Market Analysis Marketing Management
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Market Analysis
Marketing Management
Evolving Views of Marketing’s Role
Evolving Views of Marketing’s Role
The customer as the controllingfunction and marketing as the
integrative function
Customer
Marketing
Production
Human
resources Finance
Why Analyze Markets?
Search for key trends, forecast futureIdentify opportunitiesUnderstand/anticipate customer needs and wants; benefits that customers wantSegment the market into similar sub-groupsAnticipate competitors’ strategies
Defining the MarketDefining the Market
fast food
super markets
home cooking
restaurants
convenience stores
Market TrendsMarket Trends
economicdemographicpoliticalsocialtechnological
Model of Buying BehaviorModel of Buying BehaviorBuyer’s decisionprocessProblem recognitionInformation searchEvaluationDecisionPostpurchase
behavior
OtherstimuliEconomicTechnologicalPoliticalCultural
Buyer’scharacteristicsCulturalSocialPersonalPsychological
Buyer’s decisions
Product choiceBrand choiceDealer choicePurchase timingPurchase amount
Marketingstimuli
ProductPricePlacePromotion
Four Types of Buying BehaviorFour Types of Buying Behavior
ComplexBuying
Behavior
Dissonance-Reducing Buying
Behavior
Variety-SeekingBehavior
HabitualBuying
Behavior
HighInvolvement
LowInvolvement
Significantdifferences
betweenbrands
Fewdifferences
betweenbrands
Participants in the Business Buying Process
Participants in the Business Buying Process
Gatekeepers
Initiators
Buyers
Influencers
Deciders
Users
Approvers
Market AttractivenessMarket Attractiveness
sizegrowthcompetitive intensityprofitabilitybarriers to entry
Analyzing CompetitionAnalyzing Competition
define the marketidentify and describe key competitorsevaluate key competitorsanticipate competitive actionsidentify potential competitors
Hypothetical Market Structure & Strategies
Hypothetical Market Structure & Strategies
40%
Marketleader
30%
Marketchallenger
20%
Marketfollower
10%
Marketnicher
Expand MarketDefend Market ShareExpand Market Share
Attack leaderStatus quo
Special-ize
Imitate
ConclusionsConclusions
Market analysis provides an important foundation for market-driven strategy decisions.Constant change makes ongoing analysis critical.Focus on customers.Look for ways to predict future market structure, behavior, and competition.
Market Segmentation, Targeting, and Positioning
Marketing Management
Toothpaste ExampleToothpaste Example
prevent cavitieswhiten teethfreshen breathreduce tartarfight plaquetaste good
Segmentation TermsSegmentation Terms
market segmentsubgroup of people or organizations with similar product or service needs
market segmentationprocess of dividing a market into meaningful segments
Multi-Segment vs. Undifferentiated Strategy
Multi-Segment vs. Undifferentiated Strategy
multi-segment
concentrated
undifferentiated
Identifying SegmentsIdentifying Segments
featuresbenefit soughtgeographicsdemographicspsychographicsusage
rateoccasion
Describing Segments -Toothpaste
Describing Segments -Toothpaste
BenefitSought
Demo-graphics
Usage rate/occasion
Psycho-graphics
Brands
whiten,freshenbreath
teens,youngadults
smokers,“big date”
sociable,active
RembrandtListerine
preventcavities
families heavy conserva-tive
Pepsodent
taste children light hedonistic Aquafreshfor kids
sensitivity seniors medium worriers Sensodyne
Describing Segments - Dog FoodDescribing Segments - Dog FoodBenefitSought
Demo-graphics
PreferredType
Psycho-graphics
Size
ease ofuse
families,children
meal outdoor,hearty, littleattachment
40%
nutrition high income high pricedcanned
attached todog
13%
pamperdog
urban nokids
canned,soft-moist
finicky 10%
Analyzing Segment Attractiveness
Analyzing Segment Attractiveness
sizegrowthmeasurabilityresponsivenessaccessibilityprofitabilitycompetitiveness
Target MarketingTarget Marketing
Define and describe segmentsAnalyze and select target segment(s)Develop and implement a positioning strategy for each segment
PositioningPositioning
A marketing program customized for a selected market segment, appealing to the benefits sought by that segment.A unique implementation approach that establishes a clear competitive position in the minds of potential customers.
