points-of-parity(POPs)
Associations that
are not necessarilyunique to the brandbut may be sharedwith other brands
Product Differentiation
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Product Differentiation
Product form
Features
Performance
Conformance Durability
Reliability
Reparability
Style
Design
Ordering ease
Delivery Installation
Customer training
Customer consulting
Maintenance
Claims of Product Life Cycles
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Claims of Product Life Cycles
Products have a limited life
Product sales pass through distinct stages
each with different challenges and
opportunities
Profits rise and fall at different stages
Products require different strategies in each
life cycle stage
Figure 11.1 Sales and
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Product Life Cycle
Figure 11.2 Common
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Product Life-Cycle Patterns
Figure 11.3 Style, Fashion, and Fad Life
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Cycles
Strategies for Sustaining
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Rapid Market Growth
Improve product quality, add new features, andimprove styling
Add new models and flanker products
Enter new market segments Increase distribution coverage
Shift from product-awareness advertising to product-
preference advertising
Lower prices to attract the next layer of price-
sensitive buyers
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Setting Product Strategy
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What is a Product?
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What is a Product?
A product is anything that can be offered to amarket to satisfy a want or need, including
physical goods, services, experiences, events,
persons, places, properties, organizations,information, and ideas.
Figure 12 2 Five Product Levels
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Figure 12.2 Five Product Levels
Durability and Tangibility
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Durability and Tangibility
Nondurable
goods
ServicesDurable
goods
Product Differentiation
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Product Differentiation
Product form Features
Customization
Performance
Conformance
Durability
Reliability
Repairability
Style
Service Differentiation
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Service Differentiation
Ordering ease
Delivery
Installation
Customer training Customer consulting
Maintenance and repair
Returns
The Product Hierarchy
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The Product Hierarchy
Need family
Product family
Product class
Product line
Product type
Item
Product Line Analysis
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Product Line Analysis
Convenienceitems
Core product Staples
Specialties
Line Stretching
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Line Stretching
Down-Market Stretch
Up-Market Stretch
Two-Way Stretch
Line Filling
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Line Filling
Pruning
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Pruning
Pruning weak brandscan strengthen the
remaining brands in
the line
What is the Fifth P?
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What is the Fifth P?
Packaging, sometimes called the fifthP, is all the activities of designing and
producing the container for a product.
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Introducing
New Market Offerings
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Categories of New Products
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Categories of New Products
New-to-the-world
Cost reductions
New product lines
Additions
Improvements
Repositionings
Factors That Limit
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New Product Development
Shortage of ideas
Fragmented markets
Social and governmental constraints
Cost of development
Capital shortages
Faster required development time
Shorter product life cycles
What is a Venture Team?
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What is a Venture Team?
A venture team is a cross-functional groupcharged with developing a specific product or
business; intrapreneurs are relieved of other
duties and provided a budgetand time frame.
Figure 20.2 The New Product Development
D i i P
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Decision Process
Ways to Find Great New Ideas
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Ways to Find Great New Ideas
Run informal sessions with customers
Allow time off for technical people to putter
on pet projects
Make customer brainstorming a part of planttours
Survey your customers
Undertake fly on the wall research to
customers
More Ways to Find Great Ideas
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More Ways to Find Great Ideas
Use iterative rounds with customers
Set up a keyword search to scan trade
publications
Treat trade shows as intelligence missions
Have employees visit supplier labs
Set up an idea vault
Drawing Ideas from Customers
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Drawing Ideas from Customers
Observe customers using product
Ask customers about problems with products
Ask customers about their dream products
Use a customer advisory board or a brand
community of enthusiasts to discuss product
Concept Testing
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Concept Testing
Communicability and believability
Need level
Gap level
Perceived value
Purchase intention
User targets, purchase occasions, purchasing
frequency
Marketing Strategy
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Marketing Strategy
Target markets size, structure, and behavior
Planned price, distribution, and promotion for
year one
Long-run sales and profit goals and marketing-mix strategy over time
Figure 20.7 Product Life Cycle Sales
f Th P d t T
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for Three Product Types
Prototype Testing
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Prototype Testing
Alpha testing
Beta testing
Rank-order method
Paired-comparison method
Monadic-rating method
Market testing
Consumer Goods Market Testing
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g
Sales-Wave Research Simulated Test Marketing
Controlled Test Marketing
Test Markets
Test Market Decisions
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How many test cities?
