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Slide 1: Marketing Management... 100 Slides Strong High Hydraulic Pumps Clutches BUSINESS STRENGHT Medium Joints Aerospace Fittings Weak MARKET ATTRACTIVENESS Medium Flexible Diaphragms Fuel Pumps Low Relief Valves (a) Classification Powered by www.drawpack.com. All rights reserved.
Slide 2: Key Words... Market Structure – Market Forces – Marketing Concepts – Customer Added Value – Relationship Marketing – Profitability Analysis – Stakeholder Analysis – Threat Matrix – Value Creation – Marketing Mix – Hierarchy of Needs – Demand Measurement – Market Definition – Segment Rivalry – Target Market – Product Development – Demand-Life-Cycle – MarketSpace Diagram – Marketing Strategies – Market Entry – Promotions – Marketing Communication – Service Quality Model – 3 C’s Model – Hybrid Grid – Distribution Management – Consumer Brands – Control Chart Model – Multichannel Marketing – Demand Elasticity – Strategic Planning Gap – AIDA Model
Slide 3: Markets and Structure of Flow Resources Money Resource markets Resources Money Taxes, goods Services, money Taxes, goods Services, money Manufacturer markets Government markets Taxes Services Consumer markets Services, money Taxes, goods Money Goods and services Middlemen markets Money Goods and services
Slide 4: Main Actors and Forces in the Market Environment Company (marketer) Suppliers Competitors Marketing intermediaries End user market
Slide 5: The Selling and Marketing Concepts Starting point Focus Means Selling and promoting Ends Profits through sales volume Factory Products (a) The selling concept Target market Customer needs Coordinate d marketing Profits through customer satisfaction (b) The marketing concept
Slide 6: The Chart Company Organization Customers Front-line people Middle management Top management Cu sto m er sto Cu er m s s
Slide 7: Marketing`s Role in the Company Finance Personnel Marketing Personnel Marketing Marketing Production Finance Production (a) Marketing as an equal function (b) Marketing as a more important function (c) Marketing as the major function Customer Customer (d) The customer as the controlling function (e) The customer as the controlling function and marketing as the integrative function
Slide 8: Determinants of Customer Added Value Product value Services value Personnel value Image value Monetary price Time cost Energy cost Psychic cost Total customer cost Total customer value Customer delivered value
Slide 9: The Generic Value Chain Firm infrastructure Human resources management Technology development Procurement Mar g in Mar gin Inbound logistics Operations Outbound logistics Marketing and sales Service Primary Activities
Slide 10: Levels of Relationship Marketing HIGH MARGIN Many customers / distributors Medium number of customers / distributors Few customers / distributors Proactive Accountable MEDIUM MARGIN Reactive HIGH MARGIN Basic or reactive Accountable Reactive Partnership Proactive Accountable
Slide 11: Customer/Product Profitability Analysis Customers C1 P1 P2 Products P3 P4 C2 C3 ++ + + _ + High profit customer Mixed-bag customer + Highly profitable product Profitable product _ _ Losing customer Losing product Mixed-bag product
Slide 12: The Strategic Planning, Implementation and Control Process Planning Implementing Controlling Measuring results Corporate planning Division planning Business planning Taking corrective action Organizing Implementing Diagnosing results Product planning
Slide 13: Relationships Among Stakeholders Stockholder satisfaction Growth Profits Customer satisfaction Higher-quality products and services Continuous improvements Breakthrough innovations Higher-quality environment (employee satisfaction)
Slide 14: The BCG Growth-Share Matrix 22% 20% 18% Stars 4 Question Marks 1 3 2 Market Growth Rate 16% 14% 12% 10% 8% 6% 4% 2% 5 Cash Cows Dogs 6 7 8 0.5 x 0.4 x 10 x 1.5 x 0.3 x 0.2 x 2x 4x Relative Market Share 1x 0.1 x
Slide 15: Market Attractiveness – Portfolio Classification and Strategies I BUSINESS STRENGHT 5.00 Strong Medium Joints Weak Invest / grow High Selectivity / earnings Hydraulic Pumps Clutches Aerospace Fittings MARKET ATTRACTIVENESS 3.67 Harvest / divest Medium 2.33 Flexible Diaphragms Fuel Pumps Low Relief Valves 1.00 5.00 3.67 2.33 1.00 (a) Classification
