Transcript Product marketing - School of Business Administration

Global Marketing
Tom Gillpatrick, Ph.D.
Juan Young Professor of Marketing & Executive Director, FILC
Master International Management Program
School of Business Administration
Portland State University
Fall 2004
MIM 515
10-Nov
Agenda
• Market Research
• Competitor Analysis
• Colgate Case
• Samsung Case
• Case Analysis Discussion
• Quiz
Marketing Research Defined
Marketing research is the planning,
collection, and analysis of data relevant
to marketing decision making and the
communication of the results of this
analysis to management.
Market Research Examples
Market strategy
• Segmentation
• Profiling
• Market simulation
Corporate marketing
• Branding
• Image tracking
• Positioning
• Web site evaluation
Product marketing
• Packaging tests
• Naming
• Price/voluem
estimation
• Advertising
effectiveness
Channels
• Dealer programs
• Direct sales evaluation
• Win/loss studies
International Research Griggs-Anderson/Gartner Consulting
Market Research Examples
Product development
• Concept testing
• Feature valuation
• Consumer ethnographics
• Beta tests
Customer satisfaction
• Tracking studies
• Models
• Transaction
monitoring
Managing the
Research Process
• Factors influencing a manager’s decision
to use research information.
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Conformity to prior expectations.
Clarity of presentation.
Research quality.
Political acceptability within the firm.
Lack of challenge to the status quo.
Forward Research Design
Define the research problem
Check secondary sources
Determine primary research strategy
Estimate research cost
Design questionnaire
Define sample
Implement research design
Analyze data
Write report
Turning the Process
on Its Head
The backward approach I advocate rests on the
premise that the best way to design usable
research is to start where the process usually ends
and then work backward.
1. Determine how the research results will be implemented
(this helps to define the problem).
2. To ensure the implementation of the results, determine
what the final report should contain and how it should
look.
3. Specify the analyses necessary to fill in the blanks in the
research report.
Turning the
Process on Its Head
4. Determine the kind of data that must be assembled to
carry out these analyses.
5. Scan the available secondary sources and/or syndicated
services to see whether the specified data already exist or
can be obtained quickly and cheaply from others. (While
you are at it, you should observe how others have tried to
meet data needs like your own.).
6. If no such easy way out presents itself, design instruments
and a sampling plan that will yield the data to fit the
analysis you have to undertake.
Turning the
Process on Its Head
7. Carry out the field work, continually checking to
see whether the data will meet your needs.
8. Do the analysis, write the report, and help
management make it have its intended effects.
What else does this process do?
Backward Research Design
Determine what key decisions are to be made using research results
Determine what information will help
management make the best decisions
Prepare prototype report and ask management if this is what
will best help them make their decisions
Determine the analysis that will be necessary to fill in the report
Determine what questions must be asked to
provide the data required by the analysis
Ascertain whether the needed questions have been answered already
Backward Research Design
Design sample
Implement research design
Analyze data
Write report
Assist management to implement the results
Evaluate the research
process and contribution
Advantages of Manager Participation in
Backward Research
1. It serves to co-opt managers into supporting the research
work should it be criticized later by others.
2. It deepens their understanding of many of the details of
the research itself and their appreciation of both its
strengths and its weaknesses.
3. Working with hypothetical tables can make the manager
eager for the findings when they do appear and ready to
implement them.
Advantages of Manager Participation in
Backward Research
4. Working with contrasting tables makes it unlikely that the
manager will be startled by surprising results, an outcome
that sometimes causes a manager to reject an entire study.
5. Participation will also help reveal to management any
limitations of the study. In my experience, managers are
often tempted to go far beyond research “truth” when
implementing the results, especially if the reported truth
supports the course of action they prefer to take anyway.
What’s Important Depends
on Your Perspective
Relative Importance
+1
Engineering
Perspective
0
Marketing
Perspective
-1
Price
Display
Marketing people put more emphasis on price while
engineering puts more perceived customer value in display.
Estimating Market Potential
• Current market demand
– Demand for our firm
– Demand for all competitive firms
• Potential demand
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Not aware
Not available
Unable to use
Lacks benefits
Not affordable
Demand
Company
Demand
Market
Demand
Estimating Current Demand
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Total market potential
Area market potential
Industry sales
Market share
Ninety Types of Demand
Measurement (6 X 5 X 3)
World
Space
U.S.A.
level
Region
Territory
Customer
All sales
Industry sales
Company sales
Product
level
Product line sales
Product form sales
Product item sales
Short run
Medium run Long run
Time level
Factors Driving
Market Growth
• Current factors
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Felt need
Perceived risk
Innovativeness
Type of decision
• Product positioning
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Relative advantage
Relative cost
Relative complexity
Ease of use
• Market influences
– Observability
– Trialability
– Marketing effort
• Faster growth
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High
Low
High
Individual
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Attractive
Low
Minimal
Easy
– Easily seen
– Easy to try
– Extensive
Performance Measurement
Internal Measures
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Unit Cost
Mfg. Overhead
Mktg. Expense
R&D Expense
Inventory Turn
Sales/Employee
Day’s Act.’s
Receivable
• ROS, ROI, ROE
• Asset Turnover
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External Measures
Market Share
Relative Share
Customer satisfaction
Market Coverage
Product awareness
Relative quality
Relative Price
Customer Preferences
Relative New Product
Response Time
Market Strategy,
Marketing Mix, & Performance
Market
Strategy
Customer
Satisfaction
Market Mix
Strategy
Net
Marketing
Contribution
Roger Best, 1997
Market-Based Mgt.
