Marketing Made Easy (Part-II)

Copyright TNMG 2009. All rights reserved.

MAJOR MARKETING FRAMEWORKS
ANSOFFS MATRIX
Contributed by Igor Ansoff (Harvard Business Review 1957)
Helps in deciding growth strategy; also called growth opportunities matrix
Existing Products/Services
Existing Markets
Market Penetration
sell more to existing customers
New Markets
Market Development
new markets
SWOT ANALYSIS
A tool for auditing an organization and its environment; used in early stage of planning
Strengths and Weaknesses are
Objective of decision making will be to capitalize on
time minimize the effects of
Positive Factors
Strengths:
Good relationship with suppliers and distributors
An innovative product/service and q
Specialist marketing expertise and expert people
Strong distribution channel and reputation
Location of business (store location for retail)
Opportunities:
Potential international market (e.g. BRIC markets)
A new or developing market (e.g.
Acquisition, mergers, JV or strategic alliances
New market segments that offer improved profits
A market vacated by an ineffective competitor
SEGMENTATION AND TARGETING
Segmentation can be done on: (a)
Evaluation of segments and then targeting can be done based on following decision parameters
HOMOGENEITY
Companies
should try to
choose and
target
segments that
are
homogenous
i n the ki nds of
value sought
MEASUREABILITY
Can we
understand the
size and needs
of the market
segment?
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EWORKS
Harvard Business Review 1957)
Helps in deciding growth strategy; also called growth opportunities matrix
Existing Products/Services New Products/Services
Market Penetration: Gain market share,
sell more to existing customers
Product Development
to current customers
Market Development : Enter and develop Diversification: Launch
new markets (diversify portfolio)
A tool for auditing an organization and its environment; used in early stage of planning
Strengths and Weaknesses are internal factors and Opportunities and Threats are
Objective of decision making will be to capitalize on Strengths and Opportunities
time minimize the effects of Weaknesses and Threats
Negative Factors
Good relationship with suppliers and distributors
and quality process
Specialist marketing expertise and expert people
and reputation
(store location for retail)
Weaknesses:
Lack of goodwill or poor reputation
Poor quality/undifferentiated goods or services
Lack of marketing expertise
Weak supply chain; poor relation with vendors
Poor location of business
(e.g. BRIC markets)
(e.g. Internet)
or strategic alliances
New market segments that offer improved profits
A market vacated by an ineffective competitor
Threats:
Competition: new competitors,
or better products, better distribution channel
Environmental factors: new laws with higher
taxes, weak economy or recession, issues in
supply for flood, draught, strikes etc
AND TARGETING
: (a) geo/demographics, (b) psychographics, (c) behavioral, (d) benefits e
Evaluation of segments and then targeting can be done based on following decision parameters
ACCESSIBILITY
Can we
communicate
with the
segment so
that servi ng
the segment
is possi ble?
SUBSTANTIALITY
Does the
segment desire
that values that
an offering
presents?
ATTRACTIVENESS
Market,
Competi tive,
Channel , Internal
and Other
Considerations
Contact: [email protected]
Products/Services
Product Development: Sell more products
to current customers
: Launch new product in
new markets (diversify portfolio)
A tool for auditing an organization and its environment; used in early stage of planning
factors and Opportunities and Threats are external factors
Opportunities and at the same
Lack of goodwill or poor reputation
ndifferentiated goods or services
ack of marketing expertise
Weak supply chain; poor relation with vendors
business
new competitors, price wars, new
products, better distribution channel s
Environmental factors: new laws with higher
taxes, weak economy or recession, issues in
supply for flood, draught, strikes etc
, (c) behavioral, (d) benefits etc.
Evaluation of segments and then targeting can be done based on following decision parameters
ATTRACTIVENESS
Competitive,
Channel , Internal
and Other
Considerati ons
ACTIONABILITY
Can we
create a
competiti ve
advantage
with respect
to the needs
of the
segment?
Marketing Made Easy (Part-II)
Copyright TNMG 2009. All rights reserved.
POSITIONING
CONSUMER DECISION MAKING PROCESS
TYPES OF CONSUMER DECISION PROCESSES
Need
Recognition
Consideration
Set
Picking
Lowinvolvement and
limited problem
solving
Undifferentiated
brands
Variety seeking
Lowinvolvement and
limited
solving
Differentiated brands
Problemsolving
Normally for complex,
high priced
differentiated
products
High degree of
uncertainty
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Positioning refers to the
consumer's perception of a product or
service in relation to its competitors
Perceptual map
map is used to map competing products to
analyse their positioning
Generic positioning
Differentiate on needs
Attribute positioning
market; Differentiate on attributes
Emotional positioning
market; Differentiate on intangible
attributes/ brand image
KING PROCESS
DECISION PROCESSES
Information
Search
Alternative
Evaluation
Purchase
Decision
Variety seeking
Lowinvolvement and
limited problem
solving
Differentiated brands
Legalistic
Requires approval
from external sources
Based on legal and
societal norms
complex,
Heuristics
Used for repeat
decisions
Buyers uses rules of
thumb
Very quick and easy
decisions
Habit
Absence of
information search
and alternative
evaluation
Standard decisions for
repeat purchases
Contact: [email protected]
Positioning refers to the
consumer's perception of a product or
service in relation to its competitors
Perceptual map or positioning
map is used to map competing products to
analyse their positioning
neric positioning: New product;
Differentiate on needs
Attribute positioning: Growth
Differentiate on attributes
Emotional positioning: Mature
Differentiate on intangible
attributes/ brand image
Post
Purchase
Evaluation
Subcontracted
Buyer obtain a
recommendation
from a personal or
non personal source
(ex. doctor)
information search
and alternative
Standard decisions for
repeat purchases
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PLC OR PRODUCT LIFECYCLE
A popular tool to decide
Marketing Strategy and
Investment
Basic steps: which stage in PLC
Overall Marketing Mix
Reshape and control PLC
Find below an indicative
guideline for normal products
based on PLC stage but cannot
be generalized
PLC Stage Introduction Growth Maturity Decline
Marketing
Objective
Market development by
creating awareness
Maintain and build
market + Stress
differentiation
Defend market
share + Maintain
brand loyalty
Harvest (milk
the cow or
Delete
(divest the
dog)
Competition Almost not there Increasingly more Many but stable Reduced
Product Limited variety New variety and
models introduced
Improvement and
upgrade of
product
Withdraw less
profitable
products
Price Skimming or penetration
pricing
Aggressive pricing
to increase sales
Defensive pricing
to defend MS &
profit
At least break-
even (>
marginal cost)
Promotion Brochures, ads etc to
educate people
Build preference by
stressing difference
Reminder ads +
Trade promotion
Minimal
promotion
Place
(Distribution)
Exclusive/selective
distribution
More outlets to
ensure reach
Maximum reach to
ensure availability
Reduced
number of
outlets
No one knows how actual PLC curve will look like will depend on product, industry and environment!
Failure to recognize PLC stage will lead to wrong decisions; such decisions might lead to Pygmalion effect
(self-fulfilling prophesy); for example, stopping investment in a product thinking that it is going to reach
decline phase will actually lead to the decline!
INNOVATION DIFFUSION PROCESS