Marketing Key Figures Post

Introductory Marketing
Strategic Marketing Figures
Strategic Marketing
William Simcoe
Helsinki Metropolia University Metropolia Business School
W. Simcoe
Marketing...
...is a battle of Perceptions not Products
is a tool it is to predict the future - the process of planning and executing the marketing mix elements to create exchanges that satisfy the individual consumers and organizations objectives. And it is a process of matching internal goals and capabilities, along with all of the external factors involved, to the prospects wants, beliefs, and goals.
"...covers those activities that relate the organization to those parts of the outside world that use, buy, sell, or influence the outputs it produces or the benefits and services it offers." (John O'Shaughnessy, Columbia University, New York, 1984)
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Marketing
The overall objective is to achieve SCA! - Source of CA: differentiation but cost leadership is opposite side of the same coin The function is to:
- Define market groups and find out what they want - Group different wants into categories segments - Select different want groups that the firm can best serve understand their beliefs and goals - Determine the right (from consumers point of view) marketing mix - Continuously alter the mix elements in order to meet changing wants and circumstances and to achieve a competitive advantage
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Model of the Marketing System

Independent Variables (causes) Marketing Mix (controllable) Product Promotion Price Placement Situational Factors (uncontrollable) demand competition SLEPT internal resources Dependent Variables (effects) Behavioral Responses awareness knowledge liking preference intent to buy purchase
Performance Measures sales market share cost profit ROI cash flow earnings/share image
PROBLEMS & OPPORTUNITIES

Helsinki Metropolia University
SYMPTOMS
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Metropolia Business School
Consider the SLEPT Factors Social Legal Economic Political

These are the cultural manifestations that influence marketing and management
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Technological
Orientation Toward Customer as Reflecting Relative Power Balance

TELL MANIPULATE MATCH/EXCEED MEET ALL DEMANDS
Captive Market
Uninformed Market
Customer Orientation
Market Enslavement
Seller Has Power
Buyer Has Power
In a captive market, telling the prospect is adequate; in an uninformed market the seller must manipulate the perceptions of the buyers; after the balance shifts to buyer, the seller must match or exceed the prospects expectations - and finally meet all demands if there is an enslaved market.
Lecture Notes Fig.1.2
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The Boston Consulting Group (BCG) Matrix

GROWTH OPTIONS See Figure 3.2
Desired Capital Flow Cash Cow to R&D, Dividends, other projects
LOW HIGH
Star
? Wildcat
TURNAROUND OR DIVEST?
Products, Lines, Companies, Etc.
Cash Cow
HIGH
Dog
LOW
HOLD & DEFEND

Lecture Notes Fig.2.1 et al
Relative Market Share
DIVEST, HARVEST, LIQUIDATE

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The Competitive Strategies

also see Fig.6.1, etc. Metropolia Business School
M. Porter
The Stages of Evolution of an Industry Basically only two sources of Competitive Advantage:
1. Overall Cost Leadership (update plants, give incentives, put more emphasis on efficiency, etc.) Differentiated Offering (offer something that is unique to the company -this calls for strong coordination between the R&D and Marketing departments) 1-Emerging Industries when there exists a high level of indecision about technology, development, wants, applications, or what to do about buyer-switching, etc. 2-Transition to/& Maturity - accompanied by slowing growth, falling profits, excess capacity, intense competition, and less product innovation -- a tighter controlled organization is needed, more efficiency, better coordination, etc. 3-Declining Industries - occurs when wants change, better substitutes become available, or specific, market-related changes take place -- if divestment is not decided, then the firm must be sure of its strength in segments least affected, or try to dominate a particular niche. Not a stage but a sub-stage: Fragmented Industries exist when there's no dominant firm, or firms. Here, consolidation may be advisable, or acquisition.
2.
During the Industry Life Cycle, there are only two real sources of SCA
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Profitability
0
0 0
The V Curve
High
0
Low Small Inc.

Lecture Notes Fig.3.1 Helsinki Metropolia University
SIZE
Large Inc.
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Star
GROWTH OPTIONS
Strategic Direction Strategic Target Term Applied Risk / Security
Market Penetration Same Market LOW Output: Segment Penetration same segment Same / Similar Segment Enlargement new geographic Market Repositioning new segment New Market Market Development
Product Development Same Market Output: Segment Factoring same segment New / Dissimilar Segment Extension new geographic Market Expansion new segment New Market
HIGH
Diversification & Vertical Integration

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1- Analysis of National Competitiveness: Porters Diamond

CHANCE
Related & Supporting Industries Demand Conditions Firm Strategy, Structure & Rivalry
MACRO ANALYSIS
Factor Conditions
GOVERNMENT
2- Analysis within an Industry: Porters 5 Forces of Threat The Pentagon of Threat Suppliers
Substitutes
Buyers
Intensity of rivalry
New Entrants
MICRO
Competition 3:Analysis of Competition: The Competitive Triangle

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Calculation of The Planning Gap

This is the reference projection minus the target projection Also called the Performance Gap The strategy provides the step by step goals needed to be achieved in order to reach the target, to fill the gap.
(Remember PIMS)
The Performance Gap
Reference Projection
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What causes buying behavior?