Fundamental Market-Based
Strategies & Profit Growth
Strategies to
Grow Demand
Manage
Market Share
Grow Customer
Purchases
Net
Revenue Variable
Market
Market
Marketing =
X
X
per - Cost per - Marketing
Share
Expense
Contribution Demand
Customer Customer
Enter or Exit
Markets
Lower Variable
Cost per Customer
Increase
Marketing
Efficiency
COMPETITOR ANALYSIS
What You Should Expect From A Competitor Analysis
•Which competitors does our strategy pit us against?
•What are competitor strengths and weaknesses?
(Core capabilities, ability to grow, ability to respond)
•What are your competitors strategies?
•What kind of counter moves will the competitor accept?
Which moves has it already countered?
Induce your competitors not to invest in
those products, markets and services
where you expect to invest the most …
that is the fundamental rule of strategy.
Bruce Henderson, Founder of BCG
There is nothing more exhilarating than
to be shot at without result.
Winston Churchill
Five Forces Determining Segment
Structural Attractiveness
Potential Entrants
(Threat of
Mobility)
Suppliers
(Supplier power)
Industry
Competitors
(Segment rivalry)
Substitutes
(Threats of
substitutes)
Buyers
(Buyer power)
PORTER’S FIVE FORCES MODEL
Determinants of Supplier Power
Differentiation of Inputs:
Switching Costs:
Presence of substitute inputs:
Supplier concentration:
Importance of volume to supplier:
Cost relative to total purchases in
the industry:
Impact of inputs on cost or
differentiation:
Threat of forward vs. backward
integration:
Rivalry Determinants
Industry growth:
Fixed costs/value added:
Intermittent overcapacity:
Product differences:
Brand identity:
Switching costs:
Concentration & balance:
Informational complexity:
Diversity of competitors:
Corporate stakes:
Exit barriers:
Entry Barriers
Economies of scale:
Proprietary product
differences:
Brand identity:
Switching costs:
Capital requirements:
Access to distribution:
Absolute cost advantages:
Proprietary learning curve:
Access to necessary inputs:
Proprietary low-cost product
design:
Government Policy:
Expected retaliation:
Competitive
rivalry
Substitutes
Relative price/performance of
substitutes:
Switching costs:
Buyer propensity to substitute:
Determinants of Buyer Power
Buyer concentration vs. firm
concentration:
Buyer volume:
Buyer switching costs vs. firm
switching costs:
Buyer information:
Ability to backwards integrate:
Substitute products:
Pull through:
Price sensitivity:
Price/total purchases:
Product differences:
Brand identity:
Impact on quality/performance:
Buyer Profits:
Decision makers incentives:
Competitor Analysis &
Competitive Positioning
• Competitive Environment
– Market Entry/exit
– Buyer/supplier power
– Substitutes/rivalry
• Competitive Position
– Competitor intelligence
– Competitor analysis
– Competitive benchmarking
• Competitive advantage
– Cost advantage
– Quality advantage
– Marketing advantage
Competitive Position &
Competitive Advantage
• Cost Advantage
– Variable Costs
– Marketing Expenses
– Operating/Overhead Expenses
• Differential Advantage
– Product Differentiation
– Service Quality
– Brand Reputation
• Marketing Advantage
– Distribution
– Sales Effort
– Marketing Communications
Developing
Competitive Advantage
Superior
Relative
Differentiation
Position
Inferior
Differentiation
Advantage
Differentiation
with Cost
Advantage
Stuck-in-the
Middle
Low Cost
Advantage
Inferior
Superior
Relative Cost Position
Niche
Pro Forma
Year 1
Mainstream
Year 2
Year 1
Year 2
Unit Volume
13,000
20,000
42,000
59,000
Retail unit sales
8,000
15,000
27,000
44,000
$16,160.00
$30,300.00
$47,520.00
$77,440.00
3,000
3,000
8,000
8,000
$ 2,466.00
$ 2,466.00
$ 6,576.00
$ 6,576.00
11,000
18,000
35,000
52,000
$18,626.00
$32,766.00
$54,096.00
$84,016.00
Retail Dollar Sales
Professional unit sales
Professional Dollar Sales
Total Unit Sales
Total Dollar sales
Niche
Mainstream
Pro Forma
Year 1
Year 2
Year 1
Year 2
Manufacturing Costs
$ 7,260.00
$11,880.00
$22,400.00
$33,280.00
Sampling costs
$ 1,320.00
$ 1,320.00
$ 4,480.00
$ 4,480.00
Adv. & Promotion
$11,200.00
$11,700.00
$32,800.00
$29,000.00
$
$
$
887.00
$ 1,270.00
$56,087.00
$63,550.00
Capacity Costs
Total Costs
317.00
$18,777.00
450.00
$24,030.00
Niche
Pro Forma
Operating Profits
Year 1
$
(151.00)
Mainstream
Year 2
Year 1
Year 2
$ 8,736.00
$ (1,991.00)
$20,466.00
Profits as Percentage of
Sales
-81%
26.66%
-3.68%
24.36%
Cost of Cannibalization
$ 2,298.00
$ 3,761.00
$ 12,537.00
$18,626.00
Profit after cannibalization
$ (2,449.00)
$ 4,975.00
$ (14,527.00)
$ 1,840.00
Objectives Colgate Case
• To explore the evolution of a product category,
demand for which is largely derived from usage of
a related product.
