“Marketing is Managing profitable customer relationships.” “Fulfilling customers wants and desires in order to make a profit” “The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return”
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“Marketing is Managing profitable customer relationships.”
“Fulfilling customers wants and desires in order to make a profit”
“The process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return”
New Definition of Marketing (est. in 2007) Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
(American Marketing Association)
Product/Service
Producer/Deliverer
Retailer
Distributor
Wholesaler Customer
RESEARCH
Attitude Behavior
Characteristics
Necessity/Desire
Existing Concept
MARKETING OUTLINE
MARKETING
AS A FIELD
OF STUDY
OPERATIONS
CONSUMER BEHAVIOUR
4Ps
Anticipating customer need
Developing and Selling Product Concept Creating/anticipating demand Fulfilling demand
Making and delivering a product to the customer
MARKETING PROCESS
Understand the marketplace, customer needs and wants
Design a Marketing Strategy
Construct a marketing program
Build Profitable relationships with Customers
Capture value from customers in return
Marketing
Management
Orientations
Production Concept
Product Concept
The idea that consumers will favour products that are available and highly affordable
The idea that consumers will favour products that offer the most in quality, performance and features and that organizations should therefore devote all its efforts to make continuous product improvements
Selling Concept
Marketing Concept
The idea that consumers will not buy enough of the firm’s products unless it undertakes a large scale selling and promotion effort
The marketing management concept holds that achei8ving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do.
Marketing
Management
Orientations
Marketing
Management
Orientations
A principle of enlightened marketing that holds that a company should make good marketing decisions by considering consumers wants, the company’s requirements, consumer’s long term interests and society’s long run interests
Societal Marketing Concept
Psychological Factors
PerceptionPerception LearningLearning
Beliefs &AttitudesBeliefs &Attitudes
MotivationMotivation
Model of Consumer Behavior
BuyingDecision process
Problem recognitionInformation searchEvaluation of alternativesPurchase decisionPostpurchase behavior
Steps Between Evaluation of Alternatives and a Purchase Decision
EvaluationEvaluationofof
alternativesalternatives
Purchasedecision
Unanticipatedsituational
factors
Attitudeof others
Purchaseintention
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Decision Heuristics and Biases
Rules of thumb or mental shortcuts in the decision process
Availability Heuristic: Consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to minds
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Decision Heuristics and Biases
Representativeness Heuristic: Consumers base their predictions on how representative or similar the outcome is to other examples
Anchoring and Adjustment Heuristic: Consumers arrive at an initial judgment and them make adjustments of that first impression based on additional information.
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mental Accounting
The manner by which consumers code, categorize and evaluate financial outcomes of choices
Prospect Theory
“Consumers frame decision alternatives in terms of gains and losses according to a value function. Consumers are generally loss averse. They tend to overweight very low probabilities and underweight very high probabilities”
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mental Accounting
The manner by which consumers code, categorize and evaluate financial outcomes of choices
Prospect Theory
“Consumers frame decision alternatives in terms of gains and losses according to a value function. Consumers are generally loss averse. They tend to overweight very low probabilities and underweight very high probabilities”
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mental Accounting
Consumers tend to segregate gains
Consumers tend to integrate losses
Consumers tend to integrate smaller losses with larger gains. “Cancellation Principle”
Consumers tend to segregate small gains from large losses. “Silver-lining Principle”
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mapping the Customer’s Consumption System/Customer Activity Cycle/Customer Scenario
How are consumers thinking?
