E/ME 105Lecture 3 MarketingOctober 3, 2006

Mission Statement 2 minute Team Mission PresentationsDue on Thursday. Send in ppt 1 hour before class

Since last weekFriday phone conversation with LandivarThey are working on the developing world barriers thought process We will meet with them by Skype on Thursday morningsThey may be one lecture behind at the end of the week but they will have seen the Tuesday Lecture and the Thursday ppt.Tried Adobe collaboration productNot impressedTeams formed?

What is Marketing?

What is Marketing?4 Ps of MarketingProcess of planning and executing

Product PromotionPricingPlace (or distribution system)

of ideas, goods and services to satisfy customers

True for developing world as well

Importance of MarketingPerhaps the single most important failure mode in the product development processSloppy research (confirm prejudices)In development, not really understanding the customerPoor communicationThe Margaret Mead effectEphemeral nature Not in an equilibrium state(rightwrong)Poorly coupled to designTreated as a separate activityToo well coupled into designConstant changes in specifications

Some good attributesStrong Customer involvementCustomer caresCustomer has painCan define market segment (to be discussed)Market growingCompetitive advantageOthers

TechniquesInterviewingPollingWorking together to a common purposeFilmingOther?

Consider in turnP1 Product Needs identificationHow product would actually be usedContext discoveryBrainstorming of conceptChilero or coolness Modification of existing product for new market

Consider in turn

P2 PricingWhat the customer can affordWhat value does the product bringWhat financing arrangements are possible?What is the price of a competitive product?What price is necessary to return a profit?What is the reason for keeping the price as low as possible?How does the cost effect the price (dont confuse!)?Is it immoral to earn a fat profit?

Consider in turnP3 PromotionHow do you make the customer aware of the existence of the product?Word of mouthBrochures pictures?Demo at marketSomeone use it for freeProduct advertises itselfRadio Evangelical stationsUse Saturday loudspeakersDoor to DoorUse local languagesHow can you generate excitement about the product?PizzazzPersonal experiences- testimonialsPromotion lower priceCelebrity endorsements football players, community leaders, church leadersWhat are the costs of PromotionNeed to budget

Consider in turnP4 Placement (Distribution)How do you get the product to the customer?Consider where it will be manufacturedConsider who will sell it? (effect on price!)Consider how you get it to the person who will sell itConsider how it will be maintained

Marketing ResearchPrimary ResearchOriginal research - data collected from the target market

Secondary ResearchMeta research- data collected from literature, internet

We have defined a third research classificationProxy researchResearch through knowledgeable third partiesPeople with first hand experience in the specific market

Marketing ResearchPrimary ResearchOriginal research- data collected from the target marketLandivar students lead hereUse in-country contacts (NGOs, professors, other students)Use teleconferencingInterview people from indigenous villages in LA?Other?

Marketing Research

Meta research- data collected from literaturetrade association data industry publications and databasesEconomist and other publications government databases (e.g., US Dept of Commerce, State Dept, Guatemalan trade) UN, NGO databasesOther?Go quickly from general to particular

Marketing Research

Proxy research- data collected from people with first or second hand informationMentorsReturning Peace Corps volunteersReturning NGOsLandivar partnersOthers?

Target MarketsWho are the people who will use your product?Geographic Location, climate, population size and growth rateDemographic Age, sex, ethnicity, income, occupation, education PsychographicLife-style, activities, interests, opinionsHow will they use product (use patterns)?What benefits will they derive?

Do forPrimary market- the first market addressedSecondary market- the next market(s)

Segmentation- continuedPsychographic variables life-styleActivitiesInterestsOpinionsproduct use patternsand product benefits

BarriersWhat are some of the reasons why your customer wont adopt your product?What can you do to mitigate this risk?

After approval of your Mission Statement. . .Research MarketBegin ResearchWrite script

ScriptBegin with Market hypotheses (3-6)Examples?Design questions to test these hypothesesKeep short- you are using up peoples time!! 30 minutes tops. 10 minutes betterCan your customers use internet? http://www.surveymonkey.com/http://www.zoomerang.com

Market segmentationMarket strategyThere are 1.3B Chinese. Even if we got only 1% of the market. . .

Whats wrong with this?

The Technology Adoption Model as the Basis for Segment FocusA measure of the rate of adoption of a cluster of new technologies by a community over timeWhere are you on this curve?

The New Idea Adoption Model in the developing world as the Basis for Segment FocusA measure of the rate of adoption of a cluster of new ideas by a community over timeWhere is your target segment on this curve?

The New Idea Adoption Model in the developing world as the Basis for Segment FocusConsider age, sex, leadership position in village, respect, income, political savvy, entrepreneurial spirit, etc.

Generate Hypotheses & Identify Underlying Assumptions

Recruit Interview TargetsHow do I get them to talk to me?Use your personal, student and other Guatemalan contacts!Remember 6 degrees of separation! Do you know someone who knows someone?Email addresses and numbers often on the webTap your network for contacts, kiss frogsWith IPOs, you are a credible student group building products and services for Guatemala. -- meeting is a chance to influence those investmentsWith American Universities use the Caltech name! Be shameless! From Guatemalan company names get HQ city, find phone number.

For the real customerDevelop relationships in the village through multiple contactsSocializeHelp them with what they are doingUse influencers (heads, other volunteers)Others (Landivar! Help!)

InterviewHow do I approach them?Use your 30-second pitch for in-person callsE-mail, follow-up phone calls work wellSend them a 2-pager on what you know to dateProvide agenda and general topics in advance -- gives the target a chance to think

Open Ended Interview QuestionsFlow from general to increasingly specific, but always open endedQuestion DOsWhy? How do you measure that? How do you define that term? Whats working, what isnt? Can you draw a diagram of that so I can see where it fits in your overall problem? How did you determine the value of that? How would you make tradeoffs among those things? How will you remove barriers to your success? What would the ideal situation look like?Question DONTsDont you think if? Would you like it if? Black or white, yes or no? We think, what do you think? If we do this, will you do that? What do you want? What will you pay for it? What should we do?

CompetitionThe competitive landscapeProvide an overview of product competitors, their strengths and weaknessesPosition each competitors product against new productNo competition is also competition i.e., doing nothing is an alternative

Note: Size of circle can represent market share

CompetitionWhy have previous attempts at development products failed in your marketplaceHow are you going to do better?Why should you succeed?Write as hypothesis and test in your market study

StakeholdersWho has to touch the product and the process for it to be successful?Consider everyone involvedEveryone who can help Everyone who can get in the way

Important part of understanding market-people you ignore at your peril