business seminar 1. why marketing counts 33 rd new york wine industry workshop the understanding...
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Business Seminar
1. Why Marketing Counts
33rd New York Wine Industry WorkshopThe Understanding & Insight Group
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AgendaAgenda Background Why Marketing Counts Making Your Product Real
(continue through lunch) Integrating Marketing & Selling Wrap-up and Review
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Five year old business development company
Jacqueline Beckley Both have had extensive industrial
experience. Jacqueline in both Fortune 500 firms and 30
years in consumer understanding and research. Known for:
The Getting It! System Successful Front End Process
Locations in New Jersey, Ohio, and California
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Overview Weybright
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Marketing is:Marketing is:
EVERYTHING you do to promote your business, from the moment you conceive of it to the point at which customers buy your product or service and begin to patronize your business on a regular basis.
The key words to remember are everything and regular basis. Jay Conrad Levinson (“Guerrilla Marketing”)
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Elements of Marketing Elements of Marketing Shared by Small & Big Shared by Small & Big
BusinessesBusinesses 1. Research 2. Analysis 3. Strategies and Tactics
Factors Guiding Strategies and Tactics: PRODUCT Price Promotion Place (& PEOPLE)
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ProductProduct
Identify and understand the product/service being marketed
What need is there for your product or service?
Sell benefits not just products Question – “Would you buy this product
or service?” Why or Why not?
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Market Summary (People)Market Summary (People)
Market: past, present, & future Review changes in market share,
leadership, players, market shifts, costs, pricing, competition – (regionally, nationally, internationally)
Early Adopters/Pioneers
Mass Market/Followers
End of Life
Time
Numberof
customers
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CompetitionCompetition(useful as a tool for analysis and (useful as a tool for analysis and
learning)learning)
The Competitive Landscape Provides an overview of
product competitors, their strengths and weaknesses (unfilled niches)
Positions each competitor’s product against new product (learn what customers do or don’t want)
Offers marketing ideas
A B
CD
PerformanceP
rice
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““If You Do Not Change, You If You Do Not Change, You Can Become Extinct”Can Become Extinct” Who Moved My Who Moved My
Cheese, page 46Cheese, page 46
43% of U.S.farms have internet access
This appears to be a large growth from 2 years ago (29% were on the Web then)
AgWeb.com says 77% of farmers use the Internet for market and weather information
R.Hill says the bigger farmers with buying power are definitely out there on the Web, frequently
While you live regionally, think globally
EX: Tomatoes Mexican tomatoes Planting Supply Price
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““Small Business” IssuesSmall Business” Issues
I have a great idea, if I don’t move on it someone will take it!
I am not good at all the things you need to do to make a business successful.
I don’t have the time!! I don’t have the money! (I am afraid – if this doesn’t work……)
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The Decision Making ProcessThe Decision Making Process“Big Guys”“Big Guys”
Defining the Problem Not the symptoms
Determining the Objective Profit maximizing, Benefit-cost analysis
Exploring the Alternatives Leveraging information, being creative
Predicting the Consequences Understand the impact of possible decisions
Making a Choice And being happy with it in the long-run
Performing Sensitivity Analysis Understanding the impact of changing assumptions
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Common Business IssuesCommon Business IssuesIn “Big Guy” TermsIn “Big Guy” Terms
Product/portfolio strategy & planning Which products do I invest resources in?
Promotional strategy How can I make my advertising more impactful?
Consumer/customer segmentation Who really buys and consumes these products?
Competitive benchmarking & differentiation strategy Who are my competitors and what can I offer that my
competition cannot? High incidence of failure
What steps can I take to reduce the likelihood of failure? Too much information, not enough guidance
I have a lot if information, but what do I do with it?
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What’s Going on in aWhat’s Going on in a “Big Company” “Big Company”
More resources Scale has a way of masking issues that
will have great business impact Larger number of people, more people
issues
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The Product Development The Product Development ProcessProcess
Traditionally, big companies have focused their time and resources on the “back-end” of the PDP. That is the tactical space.
Planning & Situation Analysis
Planning & Situation Analysis
Consumer Needs & Idea
Generation
Consumer Needs & Idea
Generation
Concept Development
Concept Development
FRONT-END
Product Development
Product Development Product LaunchProduct Launch Post-Launch AuditPost-Launch Audit
BACK-END
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The importance of the “front The importance of the “front end”end”
Attention is now being directed on the “Front End” of the Product Development Process because of proposed ability to focus resources and improve chances for successful new product introductions.