Introspective method
Retrospective method
Prospective method
Prescriptive method
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Biases in Decision Making
Plugging-in
Frame Blindness
Lack of frame control
Overconfidence in judgment
Shortsighted shortcuts
Shooting form the hip
Group failure
Pg 202 Marketing Management Jay Russo and Kevin Schoemaker
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Biases in Decision Making by Marketing Managers
Fooling yourself about feedback
Not keeping track
Failure to audit your decision process
Problem RecognitionProblem Recognition
General Need DescriptionGeneral Need Description
Product SpecificationProduct Specification
Supplier SearchSupplier Search
Proposal SolicitationProposal Solicitation
Supplier SelectionSupplier Selection
Order Routine SpecificationOrder Routine Specification
(list price, discount, deals, both end-user and channel)
The Marketing Mix
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
Preferences Segments
Homogeneous preferences
Diffused preferences
Clustered preferencesSEGMENT MARKETING
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
Customers with distinct set of needs
Pay premium to a firm that best satisfies their needs
Unlikely to attract other competitors
Nicher gains certain economies through specialization
Niche has size, profit and growth potential
Fairly small and attract few competitors
NICHE
MARKETING
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
LOCAL MARKETING
CUSTOMERIZATION
Customized Marketing
One-to-one Marketing
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
GEOGRAPHIC
VARIABLES
Geographic region
City size
Density
Climate
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
DEMOGRAPHIC
VARIABLES
Demographic age
Family size
Family Life cycle
Gender
Income
Occupation
Education
Religion
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
DEMOGRAPHIC
VARIABLES
Race
Generation
Nationality
Social Class
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
DEMOGRAPHIC
VARIABLES
Race
Generation
Nationality
Social Class
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
PRIZM (Potential Rating Index by Zip Markets)
Combines Geographic and Psychographic segmentation variables together
Examples
Blue Blood Estates, Winner’s Circle, Hometown Retired, Latino America, Shotguns and Pickups, Black Country Folk, Young Digerati, Beltway Boomers, The Cosmopolitans, Old Milltowns
Innovators – Successful, Sophisticated, Active, “Take Charge” people, with high self esteem. Purchases often reflect cultivated tastes for relatively upscale, niche-oriented products and services
Thinkers – Mature, satisfied and reflective people who are motivated by ideals and value order, knowledge and responsibility. Favour durability, functionality and value in products
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
PSYCHOGRAPHIC
VARIABLES
Groups with Higher Resources
Achievers – successful goal-oriented people who focus on career and family. Favour premium products that demonstrate success to their peers
Experiencers – Young, enthusiastic, impulsive people who seek variety and excitement. Spend comparatively high proportion of their income on fashion, entertainment and socializing
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
PSYCHOGRAPHIC
VARIABLES
Groups with Lower Resources
Believers – Conservative, conventional and traditional people with concrete beliefs. Favour familiar products and are loyal to established brands
Strivers – Trendy and fun-loving people who are resource constrained. Favour stylish products that emulate the purchases of those with greater material wealth
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
PSYCHOGRAPHIC
VARIABLES
Groups with Lower Resources
Makers – Practical down-to-earth, self-sufficient people who like to work with their hands. Favour products with a practical or functional purpose.
Survivors – Elderly, passive people who are concerned about change. Loyal to their favourite brands
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
BEHAVIORAL
VARIABLES
Behavioral Occasions
(Regular Occasion, Special Occasion)
Benefits
(Quality, Service, Economy, Speed)
User Status
(Non-user, Ex-user, Potential User, First time user, Regular User)
Usage Rate
(Light user, Medium user, Heavy user)
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
BEHAVIORAL
VARIABLES
Loyalty Status
(None, Medium, Strong, Absolute)
Readiness Stage
(Unaware, Aware, Informed, Interested, Desirous, Intending to buy)
Measures the strength of Psychological Commitment between brands and consumers and their willingness and openness to change
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
CONVERSION
MODEL - Users
COMMITTMENT
LOW
HIGH
CONVERTIBLE
SHALLOW
AVERAGE
ENTRENCHED
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
CONVERSION
MODEL –
Nonusers
BALANCE OF DISPOSITION
LOW
HIGH
AVAILABLE
AMBIVALENT
WEAKLY UNAVAILABLE
STRONGLY UNAVAILABLE
