Welcome

John Tucker – Principal Consultant

MAKING GOOD BUSINESS

Making Good Business

Who are We?

Consultancy

Midlands Based

Specialising in helping businesses

change and grow

Systems Thinking

Sharing Good Practice

Making Good Business

Presentation Objectives:

Explore frameworks for Routes to

Market (RTM) for different types of

business

Understand how to identify risks and

opportunities

What is Marketing?

Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Marketing is an organizational function and a

set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders (AMA, 2004)

The Concept of Exchange

Two or more parties are involved

Each seeks value to satisfy needs

Each is willing to offer something of value

to the other

Marketing ….

is a managerial process

aims to create voluntary exchanges

comprises 4 components often referred to as the “4 P’s”:

product

pricing

promotion

place (distribution)

The Marketing Approach

Marketers must create an exchange situation: Target audience will perceive the benefits of changing

behaviour as superior to the costs (not always £) involved.

Requires adopting a customer orientation – you analyse behaviour from the point of view of target audiences so you must know about them (not make assumptions).

Recognises markets are comprised of market segments requiring different marketing strategies to generate desired behaviour change.

Requires research – lots of research – much available at no cost.

Requires development of strategy around 4 P’s

Marketing Planning Major Steps:

1. Decide what you want to do

2. Analyse environment (your own organisation's S&W’s, potential target audiences, competitors or competing behaviours)

Understand behaviour of your intended clients/ targets - identify barriers and benefits to your desired activity from their viewpoint

Marketing Planning

Continued…

Major Steps:

3. Develop a strategy that utilises tools shown to be effective in changing behaviour

4. Evaluate the strategy once it has been implemented or during implementation – change might be required

The Four Stages of Behaviour

Change…

To adopt a new purchasing behaviour, the

target audience evolves through 4 stages:

1. Pre-contemplation stage (need awareness)

2. Contemplation stage (have awareness – moving

to understanding/motivation)

3. Action stage (involvement/input leads to informed decisions and actions)

4. Maintenance stage (they’re doing it)

Note - can go back & forth through these stages

Marketing Plan I. Executive Summary

II. Strategic Analysis

Situation

Target audiences – barriers and benefits of the desired behaviour

Competitors/competing behaviours

Organizations current/past strategies

Organizations internal strengths and weaknesses (SW of SWOT)

External environment (OT of SWOT)

Partners (potential or pre-determined)

PEST (political, economic, social, technological)

Strategic Gap Identification

Marketing Plan (Continued) III. Mission and Objectives, Goals

IV. Strategy and Plans

Segmenting markets and selecting target audience(s)

Product strategy

Pricing strategy

Promotion strategy

Place (distribution) strategy

V. Action Plans –they’re the next logical step)

VI. Evaluation

VII. Budget

The Consumer Product Acquisition Process

Law & Ethical Issues

• managers must understand the importance of consumer protection in the context of selling:

• apply appropriate terms and conditions to a contract of sale

• appreciate how legal controls affect sales activities

• make voluntary and legal restraints work to the advantage of both the buyer and the seller

• appreciate ethical issues in selling

21st Century Landscape

Globalisation Technology

• Free movement of factors in one huge, single market

• Spread of economic innovations

• Result is increased competition

• Shorter product

cycles because of

increasing rates of

technological

changes and

diffusion

• Different forms of

competition because

of changes in IT

• Knowledge prevails

Strategic Sales Function

Sales Management

should consider the

basic concepts of

Needs, Wants,

and Demands

Markets Products and

Services

Exchange, Transactions,

and Relationships

Value, Satisfaction,

and Quality

GE/McKinsey’s Model of Market

Attractiveness/Business Position

Grow Build

Reinforce

Investment

for growth

Selective

investment

Business position

Ma

rke

t

att

rac

tiv

en

ess

Maintain Divest

High

Medium

Low

High Medium Low

No investment

Market Development Related Diversification

Unrelated Diversification

Product Development

Withdrawal

Consolidation

Market Penetration

Existing Markets

New Market

s

Existing Products

New Products

Virgin Group

Ma

rke

ts

Product Range

Positioning & Product Differentiation

Ansoff’s Directional Matrix

Existing Markets

New Market

s

Existing Products

New Products

Virgin Group

Ma

rke

ts

Product Range

Positioning & Product Differentiation

Ansoff’s Directional Matrix

Market Development

(Virgin Blue)

Related Diversification

(Virgin Galactic)

