Workshop Marketing Presentation 2004.2

8/3/2019 Workshop Marketing Presentation 2004.2

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Marketing Strategy

Business Plan Workshops

TL [email protected]

215-204-3079
mailto:[email protected]:[email protected]


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Business plan workshops

Matching Products and Services with Markets January 25

Competitive Analysis February 1

Financial Analysis: Using Financial Statements for Management February 15

Financial Analysis: Using Ratio Analysis for Management February 22

Strategy & Business Model March 15

Marketing and Sales Strategies March 22

Management & Ownership March 29

Professional Presentations April 27

Tuesdays4:30 - 6:00


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What a firm does, and how, to build andcapture wealth for stakeholders.

Translates strategic position into a businessstructure and a set of functional strategies.

Includes a trajectory of growth:

a timeline, milestones, infusions of capital, growingrevenues, growing, changing expenses.

Business model


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Key to Marketing

Knowing the needs & wants of customers Building a strategy to serve customers

External Opportunities& Threats

Niche

Internal Strengths &Weaknesses

Know the niche marketyou are uniquely qualifiedto serve


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Marketing plan

Detailed plan of to whom you will sell yourproduct, at what price, through which

channels, and with the support of what kindsof sales and advertising.

Includes a strategy, a mix, ways of

measuring success, attention to staffing,and attention to costs.

Summarized in the marketing functionalstrategy section of the business plan.


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I. Marketing strategy

Functional strategies are a subset ofcompany strategy

Part of building a company is shaping functionalstrategies to serve the overall strategy

But functional strategies also shape companystrategy by testing the corporate strategy

Marketing strategy is especially importantbecause it ties the company to its customers


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Generic marketing strategies

Same as corporate strategies -- but

focused on products/services/markets Low Cost/Low Price

Product Differentiation

Market Segmentation (Focus)


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Strategies manipulate forces

Threat from

Substitutes

SuppliersPower

Threat fromNew Entrants

BuyersPower

Rivalryof

Firms

Power of other

Stakeholders


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Low-cost/low-price

Reduce prices to customers by reducingcosts of production

Two patterns: Lower margins/higher share (Toys R Us,

Walmart) Lower costs/higher margins (private labels,

e*trade) Works by scaring off rivals, driving downsupplier power, sometimes increasingbarriers to entry


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Pitfalls of low-cost strategy

Entry of even lower-cost competitors

Cost of keeping costs down especiallyfor small firms

Reduced flexibility

Finding markets where there is spacefor a low-cost competitor


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Product / servicedifferentiation

Differentiate what is sold Branding, quality, innovation, style and image

Two common patterns: High margins/low share (Mercedes): focus on

status, production efficiencies less important

Slightly lower margins but high share (many

branded items like Coca-Cola, Nike) Works by reducing rivalry, substitutes &

buyer power


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Pitfalls of productdifferentiation

Slide down the cost/quality ladder Jaguar vs Lexis

Shifts in what matters Department stores vs big box

Perils of imitation Sharper Image, Royal Crown colas, fake designer

labels, less complete enterprise systems Missing the point

Designing the great widget no one wantsConcretec


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Market segmentation/focus

Serve a small segment Focus refers to following the whims of an

audience, differentiation to focusing on theproduct/service itself

Focused differentiation: Oshkosh emergencytrucks, Two-Ten Health, specialty steel, microbreweries

Focused low-cost/low-price: AFG specialty glassfor microwave doors, Srugo nutsche, Jindal

Works by reducing rivalry, reducingsubstitutes


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Pitfalls of market segmentation

Attracting larger competitors Blue Mountain Arts vs. Hallmark

Independent record labels

Dependence on a single segment Demographic shifts in books

AIT and armaments buying


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Exercise: Choose an defend amarketing strategy

Low Cost/Low Price

Product Differentiation Market Segmentation (Focus)

Your ownwhy?


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II. Marketing plan

Product WHAT?

Price HOW MUCH? Placement/distribution WHERE?

Promotion WHY?


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Product / Service

Means of delivering benefits to customers Possible ways to provide value:

Variety Quality Design Brand

Packaging -- sizes, wrapping, labeling Warranties, follow-up services, returns Attention, special knowledge

Example:

Freds Mt Airy Motors


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Value proposition

Clear statement of benefits that give acustomer reason to buy a product or service

Starts with precise definition of customer! And their needs

Includes: Unique selling points

Quantification of the value to the customer ofthose points

Examples Riskforce - CYA


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Exercise: Value proposition

List unique selling point(s)

Articulate the benefit referred to byeach USP

Quantify or otherwise capture thevalue of each benefit for the client

Test, review, refine


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Price

Price determines and reflects the amount ofvalue customers perceive.

Value is a customers subjective estimate of aproducts ability to satisfy their needs or desires.

Issues: List price (healthcare)

Discount policies (books)

Terms (printers)

Signals sent (Two-Ten)


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Pricing strategies

General pricing strategies Mark-up pricing

Competitive pricing Perceived value Psychological pricing

Entry pricing strategies Penetration Low price Skimming High price


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Price setting: A make orbreak decision

Assess demand How sensitive will customers be to price changes?

Analyze competition Whats the going price?

Will competitors respond to a price cut?

Set pricing objectives Target return, market share, long-term profits, quick

investment recovery, etc.

Cover costs! Including hidden ones.

