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180 Cards in this Set
- Front
- Back
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Marketing Strategy
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Macroenvironmental analysis
Swot analysis Industrial analysis Product life cycle Obectives Strategy Marketing mix Action plan contingency plan |
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Macroenvironment
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Sociocultural
Physical Economical Technological Demographic Political and legal |
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SWOT
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Internal:
Strength Weakness External: Opportunities Threats |
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Industrial analysis
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Rivalry/Competitors
Substitutes Supplier power Buyer power New entrance |
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Product life cycle
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Introduction
Growth Maturity Decline |
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Obectives for new entrant
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Maintain position
Increase market share Preempt segmentation Establish foot in new market Provide cash cow Defend market share |
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Strategies new entrant
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Skimming and Withdrawal
Mass penetration Niche penetration |
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Marketing Mix new entrant
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Skimming i.e. high price for ROI
Penetration price for market share High distribution High promotion |
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Action plan
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Includes mix and budget plan as well as profit and loss projection
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contingency plan
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Preparation for opportunity and threats
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Objective for growth market with market leader as SBU
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Share maintenance:
Retain customers stimulate selective demand among early adopters |
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Strategies growth market with market leader as SBU
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Fortress i.e Position defendance
Flanker e.g. build a second brand Confrontation market expansion Contraction i.e. strategic withdrawal |
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Objective for growth market with follower as SBU
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Attain market share
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Strategies for growth market with follower as SBU
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Leap frog
Frontal attack Guerilla attack Flanking Encirclement |
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marketing mix for growth market with Leader and follower as SBU
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Price usually low but can be stable íf demand exceeds supply
Distribution through channel or direct sales with the aim to increase availiblity at low cost Promotion is high but more brand than product |
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Objectives for mature market
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Maintain market share
Or Extend volume growth |
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Strategies for mature market for market share objective
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Flanker
Niche Fortress |
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Strategies for for mature market with volume growth objective
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increas penetration
extended use Market expansion Global market expansion |
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Marketing mix for mature market
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Price and promotion are stable
Intensive distribution |
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Objectives for decline market
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Depends on conditions of demand i.e.
Exit barier intensity of future rivalry |
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Stratgies for attractive decline market
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harvesting
Niche maintenance Profitable survivor |
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Strategies for unattractive decline market
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Divestment
Liquidation |
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Marketing research Definition
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Marketing research is the design, collection and analysis and report of data for a particular marketing challenge
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Research data source
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Primary data
Secondary data |
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Advantages of secondary data
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Easier to collect
Cheaper based on existing and proved behaviour |
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Research Types of data
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Qualitative
Quantitative |
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Advantages of qualitative data
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Deeper insight on consumer behaviour
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Disadvantages of qaulitative research data
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small sample may not represent the larger population
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Data collection technique for qualitative and quantitative data
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Focus group interviews
questionaires with quantitative questions such as: Semantic differentiation Importance Lickert intention to buy |
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Marketng research step
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1. Identify the problem
2. Determine data type and source 3. Design the research, the type pf study, collection method and sample plan with size and method 4. Data collection (Error most occur through bias) 5. Analyse data 6. Report result |
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Data collection method in research step
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Observation
Survey Experiment Contact method |
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Marketing helps business to:
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Find out which customer to target
