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Slide1 l.jpg

BUSINESS STRENGHT

Medium

Weak

Strong

High

Joints

Aerospace Fittings

MARKET ATTRACTIVENESS

Hydraulic Pumps

Clutches

Fuel Pumps

Medium

Flexible Diaphragms

Relief Valves

Low

(a) Classification

Marketing Management...

100 Slides

Powered by www.drawpack.com. All rights reserved.


Slide2 l.jpg

Key Words...

Market Structure – Market Forces – Marketing Concepts – Customer Added Value – Relationship Marketing – Profitability Analysis – Stakeholder Analysis – Threat Matrix – Value Creation – Marketing Mix – Hierarchy of Needs – Demand Measurement – Market Definition – Segment Rivalry – Target Market – Product Development – Demand-Life-Cycle – Market-Space Diagram – Marketing Strategies – Market Entry – Promotions – Marketing Communication – Service Quality Model – 3 C’s Model – Hybrid Grid – Distribution Management – Consumer Brands – Control Chart Model – Multichannel Marketing – Demand Elasticity – Strategic Planning Gap – AIDA Model


Markets and structure of flow l.jpg

Resources

Resources

Resource markets

Money

Money

Taxes,

goods

Services,

money

Services, money

Taxes

Manufacturer markets

Government markets

Consumer markets

Taxes, goods

Services

Services,

money

Taxes,

goods

Money

Money

Middlemen markets

Goods and services

Goods and services

Markets and Structure of Flow


Main actors and forces in the market l.jpg

Environment

Suppliers

Company (marketer)

Marketing

intermediaries

End user market

Competitors

Main Actors and Forces in the Market


The selling and marketing concepts l.jpg

Starting point

Focus

Means

Ends

Selling and promoting

Profits through sales volume

Factory

Products

(a) The selling concept

Profits through customer satisfaction

Customer needs

Coordinated marketing

Target market

(b) The marketing concept

The Selling and Marketing Concepts


The chart company organization l.jpg

Customers

Front-line people

Middle management

Top management

Customers

Customers

The Chart Company Organization


Marketing s role in the company l.jpg

Production

Finance

Production

Production

Finance

Marketing

Personnel

Personnel

Marketing

Personnel

Marketing

Finance

(a) Marketing as an equal function

(b) Marketing as a more important function

(c) Marketing as the major function

Production

Production

Finance

Marketing

Customer

Customer

Personnel

Personnel

Finance

Marketing

(e) The customer as the controlling function and marketing as the integrative function

(d) The customer as the controlling function

Marketing`s Role in the Company


Determinants of customer added value l.jpg

Product value

Services value

Total customer value

Personnel value

Image value

Customer delivered value

Monetary price

Time cost

Total customer cost

Energy cost

Psychic cost

Determinants of Customer Added Value


The generic value chain l.jpg

Firm infrastructure

Human resources management

Margin

Technology development

Procurement

Margin

Inbound logistics

Operations

Outbound logistics

Marketing and sales

Service

Primary Activities

The Generic Value Chain


Levels of relationship marketing l.jpg

HIGH MARGIN

MEDIUM MARGIN

HIGH MARGIN

Many customers / distributors

Accountable

Reactive

Basic or reactive

Medium number of customers / distributors

Accountable

Reactive

Proactive

Few customers / distributors

Partnership

Proactive

Accountable

Levels of Relationship Marketing


Customer product profitability analysis l.jpg

Customers

C1

C2

C3

P1

+ +

+

Highly

profitable

product

P2

+

+

Profitable

product

Products

P3

_

_

Losing

product

P4

+

_

Mixed-bag

product

High profit

customer

Mixed-bag

customer

Losing

customer

Customer/Product Profitability Analysis


The strategic planning implementation and control process l.jpg

Planning

Implementing

Controlling

Corporate planning

Division planning

Business planning

Product planning

Measuring results

Diagnosing results

Taking corrective action

Organizing

Implementing

The Strategic Planning, Implementation and Control Process


Relationships among stakeholders l.jpg

Stockholder satisfaction

Growth

Profits

Customer satisfaction

Higher-quality

products and services

Continuous

improvements

Breakthrough

innovations

Higher-quality environment

(employee satisfaction)

