Marketing

brand valuation

- An estimate is made of the percentage of a company's revenue that can be credited to a brand - A five year projection of the brand's profits is made - The risk associated with the profit projections is assessed, taking into account such factors as market leadership, stability and global reach - A discount rate is calculated based on risk, which is used to discount brand profits to arrive at a net present value (pyramid figure)

Pricing methods

- Cost - Competition - Marketing

Micro-environmental analysis

- Market analysis, which involves the statistical analysis of market size, growth rate and trends - Customer analysis of buyer behaviour- how they rate competitive offerings, and how they segment - Competitor analysis, which examines the nature of actual and potential competitors, and their objectives and strategies - Distribution analysis, which covers an examination of the attractiveness of different distribution channels, distributor buyer behaviour, their strengths and weaknesses, movements in power bases, and alternative methods of physical distribution - Supplier analysis examines who and where they are located, their strengths and weaknesses, power changes and trends in the supply chain

Marketing orientated pricing takes into account the following factors

- Price should be in line with marketing strategy. A key decision in this is the positioning strategy. Launch strategies: price should also be blended with other elements of the marketing mix: Price/Promotion high/low: Rapid skimming; slow skimming; paid penetration; slow penetration

Channel integration options

-Conventional marketing channels -Franchising. Three most common levels: manufacturer and retailer, manufacturer and wholesaler, retailer and retailer -Channel ownership: corporate vertical marketing system

Ten major cost drivers that determine the behaviour of costs in the value chain

-Economies of scale -Capacity utilization -Interrelationships -Timing -Location -Institutional factors -Policy decisions -Integration -Linkages -Learning

Cost orientated pricing methods

-Full cost pricing: pricing so to include all costs and based on certain sales volume assumptions -Direct cost pricing: the calculation of only those costs that are likely to rise as output increases

Salesforce organization

-Geographic: sales area is broken down into territories based on workload and potential -Product: effective by a diverse product range -Customer-based where key account management is used sometimes: an approach to selling that focuses resources on major customers and uses a team selling approach.

Competitor orientated pricing methods

-Going-rate pricing: perfect competition -Competitive bidding: drawing up detailed specifications for a product and putting the contract out to tender

Personal influences on consumer behaviour

-Information processing -Perception -Selective attention -Selective distortion -Information framing -Selective retention -Learning -classical conditioning -operant conditions -Cognitive learning -Role learning -Vicarious learning -Reasoning

Distribution intensity options

-Intensive distribution aims to achieve saturation-coverage of the market by using all available outlets -Selective distribution: a producer uses a limited number of outlets in a geographical area to sell its products -Exclusive distribution: only one wholesaler, retailer or industrial distributor is used in a geographic area

Developments in purchasing

-Just-in-time concept aims to minimize stocks by organizing a supply system that provides materials and components as they are required -Centralized purchasing encourages purchasing specialities to concentrate their energies on a small group of products, thus enabling them to develop an extensive knowledge of cost factors and the operation of suppliers -E-procurement: catalogue sites, vertical markets, auction sites, exchange markets, buying alliances -Reverse marketing: whereby the buyer attempts to persuade the supplier to provide exactly what the organization wants -Leasing: financial lease and operating lease -Outsourcing

categories of factors influence the channel selection

-Market factors: buying behaviour, buyer needs, willingness of channel intermediaries to market a product, location and geographical concentration of customers -Producer factors: producer must have adequate resources, product mix offered, desired degree of control of channel operations -Product factors -Competitive factors

Key assumptions of the Growth-Share Matrix

-Market growth has an adverse effect on cash flow because of the investment in such assets needed to finance growth -Market share has a positive effect on cash flow as profits are related to market share Strategic objectives Stars build sales and/or market share. Invest to maintain/increase leadership position. Repel competitive challenges. Problem children build selectively. Focus on defendable niche where dominance can be achieved. Harvest or divest the rest. Cash cows hold sales and/or market share. Defend position. Use excess cash to support stars, selected problem children and new product development. Dogs harvest or divest or focus on defendable niche.