Develope products that satisfy Needs of chosen target Make products readily available Develop customer awareness Increase appreciation value Obtain feedback and use feedback for improvement work to build a long term relationship with customer |
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Marketing definition:
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Marketing is a social process involving the activitieis necessary to enable individuals and organisation to obtain what they need and want to develop on going exchange relationships
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Changes in society the enhance the need for markting
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Division of labor
Specialisation of labor econmical and environmental changes such as: globalisation competition growth of service rapid growth and change in IT increased importance of relationship and efficiency |
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Knowledge Factors neccessary for change include:
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parties involved and their buying behaviour
which needs tobe satisfied emotional and social needs physical needs which specific want they have and with which to satisfy their need more about the product being exchange the value of th eproduct in terms of benenfit, price and service |
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How to achieve business success
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Strategy marketing
market research and opportunity analysis industrial and environmental knowledge segmentation and defferentiation as well as positioning |
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Marketing management process
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1. Integrating marketing plan with corp and sbu strategy
2. opportunity analysis involving the 4 cs through macrotrend analysis, industrial analysis, measurement od opportunity through forecast and research segmentaton, targeting and positioning 3. creating a marketing programme making decisions on th 4 ps 4. creating strategic marketing program taking into account the market lif cycle 5. Implementiing the programm defined and controlling |
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Difference between consumer buyer and organisational buyer
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Org.Demand: eratic, inelastic, depends on consumer demand for goods
Org demographics: amount is larger, geography is more concentrated there are few number of people involved Org. buyer/seller relationship: more personal, long term, based on specifications, defined number of people influence buying process there are usualls standardized process involves specialist from the purchase department |
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Types of buying situation
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New buy
straight rebuy modified rebuy |
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Types of products and characteristics being bought by an org
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Raw materials: few suppliers, location shoule be nearby
Component parts: lon term contracts, very competitive Installation: long term contract and relationship, budgeting committe is involde in decision process Accessory equipment: not as long lasting operation supplies: consumer goods frequently purcahsed business services: long term contract and relationship |
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Peopled involved in orga buying process
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Users
Influencers buyers descion makers |
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Org buying decision process
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1. recognition of need: specifications, requirements, derived demand
2. supplier and product information: value analysis, decision to make or buy, collecting information on suplier 3. evaluate and select supplier through supplier analysis 4. -type of purcahse: Longterm, on the spot 5. Post purchase analysis and evaluation |
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Define marketing
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Marketing is a social process involving the activities necessary to enable individuals and organizations to obtain what they need and want through exchanges with others and to develop on going exchange relationships.
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Describe what is involved in marketing management
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Marketing Management is the process of analyzing, planning, implementing, coordination and controlling programs involving the conception, pricing, promotion and distribution of products, services, and ideas designed to create and maintain beneficial exchanges with target markets for the purpose of achieving organizational objectives.
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What is the difference between a corporate and a business strategy?
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The corporate or business strategy is the direction for the company’s mission, the business it chooses to be in and its growth policies.
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Business Types
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1. Questions marks:
2. Stars: 3. Cash cows: . 4. Dogs: |
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What are limitations of value based planning?
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It relies on forecast based on a financial value on I.e. forecasts of sales volumes, product mix, unit price and competitive action
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What is the role of marketing in formulating and implementing strategies?
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Marketing mangers bear the primary responsibility for formulating and implementing strategic marketing plans for individual product-market entries. However freedom of action in designing such plans is often constrained by the firm’s corporate and business-level strategies.
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What are the more important characteristics of a market-oriented company?
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The marketing concept holds that the planning and co-ordination of all company activities around the primary goal of satisfying customer needs in the most effective means to attain and sustain a competitive advantage and achieve company objectives over time. They adopt a variety of organizational procedures and structures to improve the responsiveness of their decision making, including more detailed environmental scanning, continuous, real-time information systems; seeking frequent feedback form and coordinating plans with key customers and major suppliers; decentralization of strategic decisions, encouragement of entrepreneurial thinking among lower-level mangers an the use of inter functional management teams to analyze issues and initiate strategic actions outside the formal planning process.
