Marketing course at Copenhagen Business School

1. Marketing strategy and planning
A framework for strategic marketing and planning
-
Understanding the org. resource base –
Forecasting future demand and market requirements
Week 38
Jacob Holm
Jacob.k.holm@gmail.com
Tlf: 24 42 11 32
www.office2go.dk
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2. The marketing management process
Part 1:Marketing Strategy
• Market –led strategic management – chapter 1
• Strategig marketing plannng
Part 2: Competitive market analysis
• The changing market environment – chapter 3
• Customer analysis – chapter 4
• Competitor analysis - chapter5
• Understanding the organizational resource base – chapter 6
• Forecasting future demand and market requirements – chapter 7
Part 3: Identifying current and future competitive positions
• Segmentation and positioning principles – chapter 8
• Segmentation and positioning research – chapter 9
• Selecting target markets– chapter 10
Part 4: Competitive position strategies
• Segmentation and positioning principles – chapter 11
• Competing through the new marketing mix – chapter 12
•Competing trough innovation– chapter 13
• Competing through superior service and customer relationship – chapter 14
Part 5: Implementing the strategy
• Strategic customer management – chapter 15
• Strategic alliances and network – chapter 16
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• CSR – chapter 18 www.Office2go.dk

3. Today’s subject
Marketing Audit:
1. Understanding the organisational resource base
2. Forecasting future demand and market requirements
3. Markops introduction
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4. Resources – hov to use them
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5. Organisational resources
Organisational resources include both tangible and intangible
assets, capabilities and competence (page 130)
 These resources are important to identify so that they can be used to
create an sustainable competitive advantage !
Resources that are difficult to copy:
• Brand reputation
• Customer relationships
• Distribution networks
• Competitive position in the market place
Resources that are easy to copy:
• Capital
• Plant and machinery
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6. Organisational resources
 These resources are important to identify so
that they can be used to create an
sustainable competitive advantage !
Resources that are difficult to copy:
• Brand reputation
• Customer relationships
• Distribution networks
• Competitive position in the market place
Pris Høj
Resources that are easy to copy:
• Capital
• Plant and machinery Lav service
grad
Høj
service
grad
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Pris lav

7. How can you protect yourself from
duplication and intense competition?
1. A competitor must identify the resources that have been
dedicated to creating and implementing the strategy.
2. Should a competitor overcome this, it would still need to acquire
the necessary resources.
3. Resources depreciate over time as competitors find ways to
imitate successful strategies.
Porters five forces
Market definition
New entries
Threats & attractiveness, competence
PEST
Industry
competitors
Suppliers Determine Buyers
Power etc. intensisity & Power etc.
attractiveness?
Substitutes
Relative price,
switching cost etc.
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8. Value creation
• Operation excellence
• Product leadership
• Customer intimacy
• Porter argues that the danger inherent in the pressure on companies to improve
operational efficiency is not simply that we substitute operational efficiency for
strategy, but that companies become more and more similar. The more
benchmarking companies do, the more they look alike. Continuous improvement
has been etched on to managers brains. But its tools unwittingly draw
companies toward imitations and homogeneity
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9. RBV >< Market orientation
Market orientation:
All the firms capabilities are focusing on responding to market needs.
Resource-based view:
High performance strategy is dependent on historical developed
resources.
BUT
The attractiveness of markets will depend, in part, on the resources
available to the firm to build a strong competitive position
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10. Resource-based view
In general, the greater the rate of change in the external environment, the
more the company must seek to base a long term strategy upon internal
resources and capabilities, rather than upon external market focus ! Side
135
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11. Dynamic capabilities
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12. How to developed marketing assets?
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13. Brands - What are we looking at ?
Other services – Delivery, installation, repair, training
Warranty
Packaging
Product
features
Core
benefits/Brand
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14. Core benefits - Brand
What does strong brands do:
“Really strong brands are the ones which have done all my thinking for
me!”
Marieke van der Werf – fouder of New Moon Communication
“Branding is something you do to cows. Branding is what you do
when there's nothing original about your product”.
Roy Edward Disney
(Former Walt Disney Board member)
"Your brand represents the sum of all the minds and souls of every
single person that comes into contact with your company over time.”
Martin Lindstrom
A brand is more than a word. It is the beginning of a lifetime dialogue."
