Documenti di Didattica
Documenti di Professioni
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Dr Paul Fifield
Visiting Professor
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 1
Paul Fifield
Paul advises companies on Market Strategy and has
written widely on the subject.
He has 25 years experience in strategic consulting with
previous clients in: Agri Chemicals, Aviation, Banking,
Brewing, Business Services, Computing and Software,
Construction, Distribution, Domestic Appliances,
Economic Development, Education, Housing, Hotels and
Catering, Insurance, Leisure & Tourism, Online gaming,
Public Sector, Publishing, Retailing,
Telecommunications, Utilities, Web services and others.
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 3
The Approach
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 4
2 days of THINKING
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 5
Dealing with strategy & marketing
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 6
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 7
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 8
Strategy Terminology
The OBJECTIVE(S)
The goal or aim to which ALL activities in the organisation are directed
An objective always begins with the word TO
Objectives do NOT change in the short term
The STRATEGY
The ONE route which is both NECESSARY and SUFFICIENT to ACHIEVE
the objective
A strategy always begins with the word BY
Strategy is not changed in the short term
The TACTICS
The short term actions required to implement the strategy
Manoeuvres on the field of battle
Tactics do change in the short term
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 9
Filling the strategy gap
The Gap
0 +1 +2 +3 +4 +5 +6 +7
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 10
Strategy and Implementation
STRATEGY FORMULATION
ineffective effective
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 11
Planning
1. Strategic:
Three to Five years depending on the nature of the business.
2. Tactical:
One year to 18 months.
3. Programmes:
Rolling quarterly with quarterly and annual milestones and
reporting.
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 12
First, agree the Financial Hurdles
Every organisation has one or more financial imperatives that it must
satisfy to remain in business. These are not the same as objectives.
These hurdles just need to be seen, measured and jumped. They
should NOT guide the destiny of the organisation
1.
2.
3.
4.
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 13
Then, set the business objective
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 14
Objectives
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 15
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 16
Business Strategies
What is our Business
Strategy? STRATEGY:
Focus
Stuck in
The Middle
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 18
Red Ocean Blue Ocean (Kim & Mauborgne)
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 19
Strategy is rarely linear
B Vision/Objective
te gy
Stra
rk et
Ma
A
Today
1 2 3 4 5 6 7 8 .... x
Time
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 20
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 21
Henry Ford
22
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 22
Levitt on Customers
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 23
We know that customers are Selfish
Whats
WIIfm
In
It
For
Me Me Me Me Me Me Me?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 24
Consumer Behaviour models
The Process
Cultural Sociological Economic
Buying Proposition
Product or Service
[Chisnall]
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 25
The B2B Decision Making Unit (DMU)
DECISION-MAKER INFLUENCER
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 26
Three Aspects of Customer Value
Functional
Your
Offer
Emotional Economic
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 27
From Commodities to Experiences
The Experience
(enjoyed in a $2-5
5 star restaurant)
The Service
(brewed in a 50
regular cafe)
The Good
(ground, packaged,
sold) 525
The Commodity
(harvested & traded) 12
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 28
Laura Ashley
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 30
What business?....
1. Are we in?
2. Should we be in?
Product led Company Market led
Motor Cycles Harley Davidson Big Boys Toys
Watches Swatch
Electric Motors B&D
Railroads Amtrak
Electronics Sony
Cars Jaguar
Watches Rolex
Beer A Busch
Cosmetics Revlon
Pubs Bass Taverns
Coffee Shops Starbucks
Leather/Luggage Louis Vuitton
Encyclopedias Britannica
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 31
HD and their business definition
x Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 32
What business?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 33
What business are we in?
Our business is key to our plans, it:
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 34
Case Task
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 35
What businesses for Sony & Apple?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 36
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 37
Case Task
What objective or vision will you set for your company?
Remember these must be SMART
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 38
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 39
Case Task
What strategy will you use for your company to achieve the
objective or vision you have set?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 40
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 41
Nobody can foretell the future
The future is
where you must
invest. Now!
The only
Certainty IS that
this is the world
in which you will
live and work.
