Comprehensive Marketing 'tools' review March 14, 2015

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How to Grow Your Business A Conversation with … Dr. Dennis R Wubbena

Evangel University

[email protected]

….. a comprehensive “marketing tools” review

…it is a value creating process

…without it, you are not a business

…without more of it, you won’t stay in business

…to make it happen, you must rethink your marketing strategy … often

While not all the topics will apply to every business, most will lead you to valuable discussion of your strategic growth opportunities…

UNDERSTANDING YOUR MARKET… is a critical first step… potential ... served ... penetrated

ALL GROWTH OPPORTUNITES… are not equal

ALL MARKETING INVOLVES … Segmentation – Targeting – Positioning

MARKETS & PRODUCTS CHANGE OVER TIME… and so must your market strategy

MARKETING IS… more than a simple business function

INTEGRAGED MARKETING COMMUNICATIONS…going,” where the ducks are flying”

…and learning how to speak ‘ duck.’

CUSTOMERS HAVE THE FINAL SAY GROWTH REQUIRES

CUSTOMER-ORIENTED THINKING …

Everyone wants to know how to grow their business…

The Question is…”Can you help them?”

Trust the ability of your experience and God’s touch in your life.

The CORE of marketing is…

E X H A G E

IT REQUIRES… …two or more parties

…freedom to reject or accept the offer

…each has something of value & desire to deal

…communication & delivery are both present

…there is confidence in the promise

…expectations are met

The Goal of Holistic Marketing is the Creation of Customer Equity …a composite

of Value Equity + Brand Equity+ Relationship Equity Growth is more than production efficiencies;

more than product quality; more than the art of

selling…. It is all about creating VALUE from the

customer’s perspective

mailto:[email protected]

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….. a comprehensive “marketing tools” review

A Conversation with … Dr. Dennis R Wubbena

Evangel University

Growth Strategy….Intended

Likely/Beneficial

Minor Issue

List of items to ‘scan’ on a regular basis

Minor Issue

Likely/Severe

Minor Issue

Likely/Beneficial

Likely/Severe

Minor Issue

T

O

S

W Weakness

Strength

Opportunity

Threat

Where Opportunities and Strengths Meet

Currently – from your

point of view, what is

your GREATEST

need…in support of

helping you grow?

Strategic Window

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Potential Market = Geographical Reach

Served Market = Targeted within the Potential Market

Penetrated Market = Your Success

….. So…. what does your market look like…who are they and how do they think? …who do they think you are….does their IMAGE match your IDENTITY?

…do they think you are unique….valued…special in any way?

How much do you know about your Potential Market? …do you consider it to be Local, Regional or National?

What does your ‘targeted’ Served Market look like? …do they have distinctive qualities?

Geographic, such as neighborhoods or traffic patterns

Demographic, such as age, income or family status

Behaviors – differences in heavy and light users

Psychographics – Attitudes, Interests Opinions

Benefits – functional, symbolic, experiential

What is the profile of your Penetrated Market? …did you go after them or did they find you?

…what do your customers like about you?

…what does your ‘best’ customer look like?

…do others within the potential / served

market look like them?

80-20-30 Principle

Recency – Frequency – Monetary Value (RFM)

Prospect / Customer Conversion Ratio

Customer Retention Rate

Lost Customer Analysis

IDENTITY is who you say you are….

IMAGE is how you are seen by your market

Holistic Marketing involves the development of a VALUE

based OFFERING from a CUSTOMER CENTRIC point of

view through a MARKETING MIX that is specifically designed

to be EFFECTIVELY and EFFICIENTLY responsive to ALL

STAKEHOLDERS while building customer equity

[value – brand - relationship ] to the profitable

completion of a satisfactory EXCHANGE for each

selected TARGET MARKET

Every business

should have a

current/complete

customer and

potential customer

database

Processes should

be in place to hear

the “voice of the

customer?’ Ethnographic

Observation

Touch Point Metrics

Focus Groups

Panels

Markets should be…..

Measureable

Substantial

Accessible

Differentiable

Actionable

Profitable

Step #2… examine your ‘targeted’ served market

and your competitive position within your defined potential

market….are you where you need to be …is it time to consider

new opportunities …is it time to leave some markets behind

Step #3…compare the profile of your penetrated

market to the profile of your potential/served markets. Consider (width

of the Mix & depth of the Lines) the trending of your market share, the

strength of customer loyalty and the lifetime value of your customers.

Step #1… look at the

potential market to determine if

natural homogeneous groupings /

segmentations exist … and/or if

environmental factors are changing

MARKET Homogeneous

response to market

stimuli by those with

…ability, willingness,

and authority to buy

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How much do you know about your Potential Market? …do you consider it to be Local, Regional or National?

What does your ‘targeted’ Served Market look like? …did you go after them or did they find you?

…do they have distinctive qualities? Geographic, such as neighborhoods or traffic patterns

Demographic, such as age, income or family status

Behaviors – differences in heavy and light users

Psychographics – Attitudes, Interests Opinions

Benefits – functional, symbolic, experiential

Understanding … PRODUCT OFFERING (s)

1. Is your offering a good or a service or some combination? Do tangible search qualities exist or are attributes mostly intangible? Can your

product be stored easily… are there purchase barriers that must be overcome? What exactly is your customer buying?

2. How would you describe your offering [Identity] – would your customers agree [Image]?

3. What is your CORE offering (functional utility)… what SUPPLEMENTAL features enhance the core

offering? Are the benefits sought by consumers more functional, symbolic or experiential… is there room

for one more product (or modified product) within the market? [Sales Tax Index]

4. Is the demand for your offering seasonal, cyclical, derived, growing …for each targeted segment? Do you

know your average purchase cycle by served segment and by product line?

5. How has your offering changed over the past 5 to10 years [why] – are there emerging trends? Is it

time to prune, harvest, divest old business/products to release needed resources?

6. Finish this sentence, “If the consumers knew _____________ they would all buy from me.”

Understanding … MARKET ENVIRONMENT

1. At what level of competition do you compete (industry, product category, product form, brand, product attribute) … are your

competitors local, regional or national & is it the same for all markets … is consumer demand need based … is the market growing

…is there a dominant market leader … how much competitive intensity is there?

2. Is your offering more of a necessity [if it is, then selective demand is more important] …or mostly

unsought/emerging [if it is, then primary demand must be created] …are market promotions

comparative (selective demand) or competitive (primary demand)?

3. How new is your product category… is the market already saturated – is distribution selective or

intensive … how many competitors & how similar are they to each other?

4. Who are the competitors within your strategic group and what is your relative ranking for Share

of Voice (Promotion Effort), Share of Mind (Market Awareness), Share of Heart (Market

Preference / Consideration Set) and Share of Market (Market Choice )?

5. What product attributes are most important to your customers & which are most likely to reflect

the values that drive purchase decisions? How homogeneous is the market response (clustered

vs. concentrated)? How price sensitive is the market?

6. Which attribute/benefits do you share with your competitors (POP; Points of Parity) and which

are you distinctive (POD, Points of Difference)?

7. What emerging trends are beginning to take shape within your market environment?

ENVIRONMENTAL FACTORS: Social - Demographic - Economic -Technological - Political & Legal - Competitive

8. What does your potential/served market look like … what are their likes, dislikes, attitudes, opinions, interests, where do they live, how old

are they, how much wealth do they have, what do they do for fun, etc? Are there market growth opportunities?

9. Porter identified significant competitive influences – how does each relate to your current situation? Supply Chain Buyer vs. Supplier Power,

Potential New Entrants; Substitute Products; Intensity of Competition (how hard will they fight to gain/keep market share)

INTRO

DECLINE

MATURE GROWTH

Product ……………………………………………………

Place ……………………………………………………

Price ……………………………………………………

Promotion ……………………………………………………

?

Star

Dog

LOW HIGH

Market

Share

HIGH

Market

Growth

LOW Cash

Cow

BCG

PLC

Step #2… examine your ‘targeted’ served market

and your competitive position within your defined potential

market….are you where you need to be …is it time to consider

new opportunities or possibly leave some markets

Step #1… look at the

potential market to determine if

natural homogeneous groupings /

segmentations exist … and/or if

environmental factors are changing

MARKET Homogeneous

response to market

stimuli by those with

…ability, willingness,

and authority to buy

Product Market Map

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What is the profile of your Penetrated Market? What do your customers like about you?

What does your ‘best’ customer look like?

Do others within the potential / served

market look like them?

Understanding … CUSTOMER BASE .

1. What do you customers value; what do they perceive to be the consequence of buying / not buying

your market offering? Do they feel different about your nearest competitor?

2. How do you connect with your market – do your customers seek you out or must you reach out to

them? Will awareness alone generate traffic?

3. Do you know why market consumers buy from you? From your competitors? What brings

your customers back for more? Have you considered the differences between the stated needs /

real needs / secret needs / delight needs.

4. Have you conducted PROTOCOL, LADDERING & PARTIONING & CONSUMPTION analysis?

5. How many potential customers enter your store but do not purchase anything? What does your

prospect to customer conversion ratio and ‘average sale’ trend mean to you?

6. What is your customer churn/retention rate … why? What % of your customers are Loyalists,

Switchers and/or Stockpilers? Are they Deal Prone?

7. How do you capture the ‘voice of the customer’…. [mystery shops, focus groups, panels, surveys, cashier

questions, observation] ? Have you ‘walked their walk” to experience doing business with you from their

point of view - have you conducted mystery shopping on your competitor?

8. When is the last time you had a conversation with your customer, your prospective customer and your

lost customer? How did the conversation change your business approach / operations?

9. Do you know what your best customers look like… have you applied the 80-20-30 principle? Have you coded your customers using

RFM by product lines and purchase cycles? How does your served market compare to your potential market

Marketing

Information System

(MIS) to listen to

the ‘voice of the

customer’

Internal Records

Market Intelligence

Market Research

…Panels

…Observation

…Focus Groups

…Projective Techniques

If I could only…

..First word that comes to

mind when you hear

“_____”

Laddering

(values)

Protocol

Analysis

(process)

Partitioning

(attributes)

Do you ask

customers… “how was

everything?”…or…”did you

find everything you needed?”

… Does it matter what

their answer is?

A latent need

precedes a

market demand

and is revealed

by emerging

trends

Values

Offering

Consequences

Step #3…compare the profile of your penetrated

market to the profile of your potential/served markets. Consider (width

of the Mix & depth of the Lines) the trending of your market share, the

strength of customer loyalty and the lifetime value of your customers.

Weaknesses

Threats Opportunities

Strengths

SWOT…Likelihood/Severity Analysis Strategic

Window Capacity – Time – Resources

needed for growth in a

Market that has room for one

more competitor / growth

INVEST &

Grow

DIVEST

?

Star

Dog

LOW HIGH

Market

Share

HIGH

Market

Growth

LOW Cash

Cow

Growth Strategy Intended / Realized

Your ‘End Game’ is to have your geographical market clearly defined; your potential, targeted and penetrated market profiled; your product

offering and customer needs/values sought understood; your competitive strategic group identified with your competitive position

(competitive forces now and in the future) researched. Order to remittance flowchart with touch points; Laddering, protocol, partitioning &

consumption analysis of gatekeepers; List of prospects & target markets (clustered);

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Innovation

Product Enhancements & Quality Improvements

Change Market Perceptions

INTRO

DECLINE

MATURE

GROWTH

Product ……………………………………………………

Place ……………………………………………………

Price ……………………………………………………

Promotion ……………………………………………………

?

Star

Dog

LOW HIGH

Market

Share

HIGH

Market

Growth

LOW Cash

Cow

BCG

Product Market Map

Your options will vary

depending on …

IF …you are / are not the NEW ENTRY

in a current MARKET

IF …you truly do have a ‘better

mousetrap’ and a SUSTAINABLE

COMPETITIVE ADVANTAGE

You will need to discover competitive weaknesses, target the

most likely switching consumer through comparative

promotion based on delivered value

Compatability

Trial ability

Acceptance

Advocacy

Trial

(Recognition / recall) TOM awareness

Heuristic loyalty

Comprehension

Building of Expectation & Meaning

Awareness

Complexity

Observability

Satisfaction

IF …the potential TARGET MARKETS

have each recognized the NEED for your

market offering and are AWARE you

exist and consider your offering of

VALUE and barriers of entry are

minimized to reduce the risk of TRIAL

…. You are in a good position to enter

the market as a viable competitor

Need Recognition

Search --internal then external

Alternative Evaluation

Choice

Post-Purchase Response

If you encourage a consumer to action when

you do not have a competitive advantage you

will send them to your competitor.

