Introduction

‹ What is Marketing?
4 P's of MARKETING ‹ Marketing vs Selling?
‹ Planning vs Forecasting?

Mike Volker

The 4 P’s Product

‹ Product ‹ What is it?
‹ Price ‹ What “need” does it address?
‹ Place ‹ What are the functional specs?
‹ Promotion ‹ What are its Features & Benefits?
‹ Interdependent on each other ‹ What are the economics?
-what will it cost me, what will it save me?

Some Product strategies Price

‹ Features trade-offs ‹ What is Price? (vs cost?)
‹ Positioning – vis a vis competitors ‹ Price elasticity
‹ Market (consumer) preferences ‹ Channel Pricing?
‹ Kill your own products ‹ Discounts
(before competitors do) ‹ Terms
‹ Options and bundling ‹ Currency
 Some pricing strategies Place
‹ Markup vs market? ‹ Distribution
‹ Give it away (e.g. internet services) ‹ Channels
‹ Forgo normal margins (e.g. Prius) ‹ Path to get to buyer?
‹ Raise price to luxury levels (homes, boats) ‹ cost (price) tradeoffs
‹ Offer Price protection (e.g. computer) ‹ control issues
‹ Payment Plans (cell phones, cars, etc) ‹ rationing

Some distribution strategies Promotion

‹ advertising
‹ Offer exclusivity (eg by region)
‹ events
‹ Co-operative advertising
‹ press releases
‹ Offer Price protection (e.g. computer)
‹ trade shows
‹ Re-stocking privileges
‹ direct vs indirect
‹ Returns policies
‹ brand awareness
‹ brochures, datasheets
‹ freebies

Some promotion strategies It’s easy, right?

‹ Co-operative advertising ‹ Product = the best there is!
‹ Branding – define & build the brand ‹ Price = the cheapest one!
(brand portfolio) ‹ Place = ubiquitous!

‹ Internet presence ‹ Promotion = $megamillions!

‹ Follow Up readiness
‹ RESULT:
Market Dominance
Get rich quickly!
 The reality The Solution
‹ Product = OK, but lots of “me-too’s”
‹a Constrained Optimization Problem
‹ Price = a little pricey ….and
‹ Place = hard to find & get ‹ a Realistic Plan
‹ Promotion = no one has heard of it
‹ RESULT:
Sell fewer than expected
Go broke fast

The Internet The Marketing “Mix”

‹a profound impact on marketing
‹ just seeing the beginning
‹ you cannot afford not to be internet ready
‹ the internet is not just for tech types
‹ e-commerce is the wave of the future
‹ Information is power (eg competition)
‹4 P’s are your marketing “mix”
‹ You control the 4P’s (independent variables)
‹ How to choose the mix?
‹ The Product Space Map
(Price vs Performance vis a vis others)
‹ Corporate Objectives

Forecasting Sales Sales Contexts

‹ Need to estimate future revenues ‹ Type of business
(e.g. monthly product sales) product (hard, soft)
‹ Planning or Forecasting service
(how not to forecast) ‹ Physical Contraints
‹ What is the Sales Plan? production (to order? to schedule?)
‹ Start with the 4Ps
space
‹ Financial Constraints
‹ Planning is iterative
(need to start somewhere) ‹ Competitive Considerations
 Product Positioning Price/Performance Position
Product Space Map: Snowmobiles Price/Performance
FAST PRICE X
3 Companies: X,Y,Z
Y

Volume
Y
X Z
LARGE SMALL X
Z Y
Technology Shifts this to right

SLOW PERFORMANCE
(or VALUE)

Price/Quality Strategies Getting Started

9 price/quality strategies ‹ Startbuilding the spreadsheet
Price/ High Med Low ‹ Make assumptions; refine
Quality:
‹ Rationalize the numbers
High Premium Penetrate Super-
Bargain ‹ Sanity Checks

Med Over- Average Bargain

priced Quality GOOD LUCK!
Low Hit & Shoddy Cheap
Run Goods Goods

The Sales Plan (for “memo-pen”) The Spreadsheet

‹ Target Market: business people ($99 MSRP) # UNITS June July Aug…
‹ P.O.S. targets:
Staples, Office Depot, Cellular stores, Web # (web) $99 100 120 150
‹ Promote via website, in-store display, # (retail) $69 150 200 250
co-op advertising # TOT 250 320 400
‹ Resources: # Salespersons & quotas, budget
First year objectives: $ TOT $20,250 $25,680 $32,100
50K units ($4M)
‹ $1M/salesperson?
 Summary
‹4 P’s are interdependent
‹ 4 P’s constitute your “Marketing Strategy”
‹ You control these (independent variables)
‹ Product is only one “P”
‹ Sales is the dependent variable
‹ OWN YOUR MARKET