The buy class

-New task: when the need for the product has not arisen previously so there is little or no relevant experience in the company, and a great deal of information is required -Straight rebuy occurs where an organization buys previously purchased items from suppliers already judged acceptable -Modified rebuy: a regular requirement for the type of product exists, and the buying alternatives are known, but sufficient change has occurred to require some allocation to the normal supply procedure

Drivers of IMC

-Organizational drivers focus on the benefits IMC can bring from an operational perspective -Target-market based drivers focus on changes which are affecting the delivery of communication messages -Communiation drivers focus on the potential benefits associated with the delivery of the message

IMC brings opportunities for future advantages

-Reduce costs by standardizing communication messages across a selected promotional mix -Create synergies between the use of communication tools -Reinforce competitive advantage by creating a more consistent communication experience for customers

Reducing commitment

-Reducing social distance through familiarization with each other's way of working -Making formal adaptations that are contractually agreed methods of meeting the needs of the other company by incurring costs or by management involvement -Making informal adaptations beyond the terms of the contract to cope with particular issues and problems that arise as the relationship develops

marketing objectives

-Strategic thrust objectives which shape the direction of the plan and involve deciding on which markets to target and which products/services to sell (new/existing) -Strategic objectives set specific objectives for individual products

marketing strategy (3 objectives)

-Target markets: decisions should be taken about which groups of customers are most attractive to the business and best fit with its capabilities -Competitor targets are the organizations against which the company chooses to compete directly -Competitive advantage is the achievement of superior performance through differentiation to provide superior customer value, or by managing to achieve lowest delivered cost. Most a combination of being better, faster and/or closer

Brand types

-manufacturer brands created by producers and bear their own chosen brand name -own-label brands are created and owned by distributors

challenge is selecting the right mix of tools and then the media channels to deliver the message. There are six major components of the mix

1. Advertising: any paid form of non-personal communication of ideas or products in the prime idea 2. Personal selling: oral communication with prospective purchasers with the intention of making a sale 3. Direct marketing: the distribution of products, information, and promotional benefits to target consumers through interactive communication in a way that allows response to be measured 4. Digital promotions: the promotion of products to consumers and businesses through digital media channels 5. Sales promotion: incentives to consumers or the trade that are designed to stimulate purchases 6. Public relations: to educate and inform an organization's publics through the media without paying for time or space directly

anatomy of brand positioning

1. Brand domain: the brand's target market 2. Brand heritage: the background to the brand and its culture 3. Brand values: the core values and characteristics of the brand 4. Brand assets: what makes the brand distinctive from other competing brands, such as symbols, features, images and relationships 5. Brand personality: the character of the brand described in terms of other entities, such as people, animals, or objects 6. Brand reflection: how the brand relates to self-identity; how the consumer perceives him/herself as a result of buying/using the brand

the process of planning at a product level (4 options)

1. Build 2. Hold 3. Harvest 4. Divest

Implementing a brand name change requires attention to five key issues:

1. Coordination: name change requires harmonious working between the company departments and those groups most involved 2. Communication: all stakeholders need to be targeted with communications that notify them early, and with a full explanation 3. Understanding what the customer identifies with the brand 4. Providing assistance to distributors/retailers 5. Speed of change: immediate or transitional?

spider-gram analysis

1. Identify a set of competing brands 2. Identify important attributes that consumers use when choosing between brands, using qualitative research 3. Conduct quantitative marketing research where consumers: rate the importance of each attribute in their choice between the brands on a 10-point scale and score each brand on all key attributes on a 10-point scale 4. Plot brands on a spider-gram

The tools. Three major groups available

1. Mass marketing communications include advertising, sales promotions and pr 2. Direct marketing communications include personal selling, exhibitions and direct marketing 3. Digital promotions and social media communications include websites, email marketing, buzz marketing and social media.

Three mechanisms are at work that can erode a differential advantage

1. Technological and environment changes that create opportunities for competitors by eroding the protective barriers 2. Competitors learn how to imitate the sources of differential advantage 3. Complacency leads to lack of protection of the differential advantage

Questions Marketing plan

1. Where are we now? -> business mission, marketing audit, SWOT analysis 2. Where would be like to be? -> Marketing objectives 3. How do we get there? ->Core strategy, marketing mix decisions, organization, implementation 4. Are we on course? -> control

Competitor analysis

1. Who are our competitors? 2. What are their strengths and weaknesses? 3. What are their strategic objectives and thrust? 4. What are their strategies? 5. What are their response patterns?

role of marketing directors to improve R&D relationship

1.Encourage teamwork 2.Improve the provision of marketing information to R&D 3.Take R&D people out of the lab 4.Develop informal relationships with R&D 5.Learn about technolgy 6.Formalize the product development process

three types of organizational markets

1.Industrial market consisting of companies that buy products and services to help them produce other goods and services 2.Reseller market comprises organizations that buy products and services to resell 3.Government market consists of government agencies that buy products and services to help them carry out their activities

Roles of members of the buying centre

1.Initiator: the person who begins the process of considering a purchase 2.Influencer: the person who attempts to persuade others in the group concerning the outcome of the decision 3.Decider: the individual with the power and/or financial authority to make the ultimate choice regarding which product to buy 4.Buyer: the person who conducts the transaction 5.User: the actual consumer/user of the product

