mktg exam 2 material

types of strategic planning

internal and external

internal strategic planning

organization’s goals and capabilities

external strategic planning

marketing opportunities

strategy is a BLANK process

matching

4 steps in strategic planning

defining company mission, setting company objectives and goals, designing the business portfolio, product/market expansion grid

defining company mission

mission statement, take into account what is our business, who is customer, what do they value, what are our core competencies, what should our business be

mission statement

a statement of the organization’s purpose

examples of mission statements

nike and under armour. “make all athletes better through passion, design, and relentless pursuit of innovation”w

good mission statements have:

market oriented, realistic, specific, motivation, illustrative of distinctive competencies

what should you take into account when defining company mission?

what is our business, who is the customer, what do they value, what are our core competencies, what should our business be

setting company objectives and goals: what does mission statements lead to?

detailed supporting objectives for each level of management, must be measurable

designing the business portfolio

a combination of businesses that has the potential of reaching objectives: Which businesses to enter? which to exit? how much to invest?

businesses may be called strategic business units (SBUs), divisions, markets, product lines, etc.

BCG growth share matrix

BCG growth share matrix

market attractiveness= market growth rate. company strength= relative market share. question mark —> MONEY. want to turn question mark to grow into star. with time a star will become a cash cow. if its a dog —> exit market.

cash cow (dasani, coca-cold). star (fairlife shake, zero coke). question mark (bodyarmour, powerade). dog (coke orange, honest tea).

some criticisms of the BCG matrix

limited number of variables used. ignored interrelationships between businesses (ex. some disney movies are dogs). the placement of a business in the matrix is highly dependent on definition of market.

product/market expansion grid

used to identify growth opportunities.

market penetration

strategy: to increase sales to current customers without changing products being sold. achieved by: price, place, promotion. ex: starbucks.

market development

strategy: identify and develop new markets (geographic or demographic for current products). which city has the most starbucks locations? Shanghai, China

product development

strategy: offering modified or new products to current markets.

diversification

strategy: start up or buy businesses outside of current products and markets.

marketing management

planning and implementation and organization, and control

planning

marketing info, microenv, macroenv, consumer behavior

implementation and organization

who what where how

Marketing Plan

executive summary, current marketing situation, SWOT analysis, objectives, marketing strategy, action programs, budgets, controls

marketing strategy

segmentation, targeting, and position (STP). the 4ps of the marketing mix

SWOT analysis

strengths, weaknesses, opportunities, threats

four ps of marketing

-product (variety, quality, design)

-price (list price, discounts)

-promotion (advertisting, sales promotion)

-place (supply chains, channel coverage, transportation)

ALWAYS do this with the target customer IN MIND

Marketing implementation

• the execution of a plan is usually the hardest part. who when where how

  • implementation often ends up being more about personal relationships and/or luck than plans took into account.

successful marketing implementation depends upon:

• company culture

• employees’ shared beliefs and values

• organizational structure

• reward systems

marketing control

• evaluate the results of marketing strategies and plans

  • set marketing goals

  • measure actual vs. expected performance on goals

  • take corrective action to close gaps between goals and performance.

    • marketing audit

segmentation, targeting, and positioning I

design a store that will appeal to PART of the population

steps in STP: to create value for targeted customers

1. segmentation

2. targeting

3. differentiation

4. positioning

segmentation

divide the total market into smaller groups that:

• have distinct needs, characteristics, or behaviors

• respond similarly to marketing efforts, and therefore,

• might require their own products and marketing (4Ps)

targeting

select the segment or segments to enter

differentiation

differentiate the market offering to create superior customer value

positioning

position the market offering in the minds of target customers

geographic segmentation

• dividing a market into different geographic units (ex: country, country region, city size)

  • ex: mcdonalds in germany has beer, canada fries poutine, india chicken

demographic segmentation

• dividing a market based on demographic variables (ex: age, gender, family size, family life cycle, race, generation)

• easier to measure than most other types of variables

• gender segmentation: rise in gender-neutral clothing apparel to remove gender labels

  • ex: cruise lines

psychographic segmentation

dividing a market based on: social class, lifestyle, personality

behavioral segmentation

based on behaviors such as:

• benefits sought

• usage occasion

• user status

• usage rate

• loyalty status

intermarket segmentation

segments of consumers who have similar needs and buying behavior even though they are located in different countries.

