1-1 overview midterm ii discussion marketing plan lecture midterm iii and presentation discussion...
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OverviewOverview
Midterm II Discussion Marketing Plan Lecture Midterm III and Presentation Discussion John Jolliff Presentation
Country Insurance and Financial NPD for Service-based Industry
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Midterm IIMidterm II
Overall Improvement.. 221 and 222 out of 250 Suggestions…
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Midterm IIMidterm II
Positive Comments Pretty good screening Much better assumptions this time around,
much better information (could still use more work here)
More Critical Thinking
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Midterm IIMidterm II
Suggestions for Improvement Make it readable, lead the reader through what is going on,
makes sure that everything is crystal clear at all times Maybe try to explain what you doing, instead of just launching
into it? Send all files to me named in the way that I named them on the
grade sheets (Key - 002) Also, grade sheet issue, send the grade sheet with names entered
into… I'm making comments with voice recognition software, so
sometimes things slip by... if something doesn't make sense, let me know
Additional comments written in hard copy, I talk about these it sometimes in the grade sheet, but sometimes not…
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Midterm IIMidterm II
Suggestions for Improvement You don't get points taken off for when I question your
numbers (forecast, estimates, etc.)... I'm just trying to help out…
Confuse ATAR and test marketing stuff…. Marketing support isn't free... if you tell me that you going
to reach 200 million customers, and then don't talk about how much that's going to cost anywhere else in the paper, that's an issue
Confusion of repeat rate and word-of-mouth in ATAR… Don't make your concept statement a sales tool Make it easy to read…this makes a difference…
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Midterm IIMidterm II
Suggestions for Improvement Adjust screen for your needs Probably error on conservative side with screen
assumptions… or at least give a low, medium, high
Use stuff that's relevant, don't you stuff that isn't Don't apologize for guessing Don't say you are going to outsource this, then go
public, and make millions of dollars… Reverse code appropriate items on screen
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Midterm IIMidterm II
Suggestions for Improvement Multiple screens can be helpful Think of your audience when writing (Bass model detailed
in a easier to understand way) Products don't magically appear on shelves, they come
from personal selling as a part of market requirements Use hyphens Use an intro Footnotes … do this in a way that makes sense and it
makes it easy for me… it's all about me
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Midterm IIMidterm II
Suggestions for Improvement Graphs better, more visible, easier to read, more
legible You can talk to people and get quick and dirty
answers quite easily… dog collar expert kind of idea
Think about the information that people need, and give it to them... Nick's example of the screen
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Midterm IIIMidterm III
Launch Strategic Launch Planning Implementation of Strategic Plan Market Testing Launch Management Plan
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Midterm IIIMidterm III
Presentation Strategic Launch Planning Implementation of Strategic Plan Market Testing Launch Management Plan
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Marketing Planning
11
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
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Marketing PlanMarketing Plan
A marketing plan is a written document containing the guidelines for the business center’s marketing programs and allocations over the planning period.
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Time Horizons for Marketing PlansTime Horizons for Marketing Plans
Time Period
Consumer Products
Industrial Products
Services
1 year 62% 45% 65%
3 years 5 5 8
5 years 15 17 3
Long term 4 3 6
Indefinite 0 2 2
Other 14 28 16
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Hierarchy of PlanningHierarchy of Planning
SBU Planning
Annual Marketing (Business) Plan
Corporate Strategic Planning
Group or Sector Planning
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Objectives of a Marketing PlanObjectives of a Marketing Plan
1. Define the current business situation.
2. Define problems and opportunities facing the business.
3. Establish objectives.
4. Define the strategies and programs necessary to achieve the objectives.
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Objectives of a Marketing Plan cont.Objectives of a Marketing Plan cont.
