Introduction to Marketing - Session 2 at ITM, Mumbai. Includes:
Targeting
What is good marketing research?
Marketing research Questions
Types of information
Types of market research
Market research summary
Test Market
Define Target Audience
Estimate market potential
Analyze market share/share of customer
Track competitors
Identify market characteristics & trends
Analyze sales data
Sales forecasting: Existing / new products
Product
• Product Strategy
• Product Essentials
• Features and Benefits
• Classifying products
• Product line and mix
• Branding
• Packaging and LabellingTrademarks
Positioning and Brand Building
• The Art of Positioning is Marketing
• Positioning the game of Mind and Heart
• Brand is a Promise
• Brand is owned by Customers
• Understanding Brand Drivers
• Brand Attributes
• Brand Architecture
• The Positioning Template
2. Agenda
Targeting Product
What is good marketing research? Product Strategy
Marketing research Questions Product Essentials
Types of information Features and Benefits
Types of market research Classifying products
Market research summary Product line and mix
Test Market Branding
Define Target Audience Packaging and Labeling Trademarks
Estimate market potential Positioning and Brand Building
Analyze market share/share of The Art of Positioning is Marketing
customer Positioning the game of Mind and
Track competitors
Heart
Identify market characteristics & Brand is a Promise
trends Brand is owned by Customers
Analyze sales data
Understanding Brand Drivers
Sales forecasting: Existing / new
Brand Attributes
products
Brand Architecture
The Positioning Template
5. The Process
Understand the environment and the market
Situation
Identify threats and opportunities
Analysis Assess the competitive position
Define the business scope and served market
Strategy segments
Establish competitive advantages
Development
Set performance objectives.
Product and channel decision
Marketing Communication decisions
Program Pricing
Development Personal selling decisions
Performance monitoring
Implementation Refining strategies and program
6. Marketing Research in Practice
Programmatic Research
Develops market options through market segmentation,
market opportunity analysis, or consumer attitude and product
usage studies
Selective Research
Tests different decision alternatives such as new product
testing, advertising copy testing, pre-test marketing, and test
marketing
Evaluative Research
Evaluation of performance of programs
7. Marketing Decision Support Systems
Characteristics of MDSS:
Interactive
Flexible
Discovery oriented
User friendly
8. Marketing Decision Support Systems
Four components of MDSS:
Database
Reports and Displays
Analysis capabilities
Models
9. Gaining Insight from a MDSS
Manager
Modeling Display
Analysis Database
Environment
10. Participants in marketing research activities
Information Users
• General management
• Planning
• Marketing and sales managers
• Product managers
• Lawyers
Information Suppliers: Information Suppliers:
Inside Company Outside Company
• Marketing research department • Research consultants
• Sales analysis group • Marketing research suppliers
• Accounting department • Advertising agencies
• Corporate strategic planning
11. Marketing Research Process
MR Process Evolves From Answers to Five Key
Questions
Why should we do research?
What research should be done?
Is it worth doing the research?
How should the research be designed to achieve the
research objectives?
What will we do with the research?
12. Marketing Planning & Information System
MARKETING PLANNING AND INFORMATION SYSTEM
Planning system Information system
• Strategic plans • Databases
• Tactical plans • DSS
1. AGREE ON RESEARCH PROCESS
• Problems or opportunities
• Decision alternatives
• Research users
13. 2. ESTABLISH RESEARCH OBJECTIVES
• Problems or opportunities
• Decision alternatives
• Research users
Estimate
the value of NO Do not conduct
information marketing research
Is benefit >
cost
Yes
14. Yes
2. ESTABLISH RESEARCH OBJECTIVES
• Problems or opportunities
• Decision alternatives
• Research users
5. COLLECT THE DATA
6. PREPARE AND ANALYZE THE DATA
7. REPORT THE RESEARCH RESULTS AND PROVIDE
STRATEGIC RECOMMENDATIONS
15. The Marketing Research Process
Step 1
Research Purpose
Problem or opportunity analysis
Which problems or opportunities are anticipated
What is the scope of the problems and the possible reasons?
Evaluation of decision alternatives
What are the alternatives being studied?
What are the criteria for choosing among the alternatives?
Research users
Who are the decision makers?
Are there any covert purposes?
16. The Marketing Research Process (Contd.)
Step 2
Research Objective
A statement, in as precise terminology as possible, of what
information is needed
Should be framed to ensure information obtained will satisfy
research purpose
Research Question
Hypothesis Development
Research Boundaries
17. The Marketing Research Process (Contd.)
Research Question
Asks what specific information is required to achieve the
research purpose
Sample questions to determine if a specific advertisement
should be run:
Will the advertisement be noticed?