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SBU design
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A homogenous set of markets
a limited number of related technologies.. A unique set of products markets. Control over those factors necessary for successful performance. Responsibility for their own profitability |
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Three dimensions that define the scope and mission of the entire corporation also define individual SBUs:
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Technical Compatibility. Similarity in the customer needs. Similarity in the personal characteristics or customers’ behavior patterns
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What are miles and mores business strategy
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Prospector, Defender. Analyser. Reactor
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What are the characteristics of Prospector:
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broad product-market domain that undergoes periodic redefinition. a ‘first mover’ in new product and market areas
Responds rapidly to early opportunity Competes primarily by stimulating and meeting new market opportunities |
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What are the characteristics of Defender:
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Defender:
locate and maintain a secure position stable product or service areas. limited range of products or services compared to competitors. protect its domain by offering lower price, higher quality or better service than competitors. not at the forefront technological |
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What are the characteristics of Analyser:
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An intermediate type; fewer and slower product-market changes than prospectors,
less stability and efficiency than defenders. maintain a stable, limited line of products or services, Seldom a first mover, but often a second or third entrant |
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What are the characteristics of Reactor:
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No defined stragty
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SBU Goals and Objective. Theperformance dimensions:
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Effectiveness.
SALES GROWTH MARKET SHARE Efficiency. . PROFITABILITY /ROI Adaptability. Number of successful new products introduced relative to those competitors. % of sales accounted for by products introduced within the last 5 years. |
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What are the appropriate external environment conditions for a prospector strategy?
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Market characteristics:
Industry in introductory or early growth stage of life cycle, many potential customer segments as yet unidentified and/or undeveloped. Technology: Newly emerging technology; Competition: Few established competitors; single competitor holds commanding share of major market segments. Business's relative strengths: strong R&D, product engineering and marketing research and marketing capabilities |
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What are the appropriate external environment conditions for a low-cost defender strategy?
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Market characteristics: Industry in maturity or decline stage of life cycle; current offerings targeted at all major segments; sales primarily due to repeat purchases/ replacement demand. Technology: Basic technology fully developed and stable; few major modifications or improvements likely. Competition: Small to moderate number of well- established competitors; industry structure stable, though acquisitions and consolidation possible; maturity of market means relative shares of competitors tend to be reasonably stable over time. Business's relative strengths: SBU (or parent) has superior sources of supply and/or process engineering and production capabilities that enable it to be LOW-COST producer; R&D, product engineering, marketing, sales or service capabilities may not be as strong as those of some competitors
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What are the appropriate external environment conditions for a defferentiated defender strategy?
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Same as low cost but different in: Business's relative strengths: SBU has NO outstanding strengths in R&D or product engineering; HIGHER COSTS than those of at least some competitors; SBU’s OUTSTANDING STRENGTHS are in process engineering and QUALITY control and/or in MARKETING, sales, distribution or customer services
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What are the appropriate external environment conditions for an analyser?
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Market characteristics: Industry in late growth or early maturity stage of life cycle, one or more product offerings currently targeted at major customer segments, but some potential segments may still be undeveloped. Technology: Basic technology well developed but still evolving; product modifications and improvements – as well as emergence of new competing technologies – still likely. Competition: Large number of competitors, but future shake-out likely; industry structure still evolving; one or more competitors hold large shares in major segments but continuing growth may allow rapid changes in relative shares. Business's relative strengths: SBU (or parent) has good R&D, product engineering and marketing research capabilities, but not as strong as those of some competitors; has either low-cost position or strong sales, marketing, distribution or service capabilities in one or more segments.
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Ideally, what characteristics should strategic business units have?
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A homogenous set of markets to serve with a limited number of related technologies. A unique set of products markets. Control over those factors necessary for successful performance Responsibility for their own profitabilit
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Three dimensions that define the scope and mission of the entire corporation also define individual SBUs:
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Technical Compatibility, Similarity in the customer needs, Similarity in the personal characteristics or customers’ behavior patterns
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What are the various levels by which a product can be defined?