BUYING BEHAVIOR
WANTS
NEEDS
GOALS
MOTIVATIONS
BELIEFS
EXPERIENCE
Use Functions,Generated functions Habit, Picking Entrepreneurs seek Non-buying Behavior results Latent Wants from Passive Wants, or there are Exclusionary Reasons Lecture Notes
Fig. 4.1 et al
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Market Hierarchy
Technology FUNCTION Group
Market
Segment A
Segment B
Customer profiles - BENEFITS Segment C
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Market Structure Analysis Versatility HIGH Example

Competitor C
Ideal Point?
Competitor B
Competitor A
Ideal Point? LOW

Lecture Notes Fig.5.4 Helsinki Metropolia University Metropolia Business School
HIGH
Reliability
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Strategic Marketing seeks to Formulate a Strategy:

1. Define competition and assess capabilities and intentions (yours & theirs) - What potential rivals could do capabilities - What they are likely to do - intentions and capacity to mobilize resources and past displays of resourcefulness in developing and implementing a strategy 2. Collect and analyze information on competition and consumers - See Marketing Research (aka Marketing Intelligence) 3. Determine strategic options - Based on the firms and customers wants, the feasibility and commercial viability 4. Choose a competitive strategy - Moving with, away, or before competition
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Contents of a Marketing Strategy

Statement of Objectives Product / Market Growth Options Competitive Strategy
Core (Segmentation) Strategy
Support (Brand) Strategies

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Set Strategic Directions

Markets Strategy Goals Capabilities Action Plans
Market Share Sales Fixed Capital Profit Cost Reduction Image
The purpose of this stage is to ensure that your demand management development efforts are focused on the concepts that are of greatest importance to your company
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Competitive Strategies
Competitive Move: Before With
GROWTH New areas, etc. OPTIONS
Market share Advancement
Away
New Offerings Reciprocity
Capitalize Leapfrog
Additional channels
HOLD & Mix adjustments DEFEND

Market share Protection
Imitate Compensate
Merge, Collusion Acquisition
Deterrent action
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The SWOT Analysis
Strengths Weaknesses Opportunities Threats
These focus on the INTERNAL factors e.g., the marketing mix, financial, innovative capabilities, etc. These focus on the EXTERNAL factors e.g., demand, PESTLE, the 5 forces of threat, etc...
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The Generic Value Chain
Procurement
Technology
Infrastructure
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Assests Assessment Tool - Example

Assets Vs. Competitors A, B, and C Key Factors? A Financial Supply Patents Customer Goodwill Production R&D Marketing Network
B = = + + + +
C + + - ? =? = +?
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+ + + + + Metropolia Business School
Purpose of Marketing Research (MR)

...to help in the Decision-Making Process
Decision Process 1
- Recognize a situation calling for a decision - Define the decision problem - Identify alternative courses of action, i.e., options Decision to undertake research
MR Process
- Establish a need for information - Specify research objectives - Specify information needs
2 3
- Evaluate courses of action - Select - Implement Formal research project
- Determine sources of data - Develop collection forms - Design the sample - Collect, process, analyze data - Present results
1- Exploratory MR Deals with Recognizing and Identifying options 2- Conclusive MR handles Evaluating and Selecting 3- Performance-Monitoring MR focuses on Implementation
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Example of MR Applied in a Project

Mapping and Analysing Planning and Implementation
6 - 7 Weeks
Understand the Current Situation Describe the Need Specify Scope and Objectives Data Collection Analyse the Data Describe Improvements RESULT: Estimation of the Objectives and Economic Potential Evaluate Alternatives Formulate Alternatives
6 - 13 Months
Implementation Master Plan Scheduling Implementation Analyze and Select the Best Solutions RESULT: Improvement Solutions and other Items Follow - up and Measuring RESULT: Monetary Savings
RESULT: Project Definition
Workshop DECISIONS Helsinki Metropolia University Metropolia Business School
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The Product Life Cycle (PLC)

Introduction
Growth
Maturity
Sales Volume
Decline
Unit Profit Margin


Option 1 Option 2 Option 3
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The Diffusion Process

Innovator Early Adopter Early Majority Late Majority
like a pebble hitting the water
Laggards
% of those that buy the offering
2.5%
13.5%
34%
influenced
34%
16%
The Adoption Cycle

Awareness
by GATEKEEPERS & OPINION LEADERS
Interest
Evaluation
Trial
Adoption
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Option 1
Option 2
Option 3
Product Policy & Strategies Relating to Investment Objectives

IMMEDIATE Earnings Cost Reduction
Product deletions Value analysis Variety reduction
STEADY Earnings
FUTURE Earnings New Products
Product Line Improvement Development

Features Quality Style
NTW Variety variation New lines Individual modification Additions to lines Tailor-made
Lecture Notes Figs.9.1 & 9.2 Helsinki Metropolia University

