Crash Course in Basic Marketing Sep 2011

Recap workshop in Marketing
Facilitated by Prof. Suresh Vishwanath
Prof. Suresh Vishwanath

B Sc (Hons), MA (Psy & SW), Post Graduate from XLRI & Fellow Member-American Psychological Association & Worldwide Association of Business Coaches
Industry, Training and Teaching experience of over 34 years International experience including that of General Manager (Marketing) and as a Group Managing Director of an MNC; Professional pursuits have entailed presence in number of Countries & Cities in India, Middle East, Far-East, Africa, US, UK, The Continent and Scandinavia; Continues to serve on the board of a number of companies in Europe and Africa; and He was Dean at SIBM & NICMAR. Currently he is a visiting faculty at a number of B-Schools in India and abroad
1
Defining Marketing for the 21st Century
Marketing Management
A South Asian Perspective, 13th ed
What is Marketing Management?
Marketing management is the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.
What is Marketed?
Goods Services Events & Experiences Persons Places & Properties Organizations Information
Ideas
Functions of CMOs
Strengthening the brands Measuring marketing effectiveness Driving new product development based on customer needs Gathering meaningful customer insights Utilizing new marketing technology
Figure 1.5 The Four Ps
Marketing Management Tasks

Develop market strategies and plans Capture marketing insights Connect with customers Build strong brands Shape market offerings Deliver value Communicate value Create long-term growth
2
Developing Marketing Strategies and Plans
Figure 2.7 The Business Unit Strategic Planning Process
SWOT Analysis
Strengths Weaknesses Opportunities Threats
Market Opportunity Analysis (MOA)

Can the benefits involved in the opportunity be articulated convincingly to a defined target market? Can the target market be located and reached with cost-effective media and trade channels? Does the company possess or have access to the critical capabilities and resources needed to deliver the customer benefits?
Market Opportunity Analysis (MOA) (cont.)

Can the company deliver the benefits better than any actual or potential competitors? Will the financial rate of return meet or exceed the companys required threshold for investment?
Figure 2.8 Opportunity Matrix
Figure 2.8 Threat Matrix
Porters Generic Strategies

Overall Cost Leadership
Differentiation
Focus
Marketing Plan Contents

Executive summary Table of contents Situation analysis Marketing strategy Financial projections Implementation controls
Evaluating a Marketing Plan

Is the plan simple? Is the plan specific? Is the plan realistic? Is the plan complete?
3
Gathering Information and Scanning the Environment
What is a Marketing Information System (MIS)?

A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
Table 3.1 Information Needs Probes

What decisions do you regularly make? What information do you need to make these decisions? What information do you regularly get? What special studies do you periodically request? What information would you want that you are not getting now? What are the four most helpful improvements that could be made in the present marketing information system?
Sources of Competitive Information

Independent customer goods and service review forums Distributor or sales agent feedback sites Combination sites offering customer reviews and expert opinions Customer complaint sites Public blogs
Needs and Trends

Fad
Trend Megatrend
3-23
Trends Shaping the Business Landscape

Profound shifts in centers of economic activity Increases in public-sector activity Change in consumer landscape Technological connectivity Scarcity of well-trained talent Increase in demand for natural resources Emergence of new global industry structures Ubiquitous access to information Management shifts from art to science Increase in scrutiny of big business practices
Environmental Forces
Demographic
Political-Legal Economic
Technological Natural
Socio-Cultural
4
Conducting Marketing Research and Forecasting Demand
What is Marketing Research?

Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.
Types of Marketing Research Firms
Syndicatedservice
Custom
Specialtyline
The Marketing Research Process

Define the problem Develop research plan
Collect information
Analyze information Present findings
Make decision
Step 1: Define the Problem

Define the problem Specify decision alternatives State research objectives
Step 2: Develop the Research Plan
Data Sources Research Instruments Contact Methods

Research Approach Sampling Plan
Research Approaches
Observation
Ethnographic
Focus Group Survey
Behavioral Data
Experimentation
Pros and Cons of Online Research

Advantages Inexpensive Fast Accuracy of data, even for sensitive questions Versatility Disadvantages Small samples Skewed samples Technological problems Inconsistencies
What is a Marketing Decision Support System (MDSS)? A marketing decision support system is a coordinated collection of data, systems, tools, and techniques with supporting hardware and software by which an organization gathers and interprets relevant information from business and environment and turns it into a basis for marketing action.
Barriers Limiting the Use of Marketing Research

A narrow conception of the research Uneven caliber of researchers Poor framing of the problem Late and occasionally erroneous findings Personality and presentational differences
What is Marketing Metrics?