Slide 16: Market Attractiveness – Portfolio Classification and Strategies II BUSINESS STRENGHT Strong PROTECT POSITION • invest to grow at maximum digestible rate • concentrate effort on maintaining strength Medium INVEST TO BUILD • challenge for leadership • build selectively on strengths • reinforce vulnerable areas Weak BUILD SELECTIVELY • specialize around limited strengths • seeks ways to overcome weaknesses • withdraw if indications of sustainable growth are lacking LIMITED EXPANSION OR HARVEST • look for ways to expand without risk; otherwise, minimize investment and rationalize operations High MARKET ATTRACTIVENESS BUILD SELECTIVELY Medium • invest heavily in most attractive segments • build up ability to counter competition • emphasize profitability by raising productivity PROTECT AND REFOCUS SELECTIVITY/MANAGE FOR EARNINGS • protect existing program • concentrate investments in segments where profitability is good and risks are relatively low MANAGE FOR EARNINGS • protect position in most profitable segments • upgrade product line • minimize investment DIVEST • sell at time that will maximize cash value • cut fixed costs and avoid investment meanwhile Low • manage for current earnings • concentrate on attractive segments • defend strengths (b) Strategies
Slide 17: The Strategic-Planning Gap Sales Desired sales Strategicplanning gap Diversification growth Integrative growth Intensive growth Projected sales 0 5 10 Time (years)
Slide 18: Ansoff‘s Product/Market Expansion Grid Current Products New Products Current Markets Market penetration strategy Product development strategy New Markets Market development strategy Diversification strategy
Slide 19: The Business Strategic-Planning Process External environment analysis Business mission Goal formulation Strategy formulation Program formulation Implementation Feedback and control Internal environment analysis
Slide 20: Opportunity Matrix Success Probability High Low Opportunities 1. Company develops a more powerful lighting system High Attractiveness 1 2 1. Company develops a device for measuring the energy efficiency of any lighting system 1. Company develops a device measuring illumination level Low 3 4 1. Company develops a software program to teach lighting fundamentals to TV studio personnel
Slide 21: Threat Matrix Probability of Occurence High Low Threats 1. Competitor develops a superior lighting system 1. Major prolonged economic depression 1. Higher costs 1. Legislation to reduce number of TV studio licenses High Seriousness 1 2 Low 3 4
Slide 22: McKinsey 7-S Framework Structure Strategy Shared values Systems Skills Style Staff
Slide 23: Two Views of Creating Value Make the Product Sell the Product Design product Procure Make Price Sell Advertise / promote Distribute Service (a) Traditional Physical Process Sequence Choose the Value Provide the Value Sourcing Distributing Communicate the Value Customer segmentation Market selection / focus Value positioning Product development Service development Pricing Making Servicing Salesforce Sales promotion Advertising (b) The Value Creation and Delivery Sequence
Slide 24: The Product-Positioning Map High quality E A Low price B High price C D Low quality
Slide 25: The Four P‘s of the Marketing Mix Marketing Mix Product variety Quality Design Product Features Brand name Packaging Sizes Services Warranties Returns Channels Coverage Assortments Locations Inventory Transport Place Target Market Price List price Discounts Allowances Low quality Payment period Credit terms Promotion Sales promotion Advertising Salesforce Public relations Direct marketing
Slide 26: Marketing-Mix Strategy Promotion Mix Sales promotion Advertising Offer Mix Company Products Services Prices Salesforce Distribution channels Target customers Public relations Direct mail and telemarketing
Slide 27: Factors Influencing Marketing Strategy Demographic/ economic environment Marketing Intermediaries Ma ng et i t ion pla rketi ark ma M or m sys nnin ng f ste tem g in s y Product Technological / physical environment Suppliers Place Target Price customers Promotion Publics Ma conrketin sys trol g tem ing nd kettion aion r Ma iza entat an m m org plesyste im Political / legal environment Competitors Socio/ cultural environment
Slide 28: The Marketing Information System Marketing Information System Marketing Managers Analysis Developing Information Assessing information needs Internal records Marketing intelligence Marketing Environment Target markets Marketing channels Competitors Publics Macroenvironment forces Planning Implementation Distributing information Marketing decision support analysis Marketing research Control Marketing decisions and communication
