Announcements

1. Announcements • Reminders/Updates • SI Workshops on Wed., 7-9, 1C18 • Case deadline is looming! • Initial Idea for Marketing project due Feb. 7th! Agenda • Review Cost-Volume-Profit Analysis • Marketing part of internal environment • Biggest challenges facing the Marketing Manager today? Marketing trends? • The Marketing Relevance Imperative’ http://www.marketingtoday.com/marketing/0905/relevant_marketing.htm • ‘Here's to 2010: industry experts share predictions for the year ahead’ http://www.marketingmag.ca/english/news/marketer/article.jsp?content=20100111_150050_9384

2. Group Marketing Project • begin thinking about your idea as we work through the marketing material • http://www.ted.com/index.php/talks/view/id/70 • http://www.presentationhelper.co.uk/business/test_marketing_small_business_idea.htm • http://sbinfocanada.about.com/od/businessopportunities/Business_Opportunities_Business_Trends.htm • http://sbinfocanada.about.com/od/businessplans/a/quickbizplan.htm

3. Planning Organizing Critical Success Factors Stakeholders Marketing Economic Top Management INTERNAL Vision Operations Finance EXTERNAL Social Political Mission Human Resources Technological Strategy Middle Management First-Line Management Controlling Directing

4. Critical Success Factors (Indicators of Business Success) • Achieving financial performance • Meeting customer needs • Building quality products and services • Encouraging innovation and creativity • Gaining employee commitment

5. What is Marketing? • Marketing is an “integrated system of activities designed to plan, price, distribute, and promote, want-satisfying goods and services to present and potential customers. “FIND A NEED A FILL IT” Elements: Find a need Conduct research Design a product (including packaging, logo, CBP) Set a price and test Set up distribution system Design promotion Build relationships

6. How Marketing Creates Value • Offer products/services that create utility* • Ability of a product to satisfy a human need • Four types of utility: • Time – • Place – • Ownership – • Form – • Begins with understanding of customer wants and needs

7. Developing a Marketing Strategy • Know the environment • PEST + competition • Know the market – use market research to determine: • Market attractiveness • Market segmentation and target market • Develop marketing plan on basis of knowledge of target market • Marketing mix (product, place, promotion, price) • must all send same message • Ensure entire organization shares Marketing Concept • customer orientation • training in customer service company-wide • profit orientation • total quality management

8. KNOW THE ENVIRONMENT/Market Attractiveness • Economic & Technological Environment • Consumer spending - economic conditions • investment intensity - barriers to entry • industry capacity - access to suppliers • technology • Political & Social Environment • regulation - social attitudes & values • Competitive Environment • competitive structure - substitute products • price - competitor analysis • Market Factors: • size/distribution - cyclicality • market gaps - consumer bargaining power • differentiation possibilities - growth

9. Know the Market Who is your customer and what does he want? What un-met need are you satisfying? • Key to being successful is providing a want-satisfying good or service. • it must provide

10. Know your market – who is your customer? Target Market • The • group that has • the group of customers to whom • a group of customers Steps to defining Target Market: • Market Segmentation • Perceptual Mapping • Preference Analysis

11. Market Segmentation • need to know what groups of customers exist from which to choose a target market • involves splitting the market into meaningful segments to determine what groups exist • Segments tend to be similar with respect to their characteristics & what they want out of a product*... • homogeneous needs • homogeneous characteristics

12. Bases for Segmentation: • state-of-being • state-of-mind • psychographics – • product usage • volume – • purpose – • benefits sought –

13. Segment Name Benefit Sought State-of-being State-of- mind Product Usage • Example: Ice Cream Market Benefit Segmentation

14. Perceptual Mapping & Preference Analysis • how do the market segments perceive current products • determine which of the segments will be the target market • opportunity - find the biggest gap between how the customer perceives the competition meets their needs…

15. Steps: • draw axes that represent the relevant dimensions by which people differentiate between product offerings • locate the positions of competing products on the axes/dimensions according to customer perceptions - • locate each segment’s ideal product - • what is your target market?