Marketing metrics is the set of measures that helps marketers quantify, compare, and interpret marketing performance.
Table 4.4 Marketing Metrics

External
Awareness Market share Relative price Number of complaints Customer satisfaction Distribution Total number of customers Loyalty
Internal
Awareness of goals Commitment to goals Active support Resource adequacy Staffing levels Desire to learn Willingness to change Freedom to fail Autonomy
What is Marketing-Mix Modeling?

Marketing-mix models analyze data from a variety of sources, such as retailer scanner data, company shipment data, pricing, media, and promotion spending data, to understand more precisely the effects of specific marketing activities.
Marketing Dashboards
A customer-performance scorecard records how well the company is doing year after year on customer-based measures. A stakeholder-performance scorecard tracks the satisfaction of various constituencies who have a critical interest in and impact on the companys performance including employees, suppliers, banks, distributors, retailers, and stockholders.
Table 4.5 Sample Customer-Performance Scorecard Measures

% of new customers to average # % of lost customers to average # % of win-back customers to average # % of customers in various levels of satisfaction % of customers who would repurchase % of target market members with brand recall % of customers who say brand is most preferred
Figure 4.3 Example of a Marketing Dashboard
The Measures of Market Demand
Potential Market
Available Market
Target Market
Penetrated Market
Vocabulary for Demand Measurement

Market demand Market forecast Market potential Company demand Company sales forecast Company sales potential
Figure 4.4 Ninety Types of Demand Measurement
Figure 4.5 Market Demand Functions
Figure 4.5 Market Demand Functions
Product Penetration Percentage
4-47
How Can We Estimate Current Demand?

Total market potential
Area market potential

Market buildup method Multiple-factor index method
Estimating Future Demand

Survey of Buyers Intentions Composite of Sales Force Opinions Expert Opinion Past-Sales Analysis Market-Test Method
5
Creating Customer Value, Satisfaction, and Loyalty
Figure 5.2 Determinants of Customer Perceived Value

Total customer benefit Total customer cost
Product benefit
Monetary cost
Services benefit
Time cost
Personal benefit
Energy cost
Image benefit
Psychological cost
Steps in a Customer Value Analysis

Identify major attributes and benefits that customers value Assess the qualitative importance of different attributes and benefits Assess the companys and competitors performances on the different customer values against rated importance Examine ratings of specific segments Monitor customer values over time
What is Loyalty?
Loyalty is a deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior.
Measuring Satisfaction
Periodic Surveys
Customer Loss Rate
Mystery Shoppers
Monitor Competitive Performance

What is Quality?
Quality is the totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs.
Estimating Lifetime Value

Annual customer revenue: Rs.500 Average number of loyal years: 20 Company profit margin: 10% Customer lifetime value: Rs.1000
What is Customer Relationship Management? CRM is the process of carefully managing detailed information about individual customers and all customer touchpoints to maximize customer loyalty.
Framework for CRM

Identify prospects and customers
Differentiate customers by needs and value to company Interact to improve knowledge Customize for each customer
Customer Retention
Acquisition of customers can cost five times more than retaining current customers. The average customer loses 10% of its customers each year. A 5% reduction to the customer defection rate can increase profits by 25% to 85%. The customer profit rate increases over the life of a retained customer.
Figure 5.5 The Customer Development Process

Suspects
Prospects First-time customers
Disqualified Repeat customers
Clients
Members
Ex-customers
Partners
6
Analyzing Consumer Markets
Figure 6.1 Model of Consumer Behavior
7
Analyzing Business Markets
Characteristics of Business Markets

Fewer, larger buyers Close supplier-customer relationships Professional purchasing Many buying influences Multiple sales calls Derived demand Inelastic demand Fluctuating demand Geographically concentrated buyers Direct purchasing
Buying Situation
Straight rebuy
Modified rebuy
New task
The Buying Center

Initiators Users Influencers Deciders Approvers
Buyers
Gatekeepers
8
Identifying Market Segments and Targets
What is a Market Segment?

A market segment consists of a group of customers who share a similar set of needs and wants.
Segmenting Consumer Markets

Geographic Demographic Psychographic Behavioral
Demographic Segmentation
Age and Life Cycle
Life Stage Gender Income Generation Social Class
Behavioral Segmentation
Decision Roles Initiator Influencer Decider Buyer User Behavioral Variables Occasions Benefits User Status Usage Rate Buyer-Readiness Loyalty Status Attitude
Figure 8.3 Behavioral Segmentation Breakdown
Segmenting for Business Markets

Demographic Operating Variable
Purchasing Approaches
Situational Factors Personal Characteristics
Steps in Segmentation Process

Needs-based segmentation Segment identification Segment attractiveness Segment profitability Marketing-Mix Strategy
Segment positioning
Segment acid test
Effective Segmentation Criteria

Measurable Substantial
Accessible
Differentiable Actionable
Figure 8.4 Patterns of Target Market Selection
Figure 8.4 Patterns of Target Market Selection
9
Dealing with Competition
Figure 9.1 Five Forces Determining Segment Structural Attractiveness
Figure 9.6 Six Types of Defense Strategies
General Attack Strategies

Frontal Attack Flank Attack
Encirclement Attack
Bypass Attack
Guerrilla Warfare
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
10
Creating Brand Equity
What is a Brand?
A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
The Role of Brands

Identify the maker Simplify product handling Organize accounting Offer legal protection
The Role of Brands

Signify quality Create barriers to entry Serve as a competitive advantage Secure price premium
What is Branding?
Branding is endowing products and services with the power of the brand.
What is Brand Equity?

Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand.
Advantages of Strong Brands

Improved perceptions of product performance Greater loyalty Less vulnerability to competitive marketing actions Less vulnerability to crises
Larger margins More inelastic consumer response Greater trade cooperation Increased marketing communications effectiveness Possible licensing opportunities
What is a Brand Promise?

A brand promise is the marketers vision of what the brand must be and do for consumers.
What is Positioning?
Positioning is the act of designing the companys offering and image to occupy a distinctive place in the mind of the target market.
Defining Associations
Points-of-difference (PODs) Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand
Points-of-parity (POPs) Associations that are not necessarily unique to the brand but may be shared with other brands
Product Differentiation
Product form Features Performance Conformance Durability Reliability Reparability Style Design Ordering ease Delivery Installation Customer training Customer consulting Maintenance
Claims of Product Life Cycles

Products have a limited life Product sales pass through distinct stages each with different challenges and opportunities Profits rise and fall at different stages Products require different strategies in each life cycle stage
Figure 11.1 Sales and Product Life Cycle
Figure 11.2 Common Product Life-Cycle Patterns
Figure 11.3 Style, Fashion, and Fad Life Cycles
Strategies for Sustaining Rapid Market Growth

Improve product quality, add new features, and improve styling Add new models and flanker products Enter new market segments Increase distribution coverage Shift from product-awareness advertising to productpreference advertising Lower prices to attract the next layer of pricesensitive buyers
12
Setting Product Strategy
What is a Product?
A product is anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.
Figure 12.2 Five Product Levels
Durability and Tangibility

Nondurable goods Durable goods
Services
Product Differentiation
Product form Features Customization Performance Conformance Durability Reliability Repairability Style
Copyright 2009 Dorling Kindersley (India) Pvt. Ltd. 12-103
Service Differentiation
Ordering ease Delivery Installation Customer training Customer consulting Maintenance and repair Returns
12-104
The Product Hierarchy

Item Product type Product line Product class Product family
Need family
Product Line Analysis
Core product
Staples
Specialties
Convenience items
Line Stretching
Down-Market Stretch
Up-Market Stretch Two-Way Stretch
12-107
Line Filling
Pruning
Pruning weak brands can strengthen the remaining brands in the line
12-109
What is the Fifth P?

Packaging, sometimes called the fifth P, is all the activities of designing and producing the container for a product.
20
Introducing New Market Offerings
Categories of New Products

New-to-the-world New product lines Additions Improvements Repositionings Cost reductions
Factors That Limit New Product Development

Shortage of ideas Fragmented markets Social and governmental constraints Cost of development Capital shortages Faster required development time Shorter product life cycles
What is a Venture Team?

A venture team is a cross-functional group charged with developing a specific product or business; intrapreneurs are relieved of other duties and provided a budget and time frame.
Figure 20.2 The New Product Development Decision Process
Ways to Find Great New Ideas

Run informal sessions with customers Allow time off for technical people to putter on pet projects Make customer brainstorming a part of plant tours Survey your customers Undertake fly on the wall research to customers
More Ways to Find Great Ideas

Use iterative rounds with customers Set up a keyword search to scan trade publications Treat trade shows as intelligence missions Have employees visit supplier labs Set up an idea vault
Drawing Ideas from Customers

Observe customers using product Ask customers about problems with products Ask customers about their dream products Use a customer advisory board or a brand community of enthusiasts to discuss product
Concept Testing
Communicability and believability Need level Gap level Perceived value Purchase intention User targets, purchase occasions, purchasing frequency
Marketing Strategy
Target markets size, structure, and behavior Planned price, distribution, and promotion for year one Long-run sales and profit goals and marketingmix strategy over time
Figure 20.7 Product Life Cycle Sales for Three Product Types
20-121
Prototype Testing
Alpha testing Beta testing
Rank-order method Paired-comparison method Monadic-rating method
Market testing
Consumer Goods Market Testing

Sales-Wave Research Simulated Test Marketing Controlled Test Marketing Test Markets
20-123
Test Market Decisions

How many test cities? Which cities? Length of test? What information to collect? What action to take?
Timing of Market Entry