…a new entry in a current market must immediately work to develop BRAND

EQUITY …made up of Awareness and Image… each insufficient by itself

If it is a new market, PRIMARY demand must be

developed; then SELECTIVE demand

Henry Ford once

said, ‘If I had

listened to the

marketplace, I

would have built

a faster, cheaper

horse.”

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80-20-30 Principle

Recency – Frequency – Monetary Value (RFM)

Prospect / Customer Conversion Ratio

Customer Retention Rate/ Lifetime Value

Lost Customer Analysis

C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg C ur A vg # % # %

Aug 160 230 8.0 5.9 9.0 3.2 4.0 2.6 15.0 6.3 4.0 2.0 5.0 2.9 2.0 1.3 1.0 1.5 3.0 2.4 1.0 1.5 1.0 1.6 3.0 2.4 2.0 1.6 2.0 1.2 5.0 1.7 8.0 4.0 73 46% 42 18%

Sep 237 225 12.0 5.7 7.0 2.3 19.0 6.5 4.0 1.9 8.0 2.3 5.0 1.3 2.0 1.5 4.0 2.4 0.0 1.5 3.0 1.5 4.0 1.2 5.0 2.7 6.0 1.6 2.0 1.2 11.0 4.3 1.0 1.6 93 39% 40 18%

Oct 236 243 15.0 7.2 15.0 6.9 3.0 2.5 12.0 3.4 4.0 1.9 5.0 1.9 4.0 2.3 6.0 1.6 2.0 1.6 3.0 1.9 2.0 1.7 7.0 2.3 6.0 2.0 9.0 4.5 3.0 1.1 5.0 1.8 101 43% 45 18%

Nov 251 288 17.0 14.1 5.0 3.4 4.0 3.5 3.0 2.3 3.0 2.8 5.0 3.3 2.0 2.2 2.0 2.0 2.0 2.1 1.0 1.7 2.0 1.9 11.0 3.5 12.0 7.2 1.0 1.6 2.0 3.1 3.0 1.8 75 30% 57 20%

D ec 1346 1216 38.0 5.2 18.0 3.8 10.0 1.6 8.0 1.5 4.0 2.4 5.0 1.6 2.0 1.6 12.0 1.3 10.0 1.2 6.0 1.2 7.0 1.6 88.0 8.4 6.0 1.4 15.0 2.4 5.0 1.1 1.1 234 17% 37 3%

18.0 7.6 10.8 3.9 8.0 3.3 8.4 3.1 4.6 2.3 5.0 2.2 2.4 1.8 5.0 1.8 3.4 1.8 2.8 1.6 3.2 1.6 22.8 3.9 6.4 2.8 5.8 2.2 5.2 2.3 4.3 2.1 25.8% Avg. 10.0% Avg.

90.0 38.1 54.0 19.6 40.0 16.7 42.0 15.4 23.0 11.4 25.0 11.0 12.0 8.9 25.0 8.8 17.0 8.8 14.0 7.8 16.0 8.0 114.0 19.3 32.0 13.8 29.0 10.9 26.0 11.3 17.0 10.3

10th M onth Current

C urrent

compared

t o

B enchmark

15th M onth 17th M onth16th M onth11th M onth 14th M onth7th M onth 8th M onth 9th M onth2xxx

5 Month Tot #

Benchmark

17 Month Response

Pattern

2nd M onth 5th M onth

Benchmark = Avg = 10 year average from 1995 - 2005 - includes lay aways

5 Month Avg

3rd M onth 4th M onth 13th M onth12th M onth6th M onth

258.4%231.8%

increase

200%

increase

590.6%

increase

201.7%

increase

227.2%

increase

New Customer -(Segment A) - In State (MO) - Responses From (August 1, 2xxx - July 31, 2xxx)

236.2%

increase

239.5%

increase

275.5%

increase

Page 1 of 2

134.8%

increase

284.1%

increase

272.7%

increase

266.1%

increase

230.1%

increase

165.1%

increase

239.5%

increase

179.4%

increase

Penetrate

Current

Market

Current

Product

Your #1 … Opportunity

…is doing more of what you

already do….better!

Build Primary Demand … especially if you are in the

growth stage of the PLC and if you are the market

leader with a competitive advantage

Build loyalty & Selective Demand …make sure

IMAGE matches IDENTITY … look for market GAPS

…understand how demand elasticity impacts your

sales …know your best customer profile and find

others just like them……consider a “beneficial”

frequency / loyalty program

Be Distinctively Better …increase the value your

customers receive and reduce their cost of doing

business with you. …it turns customers into advocates

and reduces price sensitivity

Improve RFM …create campaigns to increase usage

and up-sell current customers, increase average sale,

improve retention

Conduct Lost Customer Analysis

Listen to your customers – walk in their shoes!

MOST businesses are existing businesses within a

mature market … so that is where will start…..

ULTIMATELY, we want to grow our business by growing market

share – in most cases, this will come from our

competitors…. We

would do well to remember that they have

the same goal!

An important question to ask

is….are your current

customers ‘loyalists’

‘switchers’ ‘stockpilers’

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New Market & New Product

Market

Development

Look for unmet market demands and

create a new CATEGORY if you can

…consider an economy (entry) brand

Find new product uses by creating

dramas, new realities, artificial

scarcities, celebrations and the like

Merge market channels: go

international, brick & click = embrace

digital marketing

Look for Niche opportunities

What do bankers, an empty-nester

and a young married family

member have in common?

Product

Development

Extend your line and/or add to your

mix especially if the market is clustered

Bundle - Joint Venture – Co-op with

compatible / noncompeting offerings

(Industry Convergence)

Gas / Groceries & Cell phones/ GPS

Your #2 … Opportunity …

Look for unmet needs, emerging

trends , competitive weaknesses,

market activities to link with.

Steinway Piano (Specialty Item)

9 months to make 12,000 parts

Made on-site - 2% Market Sales

25% Market Sales Revenue

35% Market Profit

95% Market Share of Concert Pianos

Launched a mass market economy brand to

compete – made in 20 days in china

Your #3 … Opportunity … ask

yourself what other groups could/should

be buying your product & what is the best

way to position your offering

Current

Market

New

Product

New

Market

Current

Product

If I could only…

A latent need

precedes a

market demand

and is revealed

by emerging

trends

Dodgers changed $3 empty seats

into $20 all you can eat seats and

filled the section….”everyone was

fat and happy.”

LYFT ride

Segment

Invasion

Plan

A B C 1

2

3

4

…what are our growth

options?

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Segments (micro marketing) …are discovered and not created

…There are four levels of micro marketing…Segments, Niches, Local areas and Individuals

…Segments (micro markets) have a homogeneous response to a product offering & market stimuli

…Niche is often a subsegment of a segment

Distinct set of needs

Will pay a premium

Not likely to attract competitors

Gains economies through specialization

Has the size, profit and growth potential

There are four Segmentation Categories … past behavior is the best predictor of futjure behavior

…Demographics (age, life state, gender, income, generation, social class, etc)

…Geographics (state, region, metro, town, zip code, census track/block group/block, postal route, etc)

…Psychographics (attitudes, personalities, interests, opinions, etc)

…Behaviors (occasions, benefits sought, user status, usage rate, loyalty, readiness, etc)

Roles: initiator, influencer, decider, buyer, user

Loyalty Status: hare core loyalist, split loyalist, shifting loyalist, switchers

Market Diffusion: Innovators, early adopters, early majority, late majority, laggards

“laddering” values & “protocol” the process & “partitioning” the attributes

Markets are seldom homogeneous – it is unlikely that all segments can be effectively served…. Can the benefits be articulated convincingly to a defined target market(s)?

Can the target market(s) be located and reached with cost effective media and trade channels?

Does the company possess/have access to critical capabilities needed to deliver the customer benefits?

Can the company deliver the benefits better than any actual or potential competitor?

Will the financial rate of return meet or exceed the company’s required threshold for investment?

Consider

Distinctive

Market

Segmentation

Geographic Region, Density,

Climate

Demographic Occupation, Age, Life

Cycle, Gender, Income,

Education, Religion,

Race, Social Class

Psychographic Activities, Interests,

Opinions, Personality

Behavior User Status, Loyalty,

Readiness, Benefits

Sought

Assess

Homogeneity

of Market

Response

Concentrated

Diffused

Clustered

Choose your

Target(s)

80-20-30

RFM

Measureable

Substantial

Accessible

Differentiable

Actionable

Profitable

Segmentation

Invasion Plan Differentiate

Undifferentiated

Single Segment

Niche

Individual

Position

Value based defensible

differentiation position

statement with drawn

meaning from the

culturally constituted

world (perceptual field

of target market)

…Segmentation… the first thing we do is to look at the market and see which

segmentation variables seem to ‘make a difference’ and if the market is DIFFUSED /

CLUSTERED or CONCENTRATED.

Close examination will reveal weaknesses

and strengths of both yourself and

competitors (example: why and with whom

are customers shifting loyalties)

Market

… Positioning… act of designing an offering to occupy a distinctive place in the mind

of the target market in an UNDIFFERENTIATED / DIFFERENTIATED /or NICHE approach

based on their similarity and their ability/willingness/authority to buy……undifferentiated will

use more mass media, has economies of scale and is most often part of a low cost strategy

Product Market Map

… Targeting… requires an analysis of the competitive frame of reference based on

available resources, sales estimates, competitive assessment, both scope and scale

considerations and the value/cost relationship for both the company and the

customer…determine if you are able to identify, divide, and reach profitably with distinctive

offering and sustainable competitive advantage

Segment

Invasion

Plan

A B C 1

2

3

4

…pursuing a variety of segments diversifies your risk

…market / product specialization has both pros and cons

…a niche approach…’puts all your eggs in one basket’

…’counter segmentation’ can reduce risk Position tooth paste for white teeth & fresh breath & cavity protection

…be intentional: flankers, cash cows, low end entry traffic builders, high-end prestige

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- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Springfield

MSA

Springfield

MSA

Census Tracts

Springfield

MSA

Census Tract 26

(4) Block Groups

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Mosaics – PRIZM - Demographics Now – Tapestry - Simmons

http://guides.business-strategies.co.uk/mosaicusa2011/html/animation.htm - http://thelibrary.org/

--------------------------------------------------------------------------------------------------------------------

IS / has … [100 Index = Average / ‘normal’]

46 years of age (median)… compared to 35.6 years of age for

the Springfield Market as a whole… one Block Group is 51

More likely to have a club membership (136 Index)

More likely attend a Performing Arts event (136 Index)

A higher Household Net Worth (147 Index)

More likely to give to a Religious cause (140 Index)

More likely to give $250+ to a worthy cause (148 Index)

Credit Card usage in $451-$700 range (158 Index)

3-9 Investment Transactions / month (177 Index)

Any Mutual Funds (166 Index)

$2,000+ spent on clothing / year (149 Index)

$1,000 - $1,499 spent on fine jewelry / year (161 Index)

Bought a Rolex watch last year (165 Index)

$3,000+ spent on television / year (169 Index)

Used house cleaning 2 – 3 / year (220 Index)

Prefers Radio TALK Format (156 Index)

Visited Bed, Bath & Beyond / last 3 months (162 Index)

More likely to use dry cleaners (172 Index)

Not likely to wear clothes over 1 year old (177 Index)

72 % are “Thriving Boomers” (10.2%)or “Booming with

Confidence”(12%) or “Autumn Years” (33.7%) or

“Golden Guardians”(16.4%)

DO / are NOT …

Campers (88 Index)

Bowlers (96 Index)

Listen to COUNTRY Radio Format (71 Index)

Influenced by Billboard Ads (90 Index)

Consider foreign cars prestigious (66 Index)

Spend $100+ in a convenience store (85 Index)

Visit Silver Dollar City (51 Index)… however, the

index for visiting any amusement park is 104

Pay attention to movie theater ads (88 Index)

Consider specialty store brands to be of value (83

Index)… nor do they consider the quality of

specialty stores to be of value (85 Index)

Do not agree with the statement, “I buy what I

want, when I want it and price is not an issue.”

