Appunti di Advanced strategic marketing

THE MARKETING PLAN

Marketers go through the steps of first doing a situation analysis and then STP and, based on this strategic marketing homework, develop a marketing mix of specific tactics to implement in the marketplace for their brand. These can be combined into a "roadmap" that describes how a good marketer does marketing. It also can be used as a brief outline for developing a marketing plan for a brand. See page 10 in CMB.

Part of developing a strategy or executing a tactic? Situation Analysis, STP or Marketing Mix?

• Research size and growth trend in Mintel to determine future sales potential. Research recent innovations on competitor
• Use a coupon to get consumers to try your new product.
• Analyze TV commercials of competitors to understand differences among brands.
• Shoot and run a new TV commercial for your product.
• Research government regulations to determine how much oversight there is.
• Hire a Washington lobbyist to advocate for your company's

best interests (PR).

Use a store audit to research and analyze unit pricing for the major competitors.

Give a slotting fee to retailers to get them to slot your product in their stores.

Research competitor prices and decide if your product should be high or low priced.

Choose a price point of $1.99 per pound for your product.

Test and analyze competitor products to see which ones are superior and how.

Make changes in your product like removing a preservative, adding real meat.

Research consumers and decide which ones your product should target.

Think about how your new product can stand out from its competitors—how it will be different—and decide on a specific identity for the product.

1.B Basic Marketing Math & Competitive Roles (p.11-32)

Formula for market size = ? Can be the size of a segment, a category or overall industry. Measured in units or dollars

Formula for future sales (future market size)?

Formula for market share = ? Can be brand share

1. Market Share: The percentage of a company's sales or units in relation to the total sales or units in a category or industry.
2. Market Growth or Decline: The change in market size, measured in units or dollars, expressed as a percentage. It can be used to forecast future sales.
3. Formulas:
• Current Market Size = Sales of All Brands of All Companies
• Future Sales = Current Sales + (CS x growth rate)
• Brand Share = (Brand Sales / Total Market Sales) x 100
• Change in Share = Simple subtraction and is expressed as a percentage point change, not a percent change
• Market Growth Rate = (Change / Start) x 100
4. Competitive Roles: Leader/Challenger/Follower/Nicher (p. 12)
• The Market Leader is the company with the highest market share. In the cola industry, this is which company?
• The Market Challenger is the company that is trying to challenge the leader through innovation and spending. Their market share is usually close to the leader, but not necessarily. In the cola industry, this is which company?

Follower is the “lazy one” of the industry or category. This company basically follows the lead of others in terms of product development and spending. In the cola category, this is which company? Private label products tend to be followers—following the innovations of the products made by major companies. The Market Nicher chooses a small niche in the category to serve. In the cola category, this is which company?

1. C Product Life Cycle—PLC (p. 14) 4 major stages in PLC:
   • Introduction
   • Growth
   • Maturity Saturation in terms of ?
   • Decline Change in terms of?
2. Can you graph the PLC for sales and profits? Can you name an Apple product in each stage?
3. 4 major strategies to manage a business through the PLC:
   • Build Invest to grow (what PLC stage?)
   • Hold Spend just enough to maintain sales (what PLC stage?)
   • Harvest Cut spending, “milk” the business (what PLC stage?)
   • Divest Sell (what PLC stage?)
4. D Value Delivery Network (p. 15)
   • What

are the four key parties in the value delivery network? Why is it called “value delivery” network? What is another name for it? What is the front half (upstream) include? What is the back half (downstream) include? Why is it sometimes called the distribution channel? What does this group include besides distributors?

The value delivery network is external to the company and includes all the parties that help the company create a product/service and get it to customers. They are essential to the company's ability to deliver value to its customer.

Front half of value delivery network is called the supply chain and back half is called the distribution channel. (Sometimes the whole delivery network is referred to as the supply chain.)

A quick look at distribution specifically…

Downstream is the distribution channel.

Dog food manufacturers usually use a conventional distribution system with one or more intermediaries between the producer and

consumer.

For large retailers and large producers:

Producer Retailers Consumers

For small retailers and small producers:

Producer Wholesalers Retailers Consumers

Or a company can use direct distribution to customers with no intermediaries.

1.E Competitive Advantage (p. 15)

A competitive advantage exists when the competencies of a firm permit it to outperform its competitors: through lower costs and/or product differences that allow the company to charge a premium price.

Is an established and well-known brand name like Purina or Pedigree a competitive advantage?

