Business Seminar 1. Why Marketing Counts 33 rd New York Wine Industry Workshop The Understanding &...

Business Seminar

1. Why Marketing Counts

33rd New York Wine Industry WorkshopThe Understanding & Insight Group

The U&I Group Copyright 2003 2

AgendaAgenda Background Why Marketing Counts Making Your Product Real

(continue through lunch) Integrating Marketing & Selling Wrap-up and Review


Five year old business development company

Jacqueline Beckley Both have had extensive industrial

experience. Jacqueline in both Fortune 500 firms and 30

years in consumer understanding and research. Known for:

The Getting It! System Successful Front End Process

Locations in New Jersey, Ohio, and California


Overview Weybright


Marketing is:Marketing is:

EVERYTHING you do to promote your business, from the moment you conceive of it to the point at which customers buy your product or service and begin to patronize your business on a regular basis.

The key words to remember are everything and regular basis. Jay Conrad Levinson (“Guerrilla Marketing”)


Elements of Marketing Elements of Marketing Shared by Small & Big Shared by Small & Big

BusinessesBusinesses 1. Research 2. Analysis 3. Strategies and Tactics

Factors Guiding Strategies and Tactics: PRODUCT Price Promotion Place (& PEOPLE)


ProductProduct

Identify and understand the product/service being marketed

What need is there for your product or service?

Sell benefits not just products Question – “Would you buy this product

or service?” Why or Why not?


Market Summary (People)Market Summary (People)

Market: past, present, & future Review changes in market share,

leadership, players, market shifts, costs, pricing, competition – (regionally, nationally, internationally)

Early Adopters/Pioneers

Mass Market/Followers

End of Life

Time

Numberof

customers


CompetitionCompetition(useful as a tool for analysis and (useful as a tool for analysis and

learning)learning)

The Competitive Landscape Provides an overview of

product competitors, their strengths and weaknesses (unfilled niches)

Positions each competitor’s product against new product (learn what customers do or don’t want)

Offers marketing ideas

A B

CD

PerformanceP

rice


““If You Do Not Change, You If You Do Not Change, You Can Become Extinct”Can Become Extinct” Who Moved My Who Moved My

Cheese, page 46Cheese, page 46

43% of U.S.farms have internet access

This appears to be a large growth from 2 years ago (29% were on the Web then)

AgWeb.com says 77% of farmers use the Internet for market and weather information

R.Hill says the bigger farmers with buying power are definitely out there on the Web, frequently

While you live regionally, think globally

EX: Tomatoes Mexican tomatoes Planting Supply Price


““Small Business” IssuesSmall Business” Issues

I have a great idea, if I don’t move on it someone will take it!

I am not good at all the things you need to do to make a business successful.

I don’t have the time!! I don’t have the money! (I am afraid – if this doesn’t work……)


The Decision Making ProcessThe Decision Making Process“Big Guys”“Big Guys”

Defining the Problem Not the symptoms

Determining the Objective Profit maximizing, Benefit-cost analysis

Exploring the Alternatives Leveraging information, being creative

Predicting the Consequences Understand the impact of possible decisions

Making a Choice And being happy with it in the long-run

Performing Sensitivity Analysis Understanding the impact of changing assumptions


Common Business IssuesCommon Business IssuesIn “Big Guy” TermsIn “Big Guy” Terms

Product/portfolio strategy & planning Which products do I invest resources in?

Promotional strategy How can I make my advertising more impactful?

Consumer/customer segmentation Who really buys and consumes these products?

Competitive benchmarking & differentiation strategy Who are my competitors and what can I offer that my

competition cannot? High incidence of failure

What steps can I take to reduce the likelihood of failure? Too much information, not enough guidance

I have a lot if information, but what do I do with it?


What’s Going on in aWhat’s Going on in a “Big Company” “Big Company”

More resources Scale has a way of masking issues that

will have great business impact Larger number of people, more people

issues


The Product Development The Product Development ProcessProcess

Traditionally, big companies have focused their time and resources on the “back-end” of the PDP. That is the tactical space.

Planning & Situation Analysis


Consumer Needs & Idea

Generation

Consumer Needs & Idea

Generation

Concept Development

Concept Development

FRONT-END

Product Development

Product Development Product LaunchProduct Launch Post-Launch AuditPost-Launch Audit

BACK-END


The importance of the “front The importance of the “front end”end”

Attention is now being directed on the “Front End” of the Product Development Process because of proposed ability to focus resources and improve chances for successful new product introductions.



