Basic Elements Environmental Analysis –Customer Analysis –Competitor Analysis –Channel Analysis –Company Internal Analysis –Public Policy Analysis.

Strategic Management Model

Goals/Objectives

Environme ntalAnalysis

StrategyDesign

Imp lementationPlanning

Imp lementation

Monitoring

AnalyzePerforman ce

Adjustments

CustomersCom peti torsChannelsCom panyPubl ic Policy

Basic Elements

• Environmental Analysis– Customer Analysis– Competitor Analysis– Channel Analysis– Company Internal Analysis– Public Policy Analysis

Basic Elements, continued

• Strategy– Pick targets– Do something to targeted segments– Do it with an integrated set of programs

• Marketing Programs -- the “4Ps”– Product– Promotion– Place– Price

Know the Customers

• Micro View– What motivates them? What are their needs?– How do they go through the decision process?

• Macro View– How big is the market?– How fast is it growing?– What segments exist (size and growth?)?

Know the Competitors

• Direct competitors– Future: how will they act? react?– Elements: goals, strategies, capabilities,

assumptions

• Four other forces– Upstream; Downstream (that’s two)– New entrants– Substitutes

Know the Channels

• Who they are

• What value do they provide

• What they expect to get from you

• What the power structure is and where it’s going

Know Your Company

• Mission

• Culture

• Goals / objectives

• Strengths and Weaknesses– value for customers is the criterion

Know the Public Policy Environment

• What can you do / what can’t you do?– e.g. antitrust, Robinson-Patman, consumer

protection, environmental laws– state and local laws / regulations

• What’s on the horizon?

• Is government assistance available?

Strategy and 4 Ps

• Recall that Marketing Strategy is:– Selection of target segments

– Determination of desired change in segments

– Creation of “architecture” of programs to effect desired change

• Elements of marketing programs -- 4 Ps•Product

•Price

•Promotion

•Place (Distribution)

•Plus Partnerships

Product

• Bundle of attributes that meets needs

• Includes service -- sometimes minor aspect; sometimes it differentiates

• Includes packaging

• Should have a strategy for developing new products

Life Cycle

Intro

Growth

Maturity

Decline

AnnualSales

Time

Product Management

• Positioning– differentiate from competitors on meeting

important needs– Communicate differentiation to prospects– Deliver on promises

• Manage other Ps -- implement positioning

• Management of product changes over life

• Maybe brand building

Promotion -- Communications

• Personal selling -- direct, person-to-person• Advertising -- through paid-for medium• Publicity -- third party reporting• Sales Promotion -- short term incentives for

action• Direct Marketing – direct communication

with individual customers• Interactive/Internet Marketing

Communication Model

Sender ReceiverEn-code

De-codemedium

Feedback

NOISE

Implications for Communication Effectiveness

• Must get through the noise and clutter

• Right message -- people respond to content and meaning

• Right media (communications methods) -- reaches audience and enhances message

• Easy to decode

• Get feedback other than sales -- too much information lost if marketer isn’t proactive

Some Key Promotion Points

• Message should be consistent with positioning

• Personal selling can use immediate feedback

• Advertising is good for awareness, building beliefs, building emotion

• Publicity is good for credibility

• Sales promotion gets action, but also sends a message

More Key Promotion Points

• Advertising is relatively cheap per contact• Match ad media to message and audience• Publicity is not cost-less• Sales promotion is addictive, both for customers

and for vendors• Direct marketing gets immediate response, but

also can create animosity• Interactive/Internet marketing can include

elements of all the other forms

Managing Channels

• Choose and manage channels to get consistent positioning to targeted end buyer

• Decide on right saturation level– exclusivity vs. ubiquity: consistent with positioning

• Clear roles, rewards, penalties minimize conflict if channels feel agreements are equitable

• Logistics can minimize costs; enhance value

Pricing Basics

• Max price = most that target customers will pay to receive offered value

• Min price = lowest price you can charge and still break even

• Set price level between max and min, consistent with positioning

• Consider price elasticity -- particularly when making price changes

ElasticityP

Q

Supply

Demand

E=%dif D / %dif P

Other Pricing Ideas

• Price points -- buyers have expected price levels

• Psychological aspects of price– perceived relationship between price & quality

• Penetration price vs. price skimming for new products

• Although Price is usually a factor, it is not always paramount