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Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
Managing Marketing Processes_Seminar 3
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Managing Marketing Processes_Seminar 3

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Third seminar for my Managing Marketing Processes course in the MGM program at the Stockholm School of Economics, http://www.hhs.se/EDUCATION/MSC/MSCGM/Pages/default.aspx

Third seminar for my Managing Marketing Processes course in the MGM program at the Stockholm School of Economics, http://www.hhs.se/EDUCATION/MSC/MSCGM/Pages/default.aspx

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  • Tieto Enator Vision: - The world's leading provider of high-value-added IT services in selected vertical markets Strategy: - Global leverage of vertical expertise - Solutions - Partnerships Mission: - Building the Information Society Values: - Customer benefit & Personal growth Banking & Insurance   IT services for banking, finance and insurance  Telecom & Media   IT services for telecom and media industry Healthcare & Welfare IT services for healthcare and welfare Government, Manufacturing & Retail IT services for central and local government, manufacturing, retail and logistics Forest & Energy   IT services for forest and energy industries Processing & Network   End-to-end processing and network services
  • Depends on purposes and context of analysis Which are the groups of firms that compete to supply a particular service or product? Market – defined by substitutability – Longer term the decisions, the more broadly the market should be considered since substitutability is higher in long term than in short term Precise boundaries are not greatly important
  • Three horizontal forces and two vertical forces Picture from Grant 2008 All competing to get a share of the profits
  • Process steps: Identify industry or segment boundaries. Identify players in each Force using case facts. Assess level of threat, power, intensity of each Force using case facts and course concepts. Make final assessment of whether it is an attractive industry in which to compete using results of 5 Forces analysis to support your view.
  • Threat of entry rather than actual entry may be sufficient to ensure that established firms constrain prices People express – american airlines Effectiveness of barriers to entry influence rate of profit - > industries protected by high entry barriers tend to earn above average rates of profit. Capital requirements and advertising appear to be particularly effective impediments to entry. Effectiveness depends on resources and capabilities that potential entrants possess But some entrants possess resources that allow them to surmount entry barriers – virgin with its brand name, google,
  • Concentration in the market – more concentrated –>less competition Diversity of competitors – more alike companies are in structures, strategies, and top mgt mindsets ->less competition Industries where strategic groups may be less competition pharmaceuticals, perfumes, restaurants, management consulting services High fixed costs to variable costs ratio – then more competition, airlines,
  • 38 L onger duration than product life cycle D emand growth – I ntroduction – sales small, early adapters, customers few G rowth stage – accelerating market penetration – product technology becomes more standardized, and prices fall, mass market M aturity – slowing growth - new demand gives way to replacement demand, market saturation D ecline – new industries challenge industry w ith technologically superior products Intro stage – not so much rivalry but profits not so high since heavy investments Growth phase that there is higher profitability Maturity – price competition but other forces degree of rivalry Creation and diffusion of knowledge – competition between alternative technologies and design Outcome of competition is dominant design KSFs differ dependingon phase in ILC
  • 42
  • Few buyers * Large buyers * Many companies sell the same product/service * Buyers are capable of backward vertical integration * It is possible to substitute the product/service * Buyer´s knowledge about the industry is great Can prices for bottlers vs auditing costs for company Buyer ’s information – ability to compare prices across sellers or qualities of product
  • Few suppliers * Large suppliers * No substitutes for the supplier ´ s products/services * The supplier is capable of forward vertical integration * The supplier´s products are differentiated, which make it expensive for the company to change supplier More concentrated No substitutes Not important customer Important input Differentiated product and/or high switching costs Threat of forward integration
  • Pharmaceuticals - 17 year patents! Potatoes- substitutes rice, noodles.. Tobacco – addiction How sensitive are they to price increases – gasoline… Price elasticity! Higher prices make them change! Or technology, social changes, new needs! The following factors can make the threats of substitutes larger: * Existing products/services become obsolete * Non differentiated products/services What can a company do to avoid substitution? T ravel agencies, newspapers – internet has provided substitutes for these M ore complex the product, the more difficult to discern performance differences – think strategic management consulting
  • The Industry Environment lies at the core of the Macro Environment. The Macro Environment impacts the firm through its effect on Industry Environment. 1. What environmental factors are affecting the organization? 2. Which of these are the most important at the present time? 3. Which of these are the most important in the next few years? PESTEL-analysis is a tool – not a key. PESTEL stands for P olitical, E conomic, S ocial, T echnical, E nvironment and L egislative. It is a strategic planning technique that provides a useful framework for analysing the environmental pressures on a team or an organisation A PESTEL Analysis can be particularly useful for groups who have become too inward-looking. They may be in danger of forgetting the power and effect of external pressures for change because they are focused on internal pressures. Help people make their assumptions explicit Important to look forward and at future impact of envtal factors which may be different from past impact. Usually will be combined effect of some of these separate factors that will be important rather than any single factor Plays role in focusing organizations on choices open to them and the constraints and risks involved in these choices. Political – threat of terrorism, Economic – unemployment levels Social – demographic changes Tech – development of new/subst products Environmental – antipollution Legal - antitrust
  • PESTEL-analysis is a tool – not a key.
  • Transcript

