Marketing Management

Prof.Srini.R.Srinivasan KJSIMSR

prof.Srini.R.Srinivasan-KJSIMSR

1

Flow of the Presentation
• • • • • • • • • • • • • • Introduction to Marketing Planning Marketing Planning MKIS and MR The Marketing Environment & Competitor Analysis Buyer Behaviour Strategic Development Product Decisions Pricing Decisions Channel & Distribution Tactics Promotion Decisions Implementation Segmentation Targeting Positioning
prof.Srini.R.Srinivasan-KJSIMSR 2

Environmental Audit Marketing Mix

Portfolio Analysis Marketing Plans

Segmentation Targeting Positioning

Marketing Environmen t PEST Analysis SWOT Analysis Five Forces Analysis

Ansoff's Matrix Segmentation Marketing and the Marketing Concept Objectives Boston Matrix Targeting Consumer Buyer Behaviour Strategies Bowman's Strategy Clock Positioning Marketing Mix Marketing Plans Porter's Generic Strategies Promotion Control Product Price Place/Channel Internal Marketing

prof.Srini.R.Srinivasan-KJSIMSR

3

Introduction to Marketing Planning
prof.Srini.R.Srinivasan-KJSIMSR 4

anticipates and satisfies customer requirements profitably’ The Chartered Institute of Marketing prof.Srini.R.Srinivasan-KJSIMSR 5 .Definitions of marketing ‘Marketing is the management process that identifies.

Srini.Srinivasan-KJSIMSR 6 . at the right time.R.‘The right product. and at the right price’ Adcock et al prof. in the right place.

R.Srini.‘Marketing is the human activity directed at satisfying human needs and wants through an exchange process’ Kotler 1980 prof.Srinivasan-KJSIMSR 7 .

Srini. offering and exchanging products of value with others’ Kotler 1991 prof.‘Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating.Srinivasan-KJSIMSR 8 .R.

R.Srini.Implications of marketing • Who are our existing / potential customers? • What are their current / future needs? • How can we satisfy these needs? • Can we offer a product/ service that the customer would value? • Can we communicate with our customers? • Can we deliver a competitive product of service? • Why should customers buy from us? prof.Srinivasan-KJSIMSR 9 .

The marketing concept • choosing and targeting appropriate customers • positioning your offering • interacting with those customers • controlling the marketing effort • continuity of performance prof.Srinivasan-KJSIMSR 10 .Srini.R.

Srini.Successful marketing requires: • Profitable • Offensive (rather than defensive) • Integrated • Strategic (is future orientated) • Effective (gets results) Hugh Davidson 1972 prof.Srinivasan-KJSIMSR 11 .R.

R.Srinivasan-KJSIMSR 12 .Stage One .Srini.Situation Analysis • • • • • • • • • • • • Marketing environment Laws and regulations Politics The current state of technology Economic conditions Sociocultural aspects Demand trends Media availability Stakeholder interests Marketing plans and campaigns of competitors Internal factors such as your own experience and resource availability Also see tools for internal/external audit: SWOT • PEST • Porter's Five Forces • Marketing Environment • prof.

Stage Two - Set marketing SMART Objectives
• • • • Specific - Be precise about what you are going to achieve Measurable - Quantify you objectives Achievable - Are you attempting too much? Realistic - Do you have the resource to make the objective happen (men, money, machines, materials, minutes)? • Timed - State when you will achieve the objective (within a month? By February 2010?)

If you don't make your objective SMART, it will be too vague and will not be realized. Remember that the rest of the plan hinges on the objective. If it is not correct, the plan will fail.

prof.Srini.R.Srinivasan-KJSIMSR

13

Stage Three - Describe your target market.
• Which segment? How will we target the segment? How should we position within the segment? • Why this segment and not a different one? (This will focus the mind). • Define the segment in terms of demographics and lifestyle. Show how you intend to 'position' your product or service within that segment. Use other tools to assist in strategic marketing decisions such as Boston Matrix , Ansoff's Matrix , Bowmans Strategy Clock, Porter's Competitive Strategies, etc.

prof.Srini.R.Srinivasan-KJSIMSR

14

Stage Four - Marketing Tactics
• Convert the strategy into the marketing mix (also known as the 4Ps). These are your marketing tactics. • Price Will you cost plus, skim, match the competition or penetrate the market? • Place Will you market direct, use agents or distributors, etc? • Product Sold individually, as part of a bundle, in bulk, etc? • Promotion Which media will you use? e.g sponsorship, radio advertising, sales force, point-of-sale, etc? Think of the mix elements as the ingredients of a 'cake mix'. You have eggs, milk, butter, and flour. However, if you alter the amount of each ingredient, you will influence the type of cake that you finish with.

prof.Srini.R.Srinivasan-KJSIMSR

15

Stage Five - Control
• • • • • • • Remember that there is no planning without control. Control is vital. Start-up costs Monthly budgets Sales figure Market share data Consider the cycle of control Finally, write a short summary (or synopsis) which is placed at the front of the plan. This will help others to get acquainted with the plan without having to spend time reading it all. Place all supporting information into an appendix at the back of the plan.

prof.Srini.R.Srinivasan-KJSIMSR

16

Getting there!) Control .Ensuring arrival prof.Srini.Marketing management process • • • • • • Analysis/Audit .where are we now? Objectives .which way is best? Tactics .how do we get there? (Implementation .where do we want to be? Strategies .R.Srinivasan-KJSIMSR 17 .

Srinivasan-KJSIMSR 18 .Why is marketing planning necessary? • Systematic futuristic thinking by management • better co-ordination of a company’s efforts • development of performance standards for control • sharpening of objectives and policies • better prepare for sudden developments prof.Srini.R.

Srinivasan-KJSIMSR 19 .Definitions of marketing ‘Marketing is the management process that identifies. anticipates and satisfies customer requirements profitably’ The Chartered Institute of Marketing prof.Srini.R.

Srini.‘The right product. in the right place. at the right time.R.Srinivasan-KJSIMSR 20 . and at the right price’ Adcock et al prof.

‘Marketing is the human activity directed at satisfying human needs and wants through an exchange process’ Kotler 1980 prof.Srinivasan-KJSIMSR 21 .Srini.R.

R.Srini. offering and exchanging products of value with others’ Kotler 1991 prof.‘Marketing is a social and managerial process by which individuals and groups obtain what they want and need through creating.Srinivasan-KJSIMSR 22 .

R.Srini.Marketing Planning prof.Srinivasan-KJSIMSR 23 .

R.Implications of marketing • Who are our existing / potential customers? • What are their current / future needs? • How can we satisfy these needs? • Can we offer a product/ service that the customer would value? • Can we communicate with our customers? • Can we deliver a competitive product of service? • Why should customers buy from us? prof.Srinivasan-KJSIMSR 24 .Srini.

The marketing concept • choosing and targeting appropriate customers • positioning your offering • interacting with those customers • controlling the marketing effort • continuity of performance prof.Srini.R.Srinivasan-KJSIMSR 25 .

Successful marketing requires: • Profitable • Offensive (rather than defensive) • Integrated • Strategic (is future orientated) • Effective (gets results) Hugh Davidson 1972 prof.Srini.R.Srinivasan-KJSIMSR 26 .

