Intro to mktg_itm_sept-2012_session-2


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Introduction to Marketing - Session 2 at ITM, Mumbai. Includes:
 What is good marketing research?
 Marketing research Questions
 Types of information
 Types of market research
 Market research summary
 Test Market
 Define Target Audience
 Estimate market potential
 Analyze market share/share of customer
 Track competitors
 Identify market characteristics & trends
 Analyze sales data
 Sales forecasting: Existing / new products
• Product Strategy
• Product Essentials
• Features and Benefits
• Classifying products
• Product line and mix
• Branding
• Packaging and LabellingTrademarks
Positioning and Brand Building
• The Art of Positioning is Marketing
• Positioning the game of Mind and Heart
• Brand is a Promise
• Brand is owned by Customers
• Understanding Brand Drivers
• Brand Attributes
• Brand Architecture
• The Positioning Template

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  • Convenience goods – consumers use minimal effort for frequently purchased low cost items Shopping goods - consumers make a considerable effort to evaluate Consumers make product comparison(s) They seek information before purchase They are not impulsive Moderate substitutions are made Product’s last a considerable time Monetary & social costs may be high
  • Is the product life cycle concept useful? Why or why not? The product life cycle is concerned with the sales history of a product or product class. The concept holds that a product’s sales change over time in a predictable way and that products go through a series of five distinct stages: introduction, growth, shakeout, maturity, and decline. Each of these stages provides distinct opportunities and threats, thereby affecting the firm’s strategy as well as its marketing programs. Despite the fact that many new products do not follow such a prescribed route because of failure, the concept is valuable in helping management look into the future and better anticipate what changes will need to be made in strategic marketing programs. What are the product life-cycle limitations? The product life-cycle model’s major weakness lies in its normative approach to prescribing strategies based on assumptions about the features or characteristics of each stage. It fails to take into account that the product life cycle is driven by market forces expressing the evolution of consumer preferences (the market), technology (the product), and competition (the supply side).
  • Introduction. In this stage marketers spend heavily on promotions to inform the target market about the new product's benefits. Low or negative profits may encourage the company to price the product high to help offset expenses. companies can concentrate on skimming strategies to generate high profits now or on penetration strategies to build market share and dominant the market for larger profits once the market stabilizes. Although this is a broad guideline, this may not be entirely true for some categories. For instance, pricing say Nokia Lumia on a cost plus basis would be impossible. Margins would be high because of the ‘novelty’ factor and tech products typically end up skimming. And they spend the most on advertising their new products.
  • Product Life-Cycle Strategies Growth. In this stage the company experiences both increasing sales and competition. Promotion costs are spread over larger volume and strategic decisions focus on growth strategies. Strategies include adding new features, improving quality, increasing distribution, and entering new market segments.
  • Product Life Cycle Strategies Maturity. In this stage the company must manage slower growth over a longer period of time. Strategic decisions made in the growth stage may limit choices now. Marketing managers must proactively seek advantage by either market modification to increase consumption, product modification to attract new users (quality, feature, and style improvements), or marketing mix modification in an attempt to improve competitive position.
  • Product Life Cycle Strategies Decline. In this stage the costs of managing the product may eventually exceed profits. Rate of decline is a major factor in setting strategy. Management may maintain the brand as competitors drop out, harvest the brand by reducing costs of support for short term profit increases, or drop the product (divest) altogether.
  • Steps in Segmentation, Targeting, and Positioning Market Segmentation. Market segmentation is the process of dividing a market into distinct groups of buyers who might require separate products or marketing mixes. All buyers have unique needs and wants. Still it is usually possible in consumer markets to identify relatively homogeneous portions or segments of the total market according to shared preferences, attitudes, or behaviors that distinguish them from the rest of the market. These segments may require different products and/or separate mixes. Market Targeting. Market targeting is the process of evaluating each market segment's attractiveness and selecting one or more segments to enter. Given effective market segmentation, the firm must choose which markets to serve and how to serve them. Discussion Note: In targeting markets to serve the firm must consider its resources and objectives in setting strategy. Market Positioning. Market positioning is the process of formulating competitive positioning for a product and a detailed marketing mix. Marketers must plan how to present the product to the consumer. Discussion Note: The product's position is defined by how consumers view it on important attributes. Steps in Segmentation, Targeting, and Positioning This CTR corresponds to Figure 7-1 on p. 196 and relates to the material on pp. 196.
