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A Brief History ofMarketing Strategy
James E. ColemanCPA, CFP , PhD
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What this course is about:
Address 3 common expectations ofemployers of recent MBA s A!ility to "or#$mana%e teams A!ility to e&al'ate and sol&e pro!lems A!ility to comm'nicate sol'tions pers'asi&ely
(earn !asic tools and techni)'es foranaly*in% mar#ets + ind'stries
nderstand ho" to apply the mar#etin%strate%y de&elopment process across &ario'ssettin%s
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Marketing Strategy Development Process:The Search for pportunities
!"ternal Market !nvironment
FOUR Ps
FOUR
Cs
(Context)
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Provi#es Marketing StrategyDevelopment Practice
3rd edition
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vervie$
-o' ta#e o&er mar#etin% mana%ement responsi!ilitiesfor yo'r firm.
M'st satisfy c'stomers to sell prod'ct and earn profits
Foc's is on mar#etin% strate%y plannin%.e)'ires inte%ration of all strate%y decisions.e)'ires attention to competiti&e en&ironment.
Considers short term and lon% term perspecti&es.Feat'res on%oin%, rapid feed!ac#.
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The Process
Analysis of mar#et sit'ation$opport'nities
Plannin% and !'d%etin%
Ma#e mar#etin% plan DEC/0/120
0'!mit plan decisions
4he mar#etin% %ame sim'lation
Company reports ret'rned to firms
%e"tDecision
perio#
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&n#ustry !nvironment
Mar#et %ro"th
4raditional P(C applies, !'t s'!sidiary to strate%y
4echnolo%ical en&ironment
2o ma5or inno&ations expected-early re&ision cycle
Competiti&e en&ironment4ype of competition depends on firms decisions
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Si" 'ey Pro#uct(Market Segments
HarriedAssistants
HomeUsers
High-techManagers
ModernStudents Professional
Creators
ConcernedParents
Segments have #ifferent nee#s) preferences)
situations) si*es) gro$th rates+
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Pro#uct -: /oice 0ecognition Device 1/0D2
8eyProd'ctFeat'res
Error Protection (1-10)
Number of Specia Comman!s ("-#0)
$bi it% to Customi&e (1-10)
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03D for Pro#uct Mo#ifications: ,omputing ,osts4eature 1Pro#uct -2 ,ost to Decrease ,ost to &ncrease
0pecial Commands 9:7;< >?,
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Pro#uct .: Digital /ocal ,ommunicator 1D/,2
8eyProd'ctFeat'res
Simi arit% of Comman!s (1-10)
Number of 'as s (1-10)
Ease of earnin* (1-10)
Level 3
ot necessaril' canni$alistic of Product #
$ut additional sales su""ort is needed
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Types of A#vertisingPioneerin%
Best for expandin% mar#et demand early in P(C
Direct competiti&eBest for stim'latin% c'rrent sales 9red'ced carryo&er=
/ndirect competiti&eBest for !'ildin% !rand a"areness + impro&es carryo&er
eminder /mpro&es ad effecti&eness if !rand a"areness is hi%h
Corporate 9/nstit'tional=Creates Hhalo effect for the other prod'ct 9not 'sef'l forsin%le prod'ct sit'ations=
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Marketing 0esponsibilities (Level 3)
. P0 D7,Ts 4eatures 1an# 03D for pro#uct mo#ifications2 P0&,! Wholesale price may #iffer in each channel
an# for each pro#uct
P5A,! Distribution intensity by channel) pro#uct
P0 M T& %(A#vertising 8 Spen#ing for each pro#uct
Type for each pro#uct(Personal selling %umber of sales reps in each channel
Percent non(selling time in each channel
,ommission rate(Sales promotion 8 Spen#ing per channel) pro#uct,7ST M!0 S!0/&,! 8 Spen#ingMA0'!T 0!S!A0,H 9 reports may be purchase#Deman# forecastpro#uction or#er %umber of units for each pro#uct
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Pro#uction !conomies of Scale
nit prod'ction costs "ill decline as c'm'lati&e prod'ctionincreases, !'t this is not reflected in the pro forma estimates
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0esponse 4unctions an# Marketing Spen#ing
0ales
Mar#etin% 0pendin%
4hreshold(e&el
0at'ration(e&el
0pendin% too little may ha&e little effect, !'tspendin% too m'ch 5'st increases costsand red'ces profit.
