Managing Marketing Processes_Seminar 4

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Fourth 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
  • Wide overview of business, which includes information on staff, operations, location, marketing and financial aspects, as well as clearly outlined mission and goals. Often used as financial tool, business plan provides lenders with necessary details to determine if business is viable, financially sound and able to repay. Although business plans are most commonly known for assisting new businesses, they should be used throughout the life of the business. Not only does it help to develop competitive strategies, the business plan can determine if the business actual activity matches the forecasted plans.
  • Pick an individual product or service (existing, or one that you have invented), and write a comprehensive marketing plan profiling the competitive strategy that is needed in order to bring that product or service to the market.
  • From wikipedia VALS ("Values, Attitudes and Lifestyles") is a proprietary research methodology used for psychographic market segmentation . Market segmentation is designed to guide companies in tailoring their products and services to appeal to the people most likely to purchase them. VALS was developed in 1978 by social scientist and consumer futurist Arnold Mitchell and his colleagues at SRI International . It was immediately embraced by advertising agencies, and is currently offered as a product of SRI's consulting services division. VALS draws heavily on the work of Harvard sociologist David Riesman and psychologist Abraham Maslow. [1] Mitchell used statistics to identify attitudinal and demographic questions that helped categorize adult American consumers into one of nine lifestyle types: survivors (4%), sustainers (7%), belongers (35%), emulators (9%), achievers (22%), I-am-me (5%), experiential (7%), societally conscious (9%), and integrated (2%). The questions were weighted using data developed from a sample of 1,635 Americans and their partners, who responded to an SRI International survey in 1980. [2] The main dimensions of the VALS framework are primary motivation (the horizontal dimension) and resources (the vertical dimension). The vertical dimension segments people based on the degree to which they are innovative and have resources such as income, education, self-confidence, intelligence, leadership skills, and energy. The horizontal dimension represents primary motivations and includes three distinct types: Consumers driven by knowledge and principles are motivated primarily by ideals . These consumers include groups called Thinkers and Believers. Consumers driven by demonstrating success to their peers are motivated primarily by achievement . These consumers include groups referred to as Achievers and Strivers. Consumers driven by a desire for social or physical activity, variety, and risk taking are motivated primarily by self-expression . These consumers include the groups known as Experiencers and Makers. At the top of the rectangle are the Innovators, who have such high resources that they could have any of the three primary motivations. At the bottom of the rectangle are the Survivors, who live complacently and within their means without a strong primary motivation of the types listed above. The VALS Framework gives more details about each of the groups. Psychographic segmentation has been criticized by well-known public opinion analyst and social scientist Daniel Yankelovich, who says psychographics are "very weak" at predicting people's purchases, making it a "very poor" tool for corporate decision-makers. [3] VALS has also been criticized as too culturally specific for international use. [4]
  • Managing Marketing Processes_Seminar 4

    1. 1. Seminar 4 Managing Marketing Processes ---- Identifying Market Segments and Targets: Exploring Segmentation, Targeting, and Positioning Robin Teigland Master of General Management Stockholm School of Economics September 10, 2013
    2. 2. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 2
    3. 3. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-3 What is a Marketing Plan? A marketing plan is the central instrument for directing and coordinating the marketing effort. It operates at a strategic and tactical level. McDonald, M. (2006) Strategic Marketing Planning: Theory and Practice, The Marketing Review, 6, 375-418.
    4. 4. A marketing plan ≠ A business plan 4 Wide overview of business, eg mission, goals, strategy, staff, operations, location, marketing, financial Often used as financial tool to see if business viable Business Plan Marketing Plan Details actions to fulfill mission and goals. Identifies business price points, target markets, and competition and explains how business generates customers http://smallbusiness.chron.com/difference-between-marketing-business-plan-1682.html But they are interdependent!
