Transcript Chapter 6: Developing Product and Brand Strategy

Marketing Planning & Problem Solving
[Dr. Carter; MKTG.490]
COMBINED SET OF
MARKETING PLANNING
TEXT SLIDES
Chapter 1: Introduction to
Marketing Planning
The Marketing Plan Handbook
3rd ed.
Marian Burk Wood
1-1
Marketing Planning Defined
Marketing Planning is a systematic, structured
process. It includes:
1.
2.
3.
Researching and analyzing the current
situation.
Developing and documenting the firm’s
objectives, strategies and programs,
Implementing, evaluating and controlling
marketing activities.
1-2
Contents of The Marketing Plan
I.
II.
III.
IV.
V.
VI.
VII.
VIII.
Executive Summary
Current Situation
Objectives and Issues
Target Market, Customer Analysis and
Positioning
Marketing Strategy
Marketing Programs
Financial Plans
Implementation and Controls
1-3
The Marketing Planning Process
1-4
Step 1: Research and Analyze the
Current Situation
The marketer performs both:
1. External analysis, and
2. Internal analysis
1-5
External Analysis
External analysis involves the understanding
of trends that may impact marketing
strategy:
 Demographic
 Economic
 Technological
 Political-Legal
 Ecological
 Social-Cultural
1-6
Internal Analysis
Marketers also assess the firm’s capabilities
and the strategies of competitors in order
to:
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Build on strengths
Exploit competitors’ weaknesses
1-7
Other Analyses
Other areas that are analyzed for their
impact on marketing strategy include:
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Customers
Suppliers
Distributors
Partners, and
Other Stakeholders
1-8
Step 2: Understand Markets and
Customers
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Can be consumers or businesses
A comprehensive understanding of the
customer is desired:
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Buying habits, needs, wants, attitudes and
behaviors.
Who?, What?, Where?, When?, Why?, How?
Are buying patterns changing? Why?
1-9
Step 3: Segmentation,
Targeting and
Positioning
 The purpose of segmentation: To group
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customers with similar needs, wants, behavior
or attitudes.
Targeting: The selection of specific segments for
marketing. Can be to one segment, multiple
segments, or the entire market.
Positioning: Using marketing to create a
competitively distinctive place (position) for the
brand or product in the mind of the targeted
customers.
1-10
Step 4: Plan Direction, Objectives,
and Marketing Support
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Goals: Long-term performance targets.
Objectives: Shorter-term targets that
support the achievement of goals.
Sustainable Marketing:
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Balancing long-term goals with short-term
objectives and budget realities.
Balancing goals and objectives with an eye
toward being responsible to the larger society.
1-11
Six Approaches to Growth
Based upon permutations of markets and products.
CURRENT
Market Penetration
MODIFIED
INNOVATED
Product Development
EXISTING
EXPANDED
(Geographic)
ENTIRELY NEW
Market Development
Diversification
1-12
Step 5: Develop Marketing
Strategies and Programs
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Utilizing the tools of the “marketing mix”.
Consistent with the firm’s overall
direction, goals and strategies.
Includes the development of strategic
alliances.
1-13
Alliance Provides Value
1-14
Primary Marketing Tools
The primary tools for marketing, referred to
as the “Marketing Mix” are:
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Product
Price
Promotion, and
Channels
1-15
The Marketing Mix
1-16
Product
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Tangible good or an intangible service.
Must be considered in a holistic fashion.
Branding must also be considered.
1-17
Pricing
Based upon a number of factors:
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How customers perceive the value of the
offering.
Positioning.
Product costs.
Competitive forces.
Objectives of the organization.
1-18
Channel
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How, when and where to make the goods
and services available to customers.
Requires effective relationships with
channel partners.
1-19
Promotion
Involves the following activities:
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Advertising
Public Relations
Sales Promotion
Personal Selling
Direct Marketing
Use of the Internet
1-20
Step 6: Track Progress, Implement
and Control
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Mechanisms and methods of measuring
progress toward goals:
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Sales forecasts
Budgets
Schedules
Comparing actuals vs. projections or the
plan.
Making changes as needed.
1-21
Preparing for Marketing Planning
Marketers must develop a number of
professional and organizational strengths,
including:
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Knowledge of markets and customers,
Core competencies, and
Strategic relationships
1-22
Support Strategies: Customer Service
Customer Service:
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Reinforces positive perceptions.
Enhances business through reputation
and referral.
Helps differentiate from competitors.
Poor service alienates otherwise loyal
customers.
1-23
Support Strategies: Internal Marketing
Internal Marketing:
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Focuses all employees on serving
customers.
Builds support for the marketing plan.
Enhances execution of the marketing
plan throughout the organization.