Situation Analysis • • • • • • • • • • • • Marketing environment Laws and regulations Politics The current state of technology Economic conditions Sociocultural aspects Demand trends Media availability Stakeholder interests Marketing plans and campaigns of competitors Internal factors such as your own experience and resource availability Also see tools for internal/external audit: SWOT • PEST • Porter's Five Forces • Marketing Environment • prof.Stage One .Srinivasan-KJSIMSR 27 .Srini.R.

Remember that the rest of the plan hinges on the objective. machines. If it is not correct.R. materials. prof.Srini.Set marketing SMART objectives • • • • Specific . the plan will fail.Be precise about what you are going to achieve Measurable . it will be too vague and will not be realized. minutes)? • Timed .Srinivasan-KJSIMSR 28 .Are you attempting too much? Realistic .State when you will achieve the objective (within a month? By February 2010?) If you don't make your objective SMART.Do you have the resource to make the objective happen (men. money.Stage Two .Quantify you objectives Achievable .

Srinivasan-KJSIMSR 29 . prof.Describe your target market. Porter's Competitive Strategies.Srini. Bowmans Strategy Clock. • Which segment? How will we target the segment? How should we position within the segment? • Why this segment and not a different one? (This will focus the mind). Show how you intend to 'position' your product or service within that segment. etc. Use other tools to assist in strategic marketing decisions such as Boston Matrix . Ansoff's Matrix . • Define the segment in terms of demographics and lifestyle.R.Stage Three .

Srini. However. milk.g sponsorship. radio advertising. etc? • Promotion Which media will you use? e. • Price Will you cost plus. sales force. use agents or distributors. You have eggs. as part of a bundle. prof. match the competition or penetrate the market? • Place Will you market direct. etc? • Product Sold individually. skim.Stage Four . etc? Think of the mix elements as the ingredients of a 'cake mix'. These are your marketing tactics. if you alter the amount of each ingredient. you will influence the type of cake that you finish with.R. in bulk.Srinivasan-KJSIMSR 30 . point-of-sale. and flour. butter.Marketing Tactics • Convert the strategy into the marketing mix (also known as the 4Ps).

write a short summary (or synopsis) which is placed at the front of the plan. Place all supporting information into an appendix at the back of the plan.Srinivasan-KJSIMSR 31 . Start-up costs Monthly budgets Sales figure Market share data Consider the cycle of control Finally. prof. Control is vital.Control • • • • • • • Remember that there is no planning without control.Srini. This will help others to get acquainted with the plan without having to spend time reading it all.Stage Five .R.

how do we get there? (Implementation .Srini.Ensuring arrival prof.which way is best? Tactics .where do we want to be? Strategies .Srinivasan-KJSIMSR 32 .Marketing management process • • • • • • Analysis/Audit .Getting there!) Control .R.where are we now? Objectives .

R.Why is marketing planning necessary? • Systematic futuristic thinking by management • better co-ordination of a company’s efforts • development of performance standards for control • sharpening of objectives and policies • better prepare for sudden developments prof.Srini.Srinivasan-KJSIMSR 33 .

Srini.R.Srinivasan-KJSIMSR 34 .MKIS & MR prof.

Marketing Information Systems • Marketing Research • • • • What is Marketing Research? Process Terminology Techniques • MKIS .Srinivasan-KJSIMSR 35 .R.Marketing Information Systems • What is MKIS • Components of an electronic MKIS prof.Srini.

Srini.R.Marketing Research ‘the systematic gathering. recording and analysing of data about problems relating to the marketing of goods and services’ American Marketing Association prof.Srinivasan-KJSIMSR 36 .

Srini. new product development. product management.Srinivasan-KJSIMSR 37 . mktg. Communications and even The structures of the mktg organisation.R. prof.The most basic marketing question is: “What do our customers or potential customers really value?” A well researched and considered answer to that question provides The foundation for the rest of the marketing program: segmentation & Targetting. channel management. brand Management.

Srinivasan-KJSIMSR 38 .R. It not only includes 'market' research.Srini. It is a very narrow concept. 'Marketing' research is much broader. 'Market' research is simply research into a specific market. or modes of distribution such as via the Internet. but also areas such as research into new products. Marketing Research Market research and marketing research are often confused.Market Research Vs. Here are a couple of definitions: prof.

Srinivasan-KJSIMSR 39 .R.The Marketing Research Process Set objectives Define research Problem Assess the value of the research Construct a research proposal Specify data collection method Specify techniques of measurement Select the sample Data collection Analysis of results Present in a final report prof.Srini.

Terminology of Marketing Research • Primary data .R.statistical basis • Qualitative research . desk research • Quantitative research .Srinivasan-KJSIMSR 40 .already exists.collected firsthand • Secondary data .studying part of a ‘population’ to learn about the whole prof.Srini.subjective and personal • sampling .

Marketing Research Techniques • Interviews • face-to-face • telephone • postal questionnaire • Mystery Shopping • Attitude measurement • cognitive component (know/believe about an act/object) • affective component (feel about an act/object) • conative component (behave towards an object or act) prof.R.Srinivasan-KJSIMSR 41 .Srini.

R.Srini. practical v impractical • Projective techniques • sentence completion • psychodrama (yourself as a product) • friendly martian (what someone else might do) prof.Srinivasan-KJSIMSR 42 .• Likert scale • • • • • strongly agree agree neither agree nor disagree disagree strongly disagree • Semantic differential scales .differences between words e.g.

sources of continuous data In-home scanning .• • • • • • Group discussion and focus group Product Tests Use of Internet Postal research questionnaires Diary panels .Srinivasan-KJSIMSR 43 .hand-held light pen to scan barcodes • Telephone research • Observation • home audit • direct observation • In-store testing prof.R.Srini.

Srini. There are a number of such sources available to the marketer. it already exists. and the following list is by no means conclusive: prof.e.R.Secondary Research Secondary (or desk) research uses data that has been collected for other objectives than your own i.Srinivasan-KJSIMSR 44 .

Srini.Srinivasan-KJSIMSR 45 .R.• Trade associations National and local press Industry magazines National/ international governments Web sites Informal contacts Trade directories Published company accounts Business libraries Professional institutes and organisations Omnibus surveys Previously gathered marketing research Census data Public records prof.

analysis and presentation of information for use in marketing decisions’ American Marketing Association prof. planned collection.Srini.R.What is MKIS? ‘MKIS (MIS) is a set of procedures and methods for the regular.Srinivasan-KJSIMSR 46 .

Srini.The components of a computerised MKIS Data Bank Statistical Bank MKIS Display unit Marketing Manager Model Bank prof.R.Srinivasan-KJSIMSR 47 .

Boston Matrix • Display unit .VDU and keyboard prof. spending projections • A model bank .The components of a computerised MKIS • Data bank .raw data e.Srini.Srinivasan-KJSIMSR 48 .g Ansoff’s matrix.programmes to carry-out sales forecasts. secondary data • Statistical bank .g historical sales data.R.stores marketing models e.

R.Srini.The Marketing Environment & Competitor Analysis prof.Srinivasan-KJSIMSR 49 .