  • Intro to mktg_itm_sept-2012_session-2

    1. 1. Introduction to Marketing Week 2 NANDA KISHORE SETHURAMAN ITM SEPTEMBER 2012
    2. 2. Agenda Targeting  Product  What is good marketing research?  Product Strategy  Marketing research Questions  Product Essentials  Types of information  Features and Benefits  Types of market research  Classifying products  Market research summary  Product line and mix  Test Market  Branding  Define Target Audience  Packaging and Labeling Trademarks  Estimate market potential  Positioning and Brand Building  Analyze market share/share of  The Art of Positioning is Marketing customer  Positioning the game of Mind and  Track competitors Heart  Identify market characteristics &  Brand is a Promise trends  Brand is owned by Customers  Analyze sales data  Understanding Brand Drivers  Sales forecasting: Existing / new  Brand Attributes products  Brand Architecture  The Positioning Template
    3. 3. Segmentation, Targeting, Positioning 3
    4. 4. Research – An Introduction
    5. 5. The Process Understand the environment and the market Situation Identify threats and opportunities Analysis Assess the competitive position Define the business scope and served market Strategy segments Establish competitive advantagesDevelopment Set performance objectives. Product and channel decision Marketing Communication decisions Program PricingDevelopment Personal selling decisions Performance monitoringImplementation Refining strategies and program
    6. 6. Marketing Research in PracticeProgrammatic Research  Develops market options through market segmentation, market opportunity analysis, or consumer attitude and product usage studiesSelective Research  Tests different decision alternatives such as new product testing, advertising copy testing, pre-test marketing, and test marketingEvaluative Research  Evaluation of performance of programs
    7. 7. Marketing Decision Support SystemsCharacteristics of MDSS:  Interactive  Flexible  Discovery oriented  User friendly
    8. 8. Marketing Decision Support SystemsFour components of MDSS:  Database  Reports and Displays  Analysis capabilities  Models
    9. 9. Gaining Insight from a MDSS ManagerModeling Display Analysis Database Environment
    10. 10. Participants in marketing research activities Information Users • General management • Planning • Marketing and sales managers • Product managers • Lawyers Information Suppliers: Information Suppliers: Inside Company Outside Company• Marketing research department • Research consultants• Sales analysis group • Marketing research suppliers• Accounting department • Advertising agencies• Corporate strategic planning
    11. 11. Marketing Research Process MR Process Evolves From Answers to Five Key Questions  Why should we do research?  What research should be done?  Is it worth doing the research?  How should the research be designed to achieve the research objectives?  What will we do with the research?
    12. 12. Marketing Planning & Information SystemMARKETING PLANNING AND INFORMATION SYSTEM Planning system Information system • Strategic plans • Databases • Tactical plans • DSS1. AGREE ON RESEARCH PROCESS • Problems or opportunities • Decision alternatives • Research users
    13. 13. 2. ESTABLISH RESEARCH OBJECTIVES • Problems or opportunities • Decision alternatives • Research users Estimate the value of NO Do not conduct information marketing research Is benefit > cost Yes
    15. 15. The Marketing Research ProcessStep 1Research Purpose  Problem or opportunity analysis  Which problems or opportunities are anticipated  What is the scope of the problems and the possible reasons?  Evaluation of decision alternatives  What are the alternatives being studied?  What are the criteria for choosing among the alternatives?  Research users  Who are the decision makers?  Are there any covert purposes?
    16. 16. The Marketing Research Process (Contd.)Step 2Research Objective  A statement, in as precise terminology as possible, of what information is needed  Should be framed to ensure information obtained will satisfy research purposeResearch QuestionHypothesis DevelopmentResearch Boundaries
    17. 17. The Marketing Research Process (Contd.)Research Question  Asks what specific information is required to achieve the research purpose  Sample questions to determine if a specific advertisement should be run:  Will the advertisement be noticed?  Will it be interpreted accurately?  Will it influence attitudes?