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Generic category: Includes an array of non-competing products i.e. car industry. Product class: May serve diverse markets or market segments. The more generic the definition the higher the aggregation level of products i.e. desserts versus pastries. Product type: Subsets of product class contain items that are technically the same. Brand level: Bottom of the aggregation hierarchy, inappropriate units of analysis. Sales largely function of managements strategic decisions,
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What are the product lifecycle stages
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Introduction, Growth, Shake out, Mature, Decline
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The diffrences in purchasing process of goverments and non profit
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More bureucracy
tediuos paper work submission of bids |
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General steps of a control system
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Set the standard of performance based on the objectives and strategies at the SBU and Product entry level - measurement should be both financial and non-financial
Step2: Specify and obtain data 3. Evaluate the feedback Take corrective measures |
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Determinants of performance at product level
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Profitability
Price parity relative shelf facing customer satisfaction customer attitude to changes in product |
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Balance scorecard
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Is used to measure customer satisfaction, market share and product quality
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Steps in control system at product level
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1. Sales analysis: by product, by order size, by customer and by territory
2. Analyse line item margin and expenses 3. Define how to provide information and how often 4. Contingency plan with: identification of critical assumption, assignemnt of probalilities, rank order of assumption 5. Tracking and monitoring 6. Activate the contingency pan Specify response optioms 7. Global market control |
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Control determinants at marketing performance level
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Profitabiliy
Market share Sales |
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Control steps at marketing level
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1. Identify the variables to monitor: external and internal
2. Track and monotor the control plan 3. Assess the stragy monthly, quaterly or annually |
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What is the purpose of a marketing audit
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It is used to periodically assess the marketing performance and provides and SBUs current competitive postion as well as that of its product market entries. Each of the 4 ps have to be annalysed and the audit has to take in to account environmental changes and how it will affect the business strategy or he product market action plan
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Types of audit
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Environment audit: industrial analyisis and analysisi of the 4 cs
Objectives and streatgy analysis Planning and control system audit Organisation audit marketing productivity audit markeitng function audit company's ethical audit product manager audit |
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How do you measure marketing performace at SBU level
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State determinants
State the steps |
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What is the purpose of marketing audit
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Explain the purpose and state the types of audit.
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Importance of marketing in business sucess
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Define marketing
State how it helps in terms of the decisions made in regards to 4 ps and knowledg of consumer behaviour, targeting and postioning State changes in the society State factors necessary for exchange State steps in the strategic marketing process Analysis, research, oppotunities, competitive advantage |
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Options available for an SBU seeking competive advantage
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Explain what an sbU is
Expalin porter and miles strategies Explain differences in terms of : Scope: technology, customer segment, domain Goals and objectives, effective or effecient Adaptability State marketing strategy |
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What is value proposition
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State the strategies for competitive advantage from porter and milse
Define the value propostion |
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The steps neede in order to position a product and write value propostion
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1. Identify the reslevant set of competitive products
2. Identify the determinant attribute usually features and benefits 3. Collect the data on consumer perception of products 4. Analyse the position of current products through perceptual map or positioning grid. Limitations: does not show customer preference 5. Find put the best combination of attributes prefered by customer through survey 6. Consider the best postion to suit customer needs 7. Write the value propostion |
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How to manage a new product dvelopement process
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State the importance of new products
State the stages and gates Gate 1_ Idea generaton and initial screening. Stage 1 Preliminary assessment Gate 2 Second screening decisions Stage 2 Detailed investigation and preparation of business case Gate 3 Decision on business case presented Stage 3 Deelopement stage Gate 4 Review post developement decsions Stage 4 Testing and validation Gate 5 precomercial and business analysis decision - field test, laboratory or experimental tests Stage 5 Roll out and market launch |
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Consumer buying decision process
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Explain why marketers have to know
Name the two types of involvement decisons and explain the kind of products and how they are bought State the steps in the buying process of both involvement. |
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Buying decsion for low involvemtnt goods
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Probelm identification
Purchase Post purcahse evaluation |
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Buying decision process for high involvemnt ggods
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Problem identification
Information search - elaborate on influence, intensity and sources Evaluation of alternatives: elaborate on the consumers dimensions of evaluation Purchase Post purchase evaluation |
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What influences the inforamtion serach in a high involvement good buying process
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Product factors
Situational factors: social accepatability, vlaue-related Personal factors: demographics, personality: dogmatic, low risk perciever |
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What influences the intensity of information search
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Opportunity cost and psychological cost
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Sources of information in the high involvemnt buying decision
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Personal: family