1-24
5 Guiding Principles for Effective
Marketing Planning
1.
2.
3.
4.
5.
Expect Change
Emphasize Relationships
Involve Everyone
Seek Alliances
Innovate to Provide Value
1-25
Chapter 2: Analyzing the
Current Situation
The Marketing Plan Handbook
3rd ed.
Marian Burk Wood
2-1
Environmental Scanning and Analysis
Involves the analysis of both:
 Internal Factors, and
 External Factors
2-2
Internal Factors
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Mission
Resources
Offerings
Previous Results
Business Relationships
Keys to Success and Warning Signs
2-3
External Factors
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Demographics
Ecological
Economic
Technology-related
Political-Legal
Social-Cultural
Competitors
2-4
Internal Analysis: Mission
Mission:
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States the firm’s fundamental purpose.
Indicates how the firm will add value.
2-5
Internal Analysis: Resources
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Human
Financials
Informational
Supply
2-6
Internal Analysis: Offerings
Examining what the firm is currently
offering in the way of goods and services:
 Fit with mission and resources.
 Affirm role of each line and item.
2-7
Internal Analysis: Previous Results
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Results include:
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Sales (dollars and units).
Profitability.
Customer acquisition and retention costs.
Other financial results.
Provide clues to firm’s strengths and
weaknesses.
Helps separate the effective programs
from the less-effective programs.
2-8
Internal Analysis: Business Relationships
Includes relationships with:
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Suppliers
Distributors
Other business partners
Examine:
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Capacity
Quality
Value provided
2-9
Internal Analysis: Keys to Success
and Warning Signs
Keys to Success:
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Identify special factors most crucial to
success.
Maintain focus on key priorities.
Warning Signs
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Indicate potential problems with the plan.
2-10
External Analysis: Demographic Trends
Examined by target market:
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Consumer Demographics
Business Demographics
2-11
External Analysis: Consumer
Demographic Trends
Key consumer demographic trends include:
 Population growth
 Population composition:
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Age
Gender
Ethnicity
Religious makeup
Education
Occupation
Household size
Income
2-12
External Analysis: Business
Demographic Trends
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Size and growth of industries
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Number of companies.
Number of locations or branches.
Number of employees.
Sales revenues.
Trends in new business formation may
signal emerging opportunities.
2-13
External Analysis: Economic Trends
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Must keep an eye on global, national,
regional and local economic trends.
Some measures typically monitored:
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Buying power
Income
Debt
Credit Usage
2-14
External Analysis: Ecological Trends
Potential impacts:
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Availability of raw materials.
Government regulations.
Social attitudes.
2-15
External Analysis: Technological Trends
Key trends include:
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Cell phones
Computers
Digital media
Internet access
Increasing bandwidth
2-16
External Analysis: Political-Legal Trends
Legal Trends: Laws includes international,
federal, state and local. Related to:
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Competitive behavior
Pricing
Taxation
Promotion
Distribution
Product liability
Labeling
2-17
External Analysis: Political-Legal Trends
Political Trends
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Global. national, or local
Can signal a change in the legal
environment.
2-18
External Analysis: Social-Cultural Trends
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Key trend: Increasing diversity in markets.
Keep tabs on popular culture.
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Tends to be volatile.
Core beliefs and values change more
slowly over time.
2-19
External Analysis: Competitors
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Identify:
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Current competitors.
Possible future competitors.
Learn about the unique competitive
advantages of each competitor.
Track trends in market share.
2-20
Porter’s Five Forces Model
2-21
Three Fundamental Business Strategies
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Cost Leadership Strategy
Differentiation Strategy
Focus Strategy
2-22
SWOT Analysis
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Strengths
Weaknesses
Opportunities
Threats
2-23
SWOT Analysis (cont’d)
2-24
Exhibit 2.5
Judging Organizational Strengths & Weaknesses
Past Performance Trends
Comparison vs. Competitors
Are organizational
resources & capabilities
strengths or weaknesses?
Specific Goals or Targets
Personal Opinions of
Strategic Decision Makers
Chapter 3: Understanding Markets
and Customers
The Marketing Plan Handbook:
3rd ed.
Marian Burk Wood
3-1
What is a Market?
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Market = All the potential buyers for a
particular product or service.
Markets can be defined by:
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Product
Customer definition
Geography
3-2
Markets Must Be Analyzed
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Markets are always changing
Market analysis is performed to better
understand:
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Requirements
Behaviors, and
Attitudes
3-3
Market Share
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Market share : The percentage of total
sales (dollars or units) held by a particular
company, brand or product.
Directly affects segmentation and
marketing.
Serves as a baseline for understanding
historical market dynamics.