Is a reputation for high quality and the best ingredients like Blue Buffalo has a competitive advantage?

1.F Market Concentration (p. 16)

According to the AMA, market concentration is the degree to which relatively few firms account for a large proportion of the market (when 2 or 3 companies own almost 50% share or more in a category).

What is the opposite of a concentrated category? How concentrated do you think

The dog food market is?

Checklist of topics for exam:

• Strategy vs. tactics
• Characteristics of a marketing plan
• Calculations of marketing math (market growth, future sales, share of market, changes in share)
• Competitive roles
• Product life cycle
• Value delivery network (4 main parties in supply chain)
• Two main sources of competitive advantage
• Market concentration
• Factors to consider in doing an environmental scan (PPEST)
• Understand market structure terms for dog food: what is our industry, our category, key segments in the category?
• Needs, wants, products, value, satisfaction, relationships
• Using Simmons data to analyze the dog food user

Some trends in marketing, themes to come back to:

3 Important consumer targets:

• Boomers (aging population)
• Gen Y
• Ethnic markets (Hispanic Americans and Asian Americans)

Major consumer needs/trends:

• H and W
• The new family—marriage and kids later, smaller families, more balanced in parenting/HH roles but more

stressed- Need for convenience- Mass affluence and self-indulgence- Multi-cultural society

The microenvironment includes those parties that affect the company's profitability that are close to the company such as:

• Suppliers
• Company employees
• Intermediaries
• Customers
• Competitors
• Certain public groups

The company has some influence and control over these parties.

The macroenvironment includes those parties and forces that affect the company's profitability that are in the external marketing environment.

P-P-E-S-Ts (can be a "pest" (threat) or opportunity. They are largely outside of the company's control.

The Environmental Scan (P-P-E-S-T)

Physical/Natural Environment

• Extreme weather patterns (floods, drought, extreme heat and cold)
• Pollution of air and water
• Shortage of raw materials like oil and gas
• Emphasis on "green" marketing and sustainability (80% say they worry.)

Political/Regulatory Environment

• Includes specific federal agencies as

well as federal, state, and local laws

Recent changes are new health care bill and revised financial regulations.

Economic Outlook

• Economic recession vs. expansion: changes in GDP, interest rates, unemployment, home and stock value, income, etc. All affect consumer spending.
• Income disparity: "The rich are getting richer, the poor are getting poorer, and the middle class has shrunk"... Leading to a two-tiered economy of haves and have-nots. The haves can afford luxury; the have-nots are trading down to private label and discount stores or not buying at all.

Social Changes

• Includes demographic and cultural trends

Technological Developments

• Changes in communication, information, entertainment, socializing.

ECONOMIC AND SOCIAL TRENDS

1. INCOME DISPARITY

The census data shows a distinctive trend in rising incomes for the top 20% of wage earners and lower incomes for everyone else. The top 20% account for what % of total aggregate income? What % of spending do you think

they account for? Even stronger trend within the top 10%, which we call the “mass affluent.” It is a large group (mass) and fairly well-off (affluent). But NOT just millionaires and billionaires.

2. MORE ON ECONOMIC ISSUES—RECESSION IS OVER BUT…

• Not everyone feels the change.
• When did the recession end by definition?
• Which groups did it impact the most: The higher income groups or the lower? The younger earners or older ones?

3. UNEMPLOYMENT FOR THOSE UNDER AGE 25 IN 2013/14*

• U.S. = 16% unemployment among people under 25 (vs. pop as a whole of 7% at that time; now at 5.9% as of September 2014)
• Spain = 57%
• Greece = 58%
• Italy = 41%
• Portugal = 36% *Nov. 2013

Marketers have to be Trend Trackers! To stay on top of the events and trends that affect their product, their company, their competitors and their customers.

Now on to some major issues in terms of demographic changes and social trends: changes in the population age structure, increasing diversity

and population migration within the U.S. DEMOGRAPHIC TREND: 1. CHANGING AGE STRUCTURE Different birth rates and longer life expectancy have created 3 distinctive generational groups: Baby Boomers – Post-war population boom. Children born 1946-64. Now in their 50's and 60's. 78 million strong. Most are at or approaching their peak earning years. Some are facing retirement although the recession reduced wealth (stock, homes). Still the wealthiest generation in US history: about 25% of US population but hold over 80% of nation's personal wealth. Some call them "Zoomers," because they like to think and act young. They are concerned with fitness & health. Millennials or Gen Y-"Echo Boomers" "Digital gen" "Money Gen." Heavy