Commercail: collateral from consumer Public: consumer sites and publiciued product tests |
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Dimenstion by which a cosmer evaluates alternatives in a high involvment buying process
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Cost
Performance Social attributes Availability |
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Describe the psychological variables and social infliuences which are likely to affect buying behaviour
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State the importance of the knowledge of buying behaviour of customers
State the 5 social sectors and social and psycological influences |
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social infliuences which are likely to affect buying behaviour
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Culture
Subculture social class demographics reference group |
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Psychological variables which are likely to affect buying behaviour
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Perception: perceptional vigilance and perceptual defence
Memory Need and attitude towards brand and product. Use of fishbein model to find out to customer most important attribute and compensatory and non-compesatory attribute Demographics Lifestyle |
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5 Social sectors used to social differente customers buying behaviour
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Strivers
Achievers Pressured Adapters Traditionalists |
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How can marketers try to change consumers psychological influence
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Change importance of an attribute
Add a salient attribute improve the rating af a salient attribute lower the ratings of competitors sailint attribute |
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Duiscuss the appropriteness of segmentation
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Define market segmentation
and why it is important State the benefits of Segmentation |
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Benefits of segmentation
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Improves strategic resource allocation
gives opportunity to new product developement Helps design marketing mix |
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Steps taken to evaluate the market potential of a chosen market
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Select the market attractiveness based on competitive factors
Add Weight rate to the different factors Rate the segment on each factor Project future postion of segment Choose segment and allocate resources at lest 2 of the dimentsions have to be fulfilled and one moderately fulfilled |
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Market attractiveness an competitive factors of a potential market is based on
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Consumer needs and behaviour
Size of the market segment and the growth rate Macrotrends Opportunity to for competitive advantage Resources available Industrial analysis |
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Contents of avalue proposition
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Target
Benefits price |
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4 Promotion mix (IMC)
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- Advertising: any paid form of non-personal presentation or promotion by identified sponsor, print advert, direct mail, email, radio.
- Personal selling: pesuading one or more contacts to buy a product by use of oral presentation, person to person communication, sales meeting. - Sales promotion: Incentives designed to stimulate purchase of a product usually short term e.e trade-in, rabates - Public relations: non paid, npn personal stimulation of demand for product e.g. newspaper articles |
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Intgrated marketing commumnication plan or process
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1. Define the target market
2. Set promotional objectives takining into account the key elements 3. Set a promotion budget. (Elaborate on the methods) 4. Design the promotion mix ( state the steps) 5. Evaluate the results |
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Some marketing mix objectives are
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Winining aceptance of new product by existing customers
Devloping new customers for existing products Mainting loyalty of current customers by providing good service facilitating future sales by providing technical sevices to potential customers facilitating future sales by communicating product information to potential customers Gathering market information |
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Making advertising decisions
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This involves 1. setting the right objectives to help evalute afterwards through communication hirachy:- awareness, comprehension, conviction, action
2. Setting advertising budget should be based on reach and frequency and cost is calculated by use of gross rating point (GRP) = %reach x average frequency 3. deciding which media to use : Old media - radio, print, exhibition, supplementary media, direct marketing or new media - webbaner, search key words portal deals, emails. 4. Developing a creative strategy (copy platform content) based on: products targeting, positioning decisions, what advertising should accomplish, selling idea or key benefit (USP), creative strategy steement (campaign theme), surportive information 5. emotiotional apeal, attention, interest, call for action 6. Use of international media |
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How do you measure advertising results
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Before tests - recall test, sales test
After tests - recogniton test, recall test |
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What are the key elements in setting promtional objectives as part of the promition plan or process
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Target audience
How accpeects of audience perception or attitude should change How quickly such a change should occur Degree of change required |
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Methods of setting a promotion budget in a promotion plan
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Percentage sale method - budget set as a % of anticipated sales
Competitive parity method - relative level of promotional spending is based on level of market share Objective and task method - define the promotion objectives, determine strategies and tasks as specifically as possible, Estimate the costs of performing task and budget accordingly |
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The steps in dsigning a promotion mix in a prootion plan
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Decide on promotion components e.g. advertising
Choose activities within each component - web vehicle to employ within each activity - email |
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Making personal selling decisions:
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It involves: account management policy
Quotas Deployment/territory design sales force organiasation |
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What are the keys to sales performance
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Recruiting
Training compensation Evaluation and control through sales analysis - monitor sales volume and break down sales, cost analysis - cost of selling activities (travel costs) Behavioural analysis - obtained from activity reports |
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Making decision on sales promition in the promotion plan
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This involves deciding the technique to use. Techniques are: sampling, sweepstakes, contest, trade promotions.