Relationships Among Stakeholders


The bcg growth share matrix l.jpg

Question Marks

Stars

22%

20%

18%

16%

Market Growth Rate

4

7

Dogs

Cash Cows

2

14%

8

3

12%

1

10%

5

8%

6

6%

4%

Relative Market Share

2%

10 x

4 x

2 x

1.5 x

1 x

0.5 x

0.4 x

0.3 x

0.2 x

0.1 x

The BCG Growth-Share Matrix


Market attractiveness portfolio classification and strategies i l.jpg

BUSINESS STRENGHT

Medium

Weak

Invest / grow

Strong

5.00

Joints

High

Selectivity / earnings

Harvest / divest

MARKET ATTRACTIVENESS

Aerospace Fittings

Hydraulic Pumps

3.67

Clutches

Fuel Pumps

Medium

Flexible Diaphragms

2.33

Relief Valves

Low

(a) Classification

1.00

3.67

2.33

5.00

1.00

Market Attractiveness – Portfolio Classification and Strategies I


Market attractiveness portfolio classification and strategies ii l.jpg

BUSINESS STRENGHT

Medium

Weak

Strong

  • PROTECT POSITION

  • invest to grow at maximum digestible rate

  • concentrate effort on maintaining strength

  • INVEST TO BUILD

  • challenge for leadership

  • build selectively on strengths

  • reinforce vulnerable areas

  • BUILD SELECTIVELY

  • specialize around limited strengths

  • seeks ways to overcome weaknesses

  • withdraw if indications of sustainable growth are lacking

High

MARKET ATTRACTIVENESS

  • BUILD SELECTIVELY

  • invest heavily in most attractive segments

  • build up ability to counter competition

  • emphasize profitability by raising productivity

  • SELECTIVITY/MANAGE FOR EARNINGS

  • protect existing program

  • concentrate investments in segments where profitability is good and risks are relatively low

  • LIMITED EXPANSION OR HARVEST

  • look for ways to expand without risk; otherwise, minimize investment and rationalize operations

Medium

  • PROTECT AND REFOCUS

  • manage for current earnings

  • concentrate on attractive segments

  • defend strengths

  • MANAGE FOR EARNINGS

  • protect position in most profitable segments

  • upgrade product line

  • minimize investment

  • DIVEST

  • sell at time that will maximize cash value

  • cut fixed costs and avoid investment meanwhile

Low

(b) Strategies

Market Attractiveness – Portfolio Classification and Strategies II


The strategic planning gap l.jpg

Sales

Desired sales

Diversification growth

Strategic-planning gap

Integrative growth

Intensive growth

Projected sales

Time (years)

5

0

10

The Strategic-Planning Gap


Ansoff s product market expansion grid l.jpg

Current Products

New Products

Market penetration strategy

Product development strategy

Current Markets

Market development strategy

Diversification strategy

New Markets

Ansoff‘s Product/Market Expansion Grid


The business strategic planning process l.jpg

External environment analysis

Goal formulation

Program formulation

Strategy formulation

Feedback and control

Implementation

Business mission

Internal environment analysis

The Business Strategic-Planning Process


Opportunity matrix l.jpg

Success Probability

Opportunities

High

Low

  • Company develops a more powerful lighting system

1

2

High

  • Company develops a device for measuring the energy efficiency of any lighting system

Attractiveness

  • Company develops a device measuring illumination level

4

3

Low

  • Company develops a software program to teach lighting fundamentals to TV studio personnel