    5. 5. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-5 Levels of a Marketing Plan  Strategic  Target marketing decisions  Value proposition  Analysis of marketing opportunities  Tactical  Product features  Promotion  Merchandising  Pricing  Sales channels  Service
    6. 6. Marketing Plan Contents Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2-6  Executive Summary  Table of Contents  Situation Analysis  Marketing Opportunity Assessment  Marketing Strategy  Financial and Marketing Goals and Budgets  Implementation and Controls  References
    7. 7. Marketing Plan Group Assignment  Assume role of a “marketing manager” and select an existing Swedish company within a specified industry  Develop a marketing plan for a product or service not currently offered by your company to be launched on the Swedish market  Completely new-to-the-world or can be new just to your company.  Write a comprehensive marketing plan profiling the competitive strategy to bring that product or service to the Swedish market. 7
    8. 8. 75–80%75–80% of new products being launched fail. Common reasons are:  The idea is good, but the market share isThe idea is good, but the market share is overratedoverrated..  The product itself is not developed enough.  The new product is badly positioned on the market, not well-known enough, is priced too high or has the ”wrong” packaging.  The management wants to see their favourite ideas become products against all market research.  Developing costs are higher than anticipated.  Competitors put up more of a fight than anticipated. GfK 2012
    9. 9. Marketing Plan Teams 9 MGM MARKETING - MARKETING PLAN FALL 2013   GROUPS PREFERENCES COMPANY DRAGON B2C (Fortune 500) Product H&M OPERATION BRAHMA  B2B SME (<250) Product VETROLIFE ORANGE B2C SME (<250) Product  ASSESSIO PEAK PERFORMANCE B2B SME Service TENANT & PARTNER THE MOJITOS B2C (Fortune 500) Service SPOTIFY THE TRANSFORMERS B2C SME Services LINAS MATKASSE
    10. 10. Presentations  September 13, 9:15-12:00 Initial Presentation  Max 10 minute presentation by each Team  5 minutes for discussion by Feedback Team  Upload Feedback1_Team#.doc to Courseweb and email to respective team by September 13, 17:00  September 26, 9:15-13:00 Final Presentation  Max 10 minute presentation by each Team  5 minutes for discussion by Feedback Team  Upload Feedback2_Team#.doc (3 page max Word doc) to Courseweb and email to your respective team by September 27, 17:00
    11. 11. Passport Gmid  Euromonitor International  Global Market Information Database  Market statistics on industries, countries and consumers (8 million +)  Market reports, company reports and country reports (18 000 +) Excellentresource!!
    12. 12. Final Report – October 4, 17:00  15 pages Plan + 3 pages Accounting Appendix in MS Word Doc  Not including title page, executive summary, table of contents, references or other appendices  Single-spaced, 12 Times Roman, numbered pages, 2.54 margins  All sources documented in proper manner  See www.plagiarism.org for more information on how to cite and document sources.  The marketing plan is evaluated according to three criteria:  Professional Written and Oral Communications  Critical Thinking Involving Analysis and Understanding of Theoretical Concepts and Frameworks that Build Your Argument  Creative and Original Content yet Feasible Plan  Integration with Using Accounting Reports  Separate 3 page Appendix evaluating financial consequences of proposed marketing plan: detailed month-to-month analysis of impact on company’s financial statements and quantitative evaluations of the proposed investment using capital budgeting techniques covered in “Using Accounting Reports”.  Each group member contributes to the assignment in fair proportion 12
    13. 13. Independent Research – Get Started Now  Start researching  Use library’s databases and library staff  Determine what data you need to collect and how  Databases, Qualtrics, focus groups, interviews, etc.  Contact any relevant people  Follow related topics on twitter: marketing, industry product, etc.  Blog, tweet, post, etc. about what you find  #SSEMGM2013  Share with one another! 13
    14. 14. Swedish Company and Industry Info  International: Orbis and Factiva  Swedish specific (In Swedish): Retriever and Affärsdata  Under Company Databases in library  Company information, e.g., annual reports for past 10 years  Similar in number of companies in database  Retriever is more user friendly than Affärsdata  Own sector classification vs SIC for Affärsdata  Can filter search better  Creates reports in PDF or Excel  Both have extensive news/article database  Affärsdata has better coverage, e.g., Veckans Affärer  Retriever has Svenska Dagbladet och Dagens Industri 14
    15. 15. 15
    16. 16. Friday Assignment – Marketing Plan  What do you think the marketing plan needs to accomplish in order to lead the company closer to its strategic goals?  Develop an initial idea for a product/service that you would like to launch for this company on the Swedish market. Motivate your choice of this product.  What do you need to do to develop an understanding of the markets and potential customers of your product? What market research do you need to conduct? What steps will you take to do this?  What are your initial ideas for STP for this product?  What are your next steps in order to plan the direction, objectives, and marketing support for the marketing plan? 16
    17. 17. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 17
    18. 18. Aqualisa  What is the Quartz value proposition to plumbers? To consumers?  Why is the Quartz shower not selling?  Aqualisa spent three years and €5.8 million developing the Quartz. Was the product worth the investment? Is Quartz a niche product or a mainstream product?  What should Harry Rawlinson do to generate sales momentum for the Quartz product? Should he change his marketing strategy to target consumers directly, target the DIY market, or target developers? Should he lower the price of the Quartz? Or should he do something different altogether? 18
    19. 19. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 19
    20. 20. http://en.wikipedia.org/wiki/Henry_Ford Ford’s Model T: Mass Market Approach Any customer can have a car painted any color that he wants so long as it is black. -Ford in his autobiography
    21. 21. CHP: 8&10-21 Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment
    22. 22. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-22 What is a Market Segment? A market segment consists of a group of customers who share a similar set of needs and wants.