3-4
Consumer vs. Business Markets
3-5
5 Basic Levels of Market Definition
Level
Potential Market
Available Market
Qualified
Available Market
Target Market
Penetrated
Market
Definition
All customers who may be
interested in a particular offering.
Customers who are interested,
possess sufficient income, and
have access to the offering.
Customers who are qualified to
buy based on age or other criteria.
Customers that the company
intends to target.
Customers who are already buying
the product.
3-6
Analyzing Customer Needs and Behavior
3-7
Analyzing Consumer Markets
Information needs include:
 Who?
 What?
 Where?
 When?
 Why?
 How?
3-8
Considerations for the Consumer Market
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Cultural
Social
Personal
3-9
Consumer Market: Cultural
Considerations
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Different cultures means different approaches to
buying situations, due to differing values, beliefs
and preferences.
Subcultures: Groups within a larger culture that
preserve distinct cultural identity:
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Religion
Ethnic background
Lifestyle
Class: Levels of socioeconomic status.
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Persons of same class exhibit similar behaviors
3-10
Consumer Market: Social
Considerations
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Social influences on behavior include:
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Family members
Friends
Work Groups
Civic Organizations
Within social groups, consumers are
influenced by opinion leaders, who
provide advice and guidance.
3-11
Consumer Market: Personal
Considerations
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Personal factors include:
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Family life cycle
Lifestyle
Psychological makeup
Psychographic characteristics include:
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Motivations
Perceptions
Attitudes
3-12
Considerations for the Business
Market
Special considerations for businesses
include:
 Organizational Connections
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Internal players
Suppliers
Organizational Considerations
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Company characteristics
Derived demand
3-13
Organizational Connections:
Internal Players
Also to consider:
 Those who initiate the decision
 Those who use the products/services
 Those who evaluate the alternatives
 Those who approve the release of funds
3-14
Organizational Connections:
Suppliers
Current relations with competing suppliers
should be considered:
 Long-term contracts
 Evaluations
 Requirements
 Other elements
3-15
Organizational Considerations:
Company Characteristics
Company characteristics include:
 Company’s size and industry
 Current market share and growth
 Competitive situation
 Buying policies and procedures
 Financial constraints
 Timing of the purchases
3-16
Organizational Considerations:
Derived Demand
Derived demand: The principle that demand
for business products is based upon
(derived) demand for related consumer
products.
Derived demand requires that B2B
marketers be aware of emerging trends
and needs in consumer markets and be
ready to help their business customers
serve their consumer customers.
3-17
Planning Marketing Research
Two basic types of research:
 Secondary Research:
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Information already collected for another
purpose.
More readily available and less expensive than
primary research.
Primary Research:
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Research conducted to address a specific
situation
3-18
Examples of Sources of
Secondary Research
3-19
Secondary Research: Some
Cautions
Some cautions for using secondary research:
 Before using, check dates and sources.
 Consider the source’s credibility
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Reputable?
Unbiased?
Look into the sources cited by your secondary
source
Be careful about applying general learning to
your specific situation.
3-20
Primary Research
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Problem Definition
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What information is needed?
How will it be used?
Data Collection
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Methods include:
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Observation
Surveys
Experiments
3-21
Primary Research Techniques:
Focus Groups
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Small group of customers/prospects
Guided discussion
Yields insights into customer thinking,
attitudes and behaviors
Drawback: May not be representative of
the entire market.
3-22
Primary Research Techniques:
Ethnographic Research
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Ethnographic Research: Observing how
customers behave in actual product
purchase or usage situations, and asking
to clarify the reasons for behavior.
Helps marketers to:
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Develop new product ideas.
Fine-tune personal selling approaches.
Plan for other marketing attention.
3-23
Using Marketing Research
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If research is needed, include this as a
budget item in your marketing plan.
Plan for ongoing market research to help
measure results during implementation.
Good decision making involves weighing
the pros and cons of making a decision
based on limited data, or waiting for
research.
Be respectful of consumer privacy
concerns.
3-24
Chapter 4: Planning Segmentation,
Targeting and Positioning
The Marketing Plan Handbook:
3rd ed.
Marian Burk Wood
4-1
Fragmentation and Intense
Competition
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Customers exhibiting a wider variety of:
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Needs
Attitudes, and
Behaviors
Companies must differentiate themselves
more distinctly in the markets where they
compete.
4-2
The Need for Segmentation,
Targeting and Positioning
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A move away from mass marketing.
A move towards segment marketing.
Allows marketers to focus their resources
on the most promising opportunities.
Improves marketing efficiency and
effectiveness
4-3
Market Segmentation
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Definition: the process of grouping
customers within a market according to
similar needs, habits or attitudes that can
be addressed through marketing.