Will it be interpreted accurately?
Will it influence attitudes?
18. The Marketing Research Process (Contd.)
Hypothesis Development
A possible answer to a research question.
Generating a hypothesis
Draw on previous research efforts
Borrow from other disciplines such as:
Psychology
Sociology
Marketing
Economics
Manager’s experience with related problems, coupled with
knowledge and the use of judgment
19. Source
• Theory
• Management experience
• Exploratory research
Research Research Research
Question Hypothesis Design
Purpose
Research
Objective
20. The Marketing Research Process (Contd.)
Step 3
Estimating the Value of Information
Value depends on:
Importance of decision
Uncertainty that surrounds it
Influence of research information on the decision
21. Illustrative Decision Models $ 4 million
Introduce Success
$ 1 million
Product A Failure
Do not
Introduce
$ 4 million
Success
Introduce
Product B -$ 2.5 million
Failure
Do not
Introduce
22. Research Design and Implementation
Research Design
The detailed blueprint to guide the
implementation of a research study toward
the realization of its objectives
23. Categories of Research
Exploratory Research
Used when seeking insights into the general nature of a problem, the
possible decision alternatives, and the relevant variables that need to be
considered
Descriptive Research
Provides an accurate snapshot of some aspect of the market
environment, such as:
Consumer evaluation of the attributes of our product versus competing
products.
The socioeconomic and demographic characteristics of the readership of a
magazine
The proportion of all possible outlets that are carrying, displaying, or
merchandising our products
Causal Research
Used when it is necessary to show that one variable causes or determines
the values of other variables, a causal research approach must be used
24. Detective Funnel
Uses Combination of All Three Research
Techniques
Exploratory techniques generate all possible
reasons for a problem
Descriptive and Causal approaches narrow the
possible causes
25. Detective Funnel
Problem
Exploratory
Research
Descriptive
Possible Research
causes of the
problem
Causal
Research
Probable
Causes
28. Sources of Secondary Data
PRIMARY
•SALES/PATRONAGE RESULTS ( OUTCOMES )
DATA
•MARKETING ACTIVITY ( INPUTS )
SOURCES INTERNAL
•COST INFORMATION
RECORDS
•DISTRIBUTOR REPORTS AND FEEDBACK
•CUSTOMER FEEDBACK
DATA
SOURCES
ELECTRONIC
SECONDARY
DATA •GOVERNMENT
SOURCES •TRADE ASSOCIATIONS
•PERIODICALS
PUBLISHED
•NEWSPAPERS
DATA
•BOOKS
•ANNUAL REPORTS
PRINTED •PRIVATE STUDIES
EXTERNAL
SOURCES STANDARDIZED
SOURCES OF
•STORE AUDITS
MARKETING
•WAREHOUSE WITHDRAWAL SERVICES
DATA
•CONSUMER PURCHASE PANELS
•SINGLE SOURCE DATA
•NIELSEN’S TELEVISION INDEX
•STARCH SCORES
•ARBITRON PANEL
•MULTIMEDIA SERVICES
INTERNET
29. Uses of Secondary Data
Can solve the problem on hand all by its own
Can lead to new ideas and other sources
Helps to define the problem more clearly
Can help in designing the primary data collections
process
Helps in defining the population / sample
Can serve as a reference base
30. Benefits and Limitations of Secondary Data
Benefits Limitations
Low cost Collected for some other
purpose
Less effort No control over data
collection
Less time
May not be accurate
At times, more May not be in correct form
accurate May be outdated
May not meet data
At times, only way to requirements
obtain data Assumptions have to be
made
31. Internal Sources of Secondary Data
Internal Records
Accounting Data
Sales Reports
Inventory Management
Customer Database
32. External Sources of Secondary Data
Published data sources (Census, publications of
various trade associations)
Trade directories
Computer retrievable databases ("online" databases)
