Measuring Marketing

• Difficulties– Requires specific, analytical skill set– Difficult to measure some areas, ie

advertising’s effect on sales:• Lag effect• Multiple distribution channels• Intervening Variables

Measuring Marketing

• Benefits– Improved product or service– Determination of new customer segments– Increased information on those things that

influence sales– Overall increases opportunity– Must be considered as “means to an end”

Market Characteristics

• Industry: Set of all actual sellers of a product or service

• Market: Set of all actual and potential buyers of a product or service– Available market is set of buyers with interest

income and access to product– Served market is that part of the available

market a company has decided to pursue– Penetrated market is that set of consumers who

have already bought the product or service

Market Demand• Market Demand is the total volume that would be

bought by a defined customer group in a defined market environment under a defined level or mix of industry marketing effort

• Mkt Demand is a function of a set of conditions, not a fixed, solid concrete number, and those conditions are constantly changing– Economics– Technology– Socio-cultural factors

Markets• Potential – who might be a candidate• Available – who is not currently connected

to another brand or substitute product• Qualified available – who has access and

income• Served – which segment(s) of all possible

candidates are you able to reach• Penetrated – who are currently your

customers

Market Characteristics, cont’d

• Expandable markets: Size is strongly affected by level of industry marketing expenditures/efforts– Opportunity to build Primary Demand for

product or service category• Non-expandable: Size is not much affected

by level of industry marketing effort.– Need to increase selective demand for that

particular service or brand

Competitive Environment

• Market Share is that % of the total penetrated market (buyers) held by a particular company, product or brand.

• Mkt Share allows comparison with competitors within reason:– Differences in served markets

Competitor Analysis: Industry Perspective

• Industry Structure• Entry Barriers• Mobility Barriers• Exit/shrinkage Barriers• Industry Cost Structures• Vertical Integration• Global Reach

Competitor Analysis: Industry• Slow Growth market• High Growth market• Strategic shift signals

– R & D efforts– Relationship Building– Geographic refocusing– Management changes– Changes in Spending– Realignment of SBU’s

Competitor Analysis: Market Perspective

• Segments by Customer Needs – Segments by Geography

• Who is selling a product where?– Substitute Products

• What else meets the same need?• How is it alike or different?

Competitor Analysis• Assess Strengths and Weaknesses (Competitive

SWOT)• Estimate Competitor Reaction Patterns

– Laid back & complacent?– Selective, pick their battles?– Tigers, aggressive fighters for markets?– Stochastic, unpredictable?

• Determine Own Company’s Strategy based on own SWOT and above information

Competitive Strategies• Cost Leadership: low COST (not price) Producer• Differentiation: differentiated product line(s) or

unique customer benefits• Focused: narrow concentration on a small

segment of a larger market• M-O-R or Unfocused: Non-specific customer

base or no clear strategy• Value Leadership: superior customer value

– Cost, operational or product quality leadership– Strong customer relationships

Competitive Positions

• Market Leader – largest market share• Market Challenger – runner up which is

poised to overtake leader• Market Follower – runner up which is

maintaining share or status quo• Market Nicher – serves small segments

other overlook or choose to ignore

Market Leader Strategies

• Expand Total Market– New users, new uses, increased usage of

product or service– Benefit from increased sales

• Protect Market Share– Defensive strategies

• Expand Market Share– Aggressively pursue available markets or

competitor’s share

Defensive Strategies

• Position Defense• Flanking Defense• Pre-emptive Defense• Counteroffensive• Mobile Defense• Contraction Defense

Position Defense• Attempt to Maintain Status Quo in Mkt

Share• May require significant commitment in

company resources• Inherent problems

– Competitor Innovation– Changing Customer needs/tastes/expectations

Flanking Defense

• If Competitors choose weak areas of business to attack

• Shore up weaker flanks:– Expansion of product lines– Product improvements– Image management for company, products or

brands

Pre-emptive Defense

• Competitor Scanning• Anticipate competitor strategies and actions• Reposition ahead of time to prevent loss of

share/sales• “No need to outrun any one you can

outsmart” - Garfield

Mobile Defense

• Approach customers from a broader perspective than competitors– Adjust products/services accordingly– Identify and pursue new, additional markets

with same or modified product • Diversify

Counteroffensive

• Assess damage fro a competitive attack

• Respond with a stronger impact

Contraction Defense

• Controlled, intentional reduction of market activity

• Reduce operational demands• Refocus efforts, perhaps on more core

businesses

Challenger Strategies• First define target and strategic actions:

– Attack– Avoid– Acquire

• Choose an attack strategy if required:– Frontal, flanking, encircling: attack leading, weak or

all products– Bypass: use technological innovation to leapfrog– Guerilla: sporadic, unexpected attacks to draw focus

Follower Strategies

• Clone– Closely copy all or part of competitors

marketing mix• Imitate

– Copy some aspects but differentiate in others• Adapt

– Build on, improve competitor’s offerings

Nicher Strategies• End Use Specialist• Vertical Level Specialist• Customer Size Specialist• Customer Specific Specialist• Geographic Specialist• Product/Feature Specialist• Quality/Price Specialist• Service Specialist