Presentation Transcript

1. Offering (Product & Service) Strategy and Brand Management Defining & Segmenting the Product-market Product Life Cycle and Product & Brand Strategies Modifying The Offering Concept & Positioning Strategies Forecasting New Product Sales Key Learning Points
2. Marketing Process SWOT Analysis Company Customers Competitors Collaborators Context Market Segmentation Selection & Targeting Product/Service Offering Positioning Create Value Product/Service Offering Place/ Channel Promotion/ Communication Pricing Customer Relationship Management Communicate & Capture Value Customer Acquisition Customer Retention/Expansion Sustain Value Revenue & Profits
3. Segmentation, Targeting, Positioning Segmentation Selection Targeting Acquisition vs. Retention & Expansion Positioning Break market into segments that respond differently to elements of the marketing mix. Identify segment(s) that will respond most positively (i.e., profitably) to firm’s offerings. Concentrated vs. Differentiated targeting. Determine how to best acquire, retain & expand purchases by the most profitable segments. Design, price, place, & promote offering so it occupies a distinct & valued place in target customer’s mind relative to competitive offerings.
4. Defining & Segmenting the Product Market Define & segment the Product Market by: type of customers served (who), particular needs of those customers (what), the means or technology used to satisfy those customer needs (how), & geography of the market served (where). New New Channels/ Geographies Customers New Current Products/Technology
5. Product Market Competition:Packaged Confection Product Class Cakes & Pastries Candy Gum Dark Chocolate Candied Nuts Breads & Scones All food & beverage
6. Four Levels of Product Market Definition Implies Different Tasks for each Level: Product form competition: focus marketing activities on immediate customers & competitors; e.g., Montreaux’s dark chocolates w/fruit are the best. Product category competition: convince customers that your product form/offering is best in the category; e.g., dark chocolate is much healthier than sugary candies. Generic competition: convince customers of the superiority of your product (category) offering’s ability to satisfy needs over other (category) offerings; e.g. packaged candies are the most convenient snack on the run. Budget competition: convince customers of the superiority of your company’s portfolio of products; e.g.,Apollo’s line of snacks & confections are the highest quality. Where Should the Focus Be? Be sure to identify the most relevant level of competition in each case.
7. Product Market Competition:Higher Education Law courses Marketing courses Finance courses Core Biz Classes Entrepreneurship courses Engineering courses All self improvement
8. Product Market Definition & Positioning Product form competition: focus positioning & marketing activities on immediate customers & competitors. For Cox MBA students, MKTG 6201 is a core class that, unlike other foundational classes (e.g., Accounting, Economics, OB, Finance), emphasizes the company’s boundary-spanning activities that focus on customers, downstream collaborators, and competitors. will help you understand how companies create and capture value from customers and downstream collaborators. For Cox MBA students, Marketing is a concentration that, unlike Finance, Management, or Strategy, prepares you for a successful career in Brand Management, Marketing Consulting, and Marketing Analytics. and Marketing Good positioning statements focus on: one or twobenefits that resonate with the target market.
9. Product category competition: convince customers that your product form/offering is best in the category. For working professionals in North Texas seeking career advancement, the Cox PMBA is a part-time MBA program that, unlike other programs in the area, offers a small, private-school environmentand a strong, professional network. Generic competition: convince customers of the superiority of your product (category) offering’s ability to satisfy needs over other (category) offerings. For ambitious people seeking continuing/higher education, SMU is a private university that, unlike other universities, will shape you into a world changer.
10. PositioningK&P 146-47 Formulating positioning strategy requires knowing: The importance of each value dimension to customers How the brand & the competition compare on each dimension
11. Partial Marketing-Mix Comparison Personal Computers Dell was positioned as a product leader with the best perceived technology. IBM was positioned as a brand-centric differentiator with no objective or perceived advantage. PCs  Lenovo; IBM  customer-centric. Gateway’s positioning: customer intimacy emphasizing customization (i.e., user compatibility & configurability).
12. Positioning Formulating positioning strategy requires knowing: The importance of each value dimension to customers How the brand & the competition compare on each dimension Implementing the positioning strategy requires programs that communicate a brand’s differential advantage on: Attribute/benefit, price/quality User or Use/Application Product class or competitors
13. Positioning Formulating positioning strategy requires knowing: The importance of each value dimension to customers How the brand & the competition compare on each dimension Implementing the positioning strategy requires programs that communicate a brand’s differential advantage on: Attribute/benefit, price/quality User or Use/Application Product class or competitors To determine a Product’s Position: Ask customers to rate a firm’s brand, the competitor’s brands, and the “ideal” brand on a number of dimensions. Plot ratings in 2 dimensions to represent the competitive “space” -typically called a perceptual map.
14. Hybrid Car Perceptual Map
15. Product & Brand Decisions Many Product & Brand Decisions are Related to the Product Life Cycle (PLC), Technology Diffusion, & Long-Term Expectations for Product Category Evolution The PLC sketches the sales history of a product category– or perhaps a product form – over time. Strategy and segmentation options and the importance of marketing mix variables vary across each stage of the PLC. Not all product categories follow the standard PLC curve across time in a linear manner.
