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3.

Group Discussion
Develop a consumer buying process a family would use to to purchase a car. What differing influences might, mum, dad or the 2 children separately have ?

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.2

This Week
Review Competitor analysis Kotler Ch 9 Distribution Structure and Analysis Ch 17 Market Analysis Ch 8 Use the VLE

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.3

Dealing with competition


Lets Remember ! Sustainable Competitive Advantage should be the major focus of the strategic planning process

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.4

Lecture questions
1. How do marketers identify primary competitors? 2. How should we analyse competitors strategies, objectives, strengths and weaknesses?

3. How can market leaders expand the total market and defend market share?
4. How should market challengers attack market leaders? 5. How can market followers or nichers compete effectively?
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.5

Behind the five forces


Competition is often looked at too narrowly by managers. Michael E. Porter video clip Article referred to is in Harvard Business Review January 2008

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.6

Figure 9.1

Five forces determining segment structural attractiveness


Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

Source: From M. E. Porter (1985) Competitive Advantage. Creating and Sustaining Superior Performance, New York: Free Press. Copyright 1985 by Michael E. Porter. Reproduced with permission from The Free Press, a division of Simon & Schuster Adult Publishing Group

3.7

Industry concept of competition


Number of sellers and degree of differentiation Entry, mobility and exit barriers Cost structure Degree of vertical integration Degree of globalisation

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.8

Figure 9.4

A competitors expansion plans


Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.9

Steps in benchmarking
Determine which functions or processes to benchmark

Identify the key performance variables to measure


Identify the best-in-class companies Measure the performance of best-in-class companies Measure the companys performance Specify programs and actions to close the gap Implement and monitor results
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.10

Selecting competitors
Strong vs. Weak

Close vs. Distant

Good vs. Bad

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3.11

Figure 9.5

Hypothetical market structure


Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.12

Expanding the total market

New customers

More usage

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.13

Factors relevant to pursuing increased market share


Possibility of provoking authoritative action Economic cost Pursuing the wrong marketing-mix strategy The effect of increased market share on actual and perceived quality

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.14

Specific attack strategies


Price discounts Lower-priced goods Value-priced goods Prestige goods Product proliferation Product innovation Improved services Distribution innovation Manufacturing-cost reduction Intensive advertising promotion

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.15

Market follower strategies


Counterfeiter
Cloner Imitator Adapter
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3.16

Designing and managing supply networks

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.17

Questions
1. What are supply networks and channels of distribution? 2. How should marketers design supply networks and channels of distribution? 3. How can marketers select channel members? 4. What are the challenges of managing distribution channels?

5. What are the impacts of digital/information and communication technologies?


Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.18

GOODYEAR Discussion

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.19

Who are the top supply chain companies worldwide?


Nokia
Apple Procter & Gamble IBM Toyota Motor

Best Buy
Samsung Electronics

Cisco Systems
Motorola The Coca-Cola Company Johnson & Johnson

Wal-Mart
Anheuser-Busch Tesco

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.20

Characteristics of high performing supply chain companies


Outside-in marketing focus

Supply chains extend out to customers and suppliers


Innovation is embedded Right attitude towards management and supply chain

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.21

What is a supply chain?

A supply chain is a set of three or more entities (organisations or individuals) directly involved in the upstream or downstream flows of product, service, finances and/or information from a source to a customer.

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.22

Global supply networks


What marketing tactics has the concern for long supply seeded ?

Figure 17.2

Global supply networks: coordinating road, rail, shipping, airlines and the
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

Internet

3.23

Supply Chain
This video clip explores the role of supply chains within a variety of leading businesses Dell, Zara, Victoria Secrets and Dyson with a core focus on the customer within the supply chain rather than on efficiency only. www.youtube.com/watch?v=2XUgce8lZB4&f eature=PlayList&p=AB139030DEDC47A5&pl aynext=1&index=43

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.24

What are distribution channels?

Distribution channels are sets of intermediaries that are usually independent organisations involved in the process of making a product or service available for use or consumption.

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.25

Intermediaries in distribution channels


Title Holders
Wholesalers

Non-Title Holders
Brokers

Retailers
Distributors

Manufacturers reps
Agents

Transport companies

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.26

What is supply chain management?


Supply chain management (SCM) encompasses the planning and management of all activities in buying, making, providing and distributing. It also includes coordination and collaboration with channel partners.

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.27

Components of an SCM philosophy

A systems approach

A strategic orientation A customer focus

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.28

What is a network?

A network consists of nodes and relationships with which interaction takes place. It can accommodate movements in any direction and change shapes. Its nodes include people, organisations, machines, events and activities.

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3.29

3 As of network effectiveness

Agility

Alignment

Adaptability

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.30

Key processes of supply chain management


Customer relationship management Customer service management Demand management Order fulfillment

Manufacturing or service process flow management Intermediary relationship management


Product development/ commercialisation Returns

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.31

Consumer marketing channels

Figure 17.11

Consumer and industrial marketing channels


Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.32

What is multichannel marketing?


Multichannel marketing occurs when a company uses two or more marketing channels to reach one or more customer segments. A multiple channels strategy provides multiple channels for the consumer while a multichannel strategy has cross-channel benefits.