34. New Product Research
New Product Research Process
Generation of new product concepts
Evaluation and development of those concepts
Evaluation and development of the actual products
Testing in the context of the marketing program
Need Identification
Perceptual maps
Social and environmental trends
Benefit structure analysis
Product users
Focus-group interviews
Lead user analysis
Concept Identification
35. New Product Research (Contd.)
Test Marketing
Designing the sell-in market test
Selecting the test cities
Implementing and controlling the test
Timing
Measurement
Costs of a test market
Controlled Distribution Scanner Markets (CDSM)
Projecting Trial, Repeat and Usage Rate Using Panel
Data
36. Other Applications
Pricing Research
Research for Profit-oriented Pricing
Research for Share-oriented Pricing
Distribution Research
Warehouse and Retail Location Research
Center-of-gravity Simulation
Computerized Simulation Models
Catchment Area Analysis
Outlet Location Research
Number and Location of Sales Representatives
Sales effort approach
Statistical analysis of sales data
Field experiments
Computerized models of sales force size and allocation by market and
by product line
37. Advertising Research
Criteria Copy Test Validity
Recognition Qualitative Research
Recall
Audience Impressions of
Persuasion
the Ad
Forced exposure, brand
Adjective Checklist
preference change
On-air tests -- brand Eye Movement
preference change Physiological
Customized Measures of Measurement
Communication / Attitude Budget Decision
Purchase Behavior
Coupon stimulated
Media Research
Measuring print vehicle
purchasing
Split-cable tests audiences
Tracking Studies Measuring broadcast
Diagnostic Testing vehicles audiences
38. Sales Promotion Research
Promotional Tools
Price Discounts
Features
Displays
Coupons / Rebates
Sweepstakes
Promotional Strategy
Hi-lo
Every Day Low Price (EDLP)
47. Target Marketing
Socially Responsible Targeting
Some segments, especially children, are at special risk
Many potential abuses on the Internet, including fraud
Internet shoppers
Controversy occurs when the methods used are questionable
7 - 47
49. What is a product?
A product is anything that can offered to market for
attention, acquisition ,use, consumption that might
satisfy a want or need.
56. Business products
Materials and parts
Raw materials and parts
Manufactured materials and parts
Capital items
Installation
Equiptment
Suppliers and business services
Maintenance and repair items
Operating suppliers
62. Product Mix
The assortment of products that a company offers to
a market
Width – how many different product lines?
Length – the number of items in the product mix
Depth – The no. of variants offered in a product line
Consistency – how closely the product lines are
related in usage
65. PRODUCT MIX EXAMPLE
Width (# of product lines)
Hair Care Salty Dental Soft Drinks
Snacks Care
Depth (# of items)
Shampoo Chips Tooth Brush Cola
Conditioner Nuts Tooth Paste Ginger Ale
Hair Spray Crackers Dental Floss Root Beer
66. Factors influencing change in product mix
Changes in market demand
Cost of production
Quantity of production
Changes in company desire
Competitors actions and reactions
67. Product Mix Strategies
Expansion of product mix
Contracting or dropping the product mix
Alteration of existing product s
Trading up/trading down strategies
69. Objectives of product management
To design product strategies
To spot market opportunities
To develop strategies for each stage of product life
cycle
To generate new product ideas
71. Importance of new product
To meet consumer needs and wants
To meet competition
To increase profits
To avoid threats from substitutes
72. New Product Development Process
Step 1. Idea Generation
Systematic Search for New Product Ideas
Internal sources
Customers
Competitors
Distributors
Suppliers
Step 2. Idea Screening
Process to spot good ideas and drop poor ones
Technically feasibility
Financially viable
79. Marketing Strategies: Introduction Stage
Sales
Sales Low sales
Low sales
Costs
Costs High cost per customer
High cost per customer
Profits
Profits Negative
Negative
Marketing Objectives Create product awareness and
Create product awareness and
Marketing Objectives trial
trial
Product
Product Offer a basic product
Offer a basic product
Price
Price Use cost-plus basis
Use cost-plus basis
Distribution
Distribution Build selective distribution
Build selective distribution
Advertising
Advertising Build awareness among innovators,
Build awareness among innovators,
early adopters
early adopters
80. Marketing Strategies: Growth Stage
Sales
Sales Rapidly rising sales
Rapidly rising sales
Costs
Costs Average cost per customer
Average cost per customer
Profits
Profits Rising profits
Rising profits
Marketing Objectives
Marketing Objectives Maximize market share
Maximize market share
Product Offer product extensions, service,
Offer product extensions, service,
Product warranty
warranty
Price
Price Penetration Pricing
Penetration Pricing
Distribution
Distribution Build intensive distribution
Build intensive distribution
Advertising
Advertising Build awareness in the mass market
Build awareness in the mass market
81. Marketing Strategies: Maturity Stage
Sales
Sales Peak sales
Peak sales
Costs
Costs Low cost per customer
Low cost per customer
Profits
Profits High profits
High profits
Marketing Objectives Maximize profit while defending
Maximize profit while defending
Marketing Objectives
market share
market share
Product
Product Diversify brand and models
Diversify brand and models
Price
Price Price to match or best competitors
Price to match or best competitors
Distribution
Distribution Build more intensive distribution
Build more intensive distribution
Advertising
Advertising Stress brand differences and benefits
Stress brand differences and benefits
82. Marketing Strategies: Decline Stage
Sales
Sales Declining sales
Declining sales
Costs
Costs Low cost per customer
Low cost per customer
Profits
Profits Declining profits
Declining profits
Marketing Objectives Reduce expenditure and milk the
Reduce expenditure and milk the
Marketing Objectives
brand
brand
Product
Product Phase out weak items
Phase out weak items
Price
Price Cut price
Cut price
Distribution Go selective: phase out unprofitable
Go selective: phase out unprofitable
Distribution outlets
outlets
Advertising
Advertising Reduce to level needed to retain
Reduce to level needed to retain
hard-core loyal customers
hard-core loyal customers
83. Causes of New Product Failures
Overestimation of Market Size
Product Design Problems
Product Incorrectly Positioned, Priced or Advertised
Costs of Product Development
Competitive Actions
Technical problems
Poor planning
Inadequate promotion
Poor packing
Fault pricing
85. Positioning
Positioning:
The place the product occupies in consumers’ minds
relative to competing products.