Consumer Needs & Idea Generation

Consumer Needs & Idea Generation

Concept Development

Concept Development

FRONT-END

Product Development

Product Development Product LaunchProduct Launch Post-Launch AuditPost-Launch Audit

BACK-END

Ab

ilit

y t

o in

flu

en

ce o

utc

om

e


Small BusinessSmall Business

Same issues as Big Company – Fewer resources

Better grasp of business solutions required

Fast to understand, fast to change direction “Adapt To Change Quickly” “Be Ready To Change Quickly and Enjoy It Again &

Again” both on pg 74


Critical Success FactorsCritical Success Factors

Superior, differentiated products Products that offer unique benefits &

superior value to the consumer/customer Thorough understanding of customers’

needs & wants, competitive situation, and nature of the market


Critical Success FactorsCritical Success Factors

Do the Front End Early-on idea screening, market

assessment, technical assessment, business & financial analysis, product definition, target market, product concept with attributes & benefits, and positioning

Prioritize with Go/Kill procedures Balance speed to market & quality of

execution A company culture that supports the

business goals


Focused Decision MakingFocused Decision Making A strong (product development) Process with a

consumer/customer orientation and a focus on front-end activities can deliver quick market results.

A focused Process leads to focused decision making. Defining the Problem Determining the Objective Exploring the Alternatives Predicting the Consequences Making a Choice Checking impact of the Market

Research &

Analysis


Leveraging Business Leveraging Business InformationInformation

Every business has significant knowledge stored within its people, its documents, its resources, libraries & the world.

The goal: leverage this information, identify knowledge gaps, fill those gaps, and act on robust business strategies based on integrated market information.

How do you do that? The Getting It!® system


We have entered into a Demand Driven Economy. We are No Longer in a Supply Driven Economy…We have to learn how the rules have changed. – Rick Kash, Cambridge Group Dec 9, 2003

The pressure for change Competition from low

cost economies — using new technologies, skilled people and mobile capital.

Innovative products, processes and services — spreading rapidly across the globe or down the street.

Electronic commerce — radically changing the way business meets customers' demands.

Science and knowledge — underpinning the new technologies.


What are the New Rules for a Demand Economy?

How High? What is rate limiting behavior?

How Wide? What is trade off behavior

Rate Limiting Behavior


What is Rate Limiting Behavior?

Caloric consumption I can only eat/drink so

much Income

I can only spend so much

Demographics I do certain events at

a specific age


Caloric ConsumptionCaloric Consumption

Approx 530 Calories


Consumption by Major Food Consumption by Major Food GroupsGroups


%Consumption of Alcoholic/ Non Alcoholic Beverages has Remained Fairly Constant over 35

years

0%

20%

40%

60%

80%

100%

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Total Non Alcoholic Total Alcoholic

Source: USDA Economic Research Service


Consumption of Most Beverages Except for Coffee, Soft Drinks, Bottled Water and Milk has

Remained Fairly Constant

0%

10%

20%

30%

40%

50%

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Whole Milk

Other Milk

Tea

Coffee

Bottled water

Diet SoftDrinksRegular SoftDrinksFruit Juices

Fruit drinks,

Iced Tea(Canned)VegetablejuicesBeer

Wine

DistilledSpirits

Source: USDA Economic Research Service


Income ImpactIncome Impact

$7,000


Spending by Major CategoriesSpending by Major Categories

30%

29%

28%

26%

26%

26%

24%

23%

21%

19%

17%

16%

13%

11%

4%

-18%

-30% -20% -10% 0% 10% 20% 30% 40%

Education

Transportation

Telephone

Housing

Housekeeping

Food away from home

Utilities

Alcoholic beverages

Personal care

Health care

Entertainment

Furniture

Tobacco

Food at home

Clothing

Reading % Change in per capita spending 1970- 2001

Source: Consumer Expenditure

Spending SurveyUS Bureau of Labor


0 5000000 10000000 15000000 20000000 25000000

Under 5 years

5 to 9 years

10 to 14 years

15 to 19 years

20 to 24 years

25 to 29 years

30 to 34 years

35 to 39 years

40 to 44 years

45 to 49 years

50 to 54 years

55 to 59 years

60 to 64 years

65 to 69 years

70 to 74 years

75 to 79 years

80 to 84 years

85 years and over

DemographicsDemographics

Source: US Census


Demographics – Choice Demographics – Choice BehaviorBehavior

1970 1995Average Age of First Marriage Male 23.4 28.6Female 21.8 26.6Average Duration of First Marriage 27 26Average Age at Childbirth (Female) 21.4 24.9Average Number of Children in Family Household 2.2 1.8% of First Marriage Ending in Divorce 36% 42%Average age at DivorceMale 36.4 39.7Female 33.9 37.3Average Duration of DivorceMale 4 8Female 9 15% of Women in the Labor Force 42% 60%

Source: US Census. US Dept of Labor


Rate Limiting BehaviorRate Limiting Behavior

Issue: Drives consumers

to make trade offs Global Focus

Trade Off BehaviorTrade Off Behavior


Trade off BehaviorTrade off Behavior

Some Trade Off Data Delivering the same experience for

the consumer Types of experiences


What Frameworks do What Frameworks do Consumers Use to Understand Consumers Use to Understand

BeveragesBeverages

Imagine you open a refrigerator and you see 35 different beverages.

What are the drinks identified top of mind as interesting? What makes them interesting?

What are the drinks that when consumers make trade offs are most interesting? What makes them interesting?

Is there a difference?


