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146 Cards in this Set
- Front
- Back
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Process of Strategic Marketing
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1. Situation Analysis
2. Problem & Opportunities 3. Marketing Objectives 4. Marketing Strategies 5. Budget Determination 6. Marketing Program 7. Control & Evaluation |
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Marketing Orientation:
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Company-wide philosophy focused on discovering and meeting the needs/desires of its customer through the product mix. A co-created marketing campaign between company and its customers.
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Insight:
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The true nature of information, the underlying truth
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Characteristics of insight:
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1. Comes from connection of multiple findings
2. Requires leap of interpretation and thinking 3. Not obvious nor evident |
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Business scope:
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A statement that include scope of work, its strength and limitation - a "zoom-in" on a mission
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What goes into business scope?
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1. Statement of organisation mission and vision
2. Product definition 3. Targeted product categories 4. Competitors and their products 5. Identification of target market 6. Time/space boundaries |
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Benefits of External Analysis:
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1. Helps to capitalise on early opportunities
2. Early signal of impending problems 3. Identify customer/market trends 4. Improve image of firm - being "up-to-date" 5. Intellectual stimulation - build a learning organisation |
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Aim of industry analysis:
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1. Assumption about future size of the market
2. Identify future attractiveness of the market |
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Things to consider in rivalry among existing firms:
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1. Number of competitors
2. Market concentration 3. Market growth 4. Exit barriers 5. Product differentiation 6. Fixed costs level |
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Things to consider in new entrants:
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1. Cost of entry
2. Distribution channels 3. New entrants retaliation level 4. Differentiation level 5. Unmet needs level |
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Things to consider in substitutes:
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1. Technology
2. Quality/usefulness of substitute 3. Relative price of substitute 4. Switching costs |
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Things to consider in supplier power:
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1. Level of concentration of suppliers
2. Switching cost of suppliers 3. Differentiation in suppliers' offerings 4. Importance of the input 5. Threat of forward integration 6. Threat of backward integration (from us) |
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Things to consider in in buyer power:
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1. Level of concentration of buyers
2. Switching cost 3. Differentiation in industry's offerings 4. Importance of the product 5. Threat of forward integration (from us) 6. Threat of backward integration |
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Strategic Group
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A sub-industry in which firms/brands follow similar strategies and have same target market
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Assumption of PLC model:
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1. All industries have limited time span
2. The cycle follows predictable phases 3. Conditions, threats/opportunities vary along the way |
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Competitive Analysis:
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1. Identify WHO are the most important competitors
2. Identify WHAT are they doing now and will in the future |
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Customer Analysis:
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WHO is involved in buying process?
WHY do they buy the product category? Needs/Expectations? WHAT are their choice criteria? Functional/emotional benefits? Price? WHERE do they buy the product? WHEN: purchase cycle, how frequently do they buy? How many? HOW do they use the product? Usage occasions? |
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How to set objectives?
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1. Look at problems & opportunity statement
2. Consider corporate/business unit overall strategy 3. Past objectives may be precedent 4. Use judgement and forecasting skill |
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Strategic Gap =
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= Ultimate objectives - Market Reality
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Types of marketing objectives:
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1. Short term: less than 3 years. Usually in terms of specific numerical task (i.e gain 10% of market share)
2. Long-term: more than 3 years. Focus on branding, achieving sustainable competitive advantage |
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Generic strategies:
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1. Cost leadership
2. Differentiation 3. Cost focus 4. Differentiation focus 5. Unsustainable 6. Lost in the middle 7. Breakthrough |
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Cost leadership:
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Offering mass product that is available everywhere else however at a very low price (ex. Amazon, Walmart)
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Differentiation:
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Product is highly differentiated and sold at high price. Customers are willing to pay the premium for that differentiation (i.e Apple)
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Cost focus:
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Target at highly price-sensitive customers - niche market (ex. Aldi)
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Differentiation focus:
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Target niche market, for enthusiasts (ex. Ferrari)
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Lost in the middle:
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Not be able to differentiate significantly for customers to pay premium but the price is not low (i.e Volswagen)
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Unsustainable generic strategy:
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Low differentiation but high price --> dangerous position (i.e Microsoft, Telstra)
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Breakthrough generic strategy:
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High differentiation and at low price - customer's favourite (i.e Zara)
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Market signalling:
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Announcements of motives, moves and positions of the company to avoid competition while still be able to meet its objectives --> no direct confrontation
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Offensive strategies:
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Design to attack competitors
1. Frontal attack: competitive strategy for market-to-be leaders, who has enough resources to compete 2. Bypass attack: Avoid direct confrontation, choose different positioning to attack 3. Encirclement attack: many small firms attack market leader 4. Guerrilla attack: shocking attack 5. Flanking attack: look at competitor's week points of competitors (niche, follower) to produce a better product on that feature |
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Defensive strategies:
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1. Preemptive defense: attack competitor prior to their attack
2. Position defense: erecting barriers around the company with market offerings 3. Flanking defense: create wide product proliferation to lower the chance for our customers to buy competitors product 4. Counteroffensive defense: response to the attack in the same way 5. Strategic withdrawals 6. Mobile defense: create new product to match competitors product (eliminating their POD) |
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Product-market strategies:
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1. Market Penetration
2. Market Development 3. Product Development 4. Differentiation |
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Market Penetration:
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1. Win share (offensive strategies)
2. Introduce different usage (i.e recipe for Orange punch cocktail that use Orange juice) 3. Increase usage quantity/frequency (i.e Orange juice is not only for breakfast) 4. Win more repeat purchase (focus on retaining customers 4. |
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Product development:
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Introducing new product to existing customers to increase total sales
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Market Development:
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Introducing same existing product to new market.