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.33

Types of buyers

Habitual shoppers High-value deal seekers Variety-loving shoppers High-involvement shoppers

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3.34

Types of shoppers

Service/quality customers

Price/value customers
Affinity customers

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3.35

Channel member functions


Gather information

Develop and disseminate persuasive communications


Reach agreements on price and terms Acquire funds to finance inventories Assume risks Provide for storage Provide for buyers payment of their bills Oversee actual transfer of ownership
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.36

Designing a marketing channel system


Analyse customer needs Establish channel objectives Decide on number of intermediaries Select channel members and evaluate alternatives Identify and evaluate major channel alternatives
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3.37

Customer needs
Quantity of purchase Waiting/delivery time Convenience Product variety Service backup
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3.38

Identifying channel alternatives


Who owns the customer interface? It is rarely the manufacturer.

Types of intermediaries Number of intermediaries Terms and responsibilities

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3.39

Number of intermediaries
How do you ensure your branding and positioning values are maintained ?

Exclusive

Selective

Intensive

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.40

Terms and responsibilities of channel members


Price policy Condition of sale Distributors territorial rights Mutual services and responsibilities

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3.41

Figure 17.15

The value adds versus the costs of different channels


Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.42

Channel-management decisions
Training channel members Motivating channel members Evaluating channel members Modifying channel members

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.43

Figure 17.16

Self-service channels
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

Source: Adapted from Microsoft Corporation (2007) Microsoft Customer Care Framework 2008: Redefining Customer Experience (retrieved from http://download.microsoft.com/download/b/d/2/bd2a14b8-b64b-4191-a2d5- 11d0dc9f0ce/ CCF_08_Brochure_web.pdf). Copyright Microsoft Corporation. Reproduced with permission

3.44

Analysing business markets

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.45

Questions
1. What is the business market, and how does it differ from the consumer market? 2. What buying situations do organisational buyers face? 3. Who participates in the business-to-business buying process? 4. How do business buyers make their decisions?
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.46

What is organisational buying?

Organisational buying refers to the decision-making process by which formal organisations establish the need for purchased products and services, and identify, evaluate and choose among alternative brands and suppliers.

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.47

Top business marketing challenges


Expand understanding of customer needs Compete globally as China and India reshape markets Master analytical tools and improve quantitative skills Reinstate innovation as an engine of growth Create new organisational models and linkages
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.48

Characteristics of business markets


Fewer, larger buyers Close suppliercustomer relationships Professional purchasing Many buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.49

Suppliers like Goodyear depend on a market of fewer buyers

Goodyear Tyre Company exemplifies many suppliers that depend on a market of fewer, but larger, business buyers
Source : Worth Canoy/Icon/Corbis Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.50

Top business marketing challenges

Table 8.1

The top business marketing challenges for 20052007


Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

Source: From Institute for the Study of Business Markets (2006) Know thy customer. Marketplace: The ISBM Review, Winter, Exhibit 1, p. 2 (www.smeal.psu.edu/isbm/documents/mktpw06.pdf). Reproduced with permission from ISBM, Smeal College, Pennsylvania State University

3.51

Guidelines for selling to small businesses


Professional purchasing

Multiple buying influences


Multiple sales calls Derived demand Inelastic demand Fluctuating demand Direct purchasing
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3.52

Buying situations
Straight rebuy

Modified rebuy

New task

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3.53

Systems buying and selling


Turnkey solution desired; Bids solicited System subcomponents assembled

Prime contractors

Second-tier contractors

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3.54

The buying center Discussion


Initiators Users Influencers

Deciders
Approvers

Buyers
Gatekeepers
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3.55

Of concern to business marketers

Who are the major decision participants? What decisions do they influence? What is their level of influence? What evaluation criteria do they use?

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.56

Seven keys to customer reference stories


1. State customer needs in compelling terms 2. Emphasize barriers in satisfying customer needs 3. Describe companys solution in terms of value 4. List qualified results 5. Differentiate your offering from those of competitors 6. Provide a brief comprehensive summary 7. Include numerous customer quotes
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.57

Stages in the buying process: buyphases


Problem recognition General need description Product specification

Supplier search
Proposal solicitation Supplier selection Order-routine specification Performance review
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.58

Forms of electronic marketplaces


Catalog sites Vertical markets Pure play auction sites Spot markets

Private exchanges
Barter markets

Buying alliances
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.59

Methods of e-Procurement
Websites organised using vertical hubs Websites organised using functional hubs Direct extranet links to major suppliers Buying alliances Company buying sites

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3.60

Handling price-oriented customers


Limit quantity purchased

Allow no refunds

Make no adjustments

Provide no services

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.61

Methods for researching customer value


Internal engineering assessment Field value-in-use assessment Focus-group value assessment Direct survey questions Conjoint analysis Benchmarks Compositional approach Importance ratings

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.62

Factors affecting buyer-supplier relationships

Availability of alternatives

Importance of supply

Complexity of supply

Supply market dynamism

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3.63

Categories of buyer-seller relationships


Basic buying and selling Bare bones Contractual transaction Customer supply Cooperative systems Collaborative Mutually adaptive Customer is king

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3.64

Week 3
Dealing with the Competition Designing and Managing Supply Networks Market Analysis

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009

3.65

Week 4
Research Mission and Values Balanced Scorecards Financial and Non Financial goals.

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition Pearson Education Limited 2009