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ABC Analysis
The products are listed according to sales, then divided into A, B, and C groups, and finally deletions are decided upon. One can eliminate all the Cs, but some customers here may be very loyal.
A
C
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New Product Development

Opportunity Identification / New Product Conception Screen for New Product Ideas / Opportunities Business Analysis Testing Development of the Product Developing the Marketing Mix Market Testing Product Launch
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Promotion: Roles Goals & Relationships

ROLES:
Social
Advocacy
Marketing Mix
GOALS:
GROWTH OPTIONS Market share Advancement
Attract
New offerings
Increase
New offerings
Convert
Capitalize Leapfrog Pricing
Retain
HOLD & DEFEND Market share Protection Lecture Notes Helsinki Metropolia Figs.10.1 & 10.2 University
The Competitive Strategies
Compensate Imitate Mix Adj.

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Advertising Strategy
Target Audience Consumer Goals Message Strategy
Appeal
Media & Vehicle Mix TV Radio Direct ad Newspapers Magazines
Scheduling
-USP Increase -Image Gatekeeper -Positioning Attract -Criteria Opinion Maintain leaders & Format -Dogmatic -Emotional -Rational
Lecture Notes Fig. 10.4 Helsinki Metropolia University
Convert
Concentrated Continuous Intermittent
PUSH or PULL strategy?
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Pricing Objectives & Factors

Objectives Factors
Earnings: Immediate Steady Future People Financial Goals Desired
Attract
Increase
Convert
Retain
Market Situation Requirements Price Stability Social Responsibility Sellers Reputation Market Value Orientation Sought Lecture Notes Fig. 13.2
Customer reactions Competitor retaliations Company (internal) reactions Distributor reactions Government legislation
Costs
Breakeven Point Profit Impact

AND, remember the relationship between Price & Demand and Market Structures
Lecture Notes Figs. 13.1, 14.1, 14.2
$
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Pricing Strategies
Approaches: Competitor, Cost or Demand Orientations Product-Bundle Pricing Market Penetration Pricing Product Line Pricing Optional-Product Pricing Captive-Product Pricing By-Product Pricing Market Skimming Pricing
$
Pricing bundles of products sold together Setting low price for new products to attract buyers to gain a dominant market share Setting price steps between product line items Pricing optional, accessory, products sold with main product Pricing products that must be used with main product Pricing low value by-products to get rid of them Setting high price for new products to maximize revenue from high income - then lower price for middle, then lowest price for bottom income - target market sectors
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Placement: Distribution Channels

Direct Face-to-Face Selling
Own Sales Force Anothers Sales Force Agents
Direct Marketing
Mail Order Print Media Radio TV and Internet Retailer Wholesaler Industrial Distributor
Middlemen
Owned Outlets
Lecture Notes Fig. 15.1 Helsinki Metropolia University
PUSH or PULL System?
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Introductory Marketing

Strategic Marketing Figures

Strategic Marketing Figures

Strategic Marketing Figures

Strategic Marketing Figures

Model of the Marketing System

PROBLEMS & OPPORTUNITIES

Metropolia Business School

Strategic Marketing Figures

Consider the SLEPT Factors Social Legal Economic Political

Strategic Marketing Figures

Orientation Toward Customer as Reflecting Relative Power Balance

Seller Has Power

Buyer Has Power

Helsinki Metropolia University

Metropolia Business School

Strategic Marketing Figures

The Boston Consulting Group (BCG) Matrix

Products, Lines, Companies, Etc.

HOLD & DEFEND

Relative Market Share

DIVEST, HARVEST, LIQUIDATE

The Competitive Strategies

Strategic Marketing Figures

Strategic Marketing Figures

Low Small Inc.

Strategic Marketing Figures

Diversification & Vertical Integration

Metropolia Business School

Strategic Marketing Figures

1- Analysis of National Competitiveness: Porters Diamond

Competition 3:Analysis of Competition: The Competitive Triangle

Strategic Marketing Figures

Calculation of The Planning Gap

The Performance Gap

Helsinki Metropolia University

Metropolia Business School

Strategic Marketing Figures

What causes buying behavior?

Strategic Marketing Figures

Customer profiles - BENEFITS Segment C

Lecture Notes Fig.5.1

Helsinki Metropolia University

Metropolia Business School

Strategic Marketing Figures

Market Structure Analysis Versatility HIGH Example

Ideal Point? LOW

Strategic Marketing Figures

Strategic Marketing seeks to Formulate a Strategy:

Helsinki Metropolia University

Metropolia Business School

Strategic Marketing Figures

Contents of a Marketing Strategy

Core (Segmentation) Strategy

Support (Brand) Strategies

Helsinki Metropolia University

Metropolia Business School

Strategic Marketing Figures

Set Strategic Directions

Strategic Marketing Figures

HOLD & Mix adjustments DEFEND

Merge, Collusion Acquisition

Lecture Notes Fig.6.1