COMM 103 FALL 2013 - Introduction to Marketing

8/14/2019 COMM 103 FALL 2013 - Introduction to Marketing

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Comm 103Intro to Business Management

Marketing

Fall 2013


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Wk Date Topic Simulation

8 OCT 28

NOV 1

Introduction to Marketing

Reading: Chapters 10 & 11

2ndRequired TA

meeting between Oct

28thand Nov 10th

9 NOV 4

NOV 8

Pricing; Introduction to Operations Management

Reading: Chapters 9 & 14

2ndStrategy memo

due Friday, Nov 8th

10 NOV 11

NOV 15

SPECIAL TOPIC: GRANT HALL TALKS

(1:30 pm on November 14th

)Four QSB professors (Gagnon, Mufti, Dacin, Brohman) will

each do a 1520 minute talk on an issue of practical

importance in todays economy and business environment.

Attendance at this event is mandatory for all Comm 103

students. There will be no formal class sessions for Comm 103

this week.

11 NOV 18

NOV 22

Managing HR, Ethics & CSR; Introduction to New Ventures

Reading: Chapters 4, 8 and 15

12 NOV 25

NOV 29Foundation Simulation Presentations

Second Half


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This Weeks Agenda

3-hour session

Marketing Fundamentals 1.5-hour session

In-Class Activity (Case)


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Marketing Fundamentals


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Role of Marketing

Simple Definition

Design, develop and communicate value.

Demonstrate


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Marketings value to the organization can be summarized in

three key statements:

1. Marketing should tell us wherewe should compete.

2. Marketing should tell us howwe should compete.

3. Marketing should communicate wheneither of the above

should be changed.

Marketings Impact


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The Marketing Equation

MarketPosition

MarketingEffort

Value(which

translates toprofitable

market share)

Value Proposition

Marketing Mix


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Business System Analysis

Key

Partners

Key

Activities

Key

Resources

Value

Proposition

Cost Structure

Company-Centric Analysis

Customer

Segments

Revenue

Market-Centric Analysis

Adapted from: Business Model Generation, Osterwalder, Pigneur

8

Demonstrate

& Deliver

ValueDomain of Marketing


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Strategy & Marketing


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Marketing Strategy (Ansoff)

MarketPenetration

ProductDevelopment

Market

DevelopmentDiversification

10

Current Product New Product

NewMa

rket

Curre

ntMarket


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Customers, Competitors and Company

Customer

Analysis

Basis of Targeting and

Segmentation

Competitors

Analysis

Influence Positioning

& Differentiation

Company

3C Analysis

Influences Resource

Deployment & Focus

SWOT Analysis

Assess Market Fit Assess Product Fit

Portfolio Management


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Understanding Customers


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Markets & Buyer Behavior

B2CUnderstanding

Consumer Markets

and Buyer Behaviour

B2BUnderstanding

Organizational Markets

and Buyer Behaviour

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ProblemRecognition

InformationSearch

Evaluation ofAlternatives

PurchaseDecision

PostpurchaseBehaviour


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Consumer Decision Making

14

InitialConsideration

of Options

ActiveConsideration

andEvaluation of

Options

Point ofPurchase

Post PurchaseInfluence

CommittedCustomer Loop

Future or ongoing

purchases

Initial purchases or non-

loyal repurchasesLoyal Customer Loop

Decision Disruption

Opportunity/Threat

Much more emphasis on consumer involvement2 way flow


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Impact of Influencers

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Initial Consideration SetPre-determined

purchase order

Active Option

Evaluation

Purchase

Decision

Post Purchase

Performance &

Future Decisions

1. Influencers

Company Driven

Marketing

Past Experience

Consumer Driven

Marketing

Channel Interaction

2. Influencers

Consumer Driven

Marketing

Channel Interaction

Company Driven

Marketing

Past Experience

3. Influencers

Channel Interaction

Consumer Driven

Marketing

Company Driven

Marketing

Past Experience

Product Performance Below Expectations

Committed

Customer


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Customer ProfilingWhat Does Your Customer Base Want?

