Transcript 2016-lecture-17

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MODULE 5
Market Strategy
FRE 302 Fall 2016
Lecture 17
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content
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Market Strategy and the Business Plan
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4Ps -Options & How to Determine/Assess the best option for your business
idea
 Price
 Product
 Promotion
 Place/Distribution
Back to Strategy
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Readings
Factsheets
 Marketing Mix p413
Readings
 Marketing Mix p419
 Marketing’s Four P’s: p420
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Market Strategy & the Business Plan
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Marketing Strategy
When marketing their products firms need to create a successful and
coordinated combination of:
Segmentation
4Ps
 the right product
 sold at the right price
 in the right place
 using the most suitable promotion.
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These day to day decisions are considered market strategy and they need
to be coordinated to support the Product Position that results from the
competitive and industry analysis
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Marketing Strategy – Stella Artois
Segment
young professionals men and women
older ambitious men – show beer sophistication
Position
European
Sophisticated
Heritage
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Marketing Strategy – Stella Artois
Price
 relatively high compared to other brands, suggesting it
is not as important in the mix whereas the product
itself is important
 relies on a reputation of quality to justify the higher
price.
Place
the more places it is available, the higher sales
bottles, cans, draught, etc.
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Marketing Strategy – Stella Artois
Promotion
high profile - 'upmarket' events tennis championships,
sophisticated ads highlighting its quality - emphasized by
the phrase 'reassuringly expensive'.
Product
premium grade
relatively strong lager.
https://www.youtube.com/channel/UCxEV_6BuSEHXD_qaAIPbkA
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product
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Product Strategy Objective
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Meet unmet marketplace needs
Differentiates product/service from the competition
Gain sustainable competitive advantage & be able to defend from
competition
Develop customer interest and loyalty
How to decide on product strategy for your business
idea?
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Consider the factors:
 Segments needs, benefits, usage
 Product Life Cycle
 Product Adoption Process
 Consumer Buying Process
 Competitive Grid results/niche
 Ansoff
 Porter Generic Strategies: cost/differentiation/focus
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Product Strategy Example:
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Source: tutor2u
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Price
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Price Strategy
Pricing
 Summarize specific pricing
strategies
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Price Strategy Objectives
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Maximize Profit
Economies of Scale achieved
Consistent with Quality ( as below)
Higher
Lower
Price
Higher
Quality
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Lower
Premium
Strategy
Good-Value
Strategy
Overcharging
Strategy
Economy
Strategy
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Price Strategy Options: New Products
PRICE
Mass Market Pricing
Low price  establish product in the
market
Skimming Pricing
PRICE
High price/Prestige pricing
 appeal to early adopters;
recover high R&D costs
PRICE
Skimming  Mass Market
Lower price over time
 Move inventory, stimulate
D, extend product life
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Price Strategy Options: Additional
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Price Discrimination (Segment Discounts): Ex: Airplane Tix, food and
student rate
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Price Odd-Even: Choosing numbers that have a psychological effect.
Numbers ending in 9, 5, 7
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Volume/Multiple Pricing/Bundling: Offer discount for volume
purchases
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Loss Leader Pricing: Business cuts the prices of a popular products to
increase traffic
How to decide on pricing strategy for your business
idea?
Set Strategies using five
elements
 Price determination: cos
plus; breakeven &/or price
elasticity of demand
 economic conditions,
 segment
 company competitive
advantage
 competition.
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Place (Distribution)
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Place Strategy
Define how and where you will provide the product for sale to your segment
Channel??
Distribution?
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Place Strategy & the challenge with distributing food
Distribution needs to consider challenges associated with the Unique
Features of Food & Agricultural Commodities
 Bulky
 Low in value per unit of weight
 Perishable/ Easy to Spoil/Bruise
 Produced in areas distant from consumers
 Fixed supply/seasonality
 Seasonal price fluctuations
 Production levels difficult to predefine due to uncontrollable factors
 Changing regulations on a global level
 Mix of trade and political issues
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Distribution Options
Increasingly common as internet sales increase
Most common for food product
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Distribution Options: Example – Simple Channel
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Granville Island Public Market includes permanent and temporary booths
featuring wares from local farmers, bakers, butchers, fishmongers and
craftspeople. It has been a popular destination for locals and visitors since
it opened in July 1979.