Opportunity Matrix


Threat matrix l.jpg

Probability of Occurence

High

Low

Threats

  • Competitor develops a superior lighting system

1

2

High

  • Major prolonged economic depression

  • Higher costs

Seriousness

  • Legislation to reduce number of TV studio licenses

3

4

Low

Threat Matrix


Mckinsey 7 s framework l.jpg

Structure

Systems

Strategy

Shared

values

Skills

Style

Staff

McKinsey 7-S Framework


Two views of creating value l.jpg

Make the Product

Sell the Product

Advertise / promote

Sell

Distribute

Service

Design product

Procure

Make

Price

(a) Traditional Physical Process Sequence

Choose the Value

Provide the Value

Communicate the Value

Distributing

Sourcing

Customer segmentation

Sales promotion

Product develop-

ment

Market selection / focus

Value positioning

Service develop-

ment

Advertising

Salesforce

Pricing

Making

Servicing

(b) The Value Creation and Delivery Sequence

Two Views of Creating Value


The product positioning map l.jpg

High quality

E

A

High price

Low price

B

C

D

Low quality

The Product-Positioning Map


The four p s of the marketing mix l.jpg

Marketing

Mix

Channels

Coverage

Assortments

Locations

Inventory

Transport

Place

Product

Product variety

Quality

Design

Features

Brand name

Packaging

Sizes

Services

Warranties

Returns

Target

Market

Low quality

Promotion

Sales promotion

Advertising

Salesforce

Public relations

Direct marketing

Price

List price

Discounts

Allowances

Payment period

Credit terms

The Four P‘s of the Marketing Mix


Marketing mix strategy l.jpg

Sales

promotion

Promotion Mix

Advertising

Offer Mix

Company

Products

Services

Prices

Salesforce

Distribution

channels

Target

customers

Public relations

Direct mail and telemarketing

Marketing-Mix Strategy


Factors influencing marketing strategy l.jpg

Marketing

Intermediaries

Demographic/ economic environment

Technological / physical environment

Marketing information system

Marketing planning system

Product

Publics

Price

Target customers

Suppliers

Place

Promotion

Marketing organization and implementation system

Marketing control system

Competitors

Political / legal environment

Socio/ cultural environment

Factors Influencing Marketing Strategy


The marketing information system l.jpg

Marketing Information System

Marketing Managers

Analysis

Planning

Implemen-tation

Control

Marketing Environment

Target markets

Marketing channels

Competitors

Publics

Macroenviron-ment forces

Developing Information

Assessing information needs

Internal records

Marketing intelligence

Marketing decision support analysis

Marketing research

Distributing information

Marketing decisions and communication

The Marketing Information System


Model of buyer behavior l.jpg

Other stimuli

Buyer’s

decisions

Buyer’s

characteristics

Buyer’s

decisions process

Marketing

stimuli

Problem recognition

Information search

Evaluation

Postpurchase behavior

Product

Price

Place

Promotion

Economic

Technological

Political

Cultural

Cultural

Social

Personal

Psychological

Product choice

Brand choice

Dealer choice

Purchase timing

Purchase amount

Model of Buyer Behavior


Model of factors influencing behavior l.jpg

Cultural

Culture

Subculture

Social class

Cultural

Reference groups

Family

Roles and statuses

Personal

Age and life-

cycle stage

Occupation

Economic circumstances

Lifestyle

Personality and self-concept

Psychological

Motivation

Perception

Learning

Beliefs and attitudes

BUYER

Model of Factors Influencing Behavior


Maslow s hierarchy of needs l.jpg

Self-Actualization Needs

(self-development and realization)

Esteem Needs

(self-esteem, recognition, status)

Social Needs

(sense of belonging, love)

Safety Needs

(security, protection)

Physiological Needs

(hunger, thirst)

Maslow‘s Hierarchy of Needs


How customers handle dissatisfaction l.jpg

Seek redress directly from business firms

Take some form of public action

Take legal action to obtain redress

Complain to business, private, or governmental agencies

Take some action

Dissatisfaction occurs

Decide to stop buying product or brand or boycott seller

Take some form of private action

Take no action

Warn friends about the product and/or seller

How Customers Handle Dissatisfaction


Customers use or dispose of product l.jpg

Give it away

Rent it

To be

(re)sold

Get rid of it temporarily

Trade it

Loan it

To be

used

Get rid of it permanently

Sell it

Direct to consumer

Product

Use it to serve original purpose

Throw it away

Through middleman

Keep it

Convert it to serve a new purpose

Store it

To middleman

Customers‘ Use or Dispose of Product


Model of industrial organization analysis l.jpg

Basic Conditions

Demand

Price elasticity

Substitutes

Rate of growth

Cyclical and seasonal character

Purchase method

Marketing type

Supply

Raw materials

Technology

Unionization

Product durability

Value weight

Business attitudes

Public policies

Industry structure

Number of sellers

Product differentiation

Entry and mobility barriers

Exit and shrinkage barriers

Cost structures

Vertical integration

Global reach

Conduct

Pricing behavior

Product strategy and advertising

Research and innovation

Plant investment

Legal tactics

Performance

Production and allocative efficiency

Technological progress

Profitability

Employment

Model of Industrial Organization Analysis


Shifting company orientations l.jpg

Customer

Centered

No

Yes

Product orientation

Customer orientation

No

Competitor

Centered

Competitor orientation

Market orientation

Yes

Shifting Company Orientations


90 types of demand measurement 6 x 5 x 3 l.jpg

World

U.S.A.

Space

Level

Region

Territory

Customer

All sales

Industry sales

Company sales

Product Level

Product line

Product form

Product item

Short-range

Medium-range

Long-range

Time Level

90 Types of Demand Measurement (6 x 5 x 3)


Levels of market definition l.jpg

100%

100%

Total population

Potential market

40%

Available market

20%

Qualified available market

10%

10%

Served market

Potential market

5%

Penetrated market

(a) Total market

(b) Potential market

Levels of Market Definition


Segmentation targeting positioning l.jpg

Market Segmentation

Market Positioning

Market

Targeting

  • Identify possible positioning concepts for each target segment

  • Select, develop, and communicate the chosen positioning concept

  • Evaluate the attractiveness of each segment

  • Select the target segment(s)