Slide 29: Model of Buyer Behavior Marketing stimuli Product Price Place Promotion Other stimuli Economic Technological Political Cultural Buyer’s characteristics Cultural Social Personal Psychological Buyer’s decisions process Problem recognition Information search Evaluation Postpurchase behavior Buyer’s decisions Product choice Brand choice Dealer choice Purchase timing Purchase amount
Slide 30: Model of Factors Influencing Behavior Cultural Cultural Culture Reference groups Subculture Family Social class Roles and statuses Personal Age and lifecycle stage Occupation Economic circumstances Lifestyle Personality and selfconcept Psychological Motivation Perception Learning Beliefs and attitudes BUYER
Slide 31: Maslow‘s Hierarchy of Needs Self-Actualization Needs (self-development and realization) Esteem Needs (self-esteem, recognition, status) Social Needs (sense of belonging, love) Safety Needs (security, protection) Physiological Needs (hunger, thirst)
Slide 32: How Customers Handle Dissatisfaction Seek redress directly from business firms Take some form of public action Take legal action to obtain redress Take some action Dissatisfaction occurs Complain to business, private, or governmental agencies Decide to stop buying product or brand or boycott seller Take no action Take some form of private action Warn friends about the product and/or seller
Slide 33: Customers‘ Use or Dispose of Product Get rid of it temporarily Rent it Give it away To be (re)sold To be used Direct to consumer Through middleman Loan it Get rid of it permanently Use it to serve original purpose Convert it to serve a new purpose Store it Trade it Product Sell it Keep it Throw it away To middleman
Slide 34: Model of Industrial Organization Analysis Supply Raw materials Technology Unionization Product durability Value weight Business attitudes Public policies Basic Conditions Demand Price elasticity Substitutes Rate of growth Cyclical and seasonal character Purchase method Marketing type Number of sellers Product differentiation Entry and mobility barriers Exit and shrinkage barriers Cost structures Vertical integration Global reach Industry structure Pricing behavior Product strategy and advertising Research and innovation Plant investment Legal tactics Conduct Performance Production and allocative efficiency Technological progress Profitability Employment
Slide 35: Shifting Company Orientations Customer Centered No Yes Product orientation No Customer orientation Competitor Centered Yes Competitor orientation Market orientation
Slide 36: 90 Types of Demand Measurement (6 x 5 x 3) World Space Level U.S.A. Region Territory Customer All sales Industry sales Company sales Product line Product form Product item Short-range Medium-range Time Level Long-range Product Level
Slide 37: Levels of Market Definition Total population 100% Potential market 100% Available market 40% Qualified available market Potential market (a) Total market Served market 10% Penetrated market 20% 10% 5% (b) Potential market
Slide 38: Segmentation, Targeting, Positioning Market Segmentation 1. Identify segmentation variables and segment the market 2. Develop profiles of resulting segments Market Targeting 1. Evaluate the attractiveness of each segment 2. Select the target segment(s) Market Positioning 1. Identify possible positioning concepts for each target segment 2. Select, develop, and communicate the chosen positioning concept
Slide 39: Different Segmentation of a Market (a) No market segmentation (b) Complete segmentation 1 1 1 3 2 3 B A A A B B 1B 1A 1A 2B 3B 3A (c) Market segmentation by income classes 1, 2, and 3 (d) Market segmentation by age classes A and B (e) Market segmentation by income-age class
Slide 40: Basic Market-Preference Patterns Creaminess Sweetness (a) Homogeneous preferences Creaminess Sweetness (b) Diffused preferences Creaminess Sweetness (c) Clustered preferences
Slide 41: Five Forces Determining Segment Structural Attractiveness Potential Entrants (Threat of mobility) Suppliers (Supplier power) Industry Competitors (Segment rivalry) Buyers (Buyer power) Substitutes (Threat of substitutes)
Slide 42: Barriers of Profitability Exit Barriers Low High Low, stable returns Low Low, risky returns Entry Barriers High, stable returns High High, risky returns