PriceCustomer

ValueCustomer

Accessibility&

ConvenienceCustomer

RelationshipCustomer

Differentiation

adds minimal

value

Differentiation

drives value

Price Impact is Material in

Purchase Decision

Price Impact carries little value


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Innovators2.5%

Early adopters13.5%

Early majority34%

Late majority34%

Laggards16%

Consumer Adoption Process


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Customers develop and purchase on the basis of buying criteria.

The trick is to know which buying criteria command the highestweightingfor the customer segment or micro-segment beingtargeted.

Buying Criteria can be grouped around 5 common themes

Functionalityof the product (performance)

Personal Taste of aesthetic attributes

Augmented Servicesaccessibility/ease of purchase, purchaserisk reduction strategies, post-purchase risk reduction strategies,etc.

Psychological benefits perceived to be incorporated into theproduct

Social Leader/group influencestrends, peer pressure, referrrals,etc.

Quality Further Broken Down


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Ensure it understands who are the decision-makers and what the key

decision criteria are that are being used to make the purchasedecision.

Positioncompanys productas a solutionto a customers problem(maximize the buying criteria).

Builds a path of positive linkage with influencers.

Creates opportunities for disruption at the time and place ofpurchase, or layers in insulation to minimize competitive disruption.

Ensures that customers gain the full benefit from making thepurchase.

What is Marketings Focus in All of This?


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The value of their ATR per interaction

The Value of their ATM per interaction

The frequency of their purchase

The duration of their relationship with us (desertion/churn)

The acquisition cost of procuring them

Our ability to increase the first four points and reduce the fifth

point.

The Equality of CustomersWhat is the Real Story?

ATR = Average Transaction Revenue

ATM = Average Transaction Margin


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The Marketing Process


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The Six Rs of Marketing Value Generation

SixRs

Right Need

RightSolution

Right ValueProposition

RightConnector

Right Price

RightMessage


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Putting it All Together - Marketing Process

MarketingResearch

Segmentation

Target Market

ValuePropositionDevelopment &Profiling(Positioning)

Marketing MixDevelopment

Message riflingandconcentration

Evaluate and Adjust

Right Need & FitRight SolutionP/Q

Relationship

Right

ConnectionRight Message


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Segmentation

Various MarketSegments

Marketing

Research

TargetMarket

Marketing

EffortTransitioning from the shot gun to the rifle approach

Right Need & Fit


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Key Takeaways from Research, Segmentation, and Targeting

MarketingMix

Development

Who is/are ourcustomers(s)?

What is their

need/want?

What do they value?

How do they buy?

Interact

with

Targeted

Customer

Value Positioning

Marketing Effort

& Focus

Value Proposition

Development

Willingness to

Pay


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The Marketing Effort


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Customer Base Model

CustomerAcquisition+ CustomerRetention

CustomerDesertion(Degree ofChurn)

Customer Base = (Existing Customers + New Customers)

Deserting Customers

Committed

Customers

Loyal Customers

Preference Forming Customers

Casual Customers


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Create yourmarketing mix and

develop your

communicationrifling

Uncover factors whichdrive consumer

preference

Segment the marketaccording to the

importance of thesefactors

granulation, micro-segmentation

Assess yourperformance level

relative to thefactors driving buyer

preference

Assess relative tocurrent competitorsand future potential

competitors

Transitioning from Positioning to Marketing Effort


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Strategy and Marketing

Business Strategy

Marketing Strategy

(Who to Target &How to Reach)

Marketing Tactics

Pricing Strategy

Profit = Price - Cost

Product Strategy

(Value Proposition)

Tangible ,Intangible,

Augmentation

Distribution(Connection

Strategy)

ChannelDevelopment

Communication

Positioning

Be the best!

Be the cheapest!

Be the most focused!