1. Convert non-users 2. Increase adoption rate (from innovators to mass market) 3. Geographic expansion |
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Differentiaiton:
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Enter new industry. Related diversification works better.
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Purpose of segmentation:
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To focus on most valuable segments in order to avoid marketing waste
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Types of segmentation:
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1. High-level segmentation
2. Low-level segmentation |
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High-level segmentation:
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Segmentation is at product level, based on product usage. Dividing market into strategic groups.
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Low-level segmentation:
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Segmentation at consumer level based on demographic, geographic, behavioral and psychographic characteristics.
1. A priori 2. Post hoc 3. Data mining |
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A priori segmentation, adv & disadv
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Based on secondary data (already available) such as VALS.
Advantage: Quick and cheap Disadvantage: might not be applicable for every cases. |
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Post hoc segmentation, adv & disadv
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Segmentation is done after primary research, unique to the company as it is customizable.
Advantage: most applicable/precise Disadvantage: very expensive` |
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Data mining, adv and disadv
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Look at existing consumers to find new patterns and behaviors to divide into new segments.
Advantage: market penetration, fast, readily available Disadvantage: missing out external opportunities |
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How to find the valuable segment?
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Segmentation should base on a combination of those variables that drive opportunity value for the company
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Segmentation variables:
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Demographic
psychographic behavioral geographic |
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What determine opportunity value of segments?
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1. Worth: price sensitivity and purchase frequency
2. Influence: social influencer status 3. Reach-ability: can we reach it profitably |
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Targeting types:
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Undifferentiated: no segmentation no targeting
Differentiated: segmentation without targeting Concentrated: segmentation and targeting |
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Types of positioning:
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1. Functional
2. Symbolic/emotional 3. Experiential |
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Benefits of introducing new product:
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1. Cater variety seeking consumers
2. Economies of scale 3. Increase shelf presence and retailer dependence 4. Create internal competition within the firm |
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Disadvantages of introducing new product:
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1. Cause confusion
2. Increase cost of manufacturing 3. Distribution partners may refuse to take in 4. Cost of complexity 5. Inability to compete on the same quality level in all categories |
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Product extension strategies:
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1. Upward stretch
2. Downward stretch 3. Two way stretch 4. Same level stretch |
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Considerations while extend/prune:
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1. Cost VS Benefit of extending/pruning
2. Base on generic strategy 3. Consumer needs 4. Stage of PLC 5. Competitive situation 6. Increase/decrease barrier to entry 7. Macro-level opportunities |
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What is brand leveraging?
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Using the existing brand name for a new product/product category
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Advantage of brand leveraging:
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Decrease cost and time of introduction, borrow brand awareness and credibility
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Disadvantage of brand leveraging:
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Can damage core brand image
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Product layers:
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1. Core: the basis features for the product to belong to that category (i.e car - running engine)
2. Expected: additional value that is expected to come with the product (i.e radio in the car) 3. Augmented: additional value that is not expected by consumer, point of differentiation with other brands (i.e built-in reverse camera) 4. Potential: additional value that is not yet realized but can potentially be a POD |
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What is moving frontier?
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Consumers have growing expectation --> Augmented level of product will eventually become expected and ect...