R.Srinivasan-KJSIMSR 50 .The Marketing Environment and Competitor Analysis • SWOT analysis • PEST analysis • Five forces analysis prof.Srini.

Srinivasan-KJSIMSR 51 .SWOT analysis • Strengths (internal) • Weaknesses (internal) • Opportunities (external) • Threats (external) prof.Srini.R.

R.Srinivasan-KJSIMSR 52 .Srini.INTERNAL PAST FOCUS EXTERNAL FUTURE ORIENTED prof.

PEST analysis • Political factors • Economic factors • Socio-cultural factors • Technological factors prof.Srini.Srinivasan-KJSIMSR 53 .R.

R.Srini.Srinivasan-KJSIMSR 54 .The Model prof.

Political/legal • • • • • • • Monopolies legislation Environmental protection laws Taxation policy Employment laws Government policy Legislation Others? prof.R.Srinivasan-KJSIMSR 55 .Srini.

Srinivasan-KJSIMSR 56 .Economic Factors • • • • • • • Interest Rates Inflation Employment Disposable income Business cycles Energy availability and cost Others? prof.R.Srini.

R.Srinivasan-KJSIMSR 57 .Srini.Sociocultural factors • • • • • • • • Religion Demographics Distribution of income Social mobility Lifestyle changes Consumerism Levels of education Others? prof.

Technological • • • • • • New discoveries and innovations Speed of technology transfer Rates of obsolescence Internet Information technology Others? prof.Srinivasan-KJSIMSR 58 .Srini.R.

4. Free Press.Five forces analysis Potential entrants Threat of entrants Complementors As Suggested by Andrew Grove Ex-CEO Intel Corporation “Only The Paranoid Survive” Suppliers Bargaining power COMPETITIVE RIVALRY Buyers Bargaining power Threat of substitutes Substitutes Source: Adapted from M. p.Srinivasan-KJSIMSR .R. Porter. 59 prof. E. Competitive Strategy.Srini. 1980.

Srini.R.Five Forces Analysis: Key Questions and Implications • What are the key forces at work in the competitive environment? • Are there underlying forces driving competitive forces? • Will competitive forces change? • What are the strengths and weaknesses of competitors in relation to the competitive forces? • Can competitive strategy influence competitive forces (eg by building barriers to entry or reducing competitive rivalry)? prof.Srinivasan-KJSIMSR 60 .

Srinivasan-KJSIMSR 61 .The MODEL prof.Srini.R.

Srini.Srinivasan-KJSIMSR High Volume 62 .Volume Vs.R. Margin Analysis High Margins Normal Profits Superprofits Low Subnormal Profits Normal Profits Low prof.

R. Do our competitors have the distribution channels sewn up? • Cost advantages not related to the size of the company e. personal contacts or knowledge that larger companies do not own or learning curve effects.Srinivasan-KJSIMSR 63 .g.g. will new laws be introduced that will weaken our competitive position? • How important is differentiation? e. how much will it cost for the latest technology? • Ease of access to distribution channels e.g. • Will competitors retaliate? • Government action e. • The high cost of entry e.Srini.g.g. The Champagne brand cannot be copied. prof. • Economies of scale e.The threat of entry.g. the benefits associated with bulk purchasing. This desensitises the influence of the environment.

small farming businesses supplying the large grocery chains. • The cost of switching between suppliers is low e. small suppliers e.g. from one fleet supplier of trucks to another.Srinivasan-KJSIMSR 64 . • If there are a large number of undifferentiated.R.g. large players in a market e.Srini. prof.g.The power of buyers • This is high where there a few. the large grocery chains.

Pizza Hut. • There is a possibility of the supplier integrating forward e.g.g. Brewers buying bars. Gas/Petrol stations in remote places.R. prof. Cadillac.Srinivasan-KJSIMSR 65 . • Where the switching costs are high e.Srini.g. • Customers are fragmented (not in clusters) so that they have little bargaining power e.The power of suppliers • The power of suppliers tends to be a reversal of the power of buyers. Microsoft. Switching from one software supplier to another. • Power is high where the brand is powerful e.g.

R. Video suppliers compete with travel companies.g.g.Srinivasan-KJSIMSR 66 . cigarettes. better toothpaste reduces the need for dentists. • We could always do without e.The threat of substitutes • Where there is product-for-product substitution e.Srini. • Where there is generic substitution (competing for the currency in your pocket) e. prof. email for fax Where there is substitution of need e.g.g.

prof.Srini. there is the threat of substitute products.Srinivasan-KJSIMSR 67 .Competitive Rivalry • This is most likely to be high where entry is likely.R. and suppliers and buyers in the market attempt to control. This is why it is always seen in the center of the diagram.

Srini.Consumer Behaviour prof.Srinivasan-KJSIMSR 68 .R.

R.Srini.Srinivasan-KJSIMSR 69 .Descriptive Model prof.

Srini.Srinivasan-KJSIMSR 70 .Cozenza 1985 Demographic Factors The Consumer Buying Process Maslow’s hierarchy of needs UK socioeconomic classification scheme Types of buyer behaviour The Buying Decision Process Organisational Buyer Behaviour prof.Buyer Behaviour • • • • • • • • Dominant Family Purchase .R.

price. style Whether to go. coverage Style.Cozenza 1985 PRODUCT Women’s casual clothing Vacations Men’s casual clothing Life insurance Homeowner’s insurance Household appliances DOMINANT DECISION MAKER Wife Syncratic (both) Husband Husband Husband Wife prof. price 71 . brand. style Company.Srini.R. coverage Company.Dominant Family Purchase . where Type.Srinivasan-KJSIMSR TYPICAL DECISION Price.

Srinivasan-KJSIMSR 72 .Demographic Factors • • • • • • Age Stage in family life cycle Occupation Economic circumstances Lifestyle social influence variables • family background • reference groups • roles and status prof.Srini.R.

The Consumer Buying Process Marketing Inputs Product Price Promotion Place Purchase Decisions Product Choice Consumer Location Choice Brand Choice Other Choices Psychological Inputs Culture Attitude Learning Perception Based on Cohen (1991) prof.Srinivasan-KJSIMSR 73 .Srini.R.

R.Maslow’s Hierarchy of Needs Self Actualisation Esteem Social Safety Physiological prof.Srini.Srinivasan-KJSIMSR 74 .

administrative or professional Supervisors or clerical. administrative or professional Skilled manual workers Semiskilled and unskilled workers Pensioners.Srini.Srinivasan-KJSIMSR 75 . administrative or professional Intermediate managerial.R. junior managerial. casual or lower-grade workers % of population 3 14 27 25 19 12 prof. widows.UK socioeconomic classification scheme Class name A B C1 C2 D E Social status Upper middle Middle Lower middle Skilled working Working Those at lowest levels of subsistence Occupation of head of household Higher managerial.

