Lecture 3 Slides SMM Feb 10th 2012 Module BD415029s
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Transcript of Lecture 3 Slides SMM Feb 10th 2012 Module BD415029s
3.1
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Group Discussion
•Develop a consumer buying process a family would use to to purchase a car. •What differing influences might, mum, dad or the 2 children separately have ?
3.2
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
This Week
Review
• Competitor analysis Kotler Ch 9
• Distribution Structure and Analysis Ch 17
• Market Analysis Ch 8
• Use the VLE
3.3
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Dealing with competition
Lets Remember !
Sustainable Competitive Advantage should be the major focus of the strategic planning process
3.4
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Lecture questions
1. How do marketers identify primary competitors?
2. How should we analyse competitors’ strategies, objectives, strengths and weaknesses?
3. How can market leaders expand the total market and defend market share?
4. How should market challengers attack market leaders?
5. How can market followers or nichers compete effectively?
3.5
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Behind the five forces
‘Competition is often looked at too narrowly by managers.’
Michael E. Portervideo clip
Article referred to is in Harvard Business Review January 2008
3.6
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 9.1 Five forces determining segment structural attractivenessSource: From M. E. Porter (1985) Competitive Advantage. Creating and Sustaining Superior Performance, New York: Free Press. Copyright © 1985 by Michael E. Porter. Reproduced with permission from The Free Press, a division of Simon & Schuster Adult Publishing Group
3.7
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Industry concept of competition
• Number of sellers and degree of differentiation
• Entry, mobility and exit barriers
• Cost structure
• Degree of vertical integration
• Degree of globalisation
3.8
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 9.4 A competitor’s expansion plans
3.9
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Steps in benchmarking• Determine which functions or processes to
benchmark• Identify the key performance variables to
measure • Identify the best-in-class companies• Measure the performance of best-in-class
companies• Measure the company’s performance• Specify programs and actions to close the gap• Implement and monitor results
3.10
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Selecting competitors
‘Strong’ vs. ‘Weak’
‘Close’ vs. ‘Distant’
‘Good’ vs. ‘Bad’
3.11
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 9.5 Hypothetical market structure
3.12
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Expanding the total market
New customers
More usage
3.13
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Factors relevant to pursuing increased market share
• Possibility of provoking authoritative action
• Economic cost
• Pursuing the wrong marketing-mix strategy
• The effect of increased market share on actual and perceived quality
3.14
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Specific attack strategies
• Price discounts• Lower-priced goods• Value-priced goods• Prestige goods• Product proliferation• Product innovation
• Improved services• Distribution
innovation• Manufacturing-cost
reduction• Intensive advertising
promotion
3.15
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Market follower strategies
Counterfeiter
Cloner
Imitator
Adapter
3.16
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Designing and managingsupply networks
3.17
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Questions
1. What are supply networks and channels of distribution?
2. How should marketers design supply networks and channels of distribution?
3. How can marketers select channel members?
4. What are the challenges of managing distribution channels?
5. What are the impacts of digital/information and communication technologies?
3.18
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
GOODYEAR Discussion
3.19
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Who are the top supply chain companies worldwide?
• Nokia• Apple• Procter & Gamble• IBM• Toyota Motor• Wal-Mart• Anheuser-Busch• Tesco
• Best Buy• Samsung
Electronics• Cisco Systems• Motorola• The Coca-Cola
Company• Johnson & Johnson
3.20
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Characteristics of high performing supply chain companies
• ‘Outside-in’ marketing focus
• Supply chains extend out to customers and suppliers
• Innovation is embedded
• Right attitude towards management and supply chain
3.21
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is a supply chain?
A supply chain is a set of three or more entities (organisations or individuals) directly
involved in the upstream or downstream flows of product, service, finances and/or information
from a source to a customer.
3.22
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Global supply networksWhat marketing tactics has the concern for long supply seeded ?