5. Pinpoint responsibility for achieving product objectives.
6. Encourage careful and disciplined thinking.
7. Establish a customer/competitor orientation.
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Frequent Mistakes in the Planning ProcessFrequent Mistakes in the Planning Process
The speed of the Process The Amount of Data Collected Who does the Planning? The Structure Length of the Plan
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Frequent Mistakes in the Planning ProcessFrequent Mistakes in the Planning Process (cont)(cont)
Number of Courses of Action Considered Who Sees the Plan Not Using the Plan as a Sales Document Insufficient Senior Management Leadership Not Tying Compensation to Successful
Planning Efforts Frequency of Planning
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Marketing Planning SequenceMarketing Planning Sequence
Update historical data
Data analysis
Develop objectives, strategies, programs Develop
financial documents Negotiate
final planMeasure progress toward objectives Audit
Collect current situation data
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Marketing Plan SummaryMarketing Plan Summary
I. Executive summary
II. Situation analysisA. Category/competitor definition
B. Category analysis
C. Company and competitor analysis
D. Customer analysis
E. Planning assumptions
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Marketing Plan Summary cont.Marketing Plan Summary cont.
III. Objectives
IV. Product/brand strategy
V. Supporting marketing programs
VI. Financial documents
VII. Monitors and controls
VIII. Contingency plans
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Marketing Planning
11
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
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Bases of CompetitionBases of Competition
I. Customer-orientedWho they are – competition for same budgetWhen they use itWhy they use it- benefits sought
II. Marketing-oriented: advertising and promotion
Theme/copy strategyMediaDistributionPrice
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Bases of Competition cont.Bases of Competition cont.
III. Resource-orientedRaw materialsEmployeesFinancial resources
IV. Geographic
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Levels of CompetitionLevels of Competition
Diet lemon limes
Baseball cards
Fruit flavored
colas
Coffee
DietCoke
DietPepsi
Diet-Rite cola
Bottled water
Lemon limes
Regularcolas
Beers
Juices
Wine
Fast food
Tea
Video rentals
Icecream
Product form competition: Diet colas
Product category competition: Soft drinks
Generic competition: Beverages
Budget competition: Food and entertainment
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Levels of Competition: Implications for Product StrategyLevels of Competition: Implications for Product Strategy
Budget
Generic
Product Category
Product Form
Competitive Level
Convince Customers that the Brand is Better than Others
Convince Customers that the Product Form is Best in the
Category
Convince Customers that the Product Category is the Best
Way to Satisfy Needs
Convince Customers that the Generic Benefits are the Most
Appropriate Way to Spend their Money
Product Management Task
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Energy Bar CompetitionEnergy Bar Competition
Odwalla Power Bar
Balance BarClif
Energy Bars
Snack/Health Bars
Healthy Snacks
Other Snacks
Nutrigrain Bars Slimfast Bars Granola Bars
FruitsNutsJuice
CrackersChipsCandy
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PDA CompetitionPDA Competition
Level of Competition
Definition Competitors Need Satisfied
Product form POAs Full-features Palm Pilot VIICompaq AeroCasioplus integrated communicationCassio Poeia
Personal information management plus
Product category PIMs Palm IIIRoyalCasio PV-100
PIM only
Generic computers Notebook/subnotebook
Paper-based solutions
IBMToshibaMany othersRolodexDay Timer
Other solutions to the above
Budget Business items costing $100-$1,000
Fax machinesPersonal copiersCellular phonesFurniture (e.g. Steelcase)
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Managerial Judgment of CompetitionManagerial Judgment of Competition
Markets Same Different
Product/Services
Same
Different
A
C
B
D
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Defining Competition with Brand Choice DataDefining Competition with Brand Choice Data
Regular
All brands
RegionalNational
DietFamilybrand 1
Family brand 2
Cola Non-Cola
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Defining Competition with Perceptual MappingDefining Competition with Perceptual Mapping
•Moist •Needs refrigeration
•Tapioca pudding mixLocal mix •
Pudding mix
Chocolate torte mix •
Dzer ta • •Jell-O
•Canned pudding
•Individual pie
•Hostess cupcakes
•Quick bread mix
Good for a coffee break •
As a formal dessert•
Homemade cake •Bakery cake
•
Homemade cookies
• Cheese cake mix
“Snackin’ Cake” mix •
• Frozen cake
• Layer cake mix
• “Stir’n Frost cake mix
Takes a long time to prepare •
Bundt cake mix •
Custard mix
Boston crème pie mix“Light Style” cake mix
Coffee cake mix •
Bakery cookies •Pillsbury cookie dough •
Cookie mix •
•
•Easy to carry with meIn my school work lunch •
• Between meal snack
•Pepperidge Farm cookies• Oatmeal cookies
• Frozen pie
• Homemade pie
Date bar mix •
Brownie mix •
••
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Methods Versus Competition Levels Methods Versus Competition Levels and Information Requiredand Information Required
