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Objectives and goal setting (strategic marketing) Segmentation: classify and identify clients and needs Targeting: decide the sector we want to satisfy Different strategies: Undifferentiated strategies: the same offer to all groups Differentiated strategies: offers adapted to the needs, wishes, and desires of a specific group of people More expensive (production, stock, retail) More management But if one offer is a failure, the company can continue operating with its other reduces (ex: Pug 0 Nina Rich, Carolina Hearer, Pravda).
Niches/specialists: focus on one segment/niche Strategies in terms of growth: combine a new product in an established market 0 penetration & sprinkle Action plans (operational marketing):Marketing mix (product, price, place, promotion) “Likeability’: recent term to define those people that are not good at their Job but due to their way to be and behave everybody ends up liking them and wanting to work with them. (Have it in mind when branding analysis). Sales, Profit & Marketing Mix Optimization Profit = Revenue – Cost Revenue = p * q P=p-K profit -K) -F.
M (k = discounts) Unit contribution (P – K)- C Contents of Marketing Plan (8 points) 1. Executive Summary Brief statement of goals and recommendations based on hard data. 2. Current Marketing Situation Presents data on the market, product, competition, distribution, macro-environment. (Product fact book) S. P. I. N. S. Situation “Where am ‘”Problem identification/ Implications “What is happening”, Needs Assessment “Why is it happening”, Solutions “What can I do about it” Market Situation: Data on target market, size and growth for past years and each segment.
Data uncustomary needs, perceptions, and buying behavior trends. Product Situation: Sales, prices, contribution margins and net profits for each major product line in the past several years. Competitive Situation: Major competitors described in terms of their size, goals, market share, product quality, marketing strategies. Distribution Situation: Information on size and importance of each distribution channel. Macro-environment Situation: Describes broad macro- environment trends – demographic, economic, technological, political/legal, social cultural, that bear on a product’s future. . Opportunity and Issue Analysis SOOT analysts Opportunities and Threats analysis Strengths and Weaknesses analysis Issue analysis: Use SOOT to define the main issues plan must address 4. Objectives Defines the plan’s financial and marketing goals in terms of sales volume, market share and profit. 5. Marketing Strategy (game plan) Broad marketing approach that will be used to achieve goals. Target market Positioning Product Line Price Distribution Outlets Sales Force Service Advertising Sales Promotions Research and Development Marketing Research 6.
Action Programs Special marketing programs designed to achieve objectives, I. . , winning the loyalty of existing customers 7. Projected P 8. Controls How will program be monitored? LESSON 2: NEW PRODUCT DEVELOPMENT AND LIFE CYCLE When talking about prices, decisions, we talk about goods and services that are offered in the market that satisfy a want and needs. They cover goods, services, ideas, information and everything that can be offered.
Analysis by two different points of view: Product itself (physical attributes) 0 clothing, product defined by customer needs 0 washing machine The product defined by a customer needs, not Just the product but also the problem it solves, problem recognition from consumer decision Journey Core product: product we look for to satisfy a need (concept of need/necessity) Expected product: attributes with specific function and performance. What the consumer expects from the price for example a guarantee, repair system, different washing programs… Augmented product: helps the company to create competitive advantage, extra offer to standard products.
Added features and characteristics that give extra value to consumers. Here is where the firms can get Competitiveness’s, it can be lilt around price, design, ecology 0 whatever that it is valuable and that can be offered in addition to our competitor’s products. Potential product: what a product could become (washing machines that do not use water). More innovative products are found here. Role of products: Maintain a product innovator position in the market. Market share defense: product obliteration, a product for every need ex,Deanne. Whatever you need (even if it’s new) the company will end up providing you with it.
Establish a first in position in a future market. Brand communities, necessity to be the one. Develop technology in a new way pod USB Capture a segment Capitalize on distribution strengths. Estella Adam Catalonia, Omaha Madrid Classifications: Durable/not durable (not important) Consumer goods: Convenience goods they are not expensive, the cost per unit is not too high, they are bought frequently, and consumed in small uses. Staple goods toilet paper Impulse goods They are visible and cheap Emergency goods starts raining and we need an umbrella.
Shopping goods informed about products, spend time in analyzing different products, high involvement from the consumer usually the price is high. Specialist odds related to brands, customers are willing to pay more Just because of the brand. Unsought goods we buy it when we need it. Industrial goods: materials & parts, capital items, supplies & services. Consumer behavior : different purposes, similar products. They can be classified by how making buying decisions First time buy: decision making-units (initiator, user, decider, buyer, influencer, gatekeeper).
We consider the first time a company makes a decision in order to buy an asset. Its DIM decides which products have to be bought and the gatekeeper use to choose a few suppliers in order to make the choice simpler. Adapted rebury (modified): it happens when there is a disagreement on the first time buying or when the contracts and agreements have to be changed for whatever reason. Changing some aspects of our buy (different characteristics, price, needs, paying periods) Routine rebury (direct): there is no decision involved, it is a longer contract with periodical buying, like electricity.
