intro to mktg_itm_sept-2012_session-2

NANDA KISHORE SETHURAMANITM SEPTEMBER 2012

Introduction to MarketingWeek 2

Agenda

Targeting What is good marketing

research? Marketing research Questions Types of information Types of market research Market research summary Test Market Define Target Audience Estimate market potential Analyze market share/share of

customer Track competitors Identify market characteristics &

trends Analyze sales data Sales forecasting: Existing / new

products

Product Product Strategy Product Essentials Features and Benefits Classifying products Product line and mix Branding Packaging and Labeling

Trademarks Positioning and Brand

Building The Art of Positioning is

Marketing Positioning the game of Mind and

Heart Brand is a Promise Brand is owned by Customers Understanding Brand Drivers Brand Attributes Brand Architecture The Positioning Template

3

Segmentation, Targeting, Positioning

Research – An Introduction

Situation Analysis

StrategyDevelopment

MarketingProgram

Development

Implementation

Understand the environment and the marketIdentify threats and opportunitiesAssess the competitive position

Define the business scope and served market segmentsEstablish competitive advantagesSet performance objectives.

Product and channel decisionCommunication decisionsPricingPersonal selling decisions

Performance monitoringRefining strategies and program

The Process

Marketing Research in Practice

Programmatic Research Develops market options through market

segmentation, market opportunity analysis, or consumer attitude and product usage studies

Selective Research Tests different decision alternatives such as new

product testing, advertising copy testing, pre-test marketing, and test marketing

Evaluative Research Evaluation of performance of programs

Marketing Decision Support Systems

Characteristics of MDSS: Interactive Flexible Discovery oriented User friendly

Marketing Decision Support Systems

Four components of MDSS: Database Reports and Displays Analysis capabilities Models

Gaining Insight from a MDSS

Manager

Modeling

Analysis

Display

Database

Environment

Participants in marketing research activities

Information Users

Information Suppliers:Inside Company

Information Suppliers:Outside Company

• General management

• Planning

• Marketing and sales managers

• Product managers

• Lawyers

• Marketing research department

• Sales analysis group

• Accounting department

• Corporate strategic planning

• Research consultants

• Marketing research suppliers

• Advertising agencies

Marketing Research Process

MR Process Evolves From Answers to Five Key Questions Why should we do research? What research should be done? Is it worth doing the research? How should the research be designed to achieve

the research objectives? What will we do with the research?

MARKETING PLANNING AND INFORMATION SYSTEM

Planning system

• Strategic plans

• Tactical plans

Information system

• Databases

• DSS

1. AGREE ON RESEARCH PROCESS

• Problems or opportunities

• Decision alternatives

• Research users

Marketing Planning & Information System

2. ESTABLISH RESEARCH OBJECTIVES



• Research users

Estimate the value of information

Is benefit > cost

Do not conduct marketing research

NO

Yes

2. ESTABLISH RESEARCH OBJECTIVES



• Research users

5. COLLECT THE DATA

7. REPORT THE RESEARCH RESULTS AND PROVIDE STRATEGIC RECOMMENDATIONS

6. PREPARE AND ANALYZE THE DATA

Yes

The Marketing Research Process

Step 1 Research Purpose

Problem or opportunity analysis Which problems or opportunities are anticipated What is the scope of the problems and the possible

reasons? Evaluation of decision alternatives

What are the alternatives being studied? What are the criteria for choosing among the alternatives?

Research users Who are the decision makers? Are there any covert purposes?

The Marketing Research Process (Contd.)

Step 2 Research Objective

A statement, in as precise terminology as possible, of what information is needed

Should be framed to ensure information obtained will satisfy research purpose

Research QuestionHypothesis DevelopmentResearch Boundaries


Research Question Asks what specific information is required to achieve

the research purpose Sample questions to determine if a specific

advertisement should be run: Will the advertisement be noticed? Will it be interpreted accurately? Will it influence attitudes?


Hypothesis Development A possible answer to a research question.