    18. 18. The Marketing Research Process (Contd.)Hypothesis Development  A possible answer to a research question.Generating a hypothesis  Draw on previous research efforts  Borrow from other disciplines such as:  Psychology  Sociology  Marketing  Economics  Manager’s experience with related problems, coupled with knowledge and the use of judgment
    19. 19. Source • Theory • Management experience • Exploratory researchResearch Research Research Question Hypothesis Design Purpose Research Objective
    20. 20. The Marketing Research Process (Contd.)Step 3Estimating the Value of Information  Value depends on:  Importance of decision  Uncertainty that surrounds it  Influence of research information on the decision
    21. 21. Illustrative Decision Models $ 4 million Introduce Success $ 1 million Product A Failure Do not Introduce $ 4 million Success Introduce Product B -$ 2.5 million Failure Do not Introduce
    22. 22. Research Design and ImplementationResearch DesignThe detailed blueprint to guide the implementation of a research study toward the realization of its objectives
    23. 23. Categories of Research Exploratory Research  Used when seeking insights into the general nature of a problem, the possible decision alternatives, and the relevant variables that need to be considered Descriptive Research  Provides an accurate snapshot of some aspect of the market environment, such as:  Consumer evaluation of the attributes of our product versus competing products.  The socioeconomic and demographic characteristics of the readership of a magazine  The proportion of all possible outlets that are carrying, displaying, or merchandising our products Causal Research  Used when it is necessary to show that one variable causes or determines the values of other variables, a causal research approach must be used
    24. 24. Detective FunnelUses Combination of All Three Research Techniques  Exploratory techniques generate all possible reasons for a problem  Descriptive and Causal approaches narrow the possible causes
    25. 25. Detective Funnel Problem Exploratory Research Descriptive Possible Researchcauses of the problem Causal Research Probable Causes
    26. 26. Methods & Data Collection.
    27. 27. Data SourcesSecondary DataPrimary Data
    29. 29. Uses of Secondary DataCan solve the problem on hand all by its ownCan lead to new ideas and other sourcesHelps to define the problem more clearlyCan help in designing the primary data collections processHelps in defining the population / sampleCan serve as a reference base
    30. 30. Benefits and Limitations of Secondary DataBenefits LimitationsLow cost  Collected for some other purposeLess effort  No control over data collectionLess time  May not be accurateAt times, more  May not be in correct form accurate  May be outdated  May not meet dataAt times, only way to requirements obtain data  Assumptions have to be made
    31. 31. Internal Sources of Secondary DataInternal Records  Accounting Data  Sales Reports  Inventory Management  Customer Database
    32. 32. External Sources of Secondary DataPublished data sources (Census, publications of various trade associations)Trade directoriesComputer retrievable databases ("online" databases)
    33. 33. Practical Applications
    34. 34. New Product ResearchNew Product Research Process  Generation of new product concepts  Evaluation and development of those concepts  Evaluation and development of the actual products  Testing in the context of the marketing programNeed Identification  Perceptual maps  Social and environmental trends  Benefit structure analysis  Product users  Focus-group interviews  Lead user analysisConcept Identification
    35. 35. New Product Research (Contd.)Test Marketing  Designing the sell-in market test  Selecting the test cities  Implementing and controlling the test  Timing  Measurement  Costs of a test marketControlled Distribution Scanner Markets (CDSM)Projecting Trial, Repeat and Usage Rate Using Panel Data
    36. 36. Other ApplicationsPricing Research  Research for Profit-oriented Pricing  Research for Share-oriented PricingDistribution Research  Warehouse and Retail Location Research  Center-of-gravity Simulation  Computerized Simulation Models  Catchment Area Analysis  Outlet Location Research  Number and Location of Sales Representatives  Sales effort approach  Statistical analysis of sales data  Field experiments  Computerized models of sales force size and allocation by market and by product line
