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MarkestratEd. Marketing Strategy. Michelsen Consulting Ltd. w ww.companysimulations.com. cmichelsen@labsag.co.uk. FOCUS ON. Strategy based on positioning, life-cycle congruent policies, segmentation. Strategic leverage Marketing mix useful tool to get there.
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MarkestratEd Marketing Strategy Michelsen Consulting Ltd. www.companysimulations.com cmichelsen@labsag.co.uk
FOCUS ON • Strategy based on positioning, life-cycle congruent policies, segmentation. • Strategic leverage • Marketing mix useful tool to get there. • Understanding perceived customer needs • Highly competitive environment • Marketing as a the main profit centre
Decision-making in thepositioning of brands in a segmentedmarket and in a new market. • Adaptationto a rapidlyevolvinglife-cycle. • Repositioning of matureproducts. • Developement of entirely new products • Competitionwithfourcompanies in thesamemarket. EXPERIENTIAL OBJETIVES
TWO MARKETS SONITES VODITES (current) (potential) Independent, not subsitutes, not complements….
INITIAL COMPETITORS IN THE SONITE MARKET Firmsstartfromdiffernt positions. Each has 2 brandspositioned in theSonitemarket. The portfolio can growtofivebrands.
STRATEGIC OPTIONS • Specialización: high volume low margin in one market • Diversification: several brands for several segments. • Extension: full line approach • Innovation: new product for a new market
Population 250 MILLION *MARKSLANDIA The MarkestratEd World 5 FIRMS 2 INITIAL PRODUCTS, UPTO FIVE POSSIBLE. 1 CURRENT MARKET: SONITES 1 POTENTIAL MARKET POTENCIAL: VODITES
EACH FIRM HAS 3 PROFIT CENTRES : CORPORATION R & D PRODUCTION MARKETING ….INTERACTING USING INTERNAL TRANSFER PRICES
DistribuTión “Average price”
The 3 components of the final price paid by a client $ 200 Final Price Channel Margin Marketing´s profit margin Production cost
$ 200 Final Price $ 76.60 (38.3 % ) store margin “Avg price“ $ 123.-
$ 200 Final Price $ 76.60 (38.3 % ) store margin “Avg Price. “ $ 123.- MARKETING+S PROFIT $ 43
$ 200 Final Price $ 76.60 (38.3 % ) store margin “Avg Price. “ $ 123.- MARKETING+S PROFIT $ 43 “Transf Cost $ 80 pays the production profit centre
R&D • Ittakes 12 monthstomodifyanexistingbrandnordesign a new one. • Requestspecificphysicalcharacteristis and budget. • Designing a completelydifferentbrandisveryrisky and costly. • Small improvements are cheaper ande easiertoget.
R&D DECISION TREE PERIOD T PERIOD T + 1 KEEP TRYING FAILURE ABORT PROJECT PROJECTO I & D CHANGE EXSTING BRAND LAUNCH NEW BRAND SUCCESS KEEP PROJECT FOR FUTURE USE
BENEFITS OF THE EXPERIENCE CURVE VARIABLE PRODUCTION COST(“Transfer Cost”) Initial cost as obtained in R&D project Experience curve productivity gain Effect of an R&D project focused on lowering costs ACUM. PRODUCTION 100,000 units
MANAGERIAL VIEW • SCANT DATA AVAILABLE FOR DECISION MAKING DURING FIRST YEAR EXCEPT MACROECONOMIC DATA AND THE CONSEQUENCES OF DECISIONS OF THE PREVIOUS MANAGEMENT TEAM . • NO MARKET RESEARCH AVAILABLE FOR THE FIRST PERIOD. • TO GET A HIGHER BUDGET PROFITS MUST GROW • INFLATIONARY TENDENCIES.
CORPORATE OFFICE PRODUCTION FINANCE R & D COST OF GOODS SOLD INVENTORY COSTS R&D EXPENSES CONTRIBUTION TO NET PROFITS OF MARKETING BUDGET MARKETING AS PROFIT CENTRE SALES INCOME MARKET RESEARCH EXPENSES ADVERTISING EXPENSE SALES FORCE EXPENSE ADVERTISING AGENCY AND MEDIA MARKETING CONSULTING DISTRIBUTION
HOW TO TAKE THE FIRST DECISION • ORGANIZE YOUR TEAM • FIGURE OUT THE PREVIOUS MANAGEMENT´S STRATEGY. • REDUCE PRODUCTION SCHEDULING OF BRANDS WITH HIGH INVENTORY ON HAND, INCREASING ADVERTISING AND LOWERING PRICE LEVELS. • INCREASE SLIGHTLY PRICE LEVELS AND PRODUCTION SCHEDULED OF BRANDS WITHOUT INVENTORY • ORDER A NUMBER OF MARKET RESEARCH STUDIES. • REVIEW IF ASSIGNED BUDGET IS SUFFICIENT.
Decisions Data Continued...
MARKESTRATED MARKET RESEARCH STUDIES
STUDY 1: CONSUMER SURVEY - SONITE STUDY 2: CONSUMER PANEL - SONITE STUDY 3: DISTRIBUTION PANEL - SONITE STUDY 4: SEMANTIC DIFFERENTIAL SCALES - SONITE STUDY 5: PERCEPTUAL MAP OF SIMILARITIES AND BRAND PREFERENCES STUDY 6: MARKET FORECAST - SONITE STUDY 7: CONSUMER SURVEY -VODITE STUDY 8: CONSUMER PANEL -VODITE STUDY 9: DISTRIBUTION PANEL -VODITE STUDY 10: SEMANTIC DIFFERENTIAL SCALES –VODITE STUDY 11: MARKET FORECAST -VODITE STUDY 12: ESTIMATED COMPETITIVE ADVERTISING (THOUSANDS OF $) STUDY 13: SALES FORCE COMPETITIVE ESTIMATES STUDY 14: SALES FORCE EXPERIMENT ESTUDY 15: ADVERTISING EXPERIMENT
STUDY 5: PERCEPTUAL MAP OF SIMILARITIES AND BRAND PREFERENCES STUDY PERFORMED OVER A SAMPLE OF 200 PERSONSNO SIGNIFICANT DIFFERENCES OF PERCEPTUAL CONFIGURATION FOUND BETWEEN SEGMENTSSTATISTICALLY SIGNIFACNT RESULTS WERE OBTAINED FOR A 2 DIMENSIONAL SOLUTIONTHE MOST SATISFACTORY INTERPRETATION OF THE MAP'S AXIS IS,BASED ON THE SEMANTIC SCALES:AXIS 1: PERCEIVED ECONOMY (INCREASES FROM RIGHT TO LEFT)AXIS 2: PERCEIVED POWER (INCREASES UPWARDS)