Transcript Marketing

Marketing
An Introduction
WHAT IS MARKETING
$$$$
Selling
Everywhere
around us
Advertising
Fulfilling
Needs
Org.
Function
Manipulating
People
New
Trend!
4Ps?
Copyright © Heba Bahgat
What is Marketing
Marketing management is the art and science of
choosing target markets,
getting, keeping, and growing customers
through
creating, communicating and delivering
superior customer value.
What is Marketing
• Process by which individuals and groups
obtain what they need and want through
creating and exchanging products and value
with others.
• More simply: Marketing is the delivery of
customer satisfaction at a profit.
What is Marketing
• Needs - state of felt deprivation for basic items
such as food and clothing and complex needs
such as for belonging. i.e. I am thirsty
• Wants - form that a human need takes as
shaped by culture and individual personality.
i.e. I want a Coca-Cola.
• Demands - human wants backed by buying
power. i.e. I have money to buy a Coca-Cola.
What is Marketing
• Customer Value - benefit that the customer
gains from owning and using a product
compared to the cost of obtaining the product.
• Customer Satisfaction - depends on the
product’s perceived performance in delivering
value relative to a buyer’s expectations.
Needs,
wants,
and
demands
Core
Marketing
Concepts
Market
s
Product
s
and
Service
s
Value, satisfaction,
and quality
Exchange,
transactions,
and relationships
Marketing Evolution
Orientation
Description
Relative Time
Span
Basic Managerial
Objective
Production
Transition from Home
Manufacturing to Factories
Industrial
Revolution
Profit Maximization via
Economies of Scale
Product &
Financial
Focus on Product Development,
Performance and Features and
the Growth of Large Scale
Industrial Empires
Profit Maximization
Through Superior
Product Performance
Sales
Transition from Scarcity of
Goods to Scarcity of Markets;
Market Saturation with Basics
Profit Maximization via
Demand Generation
Marketing
Transition from Internal
(Organization) to External
(Customer) Basis for Guiding
Marketing Decisions
1990s
Profit Maximization via
Matching of Products to
Customer Wants
Marketing Evolution
Production Concept
•Consumers favor products that are
available and highly affordable.
•Improve production and distribution.
Product Concept
•Consumers favor products that offer
the most quality, performance, and
innovative features.
Selling Concept
•Consumers will buy products only if
the company promotes/ sells these
products.
Marketing Concept
Societal Marketing Concept
•Focuses on needs/ wants of target
markets & delivering satisfaction
better than competitors.
•Focuses on needs/ wants of target
markets & delivering superior value.
Marketing Evolution
Starting
Point
Focus
Factory
Existing
Products
Means
Selling
and
Promoting
Ends
Profits
through
Volume
The Selling Concept
Market
Customer
Needs
Integrated
Marketing
The Marketing Concept
Profits
through
Satisfaction
The Role of Marketing in the
Company
Production
Marketing
Customer
The customer is the focal point and marketing
is the integrative function
Product-Oriented versus MarketOriented Definitions of a Business
Company
Product
Definition
Market
Definition
Railroad Company
We run a railroad
We are a people-andgoods mover
Xerox
We make copying
equipment
We help improve office
productivity
Standard Oil
We sell gasoline
We supply energy
Columbia Pictures
We make movies
We market entertainment
Encyclopaedia
We sell
encyclopedias
We distribute
Information
Business vision and mission
Five forces analysis, portfolio analysis, analysisSWOT
Goal Formulation
Qualitative and Quantitative
Strategy formulation
(cost leadership, differentiation, focus), growth
strategies
Segmentation, Targeting, Positioning
Marketing Mix
Program formulation / operational
planning
Timing, Budgeting
Implementation
Control
FEEDBACK
The Marketing Process
Strategic Analysis
BUSINESS VISION AND MISSION
VISION
“What do we want to become?”
Agreement on the basic vision for which the
firm strives to achieve in the long run is
critically important to the firm’s success.
Mission statement
A statement of company purpose. Explains why
the organization exists and what it hopes to
accomplish.