Which cities?
Length of test?
What information to collect?
What action to take?
Timing of Market Entry
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g y
First entry Parallel entry
Late entry
Criteria for
Ch i R ll t M k t
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Choosing Rollout Markets
Market potential
Companys local reputation
Cost of filling pipeline
Cost of communication media
What is Adoption?
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p
Adoptionis an individuals decision to become aregular user of a product.
Stages in the Adoption Process
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Awareness
Interest
Evaluation
Trial
Adoption
Figure 20.8 Adopter Categorization
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Developing Pricing Strategies
and Programs
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Steps in Setting Price
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Select the price objective
Determine demand
Estimate costs
Analyze competitor price mix
Select pricing method
Select final price
Step 5: Selecting a Pricing Method
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Markup pricing Target-return pricing
Perceived-value pricing
Value pricing Going-rate pricing
Auction-type pricing
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Designing and Managing Integrated
Marketing Channels
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What is a Marketing Channel?
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A marketing channel system is the particularset of interdependent organizations involved
in the process of making a product or service
available for use or consumption.
Channels and
Marketing Decisions
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Marketing Decisions
A push strategyuses the manufacturers salesforce, trade promotion money, and other meansto induce intermediaries to carry, promote, andsell the product to end users.
A pull strategy uses advertising, promotion, andother forms of communication to persuadeconsumers to demand the product fromintermediaries.
Channel Member Functions
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Gather information
Develop and disseminate persuasivecommunications
Reach agreements on price and terms
Acquire funds to finance inventories
Assume risks
Provide for storage
Provide for buyers payment of their bills
Oversee actual transfer of ownership
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Figure 15.3
Consumer Marketing Channels
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Figure 15.3
Industrial Marketing Channels
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Designing a
Marketing Channel System
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Marketing Channel System
Analyze customer needs
Evaluate major channel alternatives
Identify major channel alternatives
Establish channel objectives
Figure 15.4 The Value-Adds vs. Costs of Different
Channels
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Channels
Channel-Management Decisions
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Selecting channel members
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members
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Designing and Managing Integrated
Marketing Communications
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What are
Marketing Communications?
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Marketing Communications?
Marketing communications are the means
by which firms attempt to inform,
persuade, and remind consumers, directly
or indirectly, about the products andbrands they sell.
Modes of Marketing Communications
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Advertising Sales promotion
Events and experiences
Public relations andpublicity
Direct marketing Interactive marketing
Word-of-mouth
marketing
Personal selling
Figure 17.1 IMC Builds Brands
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Table 17.1 Communication Platforms
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Advertising Print and broadcast ads
Packaging inserts
Motion pictures
Brochures and booklets
Posters
Billboards
POP displays
Logos
Videotapes
Sales Promotion Contests, games,
sweepstakes
Premiums
Sampling Trade shows, exhibits
Coupons
Rebates
Entertainment
Continuity programs
Table 17.1 Communication Platforms
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Events/ Experiences
Sports
Entertainment
Festivals
Arts Causes
Factory tours
Company museums Street activities
Public Relations
Press kits
Speeches
Seminars
Annual reports
Charitable donations
Publications
Community relations
Lobbying
Identity media
Company magazine
Table 17.1 Communication Platforms
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Personal Selling
Sales presentations
Sales meetings
Incentive programs
Samples Fairs and trade shows
Direct Marketing
Catalogs
Mailings
Telemarketing
Electronic shopping
TV shopping
Fax mail
E-mail
Voice mail
Blogs
Websites
Word-of-Mouth Marketing
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Person-to-person
Chat rooms
Blogs
Figure17.2 Elements in the Communications
Process
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Figure 17.4 Steps in Developing Effective
Communications
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Identify target audience
Determine objectives
Design communications
Select channels
Establish budget
Decide on media mix
Measure results/ manage IMC
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Thank You
&
Wish you all the very Best!!
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