PositioningPositioning
TARGET SEGMENT
Needs?
POSITION
COMPANY Skills and Resources
COMPETITION Competitive Advantage?
MARKETING PLAN• product • distribution
• price • communications
Positioning StatementPositioning Statement
__________ (name of product or brand) is the brand of ___________ (product category) that offers ___________ (unique benefit appealing directly to the target) to _________________ (target segment).Crest is the brand of toothpaste that offers cavity prevention to parents with children in the home.
Perceptual MappingPerceptual Mapping
Select two most important product or service attributes (dimensions)Determine positions in two-dimensional space or “map” through researchUsed to diagnose current strategic position and to plan and track changes over time
Positioning at General MotorsPositioning at General Motors
Marketing Relationships
Marketing Management
Marketing ChannelsMarketing Channels
Manufacturers/producers
Agents/brokers
Wholesalers/distributors
Retailers Retailers
Consumers and organizational end users
Channel FunctionsChannel FunctionsChannel Functions
OrderingOrdering
PaymentsPayments
CommunicationCommunicationTransferTransfer
NegotiationNegotiation
FinancingFinancingRisk TakingRisk Taking
PhysicalDistribution
PhysicalDistribution
InformationInformation
Distribution AlternativesDistribution Alternatives
direct distributionuse of intermediaries (indirect distribution)both direct and indirect distribution
Distribution Intensity ExamplesDistribution Intensity ExamplesTrading Area
A B C
+ + ++ + + + ++ + + + +
+ + + + + ++ + + + + ++ + + + + +
+ + + ++ +
+
++
+
+
Exclusivedistribution
Selectivedistribution
Intensivedistribution
Cadillac automobiles Ethan Allen furniture Revlon cosmetics Caterpillar equipment Estée Lauder cosmetics Timex watches
Nature of Channel RelationshipsNature of Channel Relationshipstransactional
exchange collaborative
competitorfirm
suppliers
distributor
customer
Current Issues Discussion –Marketing Channels
Current Issues Discussion –Marketing Channels
increasing number of “e-tailers”direct distribution channelon the surface, would appear to be profitablemany failures recentlyhow can e-tailing become profitable?
Branding
Marketing Management
The Brand’s Role in MarketingThe Brand’s Role in Marketing
identifies key benefit sought by the selected target segmentcompetitive advantageexpression of valuethe brand integrates all marketing efforts across functional departmentssuperior brand positioning, re-positioning
Life Cycle Brand StrategiesLife Cycle Brand Strategies
Introduction: brand developmentGrowth: brand reinforcementMaturity: brand repositioningDecline: brand modification
How Important is Brand Name?
Name = nodes in memoryQuality perceptionsAwareness, familiarityImage (fun, boring, exciting, etc.)Reduces perceived risk, esp. for publicly consumed products and services
Brand Equity
the value of a brand name and symbolpremium consumers are willing to paymulti-dimensional (awareness, perceived quality, loyalty, and brand associations)increased through strategic, focused, image-building advertisingdamaged by excessive sales promotions and price-cutting
Brand IdentityBrand Identity
the meaning of a brand name and symbolMcDonald’s
clean, efficient, consistentgood valueBig Mackids
brand stretching
History of Brands -- Early Examples
History of Brands -- Early Examples
inventor-entrepreneurs:King C. GilletteH. J. HeinzAsa G. Candlergrowing corporations:National Biscuit Co.Colgate - product simplification
Current Status of Brand Management
Current Status of Brand Management
category managers to lessen anti-productive competitionimportance of implementation of the brand manager systeminfluence without authorityGM’s recent adoption of brand managersbrand - sales managers
Traits of Strong BrandsTraits of Strong Brands
deliver desired benefitsstays relevantpricing offers valueproper positioning strategyconsistent over time
Traits of Strong Brands (cont’d)Traits of Strong Brands (cont’d)
part of a strategic brand hierarchyintegrated marketing to build equitymanagers understand customer perceptionslong run marketing supportsources of brand equity monitored
Today’s Brand TrendsToday’s Brand Trends
manufacturer brands under attack from store brandsincreasing and decreasing brand loyaltyadvertising clutter makes building brands difficultimportance of service brandsdifficulty in finding new, unique brands (e.g., Accenture, Cingular, etc.)