Generating a hypothesis Draw on previous research efforts Borrow from other disciplines such as:

Psychology Sociology Marketing Economics

Manager’s experience with related problems, coupled with knowledge and the use of judgment

Source• Theory

• Management experience

• Exploratory research

Research Question Hypothesis

Research Purpose

Research Design

Research Objective


Step 3 Estimating the Value of Information

Value depends on: Importance of decision Uncertainty that surrounds it Influence of research information on the

decision

Product A

$ 4 million

$ 1 million

$ 4 million

-$ 2.5 million

Success

Success

Failure

Failure

Introduce

Introduce

Introduce

Introduce

Do not

Do not

Illustrative Decision Models

Product B

Research Design and Implementation

Research Design The detailed blueprint to guide the

implementation of a research study toward the realization of its objectives

Categories of Research

Exploratory Research Used when seeking insights into the general nature of a

problem, the possible decision alternatives, and the relevant variables that need to be considered

Descriptive Research Provides an accurate snapshot of some aspect of the market

environment, such as: Consumer evaluation of the attributes of our product versus

competing products. The socioeconomic and demographic characteristics of the

readership of a magazine The proportion of all possible outlets that are carrying, displaying,

or merchandising our productsCausal Research

Used when it is necessary to show that one variable causes or determines the values of other variables, a causal research approach must be used

Detective Funnel

Uses Combination of All Three Research Techniques Exploratory techniques generate all

possible reasons for a problem Descriptive and Causal approaches narrow

the possible causes

Detective Funnel

Problem

Exploratory Research

Probable Causes

Causal Research

Descriptive ResearchPossible

causes of the problem

Methods & Data Collection.

Data Sources

Secondary DataPrimary Data

DATA SOURCES

SECONDARY DATA SOURCES

PRIMARY DATA SOURCES INTERNAL

RECORDS

EXTERNAL SOURCES

PUBLISHEDDATA

STANDARDIZED SOURCES OF MARKETING DATA

INTERNET

ELECTRONIC

PRINTED

•STORE AUDITS•WAREHOUSE WITHDRAWAL SERVICES•CONSUMER PURCHASE PANELS•SINGLE SOURCE DATA•NIELSEN’S TELEVISION INDEX•STARCH SCORES•ARBITRON PANEL•MULTIMEDIA SERVICES

•SALES/PATRONAGE RESULTS ( OUTCOMES )•MARKETING ACTIVITY ( INPUTS )•COST INFORMATION•DISTRIBUTOR REPORTS AND FEEDBACK•CUSTOMER FEEDBACK

•GOVERNMENT•TRADE ASSOCIATIONS•PERIODICALS•NEWSPAPERS•BOOKS•ANNUAL REPORTS•PRIVATE STUDIES

Sources of Secondary Data

Uses of Secondary Data

Can solve the problem on hand all by its ownCan lead to new ideas and other sourcesHelps to define the problem more clearlyCan help in designing the primary data

collections processHelps in defining the population / sampleCan serve as a reference base

BenefitsBenefits LimitationsLimitations

Low costLess effortLess timeAt times, more

accurateAt times, only way

to obtain data

Collected for some other purpose

No control over data collection

May not be accurateMay not be in correct

formMay be outdatedMay not meet data

requirementsAssumptions have to be

made

Benefits and Limitations of Secondary Data

Internal Sources of Secondary Data

Internal Records Accounting Data Sales Reports Inventory Management Customer Database

External Sources of Secondary Data

Published data sources (Census, publications of various trade associations)

Trade directoriesComputer retrievable databases ("online"

databases)

Practical Applications

New Product Research

New Product Research Process Generation of new product concepts Evaluation and development of those concepts Evaluation and development of the actual products Testing in the context of the marketing program

Need Identification Perceptual maps Social and environmental trends Benefit structure analysis Product users Focus-group interviews Lead user analysis

Concept Identification

New Product Research (Contd.)

