1)Competition Analysis The purpose of Five-Forces Analysis The five forces are environmental forces...

1)Competition Analysis

The purpose of Five-Forces Analysis

• The five forces are environmental forces that impact on a company’s ability to compete in a given market.

• The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.

Threat of Substitute Products

Threat of Substitute Products

Threat of New EntrantsThreat of New

EntrantsThreat of New

Entrants

Rivalry Among Competing Firms in Industry

Rivalry Among Competing Firms in Industry

Bargaining Power of Buyers

Bargaining Power of Buyers

Bargaining Power of Suppliers

Bargaining Power of Suppliers

Porter’s Five Forces Model of CompetitionPorter’s Five Forces

Model of Competition

2)Market analysis

Specify Opportunity in Concrete TermsSpecify Opportunity in Concrete Terms

Assess Advantage Relative to CompetitionAssess Advantage Relative to Competition

Assess the Company’s Resources to Deliver the OfferingAssess the Company’s Resources to Deliver the Offering

Assess Market Readiness of TechnologyAssess Market Readiness of Technology

Identify the Specific Customers a Company Will PursueIdentify the Specific Customers a Company Will Pursue

Identify the Unmet and/ or Underserved Customer NeedIdentify the Unmet and/ or Underserved Customer Need

Assess Opportunity AttractivenessAssess Opportunity Attractiveness

CustomerCustomer

TechnologyTechnology

CompetitionCompetition

CompanyCompany

3)Customer Analysis

Customer Analysis

• Who

• Where

• When

• What

• How

Customer Analysis

• Consumers

• Business to Business

Customer Analysis

• Consumers– End use customers– Brand loyalty– Repurchase

Customer Analysis

• Business to Business requires special considerations– derived demand– purchaser is often NOT the user

Customer Analysis

• Where are my customers?– Invoice data– Warranty cards

Customer Analysis

• When Do My Customers Buy?– Demand variation– Changing customer buying patterns

Customer Analysis

• What Do My Customers Want?

• Recording sales by price range, size and color

• Competitive information from independent research firms

Customer Analysis

• How Do My Customers Buy?– Recognition of problem– Search for alternatives and info– Buyer’s mental evaluation of alternatives– Purchase– Postpurchase behavior

4)Positioning Analysis

STEP-3

STEP-4

STEP-5

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Objectives of MARCOMMEANING & PURPOSE:-

• Understand the process of marcom objective setting and the requirements for good objectives.

• Describe the hierarchy-of-effects model and its relevance for setting marcom objectives.

• Understand the role of sales as a marcom objective and the logic of vaguely right versus precisely wrong thinking.

• Understand the nature and importance of marcom budgeting.

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Setting Marcom Objectives

Goals that the various marcom elements aspire to individually or collectively achieve during a scope of time such as a business quarter or in a financial year.

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Marcom Objectives

• TO Facilitate the successful introduction of new brands.

• To Build sales of existing brands by increasing the frequency of use, the variety of use, or the quantity purchased.

• To Inform the trade and consumers about brand improvements.

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Marcom Objectives

• To Create brand awareness

• To Enhance a brand’s image

• To Generate sales leads

• To Stimulate point-of-purchase sales

• TO Increase customer loyalty

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Marcom Objectives

• TO Improve corporate relations with special interest groups

• TO Ofset bad publicity about a brand or generate good publicity

• To Counter competitors’ communication efforts

• To Provide customers with reasons for buying immediately instead of delaying a purchase

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Requirements for Setting Suitable Marcom Objectives

• Include a precise statement of who, what, and when

• Be quantitative and measurable

• Specify the amount of change

• Be realistic

• Be internally consistent

• Be clear and put it in writing

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Marcom Objectives in Terms of Sales

Presales Objectives: communication objectives that attempt to increase the target audience’s brand awareness, enhance their attitudes toward the brand, shift their preferences from the competitors’ brand and so on.

Sales Objectives: means the marcom objective literally is to increase sales by a particular amount.

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Point-of-Purchase Advertising

• Point-of-purchase;store environment• A final opportunity to affect consumer

behavior• Many product-and-brand choice decisions are

made at this time• “Shoppers are explorers. They are on a

safari, hunting for bargains, new products and different items to add excitement to their everyday lives…”

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Point-of-Purchase MaterialsPermanent P-O-P

Temporary and Semipermanent P-O-P

In-Store Media

displays intended for sixmonths or more

displays intended for fewer than six months

© 2010 South-Western, a part of Cengage Learning. All rights reserved.