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Marketing Planning
11
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
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Aggregate Category FactorsAggregate Category Factors
Category size Category growth Stage in product life cycle Sales cyclicity Seasonality Profits
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Attractiveness of Market VariablesAttractiveness of Market Variables
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Category Attractiveness over Category Attractiveness over the Product Life Cyclethe Product Life Cycle
Stage of product life cycle
Category size
Category growth
Category attractiveness
Introduction
Small
Low
Low
Growth
Moderate
High
High
Maturity
Large
Low
Low/high
Decline
Moderate
Negative
Low
Sales
Time
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Category FactorsCategory Factors
Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivalry Pressure from substitutes Category capacity
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Environmental FactorsEnvironmental Factors
Technological Political Economic Regulatory Social
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Factors in Assessing the Structure Factors in Assessing the Structure of Industriesof Industries
Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Amount of intracategory rivalry Threat of substitute products or
services
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Buyer Bargaining Power is High When: Buyer Bargaining Power is High When:
Product bought is a large percentage of the buyer’s cost.
Product bought is undifferentiated. Buyers earn low profits. Buyer threatens to backward integrate. Buyer has full information. Substitutes exist for the seller’s product or
service.
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Supplier Bargaining Power is High When: Supplier Bargaining Power is High When:
Suppliers are highly concentrated, that is, dominated by a few firms.
There is no substitute for the product supplied.
Supplier has differentiated its product or built in switching costs.
Supply is limited.
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Major Characteristics of Categories Major Characteristics of Categories Exhibiting Intensive RivalriesExhibiting Intensive Rivalries
Many or balanced competitors Slow growth High fixed costs Lack of product differentiation Personal rivalries
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Impact of Category Factors on AttractivenessImpact of Category Factors on Attractiveness
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Conceptualizing Political RisksConceptualizing Political Risks
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Projected Change in U.S. Population 1995-2005Projected Change in U.S. Population 1995-2005
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U.S. Income InequalityU.S. Income Inequality
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Share of Food PurchasesShare of Food Purchases
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Energy Bars: Category Attractiveness SummaryEnergy Bars: Category Attractiveness Summary
Aggregate Market Analysis
Category Size •$504 mm energy bar category in 2001
Attractiveness++
Energy bar category contains four primary brands, plus their sub-brands and over 100 smaller players
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market Analysis
Category Growth
•Average annual growth rate of 57% between 1997 and 2001
Attractiveness++
U.S. energy bar category sales forecasted at $750 mm in 2003 for a continued expected growth of 22%•IIndustry reports suggest current annual growth for the energy bar market 25%-30%
•CCategory expanding: new competitors are entering, existing brands are expanding with new products and flavors, market penetration and usage occasion is increasing
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market Analysis
Product Life Cycle
•Both the category and Odwalla Bars specifically are both securely in early stages of growth phase
Attractiveness++
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market Analysis
Sales Cyclicity •While energy bars are premium-priced for their convenience and nutrient level, the base dollar point of $1-$3 per bar is low such that they are not directly impacted by GDP variations
Attractiveness+
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market Analysis
Seasonality •Year-round sales
Attractiveness++
•Category overall may experience a slight sales increase in the spring and summer month during “race season” and as users are engaged in more outdoor activities and desire quick, portable energy.
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market Analysis
Profits •As most major competitors are within the product portfolios of larger consumer goods companies, it is difficult to benchmark profitability within the energy bar category specifically. Nevertheless, the recent acquisition of the leading competitors reflects an expectation for strong profit potential.
Attractiveness+
Increased category competitiveness may lead to lower pricing and profits
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Category Analysis
Threat of New Entrants/Exits
•Strong potential for new competitors given that the category is profitable, fairly easy to enter, and increasingly relevant to consumers.