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Marketing Bu#get &tems (Level 2 and 3)
+D prod'ct modification costs0ales force salaries and se&erance pay
214 commissions 9"hich come o't of profits=
Ad&ertisin% expenseC'stomer ser&ice expense0ales Promotion Expense
Mar#et research reports expenseBUDGET FOR FIRST PERIOD: $98 !
7se it or lose it;
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Discretionary Bu#get
/f yo' o&erspend yo'r re%'lar !'d%et it isa'tomatically ded'cted from this amo'nt.
IWhen it6s gone) it6s gone ./f yo' o&erspend after it s %one, it comes o'tof yo'r ad&ertisin% !'d%et.
nspent money carries to f't're periods andearns interest.
+1,"00,000
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,omputing Prices
,omputing 0etail Prices from Wholesale Prices:!"pecte# 0etail Price < Wholesale price 1-(= Markup2
!"ample: Wholesale price < 8->?,hannel - 0etail Price < 18->? 1-(+?>22 < 8.->
,hannel . 0etail Price < 18->?2 1-(+@?2 < 8- -+?
,omputing Wholesale Prices from Desire# 0etail Prices :
Wholesale Price < 0etail Price C 1- ( = Markup2
!"ample: Desire# 0etail Price < 8- > ,hannel - Wholesale Price < 8- >C1-(+?>2 < 8 ?+>>
,hannel . Wholesale Price < 8- >C1-(+@?2 < 8-.@+?>
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0etail Prices ,harge# 4inal ,onsumers
4he retail price set !y a dealer depends on4he "holesale price in the dealer s channel.
4he c'stomary mar#'p 'sed in the channel.
4he portion of any sales promotion Ideals that thedealer passes alon% to cons'mers as a price
red'ction.
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A EFoo#G Wholesale Price
0ho'ld co&er the 'nit cost of the prod'ct9%i&en its feat'res=.
0ho'ld res'lt in a retail price that "ill appealto tar%et cons'mers.0ho'ld res'lt in a profit mar%in that "illcontri!'te to other expenses and profit.
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,ompetitor Analysis
e&ie" posted reports of ind'stry res'lts. Analy*e past strate%ies + li#ely chan%es.
E&al'ate positionin% and tar%et se%ments.
X
X
X
X
1 2 3 4
4irms
1
23
4
5
6
S e g m e n t s
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&n#ustry Sales 0eport 14ree2
Brand nit 0ales 0hare 9'nits= > 0ales 9retail=Firm ;:, : .;:< > ,;K;,KFirm ; ;:, : .;:< > ,;K;,KFirm 3 ;:, : .;:< > ,;K;,KFirm ;:, : .;:< > ,;K;,KTotal ->>) > 8-9)-9-) ?
Channel nit 0ales Dollars 0ales: ,;K >
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Pro#uct 4eatures an# Prices 0eport 14ree2
Bran#of
/0D
4irm -4irm .4irm @
4irm
Specialcomman#s
!rror protect(
ion
@@@@
!aseof
learning
@@@@
0etailprice
channel -
8- >+>>8- >+>>8- >+>>8- >+>>
0etailprice
channel.
8- +-?8- +-?8- +-?8- +-?
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Market Activity 0eport (F"ee)
A#v+ DollarsA#v+ Type
Sales Promotion ,hannel - ,hannel .
%o+ Sales 0eps ,hannel - ,hannel .,ommission,ustomer Service
4irm -
8.?>)>>>
8>8>
->->?=8 .)?>>
4irm .
8.?>)>>>
8>8>
->->?=8 .)?>>
4irm @
8.?>)>>>
8>8>
->->?=8 .)?>>
4irm
8.?>)>>>
8>8>
->->?=8 .)?>>
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A##itional Market 0esearch 0eports ( NOT F"ee )
. Mar#et share !y se%ment 9all !rands=;. Mar#et share !y channel 9all !rands=
3. Cons'mer preference st'dy. Mar#etin% effecti&eness report
:. 0ales !y se%ment !y channel 9o"n !rand=
. Cons'mer shoppin% ha!its st'dyL. Prod'ct positionin% report
%ote: #e a"ate "e o"t# a"e ava%la&le 'o" ea "od* t+
E, e t 'o" t e on#*-e" # o %n. a&%t# #t*d/
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Market Share by Segment 0eport 18-?)>>>2
Bran#
4irm -
4irm .4irm @4irm
Total
Sales1units2
-
>+.?>
>+.?>>+.?>>+.?>
.>)>.