Channel consists of building in which producers or retailers rent space
Producers sell direct to consumers
Travel could be a little as 60 km from Fraser Valley or much more…
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Distribution Options: Example Complex Channels
Producer
transport
processor
transport
CFIA
wholesaler
retailer consumer
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How to decide on distribution for your business idea?
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2.
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6.
7.
Product Type they carry
Physical distribution and logistical issues
Geographic: Domestic or international
Cooperation: required or wanted
Service Provided (e.g., delivery, pickup, credit, storage, A/R, promotion,
credit, cost)
Reputation within industry
Type and number of businesses they provides service to
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Distribution example: FOOD TRUCK
The Food Truck
Phenomenon
http://www.youtube.com/
watch?v=8jmZjj2y4w0
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promotion
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Promotion Strategy
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method used to communicate with the specific market segments regarding
the product/service.
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Promotion Strategy Objectives
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Create Awareness
Stimulate Demand
Reduce Sales Fluctuations
Encourage Product Trial
Identify Prospects
Retain Loyal Customers
Combat Competitive Promotional Efforts
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Promotion Strategy Options
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Advertising: TV, radio, newspapers, magazines, or billboards
Publicity: unpaid form of presentation of ideas, goods, and services.
Personal Selling: includes all of the employee interactions with customer
Printed Materials: brochures, catalogues, business cards
Sponsorship: Events
Internet/Web Sites/Social Media
Trade Shows and Association Presentations
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How to decide on promotion for your business idea?
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Target market and segment: characteristics
Size of market (e.g., small and well defined then specialized
communication may work versus large which need mass
communications)
Location of market: local, national, provincial
Timing: seasonal, holidays, exam times, media production timing, trade
show times
Stage of the product cycle: established versus new product define level
required
Stage of adoption
Resources of business
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How to decide on promotion for your business idea?
8. Push or Pull Strategy
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A push strategy is where the
manufacturer concentrates some of
their marketing mix effort on
promoting their product to retailers
to convince them to stock the
product.
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The product is pushed onto the
retailer and consumer
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How to decide on promotion for your business idea?
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A pull strategy is based around the
manufacturer promoting their product
amongst the target market/segments to
create demand.
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Consumers pull the product through the
distribution channel forcing the
wholesaler and retailer to stock it.
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Example: Do you know these promo lines?
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I’m lovin it
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Nothin' says lovin‘ like somethin' from the oven
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Priceless - For everything else there …
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Ingredients for Life
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No One Can Eat Just One
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Good Food, Good Life.
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The King of Beers
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EXAMPLE OF MILK PROMOTIONS
http://www.youtu
be.com/watch?v=
Wr0NhWJAP2k
http://vimeo.com/1
1732092
http://www.youtub
e.com/watch?v=IJH
xsAhjKAA
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Back to market strategy
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Market Strategy & 4 P’s..
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4 P’s strategy should
 Fit segment and product position
 Coordinate with each other
 Develop via market analysis - competition & industry
 Maximizes performance of the company and fits with the company
image and business plan goals.
 Feed into financial, human resource, production plan sections
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example
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https://www.youtube.com/watch?v=zIEIvi2MuEk
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Questions
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What is market strategy & how is it different from market analysis within the
market plan section?
What are the 4Ps and why are they important in business planning?
Describe and justify your business plan pricing strategy using the price
determination & strategies
What are the key price, promotion, place and product strategies available to
food and agri-food business owners
Describe the communications strategy that you consider the most effective in
reaching your target market
Using the options provided, explain how you will deliver, promote & price your
product or service to your customers?
How can the 4Ps and market strategy be used to differentiate your
product/service from the competition? Explain
What is the difference between the push vs pull strategies?
Why is coordination between the 4Ps, segment important in business planning
and how does it relate to position??
Where does market strategy connect into financial, human resource,
production plan sections? Explain?
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Questions
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Describe several factors to consider when reviewing options for Price?
Promotion? Place? All 4Ps.
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End of slides