Marketing effectively

MARKETING EFFECTIVELY

• Strategic marketing is defined as a total system ofinteracting business activities designed to plan ,price,promote and distribute want satisfying products andservices to organizational and household users at aprofit.

• There are several aspects to know how to approacheffective marketing


Strategies are actions to achieve objectives.It is the art of coordinating the means (money, human,resources and materials ) to achieve the ends (profitcustomer satisfaction and company growth) as definedby company policy and objectives.


STRATEGY

HIGHER LEVEL MIDLEVEL LOWER LEVEL


• Higher level strategies : it includes deploying companyresources towards fulfilling the company’s aim for thefuture with a view towards understanding changingmarket conditions and keeping in mind long rangepotential for its future development and profitable growth.

• Mid level strategy: it works at the level of business unit ,itis more precise than corporate strategy .it covers 3 to 5years period and focuses on quantitative and nonquantitative objectives.


The main goal of midlevel strategy is to:1)Penetrate existing market with existing products2)Expanding into new markets with existing products3)Developing new products for existing markets4)Develop new products for new markets (diversification).

Lower level strategy :it requires shorter time frame(usually one year).


It would correlate with the company business plan andbudgeting process ,it works to achieve short termobjectives while supporting short term objectives andstrategies .it covers areas as pricing, discountsadvertising media and copy themes ,sales forcedeployment and selling aids.


• Marketing strategies allow you to:1) Interpret strategy principles and apply them to your own

business.2) Identify the importance of time factor to strengthen your

marketing campaigns3) Apply the basic strategic principles of speed, indirect

approach ,concentration ,alternate objectives andunbalancing competition.


4) Devise competitive marketing strategies to outperformyour competitors.

5) Develop a strategic marketing plan as a line ofcommunications and an action oriented document.Product positioning: product positioning is one of theapplications of marketing strategy.


Steps of product positioning include:1) Selection of a competitive advantage that larger

competitors cannot perform efficiently .this can beaccomplished by employing formal and informal marketresearch to identify areas of differentiation.

2) Commit to quality and service as an organizationalpriority .this is done by continuous training to all staff togain commitment to striving to quality


3) Focus on specialists products that allow premium price.this is done by segmenting the market for specificproducts and service applications.

4) Establish long term relationship with customers to growwith them and build technology relationships .this is doneby encouraging trust with customers.

5) Maintain a market driven orientation throughout yourorganization .this is achieved through


Organizing a team from various functions .the team willdevelop a strategic marketing plan and use it as a line ofcommunication and an actionable document to respondrapidly to market opportunities.

6) Seek global opportunities that complement long termobjectives. this is done by using internet and exploringjoint ventures.

7) Partnering sales people with customers to providesolutions to customers problems .this is achieved bycontinuous training.


8)Identify emerging ,neglected or poorly served marketniches .this is done through reassessing marketingsegmentation ,searching for additional approachesbeyond the usual criteria of customer size, frequency ofpurchase and geographic location .looking for potentialniches related to just-in-time delivery ,productperformance and reliability.


• MANOEUVRING technique is another application ofmarketing strategies .it means taking the most roundabout route to the customer .its guidelines include:

1) Knowing the market: pinpoint the likely points that wouldincrease chances of success for entry .for example lookat geographic location, availability of distributors andbuying motives.

2) Assess competitors intentions and strategies.


3) Determine the level of technology required4) Evaluate your internal capabilities and competencies

(never over estimate or under estimate your abilities)5) Maintain discipline ,vision and seek developing a

winning spirit.6) Secure financial resources :this is necessary because if

competitors detect financial weakness they can simplyplay the wait game.


7)Develop a launch plan to market your product, shape themarketing mix (product, price, distribution ,promotion)

8)Maintain a sensitive awareness of how customers willrespond to your product offering by using marketresearches to point what motivates customers to buyyour products.


It is clear that although higher technology computerizedreports and internet based data are available yet thehuman factor is still irreplaceable in the marketingprocess .marketing is considered as a battle of minds inwhich every one tries to disrupt the competitors planagainst him.


• Disruption takes place at two level: physical andpsychological.

• physical disruption :includes a series of movesTo upset your competitor’s plan through pinpointedActions against his market position .an example of this isto develop plans to cancel any advantage a competitormight have in making on time deliveries by matching orexceeding the time.


• psychological disruption :it involves the effect anyphysical move has on the mind of the competingmanager .

• The combination of both techniques will lead to distractthe competitor from his efforts and limit his moves .

• The marketing strategy techniques is similar to militaryones and takes various forms:

MARKRTING EFFECTIVELY

ATTACKINGSTRATEGIES

DIRECTATTACK

INDIRECTATTACK

ENVELOPMENTATTACK

BYPASSATTACK

GUERRILLAATTACK


• The direct attack: this technique leads to huge loss .itneeds at least 3:1 competitive advantage failure in suchattack is documented through out the history advantagefailure in such attack is documented through out thehistory.the marketer who applies this technique has noexecuse and has no place in todays competitiveenvironment.


• The indirect attack :the attacker launches a primaryattack against one of the competitor’s weaknesses anduses a secondary direct attack to distract attention awayfrom primary effort.

• This is one of the most fruitful approaches .it has thegreatest chances of success while conserving thegreatest amount of strength.

• It concentrates on a market segment that is emerging,neglected or poorly served .


• Envelopment attack :it consists of two stages.First as an indirect attack the aggressor focuses on aspecific market segment for a point of entry then byidentifying additional market segments and adding newproducts ,it uses an expansion strategy to envelop theentire market .for example SEIKO entered the northAmerican market by one type of watches then envelopedthe market with over 400 models of these watches.


• Bypass attack: it allows the attacker to circumvent itschief competitors and diversify into unrelated productsor all new geographical markets allowing compensationof missed opportunities .


• Guerrilla attack :it involves small intermittent forays intodifferent markets .applied mainly when a small companyis competing against a large corporation or by a largerorganization against its competitor .it involves actionslike selective price cuts ,supply interference andintensive promotional bursts .the aim of such movementsis to cause distraction leading to mistakes.


UnbalancingCompetition

Alternativeobjective Concentration

Speed

IndirectApproach

STRATEGYPRINCIPLES


• Speed is extremely critical in our business. Drawn outefforts divert interest and depress morale .the gap oftime created through lack of action gives the competitorgreater chance to react .two factors help reacting withspeed which are:1)new technology,2)effectiveorganization.

• The drawbacks of multi levels in decision makingprocess are:

1)Loss of time in getting information back.


1)Loss of time in getting information back2)Loss of time in sending orders forward3)Reduction of top executives full knowledge of the

situation4)Reduction of the top executive’s personal influence on

managers.To increase speed of operations the following is required


1)Reduce the reporting level and increase the pace ofcommunication from the pace to head office.

2)Utilize junior managers for flexibility and identifying andtaking advantages of new opportunities.

3)Use cross functional strategy team that tap any culturediversity that exists in the firm.


• Indirect approach: to use an indirect approach do thefollowing:

1)Search for emerging ,neglected and poorly servedmarket segments through competitive analysis.

2)Identify a competitive advantage centered on the,marketing mix (price, product, promotion distribution)

3)Use surprise and speed to disorient your competitor.


4) Move towards market expansion once gaining a point ofentry.Concentration: it has two uses in strategy:

1) Directing resources to a certain market segment2) Focusing your strength against competitor weakness.

Alternative objectives: there are 4 reasons to developalternative objectives:1)most businesses need a widerange of objectives with a variety of strategies and timeframes.


2)The strategic principle of concentration is implementedsuccessfully through the application of alternativeobjectives.

3)It permits enough flexibility giving options to achieve oneobjective while other fails.

4)It keeps your competitor on the horns of a dilemmaobliged to spread his resources and efforts to match youraction.