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Consideration while differentiating:
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1. Benefit of additional feature for consumers
2. Can we deliver it profitably 3. How fast can competitors imitate 4. What feature has added value |
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Characteristics of services products:
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1. Intangibility: hard to evaluate the quality of product --> make it more tangible with physical evidences to reduce consumers' risks
2. Inseparable: provide more usage opportunity --> online services, ATM machines, employ technology... 3. Heterogeneity: standardized service process to ensure that service have same quality 4. Perishability: cannot be saved, hard to control demand --> have a designed plan and guidelines for under- and over-demand situations |
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Brand strategy:
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Product is hardware, carries functional positioning
Brand is software, has symbolic/experiential positioning (through symbol, name, design...) Brands create tangible things (physical appearance of brand) that initiate meanings in consumers' minds Consumers create those meanings. |
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Manage product innovation:
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Early adopters and general public have different product value
Early adopters: novelty value General public: functional value Therefore, need to have 2 different product launch strategies to attract these 2 groups (to jump over the Chasm) |
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First mover advantages (pioneering strategy):
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1. Get the most profitable segment
2. Set the rule 3. Distribution advantage 4. Economies of scale and experience 5. High switching costs for early adopters 6. Possibility of positive network effects 7. Possibility of managing scarce resources |
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When to choose pioneering strategy?
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1. Can raise entry barrier for new product category
2. Resource capabilities to maintain pioneer success: R&D, quality, scale, quick product proliferation, promotional expenditures |
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Follower strategy forms:
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Fast follower: larger entry scale than pioneer, leapfrogging with superior product technology, quality and customer service
Late follower: focus on niche market segments |
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Benefits of follower strategy:
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1. Learn from mistakes
2. Bigger resource 3. More recent technology |
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When to choose follower strategy?
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1. Low barrier to entry
2. Sufficient resource to overwhelm pioneer's early advantages |
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Pricing methods:
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1. Cost-plus
2. Target pricing 3. Competitive-based pricing 4. Auction pricing 5. Customer-based pricing 6. Value-based pricing |
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What is cost-plus pricing? Adv. & Disadv.?
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Add desired margin to the cost of production.
Simple but ignore external factors |
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What is target pricing? Adv. & Disadv.?
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Set ROI, calculate the margin that required to reach that ROI --> add that margin to the cost
Simple, but ignore external factors |
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What is competitor-based pricing? Adv. & Disadv.?
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Look at competitors' price at determine our price based on positioning relative to them (higher, lower, same level)
Easy for customers to compare and form brand meaning (-): we don't know their cost structure, they may cut the price lower --> price war --> not sustainable |
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What is customer-based pricing? Adv. & Disadv.?
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Charge as much as we can, based on the demand from customers
High profit, hard to predict and control the demand |
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What is auction-based pricing? Adv. & Disadv.?
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Pricing based on bidding from customers (i.e Google Ads)
Get high profit, real time price discovery (-): may not represent price acceptability of the whole market |
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What is value-based pricing? Adv. & Disadv.?
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Charge based on value that customers receive
(+): perceived to be "fair pricing" (-): very hard to calculate |
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What to consider while developing pricing strategy?
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1. PREST factors
2. Know your competitors' basic strategies 3. Their relative price/differentiation positions 4. Their success/failure with their current price strategy 5. What pricing moves are expected? 6. Price sensitivity of customers 7. Construct demand curves 8. Costs 9. Generic strategy 10. How do you want to talk about price? |
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Price sensitivity of customers depends on:
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1. Quantity of product (less elastic if quantity is small)
2. Bundle products 3. Products that are hard to compare 4. Switching cost 5. Perceive fairness of price |
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Goals in pricing:
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1. Gain market position
2. Achieve financial performance 3. Product positioning 4. Stimulate demand tactically 5. Influence competition |
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What is penetration pricing?
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Price as low as possible to gain market share early as possible and increase margin at later stage
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What is skimming pricing?
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Price as high as possible to get profits to cover overheads at the beginning and decrease price to cover market later
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Advantage of penetration:
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Increase market share make it difficult for competitors to come in
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Disadvantage of penetration:
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Low or even negative profit at the beginning (high promotional cost needed to reach mass market)
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Advantage of skimming:
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Earn high margin, quality image --> aim for early adopters
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Disadvantage of skimming:
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Consumer alienation when price drops --> image confusion cheap/expensive, exclusive/mass?
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When to use penetration pricing?
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1. Consumers are price sensitive
2. Competitive threat can be managed 3. Adequate demand level |
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Adv. & Disadv. of adaptive pricing?
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Sell more --> effect margin and revenue of the brand
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How to do adaptive pricing?
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Sparingly and strategically, do not undermine profit and long-term competitive advantage, have healthy promotional policy
IT SHOULD SUPPORT UR COMPANY STRATEGY |
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Responses to price attack:
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Short term: match price
Long-term: Price response: Achieve superior cost efficiency Non price-response: Differentiate, Diversify, Market Signalling |
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Marketing channel is...