  • Identify segmentation variables and segment the market

  • Develop profiles of resulting segments

Segmentation, Targeting, Positioning


Different segmentation of a market l.jpg

(a) No market segmentation

(b) Complete segmentation

2

B

1

A

2B

1A

1

A

3

B

1A

3B

B

1

1B

A

3

3A

(c) Market segmentation by income classes 1, 2, and 3

(d) Market segmentation by age classes A and B

(e) Market segmentation by income-age class

Different Segmentation of a Market


Basic market preference patterns l.jpg

Creaminess

Creaminess

Creaminess

Sweetness

(a) Homogeneous

preferences

Sweetness

(b) Diffused preferences

Sweetness

(c) Clustered preferences

Basic Market-Preference Patterns


Five forces determining segment structural attractiveness l.jpg

Potential

Entrants

(Threat of mobility)

Industry Competitors (Segment rivalry)

Buyers

(Buyer power)

Suppliers

(Supplier power)

Substitutes

(Threat of substitutes)

Five Forces Determining Segment Structural Attractiveness


Barriers of profitability l.jpg

Exit Barriers

Low

High

Low, stable returns

Low, risky returns

Low

Entry Barriers

High, stable returns

High, risky returns

High

Barriers of Profitability


Five patterns of target market selection l.jpg

M1

M1

M1

M1

M1

M1

M1

M1

M1

P1

P1

P1

P1

P1

P2

P2

P2

P2

P2

P3

P3

P3

P3

P3

Single-segment concentration

Market specialization

Selective specialization

M1

M1

M1

M1

M1

M1

(P=Product /

M=Market)

Product specialization

Full coverage

Five Patterns of Target Market Selection


Three alternative market selection strategies l.jpg

Company

Marketing

Mix

Market

(a) Undifferentiated marketing

Company

marketing mix 1

Segment 1

Company

marketing mix 2

Segment 2

Company

marketing mix 3

Segment 3

(b) Differentiated marketing

Segment 1

Segment 2

Company

marketing mix

Segment 3

(c) Concentrated marketing

Three Alternative Market Selection Strategies


Segments and supersegments l.jpg

Customer Groups

Customer Groups

1

2

3

4

1

2, 3

5

6

7

8

4, 8

Products

Products

5, 6, 7

9

10

11

12

9, 10, 11, 12

(a) Segments

(b) Supersegments

Segments and Supersegments


The new bcg matrix l.jpg

Small

Large

Fragmented

Specialization

Many

Number of approaches to achieve advantage

Stalemate

Volume

Few

Size of the advantage

The New BCG Matrix


Brand quality strategies and profitability l.jpg

Quality improvement

Superior

Quality maintenance

High

(Profitability ROI)

Quality adulteration

Quality Level

Average

Low

Time

Quality Level

Average

Superior

Low

A) Relationship between product quality and profitability (return on investment – ROI)

B) Three strategies for managing product quality through time

Brand-Quality Strategies and Profitability


Evaluating a market opportunity l.jpg

No

Is the market opportunity compatible with company objectives?

Profit objective

Yes

No

Sales volume objective

Yes

No

Sales growth objective

Yes

Yes

Customer goodwill objective

No

Is the market opportunity compatible with company resources?

Does company have the necessary capital?

Can it be obtained at a reasonable cost?

No

No

Yes

Yes

Does company have the necessary production and marketing know-how?

Can it be obtained at a reasonable cost?

No

No

Yes

Yes

Does company have the necessary distribution capability?

Can it be obtained at a reasonable cost?

No

No

Yes

Yes

Reject the market opportunity

Move to next stage

Evaluating a Market Opportunity


Product and brand positioning l.jpg

High price per ounce

Brand A

Bacon and eggs

Brand C

Cold cereal

High in calories

Slow

Low in calories

Quick

Pancakes

Low

Brand B

Instant breakfast

Hot cereal

Low price per ounce

Inexpensive

  • Product-positioning map (breakfast market)

  • Brand-positioning map (instant breakfast market)

Product and Brand Positioning


The new product development decision process l.jpg

Coordinate, stimulate, and search for ideas in external environment and among company personnel

  • Identify:

  • Company factors

  • Their weights

Develop alternative product concepts

  • Propose:

  • Price

  • Distribution

  • Promotion

  • Prepare:

  • Market analysis

  • Cost analysis

Go into limited production, prepare advertising

Buy equipment and go into full production and distribution

  • Conduct:

  • Engineering tests

  • Consumer preference tests

  • Branding

  • Packaging

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Lay future plans

1. Idea generation

Is the particular idea worth considering?

2. Idea screening

Is the product idea compatible with company objectives, strategies, and resources?

3. Concept developing and testing

Can we find a good concept for the product that consumers say they would try?