    37. 37. Advertising ResearchCriteria Copy Test Validity  Recognition  Qualitative Research  Recall  Audience Impressions of  Persuasion the Ad  Forced exposure, brand  Adjective Checklist preference change  On-air tests -- brand  Eye Movement preference change  Physiological Customized Measures of Measurement Communication / Attitude Budget DecisionPurchase Behavior  Coupon stimulated Media Research  Measuring print vehicle purchasing  Split-cable tests audiencesTracking Studies  Measuring broadcastDiagnostic Testing vehicles audiences
    38. 38. Sales Promotion ResearchPromotional Tools  Price Discounts  Features  Displays  Coupons / Rebates  SweepstakesPromotional Strategy  Hi-lo  Every Day Low Price (EDLP)
    39. 39. Target Market 39
    40. 40. 40
    41. 41. Evaluating Segment Attractiveness 41
    42. 42. Let’s sell to segments with big eyes and lips 42
    43. 43. Factors driving a Target Marketing Strategy 43
    44. 44. Selling Ice Cream to Eskimos 44
    45. 45. Target Marketing Strategies 46Broad
    46. 46. Target MarketingSocially Responsible Targeting  Some segments, especially children, are at special risk  Many potential abuses on the Internet, including fraud Internet shoppers  Controversy occurs when the methods used are questionable7 - 47
    47. 47. Products
    48. 48. What is a product?A product is anything that can offered to market forattention, acquisition ,use, consumption that mightsatisfy a want or need.
    49. 49. ProductsTangible products Intangible productsGOODS SEVICES
    50. 50. Features of product tangibility Associated attributes Intangible Features of attributes product Exchange Customer value satisfaction
    51. 51. Levels of productUnexpected features Luxury features Expected features Basic featuresBasic product
    52. 52. Classifying ProductsDurablesConsumer productsBusiness products
    53. 53. DurablesDurables Services Non-Durables
    54. 54. Consumer Products
    55. 55. Business productsMaterials and parts  Raw materials and parts  Manufactured materials and partsCapital items  Installation  EquiptmentSuppliers and business services  Maintenance and repair items  Operating suppliers
    56. 56. Raw Materials Natural ProductsFarm Products
    57. 57. Manufactured materials and parts
    58. 58. Capital items EquipmentInstallation
    59. 59. Suppliers and business services Operating Suppliers Mainteinanceand repair items
    60. 60. Product mix
    61. 61. Product Mix The assortment of products that a company offers to a marketWidth – how many different product lines?Length – the number of items in the product mixDepth – The no. of variants offered in a product lineConsistency – how closely the product lines are related in usage
    62. 62. Product Line & Product Mix LAMPS•Table•Ceiling•Track•Desk
    63. 63. Product Mix Product Product Product Line 1 Line 2 Line 3LAMPS TABLES CHAIRS•Table •Kitchen •Dining Room•Ceiling •Dining Room •Living Room•Track •End •Bedroom•Desk •Coffee •Outdoor •Outdoor •Desk •Conference •Computer
    64. 64. PRODUCT MIX EXAMPLE Width (# of product lines) Hair Care Salty Dental Soft Drinks Snacks CareDepth (# of items) Shampoo Chips Tooth Brush Cola Conditioner Nuts Tooth Paste Ginger Ale Hair Spray Crackers Dental Floss Root Beer
    65. 65. Factors influencing change in product mixChanges in market demandCost of productionQuantity of productionChanges in company desireCompetitors actions and reactions
    66. 66. Product Mix StrategiesExpansion of product mixContracting or dropping the product mixAlteration of existing product sTrading up/trading down strategies
    67. 67. Product managementPlanningForecastingMarketing of products of a company is product management
    68. 68. Objectives of product managementTo design product strategiesTo spot market opportunitiesTo develop strategies for each stage of product life cycleTo generate new product ideas
    69. 69. Product Innovation – New Product Types
    70. 70. Importance of new productTo meet consumer needs and wantsTo meet competitionTo increase profitsTo avoid threats from substitutes
    71. 71. New Product Development ProcessStep 1. Idea GenerationSystematic Search for New Product Ideas  Internal sources  Customers  Competitors  Distributors  SuppliersStep 2. Idea ScreeningProcess to spot good ideas and drop poor onesTechnically feasibilityFinancially viable
    72. 72. New Product Development ProcessStep 3. Concept Development & Testing
