Marketing Strategy - Session II
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Transcript of Marketing Strategy - Session II
DAY 2Product & Branding
Strategies
BUSINESS STRATEGIES AND THEIR MARKETING
IMPLICATIONS
Kotler Speak…
The best way to hold customers is to constantly figure out how to give them more for less.
Objectives for the day…
What are the characteristics of products?How can a company build and manage its
product mix and product lines?How can a company make better brand
decisions?
3-4
1.Ultimately the goal for any firm or business unit is to gain sustainable competitive advantage. What key decisions are necessary to get there?
Discussion Question
Co
mp
etit
ive
stra
teg
y
Dif
fere
nti
atio
nC
ost
lea
der
ship
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;
actively seeking to expand into rel. prod-mkts
with differentiated
offeringsUnits with strong
core bus.; actively seeking to expand into rel. prod-mkts with low-cost
offerings
Units primarily concerned with maintaining a differentiated
position in mature markets
Units primarily concerned with maintaining a
low-cost position in
mature markets
Units with no clearly defined product-market development or
competitive strategy
Combined Typology of Business-Unit Competitive Strategies
3-6
Dimensions•Scope
•Goals and obj. Adaptability (new product success) Effectiveness (inc. mrkt share) Efficiency (ROI)
•Resource deployment
•Synergy
Low-cost defenderMature/stable/well-defined domain; mature tech.and cust. segments
Very little
Low
HighGenerate excess cash (cash cows)
Need to seek operating synergies to achieve efficiencies
Differentiated defenderMature/stable/well-defined domain; mature tech.and cust. segment
Little
Low
HighGenerate excess cash (cash cows)
Need to seek operating synergies to achieve efficiencies
How Business Strategies Differ in Scope, Objectives, Resource Deployments, and Synergy
3-7
Dimensions•Scope
•Goals and obj. Adaptability (new product success) Effectiveness (inc. mrkt share) Efficiency (ROI)
•Resource deployment
•Synergy
ProspectorBroad/dynamic domains; tech. and cust. segments not well-established
Extensive
HighLowNeed cash for product dev. (? or *)
Danger in sharing operating fac. and programs - better to share tech./mktg skills
AnalyzerMixture of defender and prospector strategies
Mix. of defender & prospector strats.
Mix. of defender & prospector strats.
Mix. of def. & prosp. strats Need cash for prod. dev. but < prospectors
Danger in sharing operating fac. and programs - better to share tech./mktg. skills
How Business Strategies Differ in Scope, Objectives, Resource Deployments, and
Synergy
3-8
Co
mp
etit
ive
stra
teg
y
Dif
fere
nti
atio
nC
ost
lea
der
ship
Emphasis on new product-market growthHeavy emphasis No emphasis
Prospector Analyzer Defender Reactor
Units primarily concerned with attaining growth
through aggressive
pursuit of new product-market opportunities
Units with strong core bus.;
actively seeking to expand into rel. prod-mkts
with differentiated
offeringsUnits with strong
core bus.; actively seeking to expand into rel. prod-mkts with low-cost
offerings
Units primarily concerned with maintaining a differentiated
position in mature markets
Units primarily concerned with maintaining a
low-cost position in
mature markets
Units with no clearly defined product-market development or
competitive strategy
Let’s combine the two perspectives and examine the book retailing
industry
5-9
Earlymajority34%
Latemajority34%
Earlyadopters13.5% 16%2.5%
Innovators
Laggardsand nonadopters
Source: Adapted with permission from Marketing, 11/e, Acetate 8-8, by Michael J. Etzel, Bruce J. Walker, and William J. Stanton. The McGraw-Hill Companies, Inc. © 1997. All rights reserved.
5-6
Ideas for new products or new ventures: How do we know how fast
customers will adopt?
5-10
4. How fast will the adoption curve move for a particular innovation?
Discussion Questions
8-11
Source: Reprinted with permission from p. 60 of Analysis for Strategic Marketing Decisions, by George Day. Copyright © 1986 by West Publishing Company. All rights reserved.
Time (years)
Pro
du
ct c
ateg
ory
sal
es(r
eal
do
llar
s)P
rofi
t p
er u
nit
(rea
l d
oll
ars)
Profit/unitSales
Life cycleextension
GrowthCompetitiveturbulence
Maturity Decline orextension
Introduction
8-3
How do opportunities evolve over time?