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 42
Some Global Strategic Issues
Some issues for consideration:-
1. The changing nature of society: technological advance;
demographic shifts; environmental issues; ethnic and religious
issues
2. Political instability: middle east; Africa; Russia; EU
3. The changing climate: real or imagined; who bears the brunt;
rate of change; influencing factors
4. The changing nature of work: new work patterns; decreasing job
security; sectoral shifts; stakeholder demands
5. The changing face of organisations: increasing adaptability;
agility; more participative style; more openness
6. The changing world economy: global recession; changing
balance of power
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 43
Dependency Ratios
UK Pensioners :
Working Age
2008, 1:3.23
2033, 1:2.78
Sources, Business
Week & ONS
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 44
Political Instability
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 45
UK Average Temperature Estimates
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 46
Worldwide Rising Sea Levels?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 47
Europe Rising Sea Levels?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 48
A fresh look at the
current Recession
2013
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 49
Some research areas covered
Dynamic capability Market research Strategic & scenario
Adaptive advantage Futurology planning
Horizontal organisations Management accountancy Structured creativity
Customer value Organisation development Complexity theory
Economic cycle theory
Buyer behaviour modelling Theory of growth
Benchmarking
Organisational buying Systems theory
behaviour Corporate strategy (incl.
Classical economics
business-model innovation
Value-based marketing Swarm theory
competitive advantage,
Change management Behavioural finance emergent strategy, decision-
Value innovation (blue Theory of the firm making etc.)
ocean) Business development Econometrics
Discontinuity Customer experience Unreason
Action learning management Brand equity
Chaos theory Organisational culture Strategic market theory
Behavioural economics Knowledge management Leadership
Stakeholder management Personal Values
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 50
NICE (Mervyn King) has become NASTY
Non Nightmare of
Inflationary Austere and
Continuous STagflationary
Expansion Years
Copyright 2011
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 51
Is it just another Recession?
Discontinuity:
A break or gap in a
process that would
normally be
continuous
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 52
Despite the protestations of the media.
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 53
Kondratiev waves
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 54
Kondratiev and Stock Market Cycles since 1789
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 55
From Datastream the 6th wave = ???
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 56
End of wave 5 - Timeline
Early 2008
Aug 2007 Scale of sub-prime
Sachsen LB problem clear when Fannie May 2010
rescued after Mae & Freddie Mac have Early 2009 Greek Bailout
E17bn lifeline problems OECD composite
leading indicators
Dec 2007 Late 2008 begin to turn up
US enters US & global
recession Government
Interventions
2007
2008
2009
2010
2011
Sep 2007 Mid 2009
Northern Rock First indications from
receives liquidity OECD that situation Late 2010
support from BoE is stabilising Bailout of Irish Banks
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 57
And the dark side..
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 58
We are in the economic Winter
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 59
Waves appear to be shortening
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 60
Case Task
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 61
Implications
Customer Behaviour?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 62
Customer Value has MIGRATED.
Much has been spoken about:
The Economic Implications of Social &
Political concerns
End of consumerism
Local/Provenance/Authenticity
The Environment Really?
Return of manufacturing
From Global to Local?
From Quantity to Quality?
Make-do-and-mend/Repair-ability
B-I Obsolescence versus Sustain-
ability?
Slow Tech & robustness
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 63
Brand shift through the discontinuity
Down: Up:
Exclusive -60% Kindness & Empathy +391%
Arrogant -41% Friendly +148%
Sensuous -30% High Quality +124%
Daring -20% Socially Responsible +63%
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 64
Implications
Organisation?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 65
Dont see it, too busy.. ( Banksy)
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 66
Ignore it ( Banksy)
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 67
Wonder what to do about it ( Banksy)
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 68
Charles Darwin
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 69
Jack Welch
John Francis "Jack" Welch, Jr. (1935-) is an American chemical engineer, business
executive, and author. He was Chairman and CEO of General Electric between 1981
and 2001. During his tenure at GE, the company's value rose 4000% and was the
most valuable company in the world for a time. In 2006 Welch's net worth was
estimated at $720 million.
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 70
Implications Strategy?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 71
John Howard
72
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 72
Edward Abby
Growth for
the sake of
growth is the
ideology of
the cancer Edward Paul Abbey (1927 1989) was an
cell
American author and essayist noted for his
advocacy of environmental issues, criticism
of public land policies, and anarchist
political views.
