Lecture 3: Marketing Plan, Strategies, Distribution and Channels
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1 Lecture 3: Marketing Plan, Strategies, Distribution and Channels Dr Bernard Leong CTO & Co-founder MPS 812 Course Taught in: 1
2 What is Marketing? Marketing deals with identifying & meeting human and social needs. Marketing is an organizational function and a set of processes for creating, communicating & delivering value for customers & for managing relationships in ways that benefit the organizations & its stake holders. (American Marketing Association) 2
3 What is Marketing? Marketing Management: the art & science of choosing target markets & getting, keeping & growing customers thru creating, delivering, & communicating superior customer value. Marketing is a societal process by which individuals & groups obtain what they need and want thru creating, offering & freely exchanging products/services of value with others. 3
4 What is Marketed? Goods Services Events Experiences Persons Places Properties Organizations Information Ideas 4
5 Marketers & Prospects A marketer: Someone seeking a response (attention, a purchase, vote, donation) from another party call the prospect. 5
6 8 Demand States Negative Demand: Consumers dislike the product & may pay a price to avoid it. Non-existent Demand: Consumers are unaware or uninterested in the product. Latent Demand: Consumers share a strong need that cannot be satisfied by an existing product. Declining Demand: Consumers begin to buy the product less frequently. 6
7 8 Demand States Irregular Demand: Consumer purchases vary on a seasonal, monthly, weekly, daily or even hourly basis. Full Demand: Consumers are adequately buying all products put in the market place. Overfull Demand: More consumers would like to buy the product that can be satisfied. Unwholesome demand: Consumers may be attracted to products that have undesirable social consequences. 7
8 Resources Money Resource Markets Resources Money Taxes, Goods Services, Money Manufacture Markets Services, Money Government Markets Taxes Consumer Markets Taxes, Goods Services Services, Money Taxes, Goods Money Goods & Services Intermediary Markets Money Goods & Services Structure of Flows in a Modern Exchange Economy 8
9 Marketers use the term market to cover various groupings of customers. 9
10 Types of Markets Consumer Markets Business Markets Global Markets Non-Profit & Governmental Markets 10
11 Marketing Practices Marketing planning process involves 5 steps: Analyzing marketing opportunities Selecting target markets Designing marketing strategies Developing market programs. Managing the marketing effort - Execution 11
12 Integrated Marketing Approach: 4 Ps of Marketing 12
13 Product 13
14 Positioning of Product 14
15 Price Quality of Product High Low Price Low High Superior Quality Value for Money Brand Economical Pricing Strategy Matrix 15
16 How to Set the Price Selecting the Price Objective - Position of market offering due to survival, maximum current profit, maximum market share or maximum marketskimming pricing. Determining Demand - Price Sensitivity - methods include surveys, price experiments and statistical analysis. Estimating Costs - Charging a price based on cost of producing, distributing and selling of a product. Analyzing competitors costs, prices & offers Selecting a price method: for e.g. markup pricing, target return pricing, value pricing. High Price (No possible demand at this price) Costing Price Customers assement of unique product features Orienting Point Competitors prices & prices of substitutes Costs Floor Price Low Price (No possible profit at this price) 16
17 Promotion: Common Platforms Advertising Sales Promotion Events/ Experiences Public Relations & Publicity Personal Selling Direct Marketing Print & Broadcast Ads, Packaging-outers, Packaging inserts, Motion Pictures, Brochures & Booklets Posters & leaflets, Directories Reprint of Ads, Billboards, Display Signs, Point of purchase displays, Audiovisual materials, Symbols and logos Videotapes, CD, DVDs Contests, games, sweepstakes, lotteries, Premium & gifts, Samples, Fairs & trade shows, Exhibits, Demonstrations, Coupons, Rebates Low-interest financing, Entertainment, Trade-in allowances, Continuity Programs, Tie-ins Sports, Entertainment, Festivals, Arts, Courses, Factory Tours, Company Museums, Street Activities Press Kits, Speeches, Seminars, Annual Reports, Charitable Donations, Sponsorships, Publications, Community Relations, Lobbying, Identity Media Company Magazine or newsletters Sales presentations, Sales meetings, Incentive programs, Samples, Fairs and Trade Shows Catalogs, Mailings, Tele-marketing, Electronic Shopping, TV shopping, Fax-mail Voice mail 17
18 Place Distribution Channel Integration based on Merger & Acquisition: Manufacturer acquires Wholesaler (Forward Integration) Wholesaler acquires Manufacturer (Backward Integration) Retailer buys over another Retailer (Parallel Integration) Customer Retailer/ Dealer Wholesaler/ Distributor Manufacturer/ Sole Importer 18
19 Packaging Physical Presentation Value Added Qualities Bundled Package (Product with Service) One Stop Services 19
20 SWOT Analysis Strength, Weaknesses, Opportunities and Threats (SWOT) Involves monitoring the external and internal marketing environment. 20
21 Strength/Weaknesses Functionality Features to measure performance or importance Marketing Company reputation, Market Share, Customer Satisfaction, Customer Retention, Product or Service Quality, Pricing Effectiveness, Distribution Effectiveness, Promotion Effectiveness, Sales Force Effectiveness, Innovation Effectiveness, Geographical Coverage. Finance Cost & Availability of Capital, Cash Flow, Financial Stability. Manufacturing Facilities, Economics of Scale, Capacity, Able & Dedicated Workforce, Ability to produce on time, Technical manufacturing skill. Organization Visionary & capable leadership, Dedicated Employees, Entrepreneurial Orientation, Flexible or Responsive. 21