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
BUSINESS MARKETS
SEGMENTATION
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
STEP S IN
SEGMENTATION
PROCESS
1. Needs Based Segmentation
2. Segment Identification
3. Segment Attractiveness
4. Segment Profitability
5. Segment Positioning – “Value Proposition”
6. Segment “Acid Test” - “Segment Story Board”
7. Marketing-Mix Strategy
BRAND EQUITY Executive Summary
Table of Contents
Situation Analysis
Marketing Strategy
Financial Projections
Implementation Controls
BRAND EQUITY
BRANDING
Benefits of Branding to Companies
• Simplify Product Handling or tracing
• Organize inventory and accounting records
• Legal Protection (Intellectual Property)
• Brand Name – Registered Trademarks
• Manufacturing Process – Patents
• Packaging – Copyrights and designs
• Brand Loyalty
• Predictability of Demand
• Entry barriers for competition
BRANDING
Benefits of Branding Marketing Advantages• Improved Perceptions of Product Performance
• Greater Loyalty
• Less Vulnerability to Competitive Marketing Actions
• Larger Margins
• More Inelastic Consumer Response to Price Increases
• More Elastic Consumer Response to Price Decreases
BRANDING
Benefits of Branding Marketing Advantages• Greater Trade Cooperation and Support
• Increased Marketing Communication Effectiveness
• Possible Licensing Opportunities
• Additional Brand Extension Opportunities
BRANDING
Benefits of Branding Marketing Advantages• Greater Trade Cooperation and Support
• Increased Marketing Communication Effectiveness
• Possible Licensing Opportunities
• Additional Brand Extension Opportunities
Product
Core Benefit
Actual Product
Brand Name
Quality Level
Packaging
Features
Design
Augmented Product
Delivery & Credit
InstallationWarranty
After sales service
ProductPRODUCT LINE
A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets or fall within given price ranges
PRODUCT MIX
The set of all product lines and items that a particular seller offers for sale
ProductBRAND EQUITY
The positive differential effect that knowing the brand name has on customer response to the product or service
BRAND POSITIONING
- Product Attributes
- Benefits
- Beliefs and Values
ProductBRAND NAME SELECTION
- Selection
- Protection
BRAND SPONSORSHIP
- Manufacturer’s brand
- Private brand
- Licensing
- Co-branding
ProductBRAND DEVELOPMENT
- Line Extension
- Brand Extension
- Multibrands
- New brands
ProductLine Extension: Different versions of the same product
Brand Extension: New products are added under the name of an existing brand
Multibrands: Different brands of the same product.
Price
PRICING APPROACHES
Cost based Pricing
Cost Plus pricing – Add standard profit (mark-up) to the cost of the product
Break-Even Analysis and Target Profit Pricing
Value-based pricing
Setting price based on buyer’s perceptions of value rather than on the seller’s cost
Price
NEW-PRODUCT PRICING STRATEGIES
Market Skimming Pricing
Selling a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price
- Fewer but more profitable sales
Market-Penetration Pricing
Setting a low price for a new product in order to attract large number of buyers and a large market share
Principles of Marketing
4 P’s of Marketing
Price
PRODUCT MIX PRICING STRATEGIES
Product Line Pricing
Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features and competitor’s prices
Optional-Product Pricing
The pricing of optional or accessory products along with a main product
Price
PRODUCT MIX PRICING STRATEGIES
Captive Product Pricing
Setting a price for products that must be used along with a main product e.g blades for razors, cartridges for printers
By-Product Pricing
Setting a price for by products in order to make the main product’s price more competitive
Price
PRICE ADJUSTMENT STRATEGIES
Discount
Allowance
Segmented Pricing
Psychological
Geographical
Promotional
International
Place
Distribution or Supply Chain Management
Marketing Channel or Distribution Channel:
Producer
Consumer
Producer
Retailer
Consumer Consumer
Retailer
Wholesaler
Producer
Direct MarketingChannel
InDirect Marketing Channel
InDirect Marketing Channel
Promotion
• Advertising
• Sales Promotion
• Personal Selling
• Public Relations
• Direct Marketing
Customer Value and Loyalty
“A deeply held commitment to re-buy or re-patronize a preferred product or service in the future despite situational influences and marketing efforts having the potential to cause switching behavior” - Oliver
Loyalty
Value Proposition
Consists of the whole cluster of benefits a company promises to deliver to its customers
CustomerSatisfaction - Elements of company performance
• Information Suppliers – Gartner, AC Nielsen, Biz360
• Customer feed back
External
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE• Trend – A direction or sequence of events that has some momentum and durability
• Fad – A sequence of events that is unpredictable, short lived and without social, political and economic significance
