Introduction

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

Mike Volker

The 4 P’s Product

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

Some Product strategies Price

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

Some distribution strategies Promotion

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

Some promotion strategies It’s easy, right?

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

Æ Internet presence Æ Promotion = $megamillions!

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

The Internet The Marketing “Mix”

Æa profound impact on marketing
Æ just seeing the beginning
Æ you cannot afford not to be internet ready
Æ the internet is not just for tech types
Æ e-commerce is the wave of the future
Æ Information is power (eg competition)
Æ4 P’s are your marketing “mix”
Æ You control the 4P’s (independent variables)
Æ How to choose the mix?
Æ The Product Space Map
(Price vs Performance vis a vis others)
Æ Corporate Objectives

Forecasting Sales Sales Contexts

Æ Need to estimate future revenues Æ Type of business
(e.g. monthly product sales) product (hard, soft)
Æ Planning or Forecasting service
(how not to forecast) Æ Physical Contraints
Æ What is the Sales Plan? production (to order? to schedule?)
Æ Start with the 4Ps
space
Æ Financial Constraints
Æ Planning is iterative
(need to start somewhere) Æ 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 Æ Startbuilding the spreadsheet
Price/ High Med Low Æ Make assumptions; refine
Æ Rationalize the numbers
Quality:

Æ Sanity Checks
High Premium Penetrate Super-
Bargain

Med Over- Average Bargain

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

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

Æ Target Market: business people ($99 MSRP) # UNITS June July Aug…
Æ P.O.S. targets:
# (web) $99 100 120 150
Staples, Office Depot, Cellular stores, Web
Æ Promote via website, in-store display, # (retail) $69 150 200 250
co-op advertising # TOT
Æ Resources: # Salespersons & quotas, budget
250 320 400

First year objectives: $ TOT $20,250 $25,680 $32,100

50K units ($4M)
Æ $1M/salesperson?
 Summary
Æ4 P’s are interdependent
Æ 4 P’s constitute your “Marketing Strategy”
Æ You control these (independent variables)
Æ Product is only one “P”
Æ Sales is the dependent variable
Æ OWN YOUR MARKET