    73. 73. New Product Development ProcessStep 4. Marketing Strategy Development
    74. 74. New Product Development ProcessStep 5. Business AnalysisStep 6. Product Development
    75. 75. New Product Development ProcessStep 7. Test Marketing
    76. 76. New Product Development ProcessStep-8 commercialization Introducing the product into the market Introducing the product into the market
    77. 77. Profit per unit Product category sales (real dollars) Product Life Cycle Life cycle extension Profit/unit Sales(real dollars) Introduction Maturity Decline or extension Competitive Growth turbulence Time (years) Source: Reprinted with permission from p. 60 of Analysis for Strategic Marketing Decisions, by George Day. Copyright © 1986 by West Publishing Company. All rights reserved. 8-78 8-3
    78. 78. Marketing Strategies: Introduction Stage Sales Sales Low sales Low sales Costs Costs High cost per customer High cost per customer Profits Profits Negative NegativeMarketing Objectives Create product awareness and Create product awareness andMarketing Objectives trial trial Product Product Offer a basic product Offer a basic product Price Price Use cost-plus basis Use cost-plus basis Distribution Distribution Build selective distribution Build selective distribution Advertising Advertising Build awareness among innovators, Build awareness among innovators, early adopters early adopters
    79. 79. Marketing Strategies: Growth Stage Sales Sales Rapidly rising sales Rapidly rising sales Costs Costs Average cost per customer Average cost per customer Profits Profits Rising profits Rising profitsMarketing ObjectivesMarketing Objectives Maximize market share Maximize market share Product Offer product extensions, service, Offer product extensions, service, Product warranty warranty Price Price Penetration Pricing Penetration PricingDistributionDistribution Build intensive distribution Build intensive distributionAdvertisingAdvertising Build awareness in the mass market Build awareness in the mass market
    80. 80. Marketing Strategies: Maturity Stage Sales Sales Peak sales Peak sales Costs Costs Low cost per customer Low cost per customer Profits Profits High profits High profitsMarketing Objectives Maximize profit while defending Maximize profit while defendingMarketing Objectives market share market share Product Product Diversify brand and models Diversify brand and models Price Price Price to match or best competitors Price to match or best competitors Distribution Distribution Build more intensive distribution Build more intensive distribution Advertising Advertising Stress brand differences and benefits Stress brand differences and benefits
    81. 81. Marketing Strategies: Decline Stage Sales Sales Declining sales Declining sales Costs Costs Low cost per customer Low cost per customer Profits Profits Declining profits Declining profitsMarketing Objectives Reduce expenditure and milk the Reduce expenditure and milk theMarketing Objectives brand brand Product Product Phase out weak items Phase out weak items Price Price Cut price Cut price Distribution Go selective: phase out unprofitable Go selective: phase out unprofitable Distribution outlets outlets Advertising Advertising Reduce to level needed to retain Reduce to level needed to retain hard-core loyal customers hard-core loyal customers
    82. 82. Causes of New Product FailuresOverestimation of Market SizeProduct Design ProblemsProduct Incorrectly Positioned, Priced or AdvertisedCosts of Product DevelopmentCompetitive ActionsTechnical problemsPoor planningInadequate promotionPoor packingFault pricing
    83. 83. Segmentation, Targeting, Positioning 84
    84. 84. PositioningPositioning:  The place the product occupies in consumers’ minds relative to competing products.  Typically defined by consumers on the basis of important attributes.  Involves implanting the brand’s unique benefits and differentiation in the customer’s mind.  Positioning maps that plot perceptions of brands are commonly used.7 - 85
    85. 85. Choosing a Positioning Strategy Topics  Differentiation can be based on  Products  Identifying possible  Services competitive advantages  Channels  People  Choosing the right  Image competitive advantage  Choosing a positioning strategy7 - 87
    86. 86. Choosing a Positioning Strategy Topics • How many differences to promote?  Unique selling proposition  Identifying possible  Several benefits competitive advantages • Which differences to promote?  Choosing the right Criteria include: competitive advantage  Important  Choosing a positioning  Distinctive strategy  Superior  Communicable  Preemptive  Affordable  Profitable7 - 88