• Mega trends – large social, economic, political and technological changes that are slow to form but influence us for sometime
Needs and Trends
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE• Political - Legal
• Economic
• Technological
• Social & Cultural
Major Factors These factors have an impact on all environments
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE• Political - Legal
• Economic
• Technological
• Social & Cultural
Major Factors
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE • Demographic Environment
• Population growth, Age Mix, Household patterns
• Economic Environment
• Geographical shifts in population, Income redistribution, Credit culture
• Social & Cultural Environment
Application of Factors on Environments
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE • Social & Cultural Environment
• Views of themselves
• Views of others
• Views of organizations
• Views of society
• Views of nature
• Views of the universe
Application of Factors on Environments
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE • Social & Cultural Environment
- Core Values
- Secondary Beliefs
Application of Factors on Environments
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE • Natural Environment
- Consumption of vital resources
- Oil, Water, Metals, Nuclear
Materials
- Global Warming, Weather
patterns
Application of Factors on Environments
MARKET
INTELLIGENCE
Market Scanning
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Define the problem and research objectives
Develop the research plan
Collect the Information
Analyze the information
Present the findings
Make the decision
Process
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Step - 1
What is the problem?
Research objectives?
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Step – 2
Research Plan
DATA SOURCES
Primary Data
Secondary Data
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Step – 2
Research Plan
RESEARCH APPROACHES
Observational Research
Focus Group Research
Survey Research
Behavioral Data
Experimental Research
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Step – 2
Research Plan
RESEARCH INSTRUMENTS
Questionnaires
Focus Groups
Qualitative Measures
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Step – 2
Research Plan
RESEARCH INSTRUMENTS
Qualitative Measures
Shadowing
Behaviour mapping
Consumer journey
Camera journals
Extreme user interviews
Unfocus groups
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Step – 2
Research Plan
Analyze the InformationAdvanced Statistical Techniques
Frequencies
Crosstabs
Factor Analysis
Cluster Analysis
Discriminant Analysis
Regression Analysis
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Step – 2
Research Plan
Present the findings
Make the decision
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Measuring Marketing Productivity
Sales Analysis
Sales variance analysis
Micro-sales analysis
Market Share
Overall Market Share
Served Market Share
Relative Market Share
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Measuring Marketing Productivity
Market Share
Overall Market Share
Served Market Share
Relative Market Share
Company’s sales expressed as a percentage of total market sales
Is all the buyers who are willing and able to buy a company’s product
A market share that is in comparison with the market leader
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Measuring Marketing Productivity
Market Share
Overall Market Share
Overall Market Share = Customer Penetration
X
Customer Loyalty
X
Customer Selectivity
X
Price Selectivity
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Measuring Marketing Productivity
Customer Penetration
Customer Loyalty
Customer Selectivity
Price Selectivity
% of all customers who buy from the company
Purchases made by customers as a % of total purchases made from all suppliers
Size of the average customer purchase from the company expressed as a % of the average customer purchase from an average company
Average price charged by the company as a percentage of the average price charged by all companies
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Measuring Marketing Productivity
Sales Analysis
Sales variance analysis
Micro-sales analysis
Expense to Sales Analysis
Financial Analysis
DuPont Analysis
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Measuring Marketing Productivity
Profitability Analysis
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Forecasting and Demand Measurement
Measures of Market Demand
Potential Market: Is the set of consumers who profess a sufficient level of interest in a market offer. They must have enough income and have access to the product offer.
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Forecasting and Demand Measurement
Measures of Market Demand
Available Market: Is the set of consumers who have interest, income, access and qualifications for the particular market offer.