Planning & Situation Analysis
Planning & Situation Analysis
Consumer Needs & Idea Generation
Consumer Needs & Idea Generation
Concept Development
Concept Development
FRONT-END
Product Development
Product Development Product LaunchProduct Launch Post-Launch AuditPost-Launch Audit
BACK-END
Ab
ilit
y t
o in
flu
en
ce o
utc
om
e
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Small BusinessSmall Business
Same issues as Big Company – Fewer resources
Better grasp of business solutions required
Fast to understand, fast to change direction “Adapt To Change Quickly” “Be Ready To Change Quickly and Enjoy It Again &
Again” both on pg 74
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Critical Success FactorsCritical Success Factors
Superior, differentiated products Products that offer unique benefits &
superior value to the consumer/customer Thorough understanding of customers’
needs & wants, competitive situation, and nature of the market
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Critical Success FactorsCritical Success Factors
Do the Front End Early-on idea screening, market
assessment, technical assessment, business & financial analysis, product definition, target market, product concept with attributes & benefits, and positioning
Prioritize with Go/Kill procedures Balance speed to market & quality of
execution A company culture that supports the
business goals
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Focused Decision MakingFocused Decision Making A strong (product development) Process with a
consumer/customer orientation and a focus on front-end activities can deliver quick market results.
A focused Process leads to focused decision making. Defining the Problem Determining the Objective Exploring the Alternatives Predicting the Consequences Making a Choice Checking impact of the Market
Research &
Analysis
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Leveraging Business Leveraging Business InformationInformation
Every business has significant knowledge stored within its people, its documents, its resources, libraries & the world.
The goal: leverage this information, identify knowledge gaps, fill those gaps, and act on robust business strategies based on integrated market information.
How do you do that? The Getting It!® system
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We have entered into a Demand Driven Economy. We are No Longer in a Supply Driven Economy…We have to learn how the rules have changed. – Rick Kash, Cambridge Group Dec 9, 2003
The pressure for change Competition from low
cost economies — using new technologies, skilled people and mobile capital.
Innovative products, processes and services — spreading rapidly across the globe or down the street.
Electronic commerce — radically changing the way business meets customers' demands.
Science and knowledge — underpinning the new technologies.
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What are the New Rules for a Demand Economy?
How High? What is rate limiting behavior?
How Wide? What is trade off behavior
Rate Limiting Behavior
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What is Rate Limiting Behavior?
Caloric consumption I can only eat/drink so
much Income
I can only spend so much
Demographics I do certain events at
a specific age
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Caloric ConsumptionCaloric Consumption
Approx 530 Calories
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Consumption by Major Food Consumption by Major Food GroupsGroups
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%Consumption of Alcoholic/ Non Alcoholic Beverages has Remained Fairly Constant over 35
years
0%
20%
40%
60%
80%
100%
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
Total Non Alcoholic Total Alcoholic
Source: USDA Economic Research Service
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Consumption of Most Beverages Except for Coffee, Soft Drinks, Bottled Water and Milk has
Remained Fairly Constant
0%
10%
20%
30%
40%
50%
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
Whole Milk
Other Milk
Tea
Coffee
Bottled water
Diet SoftDrinksRegular SoftDrinksFruit Juices
Fruit drinks,
Iced Tea(Canned)VegetablejuicesBeer
Wine
DistilledSpirits
Source: USDA Economic Research Service
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Income ImpactIncome Impact
$7,000
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Spending by Major CategoriesSpending by Major Categories
30%
29%
28%
26%
26%
26%
24%
23%
21%
19%
17%
16%
13%
11%
4%
-18%
-30% -20% -10% 0% 10% 20% 30% 40%
Education
Transportation
Telephone
Housing
Housekeeping
Food away from home
Utilities
Alcoholic beverages
Personal care
Health care
Entertainment
Furniture
Tobacco
Food at home
Clothing
Reading % Change in per capita spending 1970- 2001
Source: Consumer Expenditure
Spending SurveyUS Bureau of Labor
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0 5000000 10000000 15000000 20000000 25000000
Under 5 years
5 to 9 years
10 to 14 years
15 to 19 years
20 to 24 years
25 to 29 years
30 to 34 years
35 to 39 years
40 to 44 years
45 to 49 years
50 to 54 years
55 to 59 years
60 to 64 years
65 to 69 years
70 to 74 years
75 to 79 years
80 to 84 years
85 years and over
DemographicsDemographics
Source: US Census
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Demographics – Choice Demographics – Choice BehaviorBehavior
1970 1995Average Age of First Marriage Male 23.4 28.6Female 21.8 26.6Average Duration of First Marriage 27 26Average Age at Childbirth (Female) 21.4 24.9Average Number of Children in Family Household 2.2 1.8% of First Marriage Ending in Divorce 36% 42%Average age at DivorceMale 36.4 39.7Female 33.9 37.3Average Duration of DivorceMale 4 8Female 9 15% of Women in the Labor Force 42% 60%
Source: US Census. US Dept of Labor
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Rate Limiting BehaviorRate Limiting Behavior
Issue: Drives consumers
to make trade offs Global Focus
Trade Off BehaviorTrade Off Behavior
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Trade off BehaviorTrade off Behavior
Some Trade Off Data Delivering the same experience for
the consumer Types of experiences
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What Frameworks do What Frameworks do Consumers Use to Understand Consumers Use to Understand
BeveragesBeverages
Imagine you open a refrigerator and you see 35 different beverages.
What are the drinks identified top of mind as interesting? What makes them interesting?
What are the drinks that when consumers make trade offs are most interesting? What makes them interesting?