Typically defined by consumers on the basis of important
attributes.
Involves implanting the brand’s unique benefits and
differentiation in the customer’s mind.
Positioning maps that plot perceptions of brands are
commonly used.
7 - 85
86.
87. Choosing a Positioning Strategy
Topics Differentiation can be based on
Products
Identifying possible Services
competitive advantages Channels
People
Choosing the right Image
competitive advantage
Choosing a positioning
strategy
7 - 87
88. Choosing a Positioning Strategy
Topics • How many differences to
promote?
Unique selling proposition
Identifying possible
Several benefits
competitive advantages
• Which differences to promote?
Choosing the right
Criteria include:
competitive advantage Important
Choosing a positioning Distinctive
strategy Superior
Communicable
Preemptive
Affordable
Profitable
7 - 88
89. Choosing a Positioning Strategy
Topics • Value propositions represent
the full positioning of the brand
Identifying possible
• Possible value propositions:
competitive advantages More for More
Choosing the right More for the Same
competitive advantage More for Less
Choosing a positioning The Same for Less
strategy Less for Much Less
7 - 89
90. Developing a Positioning Statement
Positioning statements summarize the company or
brand positioning
EXAMPLE: To (target segment and need) our (brand) is
(concept) that (point-of-difference)
7 - 90
94. KAPFERER represents brand identity diagrammatically as a
six-sided prism as shown below:
Constructed Source/Sender
E I
x n
t t
e e
r r
n n
a a
l l
i i
s s
a a
t t
i i
o o
n n
Constructed Receiver
95. Brand Identity Prism
Physique according to him is the basis of the brand.
E.G. the physique of Philips is “technology and reliability”
while for the brand Tata it is “trust”
Personality is same as Aaker, it answers the question
“what happens to this brand when it becomes a
person?”
Culture symbolizes the organization, its country-of-
origin and the values it stands for.
E.G. traditional brands like balsara, dabur and zandu.
96. Brand Identity Prism
Relationship is the handshake between consumer
and the organisation.
E.G. the relationship with “safola” is safety.
Reflection is the consumer’s perception for what the
brands stands for.
E.G. coke’s image more attract youth.
Self-image is what the consumer think of himself.
E.G. benz Car owner think that since he has bought the car he
is treating himself to one of the best car in the world.
98. What is a Brand???
“ A Brand is a complex symbol. It is the intangible
sum of a product’s attributes, its name, packaging
and price, its history, reputation, and the way it’s
advertised. A brand is also defined by consumer’s
impression of people who use it, as well as their own
experience ”
- David Ogilvy
99. Now let us look at how Brand Experience is differentiated…
101. The External Brand Experience includes
Name
Logo
Advertising
Brand Identity
Environments
Products & Service
102. The Internal Brand Experience includes
Business Process
Customer Relations
Brand Values
Training
Quality
Staff Motivation
Recruitment Policies
Technology etc..
103. Now let us look at the Brand Identity Prism based on
Kapferer model and the 6 key dimensions in it
104. -Name -Logo -Business Process -Customer Relations
-Advertising -Brand Identity -Brand Values -Training
-Environments -Products & Service -Quality -Staff Motivation
-Recruitment Policies -Technology etc..