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Marcom Objectives and IMC Tools

Marcom ObjectiveMarcom Objective Marcom ToolMarcom Tool

Facilitate the successful introduction of new Facilitate the successful introduction of new brandsbrands

Brand naming and packaging, advertising, sales Brand naming and packaging, advertising, sales promotions, word-of-mouth buzz generation, and promotions, word-of-mouth buzz generation, and point-of-purchase (P-O-P) displayspoint-of-purchase (P-O-P) displays

Build sales of existing brands by increasing Build sales of existing brands by increasing the frequency of use, the variety of uses, or the frequency of use, the variety of uses, or the quantity purchasedthe quantity purchased

Advertising and sales promotionsAdvertising and sales promotions

Inform the trade (wholesalers, agents or Inform the trade (wholesalers, agents or brokers, and retailers) and consumers about brokers, and retailers) and consumers about brand improvementsbrand improvements

Personal selling and trade-oriented advertisingPersonal selling and trade-oriented advertising

Create brand awarenessCreate brand awareness Advertising, packaging, and P-O-P messages).Advertising, packaging, and P-O-P messages).

Enhance a brand’s imageEnhance a brand’s image Brand naming and packaging, advertising, event Brand naming and packaging, advertising, event sponsorship, cause-oriented marketing, and sponsorship, cause-oriented marketing, and marketing-oriented public relationsmarketing-oriented public relations

Generate sales leadsGenerate sales leads AdvertisingAdvertising


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Marcom Objectives and Tools (cont’d)

Marcom ObjectiveMarcom Objective Marcom ToolMarcom Tool

Persuade the trade to handle the Persuade the trade to handle the manufacturer’s brandsmanufacturer’s brands

Trade-oriented advertising and personal Trade-oriented advertising and personal sellingselling

Stimulate point-of-purchase salesStimulate point-of-purchase sales Brand naming and packaging, P-O-P Brand naming and packaging, P-O-P messages, and external store signagemessages, and external store signage

Increase customer loyaltyIncrease customer loyalty Advertising and sales promotionsAdvertising and sales promotions

Improve corporate relations with special Improve corporate relations with special interest groupsinterest groups

Marketing-oriented PRMarketing-oriented PR

Offset bad publicity about a brand or generate Offset bad publicity about a brand or generate good publicitygood publicity

Marketing-oriented PRMarketing-oriented PR

Counter competitors’ communications effortsCounter competitors’ communications efforts Advertising and sales promotionsAdvertising and sales promotions

Provide customers with reasons for buying Provide customers with reasons for buying immediately instead of delaying a purchaseimmediately instead of delaying a purchase

Advertising and sales promotionsAdvertising and sales promotions


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Marcom Objectives in Terms of Sales

• Objectives of Presales Communication

– To increase the target audience’s brand awareness

– To enhance the target ir attitudes toward the brand

– To shift their preferences from the competitors’ brand

• Sales Objectives

– The marcom objective literally is to increase sales by a particular amount.


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The Hierarchy of Marcom Effects

• Advancing Consumers from Unawareness to Awareness– Advertising is the most effective and efficient

method for quickly creating brand awareness.

• Creating an Expectation– Product benefits from buying and experiencing a

brand

• Encouraging Trial Purchases– Free samples, coupons, major price discounts

and rebate offers encourage trial behaviors


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The Hierarchy of Marcom Effects (cont’d)

• Forming Beliefs and Attitudes– Beliefs form the basis for developing an overall

attitude toward the brand.– Beliefs and attitudes are mutually reinforcing

• Reinforcing Beliefs and Attitudes– Marcom serves to reinforce consumer beliefs and

attitudes based on product usage experience

• Accomplishing Brand Loyalty– Brands that continue to satisfy expectations

foster brand-loyalty which reduces price sensitivity

Factors affecting budgeting

• Competition

• Campain objectives

• Product life cycle

• Market size

• Availability of Funds

• Media plan

Budgeting Methods


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Budgeting Methods

1)Percentage-of-Sales Budgeting– Brand advertising budget is a fixed

percentage of past (e.g., last year’s) or anticipated (e.g., next year’s) sales volume.

2)Objective-and-Task Budgeting– Advertising decision makers specify what role

they expect advertising (or some other marcom element) to play for a brand and then set the budget accordingly.


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(cont’d)

3)Competitive Parity Method Budgeting

– Setting the marcom budget to match or exceed what competitors are doing

– Share of Market (SOM)

– Share of Voice (SOV)


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(cont’d)

4)The Affordability Method– Spending on advertising only those funds that

remain after budgeting for everything else.

– Relegating marcom to a position of comparative insignificance (vis-à-vis other investment options)

– Marcom are implicitly considered relatively unimportant to a brand’s present success

– Challenge is to demonstrate that marcom do produce results


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Marcom Budgeting

• Budgeting in Theory

– The best (optimal) level of any investment is the level that maximizes profits

• Marginal revenue = Marginal cost, MR=MC

• Marginal Cost = Change in total cost = TCChange in quantity Q

• Marginal Revenue = Change in total revenue = TR Change in

quantity Q

– Advertisers should increase their advertising investment as long as it is profitable to do so

1)Competition Analysis The purpose of Five-Forces Analysis The five forces are environmental forces...

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