Transcript Week 1 – January 12, 2004

FM20611 – Marketing II
Week 7 – February 23, 2004
Midterm Overview
Situational Analysis
Direct & Online Marketing
A Career in Marketing
Email
[email protected]
Midterm Exam Results
Histogram
# of Students
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4
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1
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95
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Midterm Exam Grade
91
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88
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84
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81
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78
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74
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71
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68
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64
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Non-Exam Contribution
• Student X:
– Exam Grade: 63%
– Midterm Grade: 82%
• Come to class!!
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SWOT Analysis – For Company
Strengths
Weaknesses
• Internal
• Competitive advantages
• Available resources
• Internal
• Problems
• Vulnerabilities
Opportunities
Threats
• External
• Interesting trends
• External
• Obstacles
•Technology changes
•Policy changes
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• Competition
• Technology changes
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Internal: Strengths
• Expertise
– Business
– Industry
– Marketing & Sales
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Product or service
Location
Processes and procedures
Any other aspect that adds value
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Internal: Weaknesses
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Lack of expertise
Undifferentiated products and service
Location
Poor quality
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Damaged reputation
O
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External: Opportunities
• Developing markets
– Internet
– Demographic/psychographic trends
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Mergers, joint ventures, strategic alliances
New market segments with better profits
New international markets
A market vacated by an ineffective
competitor
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External: Threats
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A new competitor
Price wars with competitors
Competitors’ new products or services
Competitors’ superior access to distribution
Taxation introduced on your product/service
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SWOT Analysis – Levis
Strengths
Weaknesses
• 73rd top global brand $3.45 billion
• Distribution
• Production capabilities
• Expensive production
• Aging consumer base
Opportunities
Threats
• Lower-end consumers
• New products?
• Expanding competitors
serving younger consumer
• Lower cost competitors
• Private Label
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Successful SWOT
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Be realistic
Distinguish between present and possible future
Be specific – avoid gray areas.
Always analyze in context to your competition
– i.e. better then or worse than your competition
• Short and simple
– Avoid complexity and over-analysis
• SWOT is subjective
– Do not rely too heavily on SWOT
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Porter’s Five Forces Analysis
COMPETITIVE
RIVALRY
Buyers
Suppliers
Potential
entrants
Substitutes
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Threat of Entry
• Economies of scale
– e.g. the benefits associated with bulk purchasing.
• The high or low cost of entry
• Access to distribution channels
• Other non-size-related cost advantages
– Contacts
– Knowledge
– Learning curve
• Government action/new laws
• Importance of differentiation
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Power of Buyers
• High when few large buyers
– Not many options for suppliers
• High when many similar small suppliers
– Buyers have many to choose from
• High when switching costs are low
– I.e. is it expensive for buyers to switch
suppliers?