8-12
1. Key question: Is it better to be a market pioneer, or a follower?
Discussion Questions
8-13
2. So, when, and for whom, does it make sense to pursue a pioneer strategy?
Discussion Questions
8-14
3. When, and for whom, does it make sense to pursue a follower strategy?
Discussion Questions
8-15
4. If you want to be a pioneer, what are your strategic options? Under what circumstances might each option be more likely to succeed?
Discussion Questions
8-16
5. How might introductory marketing plans differ under each of these pioneering strategies?
Discussion Questions
8-17
First mover advantage is trumped by pioneers who are better. Best beats first. Concentrate on being best.
Being a pioneer without the basis for sustainable competitive advantage is a trap!
Some Advice for Would-Be Pioneers
Product Physical goods Services Experiences Events Persons Places Properties Organizations Information Ideas
Components of the Market Offering
The Product and the Product Mix
The Product and the Product Mix
Product levels Customer value
hierarchy Core benefit Basic product Expected product Augmented product Potential product
(Consumption system)
Five Product Levels
The Product and the Product Mix
Product hierarchy Need family Product family Product class Product line Product type Item Product system Product mix
The Product and the Product Mix
Product classifications Durability and Tangibility Classification: Nondurable goods Durable goods Services
The Product and the Product Mix
Consumer-Goods Classification: Convenience goods
Staples Impulse goods Emergency goods
Shopping goods Homogeneous shopping goods Heterogeneous shopping goods
Specialty goods Unsought goods
The Product and the Product Mix
Industrial-Goods Classification Materials and parts
Farm products Natural products Manufactured materials and parts Component materials Component parts
Capital items Installations Equipment
The Product and the Product Mix
Supplies and business services Maintenance and repair items Operating supplies Maintenance and repair services Business advisory services
Product mix (Product assortment) Product mix has a certain:
Width Length Depth Consistency
Example
The Product and the Product Mix
Product-line decisions Product-line analysis
Sales and Profits Four types of product classes:
Core product Staples Specialties Convenience items
The Product and the Product Mix
Market profile
Product Map for a Paper-Product Line
The Product and the Product Mix
Product-line length Line Stretching
Downmarket Stretch The company may notice strong growth opportunities
as mass retailers attract a growing number of shoppers The company may wish to tie up lower-end competitors
who might otherwise try to move upmarket The company may find that the middle market is
stagnating or declining Upmarket Stretch Two-Way Stretch
The Product and the Product Mix
Line Filling Just-noticeable
DifferenceLine Modernization,
featuring, andpruning
Brand decisions What is brand?
Attributes Benefits Values Culture Personality User
30
A name, term, sign, symbol or design, or a combination
Identifies the goods or services of a seller
differentiates them from competitors
What is a Brand?
Brand
Commonly used research approaches to determine brand meaning: Word associations Personifying the brand Laddering up the
brand essence Brand essence Laddering up
32
Identify the maker
Simplify product handling
Organize accounting
Offer legal protection
The Eight Roles of a Brand
33
Signal quality
Secure Price Premium
Create Barriers to Entry
Create Competitive Advantage
The Eight Roles of a Brand
Building Brand Identity
Building Brand Identity Brand bonding Brands are not built by advertising but by the brand
experience Everyone in the company lives the brand Three ways to carry on internal branding – Employees
must Understand Desire, and Deliver on the brand promise
Building Brands in the New Economy
Building Brands in the new economy Heidi and Don Schultz urge companies to:
Clarify the corporation’s basic values and build the corporate brand.
Use brand managers to carry out the tactical work. Develop a more comprehensive brand-building plan. Define the brand’s basic essence to be delivered wherever it is
sold. Use the brand-value proposition as the key driver of the company’s
strategy, operations, services, and product development. Measure their brand-building effectiveness, not by the old
measures of awareness, recognition, and recall, but by a more comprehensive set of measures including customer-perceived value, customer satisfaction, customer share of wallet, customer retention, and customer advocacy
Brand Equity
Brand Equity Brand awareness Brand acceptability Brand preference
Aaker’s five levels of customer attitude: The customer will change brands, especially for price
reasons. No brand loyalty. Customer is satisfied. No reason to change brands. Customer is satisfied and would incur cost by changing
brand. Customer values the brand and sees it as a friend. Customer is devoted to the brand.