Srinivasan-KJSIMSR 76 .g.little difference • variety seeking behaviour . salt .g soap powder prof. Intel Pentium Processor • Dissonance-reducing behaviour (brand reduces after-sales discomfort) • Habitual buying behaviour e.Types of buyer behaviour • Complex buyer behaviour e.Srini.g.significant brand differences e.R.

g Epsom action e.g a new PC choice of involvement level (time and effort justified) e. software support. etc prof.e. PC World evaluation of alternatives I.e.Srinivasan-KJSIMSR 77 .Srini.g.g. Dell. price. customer service. printer/scanner package decision . use.R.The Buying Decision Process • • • • • • • recognition of the need e. two week ends identification of alternatives e.g buy Epsom model from Comet post-purchase behaviour I.choice made e. breakdowns.

Consumer Spending Vs Age prof.R.Srinivasan-KJSIMSR 78 .Srini.

and choose among alternative brands and suppliers’ Kotler and Armstrong 1989 prof.R.Srinivasan-KJSIMSR 79 . and identify.Organisational Buyer Behaviour ‘The decision-making process by which formal organisations establish the need for purchased products and services. evaluate.Srini.

Srinivasan-KJSIMSR 80 .follows cars and lorries Concentrated purchasing .R.Characteristics of organisational buyer behaviour • • • • Organisation purpose .learns about the product • Multiple purchase influences .Decision making unit prof.large purchaser of basic rubber no intermediaries • Specialist activities .Srini.Goodyear Tyres Derived demand .stockholdings of rubber Direct dealings .DMU .

Srinivasan-KJSIMSR 81 .Strategic Development prof.R.Srini.

Srini.Strategic Development • Product Life Cycle (Revisited in ‘Product’) • Bowman’s Competitive Strategy Options • New Product Development (NPD) prof.R.Srinivasan-KJSIMSR 82 .

Initial Customer Segments prof.Srini.Srinivasan-KJSIMSR 83 .R.

R.Srini.Srinivasan-KJSIMSR 84 .PLC Characteristics prof.

R.Srini.Srinivasan-KJSIMSR 85 .prof.

sales are zero.Srinivasan-KJSIMSR 86 . investment costs are high • Introduction .Srini.profits do not exist.Five stages of the PLC • Product development . Increase outlay to compete prof.slowdown in sales growth. heavy expense of product introduction • Growth . Profits level-off.R.rapid market acceptance and increasing profits • Maturity .

Srini.Srinivasan-KJSIMSR 87 .sales fall-off and profits drop • Descriptive Model prof.• Decline .R.

Srinivasan-KJSIMSR Time 88 .Demand Life Cycle Sales d ee N T2 T1 prof.R.Srini.

Srini.Sales d ee N P3 P2 P1 prof.Srinivasan-KJSIMSR Product-Form Life Cycles Time 89 .R.

purchasing and human resource. manufacturing.Product Has Life Cycle…. • Limited life • Pass through distinct stages • Profits rise/fall with stages • Each stage requires different strategies* --------- marketing resource Also financial.R.Srini. prof.Srinivasan-KJSIMSR 90 .

Srini.R. profits improve Maturity: Decline: Sales Slowdown. profits nil Growth: Market acceptance. Profits stabilize or decline Sales/ profits show downward drift prof.Srinivasan-KJSIMSR 91 .Product Life Cycle Stages Introduction: Slow sales.

R.Srinivasan-KJSIMSR Time 92 .Srini.Product Life Cycle Sales & Profits ($$$) Sales Profit prof.

Other Shapes of the PLC Sales Volume Growth-slump-maturity Time Sales Volume Cycle-recycle pattern prof.R.Srinivasan-KJSIMSR Time 93 .Srini.

Srinivasan-KJSIMSR 94 .R.Other Shapes of the PLC Sales Volume Scalloped Pattern Time prof.Srini.

Srinivasan-KJSIMSR Time 95 .Srini. Fashion & Fad Life Cycles Sales Volume Style Time Sales Volume Fashion prof.R.Style.

Srini. Fashion & Fad Life Cycles Sales Volume Fad Time prof.Style.Srinivasan-KJSIMSR 96 .R.

Srinivasan-KJSIMSR 97 .Srini.R.Marketing Strategies Throughout The PLC Introduction Marketing Pioneers • Advantages • Risks Growth Sustaining Sales • Improve Quality/Add features • New models/Flanker Brands • Lower prices to attract next layer of $$$ sensitive buyers prof.

Srini.Srinivasan-KJSIMSR • New & more varied uses 98 .Marketing Strategies Throughout The PLC Maturity Stage Market Modification Volume = # brand users x usage rate # of brand users • Convert non-users • Enter new market segments • Win competitors’ customers Volume • More frequent use • More usage per occasion prof.R.

Marketing Strategies Throughout The PLC Maturity Product Modification • Quality & Feature Improvement Marketing Mix Modification Prices. Maintain • Decrease investment selectively • Harvest • Divest prof.R. Distribution.Srinivasan-KJSIMSR 99 .Srini. Advertising Sales Promotion. Personal Selling. Services Decline • Increase Firm’s Investment.

PLC exercise • • • • • • • The Ford Escort The Mini Cooper The Internet Phone Cadbury’s Fuse The Boeing 747 The Millennium Dome KIT KAT prof.R.Srini.Srinivasan-KJSIMSR 100 .

R.Srinivasan-KJSIMSR 101 .Family Life Cycle prof.Srini.

Bowman’s Strategy Clock Source: Based on the work of Cliff Bowman. See C. Irwin.Srinivasan-KJSIMSR 102 .Bowman and D.R.Faulkner. 1996.Srini. Competitive and Corporate Strategy. prof.

The Strategy Clock: Bowman’s Competitive Strategy Options •1 •2 • •3 • •4 • • • • Low price/low added value Low price Hybrid Likely to be segment specific Risk of price war and low margins/need to be cost leader Low cost base and reinvestment in low price and differentiation Perceived added value by user. yielding market share benefits Perceived added value sufficient to bear price premium Differentiation (a) Without price premium (b) With price premium prof.R.Srini.Srinivasan-KJSIMSR 103 .

Srini.• 5 Focused differentiation Perceived added value to a particular segment.R.Srinivasan-KJSIMSR 104 • 6 • 7 • 8 . warranting price premium Increased price/standard Higher margins if competitors do not value follow/risk of losing market share Increased price/low value Only feasible in monopoly situation Low value/standard price Loss of market share prof.

Srinivasan-KJSIMSR 105 .Srini.Generic Strategies prof.R.

entrants. but a differentiationSpecialized products & core competency protect against substitutes. become Customer's attached to differentiating attributes. Cost Leadership Supplier Power Threat of Substitutes Better insulated from powerful suppliers.Srini. .Industry Force Generic Strategies Barriers Buyer Power Generic cut price in Strategies And Five develops Ability to Focusing retaliation Customer loyalty can core competencies Forces discourage potential that can act as an Model Entry discourages potential Differentiation Focus entrants. Large buyers have less power to negotiate because of Suppliers have power because of low volumes. rivals. Rivalry Brand loyalty to keep Better ableprof. Large buyers have less power to negotiate because of Better able to pass on supplier price increases to customers. Can use low price to defend against substitutes. Ability to offer lower price to powerful buyers. reducing threat of substitutes.R. Rivals cannot meet differentiation106 focused customer needs. entry barrier.Srinivasan-KJSIMSR to customers from compete on price.