    • 1. Seminar 3 Managing Marketing Processes ---- Marketing Research Processes: Analyzing the Market and the Competition Robin Teigland Master of General Management Stockholm School of Economics September 6, 2013
    • 2. The Marketing Planning Process 2
    • 3. Seminar 3 Overview  Researching and Analyzing the Market  Guest Speaker, Peter Gavelin, SSE 3
    • 4. 4 Industry analysis
    • 5. 5 Industry definition  Technology (GSM)  Buyer (Needs driven)  Geography (US, Sweden) ““A group of firms producing products that areA group of firms producing products that are close substitutes for each otherclose substitutes for each other”” Porter
    • 6. 8 Porter’s five forces of competition ENTRANTS SUPPLIERS BUYERS SUBSTITUTES INDUSTRY COMPETITORS Rivalry among existing firms Threat of new entrants Threat of substitutes Bargaining power of suppliers Bargaining power of buyers http://www.youtube.com/watch? v=mYF2_FBCvXw&feature=channel Porter, 2008
    • 7. Threat of Potential Entrants Bargaining Power of Buyers Bargaining Power of Suppliers Threat of Substitutes Rivalry Between Competitors • Identify Competitors and intensity of Rivalry amongst competitors. • Briefly explain. •Identify Buyers and Bargaining Power of each. •Briefly explain. What business segment or industry is being considered: ___________________________________________ •Identify Suppliers and Bargaining Power of each. •Briefly explain. •Identify Substitutes and the threat level of each. •Briefly explain •Identify Potential Entrants and the threat level of each. •Briefly explain. Is this an attractive industry? Briefly explain, why or why not? Process steps: 1. Identify industry or segment boundaries. 2. Identify players in each Force using case facts. 3. Assess level of threat, power, intensity of each Force using case facts and course concepts. 4. Make final assessment of whether it is an attractive industry in which to compete using results of 5 Forces analysis to support your view. Industry Level Analysis: Porter’s Five Forces 9
    • 8. Group Assignment – Part A  How powerful are suppliers in this industry? What are the implications for the company’s business relationships?  How powerful are buyers in this industry? What are the implications for the company’s pricing strategy?  Can customers substitute other goods or services for the company’s offering?  What are the implications in terms of customer loyalty for this company?  Can the company or competitors easily exit the industry? Can more rivals easily enter the industry? What are the implications for the company if environmental conditions threaten profitability? 10
    • 9. Marketing Plan Teams 11 MGM MARKETING   FALL 2013   GROUPS PREFERENCES DRAGON 1. B2C (Fortune 500) Product   THE MOJITOS 1. B2C (Fortune 500) Service   PEAK PERFORMANCE 1. B2B SME Service   ORANGE 1. B2C SME (<250) Product (ASSESSIO)   OPERATION BRAHMA 1. B2B SME (<250) Product (VETROLIFE)   THE TRANSFORMERS 1. B2C SME Services (LINAS MATKASSE)  
    • 10. What is Marketing Research? Marketing research is the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 4-22
    • 11. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 4-23 Research Approaches  Observational and ethnographic  Focus group  Survey  Behavioral  Experimental
    • 12. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 4-24 Research Instruments  Questionnaires  Qualitative Measures  Technological Devices Information on Space
    • 13. Rising interest in ethnography “Ethnography or observational research has drawn significant attention recently, not only in the market research and marketing fields but in the mass media as well …all starts by doing something simple – keenly watching consumers, fact to face, knee to knee and listening, with ears, eyes, heart, brain and your intuitive sixth sense.” Procter & Gamble ex-CEO A.G. Lafley Tesco: http://www.youtube.com/watch?v=fGaVFRzTTP4
    • 14. Sampling Plan  Sampling unit: Who is to be surveyed?  Sample size: How many people should be surveyed?  Sampling procedure: How should the respondents be chosen? Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 4-26
    • 15. Forecasting and Demand Measurement  How can we measure market demand?  Potential market  Available market  Target market  Penetrated market Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 3-27
    • 16. A Vocabulary for Demand Measurement Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 3-28 Market Demand Market Forecast Market Potential Company Demand Company Sales Forecast Company Sales Potential
    • 17. Market Demand Functions Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 3-29
    • 18. Estimating Current Demand: Total Market Potential  Calculations  Multiple potential number of buyers by average quantity each purchases times price  Chain-ratio method Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 3-30
    • 19. Estimating Future Demand  Survey of Buyer Intentions  Composite of Sales Force Opinions  Expert Opinion  Past-sales Analysis  Market-test Method Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 3-31
    • 20. Group Assignment – Part B  How can this market be described broadly in terms of product, geography, and demographics?  If you are researching a consumer market,  approximately how many people, families, or households are in the market?  what, specifically, are the main influences on buying behavior in this consumer market?  If you are researching a business market,  approximately how many and what type of organizations are in the market for the product?  what characteristics such as turnover, number of employees, and other descriptions relevant to the product apply to customers in this business market?  What changes are currently affecting (or will soon affect) this consumer or business market?  What relationships and organizational considerations have the most influence on buying in this business market?  Prepare a 2-3 page ppt presentation summarizing your comments. Be prepared to share your presentation with the rest of the class. 40
    • 21. Marketing Plan Teams 41 MGM MARKETING   FALL 2013   GROUPS PREFERENCES DRAGON 1. B2C (Fortune 500) Product   THE MOJITOS 1. B2C (Fortune 500) Service   PEAK PERFORMANCE 1. B2B SME Service   ORANGE 1. B2C SME (<250) Product (ASSESSIO)   OPERATION BRAHMA 1. B2B SME (<250) Product (VETROLIFE)   THE TRANSFORMERS 1. B2C SME Services (LINAS MATKASSE)  

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