• Unbalancing competition: it fulfils strategy’s ultimatepurpose which is the reduction of resistance .tounbalance the competitor you have to:1)identify theareas in which the competitor is not able to respond toyour action.

2)Use the surprise factor3)Utilize new technology as electronic reporting systems.


• The previous principles of market strategy give rise toimportant lessons which are:

1)The tools of marketing are physical acts and need amental process to direct them ,thus keep the marketingprinciples in the forefront of your thinking which will giveyou the upper hand at the least cost in human andmaterial resources.

2)The tougher you make your marketing practicesThe more the competitors will consolidate against youwhich will harden the resistance you face.


3)The more intent you are in securing a market of your ownchoosing and terms the more obstacles you will face

4)If you are trying to dislodge a competitor from a strongmarket position leave him an easy way to exit the marketdo so by initiating value added services obligating thecompetitor to pump in far more resources than budgetcalls for thus giving the impression that it would beprudent for him to pull out.


Customer analysis: the customer is the center ofmarketing’s attention. Guidelines for customer analysisinclude:

1) Define the customers by demographic andpsychographic characteristics :look for unmet customerneeds, talk with customers to know their problems andencourage sales people ro innovate.

2) Examine customer usage patterns and frequency ofpurchase :observe deviations in seasonal and regionalpurchase patterns and translate to opportunities.


3)Survey selling practices :tune in to current trendsIn promotional allowances ,selling tactics ,trade discountsand purchase opportunists.

4)survey supply chain: examine own distribution channels,warehousing and seek opportunities for innovation aselectronic ordering.

5)Look for product possibilities and line extensions.6)Explore opportunities to cut costs for yourself and your

customer.


• Components that form customer analysis are:Market and product segments, patterns of customerbehavior and unfulfilled wants and needs

Market and product segments segmentation meanssplitting the overall market into smaller sub-markets orsegments that that have more in common with oneanother than the total market. Certain criteria must beput in consideration in choosing a market segment:


1)It must be measurable :possibility to quantify example:how many factories? How many residencies?......etc.

2)It must be accessible3)It must be substantial :is it of sufficient size to warrant

attention as a segment?4)It must be profitable.5)Compatible with competition: is it of active interest or

negligible interest to the competitor?


6)It must be defendable :this mainly depends on theorganization personnel and their effectiveness.

Categories to segment market are :demographic,geographic ,psychographic and product attribute factors.

MARKETING EFFECTIVELYdemographic psychographic geographic Product attribute

sex lifestyle region Usage rate

age Psychologicalvariables: personality,self image

urban Product benefits

family Cultural influences:group behavioralpatterns

Population density

race City size

education climate

income

occupation

Family size

religion

Home owner ship

MARKETING EFFECTIVELYA famous method to segment the market is to apply fieldethnography technique (ethnography is the study ofpeople in other cultures and the resultant written textfrom that culture).It includes four major steps:

1)Maping a segment: using personal information and database while describing in non judgmental terms .

2)Create an exclusive language :avoid using ownprofessional language to avoid bias ,better use termsborrowed from a neutral field .

3)Observe body language and non verbal buying signs.4)Describe the ritual which is a collection of symbols which

a good separates out and considers one by one.


The second factor to consider is patterns of customerbehavior. the behavior must be interpreted andconnected to strategy selection.

The last factor is determining the unfulfilled wants andneeds of various customer segments aiming forcustomer satisfaction through the following steps:

1)Define customer requirements and expectations throughgathering continues feed back.

2)Maintain a system of customer relationship managementsuch as customer service

3)Adhere to customer service standard such as time tohandle complaints on time shipment…..etc

MARKETING EFFECTIVELY4) Make commitment to customers a company ritual, a

commitment means guarantee that include :stock ordershipped the same day received ,technical service teamssent to customers specialized training provided tocustomers…etc.

5) Resolve complaints to achieve quality improved results:complaints must be solved on the spot and formallyreported to a customer satisfaction committee.

6) Determine what constitutes customer satisfaction7) Customer satisfaction results must be circulated so that

next year objectives can be determined8) Compare customer satisfaction levels with that of

competitors through formal and informal bench marking.

MARKETING EFFECTIVELY• Competitor analysis :it gives a picture of the rival’s

position in the market thus uncover their weak spots .toanalyze competitor’s strategies is to categorize them bystrategic group :

1) Companies that pursue a differentiation strategy whichrely on product line depth, quality ,service and brandidentification policy.

2) Companies that follow a low cost strategy base theiroperations on economies of scale ,the experience curveand manufacturing facilities.

3) Companies that use a focus strategy go after theboundaries of competitor’s product line and servedmarkets.


• Industry analysis :rate the industry readiness to acceptnew products ,technologies and value added service.estimate industry the stage of own industry in its lifecycle.

Industry analysis includes several levels:Level (1) check list includes: suppliers, existingcompetitors ,emerging ones, alternative product

Offering (aluminium instead of steel …..etc) andcustomers.


• Level 2 analysis :it is a more detailed analysis thatincludes:1)current demand for product

2) Future potential for product: three to five yearstimeframe to forecast the product potential.

3) Industry life cycle: the stage of your industry in its lifecycle (introduction ,growth ,maturity and decline)

4) Emerging technology5) Changing customer profile


6)Frequency of new products introduction.7)Level of governmental regulation: regulations change

from time to time and these changes must be monitored.8)Supply chain9)Entry and exit barriers: capital investment needed, extent

of economies of scale.10)Marketing innovations11)Cost structures: impact of cost on market efforts.


• Environmental analysis: it requires looking beyond theimmediate market scope, several steps are required todo so as:

1) Market penetration2) Product development3) Market development4) diversification.


• Internal analysis: internal analysis allows us to “look inthe window” to examine the capabilities of your ownorganization in defending or attacking markets.

• Performance analysis: it relates to structure, people,culture ,tasks, resource utilization, innovation andproductivity .within an organization ,a culture exists witha highly individualized DNA that will influence its actions.


• Guide lines for performance improvement:1) Allow information to flow down wards without routine

obstacles.2) React fast to aggressive competitors.3) Allocate proper planning and time to avoid hasty

decisions.4) Master the art of launching a product.5) Stay updated to technological changes.6) Fastly adopt your system with updated communication

tools.


• Strategy analysis :this includes the ability to react quicklyand shove aside aggressive competition ,protect marketshare and utilize the organization resources. in general(protecting an existing market share is cheaper thangaining new one)

• Strategic priority analysis: set priorities for your strategyputting customer satisfaction in the top

Search areas as product development, productionskills,distibution or complaint handling.


• Develop business building strategies on twogoals:1)deliver ever improving value to customers.

2)Communicate to customers your company’s readiness toimprove its overall company performance.

Cost analysis: in general regardless of the company sizethere is no need to compromise between market shareand profitability goal. if a cost analysis is conducted tomaintain a balance of costs and expenditures that aresynchronized


With marketing objectives.Guide lines to maintain balance between market share,growth ,costs and profitability:

1)Take in consideration that maintaining market share isless expensive than building a new one.

2)Look at the criteria used to evaluate market share. if youare serving only a segment rather than an overall marketthen there are implications for costs and profitability.


3)Defending market share is less expensive than buying itback after being pushed by competitors.

4)Examine components that contributes to increase inmarket share and choose which strategy would impactyour cost structure and profitability:1)customerpenetration,2)customer loyalty,3)customer usage 4)price selectivity.

Selection of a strategy will need an understanding ofexperience curve and forecasting techniques.


• Experience curve: the Boston consulting groupconducted thousands of cost studies and showed thateach time the volume of a product doubled the totalcosts (administration ,sales, marketing distribution andmanufacturing) fell by a constant and predictablepercentage. further the cost of purchased items fell assuppliers reduced prices as their costs fell. this relationship between cost and experience is called theexperience curve.