Is there a difference?
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Expected Experience: What are the drinks identified top of mind as interesting? What
makes them interesting? These everyday beverages; branded and with their primary
attributes… i.e. colored, caffeinated and extreme temperatures are how the consumer makes sense of drinks.
Same beverages as 2002, different ranking Cola
From a Brand Classic… just the way you like it. Thick slushie An Ice Cream Float
Ice Tea Warm smooth flavor 100% natural So Inviting From a Brand
Hot Coffee Aroma invites you to sip more Made from 100% Columbian Coffee beans Fresh ground and brewed with all natural flavors Warm and inviting
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2003 Trade Off Experience: What are the drinks when consumers trade off are most interesting?
What makes them interesting? Many different beverage bases (creamy, fruit based,
coffee based). Healthiness, brands, what it is made from and the primary attributes of the beverage themselves are how consumers make sense of drinks.
Hot Chocolate Rich Creamy with marshmallows Premium blend of chocolate Made with creamy milk chocolate Warm and inviting
Slushies Made with real fruit juice and natural flavors With Tropical flavors Rainbow of colors Satisfy your sweet tooth From a Brand With a light fizz
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2003 Trade Off Experience: What are the drinks when consumers trade off are most interesting?
What makes them interesting? Many different beverage bases (creamy, fruit based, coffee
based). Healthiness, brands, what it is made from and the primary attributes of the beverage themselves are how consumers make sense of drinks.
Hot Coffee
Aroma invites you to sip more Made from 100% Columbian Coffee beans Fresh ground and brewed with all natural flavors Warm and inviting
Flavored Milk Thick with lots of flavor From a Brand 100% natural With Calcium , Vitamins A,D or whatever you need Good for you and healthy for your bones Already prepared…just shake and drink
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Initial Interest in Beverages - 2003 Hot Chocolate, Slushies, Hot Coffee, and Flavored Milk are the
beverages consumers are initially interested in the idea of.
0
10
20
30
40
50
60
70
Hot
Chocola
te
Slu
shie
s
Hot
Coff
ee D
rinks
Fru
it S
mooth
ies
Fla
vore
d M
ilk
Fla
vore
d W
ate
r
Hot
Tea
Cre
am
y F
ruit B
evera
ge
Yogurt
Bevera
ge
Juic
e D
rinks
Juic
e S
pritz
ers
Shakes
Energ
y D
rinks
Alc
oholic
Spritz
ers
Iced T
ea
Lem
on L
ime S
oda
Coole
rs
Fla
vore
d S
oy M
ilk
Soup
Iced C
off
ee D
rinks
Pouched B
evera
ge
Aft
er
Din
ner
Drinks
Meal R
epla
cem
ent
Bevera
ge
Beer
Altern
atives
Fla
vore
d H
ard
Cid
er
Fla
vore
d T
equila
Fib
er
Drinks
Org
anic
Bevera
ge
Cola
Red W
ine
Cockta
ils
Fla
vore
d B
eer
Sport
s B
evera
ge
White W
ine
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Overall Interest in Beverages - 2003 Hot Chocolate, Creamy Fruit, Energy, Slushies, and Meal
Replacement beverages are the beverages consumers are highly interested in.
-20
-10
0
10
20
30
40
50
60
70
Ho
t C
ho
co
late
Cre
am
y F
ruit B
eve
rag
es
En
erg
y
Slu
sh
ies
Me
al R
ep
lace
me
nts
Fla
vo
red
Wa
ter
Fru
it S
mo
oth
ies
Ho
t C
off
ee
Fla
vo
red
Milk
Ju
ice
Sp
ritz
ers
Co
ole
rs
Yo
gu
rt
Alc
ph
olic
Sp
ritz
ers
Sh
ake
s
Le
mo
n L
ime
Fla
vo
red
So
y M
ilk
Fla
vo
red
Te
qu
ila
Ju
ice
Dri
nks
Ice
d C
off
ee
Fib
er
Be
er
Alte
rna
tive
s
Ho
t T
ea
Org
an
ic
Sp
ort
s
Fla
vo
red
Ha
rd C
ide
r
Ice
d T
ea
Aft
er
Din
ne
r D
rin
ks
Po
uch
ed
Be
ve
rag
es
Co
ckta
ils
So
up
Co
la
Re
d W
ine
Fla
vo
red
Be
er
Wh
ite
win
e
Constant avg Product Elements
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What’s the Difference?Expected Attributes
Branded Fresh 100% Natural Textures So Inviting
Classic Warm Smooth flavor
Trade Off Experience Attributes
Branded Pure, Fresh 100% Natural Textures Warm and Inviting
Made from… Good for you Nutritious Added Vitamins, Minerals,
Antioxidants, etc Lots of flavors, Fruit Flavor All ready prepared
Similar
Different
Unmet Needs
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Business DevelopmentBusiness Development
Your new idea or concept should be evaluated & reviewed as a new and independent business
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What will we give you What will we give you today?today?
What to do after they tell you to do The Business Plan?
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