Slide 43: Five Patterns of Target Market Selection M1 P1 P2 M1 M1 P1 P2 M1 M1 M1 P1 P2 M1 M1 M1 P3 Singlesegment concentration P3 Selective specialization M1 M1 M1 P1 P2 M1 P3 Market specialization M1 M1 P1 P2 P3 Product specialization P3 Full coverage (P=Product / M=Market)
Slide 44: Three Alternative Market Selection Strategies Company Marketing Mix Market (a) Undifferentiated marketing Company marketing mix 1 Company marketing mix 2 Company marketing mix 3 Segment 1 Segment 2 Segment 3 (b) Differentiated marketing Company marketing mix Segment 1 Segment 2 Segment 3 (c) Concentrated marketing
Slide 45: Segments and Supersegments Customer Groups 1 2 3 4 1 5 6 7 8 Customer Groups 2, 3 4, 8 5, 6, 7 Products 9 10 11 12 9, 10, 11, 12 (a) Segments Products (b) Supersegments
Slide 46: The New BCG Matrix Many Fragmented Specialization Number of approaches to achieve advantage Few Stalemate Volume Small Large Size of the advantage
Slide 47: Brand-Quality Strategies and Profitability Superior (Profitability ROI) Quality Level High Average Low Quality improvement Quality maintenance Quality adulteration Low Average Quality Level Superior Time B) Three strategies for managing product quality through time A) Relationship between product quality and profitability (return on investment – ROI)
Slide 48: Evaluating a Market Opportunity Is the market opportunity compatible with company objectives? Profit objective Sales volume objective Yes Yes No No Sales growth objective Yes Yes No Customer goodwill objective Does company have the necessary capital? Yes No Is the market opportunity compatible with company resources? No Can it be obtained at a reasonable cost? Yes No Does company have the necessary production and marketing know-how? Yes No Can it be obtained at a reasonable cost? Yes No Does company have the necessary distribution capability? Yes No Can it be obtained at a reasonable cost? Yes No Move to next stage Reject the market opportunity
Slide 49: Product and Brand Positioning High price per ounce Bacon and eggs Slow Pancakes Hot cereal Instant breakfast Low price per ounce a) Brand-positioning map (instant breakfast market) Brand A Cold cereal Quick Low in calories Low Brand C High in calories Brand B Inexpensive a) Product-positioning map (breakfast market)
Slide 50: The New-Product-Development Decision Process Coordinate, stimulate, and search for ideas in external environment and among company personnel Identify: 1.Company factors 2.Their weights Develop alternative product concepts Propose: 1.Price 2.Distribution 3.Promotion Prepare: 1.Market analysis 2.Cost analysis Conduct: 1.Engineering tests 2.Consumer preference tests 3.Branding 4.Packaging Go into limited production, prepare advertising Buy equipment and go into full production and distribution Yes Yes Yes Yes Yes Yes Yes Yes 1. Idea generation Is the particular idea worth considering? 2. Idea screening Is the product idea compatible with company objectives, strategies, and resources? 3. Concept developing and testing Can we find a good concept for the product that consumers say they would try? 4. Marketing strategy development Can we find a cost-effective, affordable marketing strategy? 5. Business analysis Will this product meet our profit goal? 6. Product development Have we developed a product that is sound technically and commercially? Yes 7. Market testing Have product sales met our expectations? 8. Commercialization Are product sales meeting our expectations? Lay future plans No No No No No No No No Should we send the idea back for product development? Would it help to modify our product or marketing program? Yes DROP
Slide 51: Adopter Categorization on the Basis of Relative Time of Adoption of Innovation 21/2% Innovators 131/2% Early adopters X - 2σ X-σ 34% Early majority X Time of adoption of innovations 34% Late majority X+σ 16% Laggards
Slide 52: Demand-Technology-Product Life Cycles G2 Demand lifecycle Sales M D Demand lifecycle Sales Demand technology cycle P4 T2 G1 E T1 Demand technology cycles P3 P2 P1 Product life cycle Time (a) Time (b)
Slide 53: Sales and Profit Life Cycles Sales Sales and Profits Profit Introduction Growth Maturity Time Decline
Slide 54: Four Marketing Strategies Promotion High Low High Rapid-skimming strategy Slow-skimming strategy Price Rapid-penetration strategy Slow-penetration strategy Low