Expected Experience: What are the drinks identified top of mind as interesting? What

makes them interesting? These everyday beverages; branded and with their primary

attributes… i.e. colored, caffeinated and extreme temperatures are how the consumer makes sense of drinks.

Same beverages as 2002, different ranking Cola

From a Brand Classic… just the way you like it. Thick slushie An Ice Cream Float

Ice Tea Warm smooth flavor 100% natural So Inviting From a Brand

Hot Coffee Aroma invites you to sip more Made from 100% Columbian Coffee beans Fresh ground and brewed with all natural flavors Warm and inviting


2003 Trade Off Experience: What are the drinks when consumers trade off are most interesting?

What makes them interesting? Many different beverage bases (creamy, fruit based,

coffee based). Healthiness, brands, what it is made from and the primary attributes of the beverage themselves are how consumers make sense of drinks.

Hot Chocolate Rich Creamy with marshmallows Premium blend of chocolate Made with creamy milk chocolate Warm and inviting

Slushies Made with real fruit juice and natural flavors With Tropical flavors Rainbow of colors Satisfy your sweet tooth From a Brand With a light fizz


2003 Trade Off Experience: What are the drinks when consumers trade off are most interesting?

What makes them interesting? Many different beverage bases (creamy, fruit based, coffee

based). Healthiness, brands, what it is made from and the primary attributes of the beverage themselves are how consumers make sense of drinks.

Hot Coffee

Aroma invites you to sip more Made from 100% Columbian Coffee beans Fresh ground and brewed with all natural flavors Warm and inviting

Flavored Milk Thick with lots of flavor From a Brand 100% natural With Calcium , Vitamins A,D or whatever you need Good for you and healthy for your bones Already prepared…just shake and drink


Initial Interest in Beverages - 2003 Hot Chocolate, Slushies, Hot Coffee, and Flavored Milk are the

beverages consumers are initially interested in the idea of.

0

10

20

30

40

50

60

70

Hot

Chocola

te

Slu

shie

s

Hot

Coff

ee D

rinks

Fru

it S

mooth

ies

Fla

vore

d M

ilk

Fla

vore

d W

ate

r

Hot

Tea

Cre

am

y F

ruit B

evera

ge

Yogurt

Bevera

ge

Juic

e D

rinks

Juic

e S

pritz

ers

Shakes

Energ

y D

rinks

Alc

oholic

Spritz

ers

Iced T

ea

Lem

on L

ime S

oda

Coole

rs

Fla

vore

d S

oy M

ilk

Soup

Iced C

off

ee D

rinks

Pouched B

evera

ge

Aft

er

Din

ner

Drinks

Meal R

epla

cem

ent

Bevera

ge

Beer

Altern

atives

Fla

vore

d H

ard

Cid

er

Fla

vore

d T

equila

Fib

er

Drinks

Org

anic

Bevera

ge

Cola

Red W

ine

Cockta

ils

Fla

vore

d B

eer

Sport

s B

evera

ge

White W

ine


Overall Interest in Beverages - 2003 Hot Chocolate, Creamy Fruit, Energy, Slushies, and Meal

Replacement beverages are the beverages consumers are highly interested in.

-20

-10

0

10

20

30

40

50

60

70

Ho

t C

ho

co

late

Cre

am

y F

ruit B

eve

rag

es

En

erg

y

Slu

sh

ies

Me

al R

ep

lace

me

nts

Fla

vo

red

Wa

ter

Fru

it S

mo

oth

ies

Ho

t C

off

ee

Fla

vo

red

Milk

Ju

ice

Sp

ritz

ers

Co

ole

rs

Yo

gu

rt

Alc

ph

olic

Sp

ritz

ers

Sh

ake

s

Le

mo

n L

ime

Fla

vo

red

So

y M

ilk

Fla

vo

red

Te

qu

ila

Ju

ice

Dri

nks

Ice

d C

off

ee

Fib

er

Be

er

Alte

rna

tive

s

Ho

t T

ea

Org

an

ic

Sp

ort

s

Fla

vo

red

Ha

rd C

ide

r

Ice

d T

ea

Aft

er

Din

ne

r D

rin

ks

Po

uch

ed

Be

ve

rag

es

Co

ckta

ils

So

up

Co

la

Re

d W

ine

Fla

vo

red

Be

er

Wh

ite

win

e

Constant avg Product Elements


What’s the Difference?Expected Attributes

Branded Fresh 100% Natural Textures So Inviting

Classic Warm Smooth flavor

Trade Off Experience Attributes

Branded Pure, Fresh 100% Natural Textures Warm and Inviting

Made from… Good for you Nutritious Added Vitamins, Minerals,

Antioxidants, etc Lots of flavors, Fruit Flavor All ready prepared

Similar

Different

Unmet Needs


Business DevelopmentBusiness Development

Your new idea or concept should be evaluated & reviewed as a new and independent business


What will we give you What will we give you today?today?

What to do after they tell you to do The Business Plan?

Business Seminar 1. Why Marketing Counts 33 rd New York Wine Industry Workshop The Understanding &...

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