Figure 17.2 Global supply networks: coordinating road, rail, shipping, airlines and the Internet
3.23
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Supply Chain
This video clip explores the role of supply chains within a variety of leading businesses – Dell, Zara, Victoria Secrets and Dyson with a core focus on the customer within the supply chain rather than on efficiency only.
www.youtube.com/watch?v=2XUgce8lZB4&feature=PlayList&p=AB139030DEDC47A5&playnext=1&index=43
3.24
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What are distribution channels?
Distribution channels are sets of intermediaries that are usually independent
organisations involved in the process of making a product or service available for use
or consumption.
3.25
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Intermediaries in distribution channels
Non-Title Holders
• Brokers
• Manufacturers’ reps
• Agents
Title Holders
• Wholesalers
• Retailers
• Distributors
• Transport companies
3.26
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is supply chain management?
Supply chain management (SCM) encompasses the planning and
management of all activities in buying, making, providing and distributing. It also includes coordination and collaboration
with channel partners.
3.27
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Components of an SCM philosophy
A systems approach
A strategic orientation
A customer focus
3.28
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is a network?
A network consists of nodes and relationships with which interaction takes place.
It can accommodate movements in any direction and change shapes.
Its nodes include people, organisations, machines, events and activities.
3.29
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
3 As of network effectiveness
Agility
Alignment
Adaptability
3.30
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Key processes of supply chain management
• Manufacturing or service process flow management
• Intermediary relationship management
• Product development/ commercialisation
• Returns
• Customer relationship management
• Customer service management
• Demand management
• Order fulfillment
3.31
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Consumer marketing channels
Figure 17.11 Consumer and industrial marketing channels
3.32
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is multichannel marketing?
• Multichannel marketing occurs when a company uses two or more marketing channels to reach one or more customer segments.
• A multiple channels strategy provides multiple channels for the consumer while a multichannel strategy has cross-channel benefits.
3.33
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Types of buyers
Habitual shoppers
High-value deal seekers
Variety-loving shoppers
High-involvement shoppers
3.34
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Types of shoppers
Service/quality customers
Price/value customers
Affinity customers
3.35
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Channel member functions• Gather information• Develop and disseminate persuasive
communications• Reach agreements on price and terms• Acquire funds to finance inventories• Assume risks• Provide for storage• Provide for buyers’ payment of their bills• Oversee actual transfer of ownership
3.36
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Designing a marketing channel system
Analyse customer needs
Identify and evaluate major channel alternatives
Select channel members and evaluate alternatives
Establish channel objectives
Decide on number of intermediaries
3.37
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Customer needs
Quantity of purchase
Waiting/delivery time
Convenience
Product variety
Service backup
3.38
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Identifying channel alternativesWho owns the customer interface? It is rarely the manufacturer.
Types of intermediaries
Number of intermediaries
Terms and responsibilities
3.39
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Number of intermediariesHow do you ensure your branding and positioning values are maintained ?
Exclusive
Selective
Intensive
3.40
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Terms and responsibilities of channel members
• Price policy
• Condition of sale
• Distributors’ territorial rights
• Mutual services and responsibilities
3.41
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 17.15 The value adds versus the costs of different channels
3.42
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Channel-management decisions
Training channel members
Motivating channel members
Evaluating channel members
Modifying channel members
3.43
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Figure 17.16 Self-service channelsSource: Adapted from Microsoft Corporation (2007) Microsoft® Customer Care Framework 2008: Redefining Customer Experience (retrieved from http://download.microsoft.com/download/b/d/2/bd2a14b8-b64b-4191-a2d5- 11d0dc9f0ce/ CCF_08_Brochure_web.pdf). Copyright © Microsoft Corporation. Reproduced with permission
3.44
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Analysing business markets
3.45
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Questions
1. What is the business market, and how does it differ from the consumer market?
2. What buying situations do organisational buyers face?
3. Who participates in the business-to-business buying process?
4. How do business buyers make their decisions?
3.46
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
What is organisational buying?