.
>+.?>
>+.?>>+.?>>+.?>
-?)>
@
>+.?>
>+.?>>+.?>>+.?>
.?)->
>+.?>
>+.?>>+.?>>+.?>
->). >
?
>+.?>
>+.?>>+.?>>+.?>
..)>?
>+.?>
>+.?>>+.?>>+.?>
)> .
Segment
ho s sellin% to "homNho s !'yin% "hatNhat is each firm achie&in%Nhich se%ments are !'yin%N
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Market Share by ,hannel 0eport 18-.)>>>2
Bran#
4irm -
4irm .4irm @4irm
Total Sales1units2
,hannel -
>+.?>
>+.?>>+.?>>+.?>
? ).
hat s sellin% "hereNho s !'yin% "hatN
,hannel .
>+.?>
>+.?>>+.?>>+.?>
)@>
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,onsumer Preference Stu#y 18@>)>>>2
Segment
Stu#entsHomeAssistants,reators
ManagersParents
Special,omman#s
->(-@9(->
->(-@-.(-?
-@(-?(
!rror Protection
.(
.((
.(
(.(
!ase of 5earning
-(@(((
.(9(
Price0ange
lo$lo$highhigh
highlo$
hat #ind of prod'ct "o'ld a se%ment preferNhat reference price seems typical for the se%mentN
Oo" are se%ments similar and differentN
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Marketing !ffectiveness 0eport 18.?)>>> or 8@>)>>> for both pro#+2
Bran# A$areness,ustomer Service ,onsumer Froup 0ating &n#ustry Average 0ating
,hannel -: Sales 0ep Workloa# Dealer Satisfaction ,hannel Strength 1EPushG2
,hannel .: Sales 0ep Workloa# Dealer Satisfaction ,hannel Strength 1EPushG2
&n#e">+??>
->>=->>=
->>=-+>>+?>>
->>=-+>>+?>>
,ompetitors$ith lo$er
&n#e">
>>
>>
,ompetitors$ith eIual or higher &n#e"
@
@@
@@
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Detaile# Sales Analysis 18-?)>>>2
4irm
,hannel -
,hannel .
-
?).
.
-)->
@)@@9
@
?) >.
-)@
-) >
-)-
?
)@ @
-) ?
-)>
-)>9
Segment
nit sales !y se%ment and channel Are yo' reachin% yo'r tar%etN
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,ustomer Shopping Habits 189)>>>2
Segment
Stu#entsHomeAssistants,reators
ManagersParents
Percent of Shoppingin ,hannel -
JJJJJ
J
ho shops "hereNOo" do shoppin% patterns match distri!'tion foc'sN
Percent of Shoppingin ,hannel .
JJJJJJ
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Pro#uct Positioning 0eport 18@>)>>>2
Bran#
4irm -4irm .4irm @4irm
-
JJJJ
.
JJJJ
@
JJJ
J
JJJJ
?
JJJJ
JJJJ
Segment
hich !rands are closest to "hich se%mentsNhich se%ments ha&e no close !randsN
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Submitting Marketing Plans
0'!mittin% mar#etin% plans decisions0'!mit yo'r decision plan files &ia emailno later than the #ue #ate an# time per class calen#ar+
Each firm has a distinct ind'stry and firmidentification 9e.%., A , B3, etc.=
2eed to #eep it strai%ht
Pass"ords and the 4M Plan soft"areemem!er pass"ord 'sed to create Plan
/t is case sensiti&e 9'pper and lo"er case ma#e a difference=Best to stic# to one pass"ord
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0ecommen#ations
Analyze the reports as yo' "o'ld analy*e acase.
Ma#e intentional chan%es.Find a balance in mar#etin% researchspendin%.Be integrative 77thin# caref'lly a!o't ho" eachdecision impacts each of the others.Oa&e some '*n !