Pricing
Marketing Management
Price Knowledge/PerceptionsPrice Knowledge/Perceptions
planned weekend trip to Parisairfare from DFW to CDG?leave Friday night, October 19th, return Mondaywhat price would you expect to pay?
Airfares (continued)Airfares (continued)first class: $10,536.98business class: $8,566.98 coach no restrictions: $2,864.98coach non-refundable, via Houston $475.98if use 40,000 AAdvantage miles$0
Price and Positioning Strategy
Marketing programProduct/Brand
decisions
target market,objectives,
& positioning strategy
Distribution
Pricing decisions
MarketingCommunications
Pricing Objectives
profit-orientedprofit maximization, ROIhigh pricing, price skimming
sales-orientedmaximize market share or saleslow pricing, penetration pricing
status quo pricingmatch competition
Price and Demand
D
D
Pric
e ($
)
Quantity
ElasticDemand
InelasticDemand
D
D
D
D
Pric
e ($
)
Pric
e ($
)
Quantity Quantity
Three Ways To SetPrices
Cost CompetitionDemand
match competitors’ prices
break-even, financial goals
what the market will bear
Break-even Analysis
Quantity (units)
Pric
e ($
)
Fixed Costs
Total Revenue
Total Costs
Profits
Losses
Break Even
Price Perceptions
internal reference price:expected priceprice last paidrange of acceptable prices
affected bypast purchasesadvertisingword of mouth
Price Perceptions
latitude of price acceptance
0 $100 $900
$450
IRP
Mid-term ExamMid-term Exam
4 hours maximum, pick up case in DRH 372, starting at 6 p.m.bring laptop computers, use DRH 232 if you prefer, individual work, open bookTCU computer labsdue at 10 p.m. via e-mail attachment ([email protected]), disk, or hard copy (DRH 372)do not be late
Mid-term ExamMid-term Exam
identify key marketing decision as purpose of reportcritically analyze the current or proposed strategy, competition, customers, industry, environment – do not summarize casefocus on your conclusions, insights, and implications based on the case information
Mid-term ExamMid-term Exam
develop two or three feasible marketing strategies (target segment, benefit sought, positioning strategy)analyze these strategies and select onedevelop and recommend a marketing program to implement the strategy
product/brand & marketing communicationspricing & distribution
Mid-term ExamMid-term Exam
good marketing strategies are:based on solid analysis and rationale drawing on your insights, conclusions and use of tools learnedfocused on a defined target market and the key benefit sought by that targetsupported and reinforced by consistent, creative, and logical marketing program toolspersuasive, convincing, likely to succeed
Developing and Managing the Market Offering
Marketing Management
The New Product DilemmaThe New Product Dilemma
on average in the U.S., one third of sales from new products (less than 5 years in the market)40% of new products fail
Keys to New Product SuccessKeys to New Product Success
satisfaction of customer needs and wantstop management leadershipinnovation culturestrong positioning strategycross-functional teams
Sources of New Product IdeasSources of New Product Ideas
customer satisfaction gapsresearch & developmentcorporate and marketing strategiescompetitive analysis
New Product Planning ProcessNew Product Planning Process
idea generationscreening, evaluating, and business analysisdevelopment and testingdeveloping marketing strategytest marketingcommercialization
Factors Which Lead to More Meaningful New Products
risk-seeking encouragedfrequent rotation of product assignmentsproduct management structuresmall new product teamsmore evidence required in marketing plans
Example for DiscussionExample for Discussion
Pepsi Oneover $100 million invested in marketing in launch year0.8% share of $57.9 billion CSD market80 million casesgoal of 1.7% share
Pepsi One (continued)Pepsi One (continued)
target: 18-30 yr. old Coke “transitioners”“edgy” imagefirst positioning “Only one has it all.”second positioning “True cola taste. One calorie.”newest positioning “This One’s just right.”
Personal Video RecordersPersonal Video Recorders
brands TiVo, ReplayTVcutting-edge digital video technologyfewer than 200,000 soldTiVo’s stock down from $49 to $3high price $350 - $700, $10/monthweak positioning strategies
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