D onto make buying decisions, Just ordering from the already agreed supplier. 2. 3 Individual product decisions: brand/brand name -??+ Characteristics: packaging, brand name, logo… Criteria, advantages offered by ranging, branding strategies traditional perspective contemporary perspective Parts in branding (brand knowledge): tangible: name + image (logo, uniform, songs… ) -??+ can be perceived intangible: brands creates identity Pet model: why sometimes we are able to rationalize our consumption patters and why sometimes not. Nagging brand: emotional stimulus intangible brand: sensory stimulus (intuition/stimulus that makes you buy a product rather than any other without knowing the exact reason why. Steps: Know brand (do people know, they are aware of the existence of the brand) management rand’s authors -??+ associating a brand with certain celebrities/well known people finding the right balance (maintaining consistency) Identify brand -??+ identify your target customers, buying a product not only for the product itself but experience and reputation, load your brand and create a compelling brand personality.
Brand communities -??+ information and impressions about the product will be shared between people inside, the same association -??+ we could win or lose lots of clients, when creating a brand community we have the opportunity to extend our market by producing different products associated with he brand’s main product. Accountancy part of the brand: Brand equity: micro level -??+ reaction of customer to branded products, macro level -??+ measuring incremental profit from a sale compared with unbranded products.
Risk measurable by observation: favoritism of the brands market, ability to shape the market stability, cross-geographical and cultural borders. (complement with brand article) Brand’s competitive advantage Brand management -??+ Equity (value) – asset, differentiation – builder Product differentiation and positioning: elements of products. Element marketing managers cake decisions about attributes, brand, package, label -??+ help identify and differentiate given a product from similar products.
A brand is any name, term, symbol, sign, design or unifying combination of these, that identifies and distinguishes one product from another competitive product (Skimmed & donation). Advantages provided by the use of brands: Facilitates product identification Facilitates product differentiation Facilitates order processing Provides manufacturers and distributors with legal protection Helps attract and build groups of loyal customers Facilitates market segmentation
Helps create corporate image Branding strategies: Manufacturer’s Brand: Ford, Phillips, Samsung Distribution brand or private Brand: Careful, El Correct Mingles Family brand (Nestle, Nested, Ensnare) Individual Brand: Pug Combination of family, individual brand second brands vertical brands -??+ Ezra (vertical integrated) Brand alliances -??+ Nested (Nestle, Collar) Multiplicands -??+ different segments Brand image and positioning: – In order to find the correct brand image we have to analyze the context and the environment under the brand is going to be sold, moreover we have to analyze the intent and the image attributes of the brand and then create the brand image. 0 Brand image: perceptual association based on attributes customers assign to the brand in relation to competitors. Identify the ideal brand for customers in order to decide future actions -??+ then we’re able to find how close are the different brands from the “ideal brand”. Brand identity: brand’s inner cohesiveness that allow the brand to exists as a separate entity, different from other brands.
Provides continuity over time. It’s build upon two principles: stability: provides continuity over time sugarless the changes it causes or goes through // differentiation: brands allow them to be identified as one and different from other brands. Brand positioning: It is not possible not to have a brand image. It does not have to be rational, logical or coherent. It evolves due to market and competitor changes. Created in the mind of customers according to their perceptions of brand’s personality-identity. 2. 4 Packaging – Container/wrapper: legislation has a lot to do in that aspect. How products have to be packed? The container is also a good criterion for recognition.
Packaging can also influence consumer’s decision. – Perform sales task: attracting attention, describing the product, add benefits (dispenser), provide instant consumer recognition. It has also to be designed keeping both distributors and consumers in mind. This means that the packaging, for example, has to be transportable but also easy to store. Packaging levels: Products immediate container 0 Final consumer (a bottle) Product’s secondary package (the cardboard box holding the bottle, six-pack bottle) Products’ shipping package (corrugated box containing six dozen units; pale) We have also to consider what materials to use, what kind of container and the capacity that it should have.
Package sometimes are too expensive, so firms opt for the refill option. Good packaging (customer oriented) Attractive, recognizable, capable of being differentiated, or creating impact on customers. Protect, maintains product characteristics Easy to use and move around Easy to transport, store, display, open… Suggest positive aspects of product We have to take into account also the product line packaging, create packages with prospective uses or recyclable, and multiple units package (pills). Product line decisions Product mix: all product lines offered by the company Product line: group of product related, similar uses, same customer, same retails…
Product line length: Extension Downward: from height/better product to low/worse product Upward: from low/worse product to high/better product 2-way stretching Filling: adding more items within present range of the line Product line modernization: price meal or more one at a time Product line featuring: traffic builders New product development New product development implies and innovation process that starts with an idea (innovation) and finishes when it is used as a product. Nowadays we are more conscious about sugar -??+ sales donuts decrease, then they create donuts light (2nd time around), but it was a failure that cost money to companies. New product development is very expensive, more if it is a failure. New product development: the concept Original products, product improvement, product modifications, and new brands that firms develop (Kettle), Both, Allen & Hamilton propose 6 different types of new products: 1. Products that are new for the world: 10% 2.