4. Marketing strategy development

Can we find a cost-effective, affordable marketing strategy?

5. Business analysis

Will this product meet our profit goal?

6. Product development

Have we developed a product that is sound technically and commercially?

7. Market testing

Have product sales met our expectations?

8. Commercialization

Are product sales meeting our expectations?

No

No

Yes

Should we send the idea back for product development?

Would it help to modify our product or marketing program?

Yes

No

No

No

No

No

No

DROP

The New-Product-Development Decision Process


Adopter categorization on the basis of relative time of adoption of innovation l.jpg

2 environment and among company personnel1/2% Innovators

16% Laggards

131/2%

Early adopters

34%

Early majority

34%

Late majority

Time of adoption of innovations

X - 2

X - 

X

X + 

Adopter Categorization on the Basis of Relative Time of Adoption of Innovation


Demand technology product life cycles l.jpg

M environment and among company personnel

D

G2

Demand life-cycle

Demand life-cycle

Demand technology cycle

T2

Sales

Sales

P3

G1

P4

T1

Demand technology cycles

P2

Product life cycle

E

P1

Time

(a)

Time

(b)

Demand-Technology-Product Life Cycles


Sales and profit life cycles l.jpg

Sales environment and among company personnel

Sales and Profits

Profit

Introduction

Growth

Maturity

Decline

Time

Sales and Profit Life Cycles


Four marketing strategies l.jpg

Promotion environment and among company personnel

High

Low

Rapid-skimming strategy

Slow-skimming strategy

High

Rapid-penetration strategy

Slow-penetration strategy

Low

Four Marketing Strategies

Price


Stages of the competitive cycle l.jpg

100% environment and among company personnel

Market share

Capacity share

Production costs

Price premium

Sole Supplier

Competitive Penetration

Share Stability

Commodity Competition

Withdrawal

Stages of the Competitive Cycle


Companies in a mature industry l.jpg

Market environment and among company personnel

Nichers

Volume leaders

Quality

leader

Cost

leader

Service

leader

Market specialist

Product specialist

Customizer

Companies in a Mature Industry


Market space diagrams l.jpg

Y environment and among company personnel1

Y2

Large

Size

Medium

Attribute 1

X

Y3

Y4

Small

4

5

6

7

8

9

Attribute 2

Number of functions

  • Market-crystallization stage-consumer-preference distribution for hand calculator

  • Market-expansion stage-illustration of a strangulation strategy with four brands of firm Y attacking firm X’s brand

Market-Space Diagrams


Market fragmentation and market reconsolidation stages l.jpg

C environment and among company personnel

H

C

AB

H

AB

DE

YZ

J

DE

XYZ

X

JK

K

FG

FG

M

L

L

M

  • Market-fragmentation stage

  • Market-reconsolidation stage

Market Fragmentation and Market Reconsolidation Stages


Hypothetical market structure l.jpg

Market environment and among company personnel

Leader

Market

Challenger

Market

Follower

Market

Nichers

40%

30%

20%

10%

Hypothetical Market Structure


Defense strategies l.jpg

(2) Flanking defense environment and among company personnel

(1) Position defense

(3) Preemptive defense

(6) Contraction defense

ATTACKER

DEFENDER

(4) Counteroffensive defense

(5) Mobile defense

Defense Strategies


Market share and profitability l.jpg

% environment and among company personnel

16

Sperry-New Holland

30.0

Profitability

14

Profitability

30

%

12

Deere

Steiger

10

Hesston

23.4

20

International Harvester

8

Allis-Chalmers

14.1

17.6

6

9.1

Massey Ferguson

10

4

J.I. Case

Average Sales (constant $000)

2

Market Share

0

(b) V-shaped relationship

0

%

Under 10

Over 40

1,000

3,000

5,000

(a) Linear relationship according to PIM studies

10-20

20-30

30-40

Market Share and Profitability


Attack strategies l.jpg

(4) Bypass attack environment and among company personnel

(2) Flanking attack

(1) Frontal attack

DEFENDER

ATTACKER

(3) Encirclement attack

Attack Strategies


Major decisions in international marketing l.jpg

Deciding whether to go abroad environment and among company personnel

Deciding which markets to enter

Deciding how to enter the market

Deciding on the marketing program

Deciding on the marketing organization

Major Decisions in International Marketing


Evaluating which markets to enter l.jpg

Market Attractiveness environment and among company personnel

High

Medium

Low

China

L

H

Czechoslovakia

M

Eastern Germany

L

Competitive Advantage

Risk

Poland

H

H

M

Romania

L

Evaluating Which Markets to Enter


Five modes of entry into foreign markets l.jpg

Direct investments environment and among company personnel

Joint venture

Indirect exporting

Direct exporting

Licensing

Amount of commitment, risk, control, and profit potential

Five Modes of Entry into Foreign Markets


Five international product and promotion strategies l.jpg

Product environment and among company personnel

Do Not Change Product

Develop New Product

Adapt Product

Do Not Change Promotion

  • Straight extension

  • Product adaptation

Promotion

  • Product invention

Adapt Promotion

  • Communication adaptation

  • Dual adaptation

Five International Product and Promotion Strategies


Whole channel concept l.jpg

Seller’s international marketing headquarters environment and among company personnel