First entry Parallel entry Late entry
20-125
Criteria for Choosing Rollout Markets

Market potential Companys local reputation Cost of filling pipeline Cost of communication media
What is Adoption?
Adoption is an individuals decision to become a regular user of a product.
20-127
Stages in the Adoption Process

Awareness Interest Evaluation Trial Adoption
Figure 20.8 Adopter Categorization
14
Developing Pricing Strategies and Programs
Steps in Setting Price

Select the price objective Determine demand Estimate costs Analyze competitor price mix
Select pricing method

Select final price
Step 5: Selecting a Pricing Method

Markup pricing Target-return pricing Perceived-value pricing Value pricing Going-rate pricing Auction-type pricing
14-132
15
Designing and Managing Integrated Marketing Channels
What is a Marketing Channel?

A marketing channel system is the particular set of interdependent organizations involved in the process of making a product or service available for use or consumption.
Channels and Marketing Decisions

A push strategy uses the manufacturers sales force, trade promotion money, and other means to induce intermediaries to carry, promote, and sell the product to end users. A pull strategy uses advertising, promotion, and other forms of communication to persuade consumers to demand the product from intermediaries.
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
Figure 15.2 Marketing Channel Flows
Figure 15.3 Consumer Marketing Channels
Figure 15.3 Industrial Marketing Channels
Designing a Marketing Channel System

Analyze customer needs
Establish channel objectives Identify major channel alternatives Evaluate major channel alternatives
Figure 15.4 The Value-Adds vs. Costs of Different Channels
Channel-Management Decisions
Selecting channel members Training channel members Motivating channel members Evaluating channel members Modifying channel members
17
Designing and Managing Integrated Marketing Communications
What are Marketing Communications?

Marketing communications are the means by which firms attempt to inform, persuade, and remind consumers, directly or indirectly, about the products and brands they sell.
Modes of Marketing Communications

Advertising Sales promotion Events and experiences Public relations and publicity Direct marketing Interactive marketing Word-of-mouth marketing Personal selling
Figure 17.1 IMC Builds Brands
Table 17.1 Communication Platforms

Advertising Print and broadcast ads Packaging inserts Motion pictures Brochures and booklets Posters Billboards POP displays Logos Videotapes
Sales Promotion Contests, games, sweepstakes Premiums Sampling Trade shows, exhibits Coupons Rebates Entertainment Continuity programs

Events/ Experiences
Sports Entertainment Festivals Arts Causes Factory tours Company museums Street activities Public Relations
Press kits Speeches Seminars Annual reports Charitable donations Publications Community relations Lobbying Identity media Company magazine

Personal Selling
Sales presentations Sales meetings Incentive programs Samples Fairs and trade shows
Direct Marketing
Catalogs Mailings Telemarketing Electronic shopping TV shopping Fax mail E-mail Voice mail Blogs Websites
Word-of-Mouth Marketing
Person-to-person Chat rooms Blogs
17-150
Figure17.2 Elements in the Communications Process
Figure 17.4 Steps in Developing Effective Communications

Identify target audience Determine objectives Design communications Select channels Establish budget Decide on media mix
Measure results/ manage IMC
Thank You
& Wish you all the very Best!!

Crash Course in Basic Marketing Sep 2011

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Recap workshop in Marketing

Facilitated by Prof. Suresh Vishwanath

Prof. Suresh Vishwanath

What is Marketing Management?

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Figure 1.5 The Four Ps

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Marketing Management Tasks

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Figure 2.7 The Business Unit Strategic Planning Process

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Market Opportunity Analysis (MOA)

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Market Opportunity Analysis (MOA) (cont.)

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Figure 2.8 Opportunity Matrix

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Figure 2.8 Threat Matrix

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Porters Generic Strategies

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Marketing Plan Contents

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Evaluating a Marketing Plan

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

What is a Marketing Information System (MIS)?

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Table 3.1 Information Needs Probes

Sources of Competitive Information

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Needs and Trends

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Trends Shaping the Business Landscape

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

What is Marketing Research?

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Types of Marketing Research Firms

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

The Marketing Research Process

Step 1: Define the Problem

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Step 2: Develop the Research Plan

Data Sources Research Instruments Contact Methods

Research Approach Sampling Plan

Pros and Cons of Online Research

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Barriers Limiting the Use of Marketing Research

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

What is Marketing Metrics?

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Table 4.4 Marketing Metrics

What is Marketing-Mix Modeling?

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Table 4.5 Sample Customer-Performance Scorecard Measures

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Figure 4.3 Example of a Marketing Dashboard

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

The Measures of Market Demand

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Vocabulary for Demand Measurement

Copyright 2009 Dorling Kindersley (India) Pvt. Ltd.

Figure 4.4 Ninety Types of Demand Measurement