(92 Index)

One Census TraCT… within the Springfield Market

Census Tract = 29077002600 There are over 12,000 profiling descriptors

available

… within the Springfield Market

Census Tract …has 4 Block Groups

Average Household Income = $74,911 (138 Index)

Median Household Income = $57,326 (131 Index)

Overall Leisure Score = 169 Index

http://guides.business-strategies.co.uk/mosaicusa2011/html/animation.htm

http://thelibrary.org/

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Block Groups 6001 6002 6003 6004 Block Groups 6001 6002 6003 6004

2000 Median Age 49 49 46 46 Gave money to religious

organization 99.3 74.58 95.27 137.93

2010 Median Age 46 44 42 51 Very Likely - remodel bathroom 98.21 67.03 81.06 130.95

Population 1168 904 1201 1531 HH owning $$ CD's 95.2 69.3 86.9 131.3

Autumn Years 43.04 39.42 27.68 28.65 Very Likely - remodel kitchen 94.60 66.77 81.61 122.42

Booming with Confidence 12.84 17.20 3.29 16.17 Downhill Skiing 91.55 82.39 79.34 134.27

Thriving Boomers 12.84 7.41 7.41 12.06 Weekend Newspaper VERY USEFUL 89.79 64.48 87.81 120.25

Golden Year Guardians 12.30 14.29 20.26 17.45 Wallgreens (last 6 months) 88.61 64.15 88.61 119.94

INDEX INDEX - based on Springfield

MSA

Somewhat Conservative Politically 88.32 65.12 86.69 122.51

Leisure Score 189.22 177.63 185.84 170.39 Adult Education Course (last year)

86.34 65.03 84.21 118.32

Perform Arts/Movies HH Exp 185.2 148.6 112.0 187.4

Used YP to find Florest (last year) 85.14 65.58 87.44 120.80

Social / Rec Club Mbrship HH Exp

178.5 143.2 107.2 180.7 "I decide what I want before I

shop" 84.47 71.25 76.64 137.85

Health Score 163.21 174.02 168.85 159.22 Very willing to pay more for

electronics 83.95 61.01 83.58 111.94

Average HH Income 163.0 128.8 95.6 158.0

$100+ spent on Baby Furniture 82.84 53.25 82.84 88.76

Gave gifts of jewelry (last year) 152.61 116.35 97.32 151.28

$150+ spent weekly - Groceries 82.66 61.85 78.65 112.25

HH Net Worth 150.9 162.6 88.5 184.0

LOTTERY past 12 months 80.93 57.29 79.90 104.05

"I buy what I want, price not an issue."

148.93 18.62 31.91 66.48 Incentives Influence my car

purchase 80.85 56.67 82.19 107.17

Dinner Out HH Exp 143.8 121.3 97.4 140.6

I plan to buy a car 80.76 59.07 83.37 111.04

Pharmacy/ Drug Store HH Exp 142.9 120.1 97.8 141.3

Applebees (last 6 months) 80.01 57.65 81.89 103.71

House Cleaning 2-3 times 141.09 123.46 123.46 246.91

Wood Working (last year) 79.03 54.08 74.88 101.22

Presc Drugs HH Exp 137.4 119.9 98.9 135.4

Discounts influence my hotel choices

77.86 55.94 81.64 104.31

"I avoid TV commercials." 125.98 58.49 35.99 89.98 Fast Food Drive-Thru (last 6

months) 76.31 54.35 77.98 101.03

"I prefer speciatly stores/ knowledge."

123.98 48.32 51.69 112.37 "I prefer speciatly stores / quality." 75.00 46.43 59.52 59.52

Bought a Rolex watch (last year)

123.46 61.73 123.46 185.19 Follow advice of my mechanic

74.81 52.35 77.66 99.64

3-9 Investment Transactions (last year)

122.54 96.28 111.6 183.81 Fast Food Restaruant

74.6 50.3 78.1 84.8

Quality of Life Score 119.03 122.98 124.36 120.81 Visited a Theme Park 73.78 56.04 70.96 102.00

$ Spent for Drycleaning 118.39 95.99 104.95 179.18

Restless Leg Syndrome 72.39 48.91 76.31 90.00

Own any mutual funds 117.86 90.86 105 167.57

Bowling 69.86 46.57 69.86 93.15

Economic Score 115.92 121.11 120.37 119.07 Any Camping

65.04 44.60 65.04 82.69

Televistion Sets Big Ticket $3,000+

114.85 91.88 114.85 168.45 "Foreign Cars are more

Prestigious." 64.90 50.87 66.65 8.77

Bed bath & Beyond (last 3 months)

111.76 89.41 106.93 162.51 Billboards are of Considerable

Interest 64.57 44.53 71.25 82.39

Avg Monthly CC charge = $451-700

111.2 88.03 109.65 151.35 Family Restaurant / Steak House

63.2 52.4 85.3 98.6

"I do not wear clothes over 1 yr old"

111.10 55.55 30.30 315.62 $100+ spent Convenience Stores

61.60 41.65 65.12 78.03

Radio - Talk Format 110.91 83.18 98.58 163.28

"Vitamins/ Nutrients make a difference."

57.96 79.89 75.38 116.83

"I prefer speciatly stores - brands."

110.03 46.76 34.39 57.08 "Branded prescriptions are better" 55.12 61.93 68.74 108.32

Spent $1,000 = $1,499 fine jueelry

108.58 86.86 97.72 162.87 Education Contributions (last

year) 49.1 65.1 185.02 71.95

Belong to any auto club 107.35 81.75 102.99 149.83

"I pay attention to movie theater ads."

40.77 35.04 85.36 94.92

Prof Exterminators (last year) 103.93 76.91 97.69 149.66 Visited Silver Dollar City 40.32 26.88 53.76 40.32

Travel Magazine 101.29 76.26 95.33 152.53

Financial service ads are interesting 34.79 69.05 51.66 146.54

$2,000 + spent on clothing 100.97 82.94 93.76 158.67

Radio - Country Format 29.20 19.11 29.97 37.00

Green = >130 Index

Red = < 60 Index

of 35


Tapestry Segmentation Area Profile – Springfield, MO http://thelibrary.org/research/business.cfm?lid=46

Households U.S. Households

Cumulative Cumulative

Rank Tapestry Segment Percent Percent Percent Percent Index

1 53. Home Town 16.1% 16.1% 1.4% 1.4% 1,150

2 48. Great Expectations 14.3% 30.4% 1.7% 3.1% 841

3 33. Midlife Junction 13.3% 43.7% 2.6% 5.7% 512

4 55. College Towns 12.0% 55.7% 0.9% 6.6% 1,333

5 36. Old and Newcomers 7.5% 63.2% 2.0% 8.6% 375

Subtotal 63.2% 8.6%

6 57. Simple Living 6.0% 69.2% 1.4% 10.0% 429

7 14. Prosperous Empty Nesters 5.5% 74.7% 2.1% 12.1% 262

8 30. Retirement Communities 3.9% 78.6% 1.6% 13.7% 244

9 29. Rustbelt Retirees 3.7% 82.3% 2.0% 15.7% 185

10 07. Exurbanites 3.1% 85.4% 2.5% 18.2% 124

Subtotal 22.2% 9.6%

11 63. Dorms to Diplomas 2.8% 88.2% 0.5% 18.7% 560

12 60. City Dimensions 1.8% 90.0% 0.9% 19.6% 200

13 65. Social Security Set 1.7% 91.7% 0.7% 20.3% 243

14 13. In Style 1.6% 93.3% 2.3% 22.6% 69

15 52. Inner City Tenants 1.2% 94.5% 1.4% 24.0% 86

16 50. Heartland Communities 1.1% 95.6% 2.0% 26.0% 55

17 22. Metropolitans 1.0% 96.6% 1.4% 27.4% 71

18 41. Crossroads 0.9% 97.5% 1.4% 28.8% 64

19 19. Milk and Cookies 0.8% 98.3% 2.2% 31.0% 36

20 03. Connoisseurs 0.7% 99.0% 1.3% 32.3% 54

Total 99.0% 32.3%

306

Index “trend” Reviews

…Sales tax by SIC

…UPC syndicated data

http://www.esri.com/data/esri_data/pdfs/tapestry/segment53.pdf




















of 35


Innovation… is the key to continued market

dominance and growth

MOSIAC Targets/RFM/80-20-30 - plus high DN Index, plus high Seasonal Code, plus missed Purchase Cycle, plus high Product code

1 2 3 4 5

Recency & Monetary

Value Affluent Suburbia

Upscale / Small Town

American/Aspiring/Urban

Metro / Rural Remote/Blue/ Struggle/Vary

Recent Top $

20%

Mail to all except Control Group





20% Mail to all except

Control Group Mail to all except



Control Group

Mail only to Stratified

Proportional Control Group …

Plus matched Psychographic

Within 2

years 20%



Mail to all except Control Group Mail only to

Stratified Proportional

Control Group … Plus matched Psychographic


Control Group








Control Group

Distant Top $

20%










Control Group




within 3 - 5

yrs 20%



Mail to all except Control Group Mail only to



20% Mail only to









20%

Renewal Top $

20%










Control Group




Over 5 years 20%













20%

20%

Consider

Distinctive

Market

Segmentation


Climate




Race, Social Class




Readiness, Benefits

Sought

Assess

Homogeneity

of Market

Response

Concentrated

Diffused

Clustered

Choose your

Target(s)

80-20-30

RFM

Measureable

Substantial

Accessible

Differentiable

Actionable

Profitable

Segmentation


Undifferentiated

Single Segment

Niche

Individual

Position




meaning from the



of target market)

Delta Education applied the 80-20-30

principle and RFM analysis to target

‘multiple purchase segments’\

“The faster customers get from that first

order to the second order, the better their

lifetime value and retention.”

of 35


SEMIOTICS

Study of signs and nature of

meaning producing events

MEANING IS A CONSTRUCTIVE PROCESS…

SOMETHING PERCEIVED

THAT SIGNIFIES SOMETHING (REFERENT)

TO SOMEBODY (INTERPRETER) IN SOME CONTEXT……..

S H A P I N G

From the Book The 22 Immutable Laws of Marketing by Al Ries & Jack Trout

Marketing is a battle of perception, not product. It's an illusion, there is no objective reality, there are no facts, there are no best

products, and all that exists in the world of marketing are perceptions in the minds of the prospect/customer. Therefore, the mind

takes precedence over the marketplace. Being first in the mind is everything in marketing. Once the consumer mind is made up, it

is like going head-to-head against an entrenched enemy. If you want to make a big impression on another person, you cannot

worm your way into their mind and then slowly build up a favorable opinion over a period of time - you have to blast your way into

the mind. When you have an open mind to work with, even a small amount of promotion money can go a long way. -A Honda in

New York is a car, a Honda in Japan is a motorcycle; -Why is Campbell’s' soup No. 1 in US and nowhere in the United Kingdom;

Why is Heinz number 1 in the United Kingdom and a failure in the US; -Coke "proved" that New Coke is No 1 in taste (200,000

taste tests), so why is it number 3 in sales and Coca-Cola Classic number one in sales and "proven" to taste worst?; -In 1986, CBS

broadcast a "60 minutes report" that Audis had "unintended acceleration" and American sales fell from 60,000 in 1986 to 12,000 in

1991. Reality is that every single automobile expert who has tested the car has failed to duplicate the complaint reported by CBS.

Which is truth ?

Marketing is often a search for the obvious. Since it is difficult to change a mind once its made up, your marketing efforts have to

be devoted to using ideas and concepts already installed in the brain. You have to use your marketing programs to "rub it in."