• To review a new product development process and
the importance of evaluating product company and
product market fit in assessing NPD opportunities.
• To emphasize the importance and marketing
program implications of determining whether a
new product represents a big breakthrough idea or
a line extension.
• To consider the relative merits of emphasizing a
corporate brand umbrella vs. an individual brand
names when launching a new product.
Samsung Case
• To Illustrate the critical importance of effective
marketing in achieving a corporate turnaround.
• To demonstrate the cross-border consumer
research in guiding global brand repositioning.
• To explore the marketing planning and
budgeting challenges typical of a multinational
company (MNC) with a single global brand.
• To explore the responsibilities of a CMO in a
major MNC.
Summary for Case Analysis
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What is a case?
What is purpose of case analysis?
How to analyze a case?
How to write a case?
How to discuss a case?
Questions?
Written Case Analysis MIM
515
• Format- 5 pages
– Executive summary- 1 page
– Analysis
– Conclusion
– Attachments/Appendix (optional)
Executive Summary
• Introduction:
– Overview of key issues
– Decision Context
• Problem Statement
– What are key managerial problems
– Use question format, prioritize
– Focus- underlying problem Vs. symptom
• Recommendations
– Do they address problem(s)
Case Analysis
• What is analysis?
– Critical breaking apart data/facts and
processing to add meaning
– Can be quantitative or qualitative
– Developing structure to convey meaning- eg.
pro/con analysis, model
• What is NOT analysis?
– Restating case facts
– listing solutions
Recommendations
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Link to key problems.
What are implications for action?
Do not confound with analysis section.
Is there a theme?
Are recommendations supported by
analysis? Do they flow from analysis?
Appendix-Examples
• Do you have any graphs charts that support
analysis?- (label, reference)
• Calculations that are too detailed for body
of paper
• Assumptions that you feel are necessary to
support analysis
Industry Research
Research Overview: Key Questions
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What is the target industry?
What is the industry overview?
What are the industry norms?
Who are the key players?
What is the size of the market & market share?
What are the forecasts and trends?
What is the target industry?
• Internet:
– SIC Manual Online:
http://www.osha.gov/oshstats/sicser.html
– NAICS & SIC Correspondence Tables:
http://www.census.gov/epcd/www/naicstab.htm
• Paper (behind Business Reference Desk)
– SIC Manual: HF1042 .U58 1987
– North American Industry Classification System
(NAICS): HF1042 .N67 1998
What is the industry overview?
• Internet
– Hoovers:
http://www.hoovers.com/industry/resources.html
– Current Industrial Reports:
http://www.census.gov/cir/www/index.html
– VIKAT: http://www.lib.pdx.edu/netwk/sirsi.html
• Paper (Basement)
– Moody’s Industry Review: Reference HG4961.M68
– Standard and Poor’s Industry Surveys: Reference
HG4905.S66
– Manufacturing USA: Reference HD9721 .M364
What are the industry norms?
• PSU Databases:
– ABI Inform
– Lexis - Nexis
– Investext
• Paper: (behind Business Reference Desk)
– Almanac of Business and Industrial Financial
Ratios: HF5681 .R25 T68
– Industry Norms and Key Business Ratios:
HD9724 .I514
Who are the key players?
• Internet
– Forbes Annual Report on American Industry:
http://www.forbes.com/
• PSU Databases
– http://www.lib.pdx.edu/netwk/databases.html
– Disclosure Global Access (sort by SIC)
• Paper CorpTech Directory of Technology
Companies: Reference T12 .C82
What is size of market/market share?
• PSU Databases
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http://www.lib.pdx.edu/netwk/databases.html
ABI Inform
Lexis - Nexis
Investext
• Paper (behind Business Reference Desk)
– Market Share Reporter: HF5410 .M35
– U.S. Industry and Trade Outlook:
HC106.5 .A17
What are the forecasts and trends?
• PSU Databases
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http://www.lib.pdx.edu/netwk/databases.html
Investext
Lexis - Nexis
ABI Inform
• Paper
– U.S. Industry and Trade Outlook: HC106.5.A17 (behind
Business Reference Desk)
– Standard & Poor’s Industry Surveys: Reference HG4905.S66
Quiz #3 Due 11-15
1.
2.
3.
4.
5.
6.
C6-n6
C6-n10
C6-n12, part two use Costco (rather than Sears & K Mart)
C7-n1
C7-n11
Briefly apply Ch:4 GM to Samsung case
relative to benefits and challenges of global
branding