Core strategy is

1.Internally consistent 2.Clearly defines target customers and their needs 3.Creates a competitive advantage 4.Incurs acceptable risk 5.Resource and managerially supportable 6.Derived to achieve product market objectives

role of senior management to improve R&D relationship

1.Make organizational design changes 2.Show a personal interest in new product development 3.Provide strategic direction 4.Encourage teamwork between marketing and R&D 5.Increase resources 6.Understand marketing's importance

Product type

1.Materials to be used in the production process 2.Components to be incorporated in the finished product 3.Plant and equipment 4.Products and services for maintenance repair and operation (MRO)

Six key principles for the effective management of multi-disciplinary project teams

1.Mission: should be clear, broad objectives 2.Organization: project leader, core team consisting of one member from each primary function in the company 3.Project plan: work plan, resource requirements etc. 4.Project leadership: make sure team stays in touch with the market 5.Responsibilities: overall success as well as own functional responsiblities 6.Executive sponsorship

Characteristics of modern selling

1.Problem-solving and system selling 2.Adding value/satisfying needs 3.Customer retention and deletion 4.Customer relationship management 5.Database and knowledge management 6.Marketing the product

There are four broad categories of new products

1.Product replacements: include revisions and improvements to existing products 2.Additions to existing lines 3.New product lines 4.New-to-the-world products

three main contexts which define the target audience and nature of IMC campagins:

1.Pull-positioning strategies aim to encourage consumers and end-user business customers to make a purchase. Messages stimulate action among members of the target audience. 2.Push-positioning strategies aim to move goods through the supply chain 3.Profile-positioning strategies aim to develop the image and identity of an organization

Creating and nurturing an innovative vulture

1.Reward success heavily 2.Tolerate failure 3.Give time off or 'turn a blind eye' to people working on pet projects 4.Be accessible 5.Resist automatic nay-saying 6.Back words with resources 7.Give clear messages about the role and importance of innovation

Distance has five dimensions

1.Social distance: the extent to which both the individuals and organizations in a relationship are unfamiliar with each other's way of working 2.Cultural distance: the degree to which the norms and values, or working methods, between two companies differ because of their separate national characteristics 3.Technological distance: the differences between the two companies' product and process technologies 4.Time distance: the time that must elapse between establishing contact or placing an order, and the actual transfer of the product or service involved 5.Geographical distance: the physical distance between the two companies

consumer behaviour process

1.The buying situation: extended, limited and habitual problem-solving 2.Personal influences: information processing, motivations, beliefs and attitudes, personality, lifestyle, life-cycle and age 3.Social influences: culture, social class, geo-demographics, reference groups

There are a number of marketing implications in the need-recognition stage, and marketing managers should be aware of:

1.The needs of consumers and the problems that they face 2.Need inhibitors which potentially stop a purchase 3.Need stimulation which might encourage a purchase

the Ehrenberg and Goodhart repeat purchase model

Awareness -> trial -> repeat purchase

Managing products methods

Boston Consulting Group Growth-Share Matrix, and General Electric Market Attractiveness-Competitive Position portfolio evaluation models

Global branding

Brand form; brand communications; brand additionals

Key branding decisions

Brand name Rebranding:

The process of market segmentation and target marketing

Disaggregated market: characteristics of individual cutomers are understood segmented market: customers are grouped into segmetns on the basis of having similar characteristics Target market: judge one segment to be the most attractive and a marketing mix startegy is designed for that target market

Macro-segmentation

Focus on the characteristics of the buying organization, such as size, industry and geographic location

the Fishbein and Ajzen model of reasoned action

High involvement: personal beliefs -> attitudes -> normative beliefs -> subjective norms -> -->> Purchase intentions -->> Purchase

Evaluation and purchase models

High involvement: the Fishbein and Ajzen model of reasoned action Low involvement: the Ehrenberg and Goodhart repeat purchase model

Product-life cycle

Introduction, growth, maturity, decline. -Product termination: emphasizes the fact that nothing lasts forever -Growth projections: warn against the dangers of assuming that growth will continue forever -Marketing objectives and strategies over the PLC -Product planning -Dangers of overpowering Limitations of PLC -Not all products follow the classic S-shaped curve -PLC is the result of marketing activities, not the cause -Unpredictability -Misleading objective and strategy prescriptions

the 4-Cs framework

Keys to successful positioning: 1. Clarity 2. Credibility 3. Consistency 4. Competitiveness