Automsoft, Jindal, Monthly Review


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Exercise: Positioning

Low Medium High

High Nordstrom

Medium Macys

Low Walmart

Q

u

a

l

i

ty

Price


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Placement/Distribution

Ways of reachingcustomers Channels

Direct mail, distributor, retail, value addedreseller, cooperatives, vertical

Issues/norms: Timing of sales cycle (time of year, length)

Expected materials, order forms, support, etc Sales force implications Coverage: Geographic, cultural Fees

Logistics


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Effective distribution

Complementary, strategic channels Clear objectives for each channel that facilitate

measures of success Increase number of stores carrying our product by 25% Keep 90% of our current customers this year Increase sales volume to 100 largest accounts by 20%

Budget & timeline Detailed outline of required logistics. Sensitive measures of success, and methods for

absorbing and adjusting to data Riverside Farm: Deep Root vs CSA


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Sales team

People Experience, reach

Team structure Support structure

Sales plan

Marketing intelligence Incentives

Materials

Logistics


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Exercise: Placement/Distribution

How will you deliver your product orservice to your customers?

Channels Sales support Marketing support

Logistics Costs Measures of success/feedback loops


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Promotion

Any form of persuasive communicationdesigned to inform consumers about a product

or service and influence them to purchasethese goods or services.

Direct selling -- mail, internet, sales representatives Promotions -- try it, youll like it

Advertising -- direct response, targeted, blanket Public relations -- word of mouth (events), media

coverage, editorial content Marketing communications

Networking structural holes


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Sales promotions

Coupons & Discounts

Free giveaways Key chains, mugs, calendars etc.

Trade Shows

Samples Contests


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Advertising

Newspapers, magazines, radio, internet,television, yellow pages, direct mail

Analyze the strengths & weaknessesof the medium Which medium will target your customers?

What is your advertising budget? What is the cost per million (CPM)?


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Advertising comparison

TV Radio News

papers

Direct

Mail

Mag-

azines

The

Web

Strengths

LargeAudience

Visual &audio impact

Low Cost

Targetspecificaudiences

Large reach

Quickresponse

Target localmarket

Easy tochange ads

Targetedmailings

Targeted tospecificaudience

Long life

Interactive

Largeaudience

Visual &audio

Weak-nesses

Expensive$$$

Shortexposuretime

No visuals

Largeaudience

Competition

Short lifespan

Junk MailLowresponserate

High cost

CostlyCompetition

CompetitionNeeds to bemarketed


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Publicity

Articles in newspaper Interview on radio or television

Coverable events Newsletters White papers Speaking engagements & white papers

Volunteer (boards & local committees)

FREE, powerful, hard to control


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Networking

Chambers of commerce

Business associations

Trade associations

Customer groups

Volunteer work


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Effective promotions

Clear plan to move recipients Ignorance >> indifference >> awareness >> interest

>> comprehension >> conviction >> action

Concrete, measurable objectives Stimulate inquiries

Encourage trial

Encourage repurchase Build traffic

Generate word-of-mouth support


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Effective promotions

Coordination Complementary pieces

Close timing Budget & timeline Detailed outline of required logistics.

Clear, sensitive measures of success,and methods for absorbing andadjusting to data


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Exercise: Sales & Promotion

Sketch a sales plan including targets,sales cycle, people needed, support

required Sketch a promotional plan to support

sales with promotions, advertising,publicity, communications and/ornetworking

Include measures of success List types of costs


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III. Marketing mix

The right mix of product, price,distribution and promotion...

That supports your strategy. Fits your capabilities. Doesnt break your budget.

Shared advertising Public relations Networking


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Marketing mix implications

Staffing

Partners

Timing

Costs

Testing, tracking, measuring


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Values-led marketing mix

Values-led marketingpromotes products and brandsby integrating social benefits into many differentaspects of a business enterprise.

- Ben & Jerrys

Product: Organic ingredients purchased fromalternative suppliers; creative, recyclable packaging

Pricing: Premium with lots of giveaways & donations Placement: Regional, country stores, youth scoop shops Promotion: Music festivals, free samples, advocacy,

public relations


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Guerilla marketing mixes

Often used when a small businessattacks a larger one

Targeted, low-cost strategies thatchange the rules of the game Examples:

Product: Midwifery, punk music both embeddedin movements

Price: Free web services (to drive advertising) Promotion: Anita Roddicks rose petals Place (distribution): Milliner on the web, CD

tables, craft shows


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Effective marketing strategy

Appropriate mix of product, price,distribution and promotion...that sells

benefits to a target market ofcustomers Consistent with company strategy

Fits company capabilities Doesnt break the budget.


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Bibliography

Verna Allee, Reconfiguring the Value Network, The Journal of Business Strategy, 21 (4),PP 36-39.

R Boulton, B Libert, S Samek, A Business Model for the New Economy, The Journal ofBusiness Strategy, 21 (4), July-August 2000, pp 29-35.

Tony DiBennedetto lecture notes, 1998.

Jeffrey Dobkin, How to Market a Product for Under $500 Pankaj Ghemawat, Strategy and the Business Landscape(Prentice Hall, 2001). Robert Hamilton, E. Eskin, M. Michael, "Assessing Competitors: The Gap between Strategic

Intent and Core Capability", International Journal of Strategic Management-Long RangePlanning, Vol. 31, No. 3, pp. 406-417, 1998

TL Hill lecture notes, 1999, 2001. J. D. Hunger & T.L. Wheelan, Essentials of Strategic Management(Prentice Hall, 2001).

Philip Kotler, Marketing Management, 9th Edition, (Prentice Hall, 1997). B. Mahadevan, Business Models for Internet-based E-Commerce, California ManagementReview, 42 (4), Summer 2000, pp 55-69.

Henry Mintzberg & James Brian Quinn, Readings in the Strategy Process, 3rdEdition(Prentice Hall, 1998).

Michael Porter, Competitive Advantage(Free Press, 1985). Michael Porter, What is Strategy?, Harvard Business Review, November-December 1996. Pearl Wang-Herrara lecture notes, 2001.

Workshop Marketing Presentation 2004.2

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