An organizational mission:
• Sets the direction for the company
• Defines the business
Mission statement
Mission
Statement
“To provide any customer a means of moving people
and things up, down, and sideways over short
distances, with higher reliability than any similar
enterprise in the world.”
Elevator
Mission statement
Mission
Statement
“To offer food prepared in the same high-quality
manner world-wide, tasty, reasonably priced, and
delivered in a consistent, low-key and friendly
atmosphere.”
Mission statement
Mission
Statement
We are the eyes and ears of the nation and at times its hidden
hand. We accomplish this mission by:
• Collecting intelligence that matters.
• Providing relevant, timely, and objective all-source analysis.
• Conducting covert action at the direction of the President to
preempt threats or achieve United States policy objectives.
CIA
STRATEGIC ANALYSIS
What to analyze?
PEST Analysis
5 Forces Analysis
Organizational
Analysis
External Factors
Internal Factors
PEST analysis
• Includes general forces that don’t directly touch on
the short –run activities of the organization but that
can/will influence its long-run decision??
• These forces are:
• Political
• Economic
• Socio-culture
• Technological
Porter’s Five Forces
Substitutes
Suppliers
My Business
Competitors
Customers
New Entrants
Customers
• How powerful My Customers/Buyers are?
•
•
•
•
Who are my buyers? (demographics, lifestyles, attitudes, behaviors…etc)
What are their needs?
How do they perceive my brand and competing brands?
What are their likes and dislikes about my product & competing products?
..etc
Existing Competition
• Market size and rate of growth.
• The Number of Competitors & Market shares.
• Product Characteristics & Degree of
Differentiation.
• Product Strengths and/or Weaknesses
• Competitive Advantage?!
• Product Positioning.
• Marketing Budget and Allocation.
Existing Competition
Customer’s Ratings of Competitors on Key
Success Factors
Customer
Awareness
Product
Quality
Product
Availability
Technical
Assistance
Selling
Staff
Competitor
A
E
E
P
P
G
Competitor
B
G
G
E
G
E
Competitor
C
F
P
G
F
F
Note: E = excellent, G = good, F = fair, P = poor.
Substitutes
• Are there any substitutes to my Product?
• How is it affecting my industry in general and
my product in particular?
New entrants
• How easy for new firms to join the industry?
• What are the barriers that makes it difficult for new
firms to enter:
• Capital Requirements
• Access to Distribution Channels
• Product Differentiation
• Switching Costs
Suppliers
How Powerful are my Supplier?
•
•
•
•
Only few suppliers
How unique the product/service they provide?
How important
Is Supply Chain Network possible? Wal-Mart/ P&G….
Organizational analysis
Any Organization is all about:
People
Structure
Resources
Strength
Culture
WEAKNESS
Organizational analysis
Resource
CORE
COMPETENCY
Competitive
Advantage
It is something that the
firm does or has the
potential to do particularly
well relative to the
abilities of existing or
potential competitors.
Portfolio analysis
Stars
Market Growth Rate
20%18%16%14%12%10%8%6%4%2%0
Question marks
4
3
5
?2
?
1
Dogs
Cash cow
8
6
10x
7
4x
2x 1.5x
1x
.5x .4x .3x .2x .1x
Relative Market Share
Outcomes of Analysis
Opportunities
Threats
SWOT
Analysis
Strengths
Weaknesses
SWOT analysis
Strengths
Total S
Opportunities
Total O
WEIGHT
(Total 50)
Score
(1 to 5)
Total
50
WEIGHT
(Total 50)
50
Weaknesses
Total W
Score
(1 to 5)
Total
Threats
Total T
WEIGHT
(Total 50)
Score
(1 to 5)
Total
Score
(1 to 5)
Total
50
WEIGHT
(Total 50)
50
SWOT analysis
Baraka
STRENGTHS
Product Level:
S1 : Market Leading Position
S2 : Market Longevity/Visibility
S3 : Baraka is Synonym for M.W.
