Basic Elements Environmental Analysis –Customer Analysis –Competitor Analysis –Channel Analysis –Company Internal Analysis –Public Policy Analysis

Basic Elements, continued Strategy –Pick targets –Do something to targeted segments –Do it with an integrated set of programs Marketing Programs -- the “4Ps” –Product –Promotion –Place –Price

Know the Customers Micro View –What motivates them? What are their needs? –How do they go through the decision process? Macro View –How big is the market? –How fast is it growing? –What segments exist (size and growth?)?

Know the Competitors Direct competitors –Future: how will they act? react? –Elements: goals, strategies, capabilities, assumptions Four other forces –Upstream; Downstream (that’s two) –New entrants –Substitutes

Know the Channels Who they are What value do they provide What they expect to get from you What the power structure is and where it’s going

Know Your Company Mission Culture Goals / objectives Strengths and Weaknesses –value for customers is the criterion

Know the Public Policy Environment What can you do / what can’t you do? –e.g. antitrust, Robinson-Patman, consumer protection, environmental laws –state and local laws / regulations What’s on the horizon? Is government assistance available?

Strategy and 4 Ps Recall that Marketing Strategy is: –Selection of target segments –Determination of desired change in segments –Creation of “architecture” of programs to effect desired change Elements of marketing programs -- 4 Ps Product Price Promotion Place (Distribution) Plus Partnerships

Product Bundle of attributes that meets needs Includes service -- sometimes minor aspect; sometimes it differentiates Includes packaging Should have a strategy for developing new products

Life Cycle Intro Growth Maturity Decline Annual Sales Time

Product Management Positioning –differentiate from competitors on meeting important needs –Communicate differentiation to prospects –Deliver on promises Manage other Ps -- implement positioning Management of product changes over life Maybe brand building

Promotion -- Communications Personal selling -- direct, person-to-person Advertising -- through paid-for medium Publicity -- third party reporting Sales Promotion -- short term incentives for action Direct Marketing – direct communication with individual customers Interactive/Internet Marketing

Communication Model Sender Receiver En- code De- code medium Feedback NOISE

Implications for Communication Effectiveness Must get through the noise and clutter Right message -- people respond to content and meaning Right media (communications methods) -- reaches audience and enhances message Easy to decode Get feedback other than sales -- too much information lost if marketer isn’t proactive

Some Key Promotion Points Message should be consistent with positioning Personal selling can use immediate feedback Advertising is good for awareness, building beliefs, building emotion Publicity is good for credibility Sales promotion gets action, but also sends a message

More Key Promotion Points Advertising is relatively cheap per contact Match ad media to message and audience Publicity is not cost-less Sales promotion is addictive, both for customers and for vendors Direct marketing gets immediate response, but also can create animosity Interactive/Internet marketing can include elements of all the other forms

Managing Channels Choose and manage channels to get consistent positioning to targeted end buyer Decide on right saturation level –exclusivity vs. ubiquity: consistent with positioning Clear roles, rewards, penalties minimize conflict if channels feel agreements are equitable Logistics can minimize costs; enhance value

Pricing Basics Max price = most that target customers will pay to receive offered value Min price = lowest price you can charge and still break even Set price level between max and min, consistent with positioning Consider price elasticity -- particularly when making price changes

Elasticity P Q Supply Demand E=%dif D / %dif P

Other Pricing Ideas Price points -- buyers have expected price levels Psychological aspects of price –perceived relationship between price & quality Penetration price vs. price skimming for new products Although Price is usually a factor, it is not always paramount