Chesebrough - Ponds

Chesebrough - Ponds

Suggested Background Reading

Developing a brand marketing plan
Marketing budget
Pro forma Income Statement
Design of promotional programs
Product life cycle management
Channel management in consumer goods company
 Chesebrough - Ponds

Questions
1. What are strengths and weaknesses of VPJ market position?
2. What consumer behavior issues should Porter consider?
3. Compare the nature and role of advt. and trade promotion?
4. How can Porter achieve 1978 profit target?
5. Should the strategy and mix of trade and media promotion altered?
What are your recommendations?
 Chesebrough - Ponds

Discuss VPJ market position

 Chesebrough - Ponds

Discuss VPJ Consumer behavior

• Based on usage
• Based on shopping habit
• Based on price sensitivity
• Planned vs impulse buying
• What is consumer decision making process?
 Chesebrough - Ponds

Discuss advertising, consumer promotion and trade promotion

• What is the difference between the two?
• What is the role of each in product promotion?
 Chesebrough - Ponds

Achieving the 1978 Profit Target

• Must be 10% higher than current budget of $ 7.7M
• What items can Porter manipulate?
• Impact of reduction of expenditure on volumes?
• What about trade related expenditure?
 Chesebrough - Ponds

Achieving the 1978 Profit Target

• Must be 10% higher than current budget of $ 7.7M
• What items can Porter manipulate?
• Impact of reduction of expenditure on volumes?
• What about trade related expenditure?
 VPJ Usage Segmentation
Heavy Users Light Users Non Users
Users

Single Jar Multi Jar Single Jar Multi Jar

Uses

Personal

Baby

Household
 VPJ Usage Segmentation

MASS Merc
Drug Stores Grocery Stores
Discount Stores

Brand Sensitivity

Price Sensitivity

Large /Small Size

Heavy/Light Users
 VPJ Consumer Decision Making Process
Problem/Need
Identification

VPJ Not Suitable VPJ Suitable

Visit Store VPJ at Home VPJ Forgotten VPJ Not at Home

Purchase Non VPJ VPJ Used Visit Store

Price not OK Price OK Price OK VPJ Not on Shelf

Size OK Size not OK Size OK

Purchase VPJ Substitute or

Purchase Purchase Avl size another store
Substitute Or
Purchase other
 VPJ Consumer Decision Making Process

Advertising Consumer Promotion Trade promotion

Franchise building Non franchise Building

Brand benefit emphasis Price emphasis

High marketer control Low marketer control

End consumer is primary

Trade is primary target
target

Pull strategy Push strategy

Long term impact Short term impact

Investment financing Pay-as-you-go financing

Long planning lead time Short planning lead time

 Advertising Vs Trade Promotion

ADVERTISING: TRADE PROMOTION RATIO

HIGH LOW

TOTAL
MARKETING HIGH AGGRESSIVE WASTEFUL?
EXPENDITURE
IMPLEMETABLE
LOW DEFENSIVE
?
 Comparison of Six Types of Consumer Promotion

PRICE/QTY
SAMPLES COUPONS REFUNDS PREMIUMS
PROMOTIONS
MOSTLY
IMMEDIATE OR DELAYED MOSTLY MOSTLY MOSTLY
IMMEDIATE IMMEDIAT
VALUE TO CONSUMER IMMEDIATE DELAYED DELAYED
E
ECONOMIC OR THEMATIC
ECONOMIC ECONOMIC ECONOMIC THEMATIC THEMATIC
APPEAL
EXISTING OR NEW USER
NEW NEW NEW EXISTING EXISTING
FOCUS
COST HIGH HIGH LOW LOW LOW
 Marketing Expenditure Planning Chart

SAME (% SALES)  (% SALES)

PRICE

ADVERTISING

CONSUMER PROMOTION

TRADE PROMOTION

TOTAL MKTG
EXPENDITURE
 Schedule of Advt. and Promotion Events

PROMOTION EVENT

CP/TP CP CP/TP TP

ADVERTISING
BUDGET
SCHEDULE

J F M A M J J A S O N D