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Anminstrative Factors, marketing progams and conditions for sucessful implementation of prospector strategy
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Prospector has to have a
High degree of autonomy Low funtional programs and facilities shared High evaluation and reward of performance is high based on sales and share growth |
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Anminstrative Factors, marketing progams and conditions for sucessful implementation of diffrentiated defender strategy
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Moderate degre or autonomy
low/high degree on funtional programmes and facilities shared High reward and evaluation of performance based on ROI |
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Anminstrative Factors, marketing progams and conditions for sucessful implementation of low cost defender strategy
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Low degree of autonomy
high degree of shred funtional activiteis and facilties |
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describe the fit between marketing programms and the different business strategies
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Describe all foru strategies in terms of price, product, place and promotion. - high broead, narrow. Mention the markting strategy for each BU strategy.
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Design the right orga. structure for implementation
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First we have to define the
Funtional competencies Resouce allocation decide on organisation structure decide on organisational form |
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Types of organisational structure
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Formalisation
Centralisation Specialisation |
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Types of organisational form
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Funtional orga
Product management orga marketing management orga matrix org New trens - Global structures - litlle or no formalorga, intenational division, global structures, central or decentral decision making |
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Contents of an annual marketing plan
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Executive summary
Current situation analysis performance review key issues objectives marketing strategy or program action plan projekced profit and loss contingency plan |
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What are the types of products
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Goods and services
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Design the right orga. structure for implementation
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First we have to define the
Funtional competencies Resouce allocation decide on organisation structure decide on organisational form |
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Types of organisational structure
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Formalisation
Centralisation Specialisation |
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Types of organisational form
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Funtional orga
Product management orga marketing management orga matrix org New trens - Global structures - litlle or no formalorga, intenational division, global structures, central or decentral decision making |
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What are the types of products
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Goods and services
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What are the eight dimensions of quality in goods
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performance
Features Reliablity Conformance Durability Serviceability Aesthetics perceived quality |
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What are the eight dimensions of quality in services
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Tangibles
Reliability Responsiveness Assurance Empathy |
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The product concept consists of
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core benefit
product features packaging wanrranty other services such as delivery, intallation |
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Types of research techniques for product design
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Empathic design - observation
capturing data reflection and analysis brain storming developing prototypes |
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Types of brand
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Brand name, brand mark, trademark
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Anvantages of branding to sellers
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effective marketing programm
customer loyalty price and margins for competitive advantage succesful brand esxtention positive channel relationship |
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What are the diffrent brand strategies
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Individual branding
Family branding Co-branding Globalistion Distributor and retailer brand |
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The components of service decisions are
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delivery reliability
fast order fast delivery credit personnel training warranty repair and maintenance |
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You can manage product lines through
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Product line extensions
Brand extensions Dropping products Product systems |
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Types of product line extensions
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Line filling - add or drop attibutes
Line streching - changes in size and price - upwards or downwards Line extensions - changes in other ways apart from size and price |
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Product decision involves
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Type of product
product concept product design research technique branding decisions packaging decision service and warranty decision |
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Key components of a corporate, business and marketing strategy
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Scope
Goals and objectives Resouce deployment Identification of sustainable competitive advantage Synergy |
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Hierachy of strategies
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corporate
business functional |
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Corporate growth strategies
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Expansion by:
- increasing penetraiotn - developing new products for current customers - selling existing product to new segment - diversifying |
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Types of Diversification
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vertical integration - forward vertical, backward integration (acquire the supplier)
- Related diversification (concentric) - unrelated diversification (conglomerate) - organisational relationship or networking |