The marketing arena can be viewed as an ever-expanding sea of categories. A category starts off as a single entity. Computer, for example, went

from mainframes to minicomputers to workstations to personal computers to laptops to notebooks, etc. Each time subdividing into new categories to be

first in. Each is a separate, distinct entity & has its own reason for existence and its own leader.

The basic issue in marketing is creating a category you can be first in. It's the law of leadership. It's better to be first than it is to be better. It's

much easier to get into the mind first than to try to convince someone you have a better product than the one who got there first. There are many ways

to be first. When launching a new product, the first question should be "First What," not "How is this product better than the competitors." Think

categories - and promote the category when you are the first in a new category. Your strategy will depend on how soon you get into the mind. The

mind is selective in that prospects use their "ladders" in deciding which information to accept and which information to reject. In general, a mind

accepts only new data that is consistent with its product ladder in that category. The stage of growth will impact the value of the third position for a

given brand - eventually, most categories become a two brand category, therefore, if you are in the introductory stage, penetrate and gain market share

and if you are in the mature stage, start looking for new avenues/categories. If you have a small market share and you have to do battle with larger,

better-financed competitors, then your marketing strategy is probably faulty in the first place. -Chrysler introduced the first minivan and today has 50%

of the minivan market. -Order of introduction matches market share (Advil = 51%, Nuprin = 10% Medipren = 1%). -Burger King (after research

indicated that fast was the most important attribute) attempted to position themselves as Fast . What was overlooked was that McDonald's was already

perceived as being the fastest hamburger chain in the country. Burger King launched its campaign with the slogan, "Fast food for fast

times"....consequently, Herb, the advertising agency and management was fired.

The leader owns the word that stands for the category. The "word" must be available in the category, must have a narrow focus and must be an

important attribute. If you are not the leader, do not go up against the leaders "word," rather, narrow the focus on an idea that is opposite the leader (be

a pro-business candidate since there will be those who support the other side; pro-life is a focused powerful word with an opposite proponent). -Scope

labeled Listerine as the "medicine breath" so they could be the "good tasting mouthwash that kills germs.

Leaders in one category should not simply extend their brand to enter a new category. The best approach is to enter with a different brand name

Line extensions and coupons/premiums increase activity in the short run, however, they neutralize the differential advantage of the brand in the category

over the long run -GM at first did this with Oldsmobile, Pontiac, etc., became too much alike and now the Oldsmobile is gone. There have been two

strong moves against GM, the Japanese came at the low end with small cars and the Germans came at the high end. Under pressure to commit

resources in an attempt to shore up the bottom and the top of its lines (saving money and maintaining profits) GM made the fateful decision to build

many of its midrange cars using the same body style and suddenly, no one could tell a Chevrolet from a Pontiac. The look-alike cars weakened GM in

the middle and opened up a move for Ford as it broke through with the Taurus and Sable. Now we have Toyota, Honda, Taurus, Sable, Mercedes,

BMW's and GM is weak across the board. -Honda introduced Acura and set up separate dealerships to avoid confusion. -A-1 is a steak sauce (by

perception), therefore, even after an $18 million advertising budget, the A-1 poultry launch was a dismal failure. Marketing is a battle of perception, not

product. -The generalist is often weak. Take Kraft, for example. Everybody thinks Kraft is a strong brand name. In jellies and jams, Kraft

has 9% of the market and Smucker's has 35% (Smucker's is only jellies and jams); In mayonnaise, Kraft has 18% of the market and Hellmann's has

42%. Kraft does have a leading brand in terms of market share; however its name isn't Kraft, its Philadelphia cream cheese with 70% of the market.

22 Immutable Laws …marketing is a battle of perception.

Exposure / Awareness is necessary but

insuffivient for communication of

meaning…. Consumers analyze first

with feature analysis then contextually

by active synbthesis, based on what

they bring to the occasion (their

perceptual field)

VIVA MARKETING!! An inter-0ffice

softball game was held every year

between the marketing and support staff.

The support staff whipped the marketing

department soundly.

Memo Posted on the Bulletin …

”The Marketing Department is pleased to

announce that for the 2000 softball season,

we came in 2nd

place, having lost but one

game all year. The Support Department,

however, had a rather dismal season,

winning only one game.”

Consider

Distinctive

Market

Segmentation


Climate




Race, Social Class




Readiness, Benefits

Sought

Assess

Homogeneity

of Market

Response

Concentrated

Diffused

Clustered

Choose your

Target(s)

80-20-30

RFM

Measureable

Substantial

Accessible

Differentiable

Actionable

Profitable

Segmentation


Undifferentiated

Single Segment

Niche

Individual

Position




meaning from the



of target market)

SIGN Stimuli used to evoke an intended meaning – anything

that is perceived by the senses and has the potential to

communicate meaning (internal response people hold for the

external stimuli)

of 35


Positioning is the act of designing an offering to occupy a distinctive place in the mind of the target market

A brand without equity is a commodity…Brand Equity = awareness plus a distinctive meaningful relative image Brand Awareness is necessary but insufficient; image drives brand equity – Top of Mind awareness is ideal with

recall second best and then recognition

Brand Image = A Value Driven customer perception of the offering based on a contextually constituted perceptual field

Brand Identity = A Value Based position statement offering the company’s distinctive market differentiation

Drivers of brand equity include Signs/Logos, market positioning and all associations (internal to

the customer and external by the company)

A brand must be…memorable, meaningful, likeable, adaptable over time, transferable to extensions, legally protectable

Marketing advantages of strong brands… Improved perception of product performance quality & conformance quality

Greater loyalty with relative market advantage

Less vulnerability to competitive marketing actions

Better margins and less elastic consumer response to price increases

A greater elastic demand response to price decreases

Better trade cooperation and support

Brand equity requires meaningful attribute differentiation… Points-of-Difference (POD) that give you distinction from your competitors must be relevant and believable (credible)

Points-of-Parity (POP) serve two purposes (1) provides category membership (2) designed to negate competitors POD’s

Sometimes attributes / benefits are negatively correlated and require separate positioning efforts (low calories / good taste;

fights dandruff/good for hair)

When it is not easy to differentiate by product attribute… add valued services, etc Atlantic group furniture can deliver

in 1 day - because of up-to-minute industry information, committed out sourcing partners, responsive

manufacturing, and extremely dedicated employees

Differentiation strategies could involve qualities/attributes/benefits/values such as…

Product Service Personnel Channel Identity Form Order Ease Competence Coverage Symbols

Feature bundles Delivery Courtesy Expertise Media

Performance Qlty Installation Credibility Performance Atmosphere

Conformance Qlty Cust. Tng. Reliability Events

Durability Consulting Responsiveness

Reliability Maintenance/repair Communication

Order Ease

Reparability

Style More Variables = Greater Differentiation Opportunity

Design (totality) Differentiate on 1, maybe 2, most 3 product variables

Strengthen your own position - Grab an unoccupied position - Deposition / reposition the competitor - Create image

of an exclusive club - Redesign - Alter beliefs - Alter importance weights – call attention to neglected attributes

Your market position will have a direct impact on your positioning strategy… For each category membership you hold, there will be a group of competitors – called a Strategic Group

Competitor Myopia is when you focus on only current competitors and not emerging ones. Watch for…

o Shifting degrees of differentiation and market position

o Entry – mobility – exit barriers (make it easy for competitors to exit)

o Cost structure differences – for some it is raw materials, others distribution costs, labor, etc

Share Metrics are important to monitor – Share of Voice, Mind, Heart, Market and Wallet Each category will face five competitive forces… in varying degrees

o Mobility threat of New Entrants into the category

o Emergence of new market substitutes for your offering – both consumer perception and reality

o Increased buyer leverage – Buyer Power

o Increased supplier leverage – Supplier Power

o Intensity of competitive rivalry – especially as market begins to shrink and competitors seek growth

Consider

Distinctive

Market

Segmentation


Climate




Race, Social Class




Readiness, Benefits

Sought

Assess

Homogeneity

of Market

Response

Concentrated

Diffused

Clustered

Choose your

Target(s)

80-20-30

RFM

Measureable

Substantial

Accessible

Differentiable

Actionable

Profitable

Segmentation


Undifferentiated

Single Segment

Niche

Individual

Position




meaning from the



of target market)

..First word that

comes to mind when you

hear “____” KEY is to take all associations into account – not

making the same mistake as Coca Cola

% ImpProd

A

Prod

B

Prod

C

100%

100%

100%

100%

100% 100% 100%

Att

rib

ute

s

Mind Share

Heart Share

Market Share

Constant

Sum

Analysis

Product Market Map

Customer Equity = [value equity + brand equity + relationship equity]

of 35


Strategy is impacted by… Product Classification… Specialty – Shopping - Convenience Product Tangibility… Separatability, Variability, Perishability Product Mix vs. Line Decisions…

Lines get deeper, especially if Market Share is a goal

There are economies of scale / scope with a wider mix

Adoption Sequence is Important… Innovators, early adopters, early majority, late majority

and laggards

Opinion leaders & Connectors are critical to adoption

Five characteristics influence adoption

o Compatability

o Complexity

o Trialability

o Communicability

o Relative advantage

There is a reason why the Marketing Mix

elements are called variables!

INTRODUCTION - GROWTH - MATURE - DECLINE Innovators Early adopters Early majority Middle majority Laggards

(4 C’s) 4 P’s of the MKT MIX

(Customer Solution) Product Variety – Quality – Features – Bundling – Warranties – Package Size

Classification Specialty Good Shopping Good Convience Good

Competitive Forces New Entrants / Supplier Power Buyer Power / Substitute Products / Intense Competition

Line / Mix Lines start to deepen and Mix will become wider

# of Substitutes None Few Some Many Few

Low sales & high cost per customer Peak sales and low cost per customer

(Customer Convenience) Place Coverage, Assortments, Inventory, Transportation, Channels

# Outlets Exclusive Selective Dual Distribution Intensive– Mass Distribution Selective

Chain Integration Building Integration Fully Integrated

(Customer Communication) Promotion Sales Promotion, Advertising, Public Relations, Direct Marketing, Personal Selling

Response Hierarchy Focus (PUSH) Awareness - Building Loyalties (PULL) Reminder

Product Demand Efforts Primary Selective Impulse

“Best” theory 3 Exposure Hypothesis (awareness) Shelf Space Model(reminder)

Encourage Trial Increase Brand Switching Minimal

(Customer Cost) Price Time/Money/Energy/Psychic - Discounts, Allowances, Returns, Credit Terms - Break Even Analysis

Elasticity Minimal Some High

Margin High Some Low

Profit Negative Good Low

Most competitive advantages are lost within a short time period – that is why it is always better to differentiate on values & experiences vs. features

Capacity tends to be overbuild during rapid growth and when a cyclical slowdown occurs, margins are driven down and competitive intensity increases

Competitive based Positioning Strategies

o Market-Leader (40+% of market share): expand total market demand; protect current market share (position, flank, preemptive

defense measures); expand market share, innovate

o Market-Challenger: look for market weaknesses and unoccupied positions, innovate

o Market-Follower: become a cloner, and imitator or an adaptor of the market leader – let them innovate

o Market-Nicher

Shake Out

Stage

Markets, not

marketers, determine

the PLC Stage

The reality is that

most products within

a given category are

in the mature stage

and similar;

Therefore, the

marketer is faced

with a double

whammy (slightly

involved consumers

and a me-too brand)

Augmented Product

Expected Product

Core

Product

Product Life

Cycle

Product

& Place… few many few

Promotion … awareness comparative reminder

Price Issues……Skim vs. Penetrate…………………Floor & Ceiling

Growth Stage Monopolistic Competition

Mature Stage Pure Competition

Decline Stage Oligopoly

of 35


GENERIC PLC STRATEGIES

During the Introduction Stage: Work on delays in production, technical problems, distribution networks

and customer loyalties; Use promotion money to induce consumer trial (pull) and secure distribution (push);

Pursue Skimming or Penetration pricing based upon your relative market position and entry barriers; Seek

the Pioneer advantage but plan for the progression of the PLC.

