Measuring Marketing

1. Measuring Marketing • Difficulties • Requires specific, analytical skill set • Difficult to measure some areas, ie advertising’s effect on sales: • Lag effect • Multiple distribution channels • Intervening Variables

2. Measuring Marketing • Benefits • Improved product or service • Determination of new customer segments • Increased information on those things that influence sales • Overall increases opportunity • Must be considered as “means to an end”

3. Market Characteristics • Industry: Set of all actual sellers of a product or service • Market: Set of all actual and potential buyers of a product or service • Available market is set of buyers with interest income and access to product • Served market is that part of the available market a company has decided to pursue • Penetrated market is that set of consumers who have already bought the product or service

4. Market Demand • Market Demand is the total volume that would be bought by a defined customer group in a defined market environment under a defined level or mix of industry marketing effort • Mkt Demand is a function of a set of conditions, not a fixed, solid concrete number, and those conditions are constantly changing • Economics • Technology • Socio-cultural factors

5. Markets • Potential – who might be a candidate • Available – who is not currently connected to another brand or substitute product • Qualified available – who has access and income • Served – which segment(s) of all possible candidates are you able to reach • Penetrated – who are currently your customers

6. Market Characteristics, cont’d • Expandable markets: Size is strongly affected by level of industry marketing expenditures/efforts • Opportunity to build Primary Demand for product or service category • Non-expandable: Size is not much affected by level of industry marketing effort. • Need to increase selective demand for that particular service or brand

7. Competitive Environment • Market Share is that % of the total penetrated market (buyers) held by a particular company, product or brand. • Mkt Share allows comparison with competitors within reason: • Differences in served markets

8. Competitor Analysis: Industry Perspective • Industry Structure • Entry Barriers • Mobility Barriers • Exit/shrinkage Barriers • Industry Cost Structures • Vertical Integration • Global Reach

9. Competitor Analysis: Industry • Slow Growth market • High Growth market • Strategic shift signals • R & D efforts • Relationship Building • Geographic refocusing • Management changes • Changes in Spending • Realignment of SBU’s

10. Competitor Analysis: Market Perspective • Segments by Customer Needs • Segments by Geography • Who is selling a product where? • Substitute Products • What else meets the same need? • How is it alike or different?

11. Competitor Analysis • Assess Strengths and Weaknesses (Competitive SWOT) • Estimate Competitor Reaction Patterns • Laid back & complacent? • Selective, pick their battles? • Tigers, aggressive fighters for markets? • Stochastic, unpredictable? • Determine Own Company’s Strategy based on own SWOT and above information

12. Competitive Strategies • Cost Leadership: low COST (not price) Producer • Differentiation: differentiated product line(s) or unique customer benefits • Focused: narrow concentration on a small segment of a larger market • M-O-R or Unfocused: Non-specific customer base or no clear strategy • Value Leadership: superior customer value • Cost, operational or product quality leadership • Strong customer relationships

13. Competitive Positions • Market Leader – largest market share • Market Challenger – runner up which is poised to overtake leader • Market Follower – runner up which is maintaining share or status quo • Market Nicher – serves small segments other overlook or choose to ignore

14. Market Leader Strategies • Expand Total Market • New users, new uses, increased usage of product or service • Benefit from increased sales • Protect Market Share • Defensive strategies • Expand Market Share • Aggressively pursue available markets or competitor’s share

15. Defensive Strategies • Position Defense • Flanking Defense • Pre-emptive Defense • Counteroffensive • Mobile Defense • Contraction Defense

16. Position Defense • Attempt to Maintain Status Quo in Mkt Share • May require significant commitment in company resources • Inherent problems • Competitor Innovation • Changing Customer needs/tastes/expectations

17. Flanking Defense • If Competitors choose weak areas of business to attack • Shore up weaker flanks: • Expansion of product lines • Product improvements • Image management for company, products or brands

18. Pre-emptive Defense • Competitor Scanning • Anticipate competitor strategies and actions • Reposition ahead of time to prevent loss of share/sales • “No need to outrun any one you can outsmart” - Garfield

19. Mobile Defense • Approach customers from a broader perspective than competitors • Adjust products/services accordingly • Identify and pursue new, additional markets with same or modified product • Diversify

20. Counteroffensive • Assess damage fro a competitive attack • Respond with a stronger impact

21. Contraction Defense • Controlled, intentional reduction of market activity • Reduce operational demands • Refocus efforts, perhaps on more core businesses

22. Challenger Strategies • First define target and strategic actions: • Attack • Avoid • Acquire • Choose an attack strategy if required: • Frontal, flanking, encircling: attack leading, weak or all products • Bypass: use technological innovation to leapfrog • Guerilla: sporadic, unexpected attacks to draw focus

23. Follower Strategies • Clone • Closely copy all or part of competitors marketing mix • Imitate • Copy some aspects but differentiate in others • Adapt • Build on, improve competitor’s offerings

24. Nicher Strategies • End Use Specialist • Vertical Level Specialist • Customer Size Specialist • Customer Specific Specialist • Geographic Specialist • Product/Feature Specialist • Quality/Price Specialist • Service Specialist