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 73
Henry Mintzberg
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 74
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 75
Case Task
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 76
Strategy & Marketing
DAY 2
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 77
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
DAY 2 MARKETING
2.1 Product
2.2 Price
2.3 Place
2.4 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 78
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 79
What is Marketing?
"Marketing is a social and managerial process by which individuals and
groups obtain what they need and want through creating, offering and
exchanging products of value with others Philip Kotler
CIM(UK)
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 80
Marketing
Marketings contribution to business success in manufacturing,
provision of services, distribution or retailing activities lies in its
commitment to detailed analysis of future opportunities to meet
customer needs and a wholly professional approach to selling to
well-defined market segments, those products and services that
deliver the sought after benefits.
Achieving revenue budgets and sales
forecasts are a function of how good our
intelligence services are, how well suited
our strategies are and how well we are led
Malcolm MacDonald
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 81
Fifields Preface to REAL Marketing
What is the point of Marketing?
To be able to charge the highest
possible price for your product or service
How do you do that? Seek out and add Customer Value By:
1. Being easy to choose
Differentiation
The better you do 2. Treat customers as individuals
these, in a constantly Segmentation
changing environment, 3. Giving them a REAL reason to come
the higher your prices Branding
will go 4. Ensure the organisation delivers
Alignment
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 82
Market Share
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 83
Sales Share
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 84
Profit Share
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 85
Other
Shareholder Stakeholders Personal values of
Value requirements key implementers
The Business
Objective
Sustainable
Competitive Competitive
Strategy The Business Advantage
Strategy
The Marketing
SCORPIO Objective
Industry
(Marketing Strategy)
Organisation or
Positioning
Structure & Market
Culture & Branding
The
Customer Customer
Segmentation
& Targeting Retention
Offerings
Place
(distribution) Price Promotion
Policy Policy Policy
Fifield 2007
(Feedback & Control) The Marketing Plans,
Programmes & Implementation
(Feedback & Control)
The Customer
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 86
The Marketing mix (Neil Borden)
Branding Promotions Servicing Physical
Handling
Product Pricing
Planning
THE
TARGET
MARKET
Packaging Advertising
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 87
The Marketing mix (4Ps)
Product Price
THE
TARGET
MARKET
Place Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 88
The Marketing mix (7Ps)
People
Product Price
THE
TARGET
MARKET
Place Promotion
Physical
Process
Evidence
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 89
The Marketing mix (11Ps)
People
Product Price
THE
Personal
Privacy TARGET Interests
MARKET
Place Promotion
Personal Physical
(Social Process Public
Networks)
Evidence Commentary
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 90
The Marketing mix (4Cs)
Customer Cost
Needs & Wants (to the user)
THE
TARGET
MARKET
Convenience Communication
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 91
The Marketing mix (5Ps)
Product Price
THE
TARGET
MARKET
Place Promotion
Position
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 92
The Marketing mix (make-your-ownPs)
P
Product Price
THE
TARGET
MARKET
Place Promotion
P P
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 93
The Marketing mix (4Ps)
Product Price
Quality Sizes List price Discounts
Features Services Allowances Rates
Options Returns Credit Changes
Style Warranties Communications
Brand Packaging Opportunity Cost
Differentiation
THE
Payment period
TARGET
Place MARKET Promotion
Channels Coverage Message Media
Locations Inventory Above/Below-the-line
Transport Partners Advertising Direct
Routes-to-market Publicity PR
Supply Chain Personal Selling WOM
Intermediaries Promotion Internet
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 94
Case Task
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 95
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 96
The Marketing mix (4Ps)
Product Price
Quality Sizes List price Discounts
Features Services Allowances Rates
Options Returns Credit Changes
Style Warranties Communications
Brand Packaging Opportunity Cost
Differentiation
THE
Payment period
TARGET
Place MARKET Promotion
Channels Coverage Message Media
Locations Inventory Above/Below-the-line
Transport Partners Advertising Direct
Routes-to-market Publicity PR
Supply Chain Personal Selling WOM
Intermediaries Promotion Internet
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 97
Products and/or markets?