During the Growth Stage: Consider product modifications ( new models, improve quality, add new lines &

flanker products, add features, improve styling, modify product / price gaps; Market modifications ( convert

non-users, enter new markets, steal market share, increase usage & frequency, volume used and new uses);

Increase distribution coverage and intensity and shelf space exposure; Respond to natural changes in the size

of the industry (economic outlook, demographic shifts, etc); Shift moves from building primary demand to

selective demand; Improve market position relative to competitor position (image); Lower prices or add

economy brands to attract next layer of consumers & switchers. Converge two industry trends and introduce

a hybrid product or service – Cell phone manufacturers added digital photo & GPS

During the Mature Stage: Take advantage of natural changes in the External Environment; Find new users

and new uses; Innovative product modifications; Stimulate non users /light users; Increase Occasions for use;

Expand distribution coverage, intensity and exposure; International production and sales – most products are

in the mature stage.

During the Decline Stage: Harvest or Divest or Dominate. Increase investment to buy out competitors to

dominate the market; Lower the exit barriers for competitors Decrease selectively to drop unprofitable

customers.

All of the following are true statements

1. Declining profit margins in late stages can reflect a shift in focus to price rivalry

2. Declining profit margins in early stages, may reflect too intense of capitalization

3. Generally, as a market grows in primary demand, the pioneer benefits most from the growth

4. A marketing strategy should be reformulated several times during a product’s life – expect it and plan for a seamless

progression!

5. A customer value package includes both tangible and intangible benefits – intangible are harder to help your

customer see but easier to defend against competitors

6. Companies should try to reduce exit barriers to help ailing competitors.

7. Not all industries have the same opportunity to differentiate

8. There are diminishing returns when it comes to quality product enhancements

9. Acceptance of the Life Cycle concept asserts that speeding up innovation is essential

10. It is sometimes better to be over budget and introduce to the market sooner than it is to be under budget and

introduce later

11. Rapid growth often leads to over capacity and lower margins

12. Monopolistic competition occurs within a market that is less homogeneous

13. Vertical concentric integration has disadvantages in that once the integration happens, it is more difficult to exit the

market and more likely to result in a fight for market share.

14. Elasticity of demand and overcapacity creates competitive intensity of a market.

15. PLC’s tend to be longer if the product meets a genuine need, is consistent with other trends and satisfies societal

values

16. Price skimming is best used in a market with high differentiation and low competitive rivalry

17. Promotion / sales ratio drops as the market leader moves from growth to mature stage

18. Most products are ‘me too’ products in the mature stage – which is generally the longest stage

19. The company faces a trade-off between higher market share and higher margin in late growth stage

20. The PLC cannot be controlled – it is driven by customer perception and must be monitored

21. “Shake out” begins in the mature stage– it is better if low exit barriers are in place

22. A latent need precedes a market demand and is revealed by emerging trends (trend analysis)

23. Consumer expectations are progressive, therefore, attribute-benefit-value based competition is dynamic (always

changing)

24. Competitor leapfrogging and technological innovation can eliminate pioneer advantage

25. Patterns of “conscious parallelism” are common in capital-intensive, homogeneous-product industries, especially in

the late mature / decline stages

ULTIMATELY,

we want to grow

our business by

growing/ stealing

market share

from our

competitors….

It would be wise

of you to

remember that

they have the

same goal!

of 35


Good Marketing / Marketing Management …is not an accident

…is meeting needs profitably

…is an art and science of choosing target markets and getting, keeping and growing customers

through creating, delivery and communicating superior customer value

…is backed by an effective Marketing Information System (MIS) involving internal records, market

intelligence and market research

Set of procedures and sources managers use to obtain everyday information about developments in the

marketing environment

…is the foundation of effective market demand forecasting (both primary and selective)

Potential Market Demand: Those with sufficient level of interest

Available Market Demand: Those with Interest, Income and Access

Target Market: Those with Interest, Income, Access and are Qualified

Penetrated Market: Those that have purchased

Exchange … is core of marketing

…is a value-creating process because it normally leaves both parties better off

…NEEDS are basic human requirements that become WANTS when deirected to specific objects and

DEMANDS when backed by an ability to pay. … there are Stated Needs (need for a car);

Real Needs (an economical running car vs. low cost car); Unstated Needs (an expectation that

it will be serviced); a Secret Needs (symbolic / experiential values involved); Delight Needs

(something beyond expectation)

Holistic Marketing … has a goal of building Customer Equity [brand equity + value equity + relationship equity]

…is the development, design and implementation of marketing programs, processes and activities that

recognize their breadth and interdependencies

…is mostly concerned with building mutually satisfying, long-term relationships with key

stakeholders to earn and retain their business (profits will follow)

…reaches beyond the cost efficiency focus of the production concept, the ‘better mousetrap’ fallacy

that product quality is all it takes, the selling concept that accompanies the perspective that

all products are unsought … INTO a proactive market orientation based on both customer’s

latent needs [strong need that cannot be satisfied by an existing product] and expressed needs

(reactive marketing)

…is the capturing of Customer Value through …Value Exploration, Value Creation and Value Delivery

Value Exploration: Company identification of new value opportunities based on the

understanding of the customer cognitive space, latent needs and need for participation

Value Creation: Create more promising value offerings to idenify ‘benefits’ from the customer’s

poin to fview, applying core competencies and partner effectively with collaborators

Value Deliver: How a company aligns its resources, capabilities, core competencies to deliver

the value offering more effectively and efficiently…with accountability

meaningful

Holistic Marketing … has a goal of building


The heart of the

inernal records

system is the

order –to-

payment cycle

Data Trends

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Customer Perceived Value …Benefits (functional, symbolic, experiential) less Costs (time, energy, psychic, monetary) Holistic Marketing is all about increasing customer benefits and reducing customer costs

Customer Satisfaction …both Performance and Conformance quality, based on expectation Holistic Marketing is all about meeting real needs and expectations – stated by companies & perceived by customers

…….defining and delivering quality requires

Identification of customer needs and requirements

Communication of these requirements to product designers

Process & delivery – correct and on time

Customer support

Staying in touch with customers

Obtaining customer & market feedback

Peter Drucker,” The aim of marketing is

to make selling superfluous….that the

product sells itself.”

Marketing is Value Exploration …the

identification of new value opportunities,

requiring an understanding of the customer’s

cognitive space, latent needs and their drive for

participation. It is beyond production

efficiencies, product quality and/or the selling

of unsought goods and all about the relevance

of the product attributes in meeting value

driven needs

Zig Ziglar,”…are you selling

what your customers are

hoping to buy?

Marketing is Value

Delivery … the alignment of

company resources,

processes, policies, training,

performance metrics,

incentives and

accountabilities for the

capturing of Customer

Value. Resources –

Capabilities – Core

Competencies – Competitive

Advantage (sustainable)

Marketing is Value

Creation …to create more

promising value offerings

through an examination of

costs and benefits from the

customer’s point of view

Identity – Value based distinctive

differentiation relative to competitors

Image – Value driven contextual

consumer perception

VALUE Based-

Product

Offering

Consequences

VALUE Driven Needs-

Advantages

& benefits

…functional

…symbolic

…experiential

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Quality Systems…

Identify Need

Customer Enters

Seat

Available?

Yes

NoWait

Seat & Drink Order

Eat Meal

Satisfactory

?

Yes

No

Customer Leaves

Order & Receive

the Meal

Make Payment

…there are several ‘sub-

processes’

External customer for

whom this process was

designed to serve

Suppliers are those that

provide information /

support

Internal customers are

those within the system

that receive your output

-Critical tasks & KSA’s

-- Risk Points

“what causes grief…

what get’s in the way”

Meaningful

Measurement

- Conformance

metrics

Six Sigma Control Charts-- Use of quality

‘tools’

-Plan-Do-Check-Act

…create a

“dashboard”

…then we identify Internal

Requirements & KSA’s needed to

meet customer needs

- JIT Training

-Tailored Recognition

Return it

& Wait

Holistic Marketing is the capturing of Customer Value [functional – symbolic – experiential]

…thru Value Exploration + Value Creation + Value Delivery

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The Corporate Lifecycle Managing Corporate Life Cycles, 2nd Edition by Dr. Ichak Adizes.

Published by the Adizes Institute. © 2004, Ichak Adizes

Infancy: Infancy begins the moment financial risk has been undertaken and the Founder quits his/her paying job, signs the loan

documents or promises 40% of the company to outside investors. Infant organizations are necessarily action-oriented and

opportunity-driven. The focus instantly changes from ideas to action. The time for talking is over. It is time to get to work and

produce results (sales and cash). Like a real baby, Infant organizations need two things to survive: 1) periodic infusion of milk

(operating capital), and 2) the unconditional love of their parents (Founder(s). Like a newborn baby learning to walk,

performance in Infant organizations is inconsistent. Unexpected crises appear with little notice. Because Infant organizations

lack systems, it's easy for them to get into trouble. Moving from one crisis to the next is normal. The Founder and all employees

constantly test the limits of their endurance for work, stress and confusion. Employees are often attracted to Infant companies

for reasons that go far beyond money; and their loyalty to the team often extends beyond the struggling Infant's ability to pay

them. They end up working seven days a week and sleeping under their desks but still there is not enough time and talent to do

everything that must be done. Lack of activity and stress can be a sign of an Infant in trouble. Normal problems: Customers

experience problems with the product or service; few procedures, rules, policies, or systems; 1-person show. No true delegation

Go-Go: A Go-Go organization is a company that has a successful product or service, growing sales and strong cash flow. The

company is not only surviving, it's flourishing. Key customers are raving about the products and ordering more. Even the

investors are starting to get excited. With this success, everyone quickly forgets about the trials and tribulations of Infancy.

Continued success quickly transforms this confidence into arrogance, with a capital A. Go-Go Companies Share These

Characteristics: Sales Drive the Ship. The Go-Go company is sales driven and has an insatiable appetite for growth. More is

better. Every opportunity uncovered in the marketplace must be pursued. The company is opportunity-driven rather than

opportunity-driving. It reacts rather than proacts to opportunities. In the rush to close the deal, agreements are sometimes signed

before the company really understands if it can do the work. When profit measurement systems are later put in place, it often

turns out that the Go-Go company increased sales by accepting new business that was unprofitable. Uncontrolled growth can

become an abnormal problem that will jeopardize the continued development of the company. Everything is a priority.

Strategically important tasks that are not urgent often get deferred to pursue the latest "hot" new project. Their leaders often

don't listen to criticism or warnings about difficulties of implementation. They do not listen because their single-mindedness is

what made them successful in the Infancy stage. To make matters worse, the entrepreneurial types who lead Go-Gos often have

difficulty articulating their ideas clearly. One listens and wonders, "What in the world does he/she want me to do?" The few who

can interpret the Founder's ideas become the people who get the business rolling. They become critically important insiders and

trusted confidants. Management is Often Ineffective (and Frustrated). With their personal involvement in the day-to-day work

of the company, Go-Go leaders often have little time to manage. Work is hastily assigned with scant attention to detail. When

pressed for clearer assignments, the response is often "you figure it out, I don't need to be involved in those details". As a result,

well-meaning, hard-working employees enthusiastically pursue their uncertain assignments, often making mistakes and errors.