Test Marketing Designing the sell-in market test Selecting the test cities Implementing and controlling the test Timing Measurement Costs of a test market

Controlled Distribution Scanner Markets (CDSM)

Projecting Trial, Repeat and Usage Rate Using Panel Data

Other Applications

Pricing Research Research for Profit-oriented Pricing Research for Share-oriented Pricing

Distribution Research Warehouse and Retail Location Research

Center-of-gravity Simulation Computerized Simulation Models Catchment Area Analysis Outlet Location Research

Number and Location of Sales Representatives Sales effort approach Statistical analysis of sales data Field experiments Computerized models of sales force size and allocation by

market and by product line

Advertising Research

Criteria Recognition Recall Persuasion

Forced exposure, brand preference change

On-air tests -- brand preference change

Customized Measures of Communication / Attitude

Purchase Behavior Coupon stimulated

purchasing Split-cable tests

Tracking StudiesDiagnostic Testing

Copy Test Validity Qualitative Research Audience Impressions

of the Ad Adjective Checklist Eye Movement Physiological

MeasurementBudget DecisionMedia Research

Measuring print vehicle audiences

Measuring broadcast vehicles audiences

Sales Promotion Research

Promotional Tools Price Discounts Features Displays Coupons / Rebates Sweepstakes

Promotional Strategy Hi-lo Every Day Low Price (EDLP)

39

Target Market

41

Evaluating Segment Attractiveness

42

Let’s sell to segments with big eyes and lips

43

Factors driving a Target Marketing Strategy

44

Selling Ice Cream to EskimosSelling Ice Cream to Eskimos

46

Broad

Target Marketing Strategies

7 - 47

Target Marketing

Socially Responsible Targeting Some segments, especially children, are at special risk Many potential abuses on the Internet, including

fraud Internet shoppers Controversy occurs when the methods used are

questionable

Products

What is a product?

A product is anything that can offered to market for attention, acquisition ,use, consumption that might satisfy a want or need.

Products

GOODS SEVICES

Tangible products Intangible products

Features of product

Features of product

Associated attributes

Intangible attributes

tangibility

Exchange value

Customer satisfaction

Levels of product

Unexpected features

Luxury features

Expected features

Basic features

Basic product

Classifying Products

DurablesConsumer products Business products

Durables

Durables

Non-Durables

Services

Consumer Products

Business products

Materials and parts Raw materials and parts Manufactured materials and parts

Capital items Installation Equiptment

Suppliers and business services Maintenance and repair items Operating suppliers

Raw Materials

Farm ProductsNatural Products

Manufactured materials and parts

Capital items

Installation

Equipment

Suppliers and business services

Mainteinance and repair items

Operating Suppliers

Product mix

Product Mix

The assortment of products that a company offers to a market

Width – how many different product lines?Length – the number of items in the product

mixDepth – The no. of variants offered in a

product lineConsistency – how closely the product lines

are related in usage

Product Line & Product Mix

LAMPSLAMPS•TableTable•CeilingCeiling•TrackTrack•DeskDesk

Product Mix

Product Product Line 1Line 1



TABLESTABLES•KitchenKitchen•Dining RoomDining Room•EndEnd•CoffeeCoffee•OutdoorOutdoor•ConferenceConference•ComputerComputer

CHAIRSCHAIRS•Dining RoomDining Room•Living RoomLiving Room•BedroomBedroom•OutdoorOutdoor•DeskDesk

LAMPSLAMPS•TableTable•CeilingCeiling•TrackTrack•DeskDesk

PRODUCT MIX EXAMPLE

Hair Care Salty Snacks

Dental Care

Soft Drinks

Shampoo Chips Tooth Brush

Cola

Conditioner

Nuts Tooth Paste

Ginger Ale

Hair Spray Crackers Dental Floss

Root Beer

De

pth

(#

of i

tem

s)

Width (# of product lines)

Factors influencing change in product mix

Changes in market demandCost of productionQuantity of productionChanges in company desireCompetitors actions and reactions

Product Mix Strategies

Expansion of product mixContracting or dropping the product mixAlteration of existing product sTrading up/trading down strategies