S4 : Nestlé's Name
S5 : Size Variations
S6 : Taste
Organization Level
S8 : Devoted Company Resources
S9 : Experienced Top Management
S10: Committed Top Management
S11: Nestlé’s Support
S12: Highest Production Capacity
S13: Strong & Efficient Distribution
S14: Strict Quality Control Measures
S15: Sales Force Integration
WEAKNESSES
Product Level:
W1: Quality Perception/Image:
- High Salt Content vs.
Competition
- Plant Location in Delta
- Blue, Old-fashioned Pack
W2: Taste
W3: No Association with Nestlé
Organization Level:
W4: Culture conflict
W5: Sales Force Quality not Adequate
SWOT analysis
Baraka
OPPORTUNITY
THREATS
O1 : Market is Growing 10%
T1: Economic Conditions (Recession)
O2 : Numerous Competitive Gaps:
- Distribution Weakness/OOS
- Minor Marketing Support
- No Foreign Support
- Lack of Distinctive Image
T2: War…Tourism Decline
O3 : Increasing Investment in Tourism
T5: Consumer's Quality Perception of
Baraka
T3: Substitute Products: Filters
T4: Competition Price War
GOAL FORMULATION
Goal formulation
•
•
•
•
Obviously relate to mission statement.
Qualitative Vs Quantitative objectives.
SMART.
Prioritize.
Goal formulation
Nike
 Protect and improve Nike’s position as the number one
athletic brand in America.
 Intensify the company’s effort to develop products that
women want and need.
 Explore the market for products specifically designed for
the requirements of maturing Americans.
 Continue the drive for increased margins through inventory
management and new product development.
Forecasting
• QUALITATIVE FORECASTING METHODS
– Subjective method
– Delphi technique
– Scenario writing.
– Composite technique.
• QUANTITATIVE FORECASTING METHODS
– Time series.
– Cause-and-effect method.
STRATEGY FORMULATION
Growth Strategy
Existing
products
New
products
Existing
markets
1. Market
penetration
3. Product
development
New
markets
2. Market
development
Diversification
Other Strategies for growth: Integrative growth (vertical, horizontal) and Diversification growth
When to Use Market Penetration?
•When current markets are not saturated with a particular
product or service
When the usage rate of present customers could be increased
significantly
When the market shares of major competitors have been
declining while total industry sales have been increasing
When the correlation between dollar sales and dollar marketing
expenditures historically has been high
When increased economies of scale provide major competitive
advantages
When to Use Market Development?
•When new channels of distribution are available that are
reliable, inexpensive, and of good quality
 When an organization is very successful at what it does
 When new untapped or unsaturated markets exist
 When an organization has the needed capital and human
resources to manage expanded operations
 When an organization has excess production capacity
When to Use Product Development?
•When an organization has successful products that are in the
maturity stage of the product life cycle; the idea here is to attract
satisfied customers to try new (improved) products as a result of
their positive experience with the organization's present
products or services
•When an organization competes in an industry that is
characterized by rapid technological developments
•When major competitors offer better-quality products at
comparable prices
•When an organization competes in a high-growth industry
•When an organization has especially strong research and
development capabilities.
Porter's Generic Strategies
What is your competitive advantage
Cost
Differentiation
Scope
Cost Leadership
Focus
Specialization
Porter's Generic Strategies
What is your competitive advantage
Cost
Innovation
Skillful team
Scope
Efficiency
Intimacy
Porter's Generic Strategies
Type of strategies
Ways to achieve the strategy
Benefits
Possible problems
Cost Leadership
Size and economies of scale
Globalization
Relocating to low-cost parts of the
world
Modification/simplification of designs
Greater labour effectiveness
Greater operating effectiveness
Strategic alliances
New source of supply
The ability to:
outperform rivals
erect barriers to entry
resist the five forces
Vulnerability to even lower cost
operators
Possible price wars
The difficulty of sustaining it in the
long term
Focus
=Specialization
Concentration upon on or a small
number of a strong and specialist
reputation
A more detailed understanding of
particular segments
The creation of barriers to entry
A reputation for specialization
The ability to concentrate efforts
Limited opportunities for sector
growth
The possibility of outgrowing the
market
The decline of the sector
A reputation for specialization
which ultimately inhibits growth
and development into other sectors
Differentiation
The creation of strong brand identities
The consistent pursuit of those factors
which customers perceive to be
important
High performance in one or more of a
spectrum of activities
A distancing from others in the
market
The creation of a major
competitive advantage
Flexibility
The difficulties of sustaining the
bases for differentiation
Possibly higher costs
The difficulty of achieving true and
meaningful differentiation
Value Discipline Strategy
OPERATIONAL
EXCELLENCE
PRODUCT
LEADERSHIP
CUSTOMER
INTIMANCY
Core Business
Processes
that….