MARKETING EFFECTIVELY• Knowing that cost will be reduced each time production

is doubled is only part of the equation, the other partsare in knowing which factors contribute to the experiencecurve and then incorporating those factors into yourmarketing plan.Cost -customer relationship profile:

1) basic: a one time purchase customer, profit margin islow thus a customer person to maintain telephonecontact is sufficient.

2) reactive: customer call for assistance with a productproblem thus a periodic check is appropriate.

3) accountable: sales rep calls the customer a short timeafter purchase to check if product is meetingexpectations .this action begins a proactive approach torelationship marketing


• Proactive: periodic meeting between customer and salesrep is involved to recommend improved products

• Partnering: the sales person and a team of specialistwork intensely to solve customer’s problem. it rangesfrom regular contact to the extreme of placing a technicalperson full time at customer location.Practically speaking accumulation of experience


Curve faster than competitors will give the advantage ofprice flexibility.The implications of experience curve are:

1) A competitive advantage is possible if greaterexperience curve is accumulated .the resulting costadvantage can be used to plough back investment toachieve additional manufacturing efficiencies.

2) It is almost preferred to study competitors experiencecurve.


3)It is used to forecast costs thus setting prices.Sales forecasting techniques: the purpose of salesForecasting is to anticipate future events and developstrategic means for controlling them.The forecasting techniques are either judgmentalmethods involving experts opinions as executives ,salespeople and informed outsiders or market surveys usingbuyer surveys and market tests.


• Judgmental methods:1) Judgment from extremes: an expert gives an opinion

about the sales whether extremely high or extremely lowif neither seems probable the range between theextreme is successively reduced until an approximatelevel is reached

2) Pert –derived method:Forecast=(O+4M+P)/6O=optimistic estimate ,P=pessimistic estimate, M=Most likely estimate.


• The standard deviation is then derivedSD=(O-P)/6The forecast range=(O+P+4M)/6(+or -)2x((o-p)/6))

3) Group discussion method: the team meets as acommittee and comes up with a group estimate.

4) Pooled individual estimate method: a project leadersimply merges separately supplied estimate into a singleestimate without interplay with or between participants.


5) Delphi technique: group members are asked to submitindividual estimates and assumptions ,reviewed byproject leader then fed back to participants for a secondround .participants are also informed of the medianforecast level that emerged from the previous round.After successive rounds of estimating and feedback ,theprocess ends after a consensus emerges.


6) Jury of executive opinion: a jury of executive opinion isoften is often composed of top level personnel fromvarious key functions such as sales ,production andfinance .

7)Composite of sales force opinion :It collects product,customer and or territorial estimates from individualsales people in the field .

8)Outside experts :knowledgeable sources could beconsulted as trade associations or economists.


• MARKET SURVEY:1)Consumer surveys: surveys from consumers are

gathered periodically. this technique works best for majorfor major consumer durables and industrial capitalexpenditures .

2)Test marketing :a new product or a variation in themarketing mix for an established one is introduced in alimited number of test cities. the entire marketingprogram that is scheduled on a national bases is put intoeffect and scaled down to the local level providing asignificant mini picture of the full scale reaction to th eplanned change.

MARKETING EFFECTIVELYmethod nature benefit Draw backs

Judgment from theextremes

Successivenarrowing of highlow range

Range instead ofsingle figure

Depends onindividual estimating

Group discussion Group estimate Merges divergentview, moderate bias

Dominated by oneindividualsuperficially

Pooled andindividual estimates

Averaging ofindividual estimates

Avoids groupdiscussion pitfalls

Lacks groupdynamics

Delphi technique Successive writtenrounds of estimatingwith feedback fromother participants

Eliminatesdomination,conservatism,superficial response

Lacks groupdynamics

MARKETING EFFECTIVELYJury of executiveopinion

top level committee quick Un familiar withmarket conditions

Composite of salesforce opinion

Adjusted estimatesfrom individual salespeople

Front line expertisemotivational tool

Bias due to impacton compensation,unfamiliar witheconomic trends

Out side experts Merging of outsideopinion

No bias due topersonal interests

Difficult to assessdegree of expertise

Consumer surveys Consumerinterviews aboutbuying intentions

Directly from thehorse’s mouse

Hypotheticalbehavior

Test marketing Sales in limitednumber of cities

Actual sales results Costly, timeconsuming ,exposedstrategy tocompetitors.


• PORTFOLIO ANALYSIS :it consists of formal modelsthat provides a systematic approach to assessing acompetitive position and determining investment levels. itis used for self contained organizational units in whichwe make investment decisions on market by market orproduct by product bases. three models are used toassess the portfolio (Boston consulting group growth-share matrix, General electric business screen andArthur D. little matrix.


• BCG growth-share matrix: it allows to evaluate whereyour products and markets are relative to competitors.


• The quadrants of the matrix categorizes products intofour groupsStars: products that have high market growth and highmarket share these are products that need constantattention to maintain or increase share through activepromotion, product improvement and careful pricingstrategies.Cash cows: product that have low market growth andhigh market share .it holds market dominance andgenerate strong cash flow. the object: retain a strongmarket presence without


Large expenditures for promotion and with minimaloutlay for research and development.Question marks: products with potential for high growthin a fast moving market but with low market share .theyabsorb a large amount of cash and are expected toreach the status of a star.Dogs: product with low market growth and low marketshare ,reflecting the worst of all situations. a number ofalternatives possible ,maintain the product in the line tosupport the


• The image of being a full line supplier, eliminate theproduct from the line ,or harvest the product through aslow phasing out.

• The interpretations of the matrix are as follows:1) Amount of cash generated increase with relative market

share.2) The amount of sales growth requires proportional cash

input to finance the added capacity and marketdevelopment .if a market share is maintained ,then cashrequirement increase only relative to market growthshare.


• 3)cash input is required to keep up with market growth.increasing market share usually requires cash tosupport advertising and sales promotion expenditureswhile a decrease in market share may provide cash foruse in other product areas.

4)In situations where a product moves towards maturity ,itis possible to use enough funds to maintain marketposition and use surplus funds to reinvest in otherproducts that are still growing.


• General electric business screen: the GE approachillustrates where an existing product fits competitively inrelation to a variety of measures .it aids in projectingchances for anew product success.

• The key points in using GE business screen are:1)Industry attractiveness is shown on vertical axis2)Business strength is shown on horizontal axis3)The matrix is divided into three color sectors


• THE green sector (three cells at upper left) indicatingthose markets that are favorable in industryattractiveness and business strength .they have greenlight to move in aggressively.

• The yellow sector (diagonal cells stretching lower left toupper right) indicating medium level in overallattractiveness.

• The red sector (three cells in lower right )indicating thosemarkets that are low in overall attractiveness.


• The Arthur D.LITTLE matrix: the competitive position ofthe products are plotted on the vertical axis while thematurity level of the products are designed on thehorizontal axisThe key interpretations are:

1) Non viable: the lowest possible level of competitiveposition

2) weak: unsatisfactory financial performance but withsome opportunity for improvement


• Tenable: financial performance is barely satisfactory.they have a less than average opportunity to improveposition.

• Favorable: a competitive position better than the survivalrate. These products have a limited range ofopportunities for improvement.

• Strong: able to defend market share against competingmoves without the sacrifice of acceptable financialperformance.



• Leading: it incorporates the widest range of strategicoptions because of the (competitive distance betweenthe given products and the competitor’s products).

• A green, yellow, red system is used to indicate strategicoptions .

• Green indicates a wide range of options• Yellow indicates caution for a limited range of options.• Red is a warning of options narrowed to those of

withdrawal .divestiture or liquidation.