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Forecasting and Demand Measurement
Measures of Market Demand
Target Market: Is the part of the qualified market that the company decides to pursue.
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Forecasting and Demand Measurement
Measures of Market Demand
Penetrated Market: The set of consumers who are buying the company’s product.
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Forecasting and Demand Measurement
Market Demand
Is the total volume that would be bought by a defined consumer group, in a defined geographical area in a defined time period, in a defined marketing environment under a defined marketing program
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Forecasting and Demand Measurement
Estimating Future Demand
Past Data Analysis
Time-Series analysis
Exponential Smoothing
Statistical Demand Analysis
Econometric Analysis
MARKET
INTELLIGENCE
MARKETING
RESEARCH
Forecasting and Demand Measurement
Estimating Future Demand
Survey of buyer’s intentions
Composite of sales force opinion
Expert Opinion
Market Test Method
5 Factor’s of Production
Porter’s Value Chain
Porter’s 5 Forces model
Analysis of Capabilities
SWOT - TOWS
Analysis of Capabilities
Porter’s Value Chain
SWOT - TOWS
Analysis of Capabilities
Porter’s 5 Forces Model
New Entrants
SuppliersIndustry Competition
Substitutes
CustomersSWOT - TOWS
Analysis of Capabilities
AirTel
SWOT - TOWS
Strengths Bharti Airtel has more than 65 million customers (July 2008). It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers.
Other stakeholders in Bharti Airtel include Sony-Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world.
The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base.
Analysis of Capabilities
AirTel
SWOT - TOWS
Weaknesses
SBU technical as well as organizational capabilities are outsourced.
As opposed to competitors (Hutshison Essar), Key Infrastructure (Communication Towers) are not owned by AirTel.
Lack of any resolve to develop future markets once the Indian market has become mature.
Rules of thumb or mental shortcuts in the decision process
Availability Heuristic: Consumers base their predictions on the quickness and ease with which a particular example of an outcome comes to minds
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Decision Heuristics and Biases
Representativeness Heuristic: Consumers base their predictions on how representative or similar the outcome is to other examples
Anchoring and Adjustment Heuristic: Consumers arrive at an initial judgment and them make adjustments of that first impression based on additional information.
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mental Accounting
The manner by which consumers code, categorize and evaluate financial outcomes of choices
Prospect Theory
“Consumers frame decision alternatives in terms of gains and losses according to a value function. Consumers are generally loss averse. They tend to overweight very low probabilities and underweight very high probabilities”
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mental Accounting
The manner by which consumers code, categorize and evaluate financial outcomes of choices
Prospect Theory
“Consumers frame decision alternatives in terms of gains and losses according to a value function. Consumers are generally loss averse. They tend to overweight very low probabilities and underweight very high probabilities”
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mental Accounting
Consumers tend to segregate gains
Consumers tend to integrate losses
Consumers tend to integrate smaller losses with larger gains. “Cancellation Principle”
Consumers tend to segregate small gains from large losses. “Silver-lining Principle”
MARKET
INTELLIGENCE
CONSUMER
BEHAVIOUR
Mapping the Customer’s Consumption System/Customer Activity Cycle/Customer Scenario
How are consumers thinking?
Introspective method
Retrospective method
Prospective method
Prescriptive method
MARKET
INTELLIGENCE
COMPETITION 1 Against whom are we competing?