Slide 55: Stages of the Competitive Cycle 100% Market share Capacity share Production costs Price premium Sole Supplier Competitive Penetration Share Stability Commodity Competition Withdrawal
Slide 56: Companies in a Mature Industry Market Nichers Volume leaders Quality leader Cost leader Service leader Market specialist Customizer Product specialist
Slide 57: Market-Space Diagrams Large Y 1 Y 2 Size Medium Attribute 1 Y X Y 4 Small 4 5 6 7 8 9 3 Attribute 2 a) Market-expansion stageillustration of a strangulation strategy with four brands of firm Y attacking firm X’s brand Number of functions a) Market-crystallization stageconsumer-preference distribution for hand calculator
Slide 58: Market Fragmentation and Market Reconsolidation Stages C H J XY Z K M L FG M DE JK AB H C DE YZ X AB L FG a) Market-fragmentation stage a) Market-reconsolidation stage
Slide 59: Hypothetical Market Structure Market Leader Market Challenger Market Follower Market Nichers 40% 30% 20% 10%
Slide 60: Defense Strategies (2) Flanking defense ATTACKER (3) Preemptive defense (4) Counteroffensive defense (1) Position defense DEFENDER (6) Contraction defense (5) Mobile defense
Slide 61: Market Share and Profitability % 30.0 30 16 14 12 % Steiger Hesston AllisChalmers J.I. Case International Harvester Massey Ferguson Deere Sperry-New Holland Profitability 20 14.1 10 9.1 17.6 23.4 Profitability Over 40 % 10 8 6 4 2 0 0 Under 10 10-20 20-30 30-40 1,000 3,000 5,000 Market Share (a) Linear relationship according to PIM studies Average Sales (constant $000) (b) V-shaped relationship
Slide 62: Attack Strategies (4) Bypass attack (2) Flanking attack (1) Frontal attack ATTACKER DEFENDER (3) Encirclement attack
Slide 63: Major Decisions in International Marketing Deciding whether to go abroad Deciding which markets to enter Deciding how to enter the market Deciding on the marketing program Deciding on the marketing organization
Slide 64: Evaluating Which Markets to Enter Market Attractiveness High H M L H M L Eastern Germany Poland Romania H China Czechoslovakia L Medium Low Competitive Advantage Risk
Slide 65: Five Modes of Entry into Foreign Markets Indirect exporting Direct exporting Licensing Joint venture Direct investments Amount of commitment, risk, control, and profit potential
Slide 66: Five International Product and Promotion Strategies Product Do Not Change Product Adapt Product Develop New Product Do Not Change Promotion 1. Straight extension 1. Product adaptation 1. Product invention Promotion Adapt Promotion 1. Communication adaptation 1. Dual adaptation
Slide 67: Whole-Channel Concept Seller Seller’s international marketing headquarters Channels between nations Channels within foreign nations Final buyers
Slide 68: Five Product Levels Potential product Augmented product Expected product Generic product Core benefit
Slide 69: Overview of Branding Decisions Branding Decision Should a brand be developed for the product? Brand-Sponsor Decision Who should sponsor the brand? Brand-Name Decision What names should be put on the products? Brand No brand Manufacturer’s brand Private brand Mixed brands Individual brand names Blanket family name Separate family name Company / individual names Brand-Strategy Decision What branding strategies should be used? New brands Brand extensions Line extensions Brand-Repositioning Decision Should the brand be repositioned? Brand repositioning No brand repositioning
Slide 70: Four Brand Strategies Product Category Existing New Existing Line extension Brand extension Brand Name New Multibrands New brands
Slide 71: Elements in a Service Encounter The Service Business as a System Service Business Physical environment Internal organizational system Contact personnel Other services Customer A Service X Not visible to customer Visible to customer Direct interactions Secondary interactions Advertising Billing and payment Sales calls Media stories Word-of-mouth comments Random exposures to personnel and facilities Market research studies Other customers
Slide 72: Three Types of Marketing in Service Industries Company Internal Marketing External Marketing Employees Interactive Marketing Customers
Slide 73: Evaluation for Different Types of Products Most goods Most services Jewelry Restaurant meals Television repair Furniture Child care Clothing Auto repair Root canal High in search qualities High in experience qualities High in credence qualities Medical diagnosis Legal services Automobiles Houses Vacation Haircuts Easy to evaluate Difficult to evaluate