Access BasedNeeds Based

Variety Based

Customer

Profiling


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FourPillars of

Marketing

Value Proposition

(Product Strategy)

Connecting withCustomers(Distribution Strategy)

Pricing Strategy

CommunicationStrategy

Build around key buying criteria

which drive meaningful value

Advertising, Sales Promotion,Publicity, Personal Selling, using

alternate media sources such as

social marketing

AccessibilityExtensive,

Selective, Exclusive, Multi-

Channel, Terms, Service Support,

etc.

Dynamic pricing model

tapping into an almost

customized pricing approach.

S l d d C id i


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Value propositionTotal Product Concept

Brands

Positioning

Product Lifecycle

Product Line Management

New Product Development

Selected Product Considerations

S l t d Ch l C id ti


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Structure

Direct Indirect

Mixed

Strategy

Exclusive

Intensive

Selective

Logistics & Physical Distribution

Selected Channel Considerations

Selected Communications Considerations


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Advertising

Promotion

Personal Sales

Publicity & PR

Events

Direct & Interactive

Selected Communications Considerations

S l t d P i C id ti


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PIMS v. ROS

Skimming v. Penetration Cost Base:

Composition of the base

% within your control

Market pressures

(which may impact the cost base)

Volume and dollars required to B/E

Good costs and bad costs

Costs vs. competition

Selected Price Considerations


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The Pull of Industry Structure

Focused System ModelExtensive Reach System10 Million customers at $100 each

to generate $1 Billion in Sales

1000 customers at $1 million each to

generate $1 Billion in Sales

Pull of commoditization Innovate to the next level of

complexity (reinvent)

Solution FocusEnhanced

Features

Experience

Focus

Core

Features

T diti l Vi P d tC t i A h


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Product

CustomerSegment

CustomerSegment

CustomerSegment

CustomerSegment

CustomerSegment

Traditional ViewProduct Centric Approach

Company creates new product

Company identifies segments to

target

Company develops marketing

mix

Company uses company

generated mass promotion

strategy to blanket targeted

segment

Company uses aggregate sales

and profitability to measure

performance

Transitioning towards Customer Centric Approach


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Customer

Products

Products

ProductsProducts

Products

Transitioning towards Customer Centric Approach(leveraging data management, streaming, & Predictive Analytics)

Company seeks to cultivate

customers

Products are developed in

response to customer needs

Company develops marketing

mix

Company customizes approach

depending on customer needs

and pre-purchase behaviour

Company assesses on the basis

of lifetime value (CLV) or equity

(CE)Thinking of the customer as a

market of one

F I fC t C t i M k ti


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Individualize youractivities according to

customer preference andinterest

Involvethe

customer inyour

activities

Initiatethe generation ofcustomer/user content in

your marketing plan

Integrateyour

marketing

activities in away that you

do notbecome anuisance

Four Is of Customer-Centric Marketing

4 Is

Individualize

Involve

Initiate

Integrate

P i P iti i


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Market-based

DifferentiatedPlayer Low Cost Leader

with Market-based

Differentiation

Price Positioning

Low Cost

Leader

Non-

Differentiated

Player


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Marketing Mix Execution5 Integration Components

Demand Potential - Grow, Maintain/Defend, Harvest (Product

Life Cycle & Market Attractiveness)

Customer FocusNew, Existing

PricingROS, PIMS

Positioningcurrent, new Industry Structural Shiftscommoditization, differentiation,

consolidation


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Product Life Cycle Management

Life Cycle Outcomes


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Life Cycle Outcomes

$0

$$$

Revenue

Time

Industry

Growth

Curve

Company B

Company A

Company C

Company D

Company E


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Product Life Cycle

Product

Inception

Product

Commercial-ization

Introduction

(Launch)Growth Maturity

Decline

Breakpoint

Go or No Go Decisions

Time

What drives the cycle?


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Product Life Cycle

ProductInception

ProductCommercial-

izationIntroduction

Growth Maturity Decline

Cash Burn

ProfitabilitySales

TimeCapitalization Well

What drives the cycle?

Demand

Repurchase Rate

Documents

COMM 103 FALL 2013 - Introduction to Marketing