MARKETING EFFECTIVELY• Financial resource analysis: to assess financial situation:• 1)current to past sales comparison• 2)customer satisfaction evaluation• 3)sales rep qualitative evaluation.• Quantitative techniques to identify financial implications

of strategies:1)Return on investment: there are several approaches to

calculate R.O.I.

MARKETING EFFECTIVELY• The most often used are:

Return on investment:ROI=(NETINCOME/INVESTMENT)X100Return on sales:ROS=(NET INCOME/TOTAL SALES)X100Cash flowCF=(Net income+ depreciation)-(change in plant andequipment)-(change in working capital)

MARKETING EFFECTIVELY2) Market share analysis: a decision of which measure of

market share will be used:Overall market share :the company ‘s overall marketshare is its sales expressed as percentage of totalindustry salesServed market share: sales expressed as a percentageof the total sales to its served market.Relative market share: the company sales

MARKETING EFFECTIVELYExpressed as a(%) of the combined sales of the threelarges competitors.Relative market share (to a leading competitor): trackingthe sales as a(%) of the leading competitor sales.

3) Marketing expense to sales analysis: it is a must tomonitor the total expenses to the outcome sales.

4) Strenghths /weakness analysis: it is important to


• Assess the company core competence before enteringnew markets putting in consideration that competitorscan see only the tactics not the strategies through whichmarket success is achieved. it examines the strong andweak points in comparison with those of competitorsAllowing the concentration on areas of highest potentialfor market expansion.


• Determining where to sell your product relies onaccurate intelligence to pinpoint opportunities.Develop a frame work for acquiring and organizingmarket information:

1) Use information from internal records2) Develop a market intelligence system which provides in

depth information that aids in the decision makingprocess.

3) Systemize your approach to develop market intelligenceas follows

MARKETING EFFECTIVELYOverall exposure to information from newspapers, tradepublications…etc.Controlled exposure to a clearly identified area ofinformation by talking informally to customers,suppliers…etcInformal research to obtain information for a specificpurpose.A planned effort to secure specific information .e.g.Through customer marketing research firms.


• The high cost of intelligence delivered by an informationsystem is only justifiable as long as it improves decisionmaking such a system can accomplish the following:

1) Monitor competitors actions to develop counterstrategies

2) Identify neglected or emerged market segment3) Assist in decisions to add, drop or modify a product4) Develop more accurate ,strategic market plans.

MARKETING EFFECTIVELYCAN DO CAN NOT DO

Track progress to longTerm strategic goals

Replace managerial judgment

Establish a common language betweenmarketing and back office operations

Provide information necessary to make aninfallible decision

Aid in day to day decision making Work successfully without managementsupport

Consider the impact of utilizing similarmarketing strategy on multiple marketingsegment.

Work successfully with out confidence

Automate many labor intensive processleading to huge saving

Work successfully without being adequatelyMaintained and responsive to usercommunity

Serve as early warning device foroperations not on target.

MARKETING EFFECTIVELYCAN DO CANNOT DO

Help to determine how to allocateresources to achieve market goalsHelp serve customer more effectively

Enable to improve overall performancethrough better planning and controlAlert to unusual competitive activity thatwould indicate developing problemsImprove control over marketing and nonmarketing activityProvide marketing and economic data onunusual problems to appropriate action

Anticipate competitor moves on time

MARKETING EFFECTIVELY• The previous slide demonstrates what a system can do

and what it cannot doGuide lines to assemble competitor intelligence:Accumulate field data from sales people at first lineGather published dataAssemble the data e.g. approaching individuals whocame in contact with competitors and key events.

Organize the data


Management analysis of data, transmitting theintelligence to practical strategies. To sum this up thecriteria of competitive intelligence must be as follows:

1) C.I. must be accurate2) C.I. must be timely3) C.I. must be usable4) C.I. must be understandable5)C.I. must be meaningful

MARKETING EFFECTIVELYC.I. applications on product life cycle introductionstage:

1) It determines whether a product is reaching the intendedaudience segment

2) Analyze the marketing mix and various components forpossible modifications

3) Monitor initial product positioning to prospects4) Identify possible points of entry by competitors

MARKETING EFFECTIVELY5) Evaluate distribution channels6) Compare initial financial results to budget

At the growth stage:1) Analyze product purchase by market segment2) Identify emerging market segment3) Conduct competitor analysis and determine counter

strategies4) Adjust the marketing mix5) Decide on use of penetration (low) pricing

MARKETING EFFECTIVELY6) Provide new incentive for sales force7) Monitor financial result against plan8) Provide feedback on product usage.

At the maturity stage:1) Evaluate differentiation possibilities2) Determine extension strategies (new applications for

new market segments)3) Expand product using among existing market segment


4) Determine potential for product line extension5) Monitor threats on market segments and threats to total

market share6) Evaluate financial performance ,particularly profitability

At the decline stage1) Evaluate options as concentrating on a specific market

niche.2) Determine where to prune product line to obtain best

profitability


3) Monitor financial performance4) Identify additional spin off opportunities through product

application.


• Market research is the systematic gathering processingand analyzing of data to solve the organization short andlong term competitive problems. market research shouldbe systematic ,comprehensive and objective.

• Market research guide lines:1) M.R. should be accurate2) M.R. should be timely: events have cycles that once

pass may not occur again

MARKETING EFFECTIVELY3) M.R. should be usable4) M.R. should be understandable5) M.R. should be meaningful.

In market research ,first primary data is collectedfollowed by secondary investigationThree major methods are used to generate primary data(experimentation, observation and interviewing)Experimentation: it involves creating artificial


• An artificial situation except all variables in except theone to be tested are kept constant.Observation: either face to face or through electronicdevicesInterviewing: it takes three forms (in person, telephoneand mailing interview)

MARKETING EFFECTIVELYPOINT OFCOMPARISON

IN PERSON TELEPHONE MAIL

Flexibility in datacollection

Most flexible Fairly flexible Least flexible

Quality of dataobtainable

Fairly extensive Generally limited Long questionnairesaffect response rate

Speed of datacollection

Time consuming Available almostinstantaneously

Delayed results fromslow and scatteredreturns

Expense of datacollection

Most expensive Less expensive Least expensive

Investigator bias high medium Non available

Lead time forrespondents

Need to respondquickly

Need to respondquickly

Have time to think


In person Telephone mail

Samplingconsideration

Requires detailedaddress

Requires randomdigital dialing

Requires mail list

Anonymity ofresponse

Eye contact maystifle frankinterchange insensitive issue

Same as withperson interviews

Frank response canbe obtained byguaranteeinganonymity

Identity ofrespondents

Available for futurereference

Telephone numbersare available forfuture reference

May not be availablein some cases

Field control Difficult andexpensive

Centralized Controlrepresents noproblem

Not a problem


IN PERSON TELEPHONE MAIL

Geographicalcoverage

Limited due to costconsiderations

Call centre permitswide coverage

Geographicalcoverage is noproblem

Investigatorassistance

Easily available toexplain instructions

Available althoughnot to the sameextent as inpersonal contact

Not available


• Focus group technique :it involves the simultaneousinterviewing of a group of individuals, physicians, homemakers, police officers ,purchasing agents in a casualround table discussion involving (6-10)persons offering aquick and un expensive research technique.This technique is used to:

1) diagnose competitor strength and weakness2) Spot the source of marketing problems

MARKETING EFFECTIVELY3) Spark new product lines4) Expand the product use5) Identify new advertising or packaging themes6) Test alternative market approaches.