Product management

PlanningForecastingMarketing of products of a company is

product management

Objectives of product management

To design product strategiesTo spot market opportunitiesTo develop strategies for each stage of

product life cycleTo generate new product ideas

Product Innovation – New Product Types

Importance of new product

To meet consumer needs and wantsTo meet competitionTo increase profitsTo avoid threats from substitutes

New Product Development Process

Step 1. Idea GenerationSystematic Search for New Product Ideas

Internal sources Customers Competitors Distributors Suppliers

Step 2. Idea ScreeningProcess to spot good ideas and drop poor

onesTechnically feasibilityFinancially viable


Step 3. Concept Development & Testing


Step 4. Marketing Strategy Development


Step 5. Business AnalysisStep 6. Product Development


Step 7. Test Marketing


Step-8 commercialization

Introducing the product into the marketIntroducing the product into the market

8-78

Source: Reprinted with permission from p. 60 of Analysis for Strategic Marketing Decisions, by George Day. Copyright © 1986 by West Publishing Company. All rights reserved.

Time (years)

Pro

du

ct c

ateg

ory

sal

es(r

eal

do

llar

s)P

rofi

t p

er u

nit

(rea

l d

oll

ars)

Profit/unitSales

Life cycleextension

GrowthCompetitiveturbulence

Maturity Decline orextension

Introduction

8-3

Product Life Cycle

SalesSales

CostsCosts

ProfitsProfits

Marketing ObjectivesMarketing Objectives

ProductProduct

PricePrice

Low sales Low sales

High cost per customerHigh cost per customer

NegativeNegativeCreate product awareness and

trialCreate product awareness and

trial

Offer a basic productOffer a basic product

Use cost-plus basis Use cost-plus basis

DistributionDistribution Build selective distributionBuild selective distribution

AdvertisingAdvertising Build awareness among innovators,early adopters

Build awareness among innovators,early adopters

Marketing Strategies: Introduction Stage

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Rapidly rising sales Rapidly rising sales

Average cost per customerAverage cost per customer

Rising profitsRising profits

Maximize market shareMaximize market share

Offer product extensions, service, warranty

Offer product extensions, service, warranty

Penetration PricingPenetration Pricing

DistributionDistribution Build intensive distributionBuild intensive distribution

AdvertisingAdvertising Build awareness in the mass marketBuild awareness in the mass market

Marketing Strategies: Growth Stage

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Peak salesPeak sales

Low cost per customerLow cost per customer

High profitsHigh profits

Maximize profit while defending market share

Maximize profit while defending market share

Diversify brand and modelsDiversify brand and models

Price to match or best competitors

Price to match or best competitors

DistributionDistribution Build more intensive distributionBuild more intensive distribution

AdvertisingAdvertising Stress brand differences and benefits

Stress brand differences and benefits

Marketing Strategies: Maturity Stage

SalesSales

CostsCosts

ProfitsProfits


ProductProduct

PricePrice

Declining salesDeclining sales

Low cost per customerLow cost per customer

Declining profitsDeclining profits

Reduce expenditure and milk the brand

Reduce expenditure and milk the brand

Phase out weak itemsPhase out weak items

Cut priceCut price

DistributionDistribution Go selective: phase out unprofitable outlets

Go selective: phase out unprofitable outlets

AdvertisingAdvertising Reduce to level needed to retain hard-core loyal customers

Reduce to level needed to retain hard-core loyal customers

Marketing Strategies: Decline Stage

Causes of New Product Failures

Overestimation of Market SizeProduct Design ProblemsProduct Incorrectly Positioned, Priced or

AdvertisedCosts of Product DevelopmentCompetitive ActionsTechnical problemsPoor planningInadequate promotionPoor packingFault pricing

84

Segmentation, Targeting, Positioning

7 - 85

Positioning

Positioning: The place the product occupies in consumers’

minds relative to competing products. Typically defined by consumers on the basis of

important attributes. Involves implanting the brand’s unique benefits

and differentiation in the customer’s mind. Positioning maps that plot perceptions of brands

are commonly used.

