Presentation on theme: "MGMT14 marketing U U … mnm institute … makes sense."— Presentation transcript:
MGMT14 marketing U U … mnm institute … makes sense
1. Identify marketing opportunities 1.1.Analyse information on market and business needs to identify marketing opportunities 1.2.Research potential new markets and assess opportunities to enter, shape or influence the market in terms of likely contribution to the business 1.3.Explore entrepreneurial, innovative approaches and creative ideas for their potential business application, and develop into potential marketing opportunities
2. Investigate marketing opportunities 2.1.Identify and analyse opportunities in terms of their likely fit with organisational goals and capabilities 2.2.Evaluate each opportunity to determine its impact on current business and customer base 2.3.Use an assessment of external factors, costs, benefits, risks and opportunities to determine the financial viability of each marketing opportunity 2.4.Determine probable return on investment and potential competitors 2.5.Describe and rank marketing opportunities in terms of their viability and likely contribution to the business
3. Evaluate required changes to current operations 3.1.Identify and document changes needed to current operations to take advantage of viable marketing opportunities 3.2.Ensure organisational changes to service an increased or different customer base include provision for continued quality of service to existing customers 3.3.Estimate resource requirements for changed operations 3.4.Determine and communicate viability of making changes to current operations to key stakeholders 3.5.Document newly identified marketing opportunities and required changes
An Overview of Marketing
Marketing is the process of identifying the needs and demands of potential customers, in order to be able to provide them with their desired products/services. Marketing is not just selling, or advertising, or promotion. It is customer focused and requires you to organise your business in such a way that you can: Identify your potential customers Identify their needs and wants Provide products/services to suit these needs and wants Tell your customers about your business and what it offers Persuade them to buy your products/services Make them satisfied with their purchases Make a profit
WHO? … The prospects: customers and competitors WHAT?… The product/service WHERE? … The location of premises and markets WHY? … The customers buying motives and needs WHEN? … The right product/service at the right place, at the right time HOW? … Production, distribution and promotion HOW MUCH? … The price customers will pay Marketing involves knowing and understanding
The Marketing Process Involves: Gathering information Identifying key issues Developing strategies and actions
Essential Steps in Marketing Involves selecting a product/service for which there is a demand, identifying your distribution or sales outlets, selling your product/service ensuring that your customers are satisfied with their purchases.
RESEARCH MARKET … research the market for your product/service SEGMENT MARKET … determine the types of customers that exist in the market place ACTION MARKET … align your product/service to the target market using design, packaging etc. CALCULATE PRICE … calculate the price of your product/service based on the market tolerance and your required profit Marketing … process
PROMOTION STRATEGY … devise a promotion strategy – advertising, business cards, tags and labels, etc. DISTRIBUTION … decide how you will distribute your product/service SEEK FEEDBACK … seek customer and distribution feedback IMPLEMENT CHANGES … make any required changes in your product/service, quality, price and mix Marketing … process
Ethics and Legal
Marketings impact on individual consumers Consumers have many concerns about how well marketing systems serve their interests. Surveys usually show that consumers hold mixed or even slightly unfavourable attitudes toward marketing practices.
Marketings impact on individual consumers Consumer worries include: High prices Poor-quality Dangerous products Misleading advertising claims Deceptive practices Breaches of privacy High-pressure selling Planned obsolescence Poor service to disadvantaged consumers
Marketings Impact on Society Criticisms of Marketings Impact on Society False Wants and Too Much Materialism Cultural Pollution Too Much Political Power Too Few Social Goods
Marketings impact on other businesses There are three major problems involved: Acquisition of competitors Marketing practices that create barriers to entry Unfair competitive marketing practices
Private and public actions to regulate marketing The two major movements are consumerism and environmentalism There are movements that attempt too ensure that ethical business practices are adopted particularly at times when executive salaries seem to be disproportionately high Example: HIH, Ansett, One Tel or when fraud and misappropriation of company monies are uncovered Example: Enron
Consumerism Business firms have been the target of organised consumer movements since the 1960s. Why? Consumers have become better educated Products have become more complex and hazardous, Marketing organisations have raised consumers expectations as they seek to gain sustainable competitive advantage. Consumerism is an organised movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.
Traditional sellers rights 1. The right to introduce any product in any size and style, provided it is not hazardous to personal health or safety; or, if it is, to include proper warnings and controls. 2. The right to charge any price for the product, provided no discrimination exists among similar kinds of buyers. 3. The right to spend any amount to promote the product, provided it is not defined as unfair competition. 4. The right to use any product message, provided it is not misleading or dishonest in content or execution. 1. The right to use any buying incentive schemes, provided they are not unfair or misleading.