It must be video taped to examine gestures and facialexpressionsImage research: an image consists of attitudes, beliefs,opinions and experience


• Developing an image: animage stems from amultiple of factors e.g.choice of brand name,the symbolism used(logo, slogan. jungle,color shape ,packaging

CONTROLABLEIMAGEINGREDIENTS

WHAT THEY CAN DO

design Provides aestheticappeal

color Sets a mood

shape Generates recognition

package Connotes value


• This table illustrates themarketing mix andproduct image

Controllable imageingredients

What they can do

name Express centralidea

slogan Createsmemorability

advertising Communicatesbenefits

Sales promotion Stimulates interest

price Suggests quality

Channels ofdistribution

Determines prestige

warranty Establishbelievability

service Substantiatesproduct support


• Changing an image: an image can be changed onlythrough quality. good image leads to a competitive edge.

• After going through primary data collection .secondarydata investigation takes place through: industry studies,trade associations and suppliers of commercialmarketing data. The central methods for gatheringmarket data include the following.


Competitive audits: measuring market share and find outhow competitors stack up against each other in productqualityCustomer satisfaction studies: by tracking performanceover a period of time measuring progress.Perceptive review: discovering through formal researchtechniques how competing products are perceived.Testing new products at conceptual stage


• Firms with written plans grow faster , achieve higherproportion of revenues than those with un written plans.Strategic marketing planning functions as the operatingsystem to manage long term objectives and day to dayactivitiesThe screening process includes (present markets,customers ,growth markets and new productdevelopment)Present markets: investigate new business, acquire


New users, displace competitors, redefine marketsegments, reposition the product….etcCustomers: improve distribution channels ,refine productpricing policy, enhance customer service using technicalservice and complains handling.Growth markets: target key geographical locations.New product development: focus on new products thatcan be differentiated and that have new potential forextended sales cycle.


Examine techniques to modify products by customergroups ,distribution outlets or individual customerapplications

Target opportunities: by focusing on area outside marketsegment or product line not included in other category.The strategic marketing plan:It includes two portions the strategic plan and the marketplan fused together at the end to form one unit.


• The strategic plan: itinvolves several aspects .

Strategicplan

Strategicdirection

Objectivesand

goals

Growthstrategies

Businessportfolio


• The strategic direction: itis the vision or missionstatement of theorganization in three tofive years time. It involvesthe managerial team fromvarious departments. Itaims in building a marketdriven orientation.

Product drivenorientation

Market drivenorientation

Rail road company Transportationcompany

Oil company Energy company

Baby foodmanufacture

Child care business

Cosmetic company Health carecompany

Computermanufacturingcompany

Informationprocessingcompany

Electrical wiremanufacturer

Energy transferbusiness

Vacuum cleanermanufacturer

Cleanerenvironmentbusiness


• It is better for the organization to position itself betweenthe extremes of a market driven and a product drivenorganization this mainly depends on:1) the organizationculture (conservative, aggressive…etc) 2) availability ofhuman ,material and financial resources 3)the amount ofrisk that managers are willing to go into debt.

• 4)the threat of competitive activities and their survival togrowth.


Objectives and goals: objectives and goals can bequantitative and non quantitative, quantitative ones arethose related to figures as market share, sales growth..etc while non quantitative are those related to businesssupport as improving reporting system, applying newmarketing intelligence systems…etc.Growth strategies: if objectives indicate what we want toaccomplish then growth strategy deals with how toachieve those objectives.


• The major guidelines are: each objective must have acorresponding strategy, if no strategy then no objectiveat all.

• Strategies are either external or internalInternal strategies: internal strategies relate to marketingmanufacture, distribution, pricing, market research,packaging information technology finance, salesactivities.. information technology, finance, salesactivities and organizational changes.


• External strategies: refer to possibilities as jointventures, licensing agreement, emerging marketsegments an diversification opportunities

• Business portfolio: a strategic direction has a meaningonly if it is translated to a business portfolio of marketsand products


• The marketing plan: itincludes one year tacticalframe work.

• It starts by situationanalysis

Marketingplan

Situationanalysis

Marketopportunity

Marketingobjectives

StrategyAnd action

plans

FinancialControl and

budgets


Situationanalysis

Marketingmix

MarketBack ground

Competitoranalysis

product price promotion distribution


A) Product: a product is studied passing by the followingaspects: 1)sales history

2) Position in industry.3) Future trends in industry4) Intended purpose of the product in terms of market use

and uniqueness5) Features and benefits of the product in terms of costs,

safety or convenience.6) Other product information such as quality, size..etc


B) Pricing: price of company and competitor is evaluatedfor each market segment, pricing trends are anticipatedon bases of source and raw material

c) distribution: the investigation involves current channelsof distribution, effectiveness of coverage through currentchannels ,special functions performed by the companysales forceAnd finally future trends in distribution methods andchannels


D) Promotion: the investigation includes analyzing theadvertising and sales promotion directed at each marketsegment.Indicate past and current advertising and salespromotion strategiesDescribe publicity ,education and other non advertisinginfluence

MARKETING EFFECTIVELY• Market background: the investigation involves

Customer profile, frequency and magnitude of productusage, geographical aspects of product usage.customer characteristics, decision making, ,customerawareness, customer motivation, segment trends.Competitor analysis: it involves listing the majorcompetitors in descending order and showing relativemarket share, competitor strength and weakness


and Product comparison including pricing, features,advertising, distribution system ,sales method,packaging, competitor share, attitude of customers,sales force effectiveness and market coverage,The second factor in the marketing plan is marketopportunitiesThe proper planning involves investigation for:


a) Present markets by cultivating new users, displacingcompetitors, increase present customer usage ,repositioning and defining new market segments.

b) Buyers: increase buyers by expanding distributionchannels, product pricing ,product promotion, growthmarkets ..etc

c) Growth markets: by identifying opportunities for growth


D) Product and service development innovation: includingimmediate and long term opportunities for addition ofnew products, diversification…etc

e) Target opportunities: listing areas of exploring newchancesThe third factor in the marketing plan is marketingObjectives. It involves primary objectives (quantitativeones) and functional objectives which concerns bothproduct and non product related goals


• For the objectives to be clear assumptions must begenerated these assumptions include:

1) Economic assumptions: about futuristic changes incompetitor activities, growth, costs.. etc

2) Technological assumptions: intensity of research,development, technical breakthroughs. .etc

3) Socio political assumptions: probability of politicaltensions …etc


• The fourth factor is strategy and action plans: it includes(product ,pricing , advertising ,media and promotionstrategies)

• The last factor is the financial control and budgets whichmust be revised periodically and consider correctivemeasures.The total marketing plan will fuse together in general ittakes 6 month period for the final version

MARKETING EFFECTIVELYPlanning activity Unit responsible

Marketing research conducts situationanalysis and generates back ground data

Marketing research

Marketing research develops assumptionsabout future environment and identifiescurrent position

Marketing research

Top managers set corporate objectives Top managers

Marketing vice president interpretscorporate objectives and derives marketingobjectives with input of strategy team orproduct managers

Vice president marketing

Sales and expense forecast areestablished

Marketing research controller

Product managers develop optimumstrategies for their assigned lines andreview with marketing vice president

Product managers, vice presidentmarketing

MARKETING EFFECTIVELYPlanning activity Unit responsible

Product managers design detailed actionprograms and review with general salesmanager

Product managers and general salesmanager

Product managers write up their proposaland submit to marketing vice president

Product managers

Marketing reviews and coordinatesindividual product plans

Vice president marketing

General sales managers assign districtvolume directives

General sales manager

District managers develop district salesplans in consultation with sales people

District sales manager

General sales manager reviews andintegrates district sales plans

General sales manager

Product managers prepare financialsummaries

Product managers

MARKETING EFFECTIVELYPLNNING ACTIVITY UNIT RESPONSIBLE

Controller prepares operating budgets controller

Top management reviews andapproves marketing plan

Top management


STRATEGIC PLAN3 to 5 years

Strategicdirection

Objectives andgoals

Growthstrategies Business portfolio

MARKETING EFFECTIVELYMARKETING

PLAN1 year

Situationanalysis

Marketopportunities

Marketingobjectives

StrategiesAnd action

plans

FinanceControl

Andbudgets

Marketingmix

Marketingbackground Competitor

analysis

Targets ofopportunity Primary

objectivesFunctionalobjectives


• We must avoid spreading the market efforts so thin otherwise this will make us vulnerable to competitors. If weare starting in anew market we must analyze accordingto some characteristics: a) responsiveness (tied to just intime delivery. b) quality control (cost saving is alwaysrelated to improved quality) c) nearness to customersalways related to a speedy response d) communicationsystem e) dependable production schedules:commitment


To customers salesforecasts.

