Today’s Topic: The Marketing Function

1. Today’s Topic: The Marketing Function What it is; why it matters; and how to make Marketing Mix decisions

2. Course Schedule • The Marketing Function (Lenovo) • Sales & Sales Channels (GolfLogix) • Internet-based Marketing (HubSpot) • R&D: Product Development (Guidant) • Operations (Crocs) • Product Launch (Invisalign) • Final Exam on Product Launch (Emotiv)

3. Today’s Agenda • Mid-course feedback survey results • The marketing function and marketing mix decisions • Return graded mid-term exams • Developing a marketing plan: Lenovo – Building a Global Brand (case) • Readings/assignment for next week: sales channels (GolfLogix case)

4. Today’s Key Learnings • Marketing roles and responsibilities • The marketing mix • Company and product positioning (with, against, content) • Promoting a product (marketing communication)

5. The Marketing Plan Executive Summary Table of Contents Summary of Current Situation Focused Assessment of Market Opportunity Financial and Marketing Goals Summary of Company’s Marketing Strategy Target Market Product/Service Positioning Distribution Price Promotion Marketing Budget (Monthly) Forecast Unit Sales and Revenues (Monthly) Plan to Monitor/Evaluate Action Plans by Period

6. The Marketing Mix: C+4P Price(s) (Target) Customer Product Place Promotion Taken together, the 4P’s define __?__

7. Marketing is responsible for “marketing mix” decisions (C + 4P’s) • Customers/needs to be targeted (target customer segments) • Product (product, positioning, service,…) • Price (levels and strategies) • Promotion (communication) • Place (sales/distribution methods)

8. If that’s what marketing does… who’s responsible for revenues and profits?

9. The only choices are……. • Senior mgmt (CEO/president, group head, ...) • Marketing • R&D • Sales • Operations (manuf, service ops, logistics) • Support: IT, Finance, HR, Legal, Investor Relations, Public/Media Relations (PR), etc

10. What is Marketing’s “true north” in making mix decisions?

11. What is Marketing’s “true north” in making mix decisions? Market and financial objectives for the product, based on corporate strategy/objectives (if relevant), guided by the company’s competitive advantages

12. Mix elements: Customers Targeted end-customers (a subset of the entire market) Identified by: • Names /group identity • Demographics • Psychographics • Needs Specificity simplifies other mix decisions!

13. Mix elements: Product • Product features/functionality (“product itself”) • Cost target (and/or profit target) • Competitive positioning, and fit with corporate (brand) positioning • Name • Packaging • Customer service • Breadth and depth of product line (versions) • …

14. Product Positioning Statement “Our product, compared to relevant competitors, is the one that… …(has these differentiators) …and/or (provides these benefits)”

15. Mix elements: Price • Prices: manufacturer, wholesaler, distributor • Payment terms and conditions • Warranty • Discount policies • Price strategy vs. competitors • Bidding tactics • …

16. Mix elements: Place • Channel choice: direct and/or indirect • Channel length and breadth • Channel partner selection • Franchising policies • Channel coordination and control • Channel competencies • Channel training (sales and product) • …

17. Mix elements: Promotion • Branding (creating a company or product “image”) • Advertising (multiple media; paid and free) • Direct marketing (mail, catalog, telemarketing, internet) • “Reference” customers (testimonials) • Public relations • Industry relations (trade orgs, industry analysts,…) • Trade shows and events • Price promotions • …

18. Promotion:message and media • Message: most often the “message” is the positioning statement itself, often expressed in an attention-grabbing way • Media: identifying the most effective “media” for delivering the message is, driven by consideration of who the “positioning targets” are

19. The mix should “fit” with….. • Needs/desires of the target customers • The company’s competencies and “image” • Competitors and their strategies/programs • Channel partners’ needs and competencies • And….the competitive advantage decision

20. The Marketing Plan Summary of Current Situation Focused Assessment of Market Opportunity Financial and Marketing Goals Summary of Company’s Marketing Strategy Target Market Product/Service Positioning Distribution Price Promotion Marketing Budget (Monthly) Forecast Unit Sales and Revenues (Monthly) Plan to Monitor/Evaluate Action Plans by Period

21. Marketing readings for 10/26 • Creating a Marketing Plan: An Overview (read to understand the specific components of each element of the marketing mix) • Lenovo: Building a Global Brand(case)

22. Lenovo case • Case timeframe is 2006 • Lenovo is the leading maker of PCs in China • Lenovo has acquired the IBM worldwide PC division; acquisition completed in late 2005 • Lenovo has to create a marketing strategy for the combined company • Includes: rationalizing the product lines, creating a new brand strategy, and launching promotional activities to roll-out the new brand and products

23. Marketing assignment for 10/26 • What was Lenovo’s financial situation* before the acquisition (2005)? What is the projected financial impact of the acquisition (2006-8)? • What were Lenovo’s pre-acquisition competitive advantages? What CA’s were obtained via the acquisition? • Which of the branding alternatives (p. 9) should Lenovo have chosen? (Consider the positives-and-negatives of each alternative in arriving at your decision.) • How should the Lenovo brand be positioned vs. competitors’ brands? Do the positionings of Think and 3000 (Ex. 9a) “fit” well within the Lenovo positioning? * Use Exhibits 1a and 1b, not “Selected Company Financials”

24. Considerations in Creating a Positioning Statement • Who are you positioning yourself “with” ? • What are their desires/needs and fears/concerns ? • Who/what are you positioning “against” ? • What are your differentiators ?

25. Today’s Key Learnings • Marketing roles and responsibilities • The marketing mix • Company and product positioning (with, against, content) • Promoting a product (marketing communication)

26. Topic for 11/2 Class:Sales (Distribution Channels) • How companies reach their customers: types of sales channels available • Rationale for choosing which sales channel(s) to use • Issues in “managing” and serving sales channels • Impacts of channel choice on the design of the “whole product”

27. Sales Readings for 11/2 Class • Going to Market - read to understand types of sales channels, and the reasons for choosing them • GolfLogix: Measuring the Game of Golf (case)

28. GolfLogix Case Summary • A start-up company in 2002 • Uses GPS technology to aid golfers • Two product versions: “distance only” and “complete system” • Currently selling to/through golf courses • Considering also using retail channels (would require a modification to their product)

29. Sales questions for 11/2 class • What are the most significant end-customer and sales channel benefits of the each of the GolfLogix products? • What is the market potential (number sold and GolfLogix revenues) of each of the GolfLogix products? • Who are the appropriate target customers for the Distance Only product? For the Complete System? • What are the positives-and-negatives of selling through golf courses? Through retail channels? • If only one of the channels can be chosen, which one should GolfLogix use? Given the option of selling through both channels, should GolfLogix do that?