requirements for effective segmentation

measurable

• can be identified and measured

accessible

• can be reached and served

substantial

• large and profitable enough

differentiable

• separate from other segments

actionable

• can be marketed to by our company

targeting

• choosing the segment that is most attractive to your organization

  • ex: target market for Wii is based on behavioral segmentation. (family)

evaluating market segments

internal and external

internal market segments

does the segment fit with our objectives and resources?

external market segments

how big is the segment? what is its growth potential?

what is the competitive climate like? are there lots of substitute products?

how much power do suppliers and customers hold?

target marketing strategies

undifferentiated (mass) marketing

differentiated (segmented) marketing

concentrated (niche) marketing

micromarketing (local or individual marketing)

differentiated (segmented) marketing

targets several market segments and design separate offers for each.

concentrated (niche) marketing

targets a large share of one or a few small segments or niches.

micromarketing (local or individual marketing)

• tailoring products and marking programs to suit the tastes of specific locales and/or individuals.

  • local marketing

  • individual marketing

    • aka. markets-of-one marketing or one-to-one marketing

    • main tool: mass customization

Positioning (step in stp)

• the key concept to be communicated to the target consumer

• the place the product occupies in the consumer’s mind relative to competing products.

• “the battle for the mind” —> products are created in a factory, but brands are created in the mind.

competitive advantage

differentiate your brand based on:

• product (whole foods/trader joes)

• services (four seasons)

• channels (amazon)

• people (disney)

• image (nike, under armour)

two types of differentiation

vertical and horizontal

vertical differentiation

one product is clearly better (think of a ladder) (ex:iphone, kindle)

horizontal differentiation

better is a matter of opinion (nike, under armour) (north face, patagonia)

positioning statement

to (target segment) who (need), (brand) is (concept) that (point-of-difference)

• ex: “to busy, mobile professionals who need to always be in the loop, Blackberry is a wireless connectivity solution that gives you an easier, more reliable way to stay connected to data, people, etc. on the go.”

STP is translated into teh 4ps

-product (quality, features)

-price (discounts, allowances)

-promotion (advertising)

-place (supply chain, channel, logistics

three levels of product: decisions driven by

• customer behavior

• marketing info

• micro environment

• macro environment

• strategy

maslows hierarchy of needs (most important —>least)

• physiological needs (hunger, thirst)

• safety needs (security, protection)

• social needs (sense of belonging, love)

• esteem needs (self-esteem, recognition)

• self-actualization needs (self-development)

types of consumer products

• convenience (everyday)

• shopping

• specialty

  • unsought

marekting considerations

• customer buying ehavior

• price

• distribution

• promotion

convenience

• frequency purchases

  • little planning

  • low comparison/effort

  • low customer involvement

• low price

  • widespread/intensive distriubiton

  • frequent advertising and sales promotion

shopping

• less frequent purchase

  • effortful planning/shopping

  • compare brands on price, quality, and style

  • higher price

• selective distriubiton

  • advertising

speciality

• strong brand preference/loyaltySpecial purchase effort

• Little comparison of brands

• Low price sensitivity

• High price 

• Exclusive distribution

  • Carefully targeted promotion

unsought

• little product awareness

• Price varies

• Distribution varies

• Aggressive sales promotion

other products

• Industrial products

• Organizations: for-profit (businesses) and nonprofit (schools, churches)

• People: politicians, entertainers, pro athletes, doctors, lawyers

• Places: tourism, country-of-origin, immigration

  • ideas(social marketing): public health campaigns, environmental campaigns, family planning, human rights, etc. 

individual product decisions

• product attributes

• branding

• packaging (selling)

• labeling and logos

• product support services

  • ex: volvo commerical illustrates

product attributes

• quality

  • features, style, and design

  • performance

  • conformance

labeling and logos

• labeling

  • identifies the product or brand

  • supports the brand’s positioning

    • adds personality to the brand

product line decisions

product line length

• the number of items in a product line

and adjust length by

• stretching downwards upwards, or both directions

  • filling

product mix

all of the product lines and items that a particular seller offers

product mix dimesnions

• width=the number of different product lines carried

• length=the number of items in a line

• depth=the number of versions offered of a product in a line

• consistency= how closely related various lines are

what is a brand?