Slide 74: Service-Quality Model Word of Mouth Communications Personal Needs Past Experience Expected Service GAP 5 Perceived Service Consumer Marketer Service Delivery (including pre- and postcontacts) GAP 3 Translation of Perceptions into Service Quality Specs. GAP 2 GAP 4 External Communications to Consumers GAP 1 Management Perceptions of Consumer Expectations
Slide 75: Nine Price/Quality Strategies Price High Medium Low High 1. Premium strategy 1. High-value strategy 1. Super-value strategy Product Quality Medium 1. Overcharging strategy 1. Medium-value strategy 1. Good-value strategy Low 1. Ripp-off strategy 1. False economy strategy 1. Economy strategy
Slide 76: Price, Revenue, Market Share, and Profits (%) 90 ($M) 80 ($M) 20 80 75 18 Pretax profit Revenue Revenue 70 16 70 Share Profit 14 60 65 50 12 Primary tradeoff range Market share 40 60 10 80 85 90 95 100 105 110 Apex Price (dollar / unit)
Slide 77: Inelastic and Elastic Demand P2 Price P1 P’2 P’1 Q2 Q1 Quantity Demanded per Period (a) Inelastic demand Q’2 Q’1 (b) Elastic demand Quantity Demanded per Period
Slide 78: The Three Cs Model for Price Setting Low Price Costs Competitors’ prices and prices of substitutes Customers’ assessment of unique product features High Price No possible demand at this price No possible profit at this price
Slide 79: Break-Even Chart 1200 Total revenue Dollars (in thousands) 1000 800 600 400 Target profit Total cost Fixed cost 200 0 10 20 30 40 50 Sales Volume in Units (in thousands)
Slide 80: How a Distributor Effects an Economy of Effort 1 3 4 M 7 8 M 9 C M C 5 6 2 M C M 1 2 3 4 5 6 C C M D C (a) (a) Number of contacts MxC=3x3=9 Number of contacts M+C=3+3=6 M = Manufacturer C = Customer D = Distributor
Slide 81: Consumer and Industrial Marketing Channels Retailer Manufacturer Wholesaler Wholesaler Jobber Retailer Retailer Consumer (a) Consumer marketing channels Manufacturer Manufacturer’s representative Manufacturer’s sales branch Industrial distributors Industrial customer (b) Industrial marketing channels
Slide 82: The Hybrid Grid Lead Generation Demand-Generation Tasks Qualifying Presales Close of Sales Sales Postsales Service Account Management National Account Management Marketing Channels and Methods Direct Sales VENDOR Telemarketing Direct Mail Retail Stores Distributors Dealers and Value-Added Resellers SMALL CUSTOMERS AND NONCUSTOMERS BIG CUSTOMERS MIDSIZE CUSTOMERS CUSTOMER
Slide 83: The Downside of Multichannel Marketing Cost using salesforce only A Cost using different sales channels Dealer National accounts Field salesforce Cost Telemarketing B Agent Small, Rural Small, Urban Medium Customer Size Large Very Large
Slide 84: Nature of Physical Distribution Procurement Suppliers Manufacturing Physical distribution Channels Customers
Slide 85: Optimal Order Quantity Total cost per unit Cost per Unit Inventory carrying cost per unit Order-processing cost per unit Q* Order Quantity
Slide 86: Response Hierarchy Models Models Stages “AIDA” Model “Hierarchy-ofEffects” Model Awareness Cognitive stage Attention Knowledge Interest Affective stage Desire Liking Preference Conviction Evaluation Trial Behavior stage Action Purchase Adoption Behavior Intentio n Interest Awareness “InnovationAdoption” Model “Communication ” Model Exposure Reception Cognitive response Attitude
Slide 87: Promotional Tools in Consumer vs. Industrial Markets Advertisin g Sales promotion Personal selling Public relations Relative Importance Personal selling Consumer Goods Industrial Goods Sales promotion Advertising Public relations Relative Importance
Slide 88: Push vs. Pull Strategy Marketing activities Push Strategy Manufacturer Demand Intermediaries Demand End users Marketing activities Demand Pull Strategy Manufacturer Intermediaries Demand End users
Slide 89: Cost Effectiveness of Different Promotional Tools Promotional Cost Effectiveness Sales promotion Personal selling Advertising and publicity Awareness Comprehension Conviction Ordering Reordering Stages of Buyer Readiness
Slide 90: Current Consumer States for Two Brands 20% not aware 40% did not try 100% market 80% aware 60% tried 100% market 80% disappointed 70% did not try 20% disappointed 60% not aware 40% aware 20% satisfied Total Awareness Brand A Brand Trial Satisfaction Total Awareness Brand B 30% tried 80% satisfied Brand Trial Satisfaction