16. Taste Perceptual Map & Preference Analysis XHaagen Dazs X Ben & Jerry’s Where is the greatest opportunity? X Breyer’s X Nestle Price X Chapman’s X No Name Brand

17. Marketing Plan/Strategy Determining the marketing mix • Key to being successful is to convince consumers that the product provides that unique benefit • Accomplished through your marketing mix • Core Benefit Proposition/CBP • clear concise statement of to ensure all elements of the marketing mix deliver same message

18. Product • the creation of a good or service that provides greater value to customers than previously existed • Total Product Concept/ Value Package • features necessary to support CBP; value-adding attributes • total package of benefits as seen from the eyes of the consumer - everything they evaluate before deciding to buy something • brand name, package, service, delivery, credit, atmosphere, image, reputation, accessibility, price • Elements to consider:

19. Product Classification • Convenience goods - • staples – • impulse - • emergency - • Shopping goods - • homogeneous goods - • heterogeneous goods – • Specialty goods - • Unsought goods – • different markets classify products differently • important to see your product as customer does

20. Sales Product Life Cycle – impacts marketing mix decisions Saturation Decline Maturity Growth Introduction Time

21. Intro. Growth Maturity Saturation Decline Comp’n Product Price Promotion * new uses, new users - market modification * can also speed up cycle “planned obsolescence” - fashion/style, quality, (functional)

22. Product Development • 5 types of product development • New-to-world • New product line • New product added to existing line • Improved product (product modification) • Lower-priced version of existing product • Extending product life • Product extension – • Product adaptation – • Reintroduction –

23. Branding • “using symbols to communicate qualities of a product” • communicate CBP • Brand equity – degree of consumer loyalty & awareness • move customer through stages of recognition • Non-recognition • Brand recognition • Brand recall • Brand preference • Brand loyalty • Types of brand names • National - Private

24. Price • cost-based, target profit • CVP Analysis! • competitive-based • value-based - “price-led” • most important

25. Specific Strategies/Approaches • introductory pricing - skimming/penetration • market protection, or market domination • market stabilization - “follow-the-leader” • product line promotion, and price lining • customer attraction (building traffic) • image enhancement - “psychological pricing”

26. Promotion • Any technique designed to sell a product • Promotional Objectives: • - Communicating information, including CBP • Positioning products • Adding value • - Controlling sales volume Promotional Tools: Advertising Personal Selling Sales Promotion Publicity Integrated Marketing Communication / IMC

27. Advertising • Objectives: • communicate CBP • create AIDA (move customer through decision process) • Remind • Advertising Strategies: • Informative advertising • Persuasive advertising • Comparative advertising • Reminder advertising • Advertising Media: • Television - direct mail • Radio - magazines

28. How Buyers Behaves How Advertising Works Need recognition Information seeking Eval. of alternatives Purchase decision Post-Purchase Evaluation

29. Advertising Communication • Failure due to: • lack of source credibility • message not encoded well • message/medium inappropriate

30. Factors to Consider in Media Selection • geographic selectivity • target selectivity • flexibility/timeliness • absolute cost • length of life • quality of reproduction • creative ability • capacity for detail

31. Personal Selling • more effective but more expensive • combine with advertising to: • factors to consider in budget decision

32. Sales Promotion • short term incentives to induce purchase • free samples, trial period • cents off coupons, cash rebates • support personal selling and advertising • support CBP Public Relations & Publicity

33. power of the Internet http://www.canadianbusiness.com/technology/trends/article.jsp?content=20060213_74332_74332 online viral marketing http://business.timesonline.co.uk/tol/business/industry_sectors/media/article2138718.ece mobile devices http://articles.moneycentral.msn.com/Investing/Extra/TheRealThreatToGoogle.aspx Promotion Trends

34. Place • purchase is a function of desire and availability • logistical decisions costly, time consuming and not easily changed • choice of location must fit with CBP • critical decision • use of marketing intermediaries / channel of distribution Manufacturer Agent Wholesaler Retailer Customer

35. Decision determined by: • company • market • product

36. Advantages provide information on market cash flow, credit risk convenient locations opportunity for comparisons Disadvantages M.S. R.P. reduced marketing effort Using a Wholesaler

37. Overcoming the Disadvantages of a Wholesaler • Push strategy • focus on • volume, contribution • case allowances, volume discounts • contests • Pull strategy

38. Relationship Marketing • emphasizes lasting relationships • get more than product/service Strategic significance? Examples:

39. International Marketing • Product – what needs to change? • Price – domestic competitors? domestic costs? • Promotion – consider • Place • difficult to begin new network