Traditional buyers rights Include: The right not to buy a product that is offered for sale. The right to expect the product to be safe. The right to expect the product to perform as claimed.
Adopting ethical marketing Ethical marketing is an approach by organisation's whereby they recognise that the task of marketing is to be both enlightened to societys views and ethical in the organisation's approach to society as a whole and to customers Most organisation's respond positively to consumerism and environmentalism in order to serve customers needs better By adopting these the company often takes a philosophical position that they instill in their employees Companies need to develop corporate marketing ethics policies as not all managers have fine moral sensitivity
Societal Marketing A principle of enlightened marketing that holds that an organisation should make marketing decisions by Considering consumers wants, The organisations requirements, Consumers long-run interests and Societys long-run interests
Legal Compliance in Marketing A legal compliance program is a system designed to identify, manage, and reduce the risk of breaking the law Australian Standards guide many businesses and is a useful guide to implementing a compliance program in marketing It draws together comments from courts, opinion of legal practitioners and best practice
Australian Standard AS Positive commitment to compliance at board and CEO level communicated to staff Positive promotion of compliance by all managers Continuous monitoring and improvement of all compliance procedures The integration of all compliance procedures into the organisations day to day operating procedures, systems and documents Adequate numbers of senior staff with high status and sufficient clout to take responsibility for compliance Ongoing education and training for all staff
Legal Education Legal education programs tend to cover four sets of relationships that need to be monitored: Relationships with competitors Relationships with suppliers Relationships with other parties such as patent licensees The relationship with the industry itself
Coverage of a legal compliance program Competition law Contract and consumer law Standards Product liability Marketing Communication Sales and after-sales finance Franchising Intellectual property
Brand … meaning and equity Levels of Brand Meaning Brand Equity Portfolios Attributes Value Benefits Personality Loyalty Preference Awareness
Market Segmentation Identifying your Target Market There are two types of broad markets your business is going to serve. 1. The industrial market: involves business-to-business marketing. 2. The consumer market: retailing typifies the activities of this market. Market segmentation is the process of dividing a market into distinguishable segments, in order to identify customer characteristics and prepare a customer profile. Types of Segmentation Industrial Markets The industrial market for example could be segmented by: automotive retail real estate and so on
Types of Segmentation Consumer Markets A market segment is a group of customers related by some common characteristic(s). Four different forms of market segmentation can be applied. Geographic segmentation Demographic segmentation Psychographic segmentation Operational variable segmentation
Geographic Segmentation Characteristics Region City Size Urban/Rural Climate Geographic Segmentation
Demographic Segmentation Demographic Segmentation Characteristics Sex Age Marital Status Occupation Education Family Size Religion Ethnic or Racial Background Income Levels
Psychographic Segmentation Characteristics Social Class Personality Type Lifestyle Psychographic Segmentation
Target marketing is a focused, planned approach for identifying and winning the customers whose needs you can best satisfy. When preparing to identify new market opportunity you should analyse the following factors: market share, market trends and development, new and emerging markets your current profitability and sales figures Identifying your Target Market Customer Profiling Having segmented the market and identifies your target market, you now need to profile the customers within the target market so that you are more readily able to satisfy their requirements.
Fundamental 2 types of customer profiles: Demographic Profile - focuses on Where individuals live Their age Their gender Their income Their level of internet usage Their preference for a particular distribution channel Behavioural Profile - focuses on what the customer is actually doing, and interpreting this behaviour Can effectively answer questions regarding their level of satisfaction and their motivation to buy. Customer Profile Types cont…
You should be attempting to answer the following questions: Who are my customers? What do they typically buy and how did they hear about it? How often do they buy How can my new product/service meet the customers needs? Profiling YOUR customer
Food for thought It is essential that you understand that customers perceive a product in their own terms and have different needs and reasons or motives for purchasing particular products services. Customer Behaviour and Buying Decisions
Individual Motives or Needs
Buying Motives When endeavouring to determine customer buying motives, it may be useful to focus on the following questions: What does the customer say they need and why? What do they see the new product/service doing that their old one did not? What specific function must the new product/service perform? How soon is the product/service needed? What budget has been allocated for this purpose?
Vision Mission Product / Service
Purpose / Benefit The whole idea behind developing a vision and mission statement is to set an organisation apart from others in its industry and give it its own special identity, business emphasis, and path for development. The Vision Statement Represents a Dream that is Beyond What you Think is Possible It represents the mountain top of where the company is headed. Visioning takes you out beyond the present. The Vision Statement Provides a Picture of What Our Business will Look Like in 5 to 10 Years from Now. It should have a time horizon of a decade or more.