Product features Customer
needs/wants
Product sales Customer
satisfactions
Technical The Customer
excellence expectations
Great
Product service Customer service
Debate: Emotional
Rational solutions
solutions Customer and/or
Product segment
profitability profitability
PUSH PULL
Strategy Strategy
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 98
Levitt on the product
A product is
what a product
does
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 99
What-it-is (features) or What-it-does? (benefits)
A Telephone? Or Identity?
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 100
A service is..
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 101
The Service Product
A service is any activity or benefit that one party can offer
to another that is essentially intangible and does not result
in the ownership of anything. Its production may or may
not be tied to a physical product
[Kotler]
Characteristics of services:
1 Intangibility
2 Inseparability
3 Heterogeneity
4 Perishability
5 Ownership
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 102
The Augmented Product Concept
The Support Emotional Benefits
Services
component
Additional Benefits
Tangible
The Core Benefits or
component Knowhow
eg. functions
eg. design
The Packaging
component
eg. Service, trust,
prestige
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 103
The Product/Service Life Cycle
Supply;
Push to Pull!
Cant make Growing
enough availability No new buyers
Little formal Growing Repeat purchase
infrastructure Competition Can get boring
Failing demand
Higher costs Best marketing?
Falling profits or
Demand: Customer focus debts
Demand: Growing Market Segmentation
Fewer
Innovators awareness (S) critical customers
Early adopters Reducing Prices Consolidation
Death, or
Higher Price Early majority Fewer BIG players
Rejuvenation
Higher Risk Emerging More NICHE players Possible re-
Little awareness standard design Can last a looong time positioning
New
Consolidation
The Chasm
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 104
Case Task
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 105
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 106
The Marketing mix (4Ps)
Product Price
Quality Sizes List price Discounts
Features Services Allowances Rates
Options Returns Credit Changes
Style Warranties Communications
Brand Packaging Opportunity Cost
Differentiation
THE
Payment period
TARGET
Place MARKET Promotion
Channels Coverage Message Media
Locations Inventory Above/Below-the-line
Transport Partners Advertising Direct
Routes-to-market Publicity PR
Supply Chain Personal Selling WOM
Intermediaries Promotion Internet
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 107
An important word about Price
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 108
108
Approaches to Pricing
80
68%
Percentage of lost customers
60
40
20 9 14
1 3 5
Death Relocation Develop Lower Product Company
New Price Dissatisfaction Indifference
Relationships
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 110
Understanding Profit Drivers
Profit
Revenues Cost
=
Sales Volume Variable Cost Fixed Cost
Price 100 30 million
(Units)
1 million
Variable cost Sales Volume
per unit = 60 1 million
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 112
Role of price
What clients of Engineering, Procurement & Construction (EPC) want
(2006)
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 113
The race to the bottom
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 114
Case Task
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 115
Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 116
The Marketing mix (4Ps)
Product Price
Quality Sizes List price Discounts
Features Services Allowances Rates
Options Returns Credit Changes
Style Warranties Communications
Brand Packaging Opportunity Cost
Differentiation
THE
Payment period
TARGET
Place MARKET Promotion
Channels Coverage Message Media
Locations Inventory Above/Below-the-line
Transport Partners Advertising Direct
Routes-to-market Publicity PR
Supply Chain Personal Selling WOM
Intermediaries Promotion Internet
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 117
The distribution channel is ...
"The route along which a product and its title (ie the rights of
ownership) flow from production to consumption"
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 118
Channel Configurations
Agent
OEM
Direct Prime
Contractor
End Buyer/User
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 119
Why use intermediaries?
Specialisation
Division of labour
Provide assortment by gathering supplies together from
number of manufacturers - honest broking
Breaking bulk so as to meet scale of need of customers - and
buying in bulk on behalf of customers
Reduce contactual costs
Geographical proximity and local knowledge
Adding value (eg customisation, service, installation)
Theoretically cash received quicker up the chain
Running interference - for their customers and their
suppliers
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 120
Reducing contactual costs or channel geometry
4 Manufacturers contact
4 retailers directly 4 Manufacturers distribute
through a wholesaler
M M M M M M M M
R R R R
No. of contacts = 4 x 4 = 16 R R R R
No. of contacts = 4 + 4 = 8
Proprietary & confidential Paul Fifield 2013. not to be used or copied without permission 121
Increasing Retailer concentration
M M M M
M M M M
R R R
R R R R
R R R R
R R R R
R R R R
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Battle for control
"I account for 25% of your business. You account for less that
5% of mine. Let's talk terms."