Some Founders view these screw-ups as further evidence that "if I want something done right, I have to do it myself". They tend

to fix these problems by taking personal control. If perpetuated, this inability to effectively delegate will plunge the Go-Go into

a premature aging syndrome known as the Founder's Trap. Internal records are weak. The limited systems that do commonly

exist in a Go-GO only support the basic needs of production/operations, customer service and accounting. Accounting typically

has its hands full just trying to properly account for revenue, expenses and cash flow. Useful cost accounting and accurate

reporting of individual product profitability is a distant dream. Management reports are often published so late (30 days after the

end of the month) that they are of little use for day-to-day operations. The best information is often word-of-mouth. The

Company Is Organized Around People and Projects. Responsibilities are assigned based on who can do the work on a project-

by-project basis. New tasks often conflict with previous assignments. If there is an organization chart, it is primarily for the

benefit of investors and the board. It probably does not accurately reflect the way work really gets done in the organization. The

"real" organization chart looks like a piece of paper that a chicken has walked on. Dotted lines, straight lines, and broken lines

run in every direction. If you ask a Go-Go employee, or even an executive, "To whom do you report?" You usually get a

complex and confusing answer. "I mostly report to Sam, but sometimes I report to Lee; however, whenever there is a quality

problem, I report to Jane." "Come to think of it, I report to Al as well." Employees Are Frustrated. In the face of an

overwhelming workload, unclear responsibilities and fuzzy goals, employees find it increasingly difficult to be productive. New

people are hired and thrown into their jobs with little training or preparation. Infrastructure is a House of Cards. As the company

continues to succeed, work processes, procedures and systems expand accordingly. The development of this infrastructure

usually occurs in response to emerging opportunities or unexpected problems, rather than according to a long-term plan. As

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things become more complex, it takes longer to fix mistakes and some fixes create new problems because of unexpected side

effects. A Major Crisis Happens. Inevitably disaster strikes the Go-Go. Success finally put enough load on the system that a

fairly catastrophic disaster happens that threatens the loyalty of major clients, or jeopardizes the entire business. When disaster

does strike, no one takes responsibility. With weak control systems, accountability is very unclear. Nobody (except the Founder)

owns the decision that created the disaster. Everyone claims inadequate information, lack of authority, and feels they are the

victims of decisions made by other people. Fingers point in all directions. This frustrates Go-Go leaders. They feel betrayed. No

one warned them of the tricky dangers ahead. Everyone just watched them fail. No one survives unscathed. The Founder's or

Family Trap: The Founder's Trap occurs when a Go-go company is unable to relieve itself from its dependency on the

Founder. The company is trapped by the capabilities and limitations of the bottleneck that is its Founder. This can occur because

the organization is unable to develop the abilities needed to replace the unique skills of the Founder. The slide into the Trap can

also occur because the Founder himself is either unwilling or unable to delegate effectively and decentralize control. Growth

beyond the founder is impossible. If a company is caught in a Founders Trap it means that when the Founder dies, the company

might also die.

Adolescence: During the Adolescent stage of the organizational lifecycle, the company is reborn. This second birth is an

emotional time where the company must find a life apart from that provided by its Founder. This critical transition is much like

the rebirth a teenager goes through to establish independence from their parents. The Adolescent company teeters on the brink

of both success and disaster. So long as the Adolescent company does well, investors and the Board regard the Founder as a

genius with a golden touch. However, when the infrastructure collapses, sales slowdown, costs mushroom or profits decline, the

finger pointing begins in earnest. The Founder, accustomed to the magic of adoration, is instantly transformed into a goat who is

no longer up to the task of leadership. Adolescence is an especially stormy time characterized by internal conflicts and turf

wars. Everyone seems at odds with everything. Sales fall short or exceed production's estimates, quality is not up to customer

expectations, and old timers plot against the new hires, waiting for them to fail (sometimes encouraging it). Emotions are

volatile and organizational morale traces a jagged line: ecstasy in one quarter, depression and dejection in another. Throughout

the organization, people are busy tracking the real and imagined injustices they have suffered, which they nurse with great care.

If these conflicts are not resolved, Adolescent companies can find themselves in Premature Aging that can lead to the early

departure of entrepreneurial leadership, or the professional managers leading to pathologies called Divorce. There are three

principal challenges (1) Effective decentralization of authority with employee empowerment (2) Change in leadership from

entrepreneurship to professional management (3) Goal development with measureable performance metrics & control charts.

Prime: Prime is the optimal position on the lifecycle, where the organization finally achieves a balance between control and

flexibility. Prime is actually not a single point on the lifecycle curve. Instead, it is best represented by a segment of the curve

that includes both growing and aging conditions. This is because flexibility and self-control are incompatible and there is no

stable equilibrium. Sometimes the Prime organization is more flexible than controllable, and sometimes it's not flexible enough.

Problems of Prime: Senior management of companies in Prime engages in a continuous struggle to maintain the delicate

balance between flexibility and control. It takes very little to push a company in either direction. When administrators gain the

upper hand, the company's balance swings in the direction of excessive control, and the company sacrifices flexibility. When

entrepreneurs gain the upper hand, the company grows more flexible but loses control. Prime companies often don't have

enough good people to run all their business units. The other key issue they face is complacency. Once you get there, the

principal leadership challenge is to stay there. " Since everything is fine, why change?" This attitude is the first step into decline.

The greatest problem of Prime is staying in Prime. Characteristics of an organization in Prime (1) The organization is

guided by the vision of its reason for being. There is a clear purpose and people know what they will do, and will not do, "they

walk their talk". (2) The company operates in a focused, energized and predictable manner. (3) Stretch goals are set, aligned and

consistently achieved. (4) There is an enterprise-wide focus on customers and earning their long-term satisfaction. There is a

high degree of customer loyalty. At the same time, the organization knows when and how to say "no" to the market. It is

disciplined enough to protect itself. (5) Priorities are clear. The organization knows what to do, and what not to do. It enjoys a

certain composure and peace of mind when making tough decisions. (6) The entrepreneurial spirit is fully institutionalized.

Evidence of organizational fertility abound. This creativity repeatedly produces controlled, profitable innovation. (7)

Organizational structures work well. Opposing forces are balanced. There is alignment between vision, strategy, structure,

information, resource allocation and rewards. A company in Prime is continuously realigning these subsystems. (8) The

infrastructure provides reliable support. (9) The governance process is institutionalized. People know and understand where and

how decisions are made. (10) Decision-making is done is an environment of healthy, constructive conflict. Points of view are

considered, but there are no hard feelings if one's recommendations are not heeded. Differences of opinion rarely deteriorate

into personality clashes or turf wars. (11) There is intra- and inter-organizational integration and cohesion with clients,

suppliers, investors, and the community. This internal cohesion enables the Prime organization to devote much of its energy

externally. (12) People enjoy working at the company. Few willingly leave and there is a backlog of people applying for

positions at all levels. (13) They embrace change. Prime companies work hard to adapt to changes in markets and technology so

that they can gain share from weaker competitors. (14) They enjoy consistent, above average growth in both sales and profits.

Prescription for Success: The slide into aging is subtle. The emergence of an attitude of complacency is the first step into

decline. Since the company is doing so well, it is easy to slip into a mindset to maintain the status quo. To remain in Prime,

management must be proactively working to refuel momentum by nurturing a portfolio of Infant, Go-Go and Adolescent

business units ensuring that entrepreneurship thrives. When a Prime organization loses its ability to embrace change and nourish

new growth, organizational vitality levels off and aging begins. On the lifecycle curve, Prime is not at the top of the curve. This

is because the curve depicts the vitality of an organization. When a company first starts to age, it is still producing the desired

results as measured by short-term sales and profitability. Aging is having a negative effect on the company, but this effect is not

yet reflected in sales or profitability. Therefore, the lifecycle curve is still rising, however the rate of change is slowing so the

rising curve is starting to level off. If Prime organizations don't refuel their momentum, if they keep harvesting their momentum

rather than nourishing it, the curve will reverse direction and the company moves into aging. After Prime, movement along the

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lifecycle is a gradual process of deterioration. Unlike the growing side of the curve, there are no major transitional events in

aging companies. The only differences between the lifecycle positions of Stable, Aristocracy, Early Bureaucracy and

Bureaucracy is a question of the degree to which aging problems pervade the organization.

Dress Code: In an Infant company, if you can do the work, you can wear your clothes inside out. By the time the company is a Go-

Go, people start wearing suits and sport coats with ties, but there is no hard-and-fast dress code. Prime companies require their

people to be professional in the way they look and the way they act. By the time the organization reaches Aristocracy, only the

requirement to look professional remains.

Meeting Rooms: In the boardroom of a typical Aristocracy, you will find a huge, highly polished, dark wood table surrounded by

matching plush chairs. The carpet is thick. Lighting is subdued, and the windows are heavily draped. From the paneled walls, a

larger-than-life portrait of the unsmiling Founder looks down on the room, as if warning everyone to remember his or her place.

When an outsider comes into the room, the dim lights, the uniformly dark suits, the somber portrait of the Founder collectively

scream "Don't make waves!" How can they possibly tell corporate leadership, "Hey, guys, we are losing market share."

How They Address Each Other: People in Infant and Go-Go organizations address one another by first names or nicknames. The

names people use for one another in an Adolescent company are not fit for print. When an organization reaches Prime, both first and

last names are commonly used. By the time the organization has reached Aristocracy, people speak to each other almost exclusively

with last names. It's Mr. Smith and Ms. Jones. They may be Bob and Mary inside their offices, but in meetings, they address each

other formally.

Verbal and Written Communications: In Aristocracy form is more important than content, the medium is the message. People

speak slowly and softly, and overuse visual aids and written handouts. Extensive notes are taken that read like a trial transcript.

During meetings, people hedge, using endless strings of double negatives and qualifiers. "It seems that, under certain circumstances

it may be assumed, however, on the other hand, and not necessarily so, we might conclude that..." One leaves wondering what the

person was really trying to say.

Weak Decision Making: Leaders of Aristocratic organizations, whether in government or business, behave as if they have a great

deal of control over their organizations. In private, they know that they can do very little, but in public they act as if they can do a

lot. The truth is that there are so many committees that need to agree, and so many, many interests that need to be appeased, that it is

almost impossible to implement any significant changes in an Aristocracy. Their leaders are limited to only what politics allow them

to do. As their companies continue to age, this inability to have a real impact gets even worse.

The Silence before the Storm: The product lines of companies in the advanced stages of Aristocracy are out-of-date. The clients

know it, the sales people know it, and even the senior executives know it (privately). Yet the problems of the future are not yet

pressing. The company is still liquid and profitable. Management holds endless meetings discussing the situation but nothing much

happens. Everyone seems to be waiting for someone else to do something. Taking action now means making waves and becoming

embroiled in political fights that may not be necessary. Who knows? Government policies might change, the competition could go

broke, or our customers might change their tastes. Maybe these problems will all go away. It could happen. Desperate over

continually declining market share, revenues, and profits, the Aristocratic organization enters Recrimination. This is not a gradual

transition. It is quick and forceful. The Aristocracy has been covering its problems with price increases and acquisitions for a long

time. The organization has expended all the goodwill it has so painstakingly accumulated from its Infancy. The artificial facelifts

and price increases stop working because they are not a substitute for providing real new value and satisfying new market needs. The

day of reckoning arrives when the financial reports finally reveal the true weakness of the company. The truth spreads rapidly. The

company incurs the scorn of Wall Street. Stock prices drop like a rock, key accounts bolt to the competition and bankers won't return

phone calls. When this happens, the gloves come off. Knives are drawn, and the fight for survival begins.

Early Bureaucracy: When an Aristocracy is unable to reverse its downward spiral and the artificial repairs finally stop

working, management's mutual admiration society abruptly ends. The good-old-buddy days of the Aristocracy are gone, and the

witch-hunts of Recrimination begin. Companies in this stage exhibit the following behaviors: (1) People focus on who caused

the problems, rather than on what to do about the problems. (2) Problems get personalized. Rather than dealing with the

organization's problems, people are involved in interpersonal conflicts, backstabbing, and discrediting each other. (3) Paranoia

freezes the organization. (4) Personal survival and turf wars absorb all available energy leaving precious little to deal with the

needs of customers or the world outside the organization. The Witch Hunt: Everyone is busy trying to find out who caused the

disaster. With blades drawn, it's backstabbing time in the boardroom. Like primitive tribes afflicted by extended drought or

famine, there is a rush to appease the gods. The organization needs a sacrifice. Whom does it sacrifice?

Typically, the management of a company in Recrimination sacrifices its most valuable and scarcest treasure.........the last

vestiges of innovation and creativity. The company fires the EVP of Marketing, explaining, "We're in the wrong market with the

wrong products and our advertising does not work." The heads of Strategic Planning, Business Development and Engineering

are the next to find themselves on the street. "Our strategy does not work. Our acquisitions are not working. Our products and

technology are obsolete." The people who get fired don't feel they are responsible for the company's situation. The Marketing

VP often said that the company ought to change its direction. The strategist has an ulcer worrying about the lack of direction.