Producers could price at competitive parity. are very good not only at producing high quality autos at a low price.1. labor is recruited and trained to deliver the lowest possible costs of production. such as Toyota. exploiting the benefits of a bigger margin than competitors. Factories are built and maintained.’ However. Cost Leadership • The low cost leader in any market gains competitive advantage from being able to many to produce at the lowest cost. Products tend to be ‘no frills.Srini. prof. Some organization. low cost does not always lead to low price. but have the brand and marketing skills to use a premium pricing policy.R. ‘cost advantage’ is the focus. Costs are shaved off every element of the value chain.Srinivasan-KJSIMSR 107 .

Costs must be recovered.Srini.2. prof. This allows companies to desensitize prices and focus on value that generates a comparatively higher price and a better margin. Differentiation • Differentiated goods and services satisfy the needs of customers through a sustainable competitive advantage. These costs must be offset by the increase in revenue generated by sales. For example. The differentiating organization will incur additional costs in creating their competitive advantage. British Airways differentiates its service. Therefore there is always an incentive to innovated and continuously improve.Srinivasan-KJSIMSR 108 . The benefits of differentiation require producers to segment markets in order to target goods and services at specific segments.R. There is also the chance that any differentiation could be copied by competitors. generating a higher than average price.

A niche strategy is often used by smaller firms. With a cost focus a firm aims at being the lowest cost producer in that niche or segment. defined segment of a market. specialist niches could disappear in the long term. Cost focus is unachievable with an industry depending upon economies of scale e. Competitive advantage is generated specifically for the niche.Srini.3. prof. With a differentiation focus a firm creates competitive advantage through differentiation within the niche or segment. A company could use either a cost focus or a differentiation focus. There are potentially problems with the niche approach. Focus or Niche strategy • The focus strategy is also known as a ‘niche’ strategy. Small. Here an organization focuses effort and resources on a narrow.R.Srinivasan-KJSIMSR 109 . telecommunications. a niche strategy could be more suitable. Where an organization can afford neither a wide scope cost leadership nor a wide scope differentiation strategy.g.

It is argued that if you select one or more approaches.Srini.Srinivasan-KJSIMSR 110 . prof. and then fail to achieve them.’ • Make sure that you select one generic strategy.The danger of being ‘stuck in the middle.R. that your organization gets stuck in the middle without a competitive advantage.

New.Product Development Process • • • • • • • • • New product strategy Idea generation Idea screening Concept development and testing Marketing strategy Business analysis Product development Test Marketing Commercialisation prof.Srinivasan-KJSIMSR 111 .R.Srini.

Product Decisions prof.Srini.R.Srinivasan-KJSIMSR 112 .

Products Decisions
• Product and Service Classification System • The Product Life Cycle • Introduction to product matrices • Boston Matrix (Growth/Share) • Ansoff’s Matrix (Product Market)
prof.Srini.R.Srinivasan-KJSIMSR 113

Product and Service Classification System
• Convenience goods - little effort, relatively inexpensive • Shopping goods - e.g ‘white goods’, DIY equipment, more expensive, infrequent • Speciality goods - extensive search e.g Jewellery, gourmet food • Unsought goods - e.g. double glazing,
prof.Srini.R.Srinivasan-KJSIMSR 114

• Industrial goods • Installations - ‘speciality’ goods of industrial markets - plant and machinery • Accessories - maintenance and office equipment • Raw materials • components • Business to business e.g. consultants, accountants
prof.Srini.R.Srinivasan-KJSIMSR 115

The Product Life Cycle

prof.Srini.R.Srinivasan-KJSIMSR

116

The Boston Matrix (Growth/Share Matrix) Market Share prof.Srini.R.Srinivasan-KJSIMSR 117 .

R.Srini.The Boston Matrix .Srinivasan-KJSIMSR .Chocolate Bars Market Share High Market Growth Low FUSE Maverick Miniature Heroes KIT KAT MARS BAR High TOPIC BOUNTY Low 118 prof.

Srini.Ansoff’s Matrix (Product/Market Matrix) Existing Markets New Markets Products New Products Existing Market Penetration Market Development Product Development Diversification prof.R.Srinivasan-KJSIMSR 119 .

Srini.Ansoff’s Matrix (Product/Market Matrix) New Products Existing Products Existing Markets New Markets E.R.g. Realignments of the marketing mix Same outlets and sales strategy .Srinivasan-KJSIMSR 120 . Geographical expansion Diversification related or unrelated prof.new product E.g.

prof. promoting the product.Srinivasan-KJSIMSR 121 .Srini.R. However.Market Penetration • Here we market our existing products to our existing customers. for example. the product is not altered and we do not seek any new customers. This means increasing our revenue by. repositioning the brand. and so on.

Risk Vs Control Graph of International Market Penetration Strategies MANUFACTURING Control Own Subsidiary JOINT VENTURES Acquisition Strategic Alliances Assembly DIRECT EXPORTING Distributors Agents Direct Marketing Franchising Mgmt. Controls INDIRECT EXPORTING Piggybacking Trading Cos Export Mgmt Cos Domestic Purchasing prof.R.Srini.Srinivasan-KJSIMSR 122 Risk .

are examples of market development. prof.Srinivasan-KJSIMSR 123 . or marketing it in a new region.Srini. but it is marketed to a new audience.Market Development • Here we market our existing product range in a new market. This means that the product remains the same. Exporting the product.R.

prof.Srini.R. Here we develop and innovate new product offerings to replace existing ones. This often happens with the auto markets where existing models are updated or replaced and then marketed to existing customers. Such products are then marketed to our existing customers.Product Development • This is a new product to be marketed to our existing customers.Srinivasan-KJSIMSR 124 .

a soup manufacturer diversifies into cake manufacture (i. There are two types of diversification.R.Srini.e. namely related and unrelated diversification. prof. Related diversification means that we remain in a market or industry with which we are familiar. Unrelated diversification is where we have no previous industry nor market experience. the food industry). For example.Srinivasan-KJSIMSR 125 .Diversification • This is where we market completely new products to new customers. For example a soup manufacturer invests in the rail business.

Srini.Srinivasan-KJSIMSR 126 .Products Decisions • Product and Service Classification System? • The Product Life Cycle stages? • Growth/Share? • Product Market? prof.R.

Srinivasan-KJSIMSR 127 .Pricing Decisions prof.R.Srini.

R.Pricing Decisions • Pricing strategies • Pricing exercise • Ten ways to ‘increase’ prices without increasing price Winkler prof.Srinivasan-KJSIMSR 128 .Srini.

BA first class Low Price High Skimming e.Srini.g.g.R.Quality Low Economy Strategy e. Tesco spaghetti High Penetration e.g.Srinivasan-KJSIMSR 129 .g. New film or album prof. Telewest cable phones Premium e.

to attract new corporate clients (or Telewest cable) • Economy pricing • placed at ‘no frills’.R. France Telecom .g.Srini.Pricing strategies • Premium pricing • Uses a high price. beans . spaghetti. Concorde. Soups. low price • e. but gives a good product/service exchange e.g.then increases price • e. The Ritz Hotel • Penetration pricing • offers low price to gain market share .Srinivasan-KJSIMSR 130 .g.‘economy’ brands prof.