    23. 23. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-23 Approaches to Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral 1. Descriptive: Start with consumer and then look at needs 2. Behavior & Attitudes: Start with product and then look at descriptives
    24. 24. Geographic Segmentation Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-24
    25. 25. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-25 Demographic Segmentation  Age and family size, lifecycle  Gender  Income  Occupation  Education  Religion  Race  Generation  Social class  Nationality, race and culture
    26. 26. Age and Lifecycle Stage Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-26
    27. 27. Gender and Income Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-27
    28. 28. Generational Influences Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-28
    29. 29. Nationality, Race and Culture Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-29
    30. 30. Psychographic Segmentation: the VALS (Values, Attitudes, Lifestyles) Framework Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-30 http://en.wikipedia.org/wiki/VALS Divide into different groups based on psychological/personality traits •Lifestyle • E.g., culture, sports, outdoor •Personality • E.g., compulsive, authoritarian
    31. 31. Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7-31 Approaches to Segmenting Consumer Markets Geographic Demographic Psychographic Behavioral 1. Descriptive: Start with consumer and then look at needs 2. Behavior & Attitudes: Start with product and then look at descriptives
    32. 32. 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
    33. 33. CHP: 8&10-33 Behavioral Segmentation Decision Roles  Initiator  Influencer  Decider  Buyer  User Behavioral Variables  Occasions  Benefits  User Status  Usage Rate  Buyer-readiness  Loyalty Status  Attitude
    34. 34. CHP: 8&10-34 Behavioral Segmentation Breakdown
    35. 35. GFE Associates: Analysis of Attitudinal Clusters in U.S. Television Households 35
    36. 36. CHP: 8&10-36 Segmenting for Business Markets Demographic segmentation – Industry, company size, location Operating variables – Technology, usage status, customer capabilities Purchasing approaches – Purchasing-function, power structure, nature of existing relationships, general purchase policies, purchasing criteria Situational factors – Urgency, specific application, size of order Personal characteristics – Buyer-seller similarity, attitudes toward risk, loyalty
    37. 37. CHP: 8&10-37 Size, purchasing power, profiles of segments can be measured. Segments can be effectively reached and served. Segments are large or profitable enough to serve. MeasurableMeasurable AccessibleAccessible SubstantialSubstantial DifferentialDifferential ActionableActionable Segments must respond differently to different marketing mix elements & programs. Effective programs can be designed to attract and serve the segments. Effective Segmentation Criteria
    38. 38. CHP: 8&10-38 Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment
    39. 39. CHP: 8&10-39 Market Targeting Evaluating Market Segments  Segment Size and Growth  Analyze current sales, growth rates and expected profitability for various segments.  Segment Structural Attractiveness  Consider effects of competitors, availability of substitute products and, the power of buyers & suppliers (five forces).  Company Objectives and Resources  Company skills & resources needed to succeed in that segment(s).  Look for Competitive Advantages.
    40. 40. CHP: 8&10-40 Segment 1Segment 1 Segment 2Segment 2 Segment 3Segment 3 Segment 1Segment 1 Segment 2Segment 2 Segment 3Segment 3 Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix Company Marketing Mix 1 Company Marketing Mix 1 Company Marketing Mix 2 Company Marketing Mix 2 Company Marketing Mix 3 Company Marketing Mix 3 MarketMarket A. Undifferentiated Marketing B. Differentiated Marketing C. Concentrated Marketing Market Targeting Market Coverage Strategies
    41. 41. Targeting Strategies 41 http://www.globalspec.com/reference/47105/203279/undifferentiated-concentrated-and- differentiated-targeting-strategies
    42. 42. CHP: 8&10-42 Patterns of Target Market Selection
    43. 43. CHP: 8&10-43 Segmentation, Targeting, and Positioning Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Segmentation 1. Identify bases for segmenting market 2. Develop segment profiles Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Targeting 3. Develop measure of segment attractiveness 4. Select target segments Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment Market Positioning 5. Develop positioning for target segments 6. Develop marketing mix for each segment
    44. 44. Diffusion of Innovation - Rogers 44http://en.wikipedia.org/wiki/File:DiffusionOfInnovation.png
    45. 45. Crossing the Chasm - Moore 45http://www.10xfactor.com/Bookstore_Ten_Best_Book5.html
    46. 46. Seminar 4 Overview  Marketing Plan Group Assignment  Aqualisa Quartz Case  STP 46

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