(tested - excellent) marketing.management.overheads
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Marketing Management
A discipline focused on
creating, developing, and maintaining
profitable relationships
between
customers and the organization.
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Developing a Marketing Plan
ProductPricePlace
Promotion
Corporate Capabilities
Objectives
Finance
Operations
Human Resources
Environmental
Analysis
Political
Economic
Social
Technological
Customer
Analysis
Who?
What?
How?
Where?
When?
Competitive Analysis
Who? (Direct and Indirect)
Relative size/Power
Strengths and Weaknesses
Potential Risks and Opportunities
Industry Statistics
NEEDS TO BE A GOOD FITALL AROUND
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Marketing Report Evaluation
Your report will be evaluated on the following 3
criteria:
Your ability to define the marketing challenge(problem).
The depth to which you have properly appliedthe marketing tools learnt in class to analyze
the problems in the case.
The effectiveness of the decision and actionplan you have committed to.
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Marketing Report General Comments
To do well, I have to believe that your decisionis appropriate and that your action plan will
work.
This will not come through in yourlanguage, it will come through in your
ability to link your analysis to yourdecision and action plan.
This is not a case write-up, it is a report.Do not give me role, constraints andconsiderations, etc.Take on the role do not be afraid of
the words I or me or we or us.
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Marketing Report Writing Style
Although grammar, punctuation and diction donot count in the mark, poor grammar will
kill the impact of your report.
PROOFREAD, PROOFREAD, PROOFREAD!Get the logic errors out first, then
worry about the grammar.
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Customer Analysis
Marketing is about deciding what to do forwhom
Marketers examine the customer in-depth, notto uncover interesting facts, but instead, tofind actionable ideas
People differ they should be divided intogroups of similar people so that marketers
can work more effectively to influence theirbehaviour (market segmentation)
It is virtually impossible to be all things to allpeople specifying a target market enables a
marketer to focus on the most attractivesegment of the market
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Customer Analysis
Customer Group
WHO
Are they?
Identify and describe potentialcustomers
DemographicsSize of the segment
WHAT
Do they
want/need?
Describe their needs in aproduct/ service
Physical characteristicsPackage of benefits
HOW
Are they
motivated to
purchase?
Determine the reasons why theypurchase
Psychological componentConvenience, impulse, etc.
WHERE
Do they
purchase?
Identify the places where theypurchase
LocationDistribution
WHEN
Do they
purchase?
Describe their purchase patternTime of year, month, dayPoint in their lifeFrequency
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Competitive Analysis
Marketers assess how successful thecompetitors are and look for exploitable
differences in their offerings
Effective marketers capitalize on theseopportunities by attempting to influence
customers perceptions
Marketers must attempt to anticipate changes inthe competitive environment
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Competitive Analysis
Competitor
(Direct/Indirect)
STRENGTHS What do they do well?
WEAKNESSES In what areas are they lacking?
RISKS Possible competitive reactions
OPPORTUNITIES Potential areas to exploit
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Marketing Arithmetic
Cost
(Recurring)
Variable Fixed
Investment
(One-time)
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Cost Classification
Variable Cost (VC)A cost which changes directly and
proportionately with changes in volume
Fixed Cost (FC)A cost which does not change despite
changes in volume
Volume
$
Volume
$
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Marketing Arithmetic
Unit Contribution (UC)Selling Price Variable Costs
Contribution Margin Ratio (CMR)Unit Contribution Selling Price
Break Even (B/E) ~ UnitsFixed Costs Unit ContributionProfit Target Break Even
Break Even (B/E) ~ Sales $Fixed Costs Contribution Margin RatioProfit Target Break Even
Market Share Break Even ~ Units or Sales $Break Even Total MarketRelevant Market Share Break Even
Return on Investment (ROI)Profit Investments
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Sensitivity Analysis
By being able to quickly determine whether anew plan will yield a profit, we can easily test
other scenarios
We could change:the selling price,the variable costs,the fixed costs, orthe profit target
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Mark-up vs. Margin
Mark-up
A percentage is added to the cost of aproduct to determine its selling price
EXAMPLE:
A retailer purchases a product from its supplier
for $10.00 and wishes to add a mark-up of 20%
$10.00 Wholesale Selling Price
2.00 20% Mark-up ($10.00 20%)
$12.00 Retail Selling Price
Margin
The cost represents a percentage of theselling price as determined by 1 margin %
EXAMPLE:
A retailer wishes to set a selling price that allows
for a 20% margin
$12.50 Retail Selling Price (RSP 80% = WSP)
10.00 Wholesale Selling Price (80%)
$ 2.50 Margin (20%)
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Pricing Strategies
Skimming Strategy
The tendency to price very high in thehopes of making a substantial profit in a
short amount of time. Often used when a
firm is the first to enter the market and
wants to make a profit quickly before it
can be copied or imitated.
Penetration Strategy
The tendency to price very low in thehopes of gaining a large market share
quickly and retaining that market share in
the long run. Often used when a markethas growth potential and firms competing in
the market want to discourage new
competitors from entering the market.
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Pricing
Prices should be set based on what customersthink the product or service is worth
(perceived value).
In setting a price, consider your positioningand your competition. Your price sends a big
signal to your customers about how they
should perceive your product/service relative
to your competitors.
In setting your price, you must be completelyaware of your cost structure. Know your
marketing math to determine whether or not
you will be profitable.
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Distribution
There are many ways to get a product/serviceto the end customer.
Deciding which distribution channel(s) to use isa major marketing decision.
it cannot be made independently of othermarketing decisions
it cannot be changed quickly
Identifying who does what for whom enablesmarketers to recognize the implications of
their companys power and control over the
marketing efforts of other channel members.
An alert marketer seeks channels that makesense for their target market.
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Marketing Communications
Often the most visible aspect of marketing,marketing communications is but one piece of
the overall marketing plan.
There are many communication methodsavailable to marketers, including:
advertisingpromotionpoint-of-purchase displaysdirect mailtelemarketingpackagingpersonal sellingtrade incentivespublicity
In general, marketers can use a combination ofthe following two communications strategies.
PUSH strategyPULL strategy
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Push vs. Pull Strategy
Push Strategythe communications effort is directed
towards members of the distribution
channel
Producer Distributor Retailer Customer
Pull Strategythe communications effort is directed
towards the end customer
Producer Distributor Retailer Customer
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Social Marketing
All marketing efforts begin by defining themarketing challenge.
the challenge for a social marketer israrely one of profit maximization
the challenge often focuses on creatingawareness within a target group of a
social problem/need, with the goal of
changing that groups behaviour
Not all people in the target group have thesame level of awareness, knowledge oracceptance. It is important that a consistent
message be given to all individuals in the group
(integrated marketing communications plan).
Social marketers must often deal with highlysensitive/controversial issues. They mustattempt to overcome any social resistance in
their communications strategy.