Channels within foreign nations

Channels between nations

Seller

Final buyers

Whole-Channel Concept


Five product levels l.jpg

Potential product environment and among company personnel

Augmented product

Expected product

Generic product

Core benefit

Five Product Levels


Overview of branding decisions l.jpg

Branding Decision environment and among company personnel

Brand-Sponsor Decision

Brand-Name Decision

Should a brand be developed for the product?

Who should sponsor the brand?

What names should be put on the products?

Individual brand names

Blanket family

name

Separate family

name

Company / individual names

Manufacturer’s

brand

Private brand

Mixed brands

Brand

No brand

Brand-Strategy Decision

Brand-Repositioning Decision

What branding strategies should be used?

Should the brand be repositioned?

New brands

Brand extensions

Line extensions

Brand repositioning

No brand

repositioning

Overview of Branding Decisions


Four brand strategies l.jpg

Product Category environment and among company personnel

Existing

New

Line extension

Brand extension

Existing

Brand Name

Multibrands

New brands

New

Four Brand Strategies


Elements in a service encounter l.jpg

The Service Business as a System environment and among company personnel

Customer A

Service Business

Physical environment

Service X

Internal organizational system

Other services

Contact personnel

Advertising

Billing and payment

Sales calls

Media stories

Word-of-mouth comments

Random exposures to personnel and facilities

Market research studies

Not visible to customer

Visible to customer

Other customers

Direct interactions

Secondary interactions

Elements in a Service Encounter


Three types of marketing in service industries l.jpg

Company environment and among company personnel

Internal Marketing

External Marketing

Customers

Employees

Interactive Marketing

Three Types of Marketing in Service Industries


Evaluation for different types of products l.jpg

Most goods environment and among company personnel

Most services

Difficult to evaluate

Easy to evaluate

Clothing

Jewelry

Furniture

Houses

Automobiles

Vacation

Haircuts

Child care

Legal services

Root canal

Auto repair

Television repair

Restaurant meals

Medical diagnosis

High in experience

qualities

High in search

qualities

High in credence

qualities

Evaluation for Different Types of Products


Service quality model l.jpg

Word of Mouth Communications environment and among company personnel

Personal Needs

Past Experience

Expected Service

GAP 5

Perceived Service

Consumer

Marketer

Service Delivery (including pre- and postcontacts)

GAP 4

External Communications to Consumers

GAP 1

GAP 3

Translation of Perceptions into Service Quality Specs.

GAP 2

Management Perceptions of Consumer Expectations

Service-Quality Model


Nine price quality strategies l.jpg

Price environment and among company personnel

High

Medium

Low

  • Premium strategy

  • High-value strategy

  • Super-value strategy

High

Product Quality

  • Overcharging strategy

  • Medium-value strategy

  • Good-value strategy

Medium

  • Ripp-off strategy

  • False economy strategy

  • Economy strategy

Low

Nine Price/Quality Strategies


Price revenue market share and profits l.jpg

(%) environment and among company personnel

($M)

($M)

80

20

90

Pretax profit

18

80

Revenue

75

Share

Revenue

70

16

Profit

70

60

14

Market share

65

Primary tradeoff range

12

50

60

40

10

Apex Price (dollar / unit)

80

85

90

95

100

105

110

Price, Revenue, Market Share, and Profits


Inelastic and elastic demand l.jpg

P’ environment and among company personnel2

P2

Price

P’1

P1

Quantity Demanded per Period

(a) Inelastic demand

Quantity Demanded per Period

(b) Elastic demand

Q’1

Q’2

Q1

Q2

Inelastic and Elastic Demand


The three cs model for price setting l.jpg

Customers’ environment and among company personnel

assessment

of unique

product features

High Price

Low Price

Competitors’

prices

and

prices of

substitutes

Costs

No possible demand at this price

No possible profit at this price

The Three Cs Model for Price Setting


Break even chart l.jpg

Dollars (in thousands) environment and among company personnel

Total revenue

1200

Target profit

1000

Total cost

800

Sales Volume in Units (in thousands)