Market entry strategies:

Strategyapplications

First instrategy

Follow theLeader

strategyLast in

strategy


• First in strategy: it has the advantages of locking keydistributors and customers and gaining a market leaderreputation. Studies showed that being first introducedinto the market even if it is over budget is better thancoming in later but on budget. The downside is thatrushing to the market before the product is thoroughlydebugged can result in a negative image.


• Follow the leader strategy: a firm must time its entry withthe competitor, both companies would gain from thepromotional impact of advertising the product categoryand would share the overall promotional costs of thelaunching.Late entry: it has some clear cut advantages, the firstentry company will have borne the cost of educating themarket, the late entrant also can avoid product flaws andtake time to appraise the market size, profile the buyerand target viable segments that remain untapped.


The decision in which strategy to follow depends on thefirm resources, the ability to sustain a competitive edgeand the long term objectives.Market commitment: there are two dimensions to marketcommitment yours and your competitorThe commitment is decided through side by sideanalysis of how much commitment will be given to keyareas such as new product developmentMarket share desired and willingness to sustain an


Aggressive promotionaleffort against competitors

Market demand strategy

strategy

Pruningstrategy

Key marketstrategy

Harvestingstrategy


Guide lines for product introduction:a) Selecting markets: markets selected must align with a

long term demand strategy and the commitments ofcompetitors to match or exceed the productintroduction must be put in consideration.

b) Entering markets: assess the suitable points of entry.c) Building market share: produce the product as a

private brand, establish the brand name


Then continue withproduct development.

d) Protecting market share:protecting market share isoften much easier thanregaining a lost one.Market diversification:

Diversification

horizontal vertical lateral Merge andacquisition


• Horizontal diversification: adding new business related toexisting products or supply chain capabilities (it is themost promising and least risky strategy.

• Vertical diversification: adding another stages ofproduction or distribution to existing operations.

• Lateral diversification: diverse into unrelated businessusing new technology and market strategy.( it is the mostextreme form)


Merge and acquisitions through forming variety ofalliances. In any type of diversification put inconsideration the following rules: a) don’t distanceyourself from customers, b) don’t permit distributors toshoulder the load of contacting prospects .take time tolearn the intricacies of distributing to local markets. c)always maintain an ongoing competitor activity


• Positioning is what you do to the mind of the project. Itis the act of designing the company offer and image sothat it occupies a distinct and valued space in thetarget customer’s mind. Put the following in yourconsideration:

a) Keep focused to monitor a chance that will result in anopportunity to rank among leaders.

b) Establish a flexible work team: these teams must beaware of the company vision


Have the authority to take the decisions and have theproper training

c) Solve customers problems: always an important factorfor survival and long term growth.

d) Look globally: as trade barriers continue to crumble andopportunities are emerging.Steps for successful positioning strategy:

1) Identify you product actual position through individualcustomer interviews


2)The easiest way to select an ideal position is to acceptyour product current position or select a position thatnobody else wants

3) To achieve an ideal position you have two options movethe product to a new position with or without a change inthe product it self or introduce a totally new product andleave the current one un touched.

4)Select the proper option according to the organizationcapabilities


5) Follow up research to track the impact of the product onthe customers mindProduct life cycle: if there is a product which reached thematurity stage and we want to its sales life we can usethe strategy of life cycle extenders:

1) Promote more frequent usage2) Find new users3) Find more uses4) Find new uses for the product basic material


In general there are three strategies to handle thedifficult maturity stage

1) Market modification: expand the number of users byconverting non users to the product,And converting competitors customers to yourcompany.

2) Product modification: utilize quality improvementTo increase the product ‘s functional performanceSuch as through durability, reliability and speed


• Add feature improvement that expand the productversatility, safety and convenience through size, materialadditives …etc

• Implement style improvement using shape, packagingcolor…etcMarketing mix modification: related to price ,salesadvertising ..etc

MARKETING EFFECTIVELYLife cycle stage product price distribution promotion

introduction Offer technicallymature product, keepmix small

Skim the cream ofprice, insensitiveinnovators throughhigh introductoryprice

Fill the pipe line tothe consumer useindirect distributionthrough middle men

Create primarydemand for productcategorySpend generously onextensive andintensive flightadvertising,incorporate theinternet in the mix

growth Improve product,keep mix limited

Adjust price asneeded to meetcompetition

Increase productpresence and marketpenetration.

Spend substantiallyon expansion ofsales volume

maturity Distinguish theproduct fromcompetition.

Capitalize on pricesensitive demand byfurther reducing price

Take overwholesaling functionYourself byestablishingdistribution centers

Differentiate yourproduct in the mind ofprospective buyersEmphasize brandappeal


Maturity Expand your productOffering to satisfydifferent marketsegments

And have your ownsales force call oncompetitors

saturation Proliferate your mixfurther diversify intonew market

Keep price stable Intensify yourdistribution toincrease availabilityand exposure

Maintain states quo,to support marketposition

decline Prune your mixradically

Carefully monitorprices

Consolidatedistribution andestablish minimumorders

Reduce advertisingactivity to reminderlevel


• Product competition: to develop competing products,focus on the following:

1) Features and benefits: always add unique features andbenefits.

2) Performance : always related to the level at which theproduct operates.

3) Acceptance4) endurance: related to product expected operating life


• Dependability: related to the probability of the productbreaking or mal functioning.

• Appearance: it integrates the product with all itsdifferentiating components including packaging

• Design: it encompasses the last three factors.Product mix: a product is considered new when theprospect or customer perceives it as new thus covering arange of innovations.


• You can develop your product mix by monitoring thefollowing: a) review the company strategic direction oroverall product line objectives. thus guarding againstventuring into line segments that are not related to yourcore business,

B) Define the market by sales , profit volume, customerusage, purchasing patterns…etc

C) Determine product development requirementD) Evaluate competitive offerings


E) Determine the proposedproduct’s position : will itbe defending marketniche or offensive tosecure additional marketshare…etc.Product design:

Productdesign

Standardproduct

Customizedproduct

Modifiedproduct


• Explore customers needs and problems in two broadcategories : revenue expansion and cost reduction. Thiswill involve product developers and other non marketingmanagers to interpret findings and translate them intoproduct design solutions.


• New product/service: this involves( innovation,modification, line extension, diversification,remerchandising, market extension.)

• To manage your brand consider the following:• Protect the brand name: a brand ‘s deeper essence is

defined by attributes essence ,culture personality selectfrom those factors one or more that are distinctive andnot easily duplicated by a competitor.


• Build brand equity: it involves brand awareness, brandacceptability and brand equity.

• Strengthen your capability to develop brand: try toincrease options to reach additional market segments.

• Develop short and long term brand strategies: tostrengthen brand equity take the following actions: a)recommend investing in new brands, sustain aconcentrated promotional program to


Maintain high brand awareness, b) define the correctpositioning for each brand in partnership withdistributors. c) develop a strong customer relationship.Only one of five innovations survives long enough in themarket to become a commercial success. A new productis considered new when the customer perceives it ASnew. Use a combination of the following approaches tomaintain a steady growth.


category definition nature benefit

modification Altering a productfeature

Same number ofproduct number andproducts

Combining the newwith the familiar

diversification Entering a newbusiness

New product linehigher number ofproducts

Spreading risk andcapitalizing onopportunities

Re merchandising Marketing change tocreate newimpression

Same products,same markets

Generatingexcitement andstimulating sales.