Sharpen
distribution
systems and
provide no hassle
service
Nurture ideas,
translate them
into products,
and market them
skillfully
Provide solutions
and help
customers run
their businesses
Structure
that….
Has strong, central
authority and a
finite level of
empowerment
Acts in an ad hoc,
organic, Loosely
knit, and everchanging way
Pushes
empowerment
close to customer
contact
Management
System that….
Maintain standard
operating
procedures
Reward
individuals’
innovative
capacity and new
product success
Measure the cost
of providing
service and of
maintaining
customer loyalty
Culture that…
Acts predictably
and believes “one
size fits all”
Experiments and
thinks “out-ofthe-box”
Is flexible and
thinks “have it
your way”
Competitive Strategy
Market
leader
40%
Expand Market (new users,
new uses, more usage)
Potential
challenger
30%
Attack leader?
Status quo?
Potential Market
nicher
follower
20%
10%
Imitate? Define
Innovate? niche
Defend Market Share
Expand Market Share
Percentages are illustrative, not exact
Portfolio analysis
Product Life Cycle
Product Life Cycle
Development Phase
Strategic
Goal
Make your product
known and establish
a test period
Almost not there
Competition
Product
Limited number of
variations
Price Goal
High sales to middle
men
Promotion
Goal
Creation of public –
market product
awareness
Distribution
Goal
Exclusive and
selective distribution
through certain
distribution channels
and creation of high
profit margins for
middle men
Introduction
Phase
Acquire a strong
market position
Growth Phase
Maintain your
market position
and build on it
Maturity Phase
Defend market
position from
competitors and
improve your
product
Establishment of
competitive
environment
Early entry of
aggressive
competitors into
the market
Introduction of
product variations
and models
Price and
distribution
channel pressure
Aggressive price
policy (decrease)
for sales increase
Reinforcement of
product awareness
and preference
Re-estimation of
price policy
Defensive price
policy
Reinforcement of
middle men
Maintain loyal to
middle men
General and
reinforced
distribution through
all distribution
channels available
General and
reinforced
distribution with
good supply to the
middle men but
with low margins of
profit for them
General and
reinforced
distribution with
good supply to the
middle men but
with low margins of
profit for them
Improvement –
Price decrease
upgrade of product
Decline Phase
“Milk” all remaining
profits from
product
Some competitors
are already
withdrawing from
market
Variations and
models that are
not profitable are
withdrawn
Maintain price
level for small
profit
Gradual decrease
Withdrawal from
most channels of
distribution except
those used in the
development
phase
TOWS Matrix
Strengths – S
Weaknesses – W
List Strengths
List Weaknesses
Opportunities – O
SO Strategies
WO Strategies
List Opportunities
Use strengths to take
advantage of
opportunities
Overcoming weaknesses
by taking advantage of
opportunities
Threats – T
ST Strategies
WT Strategies
List Threats
Use strengths to avoid
threats
Minimize weaknesses and
avoid threats
Strategy Options Generation: TOWS Analysis
Internal
External
O1 : Market is Growing
O2 : Numerous Competitive
Gaps:
- Distribution Weakness/OOS
- Minor Marketing Support
- No Foreign Support
- Lack of Distinctive Image
O3 : Increasing Investment in
Tourism
T1: Economic Conditions
(Recession)
T2: Governmental Regulations
(Sales Tax)
T3: War…Tourism Decline
T4: Substitute Products: Filters
T5: Competition Price War
T6: Consumer's Quality
Perception of Baraka
S1 : Leadership & Visibility
S2 : Nestlé Name & Support
S3 : Strong & Efficient
Distribution
S4 : Sales Force Integration
S5 : Strict Quality Measurers
S6 : High Production Capacity
W1 : Product Quality: Salt
Content, Pack
W2 : Taste
W3 : No Association with Nestlé
W4 : Culture
W5 : Not Enough Research
W6 : Sales Force Quality
SO Strategies:
WO Strategies:
1. Capitalize on Baraka’s
Strengths to penetrate
through competitive gaps
3.Improve Product Quality,
emphasizing Nestlé Name to
penetrate through
Competitive gaps
2. Enforce Baraka’s
Distribution in the Catering
Business
4. Increase Sales Force
quality
ST Strategies:
WT Strategies:
5. Adjust sales split to rely
more on outlet business
using the efficient
distribution Network
6. ……………………………..