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A group of independent firms collaborate to deliver product and service to end users
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Functions of marketing channel
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1. Sales: generate sales
2. Financial: facilitate money between buyers and sellers (and bear some risk) 3. Inventory: lowering storage costs for manufacturer 4. Physical distribution: bring goods/service closer to consumer 5. Post-sale services 6. Provide information about product 7. Help with differentiation/positioning |
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Factors to consider when choose distribution partners
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1. Remote environment (regulations, fashionable products)
2. Competition: intense or exclusive 3. Stage of PLC 4. Consumer purchase habits 5. Functions required for product to be used 6. Intermediaries 7. Objective and strategy 8. Resources and capabilities 9. Other items of marketing mix 10. Control: how much want to give up |
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Channel members:
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1. Sales agent
2. Wholesalers 3. Retailers |
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Trends in distribution:
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1. Internet is a key direct channel
2. Efficiency in logistics and supply chain management techniques 3. Retailer power increases 4. Globalisation 5. Adoption of technology is crucial |
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Types of distribution channels:
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1. Conventional
2. Vertical Marketing System 3. Horizontal Marketing System |
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What is conventional distribution? Adv. & Disadv.?
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Channel members have different goals, each act independently on the basis of "sell-and-forget" strategy
Adv.: easy, allow flexibility in actions Disadv.: competition within channel |
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What is vertical marketing system?
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"Channel leader" in charge of coordination of activities and function in the channel
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Types of VMS:
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1. Ownership
2. Contractual 3. Administered relationship |
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What is Ownership VMS? Adv. & Disadv.?
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One company owns and controls all members of distribution channel.
Adv.: full control and get all revenue Disadv.: high capital intensity |
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What is Contractual VMS? Adv. & Disadv.?
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Channel partners work on the basis of contract that state rules and guidelines for channel activities (i.e franchise businesses)
Adv.: coordination without financial burden Disadv.: sacrifice some margins |
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What is Administered Relationship VMS? Adv. & Disadv.?
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One company has enough power to influence/control other channel members (very rare, i.e DeBeers control 60% of diamonds in the world, it sets the rules)
Adv.: control is achieved without financial burden Disadv.: Very few can do this |
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What is horizontal marketing system?
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2 or more companies that are not related, cooperate with each other to take advantage of marketing opportunities (i.e Fast banking in supermarket chain)
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Types of intensity distribution:
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1. Intensive
2. Selective 3. Exclusive |
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What is selective distribution? Adv. & Disadv.?
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Number of intermediaries selected base on their ability to provide a desired level of sales support and service
Adv.: best of both intensive and exclusive Disadv.: May get lost in the middle |
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What is intensive distribution? Adv. & Disadv.?
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Product is distributed widely through mass channel such as supermarkets.
Adv.: maximise sales Disadv.: low involvement products only |
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What is exclusive distribution? Adv. & Disadv.?
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Give territorial rights to selected intermediaries
Adv.: high brand image quality, exclusiveness Disadv.: high channel cost and low market coverage |
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Channel configuration is...
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The choice of how many level to have in distribution channel
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When to go direct?
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1. Rapidly changing remote environment
2. Product is complex or digitasable 3. Competitors don't go direct --> first mover 4. Internal financial capabilities |
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What are non-marketing capabilities of the company?
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Management, production, HR, R&D, logistics, value chain, activity system, portfolio matrices, operation
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What are marketing capabilities of the company?
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1. Marketing strategies
2. Marketing performance 3. Marketing planning 4. Marketing control and intelligence 5. Marketing organisation |
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Value chain analysis:
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Analysis of each steps that involved in production to find out the most profitable activity of the process
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Activity systems:
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A better version of value chain analysis, assumes that the unique value to the company is not cause by individual activity but a coordination of synergistic activities within the firm.
"The set" is harder to replicate than individual activity |
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BCG matrix:
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To assess the performance of each company's business unit in order to set future strategy
Brand/product is evaluated based on current market share and potential growth Cash cow, Star, Question, Dog |
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Characteristic of Cash Cow product?
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Currently high market share, but growth is slowing down
Strategy: focus on customer service, loyalty program to keep the current customer base |
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Characteristic of Star product?
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Company's favourite. High growth rate with potentially high market share gain in future
Strategy: Emphasis on increasing market share |
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Characteristic of Question product?
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Typical new product, low market share but potential growth rate is high
Strategy: fight for budget to support development |
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Characteristic of Dog product?
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Low market share and low growth (or declining), at declining stage of PLC
Strategy: strategic withdrawal |
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What is GE-McKinsey matrix?