The general Electric Market Attractiveness-compeititve position model

Market attractiveness criteria: market size, market growth rate, beatable rivals, market entry barriers, social, political and legal factors Competitive strength criteria: market share, reputation, distribution capability, market knowledge, service quality, innovation capability, cost advantages Zone 1: build- manage for sales and market share growth as the market is attractive and competitive strengths are high (equivalent to stars) Zone 2: hold-manage for profits consistent with maintaining market share as the market is not particularly attractive but competitive strengths are high (equivalent to cash cows) Zone 3: build/hold/harvest - question mark zone (equivalent to problem children) Zone 4: harvest - manage for cash Zone 5: divest- improve short-term cash yield by dropping or selling the product (equivalent to dogs) Criticisms - Harder to use than Growth-Share matrix - Its flexibility allows for managerial bias

Product growth strategies: the Ansoff Matrix

Markets/products; existing/new market penetration or expansion/product development/market development/diversification

The development of buyer-seller relationships in industial markets

Pre-relation stage -> Early stage -> Development stage -> long-term stage -> Final stage

Rebranding

Rebranding: the act of changing a brand name. Why rebrand? - Mergers/acquisitions - Desire to create a new image/position in the marketplace - Sale or acquisition of parts of a business - Corporate strategy changes - Brand familiarity - International marketing considerations - Legal problems

Buy phases: the organizational decision-making process

Recognition of a problem (need) -> Determination of specification and quantity of needed item -> search for and qualification of potential sources -> acquisition and analysis of proposals -> evaluation of proposals and selection of suppliers -> selection of an order routine -> performance feedback and evaluation

Reposition strategies

Repositioning involves changing the target markets, the differential advantage, or both. Target market/product same/ different image repositioning; product respositioning; intangible repositioning; tangible repositioning

Micro-segmentation

Require a detailed level of market knowledge as it concerns the characteristics of decision-making within each micro segment, based on such factors as choice criteria, decision-making unit structure, decision-making process, buy class, purchasing organization and organizational innovativeness.

Five considerations will have a major impact on the choice of the promotional mix:

Resource availability and the cost of promotional tools 2. Market size and concentration 3. Customer information needs 4. Product characteristics 5. Push vs pull strategies

Business mission

a broadly defined, enduring statement of purpose that distinguishes a business from others of its type.

Industry

a group of firms that market products that are close substitutes from each other.

Brand equity

a measure of the strength of a brand in the market place by adding tangible value to a company through the resulting sales and profits. Two types: -Customer-based brand equity: the differential effect that brand knowledge has on consumer response to the marketing of that brand -Proprietary-based equity is derived from company attributes that deliver value to the brand. Two main sources are patents and channel relationships

Marketing audit

a systematic examination of a business' marketing environment, objectives, strategies, and activities with a view to identifying key strategic issues, problem areas and opportunities. Provides the basis for developing a plan of action to improve marketing performance and in doing so should provide answer to the question: where are we now?

Customer relationship management (CRM

a term for the methodologies, technologies and e-commerce capabilities used by firms to manage customer relationships. 1.Targeting customer and prospect groups with clearly defined propositions 2.Enquiry management 3.'welcoming' 4.Getting to know 5.Customer development 6.Managing problems 7.Win back

Integrated Marketing Communications school of thought

aims to move the emphasis of communications away from a step-by-step, linear, transactional process to an ongoing relational dialogue. It means: integrating all useable promotional tools and appropriate media to deliver synergistic communication campaigns.

Segmenting consumer markets

behavioural; psychographic; profile

Four strategic objectives are relevant to pricing:

build objective: for price-sensitive markets a price lower than competition. For price-insensitive markets, it is dependent on the overall positioning strategy thought appropriate for the product -hold objective: maintain or match price relative to the competition ¬-harvest objective: maintainenance or raising of profit margins even through sales and/or market share are falling. Set premium prices -reposition objective may involve a price change, where the direction and magnitude of which will be dependent on the new positioning strategy for the production

Physical distribution management

concerns the balance between cost reduction and meeting customer service requirements.

Marketing structure

consist of the marketing organization, training, and intra- and interdepartmental communication that takes place within an organization.

macroenvironment

consists of broad environmental issues that may affect business performance. These are political, legal, economic, ecological/physical, social/cultural and technological (PESTEL).

microenvironment

consists of the actors in the firm's immediate environment that affect its capabilities to operate effectively in its chosen markets.

Marketing systems

consists of the marketing information, planning and control systems that support marketing activities

Limited problem-solving

customer has some experience with the product, but a certain amount of external search and evaluation may take place. This situation provides marketers with some opportunity to affect purchase by stimulating the need to conduct search and reducing the risk of brand switching.