• Price skimming • where prices are high .g Grundig offers a ‘cash back’ incentive for expensive goods prof.etc • e.01 ‘price point perspective • Product line pricing • rationale of a product range • e. MARS 32p. early booking discounts. Bite-size £1.R.g.g 99p not £1.e.Srinivasan-KJSIMSR 131 .Srini. Four-pack 99p.29 • Pricing variations • ‘off-peak’ pricing.usually during introduction • e. rather than rational basis • .g new albums or films on release • ultimately prices will reduce to the ‘parity’ • Psychological pricing • to get a customer to respond on an emotional.

g. toothpaste. soups.• Optional product-pricing • e. • Promotional pricing • BOGOF e.g Gillette razors (low price) and blades (high price) • Product-bundle pricing • sellers combine several products at the same price • e.g software.Srinivasan-KJSIMSR 132 . optional extras .Srini.R. etc prof.g. CDs. books.BMW famously underequipped • Captive product pricing • products that complement others • e.

g.g.Include shipping costs.• Geographical pricing • different prices for customers in different parts of the world • e.Srinivasan-KJSIMSR 133 . Value menus at McDonalds In deciding which pricing strategy to use must consider the Elasticity of demand for the product prof. or place on PLC • Value pricing • usually during difficult economic conditions • e.Srini.R.

Winkler • • • • • • • Revise the discount structure Change the minimum order size Charge for delivery and special services Invoice for repairs on serviced equipment Charge for engineering.Srinivasan-KJSIMSR 134 .Srini.R.Ten ways to ‘increase’ prices without increasing price . installation Charge for overtime on rushed orders Collect interest on overdue accounts prof.

R.Srini.Srinivasan-KJSIMSR 135 .• Produce less of the lower margin models in the line • Write penalty clauses into contracts • Change the physical characteristics of the product prof.

Srini.Srinivasan-KJSIMSR 136 .Channel & Distribution Tactics prof.R.

R.Srinivasan-KJSIMSR 137 .Channel and Distribution Tactics • • • • • • Bucklin’s definition of distribution Today’s system of exchange Channel intermediaries Six basic channel decisions Selection consideration Potential Influence Strategies .Frazier and Summers (1984) prof.Srini.Frazier and Sheth (1989) • Frequencies of use of influence strategies .

A channel of distribution comprises a set of institutions which perform all of the activities utilised to move a product and its title from production to consumption
Bucklin - Theory of Distribution Channel Structure (1966)
prof.Srini.R.Srinivasan-KJSIMSR 138

Today’s system of exchange
Promotion Contact Negotiation

Producers

Transporting and storing Financing Packaging Money Goods
prof.Srini.R.Srinivasan-KJSIMSR 139

Users

Channel intermediaries Wholesalers
• • • • • Break down ‘bulk’ buys from producers and sell small quantities to retailers Provides storage facilities reduces contact cost between producer and consumer Wholesaler takes some of the marketing responsibility e.g sales force, promotions

prof.Srini.R.Srinivasan-KJSIMSR

140

Channel intermediaries - Agents
• Mainly used in international markets • Commission agent - does not take title of the goods. Secures orders. • Stockist agent - hold ‘consignment’ stock • Control is difficult due to cultural differences • Training, motivation, etc are expensive
prof.Srini.R.Srinivasan-KJSIMSR 141

Srinivasan-KJSIMSR 142 .Srini.Channel intermediaries .Retailer • Much stronger personal relationship with the consumer • Hold a variety of products • Offer consumers credit • Promote and merchandise products • Price the final product • Build retailer ‘brand’ in the high street prof.R.

Srinivasan-KJSIMSR 143 . shopping software. etc) • Paradigm shift in commerce and consumption prof.R.Srini.Internet • • • • Sell to a geographically disperse market Able to target and focus on specific segments Relatively low set-up costs Use of e-commerce technology (for payment.Channel intermediaries .

Srini.Six basic channel decisions • • • • • • Direct or indirect channels Single or multiple channels Length of channel Types of intermediaries Number of intermediaries at each level Which intermediaries? Avoid intrachannel conflict prof.Srinivasan-KJSIMSR 144 .R.

Selection consideration • Market segment .their policies.Srini.experience and track record must be established • Distributor training and support • The width and depth of distribution networks will also decide other strategies like: – How much of branding – How large a production facility to employ – Where to set up the production facility so as to be able to supply to my target market prof.Srinivasan-KJSIMSR 145 .different channels are exploited at various stages of plc • Producer-distributor fit . strategies and image • Qualification assessment .must know the specific segment and target customer • Changes during plc .R.

Srini.given to channel members and their firms prof.Potential Influence StrategiesFrazier and Sheth (1989) • Indirect influence strategies .R.information is merely exchanged with channel member personnel • Direct unmediated strategies consequences of a poor response from the market are stressed • Reward and punishment strategies .Srinivasan-KJSIMSR 146 .

2 minimum order size e. 5 territorial and customer restrictions prof.g. No consequences are applied or mentioned • Direct mediated strategies .Srinivasan-KJSIMSR 147 .R.• Direct unweighted strategy or request producer’s wishes are communicated .g.g.1 control of retail pricing e.g.g.4 physical layout of store e.3 salesperson training e.specific action is requested and consequences of rejection are stressed – – – – – e.Srini.

R.Frequencies of use of Influence Strategies M ost Tied for Never frequently most used used frequently used Information 49% 62% 6% 8% exchange Requests 27 13 7 11 Recommend 19 8 7 23 ations Promises 15 4 9 37 Threats 10 1 5 53 Legalistic 6 0 3 59 pleas M ean use Frazier and Summers (1984) prof.Srini.Srinivasan-KJSIMSR 148 .

R.Srinivasan-KJSIMSR 149 .Promotion Decisions prof.Srini.

R.Srini.Srinivasan-KJSIMSR 150 .Promotions Decisions • • • • • • Elements in the communication process Promotions mix The promotions message Executions style Media choice? Promotional objectives prof.

Elements in the Communication Process Sender Encoding Message Media Decoding Receiver

Noise

Feedback

Response

prof.Srini.R.Srinivasan-KJSIMSR

151

• Sender - party sending the message • Encoding - message in symbolic form • Message - word, pictures and symbols that the sender transmits • Media - the communication channel e.g radio • Decoding - receiver assigns meaning to symbols encoded by the sender
prof.Srini.R.Srinivasan-KJSIMSR 152

• Response - reaction of the receiver after being exposed to the to the message • Feedback - the part of the receiver’s response after being communicated to the sender • Noise - unplanned static or distortion during the communication process e.g. competitor action (Creature Comforts?)

prof.Srini.R.Srinivasan-KJSIMSR

153

Promotions Mix
• • • • • • • • • • Personal selling Telemarketing Direct mail Trade fairs and exhibitions Commercial television Newspapers and magazines Radio Cinema Point of sale displays Packaging CRM Asks to avoid traditional mass media Which are only one way and Adopt dialogue media like: •Telemarketing •Personalised emails •direct mail, •direct sales

prof.Srini.R.Srinivasan-KJSIMSR

154

The Promotional Message Grab Excite Create Prompt ATTENTION INTEREST DESIRE ACTION AIDA prof.Srini.Srinivasan-KJSIMSR 155 .R.