Constructed Source
E I
x n
t t
e e
r r
n n
a a
l l
i i
s s
a a
t t
i i
o o
n n
Constructed Receiver
105. Physical
Product features, symbols & attributes
Personality
Character & attitude
Relationship
Beliefs & association
Culture
Set of Values
Reflection
Customer’s view of the brand
Self-Image
Internal mirror of customer as user of brand
106. Let us now understand the prism with some examples…
107. For Sify India let us look at how they have built the brand basis the
Kapferer Model
108. Sify India
Physical
Kite Symbol, Online Access
Personality
Innovative & Tech savvy
Culture
Customer centric & Indian
Self -image
"net" way of life empowered
Reflection
Consistent & dependable performer
Relationship
Best guide to the net
109. Sify India
Physical
Kite Symbol, Online Access
Personality
Innovative & Tech savvy
Culture
Customer centric & Indian
Self -image
"net" way of life empowered
Reflection
Consistent & dependable performer
Relationship
Best guide to the net
Convenience goods – consumers use minimal effort for frequently purchased low cost items Shopping goods - consumers make a considerable effort to evaluate Consumers make product comparison(s) They seek information before purchase They are not impulsive Moderate substitutions are made Product’s last a considerable time Monetary & social costs may be high
Is the product life cycle concept useful? Why or why not? The product life cycle is concerned with the sales history of a product or product class. The concept holds that a product’s sales change over time in a predictable way and that products go through a series of five distinct stages: introduction, growth, shakeout, maturity, and decline. Each of these stages provides distinct opportunities and threats, thereby affecting the firm’s strategy as well as its marketing programs. Despite the fact that many new products do not follow such a prescribed route because of failure, the concept is valuable in helping management look into the future and better anticipate what changes will need to be made in strategic marketing programs. What are the product life-cycle limitations? The product life-cycle model’s major weakness lies in its normative approach to prescribing strategies based on assumptions about the features or characteristics of each stage. It fails to take into account that the product life cycle is driven by market forces expressing the evolution of consumer preferences (the market), technology (the product), and competition (the supply side).
Introduction. In this stage marketers spend heavily on promotions to inform the target market about the new product's benefits. Low or negative profits may encourage the company to price the product high to help offset expenses. companies can concentrate on skimming strategies to generate high profits now or on penetration strategies to build market share and dominant the market for larger profits once the market stabilizes. Although this is a broad guideline, this may not be entirely true for some categories. For instance, pricing say Nokia Lumia on a cost plus basis would be impossible. Margins would be high because of the ‘novelty’ factor and tech products typically end up skimming. And they spend the most on advertising their new products.
Product Life-Cycle Strategies Growth. In this stage the company experiences both increasing sales and competition. Promotion costs are spread over larger volume and strategic decisions focus on growth strategies. Strategies include adding new features, improving quality, increasing distribution, and entering new market segments.
Product Life Cycle Strategies Maturity. In this stage the company must manage slower growth over a longer period of time. Strategic decisions made in the growth stage may limit choices now. Marketing managers must proactively seek advantage by either market modification to increase consumption, product modification to attract new users (quality, feature, and style improvements), or marketing mix modification in an attempt to improve competitive position.
Product Life Cycle Strategies Decline. In this stage the costs of managing the product may eventually exceed profits. Rate of decline is a major factor in setting strategy. Management may maintain the brand as competitors drop out, harvest the brand by reducing costs of support for short term profit increases, or drop the product (divest) altogether.
Steps in Segmentation, Targeting, and Positioning Market Segmentation. Market segmentation is the process of dividing a market into distinct groups of buyers who might require separate products or marketing mixes. All buyers have unique needs and wants. Still it is usually possible in consumer markets to identify relatively homogeneous portions or segments of the total market according to shared preferences, attitudes, or behaviors that distinguish them from the rest of the market. These segments may require different products and/or separate mixes. Market Targeting. Market targeting is the process of evaluating each market segment's attractiveness and selecting one or more segments to enter. Given effective market segmentation, the firm must choose which markets to serve and how to serve them. Discussion Note: In targeting markets to serve the firm must consider its resources and objectives in setting strategy. Market Positioning. Market positioning is the process of formulating competitive positioning for a product and a detailed marketing mix. Marketers must plan how to present the product to the consumer. Discussion Note: The product's position is defined by how consumers view it on important attributes. Steps in Segmentation, Targeting, and Positioning This CTR corresponds to Figure 7-1 on p. 196 and relates to the material on pp. 196.