Line extension Adding more variety Same number ofproducts lines highernumber of products

Segmenting themarket by offeringmore choice

Market extension Entering new market Same products newmarkets

Broadening the base


• Product audit: it involves line reduction or lineelimination. To take such a decision set up a productaudit committee that can assist in accomplishing thefollowing:

• 1) determine product long term market potential• 2)assess the advantages and disadvantages of adding

value to the product• Alter the product market position compared to that of a

competitors comparable product.


Evaluate the chances of your product being displaced byanother product or technology.Calculate product contribution to company financialgoals

Judge if the product line is filled out sufficiently to preventyour customers from shopping else where.Establishing a product audit program: after establishing acommittee review the performance of each product atleast annualy.

MARKETING EFFECTIVELYPRODUCT CRITERIA 1 2 3 4 5

What is the product marketpotential ? Assign a score basedon dollar value unit volume orother quantitative measures.What competitive advantagemight be gained by adding value,modifying the product orcreating other differentiationfeature and benefits?

What would be gained bypositioning the product differentlyto customers and againstcompeting products?How much resources would beavailable by eliminating theproduct?

MARKETING EFFECTIVELYPRODUCT CRITERIA 1 2 3 4 5

How good are the opportunities toredeploy the resources to anewproduct service or business/

Based on financial calculation ofR.O.I ,profits and other financialcriteria how much is the productcontributing beyond its directcosts?What values does the producthave in supporting the sale ofother company products/

Is the product useful in defending apoint of entry against competitors?


• Each criteria is given a score from 1 to 5 (one is lowwhile five is high ) based on score summation you cantake the decision of keeping or dropping the product.

• To sum this up the steps to implement product/marketstrategies are:

1) Identify the frame work for developing product strategies2) Develop a strategy that provides a competitive

advantage.


3) Use life cycle extension strategies to revitalize theproducts

4) Use product audit to sustain product profitability.


• Pricing must work inharmony with all the otherstrategies

Newproduct

Skimpraicing

Penetratingpricing

Psychologicalpricing

Followpricing

CostPlus

pricing


• Skim pricing: it involves pricing at high level to hit the“cream of the buyers” who are less sensitive to price.The conditions for weighing such strategy are as follows:

1) Recovering research and development ,equipment andtechnology and other start up costs rapidly.

2) The product or service is unique .it is new or in theintroductory stage of the life cycle or serves a smallsegment where price is not a major consideration.


3) There is little danger of short term competitive entrybecause of patent protection, high entry costs ,highpromotion costs…etc

4) There is need to control demand until production isgeared up.Penetration pricing: pricing below the prevailing level togain market entry or to increase market share. theconditions for considering this strategy are as follows:


• There is an opportunity to establish a quick foot hold in aspecific market

• Existing competitors are not expected to react toThe price.

• The product or service is a ( me too) entry and you haveachieved a low cost producer capability.

• You hold to the theory that high market share equalshigh return on investment .


• Psychological pricing: it means pricing at a level that isperceived to be much lower than it actually is.(e.g.99€, 19.47€,1.98€) the conditions for consideringsuch strategy is:

1) A product is singled out for a special promotion2) A product will be quoted in writing.3) The selling price is a multiple of 10,100 …etc

The traditional (9) is not used (7) has come out on top


• Follow pricing: price in relation to industry leaders.Conditions for considering this strategy are as follows:

1) The organization is small in an industry dominated byone or two price leaders.

2) Aggressive price fluctuations may result in damagingprice wars.

3) Most products offered don’t have distinguishedfeatures.


• Cost plus pricing: basing price on product costs thenadding on components as administration and profit .theconditions for using such price are as follows:

• The pricing procedure conforms to governmental,military or construction regulations

• There are un predictable total costs owing to ongoingnew product development and testing phases.


• A project moves through a series of start and stopconsequences.

• It is considered a product based pricing not a marketbased one as it does not put in consideration ( productline objectives ,concerning profits, target marketobjectives, dealing with market position ,profile ofcustomer segments, current demand for product,marketing mix strategy…etc)


Establishedproduct

slide downpricing

Segmentpricing

Flexiblepricing

Pre_ emptivepricing

Phase_ outpricing

Loss_ leaderpricing


• Slide down pricing: which moves price down to tapsuccessive layers of demand . The conditions toconsider such strategy are :

1) The product would appeal to progressively largergroup of users at lower prices in a price elastic market.

2) The organization has adopted a low cost producerstrategy by adhering to efficiencies , which impacteconomies of scale in manufacturing ,distribution andsales.


3) There is need to discourage competitive entrySegment pricing: pricing the same product differently tovarious groups. The conditions to consider suchstrategies are :

1) The product is appropriate for several market segments.2) The product can be modified or packaged at minimal

cost to fit the varying needs of customer groups.3) The consuming segments are non competitive


And do not violate legal constraints.Flexible pricing: pricing to meet competitive or marketplace conditions. The conditions for considering suchstrategy is as follows:

1) There is competitive challenge from imports2) 2)price variations are needed to create tactical

surprise.3) There is a need for fast reactions against competitors

attacking the market with penetrating prices.


• Pre emptive pricing: used to discourage competitivemarket entry. the conditions for considering suchstrategy are as follows:

1) You hold as a strong position for a medium to smallmarket.

2) You have sufficient coverage of the market andsustained customer loyalty to cause competitorsTo view market as un attractive.


• Phase out pricing: it means pricing high to remove theproduct from the line. Conditions for considering suchstrategy are as follows:

1) The product has entered the down side of the life cyclebut still used by a few customers

2) Sudden removal of the product from the line wouldcause problems.Loss leader pricing: pricing a product low to attractbuyers for other products is called loss leader pricing.


• Conditions for adapting such technique are:1) Complimentary products are available that can be sold

in combination with the loss leader at normal price2) The product is used to draw attention to a total product

line and increase the customer following.


AUCTION PRICING

Ascending bidauctions

Descending bidauctions

Sealed-bidauctions


• Ascending bid auctions: it includes one seller andnumerous buyers. The seller offers a product and thebidders raise the price until the maximum is reached.

• Descending bid auctions: either one seller and manybuyers or one buyer and many sellers . It begins withhigh price, the price is reduced until a bidder accepts theprice.

• Sealed bid auction: prospective suppliers submits asingle bid and cannot know the price or details of thecompeting bids .


• FEES: instead of raising a price fees are added thismethod faces negative reactions from customers andmay result in customer loss.


Communicationmix

advertising Sales promotion Public relations Personalselling Direct response


• Advertising: the steps of asuccessful advertisingcampaign are:

Campaignstep

Advertisingactivity

Researchactivity

Marketanalysis

Studycompetitors,positioning,media,distribution.

Productresearch

Identifyperceivedproductcharacteristics andbenefits.

Customerresearch

Conductdemographic studies

MARKETING EFFECTIVELYCampaign step Advertising activity Research activity

Customer research Investigate media,purchasing andconsumption patterns

Set advertising objectives Determine target market,identify users profile andexposure goals

Decide on level ofappropriation

Determine total advertisingspending necessary tosupport objective

investigate competitorspending level and mediacosts

Formulate advertisingstrategy

Develop creative approachand prepare shopping list ofappropriate media

examine audience profile,reach, frequency.

Integrate advertisingstrategy with overall marketstrategy

Make sure of mutualsupport of advertising andmarketing mix.