2 What strengths and weaknesses do they possess?
3 What are their objectives?
4 What strategies are they pursuing and how successful are they?
5 How are they likely to behave and, in particular, how are they likely to react to offensive moves?
MARKET
INTELLIGENCE
COMPETITION
Levels of Competition
1 Competition consists only of those companies offering a similar product or service to the target market, utilizing a similar technology, and exhibiting similar degrees of vertical integration. Thus, Nestlé (which makes Nescafé) sees General Foods, with its Maxwell House brand, as a similar competitor in the instant coffee market, while Penguin sees its direct competitors in the chocolate snack bar market to be Kit-Kat’s six pack, Twix and Club.2 Competition consists of all companies operating in the same product or service category. Penguin’s indirect competitors, for example, consist of crisps and ice-creams.3 Competition consists of all companies manufacturing or supplying products that deliver the same service. Thus, long-distance coach operators compete not just against each other, but also against railways, cars, planes and motorcycles.4 Competition consists of all companies competing for the same spending power. An example of this is the American motorcycle manufacturer, Harley Davidson, which does not necessarily see itself as competing directly with other motorcycle manufacturers. Instead, for many buyers it is a choice between a Harley Davidson motorcycle and a major consumer durable such as a conservatory or a boat
Market and performance-related factors ➡ Slow/poor growth ➡ An overdependence on one market ➡ An overdependence on one or a small number of customers ➡ Strength in declining market sectors ➡ Little presence in growing and high margin markets ➡ Low market share ➡ Distribution weaknesses ➡Weak segmentation of the market ➡ Poor/confused and/or unsustainable positioning ➡ A weak reputation and/or poorly defined image.
MARKET
INTELLIGENCE
COMPETITION
Identifying Competitor Weaknesses
Product-related factors ➡ Outdated products and a failure to innovate ➡ Product weaknesses ➡Weak or non-existent selling propositions.
Managerial factors ➡ A short-term orientation ➡ The poor management of staff ➡ The failure to focus upon what is important ➡Managerial predictability and the adherance to well-tried formulae ➡ Product or service obsolescence/weaknesses ➡ An over- and ill-justified confidence ➡Managerial arrogance and a belief that the organization has an
inalienable right to a place in the market ➡ Competitive arrogance, competitive myopia and competitive
sclerosis ➡ Bureaucratic structures ➡ A fiscal year short-term fixation
MARKET
INTELLIGENCE
COMPETITION
Competitive Intelligence System
MARKET
INTELLIGENCE
SEGMETATION, TARGETTING & POSITIONING
Stages of STP
MARKET
INTELLIGENCE
IDENTIFYING
MARKET
SEGMENTS
AND TARGETS
PSYCHOGRAPHIC
VARIABLES
VALS Framework
MARKET
INTELLIGENCE
SEGMETATION, TARGETTING & POSITIONING
Segmentation Psychographic
Young & Rubicam, 4Cs (a Cross-CulturalConsumer Characterization) for UK
1 The constrained(i) the resigned poor(ii) the struggling poor.
2 The middle majority(i) mainstreamers(ii) aspirers(iii) succeeders.
3 The innovators(i) transitionals(ii) reformers.
MARKET
INTELLIGENCE
Source: The Times, 1 February 1997, p. 17.SEGMETATION, TARGETTING & POSITIONING
1 Confused positioning, where buyers are unsure of what the organization stands for
2 Over-positioning, where consumers perceive the organization’s products as being expensive and fail to recognize the full breadth and value of the range
3 Under-positioning, where the message is simply too vague and consumers have little real idea of what the organization stands for or how it differs from the competition.
MARKET
INTELLIGENCE
GENERIC STRATEGIES
BCG based strategies
1. BUILD
2. HOLD
3. HARVEST
4. DIVEST
MARKET
INTELLIGENCE
GENERIC STRATEGIES
GE MATRIX based strategies
MARKET
INTELLIGENCE
GENERIC STRATEGIES
Shell Matrix
MARKET
INTELLIGENCE
GENERIC STRATEGIES
PORTER’S STRATEGIES
MARKET
INTELLIGENCE
GENERIC STRATEGIES
PORTER’S STRATEGIES
MARKET
INTELLIGENCE
GENERIC STRATEGIES
POSITION BASED STRATEGIES
MARKET
INTELLIGENCE
SCORPIO TECHNIQUE
MARKET
INTELLIGENCE
SCORPIO TECHNIQUE
Industry or Market
Industry or Technology thinking
Market or Customer Thinking
MARKET
INTELLIGENCE
SCORPIO TECHNIQUE
Industry or Market-Importance
● It defines your real competition● It defines your customers ’ needs● It defines your potential for growth● It defines your strategic threats and opportunities● It can kill you early if you don’t get it right .