Simultaneous engineering

designers and production engineers work together rather than passing the project from one stage of development to another once the first department's work is finished

Invention

discovery of new ideas and methods

Strategic issues analysis

examines the suitability of marketing objectives and segmentation bases in the light of changes in the market place

brand name

family brand name (used for all products), individual brand name, combination brand name combines the two. Criteria for choosing brand names: - Evoke positive associations - Easy to pronounce and remember - Brand transferability - Suggest product benefits - Does not infringe an existing brand - Use numerals or alphanumerics when emphasizing technologies

product line

group of brands that are closely related in terms of their functions and the benefits they provide

Extended problem-solving

high degree of information search, and close examination of alternative solutions self-image -> percieved risk -> social factors -> Hedonism -> ----> level of involvement -> Differentiation and number of alternatives -> time pressure - > ---> extent of problem solving

Consumers

individuals who buy products or services for personal consumption

Channel strategy decisions

involve the selection of the most effective distribution channel, the most appropriate level of distribution intensity and the degree of channel integration.

Communications based co-branding

involves the linking of two or more existing brands from different companies or business units for the purposes of joint communication

Product based co-branding

involves the linking of two or more existing brands from different companies or business units to form a product in which the brand names are visible to customers.

Ingredient co-branding

is found when one suppliers explicitly chooses to position its brand as an ingredient of the product

workload approach

most practical method for deciding the salesforce size; based on the calculation of the total annual calls required per year divided by the average calls per year that can be expected from one salesperson.

Consumer decision making process

need recognition/problem awareness -> information search - > evaluation of alternative -> purchase - > post-purchase evaluation of decision

eight stage new production development process

new product strategy ->

Product replacement strategies

no change: Remerchandising: remix/no change Intangible repositioning: New market/ segment/no change Facelift:Nochange/ product modified Relaunche: remix/product modified Tangible repositioning: new market/segment/ product modified Inconspicuous technological substitution: no change/Technology change Conspicuous technological substitution: remix/technology change Neo - innovation: New market/segment/Technology change

Habitual problem-solving

occurs when a consumer repeat-buys the same product with little or no evaluation of alternatives.

Innovation

occurs when an invention is commercialized by bringing it to the market

Parallel co-branding

occurs when two or more dependent brands join forces to produce a combined brand.

Channel intermediaries:

organizations that facilitate the distribution of products to consumers

Marketing planning

overarching corporate strategic planning process - provides range of insights from trading environments to target markets and customer needs.

Maslow's hierarchy of needs

physiological; safety; Belongingness and love; esteem and status; self-actualization

cognitive dissonance

post-purchase concerns: Dissonance is likely to increase in four ways with the expense of purchase, 1. difficult 2. irrevocable 3. experience anxiety

selling process

preparation -> The opening -> need and problem identification -> presentation and demonstration - > dealing with objections -> closing the sale -> the follow-up

Retailing differentiation

process innovation/ total innovation/ non-innovation/ product innovation process/product differentiation

Portfolio managing

process of managing groups of brands and product lines

Benefit segmentation

provides an understanding of why people buy in a market and can aid the identification of opportunities

Physical distribution

set of activities concerned with the physical flows of materials, components, and finished goods from producer to channel intermediaries and consumers.

SWOT analysis

structured approach to evaluating the strategic position of a business by identifying its strengths, weaknesses, opportunities and threats.

product

that is capable of satisfying customer needs

awareness set

the array of brands that may provide a solution to the problem.

evaluation phase of consumer decision making process

the awareness set passes through a screening filter to produce an evoked set

understanding customer behaviour (three key areas)

the dimensions, the processes and the influences.

Direct marketing

the distribution of products, information, and promotional benefits to target consumers through interactive communication in a way that allows response to be measured. It is increasingly used in communication campaigns, influenced by the following factors: - Market and media fragmentation - Technology advances - Emerging analytical techniques

Market segmentation

the identification of individuals or organizations with similar characteristics that have significant implications for the determination of marketing strategy.

Channel of distribution

the means by which products are moved from the producer to the ultimate consumer

Branding

the process by which companies distinguish their product offerings from the competition

product mix

the total set of brands marketed in a company: the sum of product lines offered.

Brand extension

the use of an established brand name on a new brand within the same broad market or product category

evoked set

those brands that the customer seriously considers before making a purchase.

perceptual map

visual representation of consumer perceptions of the brand and its competitors: Key steps: 1. Identify a set of competing brands 2. Identify important attributes that consumers use when choosing between brands, using qualitative research 3. Conduct quantitative marketing research where consumers score each brand on all key attributes 4. Plot brands on two-dimensional map(s)

Brand stretching

when an established brand name is used for brands in unrelated markets or product categories