16. Cumulative Five-Year Purchase Volume for Various Mobile Technologies Source: Morgan Stanley %s represent five-year predicted penetration rate for tablets & 2011 penetration rates for other technologies
17. The Product (Category) Life Cycle -- Context Two Critical Inflection Points Greatest Customer Complexity Greatest Competitor Complexity Key Segment Early Market First-time Purchase Early Majority/ Pragmatists Mainstream Repurchase Strategic Emphasis Product Differentiation Customer Acquisition Brand Differentiation/Customer Intimacy  Cost Customer Retention & ExpansionLeadership
18. Marketing Strategies Over the Product Life Cycle PLC Stages Introduction Growth Maturity Decline Market size small and growth rate is increasing. Product: disruptive technology that creates new product category. Pricing: skimming targets innovators/visionaries & LT Product (quality-based) differentiation Advertising: product category advantages. Distribution & Selling : PUSH
19. Marketing Strategies Over the Product Life Cycle PLC Stages Introduction Growth Maturity Decline Moving Mainstream Increasing competition Market segmentation Positioning for LT advantage Continue to emphasize Product differentiation (innovation & quality) & market growth or niche of maturing market Begin shift to brand differentiation/ customer intimacy with incremental product improvements, proliferation as market matures (i.e., late growth)
20. Product & Brand Strategies… In the Growth Stage or in Hi-Tec, Turbulent Categories with Rapid Cycles & Permanent Growth: Product Line Strategies focus on Product Innovation that replaces (i.e., cannibalizes) current offerings Branding strategies deemphasize specific products/features and focus on organizational competencies & differentiation (i.e., multiproduct or corporate branding) Consistent with Innovation or Product Differentiation
21. Intel’s Co-branding Efforts After the “Intel Inside” branding campaign began 1991, the company received over $3 billion worth of advertising exposure showing the Intel Inside logo. The logo appears in POP displays too.
22. Marketing Strategies Over the Product Life Cycle Fully Mainstream Oligopoly market structure Well-defined segments with sophisticated consumers Positioning for advantage Emphasize brand differentiation/ customer intimacy, incremental product improvements, proliferation, intangibles (e.g., branding, service, advertising) or Emphasize operational efficiencies to establish Cost Leadership advantage in fully mature market. Innovator attempts to jumpstart new cycle of Growth (Apple). PLC Stages Introduction Growth Maturity Decline
23. Product & Brand Decisions… In the Maturity/Decline Stage: Product Line Strategies focus on Product Proliferation that extends current offerings to: Eliminate competitors &/or erect entry barriers Provide one-stop shop for downstream collaborators Satisfy increasingly segmented customer base Branding strategies emphasize distinct product brands and features (i.e., multibranding), sometimes applied to entire lines. Consistent with Brand-centric differentiation or Customer Intimacy
24. P&G’s Product Proliferation & Multibranding Strategy P&G Controls Over 60% Market Share in the Laundry Care Category Key Management Challenge: How to organize, manage & market all the brands?
25. P&G’s Product Proliferation Multibranding Strategy
26. Marketing Strategies Over the Product Life Cycle PLC Stages Introduction Growth Maturity Decline Many strategies for reviving mature product categories can be applied to those in decline; for example, product enhancements and line extensions for segments still buying category. Sometimes product categories revive due to serendipity. Being the “last iceman” in a truly dying market can be profitable… to a point.
27. Modifying the Offering Mix How consistent is the new offering with existing offerings Complementarities versus cannibalization Does the organization have the resources & capabilities to introduce & sustain the offering? Is there a viable market for the offering? What share is required? What position do we currently own and do we want to own? What type of branding strategy do we implement? Multiproduct (family) or multibranding (individual)
28. Montreaux Chocolate USA This case addresses a global CPG company’s attempt to develop optimal positioning for a new dark chocolate offering. Be sure to use the Montreaux spreadsheetto calculate trial rates, market share, and project contribution; review the Sales Projections assignment if you’re not sure how to conduct the analyses. And use the Montreaux Exhibitsto identify Apollo’s (potential) competitive advantage and a positioning statement for Montreaux chocolates.
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30. Financial Analysis in MarketingK&P Chapter 2 Marketing Pro Formas Breakeven Analysis Customer Lifetime Value (CLV) Sales Forecasts Economic Value Analysis Channel Margin Calculus Demand Elasticity
31. Market Potential, Sales Potential, Sales Forecast Estimating Market Potential: Determine the potential buyers /users of the products. Determine # of customers in each group of buyers. Estimate the potential purchasing/usage rate. Estimating Company Sales Potential Multiply market potential by desired or “best” possible market share. Sales Forecast: Estimate from Sales Potential… Use purchase intention surveys/qualitative methods. Forecasts for frequently-purchased items combine test market or early sales data with brand awareness, trial, repeat purchase, or usage rate data (See Sales Forecast Final Exam Question)
32. Estimating Year-1 Sales Volume Using a Chain Ratio Model × × × × = × = × = + × =
33. Review Questions What are 4 levels of product market definition? What are the key customer segments, growth strategies, and strategic emphases for each stage of the product life cycle? What are the key questions to ask when making offering modification decisions? What is the difference between market potential, sales potential, & sales forecast? Next Week Montreaux Chocolates