Benefits of a Vision Seeing the benefits of vision can be a powerful motivation for individuals to reprioritise their activities and resources. A vision is beneficial for some of the following reasons: It empowers people and focuses their efforts It focuses energy for greater effectiveness It raises the standard of excellence It establishes meaning for today It gives hope for the future It brings unity to community It provides a sense of continuity It raises commitment level It brings positive change
Clearly stating the mission of the organisation both attracts or deters prospective employees and leaves no doubt in the customer's mind what the organisation stands for and offers. Three major mission elements; Vision statement – specifies what an organisation could achieve if it performs perfectly. Difficulties encountered when the vision is too far removed from the reality of individual sections of the organisation. Purpose statement- definition of the organisations business. Often a problem that the business is stated too narrowly. Value statement – underlying beliefs of the organisation - how it chooses to work as a human enterprise Benefits of a Mission
Purpose … value proposition The organisations purpose statement is a description of the nature and scope of the organisations activities – the definition of the organisations business. Issues in defining purpose - narrow versus broad purpose Purpose and relevant environment – relates to the total economic, social, political and competitive environment – internal and external.
Success Success comes from a combination of luck and good management. Good luck alone cannot be relied on. Successful organisations manage (scarce) resources to achieve the best results (return on our investments of money, skills, time etc.) Marketing is an effective way of applying resources where they will have the best return on investment.
Concept of a Business
The Concept of a Business We can define a business as an organised or managed activity aimed at exchanging value with its market(s) The business (eg supplier, seller, originator, etc) has a value proposition or product (eg goods, an idea, place, program, services, technology, etc) It wants to get something back for it (sell it) for payment (eg money, barter, goodwill, more business, etc) From a buyer (the market - buyer, customer and consumer).
PeopleProcessesDelivery Mechanisms Pricing & Cost Strategy Vision -Ensure Market Potential Leadership Technology Platform … external action required … platform to run … what will it be? … business or career? A Business Model
Basic It doesnt matter what type of organisation it is: Most organisations want to continue to be in business. They want customers to come back. It is not just about short-term objectives. If you want to make a profit, you need first to create customers.
Key business development questions
Questions STAGE 1 SITUATION ANALYSIS WHERE ARE WE NOW? How are we performing? What are our distinctive competitive (marketing) advantages? How effective is our Marketing Mix? Are we focusing on the best segments with the right type of customer? Are we using the most appropriate channels for communication and distribution? What uncontrollable event(s) or trend(s) can impact my business?
Questions STAGE 2 SET OBJECTIVES WHERE DO WE WANT TO GO? Business Mission? Business Objectives? Marketing Objectives – Business Development? Marketing Communication Objectives?
Questions STAGE 2 SET OBJECTIVES The SMART Test for Objectives Make sure your objectives are practical and measurable. Do they fit the following criteria? Specific (with numbers) Measurable (to monitor progress and confirm achievement) Actionable (can we do it?) Reasonable (realistically attainable) Timed (incorporate deadlines)
Questions STAGE 3 STRATEGY HOW DO WE GET THERE? Segmentation – How do we want to divide up the market(s)? Targeting – Which segments of the market do we wish to focus upon? Positioning – How do we want to be perceived in each different target segment?
Group key business development ideas /goals /objectives Vision -Ensure Market Potential Leadership Technology Platform by your idea / goal / objective value offer
Define key business operational planning / impact … analysis Outline policies and procedures by your idea / goal / objective function PeopleProcessesDelivery Mechanisms Pricing & Cost Strategy
Key Components of any Organisations Business A market: The people or organisations who will buy, rent or hire your product. Without a market (the source of your payment), you have no basis for exchange. A value proposition/product (goods and services, anything of value to offer): What you believe the market will want and will pay for. Operations: How you produce and/or offer your product for exchange. Management and organisation: How you manage your resources and activities in relation to producing your product. This includes management of the above operations as well as financial management.
Competitors A competitor is any business that offers the same or similar products and services to the same group of customers you are targeting. These are three types of competitors Direct Competitors Indirect Competitors Emerging Competitors
Analysing Competitors In order to analyse your competitors, you need information in the following areas: Location Products Offered Services Offered Markets Offered Points of Sales Pricing Structure Strengths Weaknesses
Competitive Advantage A competitive advantage is a feature or set of features, together with the associated benefits, which make your products/services meaningfully different from those of your competitors and valuable to the customer. To succeed against competitors your business must be: cost effective able to offer products/services which customers regard as preferable to the products/services offered by rival suppliers.