MARKETING EFFECTIVELYCampaign step Advertising activity Research activity

Develop detailed advertisingbudget

break down overallallocations for mediacategories and individualmedia

Choose message contentand mode of presentation

Develop alternative,creative concepts ,copyand lay outs

Conduct concepts and copytests

Analyze legal ramifications Review selected copy withlegal staff

Establish media plan Determine media mix andschedule

Conduct media researchprimarily from secondaryresources.

MARKETING EFFECTIVELYCampaign step Advertising activities Research activities

Review agency presentation Evaluate the entirepromotion campaign with astrategic perspective forapproval

Production and traffic Finalize and reproduceadvertisement , buy mediatime and space and deliverads.

Insert advertisement Actually run advertisementin selected media

Check whether adsappeared as agreed anddirected.

Impact control Obtain feed back onconsumer and competitivereaction.

Review and revision Adjust spending levels Check whether changesachieved desired result.


• Advertising spending techniques:1) affordable method: how much a company can afford to

spend which can over or under estimate the amountneeded.

2) Percentage of sales approach: advertising allowance istied to expected sales. It neglects current businessneeds and discourage long term advertising.

3) Competitive parity method: propose that company matchcompetitive spending levels.


• Objective and task method: most practical method.define the advertising objective, identify the task thatmust be performed to achieve the objective and finallyestimate the costs of this task. It offers a reliableassessment transferable into a workable budget.

• Guide lines for advertising:1) Be aware of product positioning in the market space2) Maintain a brand personality3) Don’t bore audience and don’t be impersonal4) Be factual adopting a problem solving approach5) Don’t replace the advertisement until developing their full

potential.


• Sales promotion :it is a dynamic complement toadvertising and personals selling. In a more widedefinition: it refers to the activities and or objects thatattempt to encourage sales people ,resellers andultimate buyers to cooperate with a manufacturer’s plansby temporarily offering more value for the money orproviding some special incentive related to specificproduct or service.

• In general sales promotion is an incentive to buy whileadvertising is a reason to buy

MARKETING EFFECTIVELYSales promotion technique advantages disadvantages

Free samples Induce trial, attract newcustomer, speed upadoption

Expensive, lacks precision,cumbersome.

Free trial Overcome marketresistance

Costly to administrator

Door to door couponing Very selective ,highredemption rate

Time consuming and needscareful supervision.

Direct mail couponing High target ability, at homecoverage, high redemptionrate

Costly and dependent onlist quality

News paper couponing Quick, convenient, low cost Low redemption rate,retailers may complain,require careful planning.


Technique Advantage Disadvantage

Magazine /supplementcouponing

Targeted audience, effectivecoverage ,increase readership

Can become expensive,slow redemption rate

Money refund Generates new business,reinforces brand loyalty

Results can be slow,modest impact

In or near pack premiums Increase product sales,modest distribution costs

Bonus to loyal buyers,pilferage problem

Self liquidating premiums Low cost, boosts brandimage

Modest sales impact, maybe too popular

Price pack Moves merchandise, keepsup visibility

Not selective and maycheapen brand image

MARKETING EFFECTIVELYTechnique advantage Disadvantage

Contests/Weep stakes No Purchase required,Increases brandawareness

ExpensiveModest participation

Trading stamps andPromotional games

No extra expense forConsumer Creates storepreference

Consumer boredomExpensive

Point-of-purchasedisplays

Effective stimulation Requires dealerCo opertion

Warranties Effective in influencing aPurchase decision

Expensive and labourIntensive with a productproblem


• PUBLIC RELATIONS: it directly supports corporate orproduct promotion and image taking. major toolsinvolved in public relations include:

1) publications: influencing target groups with publishedmaterial such as (annual reports, brochures,articles…etc)

2) Special events: use conferences , seminars, tradeshows …etc)


3) Sponsor ships: sponsoring special events, associationfunctions…etc

4) New stories: develop newsworthy items for key mediaand provide favorable information about a company,product…etc

5) speeches: give opportunities to company seniorexecutives to give talks at meetings , events…etc

6) Public service activities: involve company personnel inpublic activities


7) lobbying: influence government officials to defeatspecific types of legislation.Personal selling: sales people should be trained instrategic planning and techniques of thinking likestrategists. A sales person should think as a generalmanager and act as market director for his territoryDirect marketing: it involves:

1) Direct mailing: using mailing list to send lettersThis method permits high level of selectivity andpersonalization


2) Catalogue marketing: full line merchandisecatalogues,business to business catalogues…etc thusproviding excellent opportunity to reach global market

3) Tele marketing: use telephone calls and video phones4) Kiosk marketing: including variety of free standing

structures or carts where vendors sell a variety ofproduct and service.

5) E-marketing using the internet.6) Other media news paper ,magazine….etc


• Supply chain evaluation: the supply chains should rankhigh in the importance to the organization.

• The supply chain involves long term commitments toother firms.

• It determines the portion of the market you can reach.• It affects all other market decisions.


• Supply chain control considers four sets ofcircumstances that dictate the search for newdistributors:

1) New marketing efforts such as introducing a newproduct or entering a new market

2) Desire to intensify market coverage3) Need to replace existing distributors4) Industry changes affecting distribution strategies.

The criteria of choosing the distributors is :

MARKETING EFFECTIVELYCriteria impact

Financial aspect Choose one with a solid financialcontrol

Sale organization and performance Sales strength and performancerecordAre important

Number of sales people in the field The more the sales people the morethe coverage

MARKETING EFFECTIVELYSales and technical competence Sales people wit sales skills are an

advantage

Quality levelNumber of lines

The higher the betterWill I get enough attention?

Compatible productsCompetitive product

Tend to be beneficialGenerally avoided

reputation A good reputation is a must

Market coverageGeographical coverage

Exposure means salesAvoid overlap and conflicts

Industry coverageIntensity of coverage

Major used groups must be coveredInfrequent calls means lost business

MARKETING EFFECTIVELYInventory and ware housing Ability to deliver products and services

accurately and on time are often decisive

Kind and size of inventory You want the right mix and a willing tomaintain adequate stock

Ware house facilities Storage and order handling must besuitable to customers

Managementability

Effective leadershipCompetent management

Continuityenthusiasm

Succession should be assuredLook for enthusiasm and total customerorientation


• A periodic evaluation must be performed to keepinformed about the performance of distributors. shortenthe supply chain and reduce communication timebetween the customer and home office to assureprofitable market conditions.


Entry strategiesInto global

markets

exporting licensing Joint venture Ownedsubsidiaries

Managementcontract

MARKETING EFFECTIVELYStrategy definition Intensity of

commitmentAmount ofinvestment

Extent ofcontrol

Degree ofprofitability

exporting Marketing inone countrygoodsproduced inanother

Very limited Possibleinvestmentin inventory

limited Moderatedue totransportation cost

licensing Licensorgrantslicenseeright to usepatent

Ownmarketingeffort

Virtuallynone

Veryrestricted

Fixedroyalities

Joint venture Sharingmember shipwith at leastone partner

Equitycapitalportion

Dependingon equityshare

Dependenton ownership ratio

varies


Ownedsubsidiary

Firm abroad100%companyowned

Strongcommitment

Investmentin plant andsystems

Control overphases ofoperation

Can behighlyprofitable

Managementcontract

Managing aforeignfacility undercontract

Only humanresources

Facility notowned bymanagementfirm

Restricted bycontract

moderate


• A strategist treat each market with tailored strategies tocustomers needs and distinctive cultures.

• Global markets open through the increasing useOf the internet and with improved supply chainsThe revolution of the internet and electronic reportinglead to what so called (transnational organizations).They operate through global network of operations todeal with the gaps between time zones and cultures.


Each of these strategies has its advantages anddisadvantages but the choice will depend only on thefirm circumstances.

Marketing effectively

Marketing

Transcript of Marketing effectively