Organisational buying refers to thedecision-making process by which formal
organisations establish the need for purchased products and services, and identify, evaluate and choose among
alternative brands and suppliers.
3.47
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Top business marketing challenges
• Expand understanding of customer needs
• Compete globally as China and India reshape markets
• Master analytical tools and improve quantitative skills
• Reinstate innovation as an engine of growth
• Create new organisational models and linkages
3.48
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Characteristics of business markets
• Fewer, larger buyers• Close supplier-
customer relationships
• Professional purchasing
• Many buying influences
• Multiple sales calls• Derived demand• Inelastic demand• Fluctuating demand• Geographically
concentrated buyers• Direct purchasing
3.49
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Suppliers like Goodyear depend on a market of fewer buyers
Goodyear Tyre Company exemplifies many suppliers that depend on a market of fewer, but larger, business buyers Source : Worth Canoy/Icon/Corbis
3.50
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Top business marketing challenges
Table 8.1 The top business marketing challenges for 2005–2007Source: From Institute for the Study of Business Markets (2006) Know thy customer. Marketplace: The ISBM Review, Winter, Exhibit 1, p. 2 (www.smeal.psu.edu/isbm/documents/mktpw06.pdf). Reproduced with permission from ISBM, Smeal College, Pennsylvania State University
3.51
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Guidelines for selling to small businesses
• Professional purchasing
• Multiple buying influences
• Multiple sales calls
• Derived demand
• Inelastic demand
• Fluctuating demand
• Direct purchasing
3.52
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Buying situations
Straight rebuy
Modified rebuy
New task
3.53
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Systems buying and selling
Turnkey solution desired;
Bids solicited
Primecontractors
Second-tiercontractors
System subcomponents
assembled
3.54
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
The buying center Discussion
Initiators
Users
Influencers
Deciders
Approvers
Buyers
Gatekeepers
3.55
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Of concern to business marketers
• Who are the major decision participants?
• What decisions do they influence?
• What is their level of influence?
• What evaluation criteria do they use?
3.56
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Seven keys to customer reference stories
1. State customer needs in compelling terms2. Emphasize barriers in satisfying
customer needs3. Describe company’s solution in terms of value4. List qualified results5. Differentiate your offering from those of
competitors6. Provide a brief comprehensive summary7. Include numerous customer quotes
3.57
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Stages in the buying process: buyphases
• Problem recognition
• General need description
• Product specification
• Supplier search
• Proposal solicitation
• Supplier selection
• Order-routine specification
• Performance review
3.58
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Forms of electronic marketplaces
• Catalog sites
• Vertical markets
• Pure play auction sites
• Spot markets
• Private exchanges
• Barter markets
• Buying alliances
3.59
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Methods of e-Procurement
• Websites organised using vertical hubs
• Websites organised using functional hubs
• Direct extranet links to major suppliers
• Buying alliances
• Company buying sites
3.60
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Handling price-oriented customers
Limit quantity purchased
Allow no refunds
Make no adjustments
Provide no services
3.61
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Methods for researching customer value
• Internal engineering assessment
• Field value-in-use assessment
• Focus-group value assessment
• Direct survey questions
• Conjoint analysis• Benchmarks• Compositional
approach• Importance ratings
3.62
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Factors affecting buyer-supplier relationships
Availability of alternatives
Supply marketdynamism
Complexity ofsupply
Importance ofsupply
3.63
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Categories of buyer-seller relationships
• Basic buying and selling
• Bare bones• Contractual
transaction• Customer supply
• Cooperative systems
• Collaborative• Mutually adaptive• Customer is king
3.64
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Week 3
• Dealing with the Competition • Designing and Managing Supply Networks • Market Analysis
3.65
Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009
Week 4
• Research • Mission and Values • Balanced Scorecards• Financial and Non Financial goals.