Privately, these individuals complained, urged, begged, and threatened, but their efforts were like pushing wet spaghetti up a

hill. Their exodus merely exacerbates the problem because these creative people are the individuals the organization needs most

for survival. In the Aristocratic organization, silence precedes the storm. People smile. They are friendly, handling one another

with kid gloves. In Recrimination, when the bad results are undeniable, managers start fighting each other. The ritual of human

sacrifice is repeated over and over. Someone must take the blame every time there is bad news. Bad news comes every quarter

when they must report results, so every quarter a new scapegoat emerges.

No one is sure who will be the next to get the ax. Paranoia reigns.

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INTEGRAGED MARKETING COMMUNICATIONS…going where the are flying from a

media neutral

approach

CHANNEL

SOURCE

ENCODES THE MESSAGE BY TRANSLATING PERCEPTUAL DECODING IN CONTEXT

INTENDED MEANING INTO SYMBOLIC RECEIVER …APPLYING FILTERED MEANING THROUGH FORM (SIGN) = IDENTITY PERCEPTIONS (THOUGHTS) & AFFECTIVE

REACTION (FEELINGS) = IMAGE

20% PRINT ADS ARE MISCOMPREHENDED

33% OF FACE TO FACE CONVERSATION IS MISUNDERSTOOD

We must FRAME our discussion to enhance MOA factors so consumers process the marcom message in a manner that we hope that they do……

M..Motivation: first, involuntary to voluntary attention through …intense/prominent cues and …enhanced relevance/curiosity

O..Opportunity (repetition): “best” time is when the need is experienced with careful selection of both media and message

A..Ability: to access knowledge structures through Framing (verbal, visual, contextual) and Concretizing abstract concepts

FRAMING is used to access existing customer knowledge structures, to reduce processing time, encourage motivation and raise emotional involvement.

When there is imagery, [EXPOSURE to a Perceptually Encoded message in the form of a sign (stimulus that represents an object)] it is involuntarily

perceived by our senses within the context of our perceptual field (culturally constituted world) through SENSORY RECEPTORS (sight, sound, touch, etc)

at which point ATTENTION must be given for it to enter our SENSORY STORE. If attention is not given, it is lost; if attention is given it moves

voluntarily into a SHORT TERM MEMORY with limited information processing capacity. It is quickly comprehended (interpreted first by feature, then

active synthesis in some idiosyncratic manner through a process of contextually dependent decoding) from either a CPM (consumer processing model)

approach that is cognitive, systematic and reasoned or a Hedonic (HEM) approach which is experiential and emotionally driven, depending upon the level of

involvement (engagement) - then rejected or accepted. If accepted, it is moved into LONG TERM MEMORY (virtual storehouse of unlimited information)

where LEARNING (changes in the context within LTM) takes place that either strengthens the linkages of memory concepts or establishes new linkages

within a KNOWLEDGE STRUCTURE and stored for future reference which will be simplified through HEURISTICS

NEILSON STUDY

700 stores – ½ had POP -- % increase in sales due to POP 5% 29% 38% 52% (Guess which one)

MOTION DISPLAY (Place these numbers: 49% - 18% ) Liquor Store Grocery Store

(Olympia beer): Static POP

Motion POP 107% 56%

POPAI BENYLIN STUDY (Place these numbers: 29% - 98% – 139%) Increase -- Feature price on shelf = ___ % -- Feature price on end cap = ___ % -- Feature price in isle display = ___ %

http://www.youtube.com/watch?v=cFdCzN7RYbw ( Science of Persuasion; 12minutes)

Research on purchase decisions…

Super.. Mass M

Specifically Planned 30% 26%

Generally Planned 6% 18%

Substituted 4% 3%

Unplanned 60% 53%

Video screens on grocery carts

Mobile truck in India (25 ft poles)

Live players on an outdoor sign

Huston, TX

…car dealer – Black,

Friday Sale – 200 cars

marked down (3 to $1)

Huge BUZZ mkt

success!

NOISE

Feature – Symbolic – Experiential Value Based Marketing (1) Must be relevant to target market needs

/ demands (2) Value based marketing is progressive in market impact, sustainable competitive advantages

with experiential offering the greatest value. Experiential is more than event marketing.

6 million Benadryl samples given away at 550 “Point of Itch” sites

Experiential is

more than event

marketing

Would an App work to map out your grocery list?

THREE EXPOSURE HYPOTHESIS VS.

SHELF SPACE MODEL APPROACH

http://www.youtube.com/watch?v=cFdCzN7RYbw

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media neutral

approach

You have to get noticed before anyone will know you exist.

It is easy if they are looking for you; but if not, then you

need some peripheral cues to draw their attention –

something emotional, humorous, modest fear, noise, etc…

and once you have their attention, you can deliver your

message. However, remember that communication is more

about what they ‘hear’ and not what you ‘say’ ….. Awareness by itself is insufficient / Brand Equity = Awareness + Image

Consumer

Decision Process

NEED RECOGNITION

SEARCH

First Internal then External Inversely related to age & income Related to level of INVOLVEMENT

ALTERNATIVE

EVALUATION

Relative Value Perception

CHOICE

POST-PURCHASE

RESPONSE

Encoded SIGN (Referent in context)

Dual Coding Theory

Media Neutral - 360 degree Brand Equity (awareness & image)

IMAGE… Stored brand association

Engagement… Elaboration… Momentum…

Sensory Store

(Involuntary)

Short Term Memory

Feature Analysis & Active Synthesis

(Attributes & Benefits …Functional, Symbolic

Experiential)

Comprehension

Building of Expectation & Meaning

…Perceptual encoding

Awareness

CPM Cognitive Affective Conative

HEM Affective Cognitive Conative

Long Term Memory

& Learning

(Altered state of Belief & Attitudes)

Observability – Complexity - Compatability

Trial ability

Acceptance

Consideration Set &

Relative Advantage

Advocacy

IDENTITY… Value based defensible differentiation position statement with drawn meaning from the culturally constituted

world (perceptual field of target market)

‘Response Hierarchy’ comparison of

TWO market positions

A B A B A B A B A B A B

REP

EAT

TRIA

L

ACC

EPT

COM

P

AWARETOTAL

Market &

Awareness

Heuristic methods are used to speed up the process of finding a satisfactory

solution via mental shortcuts to ease the cognitive load of making a decision.

Encodes the message by

translating intended meaning

into symbolic form (sign)

Trial

(Recognition / recall) TOM

Heuristic loyalty

The purpose of IMC

is to influence

behavior Advertising (media & vehicle)

Personal Selling

Sales Promotion (Push / Pull)

Social Media

Public Relations

Winner

SUTR

Yes

No

Yes No

Encourage Action?

Do You Have Advantage?

Promote Competition

Ineffective promotion is the

same as no promotion only costs

more

Trial ability is

critical in the process

of changing beliefs /

attitudes toward your

offering

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media neutral

approach

Understand the consumer decision process and what you can do to positively influence it

‘Laddering” is a detailed reflection of the behavioral steps and mental processing a consumer goes through when

making the purchase decision for a given product category. Understanding the decision process and the potential

influences is critical to improving the likelihood of a successful exchange.. Your goal is to positively influence the

perception of the Potential Market – those that may have interest to encourage action of the Available Market –

those with interest, income and access and grow the membership of the Penetrated Market, first as a Customer

and ultimately a loyal (Heuristic) Advocate.

Need Recognition: The consumer must recognize there is a need before they will act. Once recognized (problem

comes up, a replacement is necessary, an event occurs, a new situation arises) and if there is a sufficient

consequence, the need becomes a motive, then a want, then a demand… and when accompanied by interest, income

and access, the consumer decision process is initiated.

Sometimes it is necessary to help consumers recognize a need - by creating dramas, new realities,

artificial scarcities, celebrations and the like

An analysis of life stages and segmentation profiles (geo, demo, psycho, behavior) provides significant

insight as to what needs – demands are likely to emerge.

Search: The search process starts internally with a mental review of what the prospect perceives to be

relevant knowledge / ‘truth’ stored in their long term memory. The higher the perceived risk and expected

value gained/lost will directly influence the amount of search effort. If internal memory knowledge sets are

I insufficient, the search process moves to trusted external sources for information and guidance.

A low risk need (social, physical, monetary, effort, psyche, etc) will be filled via a routine consumer

action driven by brand recognition and habitual behaviors – the more frequent the purchase and

lower the price, the more likely it will involve a decision with limited cognitive involvement.

It is possible for a competing product to compare itself to market leaders on important

values/attributes, thereby altering the prospect’s perceived value/risk relationship… however,

AWARENESS, COMPREHENSION and ACCEPTANCE are necessary.

There are significant differences based on product categories (1) As much as 60% of the purchased

staple consumption items (grocery, discount store) are preplanned only by category and not by brand,

(2) There is greater involvement with less frequent, high ticket item purchases with increased joint

decision roles (3) Reduction of the search process is an important goal for marketers!

A measure of the prospect’s perceived Value Triad (quality, service, and price) relative to your

competitor’s offering (strategic group) will determine if you are part of their CONSIDERATION SET.

Alternative Evaluation: You are now part of the review process (consideration set). There is a significant

difference in what it takes to convince your satisfied customer to repurchase vs. convincing a competitor’s satisfied

customer to consider your offering as an acceptable alternative. Your offering / message platform cannot be too

complex, it must be compatible to their current knowledge structure, trial ability (actual, virtual, vicariously) is

critical and it must have a perceived benefit based on the valued EXPECTATION you help create.

AWARENESS is necessary but insufficient; there must be a compelling reason to seriously

consider your offering … perceived value; congruency to existing knowledge sets and

persuasive influence must also be present.

Not all attributes/benefits/advantages are perceived equally across segments, careful analysis

will help you determine if differentiated or undifferentiated approaches are required.

Choice: The decision is made. Often, suspects and prospects will need encouragement with

a premium before they initiate trial of a new/different product.

Tribal opinion leaders and reference groups are important influencers of high involvement decisions

High involvement offerings will lead to counterarguments if the message is not congruent with

existing perceptions and knowledge sets.

TRIAL is necessary for behavior change - trial leads to learning which is then

stored in long term memory for future reference(internal search) … positive or negative

Post Purchase Response: Performance quality reflects a functional product expectation and conformance

quality is relative to the perceived fulfillment of the expectation built by the product offering / message

platform. Both are necessary to achieve relative advantage within the strategic group for the next time a

similar need arises.

When listening to the ‘voice of the customer,’ both performance and conformance quality should be

measured and carefully examined for both importance and satisfaction.

High involvement decisions will result in significant post-purchase cognitive activity to affirm the

wisdom of the choice made – what can you do to remind them of your great product ?

Consumer Decision Process

& Business Response

Hierarchy

NEED

RECOGNITION

Create

Awareness

SEARCH …first Internal then External Selective exposure/ distortion /retention

Comprehension

& Acceptance

ALTERNATIVE

EVALUATION Weighted perceptual value of salient attributes

Build

EXPECTATION

CHOICE

Encourage

TRIAL

POST

PURCHASE

RESPONSE Satisfaction or Cognitive Dissonance Learning (change in thought process)

Reinforce

Attitudes

(Enduring evaluation of behavioral tendencies toward

something

Accomplish

Heuristic

Loyalty

Share of Mind

Awareness Set

Share of Heart

Consideration Set

Share of Market

Choice Set

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media neutral

approach

Sample… Heuristic / Promotion Principles

1. Comparative advertisements are of questionable value except when introducing a new product or your market share is small

and you have a distinctive advantage (Points of Difference).

2. Negative ads carry more weight than positive ads - Fear appeal is best with non users when you do not want them to start.

3. First and last points in a message are remembered better (first has primary effect and last has recency)

4. Conclusion drawing in the message makes the message easier to understand and is more likely to result in immediate

action. - The more informed and higher involved the target market, the more likely they will want to draw their own

conclusions from the message.

5. One sided message is better when positive attributes already exist and the audience is less educated - 2-sided arguments in

the message works best if the audience has a negative opinion or is more informed

6. The endorsing celebrity ‘source’ has stopping power (can gain attention) in a cluttered environment and when involvement

is low; it reduces counter-arguing, especially if there are negative opinions toward your offering. “Association” is a critical

celebrity quality when customers have low involvement and ‘Credibility” is more important when the customer is highly

involved/engaged.