Brand Value
Value of Brand Equity Brand valuation Competitive advantages of high brand equity:
The company will have more leverage in bargaining with distributors and retailers because customers expect them to carry the brand.
The company can charge a higher price than its competitors because the brand has higher perceived quality.
The company can more easily launch extensions because the brand name carries high credibility.
The brand offers some defense against price competition.
Managing Brand Equity Branding Challenges Branding Decision: To Brand or Not to Brand?
Discussion Question
When is a brand more than just a brand? Have you ever based a purchasing decision primarily on the brand? Was it because of some perceived quality difference, or was it based on the expectation of how others would see or treat you? Have you ever seen someone buying a given brand of an item in an attempt to be seen as “cool”?
39
Improved Perceptions of Quality
Greater Loyalty
Less Vulnerability to Competitive ActionsLess Vulnerability to Crises
Eight Advantages of Strong Brands
40
Larger Margins
More inelastic consumer response
Increased IMC effectiveness
Potential Licensing opportunities
Eight Advantages of Strong Brands
Branding Decisions
Brand-Sponsor Decisions Manufacturer brand Distributor brand Licensed brand name Slotting fee Brand ladder Brand parity
Brand-Name Decision Four available
strategies: Individual names Blanket family names Separate family names
for all products Corporate name
combined with individual product names
Qualities of a brand name
Desirable qualities for a brand name It should suggest something about the product’s
benefits It should suggest the product or service category It should suggest concrete, “high imagery” qualities It should be easy to spell, pronounce, recognize and
remember It should be distinctive It should not carry poor meanings in other countries
and languages
Tools
Brand building tools Public relations and press releases Sponsorships Clubs and consumer communities Factory visits Trade shows Event marketing Public facilities Social cause High value for the money Founder’s or a celebrity personality Mobile phone marketing
Discussion Question
Nike’s arrangement with Michael Jordan has provided an excellent example of a celebrity endorsement. Can you think of an endorsement campaign that backfired? What did it cost the company in the short term? What, if any, have been the lasting effects?
4 Branding Strategies45
Branding Decisions
Brand Strategy Decision
Functional brand Image brand Experimental brands
Line Extensions Branded variants
Brand extensions Brand dilution
Multibrands, New Brands, and Co-Brands Multibrand
Flanker BandsCo-branding (Dual
branding) Ingredient co-branding Same-company co-
branding Joint venture co-
branding Multisponsor co-
branding
Packaging as Branding
Packaging and Labeling Packaging Package
Primary Package Secondary Package Shipping Package
Factors which have contributed to the growing use of packaging as a marketing tool Self-Service Consumer affluence Company and brand
image Innovation opportunity
Labeling Functions
Identification Grading Description
Consumerists have lobbied for: Open dating Unit pricing Grade labeling Percentage labeling
Branding is a Business Process
One that is planned, strategically-focused and integrated throughout the organization. Branding establishes the direction, leadership, clarity of purpose, inspiration and energy for a company’s most important asset – its brand. Even the most potentially powerful strategy will fail if not executed effectively and consistently.
Brand Promise
Everyone in the company must live up to the Brand Promise – the concept is simple but all-encompassing – it is about turning every company member, product, service, piece of communication or interfaces into a walking, talking, touchable reflection of the brand itself
Brand Strategy
It is not a consequence,
but the starting point itself.
Three requirements of Branding Strategy
Clearly articulated business strategy with a view of the scale & scope of the business and how you want to compete
Deep customer insights and understanding of evolving business economics
Determine the role of branding as perceived by your corporation which will help shape many strategic brand decisions during the development process.
7 Step Brand Strategy Development Process
Brand Positioning, Identity and Image
Brand IdentityHow brand strategists want the brand to
be perceived or needed to be perceived as part of the business strategy
Brand PositioningThe part of the brand identity and
value proposition to be actively communicated to selected target
segments
Brand ImageHow the brand is currently being perceived
in the market place as confirmed by research
Kingfisher – Irreverence, individual, freedom-loving and anti-establishment.Kingfisher stands for all the above qualities whether you like it or not and that’s why it is loved.
Brand Positioning Example
5 Positioning Principles
Consistency
Importance
Uniqueness
Endurance
Believability
7 Step Brand Strategy Development Process
END OF DAY 2