Success Formulas Success Formulas ® Session Three Marketing Strategy Marketing Strategy
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Success FormulasSuccess Formulas®
Session Three
Marketing StrategyMarketing Strategy
Session Three Session Three AgendaAgenda
� Present Revised Executive Summaries� Market Life Cycle� Defining Your Market� Estimating Market Size� Adaptation Curve� Leadership Style� Sales Channel
Executive SummaryExecutive SummaryIn 2-or-3 Pages, highlight the following:
� Elevator Speech� Industry� Vision� Mission� Corporate Legal Description� Product/Service - What it does, how much it sells for,
proprietary position� Market - Who’s going to buy, what is the sales channel.� Operations� Management Team� Investment Required� Financial Proforma� Note: Develop each topic for five years
Your MarketYour Market
Working Definition
Products or Services that You can Sell to People in Your Geographic Distribution Area, or Where your Competition Could Sell Instead of You.
Market Life CycleMarket Life Cycle
Time
Interesting Fact
Of All “New” Products Brought to Market by Large US Firms…(Approximately)
� 70% are Modifications of an Old Product� 20% are Minor Modifications of an Old
Product� 10% are Major Innovations.
Where Does YOUR Business Fit In the
Competitive Landscape?
Market Life CycleMarket Life Cycle
Time
Market Life CycleMarket Life Cycle
� Innovation� Growth� Maturity� Decline
For Each of These Phases...For Each of These Phases...
InnovationInnovation
Description1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy1) Marketing 2) Engineering 3) Sales 4 Pricing 5) Promotion 6) Manufacturing 7) Investment8) Target the Customer
GrowthGrowth
Description1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy1) Marketing
2) Engineering
3) Sales
4 Pricing
5) Promotion
6) Manufacturing
7) Investment
8) Target Customer
MaturityMaturity
Description1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy1) Marketing
2) Engineering
3) Sales
4 Pricing
5) Promotion
6) Manufacturing
7) Investment
8) Target Customer
Decline PhaseDecline Phase
Description1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy1) Marketing
2) Engineering
3) Sales
4 Pricing
5) Promotion
6) Manufacturing
7) Investment
8) Target Customer
Revisit the question:
Where Does YOUR Business Fit In the Competitive Landscape?
Your Market Your Market
� Define Target Market� Estimate % of Market � Estimate Potential Usage Rate.� Estimate Market Share Factor.� Check Estimates Against Market Size of
Similar Products.� Growth Rate of the Market
How Big Is Your Market?
� Top-Down Approach� Bottom-Up Approach� Cross-Sectional Approach� Combination of All Three
Top-Down ApproachEstimates Total Company Demand… Total industry volume (from reliable sources, e.g. US Dept. of
Commerce)
Bought by a defined customer group (demographics)
In a defined geographical area (where selling?)
In a defined time period (when selling; e.g.. toys sell big at Christmas-time)
In a defined market environment
Resulting in a defined market share (% of overall market)
Reduced by the competitors (defined) share (% of overall market after the competitors share)
Adaptation Curve Adaptation Curve (Bass)(Bass)
Bottom-Up Approach
Estimates Total Demand..
Cross-Section Approach
Estimates Total Demand...
Combination Approach
Based on Estimates Derived From the Three Methods…
Leadership StyleLeadership Style
� Low Price Leader� Technology Leader� Quality Leader� Relationship Leader
Low Price LeaderLow Price Leader
Example: Wal-MartWal-MartPremise: � Investment in Infrastructure = Low Pricing� Track Buying Patterns & Inventory � Investment in Logistics & Transportation
Trade-Off: Lack of Expert Sales People & Aversion Away From Leading Edge Products
Technology LeaderTechnology Leader
Example: Sony Digital CamerasSony Digital CamerasPremise:� Investment in Technology= Product Obsolete� Keep the Competition Running to Catch Up
Trade-Off: Can’t be the Low Price Leader and Can not Build Expensive Relationships With Customers.
Relationship LeaderRelationship Leader
Example: Lexus AutomobilesLexus AutomobilesPremise:� Extreme Customer Service = Loyalty
Trade-Off: Not the Low price Leader and Not the Technology Leader
Quality LeaderQuality Leader
Example: Porsche Design GroupPorsche Design GroupPremise:� Precision Design/Production = High Performance
Trade-Off: Usually Not the Low Price Leader
Which Will Your Business Be?Which Will Your Business Be?
� Low Price Leader?� Technology Leader?� Quality Leader?� Relationship Leader?
Sales ChannelSales Channel
WHO Will Sell Your Product?� Executive Sales: Company Executives Sell
� Direct Sales: Hired Sales People Sell
� Stocking Distributors: Third Parties Buy and Resell it at a Mark-Up
� Commissioned Reps: Third Parties Take Orders and Earn Commission When They Sell
Sales Channels
M ethod Success Cost ControlExecutive Sales Highest Highest Highest
Direct Sales Good High High Stocking Distributor Fair M odest M odest Commissioned Reps Poor Low Poor
Homework AssignmentHomework Assignment
� Update Executive Summary to Include Marketing & Sales Information
� Write Chapter on Marketing & Sales
Review Session Four: Technical Strategy
� Present Revised Executive Summaries� Product/Service Strategy� Offensive & Defensive Strategy� Intellectual Property� Make/Buy Decision� Group Discussion: What Will Your
Technology Strategy Be?
Success FormulasSuccess Formulas®
Session Three
Marketing StrategyMarketing Strategy
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