Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Big picture
Marketing Mix what actions will we use in the marketplace to
implement marketing strategy
o Pricing
o Product
o Partnerships internal & external
o Promotion/Communication
Pricing I
Pricing II
Charging diff. prices to diff. consumers for same product increases
profits vs. same price to all consumer, through taking more consumer
surplus (difference b/w price the consumer paid and highest price
they were willing to pay)
E.g. plane fare price discrimination
3 conditions for successful price discrimination
o 1. Different segments with different price sensitivities
o 2. Able to identify what segment a customer belongs, or have
him tell you indirectly (self-selection)
o 3. Prevent resale b/w segments (otherwise low price buyers resell
to high)
75 cent coupon for Tylenol
o 1. Yes, diff. price sensitives
o 2. Self-select by clipping/downloading coupon; could also direct
to particular zip codes
o 3. Unlikely to resell since such low cost; to prevent, could print
name
Check-out coupons @ CVS/Costco club cards
o Purchase habit and history; targeted
Internet retailer
o Know your purchase history or may be able to gauge interest by
time spent, where cursor is etc.
o Price may be dynamic based on history
Price discrimination can achieve social purposes
o Lower prices for drugs in countries with lower incomes
o Scholarships
o Senior citizen discounts
o Parking meters
Yield management
o Change prices quickly based on current or forecasted demand
o Combines price discrimination with dynamic pricing
o High demand or low price sensitivity increase price
o Low demand or high price - price
o Implemented with algorithms for predicting demand
o E.g. Lion King Broadway show
Draws on data for 11.5m audiences, recommends price for
5 types of performance peak dates, off-peak, periods in
between; tickets demand in different time intervals would
affect price recommendation
Customer Value
Customer value is economic value of a customer to the firm
Includes NPV of future profit from customer
Firm must attract high-value customers to flourish
E.g. Spring bought Nextel for the targets high-valued customer base
E.g. Apple has high customer loyalty (retention rate)
Framework:
o How much to spend to attract & keep a customer
o How much is customer worth in the long run
o How does customer value vary across customers
Forecasting Customer Value see written
o 1. Attraction costs
o 2. Net margin on first sale
o 3. Retention costs
o 4. Net margin in future periods
o 5. Forecast: steps 1-4 added together, with discounting
Do not have to make profit on first sale (net margin on 1st sale
attraction costs>0); e.g. credit cards; first year usually at a loss, but
annual profit climbs quickly
Slides 25,26 skipped
How to increase customer value
o 1. Identify and pamper best customers e.g. Chase private client
branch, Starbucks rewards program which gives more rewards to
people who spend more, pay flat fee to get unlimited coffee
o 2. Get rid of low-value customers e.g. Time Warner Table prefers
people who have $$$ packages, retailers reject returns from
serial exchangers
o 3. Increase value of existing customers
Get people to buy more
Special promotions
Reduce prices
Free shipping
Opposite of pampering best customers
E.g. delta private jets increasing value of existing
customers who are already valuable
o 4. Win back former customers
Find out why they left, if they are satisfied with current
firm, and see what you have to offer
New Products
o Introductory stage
E.g. wireless charging for electric cars
Sometimes introductory stage lasts a long time e.g. VR,
microwave
o Rapid growth stage
Standing desk, drones
o Mature stage
Fridge
o Decline stage
Itunes (losing to app store as % of services revenue mix
o Some products have a second life after decline
E.g. butter making a comeback after margarine took its
market share
o Product life cycles are getting shorter (high tech)
Awareness-Trial-Repeat model
Forecast market share
Forecast market share = awareness rate * trial rate *
repeat rate * market size
Awareness rate: % of consumers in target segment
who are aware of product
Trial rate: % of aware consumers who try the product;
a conditional probability; i.e. % of total market who
try = awareness rate * trial rate
Repeat rate: % of triers who buy again
o % of total market who repeat = awareness rate
* trial rate * repeat rate
High repeat rate ~ high success rate of product
Market share among repeaters: what % of their
purchase in category are our product?
Tying together,
o Forecast market share = awareness rate *
trial rate * repeat rate * market size
Market share forecast sales forecast
o Forecast market share * total market
estimate = projected annual sales
o If this figure > GO benchmark, introduce
Forecast sales
Forecast sales = forecast market share * market size
Another way to forecast sales:
Use usage rate among repeaters
% of total market who repeat = awareness rate * trial
rate * repeat rate
% of total market who repeat * total number of
consumers * purchase frequency * amount per
purchase = forecasted sales
Compare FSTM results with goals in business plan
Identify what went wrong i.e. target trial rate in plan
was 60%, but actual was only 45%; identify problem
Use FSTM to fine tune marketing mix if decide to GO
Can test different levels of
o Price
o Package
o Distribution intensity
o Advertising message or level
FSTMs have high external validity, but is
o Expensive
o Time consuming
o Not confidential
o Can be interfered by competitors (interfere with marketing action
or copy product)
Pre-test market
o 1. Controlled test market (field)
Release in a few actual stores
Little or no marketing effort outside of store
o 2. Sales wave (lab is the home)
Receive at home
Contact buy again?
Excellent for measuring multiple repeats and wearout
o 3. Simulated market test ASSESSOR (lab)
Recruit consumers, ask what they buy now, product
perceptions/preferences
Show ads for new product and existing competitors
awareness rate
Give opportunity to buy in simulated store with products
trial rate
If they buy, contact at home for repurchase intent repeat
rate
o Use Awareness-Trial-Repeat model to evaluate Pre-test market
results
o Can use PTM as screen to decide whether to go to more
expensive FSTM
International Marketing
Reasons to go international
o Slow growth in home markets
o Diversify risk
o Economies of scale and scope
o Friendlier regulatory environment
o If you dont, competitors will
o International consumers may like your products better than
domestic consumers
International involvement
o 1. Export, but let distributors control international strategy
o 2. Use distributors, but play active role in international strategy
o 3. Contract or JV with local partner
o 4. Wholly owned subsidiary purchase existing firm
o 5. Greenfield subsidiary start from scratch
Decide right level of involvement
o Financial resources
o Risk tolerance
o Regional expertise
o Past international experience
Choosing location
o Similarity of consumers
o Can use existing consumer and operating advantages
o Growth
o Competition
o Political stability
o Political and regulatory environment
Global international strategy
o Same product/positioning/target segment/market mix in all
countries
o Benefits:
Power of global brand transcends national borders
Centralized coordination saves money and improves
marketing
More efficient product line
Local international strategy
o Different product/positioning/target segment/market mix in each
market
o Benefits:
Recognizes cultural differences
A mix Glocal
o E.g. McD; menus similar, but exists regional variations to cater to
local tastes
E.g. Disney in Europe and HK
o Europe emphasized European roots of characters; multilingual
guides; at first misjudged European habits, which include alcohol
with meals and strict eating times as opposed to frequent snacks
o HK, too small, people did not feel like it was a theme park