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Intro to mktg_itm_sept-2012_session-2

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Introduction to Marketing - Session 2 at ITM, Mumbai. Includes:
Targeting
 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
• 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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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
  14. 14. Yes2. ESTABLISH RESEARCH OBJECTIVES • Problems or opportunities • Decision alternatives • Research users5. COLLECT THE DATA6. PREPARE AND ANALYZE THE DATA7. REPORT THE RESEARCH RESULTS AND PROVIDE STRATEGIC RECOMMENDATIONS
  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
  28. 28. Sources of Secondary Data PRIMARY •SALES/PATRONAGE RESULTS ( OUTCOMES ) DATA •MARKETING ACTIVITY ( INPUTS ) SOURCES INTERNAL •COST INFORMATION RECORDS •DISTRIBUTOR REPORTS AND FEEDBACK •CUSTOMER FEEDBACKDATASOURCES ELECTRONIC SECONDARY DATA •GOVERNMENT SOURCES •TRADE ASSOCIATIONS •PERIODICALS PUBLISHED •NEWSPAPERS DATA •BOOKS •ANNUAL REPORTS PRINTED •PRIVATE STUDIES EXTERNAL SOURCES STANDARDIZED SOURCES OF •STORE AUDITS MARKETING •WAREHOUSE WITHDRAWAL SERVICES DATA •CONSUMER PURCHASE PANELS •SINGLE SOURCE DATA •NIELSEN’S TELEVISION INDEX •STARCH SCORES •ARBITRON PANEL •MULTIMEDIA SERVICES INTERNET
  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

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