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Models for allocating corporate resources
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Portfolio models
value-based planning |
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sources of corporate synergy
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Knowledge based synergy
corprate brand and corporate identity Synergy from shared resources |
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What are the institutions found in a marketing chanel
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Merchant wholesalers
Agent middlemen - brokers or representatives of maufacturers, rack jobbers Retailers Fascilllitating ageincies - advetisng ageny, research firms |
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Types of retailers
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General merchandise discount chain
wholse clubs supermarket single-line mass merchandise stores - toyRs |
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Types of nonstore retailer
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Direct selling
Teleshop Cataog Vending shop online shop |
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5 Consumer good channel
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producer - consumer
producer - retailer - consumer producer - agents - wholesaler - reetailer - consumer producer - agent - retailer - consumer |
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4 industrial goods channel
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producer - industrial buyer
producer - wholesaler - industrial buyer producer - agent - industrial buyer Producer - agent - wholesaler - industrial buyer |
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BUs objective and resources for for channel
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- Increase in product availablilty - mention strategies for retail coverage i.e. exclusive, selective and intensive distribution
- satisfy customers service requirement - ensure promotional effect - obtain market share - increase cost effectiveness - supply chain management, make or buy decsions - maintain flexibility - Multiple channel distribution - hybrid system |
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Three basic strategies of retail
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Intesive
Exclusive Selective |
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Explain the "intensive" basic retail strategy with its retail coverage, major strength , weakness and product appropriate
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Intensive - maximum coverage, strength: product availability, weakness: lack of retailer support, products are low involvement convinient goods
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Explain the "exclusive" basic retail strategy with its retail coverage, major strength , weakness and product appropriate
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Exclusive - single coverage, strength: matches retailer clientele with target market, fascilitates close co-operation with retailer, weakness: risk of relying on one retailer, high-involvement products
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Explain the "iselective" basic retail strategy with its retail coverage, major strength , weakness and product appropriate
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Seletive - limited coverage, strength: provides adequate coverage without risking manufacturer retailer co-operation, weakness: difficult to implement due to competition, products are not frequently purchased goods
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Types of vertical integrated markting systems
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Corporate - verticlly integrated system
Contracttual - wtih agreements stating obligation, rights of members of the system Adminstered - co-operation between on or two channel partners based on norms of mutual trust |
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Major souces of channel power
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economic power
coercive power expert power referent power legitimate power |
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Under what condition should the manufacturer use a pull or push strategy
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Pull - where manufacter is market leader and has the resources for promotion, new product, high demand
Push strategy - small firm little or no resource for promotion, little or no demand, has to convince the retailer to promote his products |
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What is the use of chanel incentives
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Increase purchases - get channel partner to store larger inventory
Increased personal selling effort increased promotinal effort - instore, local advert, increased display space improved customer service |
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Types of channel incentive
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quantity discount, buy-in and buy-back, sales training, larger margins, exclusie teritories, joint advertising, display racks
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In Decisions on designing a distribution channel one has to take into account
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SBU and market strategy
target market characteristics product characteristics computer characteristics company strengths and weakness environmental trends |
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Using a middleman can improve the following
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Functional effeciency
Scale effeciency Transactional effeciency |
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Channel Ways of entering a global market
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- Exporting - using export merchants, agents or cooperative organisation eho export for several producers
- Contractual entry modes - e.g. licensing - Franchising - Contract manufacturing - out sourcing - e.g. turnkey construction contact - coproduction - technical knowhow in return for share in output - countertrade - counter purchase (dleayed barter), barter, compensation packages, buyback arrangement - overseas direct investment - joint venture or sole ownership |
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Types of franchise system
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. manufacturer - retail e.g oil or car companies - shell, toyota
. manufacturer - wholesaler e.g softdrink industries sell concentrate to bottling wholsalers . wholesaler - retailer e.g drug stores . service sponsor - retailer e.g. mcdonalds, burger king, subway, car rental - sixth |
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Types of coporate vertical marketing system
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Forward vertical integration
backward vertical integration |
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What are the strategic pricing objectives
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Maximise sales growth
maintian quality or service differentiation maximsie current profit survival attain social objectives |
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How can an SBU reach the price objective of maximising sales growth and what are the conditions.