Addition to existing product lines: 60% 3. Product modifications: 26% 4. Product repositioning: 7% 5. Cost reduction: 1% Newness to the market, newness to the Company. Relevant issues of new products: Source and nature of innovation: Technological innovation: based upon the product’s physical features (production, raw materials, components, technology… ). Ex: Evolve. Marketing innovation: based upon organization, distribution and centralization (packaging, distribution channel, advertisement, payment system… ). Ex: Tetra-brick. Consumer based innovation: analyzing market needs generates innovations with better results (60-80% success rate).
Innovations due to fundamental or applied research: usually new to the world” innovations – discontinuous innovations. Why should a company launch new products? Changes in customer tastes, lifestyles, and technologies. Changes in technology Competitors launch new products Characteristics of success (Sigmund & dynamic) Relative advantage Compatibility with existing consumption patterns Durability: opportunity for buyer testing (samples) Absorbability Complexity (simplicity of usage) Reasons for success: Market related: The product does satisfies market needs Better than competitor’s product Precise concept definition (positioning, physical and perceptible characteristics)
Company related: Takes company strengths & weaknesses into account Has management support and resources Efficient organizations Causes of failure: Market over-estimation. Design mistakes. Wrong positioning, advertising, distribution, price. Underestimation of competitor’s strengths. Actual investment higher than projected. New product development process: 1. Exploration – idea generation 2. Idea screening 3. Concept development 4. Business analysis 5. Product development 6. Test marketing 7. Centralization 1) Exploration: search for product ideas Indirect source: company employees, distributors, competitors, consumers, users. Direct source: sales reports, market research, available new products and licenses, magazines and commercials, inventors, trade shows.
Creative analysis: analyzing and solving a problem, combining previous experience with other techniques such as brainstorming. 2) Idea screening: this is a very important stage, its objective is to analyze and spot the most attractive ideas and to identify and drop the least attractive ideas, or those that are incompatible with the company goals and resources. This is an evaluation stage, which implies evaluation criteria, commonly seed criteria are related to the following aspects: 1) identify key success factors in marketing 2) assign value to each factor according to its relative importance 3) Value the idea regarding each factor 4) Generate a results index 3) Concept development and testing: it is important to distinguish between product idea, concept and image.
Product concept: detailed version of the idea stated in meaningful consumer terms, product image: how the consumers perceive the actual potential product once the concept has been developed it has to be tested through a concept test, thus, we can now whether the concept is attractive for the market. 4) Marketing strategy: – Gathering the required information – Evaluation criteria – Economic Analysis (NP, AIR) – Strategic Analysis (market attractiveness & project contribution to the company) Business analysis To evaluate the feasibility, real possibilities of the selected product concepts. The company must analyze the new proposal attractiveness. The following information is needed: sales forecast, cost estimates, cash flows estimates, and investment project analysis.
Selection relies on the evaluation of economic & strategic aspects of the business, always keeping in mind that: a) resources are usually scarce b) There are many different opportunities c) Each project around a new idea has different risk implications. 5) Product development The idea becomes a product: physically, technically & commercially profitable. The proposed new product idea is transformed from a product concept to a product prototype. This stage implies a big investment, in terms of time & money, its central focus is product specifications: physical characteristics, package design, brand name decisions. One or more versions of the product are created keeping in mind that. -It as to be perceived as possessing the described characteristics – It has to work safely under normal conditions – Can be produced according to projected costs 6) Product testing: Alfa-test: company employees & potential customers try the product. Beta-test: check the product with real consumers. Give samples to be used under normal conditions, during pre-arranged period of time. Gamma-test: product & marketing plan presentation to people & institutions implied (distributors, politicians… ) Delta-test: Check products that have been used for long periods of time. 6) Test marketing Consumer products: Standard test markets: A small number of cities. -Controlled test markets: controlled panels of stores which carry new products for a fee. Simulated test markets: conducted with a sample of consumers that are given money to buy after being shown ads & promotions. Industrial goods: – Making projected investments real, incurring in marketing & production expenditures. – Adjusting the marketing plan of action to the last pieces of information. – Establishing the control system (to know the evolution & facilities readjustments) 7) Centralization – Making projected investments real incurring in marketing and production information. – Establish the control system (to know the evolution and facilitate readjustments).