Martin Lindstrom
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15. Brands as an asset
• Brands are difficult to build
• Brands ad value for customers
• Brands create defensible competitive positions
• Brands build customer retention
• Brands can transform markets
• Brands can perform financially
• Brands can cross national borders
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16. How to developed marketing assets and
capabilities?
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17. Dynamic capabilities
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18. Marketing capabilities
(4 p’er)
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19. Dynamic marketing capabilities
• Absorptive marketing capabilities
– The firm ability to recognize the value of new
information from the market an assimilate to it.
• Adaptive marketing capabilities
– Firms ability to identify and capitalize on emerging
market opportunities. Adaptation implies doing things
differently in response to external stimuli.
• Innovative marketing capabilities.
– Firms ability to innovate and develop the next
generation of goods and services
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20. Forecasting
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21. Measuring market opportunities –
forecasting and market knowledge.
Men inden vi starter – en lille film om at man ikke
skal tror på alt hvad man ser og hører
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22. Forudsigelser – prognoser
forecast
Er pr definition forkerte – så hvorfor lave dem?
Fordi:
Ure
Foto
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23. Forecasting
Macro analysis - economics
Macro demographics
Top-down Trends Buttom up
Micro economics
Customer analysis
Regional sales trends
Local sales trends
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24. Simple mathematical methods
Market build up methods
Q=n*q*p
Q = Total market demand
n = Number of buyers in the market
q = Quantity purchased by an average buyer per year
P = price of an average unit
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25. Market build up methods in Office2go
antal
nystart antal nystart
Antal arbejdspladser Gens. antal antal år virks. Over virks. Der Antal kundeværdi
i nystartede og Antal antal medarb. med før 2 køber nye nye arb. ved 9.000 kr
små virksomheder virks. medarb. kontorarb nykøb medarb. møbler. pladser pr. arb.plads
Antal vi rk. 31-40 meda rb. 3.818 35 50% 5 13.363 315.000
Antal vi rk. 21-30 meda rb. 2.234 25 50% 5 5.585 225.000
Antal vi rk. 11-20 meda rb. 10.867 15 50% 5 16.301 135.000
Antal vi rk. 2-10 meda rb. 70.038 5 50% 5 35.019 45.000
Antal nys tartede vi rk. Pr å r 25.000 3 75% 1 50% 50% 14.063 27.000
Total 111.957 Gens . 7 84.330
Total ma rked ved 9.000 kr
pr. a rbejds pl a ds : kr 758.970.000
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26. Market build up methods in Office2go
Møbler BtB markedet 2010/2011
OMS
400
350
300 Samlet marked ca.
2 mia kr
250
200
Mio kr.
150
100
50
-
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27. Forecast models in Markops
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28. Metoder
U d vik lin g T o ta l
A lle sæ lg ere - o gs å d em s om ikke l æ ng e re e r h o s o s
45 00
• Statistiske modeller 40 00
– Linear regression 35 00
– Tidsserie analyser 30 00
25 00
T kr.
20 00
15 00
• Fordele 10 00
– Giver overblik
5 00
0
– Enkle at arb. Med 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
29-
32
33
34-
35
36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
T o ta l 724 554 580 423 480 423 248 809 1.3 552 969 665 3.2 366 516 1.6 1 .0 2 .1 436 222 608
L in e a r re g . 973 982 991 100 100 101 1.0 1.0 1.0 1.0 1.0 107 108 10 9 110 111 1 .1 1 .1 1 .1 1 .1 1 .1 1 1 6 1 1 7 1 1 8 1 1 9 1 2 0 1 .2 1 .2 1.2 1 .2
• Ulemper
– Tager ikke højde for paradigme skift
– Kræver et pålideligt statistisk grundlag
– Giver et statisk billede
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29. Time-series analysis
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30. Metoder
• Observationer
– Viser hvad folk faktisk gør
– Man kan manipulere med folk og lære af det
– Er dog ikke statistisk dækkende pga begrænsningen i observationer
• Spørgeskemaundersøgelser
– Kan afdække et stort antal respondenter
– Kan dog stille et begrænset antal spørgsmål
• Kan dog gøres elektronisk
• Pas på med svar
• Fokus grupper
– Afdække få respondenter
– I dybden spg.
