1- 1- 1 1 Open Floor Open Floor Look at the Chevron Ad from Yesterday’s NY Times... There is a Clear Inaccuracy in the Ad, What is it? What Impact Might the Inaccuracy have on have on Chevron? What Would You do If You Were the Chevron Person Responsible for This?
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1-1 Open Floor Look at the Chevron Ad from Yesterday’s NY Times... There is a Clear Inaccuracy in the Ad, What is it? What Impact Might the Inaccuracy.
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1-1-11
Open FloorOpen Floor
Look at the Chevron Ad from Yesterday’s NY Times... There is a Clear Inaccuracy in the Ad, What is
it? What Impact Might the Inaccuracy have on
have on Chevron? What Would You do If You Were the Chevron
Person Responsible for This?
1-1-22
Open FloorOpen Floor
Hand In Midterm III With Group Evaluations (from Website)
Extra Copies Available in Front
Hard Copy to Me E-mail me copy to Me with Group name and
Section (i.e., KEY-001)
1-1-33
Open FloorOpen Floor
Midterm III… General Comments…
What Went Well? Where is there Room for Improvement?
What Did You Learn? What Was the Element that You Didn’t
Have that You Needed the Most? What Was the Most Helpful Element?
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PreviewPreview
Lecture… Finish Lecture on “Industry Analysis” from Last Time Lecture on…
Discussion on “Presentation” Overview and Comments Questions
Comments on John Jolliff Guest Speaker Simon Luthi and Peter Reugger Next Week
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PreviewPreview
Remember… This is an “Overview” Book Covers This Quite Well
Resource for Marketing Plan Resource for Future
Exceptions and Differences in Categories and Products
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BA 590BA 590
Industry Analysis(Continued)
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Projected Change in U.S. Population 1995-2005Projected Change in U.S. Population 1995-2005
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U.S. Income InequalityU.S. Income Inequality
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Category Factors: Energy Bars (Attractiveness Summary)Category Factors: Energy Bars (Attractiveness Summary)
Aggregate Market Analysis
Category Growth
•Average annual growth rate of 57% between 1997 and 2001
Attractiveness++
U.S. energy bar category sales forecasted at $750 mm in 2003 for a continued expected growth of 22%•IIndustry reports suggest current annual growth for the energy bar market 25%-30%
•CCategory expanding: new competitors are entering, existing brands are expanding with new products and flavors, market penetration and usage occasion is increasing
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary
Aggregate Market Analysis
Product Life Cycle
•Both the category and Odwalla Bars specifically are both securely in early stages of growth phase
Attractiveness++
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary
Category Analysis
Threat of New Entrants/Exits
•Strong potential for new competitors given that the category is profitable, fairly easy to enter, and increasingly relevant to consumers.
Attractiveness-
•Further, with the “big three” brands strongly in place [PowerBar, Clif (including Luna), and Balance], it is most likely that small competitors will enter through the natural foods channel, creating more direct competition with Odwalla bars.
Criteria to Assess Technological StrategyCriteria to Assess Technological Strategy
1. Technology selection or specialization
2. Level of competence
3. Sources of capability: internal versus external
4. R&D investment level
5. Competitive timing: initiate versus respond
6. R&D organization and policies
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Competitor Information to CollectCompetitor Information to Collect
Ability to conceive and design Ability to produce Ability to market Ability to finance Ability to manage
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A Competitive Conjecture ProcessA Competitive Conjecture Process
Customer response
We lower our price
Our unit sales
Their expected price
Our profit
Their price reaction
Customer response
Our unit sales Our profit
Our total
outcome
Second period
First period
Should we cut price?
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Energy Bars: Competitor Feature/Strategy MatrixEnergy Bars: Competitor Feature/Strategy Matrix
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Energy Bars: Current & Future Strategy MatrixEnergy Bars: Current & Future Strategy Matrix
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BA 590BA 590
Customer Analysis
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What We Need to Know What We Need to Know about Current and Potential Customersabout Current and Potential Customers
Who buys and uses the product What customers buy and how they use it Where customers buy When customers buy How customers choose Why they prefer a product How they respond to marketing programs Will they buy it (again)?