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Who owns the customer owns the margins
Producer
Push Pull
(sales) (marketing)
Consumer/
End User
= Margin
Brand Franchise!
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Your choice
Agent
OEM
Direct Prime
Contractor
End Buyer/User
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Case Task
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Agenda
DAY 1 STRATEGY
1.1 What is Strategy?
1.2 The critical importance of Customers
1.3 What business?
1.4 What is the Objective?
1.5 What is the Strategy?
1.6 The Future..
DAY 2 MARKETING
2.1 Target Market
2.2 Product
2.3 Price
2.4 Place
2.5 Promotion
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The Marketing mix (4Ps)
Product Price
Quality Sizes List price Discounts
Features Services Allowances Rates
Options Returns Credit Changes
Style Warranties Communications
Brand Packaging Opportunity Cost
Differentiation
THE
Payment period
TARGET
Place MARKET Promotion
Channels Coverage Message Media
Locations Inventory Above/Below-the-line
Transport Partners Advertising Direct
Routes-to-market Publicity PR
Supply Chain Personal Selling WOM
Intermediaries Promotion Internet
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Which half ?
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Value or Volume?
2006 data (UK):
Number of messages seen per day = +/-3500
= 4/minute in a waking day
EyeContact glasses:
90 minute London shopping trip
250 messages recorded
100 brands
70 formats
Prompted recall = 130
Customer interested
Unprompted recall = 1
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The Future of Advertising?
A recent paper titled "The
Future of Advertising is Now"
by Christopher Vollmer et al,
attempts to solve Lord
Leverhulmes dilemma, at
least for the automobile
industry.
Clearly, his lordships
assessment remains
remarkably accurate, as this
chart from the paper shows.
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Promotion can affect.
1.Attention
2.Interest
3.Desire
4.Action
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Promotional objectives
, o n
Promotion may be used to achieve the following:
t i o n
the service organisation
o t
1. To build awareness and interest in the service or product and
m o a n n
o c
2. To differentiate the product/service offer and the organisation
P r
from competitors
n ,
o w
3. To communicate and portray the benefits of the
ti s
products/services available
l
4. To build and maintain the overall image and reputation of the
se l
providing organisation
1 Promotional objectives
2 The target audience
3 The message
4 The media: advertising
sales promotion
publicity
personal selling
public relations
5 Budgets
6 Testing and Control
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The promotional mix
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The fundamental proposition
1 2
Who is the one person What is the one thing
you want to talk to? you want to say to
them?
The
4
Questions
4 3
How do you want them Why should they
to feel as a result? believe you?
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Case Task
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FINAL Case Task
From 0 to 10
How confident would you be of investing your entire pension
over the next 40 years in the outcome of your plans?
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Reading List
1. Principles of Marketing: European Edition- Kotler, Saunders & Armstrong,
FT Prentice Hall 2004
2. Mercator : Thorie et pratique du marketing, Lendrevie, Levy & Lindon
2006
3. Marketing Strategy 3rd Edition - P Fifield, Elsevier 2007
4. Marketing Strategy Masterclass P Fifield, Elsevier 2008
5. Collected Essays in Marketing Strategy P Fifield, Fifield, 2006
6. The Marketing Imagination - T Levitt, Free Press, 1998
7. Market-led Strategic Change N Piercy, Butterworth Heinemann, 2010
8. Marketing Briefs S Dibb & L Simkin, Butterworth Heinemann 2004
9. Marketing Plans M MacDonald, Butterworth Heinemann 2002
10. Marketing Management and Strategy P Doyle, FT Prentice Hall, 2006
11. Marketing Research: An Applied Approach D Birks & N Malhotra, FT
Prentice Hall 2005
12. Essentials of Marketing Research - T Proctor, FT Prentice Hall, 2003
13. International Marketing V Terpstra, South Western College Pub, 2001
14. Marketing across cultures - JC Usenier & J Lee, FT Prentice Hall 2005
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Strategy & Marketing
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