– Kan styre diskussionen
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31. Nestlé forecast
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32. Metoder
• Analogier
– Hvad gør man når produktet ikke findes på markedet. Eks.
Sony Walkman, fax maskinen
– Men hvad skal man vurdere ud fra?
• Markeds test
– Test et begrænset område inden man ruller den store
marketing / salgs plan ud.
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33. Hvem og hvad vil vi undersøge
• Adoption process
– Awareness
– Interest
– Evaluation
– Trial
– Adoption
• Adopter categories
– Innovators
– Early adopters
– Early majority
– Late majority
– laggards
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34. Diffusion of innovation
Opportunity attractiveness
Adopter Innovators Early Early Late majority Laggards
categories adopters majority
2,5% 13,5% 34 % 34 % 16 %
Adoption process venturesome, social leaders, deliberate, skeptical, neighbors and
educated, popular, many informal traditional, friends are main
multiple info educated social lower socio- info sources,
sources contacts economic fear of debt
status
Awareness
Interest
Evaluation
Trial
Adoption
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35. Diffusion theory and the s-curve
The diffusion curves of many household innovations, from the Federal Reserve Bank of Dallas, 1998
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36. Pas på fejlkilder
• Man er for forankret i fortiden
• Man kan ikke se skoven for bar træer
• Man overfortolker resultater
• Man overfortolker på statistik der ikke er statistisk validt
• Man stiller ledende spg. Og konkluderer pba dette.
S a lg s ra p p o rt
D at o n y 0 3- 10- 200 8
Eks: D at o G am m el 2 6- 09- 200 8
Uge 40
T kr
F a kt ur ere t O rd re T ilb u d
N avn T ilg a n g A f ga n g T ilg an g
C h rist ia n 11 7 42 1 404 210
M a rin a 10 8 17 6 184 213
Jo h n (2 1) - - -
An d r e
C am illa 28 38 17 209
Ø yvin d 34 - 17 207
Jan 21 5 45 2 125 113
T o ta l 48 1 1.08 7 748 952
In d ex 49 %
T kr
F a kt ur ere t O rd re T ilb u d
N avn T ilg a n g A f ga n g T ilg an g
B u t ik 83 - - -
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37. Coffee break
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38. Markops Online Simulation
Introduction
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39. MARKOPS GRUPPER – Deadline mandag 24 sept
Sendes til jacob.k.holm@gmail.com
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41. Market
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42. The Markops Online World
• Population : 80,000,000
• Currency : Markops Monetary Unit (Symbol = $)
• Stable GNP growth
• No inflation
• No major political, social or economic events anticipated in the near
future - PEST
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43. 4 companies are in competition in a
fictitious FMCG market: the “Yumite” market
– “Yumites” are a class of edible consumer products
comparable to savory snacks, confectionary products or
dessert items
– “Yumite products have existed for several years
– Now a well-established market, with several strong brands
at different price points covering a wide range of needs
– Consistent solid growth since the introduction of the first
Yumite brand
– Probable continued growth over the next five years
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44. 4 well-established competing firms are in
different starting positions
– Varying strengths & weaknesses
• R&D Pipeline, Brand portfolio, Target segments, Channels, Finances
– Distribution through established distribution channels
– Slow transition into the new Internet world
CHEWY
(Your Firm) Savor
Tasty Whippit
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45. Products - Brands
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46. “Yumite” brands are usually differentiated in
terms of 4 most important attributes
High Rating
(highest achievable)
– Four tangible attributes on a 0 (Poor) to 100 (Excellent) 100
scale
PERFORMANCE NUTRITION
WAHOO
Main product benefit Healthful/Quality
ingredients
 Appearance
 Texture  No preservatives
 Mouthfeel  Lack of artificial coloring CARE
 No added sugar
PACKAGING FLAVOR
Quality of packaging Taste experience SAGA
 Attractiveness  Uniqueness
 Ease of use/convenience  Pleasure TEENS
 Serving size  Smooth, natural, fresh
0
Low Rating
46 (minimum acceptable)
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47. Newsletter
Attributes of marketed brands
Brand names start
with firm’s initial
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48. The unit cost of Yumite brands is set by the
production department
 The Unit cost increases as attribute levels increase
PERFORMANCE
NUTRITION
BASE UNIT COST
E.G. $ 5.65 FOR BRAND “CENTO”
PACKAGING
FLAVOR
 The Unit cost decreases with cumulative production due to experience effect
MILLIONS OF UNITS PRODUCED
RESULTING UNIT COST
(CUMULATIVE)
LOWER THAN 10 C : BASE UNIT COST
FROM 10 TO 20 C x 0.85
FROM 20 TO 40 C x 0.85 x 0.85 = C x 0.72
GREATER THAN 40 C x 0.85 x 0.85 x 0.85 = C x 0.61
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49. Consumers
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50. Five consumer segments of Yumite
products vary in age, occupation and family
status
HIGH EARNERS
 High income
 25+
SINGLES  Single or married no kids
AFFLUENT FAMILIES
 Low income
 Buy expensive products
 High income
 18 – 35
 Motivated by social status
 25 – 45
 Single, student or employee  Married with kids
 Heavy users, rather price  Frequent buyers of Yumites
sensitive  Buy high quality products
LOW INCOME FAMILIES MEDIUM INCOME
FAMILIES
 Low family income  Lower income than Affl. Fam.
