This document outlines topics from a marketing strategy session, including defining the target market, estimating market size using top-down, bottom-up and cross-sectional approaches, and determining leadership style and sales channels. It provides frameworks for analyzing the market life cycle, adaptation curve, leadership styles of low price, technology, quality and relationship leaders, and sales channel options of executive sales, direct sales, stocking distributors and commissioned reps. The homework is to update the executive summary and write a chapter on marketing and sales.

1. Success Formulas®
Session Three
Marketing Strategy

2. Session Three Agenda
Present Revised Executive Summaries
Market Life Cycle
Defining Your Market
Estimating Market Size
Adaptation Curve
Leadership Style
Sales Channel

3. Executive Summary
In 2-or-3 Pages, highlight the following:
Elevator Speech
Industry
Vision
Mission
Corporate Legal Description
Product/Service - What it does, how much it sells for,
proprietary position
Market - Who’s going to buy, what is the sales channel.
Operations
Management Team
Investment Required
Financial Proforma
Note: Develop each topic for five years

4. Your Market
Working Definition
Products or Services that You can
Sell to People in Your Geographic
Distribution Area, or Where your
Competition Could Sell Instead of
You.

5. Market Life Cycle
Time

6. Interesting Fact
Of All “New” Products Brought to Market by
Large US Firms…(Approximately)
70% are Modifications of an Old Product
20% are Minor Modifications of an Old
Product
10% are Major Innovations.

7. Where Does YOUR
Business Fit In the
Competitive Landscape?

8. Market Life Cycle
Time

9. Market Life Cycle
Innovation
Growth
Maturity
Decline
For Each of These Phases...

10. Innovation
Description
1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy
1) Marketing
2) Engineering
3) Sales
4 Pricing
5) Promotion
6) Manufacturing
7) Investment
8) Target the Customer

11. Growth
Description
1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy
1) Marketing
2) Engineering
3) Sales
4 Pricing
5) Promotion
6) Manufacturing
7) Investment
8) Target Customer

12. Maturity
Description
1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy
1) Marketing
2) Engineering
3) Sales
4 Pricing
5) Promotion
6) Manufacturing
7) Investment
8) Target Customer

13. Decline Phase
Description
1) Characteristics of sales
environment
2) Issues of operations
3) Competition
4) Profits
Strategy
1) Marketing
2) Engineering
3) Sales
4 Pricing
5) Promotion
6) Manufacturing
7) Investment
8) Target Customer

14. Revisit the question:
Where Does YOUR Business
Fit In the Competitive
Landscape?

15. Your Market
Define Target Market
Estimate % of Market
Estimate Potential Usage Rate.
Estimate Market Share Factor.
Check Estimates Against Market Size of
Similar Products.
Growth Rate of the Market

16. How Big Is Your Market?
Top-Down Approach
Bottom-Up Approach
Cross-Sectional Approach
Combination of All Three

17. Top-Down Approach
Estimates Total Company Demand…
 Total industry volume (from reliable sources, e.g. US Dept. of
Commerce)
 Bought by a defined customer group (demographics)
 In a defined geographical area (where selling?)
 In a defined time period (when selling; e.g.. toys sell big at
Christmas-time)
 In a defined market environment
 Resulting in a defined market share (% of overall market)
 Reduced by the competitors (defined) share (% of overall market
after the competitors share)

18. Adaptation Curve (Bass)

19. Bottom-Up Approach
Estimates Total Demand..

20. Cross-Section Approach
Estimates Total Demand...

21. Combination Approach
Based on Estimates Derived From the
Three Methods…

22. Leadership Style
Low Price Leader
Technology Leader
Quality Leader
Relationship Leader

23. Low Price Leader
Example: Wal-Mart
Premise:
Investment in Infrastructure = Low Pricing
Track Buying Patterns Inventory
Investment in Logistics Transportation
Trade-Off: Lack of Expert Sales People
Aversion Away From Leading Edge Products

24. Technology Leader
Example: Sony Digital Cameras
Premise:
Investment in Technology= Product Obsolete
Keep the Competition Running to Catch Up
Trade-Off: Can’t be the Low Price Leader and
Can not Build Expensive Relationships With
Customers.

25. Relationship Leader
Example: Lexus Automobiles
Premise:
Extreme Customer Service = Loyalty
Trade-Off: Not the Low price Leader and Not
the Technology Leader

26. Quality Leader
Example: Porsche Design Group
Premise:
Precision Design/Production = High Performance
Trade-Off: Usually Not the Low Price Leader

27. Which Will Your Business Be?
Low Price Leader?
Technology Leader?
Quality Leader?
Relationship Leader?

28. Sales Channel
WHO Will Sell Your Product?
Executive Sales: Company Executives Sell
Direct Sales: Hired Sales People Sell
Stocking Distributors: Third Parties Buy and
Resell it at a Mark-Up
Commissioned Reps: Third Parties Take
Orders and Earn Commission When They Sell

29. Sales Channels
Method Success Cost Control
Executive Sales Highest Highest Highest
Direct Sales Good High High
Stocking Distributor Fair Modest Modest
Commissioned Reps Poor Low Poor

30. Homework Assignment
Update Executive Summary to
Include Marketing Sales
Information
Write Chapter on Marketing Sales

31. Review Session Four: Technical Strategy
Present Revised Executive Summaries
Product/Service Strategy
Offensive Defensive Strategy
Intellectual Property
Make/Buy Decision
Group Discussion: What Will Your
Technology Strategy Be?

32. Success Formulas®
Session Three
Marketing Strategy