Some specific areas: depth of your product/service lines quality uniqueness your knowledge, skills and experience marketing approach and strategies image reputation level of customer service location price availability days ad hours of opening parking facilities Competitive advantage include……
Positioning Strategies In order to give your business a strategic advantage over your competitors, you need to formulate a strategy which positions your marketing mix in a more powerful position than those of your competitors. The aim of your positioning strategy is to ensure that your business is able to better its competitors in supplying particular products/services.
Black and White page ANSOFF 1 off 4 objectives Extending, expanding or otherwise changing an existing business (Ansoff) Potential for greater penetration of existing markets with existing products or services New products or services for existing markets New products or services for new markets
The Boston Consulting Group (BCG)
The Boston Consulting Group (BCG) History Global management consulting firm with offices in 41 countries. It is recognised as one of the most prestigious management consulting firms in the world. It is one of only three companies to appear in the top 15 of Fortune's "Best Companies to Work For" report for six consecutive years. In 1968, BCG created the "growth-share matrix", a simple chart to assist large corporations in deciding how to allocate cash among their business units.
Matrix "Stars""Question Marks" "Cash Cows""Dogs" high low high low relative market share market growth rate Divest the others Licqidate Select a few Invest if needed to create cash cow
Relative Position (Market Share) The percentage of the total market that is being serviced by your company. Measured either in revenue terms or unit volume terms. The higher your market share, the higher the proportion of the market you control. The Boston Matrix assumes that if you enjoy a high market share you will be making money
Business Growth Rate (Market Growth) Used as a measure of a market's attractiveness. Markets experiencing high growth are ones where the total market is expanding, meaning that its relatively easy for businesses to grow their profits, even if their market share remains stable. By contrast, competition in low growth markets is often bitter, and while you might have high market share now, it may be hard to retain that market share without aggressive discounting.
Generally, there are three types of positioning concepts: Functional positions Solve problems Provide benefits to customers Get favorable perception by investors and lenders Symbolic positions Self-image enhancement Ego identification Belongingness and social meaningfulness Affective fulfillment Experiential positions Provide sensory stimulation Provide cognitive stimulation
Perceptual Mapping Extensively used perceptual mapping for over thirty years now. Most companies use perceptual maps before they embark on to any new brand positioning activity. You can get the most complicated market information made simple with easy to understand graphic representations. Graphics speak much more than numbers or words. A perceptual map helps you get a comparative perspective with regards to competition, consumer behavior, market trends etc. The most commonly used two dimensional maps are highly effective with their visual impact. They are simple to read and help in quick strategic decision making.
What are perceptual maps? Perceptual mapping helps to communicate the relationship between competitors and the criteria used by your consumers while making purchase decisions. Perceptual maps, being simple graphic figures, can pave the path towards strategic thinking and trigger discussions. There are various statistical and mathematical methods used to produce perceptual maps, however, published research has found that multi- dimensional scaling provides the most reliable methodology.
How are perceptual maps created? Rating scales provide the data required for perceptual mapping. These rating scales will have the subjects of the map described on the basis of selected attributes. The raw data collected from a survey can be converted into a perceptual map through an assortment of statistical procedures. Multi-dimensional scaling will produce ideal points and competitor positions.
What functions can perceptual mapping help you in? If you want to test the waters before you launch a product or before you contemplate on a new brand positioning strategy, you can benefit from using a perceptual map. Here is a gist of the marketing functions that perceptual mapping serves: Brand positioning Market segmentation Concept evaluation Product positioning Positioning analysis Cluster analysis Trend analysis Competitor analysis Identifying new market opportunities Identifying potential customers
Perceptual … analysis of competing products Opportunity at mid Quality and Price
Airlines Positioning Map Best Good Service Best Affordable Best Onboard Comforts High (2 nd ) Entertainment Facilities Map shows consumer perceptions of various airlines on the dimensions of Affordable/ Onboard comforts and Entertainment/Services
Destination Positioning Map The destination brand positioning map Source: Morgan and Pritchard (2004: 67)
Michael Porters Generic Strategies
Positioning A firm positions itself by leveraging its strengths. Michael Porter has argued that a firm's strengths ultimately fall into one of two headings: Cost advantage Differentiation For an organisation to obtain a sustainable competitive advantage Michael Porter suggested that they should follow either one of three generic strategies. Strategy 1: Cost Leadership Strategy 2: Differentiation Strategy 3: Focus Strategy ( Niche strategies) Porters
Cost Leadership This strategy involves the organisation aiming to be the lowest cost producer within their industry. The orgainisation aims to drive cost down through all the elements of the production of the product from sourcing, to labour costs. The cost leader usually aims at a broad market, so sufficient sales can cover costs. Low cost producers include Easyjet airline, Ryan air, Asda and Walmart. Some organisation may aim to drive costs down but will not pass on these cost savings to their customers aiming for increased profits clearly because their brand can command a premium rate.