Unrelated Diversification

(Financial Services &

Virgin Bank)

Product Development (Mobile Telephony

&/or

Holidays & Leisure)

Withdrawal

(Cosmetics & Alcohol )

Consolidation

(North Atlantic Air Routes)

Market Penetration

(New Routes to Far East)

Product Life Cycle….. N

o o

f sa

les

Timeline

Decline

Saturation

Maturity

Growth

Launch /

Introduction

R&D

Sale

s

Time

Pricing & Cost Leadership

Advertising & Promotions

Effects of Extension Strategies

Extending the Product Life Cycle

Question

Marks

Cash Cows Dogs

High

Low Low High M

ark

et

Gro

wth

Ra

te

Relative Market Share

Boston Matrix Boston Consulting Group Growth/Share Matrix

Boston Matrix Objectives & Strategies

(Suggestions)

Stars – Invest for growth

Question Marks – Opportunistic

development

Cash Cows – Manage for earnings

Cash Dogs – Extend life

Genuine Dogs – Harvest/divest

Sales channels

Is the route that goods take

through the selling process from

supplier to customer.

A Sales Channel

Logistics The process of strategically

managing the efficient flow

and storage of raw materials,

in-process inventory, and

finished goods from point of

origin to point of

consumption.

Sales channels

Logistics Mix

Order processing

Material handling

Warehousing

Inventory control

Transportation

Packaging

Channels for Consumer Products

Producer Producer Producer Producer

Consumers Consumers Consumers Consumers

Retailers Retailers Retailers

Wholesalers Wholesalers

Agents or Brokers

Wholesaler Channel

Retailer Channel

Direct Channel

Agent/Broker Channel

Channels for Business Products

Producer

Industrial User

Direct Channel

Producer

Govt. Buyer

Direct Channel

Producer Producer Producer

Industrial User

Industrial User

Industrial User

Industrial Distributor

Industrial Distributor

Agents or Brokers

Agents or Brokers

Agent/Broker Channel

Industrial Distributor

Agent/Broker Industrial Channel

Selecting Sales Channel Criteria

Channel costs

The product

Profit potential

The market

Non-marketing factors

Product life-cycle

Channel structure

Selecting Sales Channel Criteria

The Market

Must be analyzed

Channel compatibility with similar products in the market

is important

Companies must ensure to maintain the status and

image associated with the channels.

Selecting Sales Channel Criteria

Channel costs

Short channels are the costliest.

Short channels have an advantage of being nearer to the end users.

Recently manufacturers have tendency to shorten the channels.

Selecting Sales Channel Criteria

The product

Low -cost, low-technology items are better suited to

longer channels

More complex items, requiring after-sales service, tend

to be sold through short channels

The width of product line is important

A narrow product line is more suited to a longer channel

Selecting Sales Channel Criteria

A manufacturer using short channels is more likely to

have high gross margins, but equally high channel

expenses.

A manufacturer using longer channels is will have

relatively lower gross margins, coupled with lower

channel expenses.

Profit potential

Selecting Sales Channel Criteria

A manufacturer’s choice of distributive intermediaries is

governed by the members in the channel.

Sometimes difficult to gain entry to the channel unless

the product is differentiated by way of uniqueness or

lower price.

Channel structure

Selecting Sales Channel Criteria

A new concept or product entering the life-cycle might

need intensive distribution

Later, after-sales service criteria become important

leading to selective distribution

Product life-cycle

Selecting Sales Channel Criteria

The amount of finance available

International selling

Non-marketing factors

Characteristics of Sales Channels

Direct: the manufacturer sells to the end-user.

Selective: the manufacturer sells through a limited number

of middlemen chosen

Intensive: the manufacturer sells through as many outlets

as possible.

Exclusive: the manufacturer sells to a restricted number

of dealers.

First Steps

Multiple channels available

Understand your business first

Capabilities and available resources

Competitive Environment

Undertstand your target market

The Business Model Canvas

Using the Business Model Canvas

Discussion

Examples from attendees

How to usefully apply the Business Model

Canvas

Value-Adds vs. Costs of Different Channels

Summary: Routes to Market

Multiple channels available

Understand your business first Capabilities and resources

Competitive Environment

What if? Planning for the unexpected

Segment your market

Undertstand your target customer

Review regularly

Minimise risk

Support with process

Sources of support

LLEP

Chamber of Commerce

FSB

IoD

DIT

gov.uk

Us!

Making Good Business