OXO e. Richard Branson 156 prof.g.Execution styles • • • • • • Slice of life Lifestyle Fantasy Mood or image Musical Personality symbol e.g.Srinivasan-KJSIMSR .Gap e.g.Srini.R.g.Turkish Delight e.g . Timotei shampoo e.g . After Eight mints e.

Audi • Scientific evidence e.Srinivasan-KJSIMSR 157 .• Technical expertise e.Vorsprung durch Technik .R.g. Ian Botham prof.g.g.Srini. Whiskers • Testimonial evidence e.

Srini.Srinivasan-KJSIMSR 158 .g falling awareness Evaluation of different tools choice of optimum mix of promotional methods • Integration into overall marketing communication programme prof.R.Media choice? • • • • Marketing objectives Definition of problem e.

R.Exercise .Srinivasan-KJSIMSR 159 .What beliefs and expectations do you have about the following brands? How far are these due to promotion as opposed to personal experience? • • • • • • Fairy liquid Persil washing powder Midland Bank Virgin Radio Nissan Tesco prof.Srini.

Srini.Promotional objectives • • • • • • • • To support sales increases To encourage trial To create awareness To inform about a feature or benefit To remind To reassure To create an image To modify attitudes prof.Srinivasan-KJSIMSR 160 .R.

Srini.Implementation prof.R.Srinivasan-KJSIMSR 161 .

R.Implementation • • • • • The implementation process An action checklist Total quality and marketing Managing the organisation/stakeholder interface Activities to establish and build customer relationships • Relationship marketing • McKinsey 7-S framework prof.Srinivasan-KJSIMSR 162 .Srini.

Srini.The Marketing Implementation Process Marketing Strategy Tactical Decisions Internal Factors Implementing the Marketing Mix External Factors Monitoring Results Adaptation of strategy/tactics Berman and Evans 1985 163 prof.Srinivasan-KJSIMSR .R.

Srinivasan-KJSIMSR 164 . changing competition • Poor planning e.Srini.R.g.g. Hoover’s flight tickets • Poor intelligence e.g.g change of management • External problems e.Implementation problems • Internal problems e. 1985 Coca-Cola • Poor execution prof.

Srini.R.Implementing a programme an action checklist • • • • • • • Agree the implementation strategy Agree a timeframe Draw up detailed implementation plans Set up a team of stakeholders Establish good project management Personalise the case for change Ensure participation prof.Srinivasan-KJSIMSR 165 .

Srinivasan-KJSIMSR 166 .R.• Create a sense of purpose and urgency to tackle real problems which have prevented progress in the past • motivate • be prepared for conflict • Be willing to negotiate • Anticipate stress • Build skills • Build in the capacity for learning • Monitor and evaluate prof.Srini.

R.Total Quality and Marketing • Quality is what customers say it is.Srini.Srinivasan-KJSIMSR 167 .g BS EN ISO 9000 prof. • Juran and TQM • zero defects • right first time • continuous improvement • Statistical process control (SPC) • New relationships with suppliers (JIT) • Quality Assurance e.

Srinivasan-KJSIMSR 168 .Srini.g. cigarettes dishonest marketing and promotion the abuse of power the availability of information prof.R.Managing the organisation/stakeholder interface • • • • • External and internal relationships Accountability of managers Marketer projects an image and style Ethical responsibilities towards consumers Social responsibility • • • • dangerous products e.

Srinivasan-KJSIMSR 169 .‘expensive’ in promotional terms Build sales to existing customers Improving service quality Auditing the fulfilment of customer needs Cause a cultural change to a marketing orientation .Marketing Myopia Levitt (1960) prof.Activities to establish and build customer relationships • • • • • • Need for long term relationships UACCA .Srini.R.

ongoing relationships Regular customer contact Spirit of trust prof.Srinivasan-KJSIMSR 170 . Customer retention not attraction Long term. In order to develop a continuous and long-term relationship’ Cram • • • • • Not mass marketing. .R.Srini. .Relationship marketing • The consistent application of up-to-date knowledge of individual customers to product and service design . Aimed at individual. .

Srinivasan-KJSIMSR 171 .R.Srini.Mckinsey 7-S framework • • • • • • • Strategy Structure Systems Share values Style Skills Staff prof.

Targeting.Srini.R. Positioning prof.Segmentation.Srinivasan-KJSIMSR 172 .

Srini.Segmentation prof.R.Srinivasan-KJSIMSR 173 .

R.Product Market Segmentation M1 P4 P3 P2 P1 M2 M3 M4 HALLS – (Institutions) WALLS – (Government) MALLS – (Retail) INDIVIDUALS prof.Srinivasan-KJSIMSR 174 .Srini.

Srinivasan-KJSIMSR 175 .Example prof.R.Srini.

Types of Targetting M1 M2 M3 M4 P4 P3 P2 P1 P4 P3 P2 P1 M1 M2 M3 M4 P4 P3 P2 P1 M1 M2 M3 M4 Full Market Coverage Product Specialisation Market Specialisation M1 M2 M3 M4 P4 P3 P2 P1 P4 P3 P2 P1 M1 M2 M3 M4 P4 P3 P2 P1 M1 M2 M3 M4 Niche Marketing Multiple Niches prof.R.Srinivasan-KJSIMSR 176 .Srini.

Segmentation aims to match groups of purchasers with the same set of needs and buyer behavior.Srini.Definition • Segmentation is essentially the identification of subsets of buyers within a market who share similar needs and who demonstrate similar buyer behavior.R. Such a group is known as a 'segment'. The world is made up from billions of buyers with their own sets of needs and behavior.Srinivasan-KJSIMSR 177 . prof.

R.Srinivasan-KJSIMSR 178 .Characteristics of a “Good” Segment • Is the segment viable? Can we make a profit from it? A minimum Level of sales value • Must have a Minimum volume for me to set up a minimum volume of production. • Is the segment accessible? How easy is it for us to get into the segment? • Is the segment measurable? Can we obtain realistic data to consider its potential • The segment must be Homogeneous from within and Heterogeneous with other segments prof.Srini.

such as lifestyle or beliefs • by Socio-cultural factors .Basis for Segmentation • by Geography .such as age.such as class • by Demography .R.such as where in the world was the product bought • by Psychographics . and so on. attitudes held benefits sought prof.Srinivasan-KJSIMSR 179 . sex.Srini.

Targeting • After the market has been separated into its segments. the marketer will select a segment or series of segments and 'target' it/them. Resources and effort will be targeted at the segment.Srini.R.these are your segments. Its like looking at a dart board or a shooting target. Aiming the dart or the bullet at a specific scoring area is 'targeting' prof.Srinivasan-KJSIMSR 180 . You see that it has areas with different scores .