A COST LEADERSHIP STRATEGY is based on the concept that you can produce and market a good quality product or service at a lower cost than your competitors. These low costs should translate to profit margins that are higher than the industry average. Some of the conditions that should exist to support a cost leadership strategy include an on-going availability of operating capital, good process engineering skills, close management of labour, products designed for ease of manufacturing and low cost distribution.
Differentiation To be different, is what organisations strive for. Having a competitive advantage which allows the company and its products ranges to stand out is crucial for their success. Organisation aims to focus its effort on particular segments and charge for the added differentiated value. If we look at Brompton folding cycles their compact design differentiates them from other folding bike companies. New concepts which allow for differentiation can be patented, however patents have a certain life span and organisation always face the danger that their idea that gives the competitive advantage will be copied in one form or another.
A DIFFERENTIATION STRATEGY is one of creating a product or service that is perceived as being unique "throughout the industry". The emphasis can be on brand image, proprietary technology, special features, superior service, a strong distributor network or other aspects that might be specific to your industry. This uniqueness should also translate to profit margins that are higher than the industry average. In addition, some of the conditions that should exist to support a differentiation strategy include strong marketing abilities, effective product engineering, creative personnel, the ability to perform basic research and a good reputation.
Focus Strategy ( Niche strategies) Organisation focuses its effort on one particular segment and becomes well known for providing products/services within the segment. They form a competitive advantage for this niche market and either succeed by being a low cost producer or differentiator within that particular segment. Examples include Roll Royce and Bentley.
A FOCUS STRATEGY may be the most sophisticated of the generic strategies, in that it is a more 'intense' form of either the cost leadership or differentiation strategy. It is designed to address a "focused" segment of the marketplace, product form or cost management process and is usually employed when it isn't appropriate to attempt an 'across the board' application of cost leadership or differentiation. It is based on the concept of serving a particular target in such an exceptional manner, that others cannot compete. Usually this means addressing a substantially smaller market segment than others in the industry, but because of minimal competition, profit margins can be very high.
Positioning of your product / service … decision making
Stuck in the middle The danger some organisation face is that they try to do all three and become what is known as stuck in the middle. The have no clear business strategy, be all to all consumers, which adds to their running costs causing a fall in sales and market share. Stuck in the middle companies are usually subject to a takeover or merger.
Sales Forecasting Organisations need to look well ahead in order to plan their investments, launch new products, and decide what volume to bring to market, when to bring it, and when to withdraw products. As the future is never totally predictable, a sales forecast is really an educated guess.
Estimating Future Market Demand Sales forecast has three stages: Prepare a macroeconomic forecast Prepare an industry sales forecast Prepare the organisation sales forecast Sales forecasts can be based on information inputs, such as: Buyer intention. Current sales Past sales
Time Series Analysis Time series analysis is a sales forecast on the basis of past sales. Four components: Trends Seasonal or cyclical factors Erratic events Marketing responses
Performance Analysis Can include Product Quality Customer Satisfaction Level Quality of Service Provides a basis of checking the degree of success of the marketing mix. We can monitor and evaluate Performance targets Performance gaps Over performance
Performance Target Objective that the business (company) wants to achieve Should be analysed as soon as possible after targets have been set in motion Ongoing Analysis allows us to see if the marketing plan is working and to what extend
Analysing previous marketing activities Assessment of effectiveness of a marketing activity: Did sales increase or decrease after the activity? How many customers initiated contact with business in response to the activity? How many customers were prompted to purchase from the organisation as a result of the activity? Did customer inquiries increase? Did visits to the organisations website increase? Has brand awareness grown? Has traffic flow into the store increased? Did activity reach and communicate with its intended audience?
Otilia (2012) online resources Brand Planning (2012) McCleary, Geoff; Hill, Bryan Marketing in Black and White by Brian Monger (2011) Marketing a Practical Approach, Peter Rix,( 2011) Mc Graw Hil Slideshow creation MnM Institute Pty Ltd