7. Improve Product Quality,
emphasizing Nestlé Name to
overcome negative
customer attitude towards
the brand
Feasibility Check
Option (1)
Option (2)
Option
(3/7)
Option (4)
Option (5)
Capitalize on
Baraka’s
Strengths to
penetrate
through
competitive
gaps
Enforce
Baraka’s
Distribution in
the Catering
Business
Improve
Product
Quality,
emphasizing
Nestlé Name to
penetrate
through
Competitive
gaps/ and
meet customer
negative
attitude??
Increase Sales
Force quality
Adjust sales
split to rely
more on outlet
business using
the efficient
distribution
Network















Costs
ACH.
Results
 Means ok
 Means not that easy/costly
 Rocket Success
 Ordinary Results
Strategic Choice
SEGMENTATION, TARGETING AND
POSITIONING
True or False
1.
Companies can appeal to all customers in the
marketplace. (…)
2.
Companies can address all customers in almost the same
way. (…)
3.
Companies are more competitive if they are to focus on a
specific group(s) of customers. (…)
4.
Even if a company has the capabilities of serving the
whole pie, it still needs to slice this pie into slices and
tailor its products to match the specific needs of every
slice! (…)
You are either believe that
‘One-size-fits all’.
‘They can have the car in any
color they want, as long as it is
black…’
Henry Ford
…. And this is the kind of Marketing
that you Practice…
Mass Marketing
Or
Undifferentiated Marketing
Company
Marketing
Mix (product)
Market
Or
You believe in what we call
‘Differentiation’
You as a marketer must be engaged in a Process of Three
stages:
- Market Segmentation (Slicing)
- Market Targeting
- Market Positioning
S, T, P
Segmentation
1. Identify
segmentation
variables and
segment the
market
2. Develop
profiles of
resulting
segments
Targeting
3. Evaluate
attractiveness
of each
segment
4. Select the
target
segment(s)
Positioning
5. Identify
possible
Positioning/
differentiation
concepts for
each target
Segment
6. Select,
develop, and
communicate
the chosen
positioning
concept
Market Segmentation
Dividing a market into distinct groups with
distinct needs, characteristics, or behavior
who might require separate products or
marketing mixes.