• A marker of identification for a product 

• A promise to the customer

  • Brand identity and brand consistency lead to feelings of trust

brand equity

• The positive effect that knowing the brand name has on customer response to the product. 

  • Ex: Cheerios, ketchup, soda

what does high brand equity provide?

• Greater awareness and loyalty

• Basis for strong, profitable customer relationships

• willingness to buy over competitors and/or willingness to pay a premium for the brand

brand positioning

based on:

• product attributes

• benefits

• beliefs and values

desirable qualities of brand name selection

• Suggests product’s benefits and qualities

• Easy to pronounce, recognize, and remember

• Distinctive

• Extendable, not limited to one particular brand

• Translates easily into foreign languages

• Capable of being registered and legally protected

memorable brand name selection

• rhyme ex: fitbit

• alliteration ex: vineyard vines

• reptition ex:m&ms

protect brand names

• Genericization voids trademark’s legal protections

• Must include the registered trademark symbol

  • Some include the word “brand” for added protection

law of shape (ries and ries)

the ideal shape for a logo is horizontal

brand development strategies

line extension

Introduction of additional items within the current product category under the same brand name (ex: new flavors, forms, colors, ingredients, or package sizes)

brand extension

• using  a successful brand name to launch a product in a new category

  • Greater credibility

  • Faster acceptance

  • Ex: snoopy dog, apple watches

multibranding

• Multiple brands by the same company in the same product category.

  • Ex: pepsi, sierra mist, MUG root beer

new brands

• Used when existing brand names are either unsuitable for brand extension or the company doesn’t want to dilute them. 

the law of the word (ries and ries)

• A brand should strive to own a word in the mind of the consumer. 

four service characteristics

intangibility

• services cannot be seen, tasted, felt, heard, or smelled before purchase.

variability

quality of services depends on who provides them and when, where, and how

inseparability

services cannot be separated from their providers

perishability

services cannot be stored for later sale or use

why new products?

• New products are crucial for the health of the enterprise

  • Rejuvenate

  • Grow

• Tied to higher stock values and internal motivation for employees

npd process

• Having skill sets for one point in the process does not mean you’re also good at the others. 

steps of npd (instagram, sneaky, can’t make bad posts to care)

1. idea generation

2. idea screening

3. concept development and testing

4. marketing strategy development

5. business analysis

6. product development

7. test marketing

8. commercialization

idea generation

1. Systematic search for new product ideas

2. Internal sources:

   1. Company employees at all levels

3. External sources:

   1. Customers, competitors, distributors, suppliers, outsourcing partners

      1. What percentage of new product innovation ideas come from employees? 40-50%

         1. Flaming hot cheetos, outsourcing partners: pringles jokes

idea screening

1. Screening process to reduce # of ideas by spotting good ones and dropping poor ones.

   1. Describe product, target market, and competition.

   2. Estimate market size, product price, development time and costs, manufacturing costs, and rate of return.

   3. Evaluate against a set of company criteria for new products.

concept development

1. translate your product into a detailed concept stated in meaningful consumer terms (i.e., what will the consumer get out of this product?)

   1. Ex: A <describe product> that provides <benefit> → A convenience restaurant that provides high quality, fresh, made-to-order food. (sheetz)

concept testing

1.  test concepts with a group of target consumers to find out level of appeal.

   1. In doing so, describe the product and elicit responses to the concept

sample questions for concept tesing

1. Do you understand the concept behind this product?

2. Is this concept believable?

3. What are the major benefits of this product?

4. How does it compare with other similar products?

5. What improvements might you suggest?

6. What factors might affect your decision to buy this product?

marketing strategy development

1.  An initial marketing strategy is designed for the new product, consisting of:

   1. Target market and initial objectives

      1. Target market: planned product positioning, and goals for sales, market share, and profit for the first few years.

   2. Launch tactics

      1. Price, distribution, and marketing budget for the first year.

   3. Long-term objectives

      1. Long-run sales and profit goals, marketing mix (4Ps) to be used.

business analysis

1. Does the idea make business sense?

2. Involves a review of the sales, costs, and profit projections to assess fit with company objectives.

3. Assess risk under various scenarios

4. If results are positive, project moves to the product development stage