600

Fixed cost

400

200

0

10

20

30

40

50

Break-Even Chart


How a distributor effects an economy of effort l.jpg

1 environment and among company personnel

M

M

C

C

2

4

1

3

4

M = Manufacturer C = Customer D = Distributor

5

2

5

M

C

M

C

D

6

6

3

7

  • Number of contacts M + C = 3 + 3 = 6

8

  • Number of contacts M x C = 3 x 3 = 9

C

C

M

M

9

How a Distributor Effects an Economy of Effort


Consumer and industrial marketing channels l.jpg

Retailer environment and among company personnel

Manufacturer

Consumer

Wholesaler

Retailer

Wholesaler

Jobber

Retailer

(a) Consumer marketing channels

Industrial distributors

Manufacturer

Industrial customer

Manufacturer’s representative

Manufacturer’s sales branch

(b) Industrial marketing channels

Consumer and Industrial Marketing Channels


The hybrid grid l.jpg

Demand-Generation Tasks environment and among company personnel

Lead Generation

Qualifying Sales

Close of Sales

Postsales Service

Account Management

Presales

National Account Management

Direct Sales

BIG CUSTOMERS

Telemarketing

MIDSIZE CUSTOMERS

C U S T O M E R

V E N D O R

Direct Mail

Marketing Channels and Methods

Retail Stores

Distributors

SMALL CUSTOMERS AND NONCUSTOMERS

Dealers and Value-Added Resellers

The Hybrid Grid


The downside of multichannel marketing l.jpg

Cost using salesforce only environment and among company personnel

National accounts

A

Field salesforce

Cost using different sales channels

Cost

Telemarketing

Dealer

B

Agent

Small, Rural

Small, Urban

Medium

Large

Very Large

Customer Size

The Downside of Multichannel Marketing


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Procurement environment and among company personnel

Manufacturing

Physical distribution

Suppliers

Channels

Customers

Nature of Physical Distribution


Optimal order quantity l.jpg

Total cost per unit environment and among company personnel

Cost per Unit

Inventory carrying cost per unit

Order Quantity

Order-processing cost per unit

Q*

Optimal Order Quantity


Response hierarchy models l.jpg

Models environment and among company personnel

Stages

“AIDA” Model

“Hierarchy-of-Effects” Model

“Innovation-Adoption” Model

“Communication” Model

Awareness

Exposure

Cognitive stage

Attention

Reception

Awareness

Knowledge

Cognitive response

Liking

Interest

Attitude

Interest

Affective stage

Preference

Conviction

Evaluation

Intention

Desire

Trial

Behavior

Behavior stage

Purchase

Action

Adoption

Response Hierarchy Models


Promotional tools in consumer vs industrial markets l.jpg

Advertising environment and among company personnel

Personal selling

Sales promotion

Sales promotion

Consumer Goods

Industrial Goods

Personal selling

Advertising

Public relations

Public relations

Relative Importance

Relative Importance

Promotional Tools in Consumervs. Industrial Markets


Push vs pull strategy l.jpg

Marketing activities environment and among company personnel

Demand

End users

Manufacturer

Intermediaries

Push Strategy

Demand

Marketing activities

Demand

Demand

End users

Manufacturer

Intermediaries

Pull Strategy

Push vs. Pull Strategy


Cost effectiveness of different promotional tools l.jpg

Sales promotion environment and among company personnel

Promotional Cost Effectiveness

Personal selling

Advertising and publicity

Stages of Buyer Readiness

Comprehension

Conviction

Reordering

Awareness

Ordering

Cost Effectiveness of DifferentPromotional Tools


Current consumer states for two brands l.jpg

20% not aware environment and among company personnel

60% not aware

40% did not try

100% market

100% market

80% aware

20% disappointed

80% disappointed

70% did not try

60% tried

40% aware

30% tried

20% satisfied

80% satisfied

Total

Awareness

Brand Trial

Satisfaction

Total

Awareness

Brand Trial

Satisfaction

Brand B

Brand A

Current Consumer States for Two Brands


Major decisions in advertising management l.jpg

Message decision environment and among company personnel

Message generation Message evaluation and selection Message execution

Objectives setting

Advertising evaluation

Budget decisions

Affordable approach Percent of sales Competitive parity Objectives and task

Communication objectives

Sales objectives

Communication impact

Sales impact

Media decision

Reach, frequency, impact major media types, specific media vehicles, media timing

Major Decisions in Advertising Management


Classification of advertising timing patterns l.jpg

Rising environment and among company personnel

Falling

Level

Alternating

(1)

(2)

(3)

(4)

Concentrated

(7)

(5)

(6)

(8)

Continuous

(9)

(10)

(11)

(12)