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Who Buys and Uses the ProductsWho Buys and Uses the Products
Initiator -who identifies the need for product
Influencer -who has informational or preference input to the decision
Decider –who makes the final decision through budget authorization
Purchaser –who makes the actual purchase User
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Buying Roles and Needs/Benefits SoughtBuying Roles and Needs/Benefits Sought
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Categories for Describing ConsumersCategories for Describing Consumers
1. Demographic
2. Socioeconomic
3. Personality
4. Psychographics and values
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Major Segmentation Variables for Consumer MarketsMajor Segmentation Variables for Consumer Markets
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Major Segmentation Variables for Consumer Markets Major Segmentation Variables for Consumer Markets (cont.)(cont.)
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Major Segmentation Variables for Consumer Markets Major Segmentation Variables for Consumer Markets (cont.)(cont.)
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Lifestyle TypologiesLifestyle Typologies
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List of ValuesList of Values
1. Self-respect2. Security3. Warm relationship with others4. Sense of Accomplishment5. Self-fulfillment6. Sense of belonging7. Respect from others8. Fun and enjoyment9. Excitement
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Major Segmentation Variables for Business MarketsMajor Segmentation Variables for Business Markets
Demographic Operating variables Purchasing approaches Situational factors Personal characteristics
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Multiattribute Model QuestionsMultiattribute Model Questions
1. Which attributes do customers use to define a product?
2. How do customers determine how much of each attribute a brand possesses?
3. How are the importance weights determined?
4. What decision rule is used to combine the information?
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Bank Perceptual MapBank Perceptual Map
Courteous personnel
Convenient ATM locations
A•
D•
B•
C•
E•
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Sources of Customer ValueSources of Customer Value
Economic: The economic benefit a customer derives from using a
product Functional:
Those aspects of a product that provide functional or utilitarian benefits to customers
Psychological: The image of the product, including how the product
“feels” and whether that feeling matches the image the customer wants to project
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Measuring Brand EquityMeasuring Brand Equity
1. Awareness: Being aware of a brand is usually a requirement for its purchase and tends to lead to more favorable opinions by reducing the risk associated with a familiar option.
2. Associations: Images related to overall quality as well as specific product attributes and user characteristics affect the reaction to a brand.
3. Attitude: Overall favorability toward a brand is a critical part of brand equity.
4. Attachment: Loyalty to a brand is the strongest type of equity, and most beneficial for sellers.
5. Activity: The strongest fans of a brand become advocates.
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Manifestations of Customer ValueManifestations of Customer Value
Price. Price is the company’s assessment of the product’s value.
Price sensitivity. A product with constant sales when prices increase generally is of greater
value than one for which demand slumps.
Satisfaction. Survey-based satisfaction measures are standard practice in my business.
Complaints and compliments. The number of complaints or compliments the company receives indicates the
product’s value.
Word-of-mouth. Although often difficult to track, spoken and written comments provide a
useful subjective assessment of a product’s value.
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Manifestations of Customer Value cont.Manifestations of Customer Value cont.
Margin/profit contribution. Generally, higher margins indicates partially monopolistic positions due
to greater communicated value.
Dollar sales. Total dollar sales provide an aggregate measure of the value of a product
as assessed by the market.
Competitive activity. Competitive activity such as new-product introductions indicates that
the total gap between customer value and company costs is sufficiently large to allow for profits even when more companies divide the market.
Repeat purchase rate. High loyalty indicates high brand value.
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Assessing the Value of the Product CategoryAssessing the Value of the Product Category
1. Determine the uses of the product
2. Estimate the importance of the uses
3. List competing products for the uses
4. Determine the relative effectiveness of the product category in each usage situation
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Desirable Criteria for SegmentsDesirable Criteria for Segments
Who the Customers Are: Primarily upscale mobile professionals Predominately male Analytical and quantitative in nature Well educated Over 21 years of age
What They Buy: Small size/light weight PC connectivity E-mail communications capability Phone/address book Appointment book/calendar/alarm One-way paging