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Penetraton pricing
conditions are - target maerket is cos sensitive - firm cost is low compared to cpmpetitor - sbu is pursuing a low- cost defender business stratgy - prodcution cost is likely to fall with increase in volume Low price is likely to discourage competitor from entering |
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How can a BU achieve the price objective to maintain quality and service and what are the conditions
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Premium pricing.
conditions are - - target customer not sensitive to price - product market is in growth or mature stage - Percieved by target to have quality and service advantage - SBU is pursuing deferentiated defender strategy - firm has high cost extensive advertising to maintain image |
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How can a BU achieve the price objective to maximise current profit and what are the conditions
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1. Skimming price policy (setting price very high at the beginnning), Conditions are. - Product market at introductory or early growth stage - Firms first entrant - SBU pursuing prospector strategy - Limited capacity - Advanced technology hinder immediate competitor entrance
2. Harvesting (set price to maintain margins and ROI) Conditions are: - Product market is at late maturity or decline stage - SBU is pursuing differentiated defender strategy - competitive position can not be sustained - product is a cash cow 3. Survival very low price, Conditions are: - Weak product - Firm needs to buy time and maintain cash flow - product market in growth or early maturity stage |
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How can a non profit BU achieve its social price objective and what are the conditions
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Low price, perhaps below total cost for some segments, to stimulate or subsidise demand
Conditions are: - Non-profit - Costs subsidised by tax revenue or contributions - one or segments need product but are unable to pay the price |
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What are the factors tha affect customers sensitivity to price
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perception and prefrence
awareness and attitude towards substitutes ability to pay |
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Which conditions affect buyers ability to pay in terms of price sensitivity
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total expenditure
end benefit shared cost inventory |
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which conditions affect buyers awareness and attitude to sustitutes in terms of price sensitivity
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Difficult comparison
sunk investment subsitute awareness |
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Which conditions affect buyers perception in terms of price sensitivity
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Unique value
price - quality ratio |
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Price elasticity of demand
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% change in quantity divided by % change in price
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What are the disadvantages of estimated demand
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Reaction to change in price can not be calculated
Ignores effect of non price factors |
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Ways of estimating demand curve
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Survey consumer in a laboratory tes atmosphare
instore experiments analysis of sales history multiple test markets |
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To estimate cost a firm has to include
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Fixed costs and variable costs
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How to determine the right price level or unit cost
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Unit cost= Variable cost + fixed cost/expected unit sales
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How to calculate a markup or cost plus pricing
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Markup price: unit cost divideded by 1 minus desired % markup on retail
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How to calculate a rate of return or target return pricing
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Target return price= unit cost plus desired % return x capital investment divided by unit sales
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How to calculate the break even volume
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Break-even volume= fixed cost divided by price minus varaiable cost
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Types of discounts and allowances
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Rabat
trade discount quantitiy discount cash discount allowances price off promotions |
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Types of defferential pricing
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Time pricing
Location pricing customer segment pricing |
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Types of global counter trade in pricing
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barter
compenstion deals buy back arrangements offsets |
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Methods to estimate costumer value in pricing
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Industrial engineering
overall estimate decomposition approach compositional approach improtance rating |