Even within a large segment, marketers
often can identify niches.
4-4
Steps in the Segmentation Process
1. Select the general market:

Eliminate markets that have no need for the
product or are inappropriate for other
reasons.
2. Apply segmentation variables.
3. Assess and select segments for
targeting
4-5
Overview of Segmentation,
Targeting and Positioning
4-6
Consumer Segmentation Variables
Type of Variable
Behavioral and
Attitudinal
Examples
Geographic
Benefits sought, rate of usage,
attitude toward product and
usage, price sensitivity.
Age, gender, family status,
household size, income,
occupation, education.
Location, distance, climate.
Psychographic
Lifestyle, activities, interests.
Demographic
4-7
Segmenting by Behaviors and
Attitudes
In many ways, the best way to segment:
 Help marketers analyze the specific value
that a particular group expects from the
offering.
 Include variables like:
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Benefits required or expected
Usage occasion and status
Loyalty status
Technological orientation
Attitudes toward products or usage
4-7
Segmenting by Demographics
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Popular for segmentation because they
are common and easily identified
consumer characteristics.
Often point to meaningful differences in:
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Consumer needs and wants.
Product consumption.
Media usage.
However, care must be taken to avoid
over-generalization or stereotyping.
4-9
Segmenting by Geographics
May be based on:
 A company’s ability to sell and service
products in certain areas or climates,
 Its interest in entering promising new
markets, or
 Its reluctance to sell in certain areas due
to environmental threats or unfavorable
climate.
4-10
Segmenting by Psychographics
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Includes such variables as lifestyles,
activities, interests and attitudes.
Provides a deeper understanding of what
and why consumers buy.
When consumer activities or interests
cross demographic and/or geographic
lines.
4-11
Business Segmentation Variables
Type of Variable
Examples
Behavioral and
Attitudinal
Purchasing patterns and
process, user status, benefits
expected, order size/frequency,
buyer/influencer/user attitudes.
Industry, business size, business
age, ownership structure.
Demographic
Geographic
Location, distance, climate.
4-12
Segmenting by Behaviors and
Attitudes
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Helps marketers identify what specific business
segments want and value, as well as how/why
they buy.
Includes variables such as:
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Purchasing patterns
User status
Attitude toward technology
Loyalty status
Price sensitivity
Order size/frequency
Attitudes
Benefits expected
4-13
Segmenting by Demographics
Common business demographic variables
used:
 Industry
 Business size
 Business age
 Ownership structure
4-14
Segmenting by Geographics
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Utilizes such variables as nation, region,
state, city and climate.
Allows for the grouping of potential
customers according to:
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Concentration of outlets
Location of headquarters
Geography-related needs or responses
4-15
Assessing Potential Target Markets
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Target Market: The segment of the overall
market that a company chooses to
pursue.
Each potential segment must be
evaluated based upon fit with the firm’s:
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Resources
Core competencies
Goals and objectives
Offerings
4-16
Assessing Segment Attractiveness
4-17
Ranking and Choosing Among
Potential Segments
Here is an approach sometimes taken:
1. Take all potential targets.
2. Rate each potential target across a
number of selected criteria. Develop
“importance” weights for each of the
criteria.
3. Develop a composite score for each
segment.
4-18
Sample Segment Ranking
Fit with
Growth Competitive Company Overall
Segment Potential Superiority Resources Score
A
3
5
2
10
B
5
4
4
13
C
4
2
3
9
Scoring key: 5 = highly attractive, 4= moderately attractive, 3 =
average, 2 = moderately unattractive, 1 = highly unattractive
4-19
Coverage Strategies
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Concentrated Marketing
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Undifferentiated Marketing
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Concentrating the marketing efforts on only
one key segment.
Targeting all segments with the same
marketing strategy.
Differentiated Marketing

Creating a separate marketing strategy for
each segment.
4-20
Personas
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Growing number of companies are
gaining insights by developing personas:
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Detailed but fictitious profiles representing
how individual customers in their targeted
segments behave, live and buy.
Give marketers a deeper understanding of
what shapes each segment’s needs,
preferences, buying behavior and
consumption patterns.
4-21
Positioning
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Positioning is the differentiation of the
brand or product on the basis of
attributes that customers find meaningful.
Positioning conveys the value that the
brand provides and sets the brand apart.
Sets the tone for the marketing plan.
Should be re-evaluated periodically.
4-22
Meaningful Differentiation
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Some sources of meaningful
differentiation:
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Product features
Service attributes
Channel attributes
Pricing attributes
Other attributes
Consideration is also given to positions
being staked out by the competition.
4-23