    87. 87. Choosing a Positioning Strategy Topics • Value propositions represent the full positioning of the brand  Identifying possible • Possible value propositions: competitive advantages  More for More  Choosing the right  More for the Same competitive advantage  More for Less  Choosing a positioning  The Same for Less strategy  Less for Much Less7 - 89
    88. 88. Developing a Positioning StatementPositioning statements summarize the company or brand positioning  EXAMPLE: To (target segment and need) our (brand) is (concept) that (point-of-difference)7 - 90
    89. 89. Communicating the PositioningCompanies must be certain to DELIVER their value propositions.Positions must be monitored and adapted over time.7 - 91
    90. 90. Market Segmentation Process 6. Develop Marketing Mix for Each Target Segment Market 5. Develop Positioning Positioning for Each Target Segment 4. Select Target Segment(s) Market 3. Develop Measures of Segment Attractiveness Targeting 2. Develop Profiles of Resulting Segments1. Identify Bases Market Segmentationfor Segmenting the Market
    91. 91. Brand Identity Prism (KAPFERER)
    92. 92. KAPFERER represents brand identity diagrammatically as a six-sided prism as shown below: Constructed Source/Sender E I x n t t e e r r n n a a l l i i s s a a t t i i o o n n Constructed Receiver
    93. 93. Brand Identity PrismPhysique according to him is the basis of the brand.  E.G. the physique of Philips is “technology and reliability” while for the brand Tata it is “trust”Personality is same as Aaker, it answers the question “what happens to this brand when it becomes a person?”Culture symbolizes the organization, its country-of- origin and the values it stands for.  E.G. traditional brands like balsara, dabur and zandu.
    94. 94. Brand Identity PrismRelationship is the handshake between consumer and the organisation.  E.G. the relationship with “safola” is safety.Reflection is the consumer’s perception for what the brands stands for.  E.G. coke’s image more attract youth.Self-image is what the consumer think of himself.  E.G. benz Car owner think that since he has bought the car he is treating himself to one of the best car in the world.
    95. 95. Let us understand the model in detail…
    96. 96. What is a Brand???“ A Brand is a complex symbol. It is the intangiblesum of a product’s attributes, its name, packagingand price, its history, reputation, and the way it’sadvertised. A brand is also defined by consumer’simpression of people who use it, as well as their ownexperience ”- David Ogilvy
    97. 97. Now let us look at how Brand Experience is differentiated…
    98. 98. Brand Experience are of Two types
    99. 99. The External Brand Experience includesNameLogoAdvertisingBrand IdentityEnvironmentsProducts & Service
    100. 100. The Internal Brand Experience includesBusiness ProcessCustomer RelationsBrand ValuesTrainingQualityStaff MotivationRecruitment PoliciesTechnology etc..
    101. 101. Now let us look at the Brand Identity Prism based on Kapferer model and the 6 key dimensions in it
    102. 102. -Name -Logo -Business Process -Customer Relations-Advertising -Brand Identity -Brand Values -Training-Environments -Products & Service -Quality -Staff Motivation -Recruitment Policies -Technology etc.. Constructed Source E I x n t t e e r r n n a a l l i i s s a a t t i i o o n n Constructed Receiver
    103. 103. Physical  Product features, symbols & attributesPersonality  Character & attitudeRelationship  Beliefs & associationCulture  Set of ValuesReflection  Customer’s view of the brandSelf-Image  Internal mirror of customer as user of brand
    104. 104. Let us now understand the prism with some examples…
    105. 105. For Sify India let us look at how they have built the brand basis the Kapferer Model
    106. 106. Sify IndiaPhysical  Kite Symbol, Online AccessPersonality  Innovative & Tech savvyCulture  Customer centric & IndianSelf -image  "net" way of life empoweredReflection  Consistent & dependable performerRelationship  Best guide to the net
    107. 107. Sify India Physical  Kite Symbol, Online Access Personality  Innovative & Tech savvy Culture  Customer centric & Indian Self -image  "net" way of life empowered Reflection  Consistent & dependable performer Relationship  Best guide to the net
    108. 108. End of Day 2