Slice it…
Market Segmentation Variables…
• Demographic Variables:
–
–
–
–
Age
Gender
Family Size
Family Life cycle stage
(Under 6, 6–11, 12–19, 20–34, 35–49, 50–64, …)
(Male/Female)
(1-2/ 3-4/ Over)
(Young, single; young, married, no children; young,
married with children; older, married with children;
older, married, no children under 18; older, single; other)
Social Class
–
–
–
–
Income Level
Occupation
Education
Residential Area
Lower lowers, upper lowers, working class, middle class,
upper middles, lower uppers, upper uppers
Low-end of
the market
Upper-end of
the market
Market Segmentation Variables…
• Psychographic Variables:
– Personality
»
»
»
»
»
Compulsive, outgoing, authoritarian, ambitious
Gateway:
Nike:
HP:
Lexus:
Levi’s:
– Attitude:
Enthusiastic, positive, indifferent, negative, hostile
– Lifestyle:
How You Live Your Life
• Behavioral Variables:
–
–
–
–
–
–
Occasions
Benefits/Needs
User Status:
Usage Rate:
Loyalty Status:
Buyer-readiness:
Nonusers, Ex-users, Potential user, First time user, regular users
heavy user, light user, medium user
Hard-core, Split, Shifting, Switchers
unaware, interested, informed, intending to buy
Segmentation of Toothpaste
Benefit
Segment
Demo.
Behav.
Psych.
Favored Brand
Economy
(Low price)
Men
Heavy users
Practical, Value
oriented
Any brand
available
Decay
Prevention
Large families
Heavy users
Health conscious,
Family oriented,
Conservative
Crest
Cosmetics
Teens & young
(Bright teeth) adults
Smokers
Highly sociable,
outgoing, active
Maclean’s
Taste (good
tasting)
Mint lovers
kids
Colgate/Close
up
Children
Compare
Targeting
1. Evaluating Market Segments:
•
Overall Attractiveness of the segment:
•
•
•
•
•
Size
Purchasing Power
Sustainable
Accessible
Company’s Objectives & Resources
2. Selecting Market Segment(s):
Targeting
Targeting
Selecting Market Segments
Product 1
Segment1
Product 2
Segment 2
Product 3
Segment 3
Company’s
Marketing
Mix
Product A
Segment1
Segment 2
Segment 3
Firm decides to target
several market segments
and designs separate
offers for each
Niche Marketing
P&G makes 11 brands of
detergents: Tide, Ivory, Bold,
Cheer, Arial, Dash, Gain…etc
J&J consists of 170 business units,
most of which pursues niche
marketing
• Segment Subsequent
• Narrowly Defined
Positioning
Why??????????????
to be different…
Because you want to set yourself apart..
Because you want to…
Stand OUT IN THIS COMMUNICATION
JUNGEL OUT THERE…
Positioning
You Have to face it …. Your Market is:
Oversaturated
Over
, distributed
Overestimated
Positioning
Differentiation Defined!
It is the act of designing a meaningful
set of differences to distinguish the
company’s offering from competitor’
offerings in order to obtain a
competitive advantage/edge over
competition.
Positioning
Differentiators
• Product
• Service
• Personnel
• Image
Product
Marketer works on the physical product
itself, trying to make it different from
competitors by changing / modifying /
improving / innovating one or more of the
design parameters such as:
• Features
• Quality (performance, consistency, durability,
reliability, reparability)
• Style
Service
Firm can always differentiate its market offering
by innovating/adding/offering its consumers
more and more value-adding services with
quality. The main service differentiators are:
– Ordering Ease
– Delivery & Lead-time
– Installation & Maintenance
– Customer care centers (24 hours service)
Personnel
•Companies can gain a strong competitive
advantage through hiring and training
better people than their competitors do.
•People differentiation requires that a
company select its customer-contact
people carefully and train them well
Image
• So, even if you think that there is
absolutely no way to differentiate, you
can always resort to Image
Differentiation.
• Even when competing offers look the
same, consumers may perceive a
difference based on company or brand
image.
Positioning
• It is the act of designing the Market
Offering and Image so that they occupy a
meaningful and distinct competitive
position in the minds of the target
market.
Positioning
Refers to the placement of an object in a
person’s visual field. Objects that are placed
near the center of the visual field are more
likely to be noticed than those near the edge.
This is not only applicable for physical
positions/places but also on mental
positions… what do I mean?
Typically defined by consumers on the basis of
important attributes.
Positioning
• Positioning statements summarize the company or brand
positioning
• Example:
– To (target segment and need) our (brand) is
(concept) that (point-of-difference).