7 - 87

Identifying possible competitive advantages

Choosing the right competitive advantage

Choosing a positioning strategy

Differentiation can be based on Products Services Channels People Image

Topics Topics

Choosing a Positioning Strategy

7 - 88

• How many differences to promote? Unique selling

proposition Several benefits

• Which differences to promote? Criteria include: Important Distinctive Superior Communicable Preemptive Affordable Profitable

Topics Topics Identifying possible

competitive advantages




7 - 89

• Value propositions represent the full positioning of the brand

• Possible value propositions: More for More More for the Same More for Less The Same for Less Less for Much Less

Topics Topics Identifying possible

competitive advantages




7 - 90

Positioning statements summarize the company or brand positioning EXAMPLE: To (target segment and need) our (brand)

is (concept) that (point-of-difference)

Developing a Positioning Statement

7 - 91

Companies must be certain to DELIVER their value propositions.

Positions must be monitored and adapted over time.

Communicating the Positioning

1. Identify Basesfor Segmenting the Market

2. Develop Profilesof Resulting Segments

3. Develop Measuresof Segment Attractiveness

4. Select TargetSegment(s)

5. Develop Positioningfor Each Target Segment

6. Develop MarketingMix for Each Target Segment Market

Positioning

MarketTargeting

Market Segmentation

Market Segmentation Process

(KAPFERER)

Brand Identity Prism

KAPFERER represents brand identity diagrammatically as a six-sided prism as shown

below:

Internalisation

Externalisation

Constructed Source/Sender

Constructed Receiver


Physique according to him is the basis of the brand. E.G. the physique of Philips is “technology and

reliability” while for the brand Tata it is “trust”

Personality is same as Aaker, it answers the question “what happens to this brand when it becomes a person?”

Culture symbolizes the organization, its country-of-origin and the values it stands for. E.G. traditional brands like balsara, dabur and zandu.


Relationship is the handshake between consumer and the organisation. E.G. the relationship with “safola” is safety.

Reflection is the consumer’s perception for what the brands stands for. E.G. coke’s image more attract youth.

Self-image is what the consumer think of himself. E.G. benz Car owner think that since he has bought

the car he is treating himself to one of the best car in the world.

Let us understand the model in detail…

What is a Brand???

“ A Brand is a complex symbol. It is the intangible sum of a product’s attributes, its name, packaging and price, its history, reputation, and the way it’s advertised. A brand is also defined by consumer’s impression of people who use it, as well as their own experience ”- David Ogilvy

Now let us look at how Brand Experience is differentiated…

Brand Experience are of Two types

The External Brand Experience includes

NameLogoAdvertisingBrand IdentityEnvironmentsProducts & Service

The Internal Brand Experience includes

Business ProcessCustomer RelationsBrand ValuesTrainingQualityStaff MotivationRecruitment PoliciesTechnology etc..

Now let us look at the Brand Identity Prism based on Kapferer model and the 6 key dimensions in it

Internalisation

Externalisation

Constructed Source

Constructed Receiver

-Business Process -Customer Relations -Brand Values -Training-Quality -Staff Motivation-Recruitment Policies -Technology etc..

-Name -Logo-Advertising -Brand Identity-Environments -Products & Service

Physical Product features, symbols & attributes

Personality Character & attitude

Relationship Beliefs & association

Culture Set of Values

Reflection Customer’s view of the brand

Self-Image Internal mirror of customer as user of brand

Let us now understand the prism with some examples…

For Sify India let us look at how they have built the brand basis the Kapferer Model

Sify India

Physical Kite Symbol, Online Access

Personality Innovative & Tech savvy

Culture Customer centric & Indian

Self -image "net" way of life empowered

Reflection Consistent & dependable performer

Relationship Best guide to the net

End of Day 2

intro to mktg_itm_sept-2012_session-2

Business

research information

practiceprogrammatic

research results

marketing research processstep

good marketing research

research process problems

research objectives

research purpose problem