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Power of Suppliers
• High when switching costs are high
• Power is high where the brand is powerful
– E.g. Coca-Cola, Microsoft
• High when supplier can integrate forward
– E.g. Brewers buying bars
• High when customers have little bargaining
power
– E.g. Gas stations in remote places
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Threat of Substitutes
• Product-for-product substitution
– E.g. email for fax
• Substitution of need
– E.g. better toothpaste reduces the need for
dentists
• Generic substitution
– E.g. Music vs. computer games
• Doing without
– E.g. cigarettes
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Competitive Rivalry
• High when
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Buyers are powerful
Suppliers are powerful
Potential threats
Potential substitutes
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Five Forces Analysis – Sneakers
• Entrants
– Expensive to enter
– Hard to get distribution
– Hard to differentiate
• Buyers
– Many large buyers, some small
– Limited suppliers
– Low Switching costs
• Suppliers
– Powerful brands
• Substitutes
– Low
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Direct & Online Marketing
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Catalog
TV
Internet
Clubs
Vending Machines
Door to Door
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Catalog: Costs
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Photography & Models
Art & Art Direction
Copy writing and setting
Printing – Four-color process
Addressing
Mailing lists
– Rentals
• 30-day lists
• Supplied on computer disks/over Internet
– Management – Merge and Purge
• Postage - Bulk mail
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Catalogs continued
• Cost of order-taking & fulfillment
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A/k/a shipping and handling
Telephone lines & operators
Warehousing & shipping
Can be outsourced
• No-hassle return
– Limited (new condition w/box-intact)
– Unlimited lifetime (LL Bean)
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TV Selling
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QVC (West Chester)
Home Shopping Network
Dedicated cable channel or UHF time
Biggest sellers:
– Jewelry
– Women’s fashion
– Small gadgets
• On-screen counter
• Live phone comments
• Easy returns – refunds
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Internet
• Frequently same as catalog merchants
• Issues
– Ease of navigation
– Security for credit card info
– Fulfillment
• Can be independent or through service
• Can coordinate with store
– Returns
– Purchases
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Clubs
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Books, Records, Videos
Special sign-up offer
Monthly “selection” or “alternatives”
Monthly offer
– Order two, get one free
• Negative response option
– Must return card not to get selection
– People hate this!
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Vending Machines
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Time/Place Utility
Candy
Cigarettes
Videotapes
Pantyhose
Etc
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Door to Door
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Oldest form of non-store retail
Vacuums, encyclopedias
Bibles
Avon & Mary Kay
– Opening retail outlets – dual distribution issue
– “Mark” line
• Tupperware
– Invite friends and neighbors to “parties”
• Lingerie parties, Pickle (handbag) parties!
• Personal & private
• Feel obligated
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A Career in Marketing
Some things you might not think
about
Consumer vs. Industrial Markets
• Consumer
– Personal
– Household
– Gifts
• Industrial
– Business
– Industry
– Resale in another form
• Matches for hotel rooms/bar
• Battery/tires on car
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Ex: Soap - Consumer market
• Venues
– Drugstores
– Supermarkets
• Forms
– Multi-bar packs
– Pumps
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Ex: Soap - Industrial Market
• Venues
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Supply houses/distributors
Hotels
Hospitals
Restaurants
• Forms
– Large bottles
– Dispenser bottles
– Little bars with logos
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Ex: Buttons - Consumer market
• Venues
– Sewing stores
– Drugstores
• Forms
– Cards
– Assorted boxes
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Ex: Buttons - Industrial market
• Venues
– Manufacturers
– Tailors
– Uniform Supply
• Forms
– Cases
– Small clear boxes
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Industrial Market Selling
• Compensation
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Commission + “draw”
Company credit card – for entertaining
Mileage allowance for car
Cellphone
• Who?
– Like people from that industry
– Can “talk the talk” – create a rapport
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Industrial Selling - Duties
• Daily Schedule
– Self-managed
– Covers a territory
• Building, City, State, Region
• After-sale duties
– Setup
– Training
– Constant Liaison
• New Products, Product updates
• Build personal rapport – value added
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Functions of Sales Office
• Develop “leads”
• Supply literature and demos
• Provide “office address” with associated
functions
• Voicemail/receptionist
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Professional markets
• Not making actual sales – supporting
products
– i.e. One-to-one advertising
– “Detail People” (educators) – pharmaceuticals
– Support sales efforts
• Information
• Samples
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Marketing Dept – By Function
VP, Marketing
Advertising Mgr
Nat'l Sales Mgr
Broadcast
Western Region
Print
Northern Region
Prod. Development
Market Research
Southern Region
Eastern Region
Districts
Stores
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Marketing Dept – By Product
VP, Marketing
Product A
Advertising Mgr
Product B
Nat'l Sales Mgr
Product C
Prod. Development
Market Research
Broadcast
Print
Regions
Districts
Stores
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Next Class
• Mar 1st:
– Trade Show/Expo Selling
– Team Project preparation
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