Intermittent

Number of messages per month

Month

Classification of Advertising Timing Patterns


Steps in designing and managing the salesforce l.jpg

Salesforce objectives environment and among company personnel

Salesforce strategy

Salesforce structure

Salesforce size

Salesforce compensation

Designing the salesforce

Recruiting and selecting sales representa-tives

Training sales representa-tives

Directing sales representa-tives

Motivating sales representa-tives

Evaluating sales representa-tives

Managing the salesforce

Relationship building skills

Improving salesforce effectiveness

Salesmanship training

Negotiation skills

Steps in Designing and Managing the Salesforce


Major steps in effective selling l.jpg

Preapproach environment and among company personnel

Prospecting and qualifying

Follow-up and maintenance

Closing

Presentation and demonstration

Overcoming objections

Approach

Major Steps in Effective Selling


Stages in the evolution of the marketing department l.jpg

President environment and among company personnel

President

Sales VP

Sales VP

Marketing Director Other marketing functions

Other marketing functions

Salesforce

Salesforce

(a) Stage 1

(b) Stage 2

President

President

Executive VP of Marketing and Sales

Sales VP

Marketing VP

Sales VP

Marketing VP

Other marketing functions

Salesforce

Other marketing functions

Salesforce

(c) Stage 3

(d) Stages 4 and 5

Stages in the Evolution of theMarketing Department


Functional organization l.jpg

Marketing vice-president environment and among company personnel

Marketing administration manager

New products manager

Marketing research manager

Advertising and sales promotion manager

Sales manager

Functional Organization


The product manager s interactions l.jpg

Advertising agency environment and among company personnel

Agency media dept, Company media dept. Media sales reps

Suppliers

Media

Trade

Manufacturing and distribution

Premium suppliers Premium screening Store testing Sampling Couponing

Suppliers

Research and development

Promotion services

Product manager

Packaging

Legal

Designers Researchers

Purchasing

Fiscal

Suppliers

Market research

Publicity

Research suppliers

Salesforce

Trade

The Product Manager‘s Interactions


Three types of product teams l.jpg

PM environment and among company personnel

PM

PM

APM

PA

D

F

E

R

C

R

C

S

(a) Vertical product team

(b) Triangular product team

(c) Horizontal product team

PM = product manager, APM = associate product manager,

PA = product assistant, R = market researcher,

C = communication specialist, S = sales manager,

D = distribution specialist, F = finance / accounting specialist,

E = engineer

Three Types of Product Teams


The control chart model l.jpg

Upper control limit environment and among company personnel

Advertising Expense / Sales Ratio

14

Desired level

12

Lower control limit

10

8

6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

Time Period

The Control-Chart Model


Financial model of return on net worth l.jpg

1.5% environment and among company personnel

4.8%

3.2

2.6

Profit margin

12.5%

Financial leverage

Return on net worth

Return on assets

=

X

=

Net profits

Net worth

Net sales

Total assets

Total assets

Net worth

Net profits

Net sales

Net profits

Total assets

Asset turnover

Financial Model of Return on Net Worth


Dynamic interactions between sales orders and distribution efficiency l.jpg

Perceived need to improve delivery time environment and among company personnel

Sales surge

Management increases sales incentives

No or late action taken to add capacity

Delivery delay

Insufficient production and distribution capacity

Sales fall

Dynamic Interactions Between Sales Orders and Distribution Efficiency


Major marketing decision areas posing legal or ethical questions l.jpg

SELLING DECISIONS environment and among company personnel

COMPETITIVE RELATIONS DECISIONS

COMPETITIVE RELATIONS DECISIONS

PRODUCT DECISIONS

Product additions and deletions?

Patent protection?

Product quality and safety?

Product warranty?

Harmful products?

Bribing?

Stealing trade secrets?

Disparaging customers?

Misrepresenting?

Disclosure of customer rights?

Unfair discrimination?

Anticompetitive acquisition?

Barriers to entry?

Predatory competition?

ADVERTISING DECISIONS

PACKAGING DECISIONS

False advertising?

Deceptive advertising?

Bait-and-switch advertising?

Promotional allowances and services?

Fair packaging and labeling?

Excessive cost?

Scarce resource?

Pollution?

Legal or Ethical Questions

PRICE DECISIONS

CHANNEL DECISIONS

Exclusive dealing?

Exclusive territorial distributorships?

Tying agreements?

Dealers’ rights?

Price fixing?

Resale price maintenance?

Price discrimination?

Deceptive pricing?

Major Marketing Decision Areas Posing Legal or Ethical Questions


Drawpack diagrams l.jpg
Drawpack Diagrams environment and among company personnel

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Usage rights environment and among company personnel

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