 25 – 45  25 – 45
 Married with kids  Married with kids
 Buy lower quality products  Buy average quality products
 Very price sensitive  Slightly price sensitive
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51. Distribution
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52. Over 95% of Yumite products are purchased
in traditional distribution channels
SUPERMARKETS
 20 chains – 2,000 stores
 Large % sales from Yumites
 Broad product line
MASS  Both cheap and expensive SPECIALTY CHAIN
MERCHANDISERS brands STORES
 10 chains – 12,500 stores  15 chains – 6,000 stores
 Food, house wares, personal  Specialize in Yumites
care products  Extensive customer service
 Limited product line  Focus on expensive, high quality
 Cheaper, lower-quality brands brands
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53. The growth of web-based channels has
decreased strongly in the past two years
E-GROCERS E- BOUTIQUES
 10 web sites
 8 sites
 Food, house wares, personal
 Specialized in Yumites
care products, …
 Focus on expensive, high
 Limited product line
quality brands
 Cheaper, lower-quality brands
DIVAGO
Chocolatier
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54. Margins and discounts vary with distributions
channels
Mass Specialty chain
Merchandisers Supermarkets stores & e-
& e-Grocers Boutiques
Average Margin 35 % 40 % 50 %
Average Discount 10 % 5% None
Recommended Retail
$ 10.00 $ 10.00 $ 10.00
Price
Price Paid by Consumers $ 9.00 $ 9.50 $ 10.00
Margin $ 3.15 $ 3.80 $ 5.00
Firm Revenue in $ $ 5.85 $ 5.70 $ 5.00
% of Rec. Retail Price 58.5 % 57.0 % 50.0 %
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55. Managing your firm in
the Markops Online world
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56. Your mission
IMPROVE CONSUMER WELL-BEING
THROUGH INNOVATIVE
PRODUCTS AND SERVICES
AND
MAXIMIZE
SHAREHOLDER VALUE
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57. You are responsible for designing and
implementing the marketing strategy of
your firm
•Product portfolio strategy
– Which brands the company is going to develop and market
•Segmentation and positioning strategy
– Which market segments will be targeted
– How products will be positioned
•Marketing mix strategy
– Day-to-day operational marketing decisions
– Pricing, production, communication, distribution, …
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58. Data is available on Consumers, Firms, Brands...
It is up to you to prioritize, digest and interpret them
Strategic
Data Information
Options
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59. Use the Semantic Scales study and the relevant
Brand Map to decide on advertising content
High Nutrition
This is the
Brand Map
available in the
Semantic
Scales study
Low High
Performance Performance
Brand COCOA is
perceived as having
less nutrition than its
direct competitor TANG.
Use positioning
decisions to close these
Low Nutrition gaps
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60. Positional strategy – Markops
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61. Today’s subject
Marketing Audit:
1. Understanding the organisational resource base
2. Forecasting future demand and market requirements
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62. Nothing more for today
Husk Deadline for grupper I
Markops 24 sept! Jacob Holm
Tlf: 24 42 11 32
Email: jacob@movement.dk
www.office2go.dk
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