7. Markets of low involvement products often rely on creative tactics that emphasize peripheral cues and use high frequency

repetitive advertising to create and maintain attitudes.

8. People who enjoy a commercial are twice as likely to be convinced the brand is best.

9. The less loyalty, the more the promotion should be directed at motivations.

10. Post purchase dissonance is more likely to occur with important decisions that have close alternatives/ substitutes

11. Exposure does not mean attention and comprehension … greater understanding does not equate to acceptance.

12. Non durable staple items are influenced by point of purchase materials & packaging

13. Sales Promotions (coupons) decisively create selective demand when loyalty is minimal

14. The farther away the product is from a necessity, the more likely it is that primary demand must be created

15. If you want to make inroads into competitors markets, the best strategy is to appeal to the wavier & deal prone switchers

16. Much competitive noise requires more exposure

17. Consumers avoid contradictory exposure (selective exposure, selective distortion, selective retention)

18. Deeper and more elaborate information processing is likely when an important need is activated by emotional and complex

message symbolism…. Focus on values.

19. Decisions tend to be automatic when time pressures exist

20. People will believe a statement if they hear it enough and if they have no intrinsic interest in the product message.

21. Personal social pressures and positive reactions of satisfied customers tend to stimulate interest of others

22. When advertising is proportional to market share, successful competitive warfare is less probable

23. Word of mouth is very important when it is difficult to evaluate a product

24. Humor is more commonly used and is typically more effective with low-involvement products.

25. Patterns of “conscious parallelism” are common in capital-intensive, homogeneous-product industries.

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Defining customer needs from the customer point of view must be done…. When customers ‘fire a

business’ and leave, 15% of the time it is because of inferior products; 15% of the time it is

because the cost is too high for the value received; 20% of the customers leave because of a lack of

personal interaction and 50% leave because they believe their received poor service…

Research tells us… that 96% of customers that are not happy will not tell

you; most will simply stop buying and of those that do complain, 54 - 70%

will buy again if the complaint is resolved, 97% if it is resolved quickly.

Customer defection can be reduced by raising switching barriers and/or delivering greater satisfaction

An average of 10% of your customers will ‘naturally’ defect…..what is your customer churn rate?

Not all customers are worth keeping….80-20-30 principle

Your holistic marketing effort will reflect Lifetime Value of your customer base…. Basic Marketing = to sell the product

Reactive Marketing = to sell the product and encourage the customer to let you know if they have issues

Accountable Marketing = to sell the product and follow-up once with the customer after the sale

Proactive Marketing = to sell the product and follow-up on a regular basis after the sale

Partnership Marketing = continuous interaction with the customer

How did it make you feel when…

1. An employee says ‘hi’ when you walk in but no one is making eye contact and you have no

idea who said it …sometimes, you actually answer only to find out no one is

listening….foolish huh!

2. An employee asks how everything was when you leave a restaurant… your measured

response is, ‘not that good,” and they smile as they ring up your bill with no further

comment.

3. You get to the store 3 minutes before they open – you look inside the glass door, an

employee is right on the other side, makes eye contact, but totally ignores you.

4. You approach the checkout and have to wait for the employee to finish a private

conversation with another person … or your items are run up with no acknowledgement

from the cashier until the bill is due

5. Others….


3M has said that ¾ of all product

improvements have

come from complaints

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Holistic Marketing---What can we do to build Customer Value---

(Touch Points & Departmental Coordination)

Marketing Needs Benefits Costs

Expected

– Primary

(basic

product

Most

important

quality

Major Customer Issue (s)

“Zone of Tolerance”

To move from Basic

thru Accountable to

RELATIONAL

To identify and meet

important, latent,

secret needs

To increase tangible

benefits and the

evidence of intangibles.

To provide a

seamless process

with reduced costs

Customer

Enters

Responsive Acknowledgement

Access to destination

Customer

Transacts

Business

Customer

Leaves

Post

Purchase

Expanding Customer Share - Building Customer Loyalty

Capturing Customer Lifetime Value

-Money

-Time

-Effort

-Opportunity

-Psyche

We have to go beyond “Basic” marketing, past

“Reactive” marketing, into an “Accountable &

Proactive” activity system that is more

RELATIONAL …to DELIGHT our customers beyond

EXPECTATION. Customer Perceived Value

Customer Delivered Value

BENEFITS less COSTS

True…Gaining new customers can cost up to 5 times

more than retaining current customers

True…A 5% reduction in customer defection rate can

increase profits by 25+%


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Expectancy-value model 10 point rating scale / or / Constant Sum Analysis

Importance Rating 40% 30% 20% 10%

Attribute A Attribute B Attribute C Attribute D

Competitor “A” 10 8 6 4

8.0

Competitor “B” 8 9 8 3

7.0

Competitor “C” 6 8 10 5

6.0

Your Offering 4 3 7 8

5.0

Your Options: Redesign product- Alter beliefs toward you - Alter beliefs toward competitor

Alter importance weights – Call attention to neglected attributes

ACCOUNTABILITY … Create a Balanced Score Card with important metrics & control charts

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Control Chart

Average

Ask your customer…

What made your ‘worst experience’ bad….

What made your ‘best experience’ good…

Value Based Marketing (1) Must be relevant to

target market needs / demands (2) Is progressive in

market impact, sustainable competitive advantages

with experiential offering the greatest value

Feature – Symbolic –

Experiential Value Based

Marketing … interpreted first

by functional feature, then

active synthesis in some

idiosyncratic manner through a

process of contextually

dependent decoding ….. who

they are, how they think, how

they feel will impact their

response

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The Marketing Audit Comes Of Age Philip Kotler, William Gregor and William Rogers

COMPONENTS OF A MARKETING AUDIT

I. Micro-Environment

Economic-Demographic 1. What does the company expect in the way of inflation, material shortages, unemployment, and credit availability in the short

run, intermediate run, and long run?

2. What effect will forecasted trends in the size, age distribution, and regional distribution of population have on the business?

Technology 1. What major changes are occurring in product technology? In process technology?

2. What are the major generic substitutes that might replace this product?

Political-Legal 1. What laws are being proposed that may affect marketing strategy and tactics?

2. What federal, state, and local agency actions should be watched? What is happening in the areas of pollution control, equal

employment opportunity, product safety, advertising, price control etc., that is relevant to marketing planning?

Socio-Cultural 1. What attitudes is the public taking toward business and toward products such as those produced by the company?

2. What changes are occurring in consumer life-styles and values that have a bearing on the company’s target markets and

marketing methods?

II. Task Environment

Markets 1. What is happening to market size, growth, geographical distribution, and profits?

2. What are the market segments? What are their expected rates of growth? Which are high opportunity and low opportunity

segments?

Customers 1. How do current customers and prospects rate the company and its competitors, particularly with respect to reputation,

product quality, service, sales force, and price?

2. How do different classes of customers make their buying decisions?

3. What are the evolving needs and satisfactions being sought by the buyers in this market?

Competitors 1. Who are the major competitors? What are the objectives and strategies of each major competitor? What are their

strengths and weaknesses? What are the sizes and trends in market shares?

2. What trends can be foreseen in future competition and substitutes for this product?

Distributions and Dealers 1. What are the main trade channels bringing products to customers?

2. What are the efficiency levels and growth potentials of the different trade channels?

Suppliers 1. What is the outlook for the availability of different key resources used in production?

2. What trends are occurring among suppliers in their pattern of selling?

Facilitators 1. What is the outlook for the cost and availability of transportation services?

2. What is the outlook for the cost and availability of warehousing facilities?

3. What is the outlook for the cost and availability of financial resources?

4. How effectively is the advertising agency performing? What trends are occurring in advertising agency services?

III. Marketing Strategy Audit

Marketing Objectives 1. Are the corporate objectives clearly stated and do they lead logically to the marketing objectives?

2. Are the marketing objectives stated in clear form to guide marketing planning and subsequent performance measurement?

3. Are the marketing objectives appropriate, given the company’s competitive position, resources, and opportunities? Is the

appropriate strategic objective to build, hold, harvest, or terminate this business?

Strategy 1. What is the core marketing strategy for achieving the objectives? Is it a sound marketing strategy?

2. Are enough resources (or too much resources) budgeted to accomplish the marketing objectives?

3. Are the marketing resources allocated optimally to prime market segments, territories, and products of the organization?

4. Are the marketing resources allocated optimally to the major elements of the marketing mix, i.e. product quality,

service, sales force, advertising, promotion, and distribution?

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IV. Marketing Organization Audit

Formal Structure 1. Is there a high-level marketing officer with adequate authority and responsibility over those company activities that

affect the customer’s satisfaction?

2. Are the marketing responsibilities optimally structured along functional product, end user, and territorial lines?

Functional Efficiency 1. Are there good communication and working relations between marketing and sales?

2. Is the product management system working effectively? Are the product managers able to plan profits or only sales volume?

3. Are there any groups in marketing that need more training, motivation, supervision, or evaluation?

Interface Efficiency 1. Are there any problems between marketing and manufacturing that need attention?

2. What about marketing and R & D?

3. What about marketing and financial management?

4. What about marketing and purchasing?

V. Marketing System Audit

Marketing Information System 1. Is the marketing intelligence system producing accurate, sufficient, and timely information about developments in the

marketplace?

2. Is marketing research being adequately used by company decision makers?

Marketing Planning System 1. Is the marketing planning system well conceived and effective?

2. Is sales forecasting and market potential measurement soundly carried out?

3. Are sales quotas set on a proper basis?

Marketing Control System 1. Are the control procedures (monthly, quarterly, etc.) adequate to insure that the annual plan objectives are being achieved?

2. Is provision made to analyze periodically the profitability of different products, markets, territories, and channels of

distribution?

3. Is provision made to examine and validate periodically various marketing costs?

New Product Development System 1. Is the company well-organized to gather, generate, and screen new product ideas?

2. Does the company do adequate concept research and business analysis before investing heavily in a new idea?

3. Does the company carry out adequate product and market testing before launching a new product?

VI. Marketing Productivity Analysis

Profitability Analysis 1. What is the profitability of the company’s different products, served markets, territories, and channels of distribution?

2. Should the company enter, expand, contract, or withdraw from any business segments and what would be the short

and long-run profit consequences?

Cost-Effective Analysis 1. Do any marketing activities seem to have excessive cost? Are these costs valid? Can cost-reducing steps be taken?

VII. Marketing Function Audit

Products 1. What are the product line objectives? Are these objectives sound? Is the current product line meeting these objectives?

2. Are there particular products that should be phased out?

3. Are there new products that are worth adding?

4. Are any products able to benefit from quality, feature, or style improvements?

Price 1. What are the pricing objectives, policies, strategies, and procedures? To what extent are prices set on sound cost,

demand, and competitive criteria?

2. Do the customers see the company’s price as being in line or out of line with the perceived value of its offer?

3. Does the company use price promotions effectively?

Distribution

1. What are the distribution objectives and strategies?

2. Is there adequate market coverage and services?

3. Should the company consider changing its degree of reliance on distributors, sales, reps, and direct selling?

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Sales Force 1. What are the organization’s sales force objectives?

2. Is the sales force large enough to accomplish the company’s objectives?

3. Is the sales force organized along the proper principle(s) if specialization (territory, market, product)?

4. Does the sales force show high morale, ability, and effort? Are they sufficiently trained and incentivized?

5. Are the procedures adequate for setting quotas and evaluating performances?

6. How is the company’s sales force perceived in relation to competitors sales forces?

Advertising, Promotion, and Publicity 1. What are the organization’s advertising objectives? Are they sound?

2. Is the right amount being spent in advertising? How is the budget determined?

3. Are the ad theme and copy effective? What do customers and the public thinks about the advertising?

4. Are the advertising media well chosen?

5. Is the sales promotion used effectively?

6. Is there a well-conceived publicity program?

Comprehensive Marketing 'tools' review March 14, 2015

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Transcript of Comprehensive Marketing 'tools' review March 14, 2015