22 Opportunity/Threat A marketing opportunity is an area of buyer need & interest in which there is a high probability that a company can profitably satisfy that need. Three main sources of market opportunities: Supply something that is in demand. Supplying product or service in a new or superior way. Totally new product that bring about a new consumer behavior or impact. 22
23 Opportunities A company may benefit from converging industry trends & introduce hybrid products or services that are new to the market. A company may make a buying process more convenient or efficient. A company can meet the need for more information or advice. A company can customize a product or service that was formerly offered in a standard form. A company can introduce a new capability. A company may be able to deliver a product or service faster. A company may be able to offer a product at a much lower price. 23
24 Questions for Market Opportunity Analysis Can the benefits involved in the opportunity be articulated convincingly to a defined target market? Can the target market(s) be located & reached with cost effective media & trade channels? Does the company process or have access to the critical capabilities & resources needed to deliver customer benefits? Can the company deliver the benefits better than any actual or potential competitors? Will the financial rate of return meet or exceed the company s threshold for investment? 24
25 Success Probability High Low Example Attractiveness High Low Opportunity Matrix 1. Company develops more powerful lighting system. 2. Company develops device to measure energy efficiency. 3. Company develops device to measure illumination level. 4. Company develops software program to teach lighting fundamentals to TV studio personnel. 25
26 Probability of Occurrence High Low Example Seriousness High Low Competitor develops superior lighting system. 2. Major prolonged economic depression. 3. Higher Costs. Threat Matrix 4. Legislation to reduce number of TV licenses. 26
27 Marketing Channels Marketing Channels are sets of interdependent organizations involved in the process of marketing a product or service available for consumption and use. Set of pathways which follows after production, culminating in purchase & use by the final user. 27
28 Push/Pull Strategy A push strategy involves the manufacturer using its sales force & trade promotion money to induce intermediaries to carry, promote & sell the product to the end-user. A pull strategy involves the manufacturer using advertising to induce consumers to ask intermediaries for the product and is appropriate when there is high brand loyalty & involvement in the category when people perceive differences between brands. 28
29 29
30 What is branding? A brand is the symbolic embodiment of all information encoded with a product or service. Branding is the process by which a company, product or image becomes synonymous with a set of values, aspirations or states. 30
31 Brands in the World 31
32 Key Elements in Brands Experiential Visual Functional Brand Cultural Emotional Rational 32
33 Principles of Influence for Marketing/Sales Aristotle (Rhetoric) Logos (Logic) Pathos (Emotion) Ethos (Ethics) R. Cialdini - 6 Rules of Influence Reciprocation, Commitment & Consistency, Authority, Social Proof, Liking & Scarcity 33
34 Reciprocation People generally feel obliged to return favours to them. 34
35 Commitment & Consistency People have a general desire to appear consistent in their behavior. Strong desire to commitments by providing reasons to justify them. 35
36 Social Proof People generally look to other people similar to themselves in making decisions. 36
37 Liking People are more likely agree to brands which they like: Physical Attractiveness Common goals 37
38 Authority People act in an automated fashion to commands from authority, particularly to leading brands. 38
39 Scarcity People tend to want brands as they become less available. 39
40 Inventory Storage & Distribution Costs Insignificant User Driven Innovation Opportunities for Niches Markets Signal to Noise is higher Niche getting to the Mainstream is tough Platforms are Walled Gardens 40
41 What is social media? 41
42 Why Startups need Social Media Getting the attention of the mainstream media. Budget constraints and not able to afford big marketing budgets. Advertising and Marketing purposes. Crisis management given no PR channels 42
43 Crisis Management - Kryptonite 43
44 44
45 Mainstream Media Social Media Principle behind Channel Distribution Rule Long Tail Users Consumers Prosumers Channel Examples Cable TV, Radio, Printed Media - Newspaper YouTube, Blogs, Social Networks (Facebook, Ning), Flickr, Twitter UStream, Qik, Wikis Approach Top to Bottom Bottom Up (Niche) to Top Feedback/Engagement Very little A lot 45
46 Social Media Tools Blogs - Blogger/Wordpress/Tumblr/ Posterous Rich Media Sharing - Flickr, YouTube, Vimeo, PhotoBucket, Picasa, Phlook, Todou. Social Networks - Facebook, Linkedin, Ning, CyWorld MicroBlogging - Twitter, Plurk, Yammer Aggregators - Digg, StumbleUpon Online Forums - HardwareZone (HWZ), Comsenz Mobile: FourSquare, Gowalla 46
47 Social Technographics Ladder 47
48 Case Study 1: Corporate Blog Page for Start-Ups Singapore based Case Study: blog.zopim.com To engage users and let them know the latest features of the web application. 48
49 Case Study 2: Facebook Pages for Non-Profit Organizations 49
50 How to measure ROI for marketing for Facebook Source: Ogilvy 360 Facebook For Businesses 50
51 Case Study 3: Twitter for Start-Ups Start by identifying your start-ups or communications objective using Twitter: Customer Service - Product Promotion & Sales - Crisis Management - Events activation Issue Advocacy Corporate Reputation Management 51
52 Source: Ogilvy 360 Twitter For Businesses 52
53 Twitter to track major events: Singapore Idol
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