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Ge-McKinsey matrix like BCG, but with more detailed variables for evaluation --> map performance against market attractiveness
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What to include in problem and opportunity statements?
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1. Current opportunities
2. Other opportunities 3. Future opportunities 4. Problems 5. Strategic implication of P&O |
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What is IMC?
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A strategic coordination of all media disciplines and channel in organization to deliver a consistent message to customers
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IMC Strategy Process:
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1. Define communication objectives by looking at situational analysis, marketing objectives and other elements of marketing mix
2. Develop IMC strategy and creative idea |
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How to develop IMC strategy?
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1. Target definition
2. Use brand positioning 3. Message strategy 4. Choose IMC mix 5. Develop execution plan for each IMC element |
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What is Hierarchy of Effect model?
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Model that is used to set communication objectives based on assumption that customers react to communication stimulus on the same way (Attention --> Interest --> Desire --> Action)
Therefore, need to know at which stage are the consumers in order to create effective communication campaign that influences them to move to the next stage. |
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Problems with Hierarchy of Effect model?
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Not applicable for all kind of product
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What is FCB grid?
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A communication objective-setting tool, which take into account importance of the product (high/low involvement) and product positioning(functional/emotional)
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IMC disciplines:
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1. Advertising
2. Sales Promotion 3. PR 4. Personal Selling 5. Direct Marketing |
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IMC channels:
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TV, radio, newspaper, cinema, billboards, magazines, digital...
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Advertising strategy: Adv. & Disadv.
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Adv.: message can be repeated many times, allow high creativeness with sound and visual, impersonality
Disadv.:cluttered - can be easily ignored by consumers |
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Elements of advertising strategy:
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1. Set advertising objectives in accordance with IMC objectives
2. Set message/creative strategy 3. Set media strategy |
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Steps in setting media strategy:
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1. Look at brand positioning
2. Decide on message 3. Decide on reach and frequency 4. Choose IMC discipline 5. Choose media channel 6. Choose media vehicle 7. Decide on timing/scheduling |
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Types of advertising objectives:
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1. Increase awareness
2. Persuade 3. Remind 4. Reinforce brand loyalty 5. Provide information 6. Drive traffic to digital space |
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Types of advertising messages:
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1. Product attributes/USP
2. Competition 3. Brand image 4. Price/quality 5. Use or application 6. Benefits 7. Type of user 8. Product class |
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Factors to consider when choosing media types:
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1. CPM
2. Target audience media habit 3. Message characteristic 4. Product characteristic |
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Factors to consider when choosing media vehicle?
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1. Popularity
2. Type of audience 3. CPM 4. Positioning fit |
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Decision on timing/scheduling:
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1. Purchase cycle
2. Competitive activity/clutter 3. Market seasonality 4. IMC objectives 5. PLC stage |
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Sales promotion strategy: Adv. & Disadv.
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Adv.: increase short term sales, incentive to buy now, promote message strategy
Disadv.: detrimental for brand equity |
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Types of paradox in sales promotions:
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1. Consumer-franchise building: build brand equity with sales promo
2. Non-consumer franchise building: deteriorate brand equity |
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Types of sales promotion:
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1. Consumer sales promotion
2. Trade promotion 3. Internal promotion |
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Characteristics of PR:
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1. Highly credible (earned)
2. Reach people who avoid paid ads 3. Lack of control |
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Types of PR:
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1. Marketing PR
2. Corporate PR |
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Objectives of marketing PR:
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1. Help launch new product
2. Build brand awareness 3. Create interest and generate desirability 4. Repositioning |
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Objectives of corporate PR:
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1. Crisis management
2. Build corporate image 3. CSR |
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Earned PR:
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1. Press release
2. Social media 3. Blogger outreach 4. Personal apperance |
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Characteristics of Direct marketing?
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1. Customised to individual
2. Up-to-date: message can be altered quickly 3. Detailed: provide rich information to foster decision making process |
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Objectives of direct marketing:
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1. Generate immediate sales/trial or sales lead
2. Provide information 3. Gather customer information database 4. Build brand loyalty |
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Types of direct marketing:
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1. Telemarketing
2. Teleshop 3. Digital 4. Direct mail 5. Catalogue |
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Characteristics of personal selling:
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1. Personal interaction
2. Personal customer relationship 3. Buyer feels oblige to respond |
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When to use personal selling?
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1. With complex product
2. In B2B with companies 3. In B2C with channel members 4. Small firms not engaging in any other communication activity |
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Steps in developing sales plan:
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1. Sales objectives
2. Sales strategy 3. Structure 4. Administration |