Srinivasan-KJSIMSR 181 .POSITIONING prof.R.Srini.

prof.R.Srinivasan-KJSIMSR 182 .Positioning Positioning is the development of a service and a marketing mix to occupy a specific place in the minds of customers within target markets.Srini.

there will be similarities. prof.Positioning • Positioning is all about 'perception'.g what you perceive as quality. value for money. so do the results of the positioning map e.Srinivasan-KJSIMSR 183 .R. etc. As perception differs from person to person. However. is different to my perception.Srini.

Perceptual processes of customers They screen out most information 2. Greater competition More organizations competing for share of mind 3.R.Srinivasan-KJSIMSR 184 .Srini. Growing volume of commercial messages Advertising and promotion clutter prof.Reasons for Increased Importance of Positioning 1.

Steps Required for Effective Positioning (the five Ds)  Documenting  Deciding  Differentiating  Designing  Delivering prof.R.Srinivasan-KJSIMSR 185 .Srini.

R.The 5 Ds of Positioning  Documenting What benefits are the most important to your current and potential customers?  Deciding What image do you want your current and potential customers to have of your organization?  Differentiation Which competitors do you want to appear different from.Srinivasan-KJSIMSR 186 . and what are the factors that you will use to make your organization different from them? prof.Srini.

The 5 Ds of Positioning  Designing How will you develop and communicate these  Delivering differences? How will you make good on what you’ve promised.R. and how do you make sure that you have “delivered?” prof.Srinivasan-KJSIMSR 187 .Srini.

R.Srinivasan-KJSIMSR 188 . or needs  Specific usage occasions  User category  Against another “product”  “Product class” dissociation prof.Srini.Positioning Approaches: Six Major Alternatives  Specific product features  Benefits. problem solution.

Srini.R.Srinivasan-KJSIMSR 189 .Positioning Map prof.

Things to think about.Srinivasan-KJSIMSR 190 .R. • • Ensuring that all the levels of your distribution channels project the same “face” to your customer Guerilla marketing prof.Srini.

MARKETING M prof.R.Srinivasan-KJSIMSR 191 .Srini.

Or a civil or hydraulics engineer designing a dam to hold back a reservoir 200 feet deep might use a model to determine the concrete density and materials necessary to withstand the water pressure at each depth level. These inputs are often estimates of such unknowns as new product demand. Models characterize either what currently exists in fact. Model builders in the applied or physical sciences often use readily measurable and quantifiable input data. Similarly. optimal sales force allocation. Marketing models might depict such operations as an existing product distribution system. our numbering system is a model by which quantities of objects or ideas can be represented.Srinivasan-KJSIMSR 192 . or estimates of pricing strategy. The purpose of a model is typically to provide the manager with a guide for evaluating the effect of a set of input variables. but real. But marketing model builders typically often have only very loose and imprecise inputs. These are trivial. all our perceptions of reality are "models" since they are only perceptions and not reality itself. and so is a graph which represents a company's sales over time. In this sense. Our language is a model. knowledge.What is a Model A model is simply a representation. which represents the countryside. a design engineer for General Motors might model the aerodynamics of a different body design features to determine their impact on airflow and fuel economy. A map. For example. attitudes. consumer preference modeling for product choices. advertising efficiency. advertising effectiveness.R. is a model. prof. or intention to purchase. or the effects of advertising on consumer awareness. a consumer's value structure.Srini. distinctions between models and reality. or what might exist in the future. since words are only representations of objects or ideas. results of a product positioning option.

The model must be simple to use and understand. Model builders should measure the quality of their models against the criteria of validity and utility.Srini.Srinivasan-KJSIMSR 193 . A sales forecasting model which does not forecast sales with reasonable accuracy is probably worse than no sales forecasting model at all.Characteristics of a good Model • 1.its results must not vary wildly with small changes to the input data. prof. It must be easy to communicate with. and • 6. • 5. It must be adaptable to other products or situations. It must be robust -. • 4. It must be easy to control. • 3.R. Validity refers to the accuracy of the model in describing and predicting reality. It must be complete on important details. • 2.

modify it. They begin to question assumptions about supposedly influential variables.Srinivasan-KJSIMSR 194 .R. They re-evaluate the input data. By using models in this way. prof. and they may begin to recognize that a symbiotic. and watch the effect on the model's outputs. managers become sensitized to recognize and evaluate the elements that are important to making an appropriate decision.Srini.Advantages of Modelling • In spite of the complexities of model building. then evaluate the model's outputs. Perhaps most important is the sensitization process they help develop. relationship exists between many marketing activities and effects. the manager is forced. He or she begins to be aware of interactions between them. to consider the relationships between variables. • Finally. models offer significant benefits. • Modeling activities also force both the manager and the researcher to be critical (and parsimonious) in evaluating the impact of variables that could explain the process. synergistic. Managers must gather and enter the input data. and begin to discover important new variables. as part of the variable selection process.

or (c) mathematical forms that describe a specific process prof. maps. Photographs. but • Iconic (which means "image") models are like reality in the sense that they look like reality. They include either (a) verbal.Srinivasan-KJSIMSR 195 .Srini. • Symbolic symbolic models do not look like reality. control) models are the most difficult models to construct since these models provide direction about the proper course of action. but emulate reality in other ways. not only describe and predict.R.Types of Models • Descriptive eg: Revenue = Price . architectural miniatures. (b) schematic. and rough layouts of advertisements are all iconic models.Costs • Prescriptive • Normative Normative (or.

prof. like all management science models. sets of premises or theories are developed.DEVELOPING MARKETING MODELS Marketing models. From these generalizations. are developed through either inductive or deductive logic which leads to generalization about market behavior. These lead to sets of relationships which constitute marketing models.Srini.Srinivasan-KJSIMSR 196 .R.

R.Srini.Srinivasan-KJSIMSR 197 .prof.

R.Srini.Srinivasan-KJSIMSR 198 .CUSTOMER RELATIONSHIP MANAGEMENT CRM prof.

Creating a Customer Database prof. given the analyses. how to build relationships with the targeted customers.Srini.R. analyses of the database.Basic Model of CRM 1. 3. 2.Srinivasan-KJSIMSR 199 . decisions about which customers to target. 7. 4. 5. and 6. metrics for measuring the success of the CRM program. privacy issues. a database of customer activity. tools for targeting the customers.

or any other direct contact.Srinivasan-KJSIMSR 200 .R. • Customer Contacts-Touchpoints used by the customer • Descriptive Information-for segmentation and other data analysis purposes.Srini.Information needs for the database • Transactions-complete purchase history with details (price paid. SKU. a sales contact. prof. • Response to Marketing Stimuli-whether or not the customer responded to a direct marketing initiative. delivery date).

Srinivasan-KJSIMSR 201 .R.Srini.• The data should also be represented over time prof.

Srinivasan-KJSIMSR DIRECT NATURE OF INTERACTION 202 .FREQUENCY OF INTERACTION (with customers) •FMCG HIGH •Banks. •Retail Easy to develop database LOW Hardest to develop database INDIRECT (through channel Intermediaries) prof.R.Srini.

R.Srinivasan-KJSIMSR 203 .Srini.Limitations • FMCG: – Lack of systematic information – Millions of customers – Use of indirect means (intermediaries) • Challenge is to create opportunities for customer interaction prof.

Sign up to vote on this title
UsefulNot useful