Slide 91: Major Decisions in Advertising Management Message decision Message generation Message evaluation and selection Message execution Objectives setting Communication objectives Sales objectives Budget decisions Affordable approach Percent of sales Competitive parity Objectives and task Advertising evaluation Communication impact Sales impact Media decision Reach, frequency, impact major media types, specific media vehicles, media timing
Slide 92: Classification of Advertising Timing Patterns Level (1) Concentrated (2) Rising (3) Falling Alternating (4) (5) Continuous (6) (7) (8) (9) Intermittent (10) (11) (12) Number of messages per month Month
Slide 93: Steps in Designing and Managing the Salesforce Designing the salesforce Salesforce objectives Salesforce strategy Salesforce structure Salesforce size Salesforce compensation Managing the salesforce Recruiting and selecting sales representatives Training sales representatives Directing sales representatives Motivating sales representatives Evaluating sales representatives Improving salesforce effectiveness Salesmanship training Negotiation skills Relationship building skills
Slide 94: Major Steps in Effective Selling Prospecting and qualifying Preapproach Approach Presentation and demonstration Overcoming objections Closing Follow-up and maintenance
Slide 95: Stages in the Evolution of the Marketing Department President President Sales VP Sales VP Salesforce Other marketing functions Salesforce Marketing Director Other marketing functions (a) Stage 1 (b) Stage 2 President President Executive VP of Marketing and Sales Sales VP Marketing VP Sales VP Marketing VP Salesforce Other marketing functions Salesforce Other marketing functions (c) Stage 3 (d) Stages 4 and 5
Slide 96: Functional Organization Marketing vice-president Marketing administration manager Advertising and sales promotion manager Sales manager Marketing research manager New products manager
Slide 97: The Product Manager‘s Interactions Suppliers Trade Manufacturing and distribution Advertising agency Media Agency media dept, Company media dept. Media sales reps Premium suppliers Premium screening Store testing Sampling Couponing Suppliers Research and development Promotion services Legal Product manager Packaging Designers Researchers Fiscal Purchasing Market research Research suppliers Salesforce Publicity Suppliers Trade
Slide 98: Three Types of Product Teams PM APM PA PM PM R C R C S D F E (a) Vertical product team (b) Triangular product team (c) Horizontal product team PM = product manager, APM = associate product manager, PA = product assistant, R = market researcher, C = communication specialist, S = sales manager, D = distribution specialist, F = finance / accounting specialist, E = engineer
Slide 99: The Control-Chart Model Advertising Expense / Sales Ratio 14 12 10 8 6 Upper control limit Desired level Lower control limit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Time Period
Slide 100: Financial Model of Return on Net Worth Profit margin 1.5% Net profits Net sales = Asset turnover 3.2 Net sales Total assets Return on assets 4.8% Net profits Total assets X Financial leverage 2.6 Total assets Net worth = Return on net worth 12.5% Net profits Net worth
Slide 101: Dynamic Interactions Between Sales Orders and Distribution Efficiency Sales surge Perceived need to improve delivery time Management increases sales incentives Delivery delay No or late action taken to add capacity Sales fall Insufficient production and distribution capacity
Slide 102: Major Marketing Decision Areas Posing Legal or Ethical Questions SELLING DECISIONS Bribing? Stealing trade secrets? Disparaging customers? Misrepresenting? Disclosure of customer rights? Unfair discrimination? COMPETITIVE RELATIONS DECISIONS COMPETITIVE RELATIONS DECISIONS PRODUCT DECISIONS Product additions and deletions? Patent protection? Product quality and safety? Product warranty? Harmful products? Anticompetitive acquisition? Barriers to entry? Predatory competition? ADVERTISING DECISIONS False advertising? Deceptive advertising? Bait-and-switch advertising? Promotional allowances and services? PACKAGING DECISIONS Fair packaging and labeling? Excessive cost? Scarce resource? Pollution? Legal or Ethical Questions CHANNEL DECISIONS Exclusive dealing? Exclusive territorial distributorships? Tying agreements? Dealers’ rights? PRICE DECISIONS Price fixing? Resale price maintenance? Price discrimination? Deceptive pricing?
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