Attractiveness-
•FFurther, with the “big three” brands strongly in place [PowerBar, Clif (including Luna), and Balance], it is most likely that small competitors will enter through the natural foods channel, creating more direct competition with Odwalla bars.
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Category Analysis
Economies of Scale
•Competitors within the broader category of snack bars would likely experience economies of scale with a relatively easy entry into the energy bar market
Attractiveness-
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Category Analysis
Capital Requirements
•Within the mainstream energy bars, differentiation is largely through brand, taste, and flavor variety. With the exception of targeted nutrition products like protein- or carbohydrate-specific products, nutritional levels are largely at parity.Attractivenes
s-
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Energy Bars: Attractiveness Summary Energy Bars: Attractiveness Summary (cont)(cont)
Category Analysis
Switching Costs
•Switching costs are very low, opening the door to potential competitors
Attractiveness-
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market
Analysis
Distribution •As there are not specialty requirements for distribution (refrigeration, etc.), it would be very easy for any of the “center of the store” consumer food companies to enter the category and add on to their existing distribution structure. This is particularly true for companies that have an established relationship with the category buyer.
Attractiveness- Shelf life
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market
Analysis
Bargaining Power of Buyers
•Lots of competitors with relatively similar options distinguished by brand and taste keeps retailer power strong
Attractiveness-
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market
Analysis
Bargaining Power of Suppliers
•As the suppliers of raw inputs for energy bars are largely agricultural, the commodity nature of agriculture keeps prices and supplier power low. While still relatively low, supplier power will be higher for nutrient supplement suppliers
Attractiveness+
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market
Analysis
Pressure from Substitutes
•Considerable
Attractiveness-
•Fresh fruit, cereal bars, smoothies, candy bars, etc. are all suitable portable substitutes for the mainstream energy bar consumer. True athletes are most likely to substitute with higher nutrient level energy bars
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market
Analysis
Category Capacity
•Appears to be high given current scenario of more than 100 manufacturers and many more products. But, still, it is too early to determine true capacity
Attractiveness+
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Aggregate Market
Analysis
Current Category Rivalry
•Very high. Differentiation largely by taste and flavor variety, and by targeting unique market segments
Attractiveness-
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Environmental
Analysis
Technological •Technology could play a significant role with respect to manufacturing efficiencies and taste profiles
Attractiveness+
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Environmental
Analysis
Economic •While premium priced, energy bars have so far seemed to fair the recession well. Still, however, if economic conditions persist, consumers may opt for less expensive alternatives like fresh fruit or non-energy snack bars
Attractiveness+
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Environmental
Analysis
Political/ Regulatory
•The energy bar category is regulated by the FDA as are other food products. There are not to our knowledge, however, additional regulations directed toward the energy bar category.
Attractiveness0
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Energy Bars: Attractiveness SummaryEnergy Bars: Attractiveness Summary (cont)(cont)
Environmental
Analysis
Social •As lives get busier and mealtimes shrink, energy bars will continue to be an acceptable meal replacement.
Attractiveness++
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PDA: Category Attractiveness AnalysisPDA: Category Attractiveness Analysis
Aggregate Market Factors Attractivenes
s
Market Size $2.3 billion
Market Growth
Product Life Cycle
0%-40% +
+
+Growth
Profits
Sales CyclicityGood
one
Sales Seasonality
one
+/0
+
+
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PDA: Category Attractiveness AnalysisPDA: Category Attractiveness AnalysisCategory Factors Attractivenes
sThreat of New Entrants
•Moderate; R&D required, distribution
Bargaining Power of BuyersBargaining Power of Suppliers
Low, high switching costs +
0
0Moderate; PCs use similar components
Category Rivalry
Pressure from Substitutes
Intense
High
Category Capacity
Not a problem for now
-
-
+
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PDA: Category Attractiveness AnalysisPDA: Category Attractiveness Analysis
Environmental Factors: Attractivenes
s
Technological •Very sensitive
Political/ Regulatory
Economic
Telecommunications deregulation
+
-
+Relatively inexpensive
Social More work done on the road
+