Marketing Analysis

1
Marketing Analysis

• Powering Design Innovation.

2
Today..

• Marketing Mix
• SWOT Analysis
• Product Life Cycles
• Product Viability
• Macro-Environmental Analysis
• Competitor Analysis
• Customer Analysis

3
The Marketing Mix..

• The ingredients of the marketing mix
• Product
• Price
• Promotion
• Place
• The four Ps

4
Marketing Mix

• What is the marketing mix for?
• The way in which differential advantage may be
  achieved and sustained by manipulating the four
  Ps
• There are more Ps but we are focusing on the
  main four.

5
Marketing Mix..

• Product Product management, New Product
  Development, Branding and Packaging.
• Price Cost, Discount Structure, Terms of
  Business.
• Promotion Advertising, Sales Promotion, Public
  Relations, Merchandising.
• Place Customer Service, Physical Distribution,
  Channel Management.

6
Questions to ask..

• Product
• Objectives of the Product Who, What Where and
  When?
• What modifications may be made?
• To what extent is the product differentiated from
  the competition?
• These depend on many factors!

7
Price

• What is an appropriate cost of the product given
  manufacturing overheads, differentiation of
  product? (Perceived product value)
• What are the comparative costs of other products
  in your range and competitors range?
• When should cost be re-assessed?
• Price/promotion strategy?
• Sufficient profit!

8
Promotion..

• Promotional objectives who, what where, why
  (again)!
• Budget is a key one but perhaps not so relevant
  to your project.
• Advertising research
• Choosing the right media
• Frequency of advertising
• Measuring effectiveness of campaign.

9
Place

• What levels of market coverage are appropriate?
• What scope is there for improvements to service?
• What are your competitors distribution channels?
• What levels of dealer and distributor loyalty
  exist.
• Do distributors have adequate product knowledge

10
SWOT Analysis..

• Strengths, Weaknesses, Opportunities and Threats.
• A lot to consider in this area as it is a general
  overview of a company and its market, its
  competitors in that market etc.
• Some details..

11
(No Transcript)
12
Details to consider for SWOT..

• Market Factors Reputation, previous performance,
  competitive stance, customer loyalty, breadth of
  product range, product modifications, quality
  issues, geographical coverage, manufacturing
  costs, customer service, pricing, advertising,
  new product programme.
• Financial Factors Investment capital,
  profitability, sales, financial stability,
  margins.
• Manufacturing Factors Production facilities,
  Economies of scale, workforce, technical skill,
  supplies.
• Organisational Culture, Leadership, Management
  capabilities, adaptability.

13
Product Life Cycles

• The life and death of products from introduction
  to decline.
• Time scales depend strongly on the type of market
  your in and are influenced by design, marketing
  and promotional strategies.
• Electronics for example is very fast moving
• Cars are often long terms products
• Again.. Many factors, like cost design and even
  relationship influence lifecycle.

14
The notion of product change
gt The main purpose of the product life cycle is
to remind us of three characteristics (1) that
products have a limited life (2) that profit
levels are not constant, but change throughout a
products life and (3) that the product requires
different strategies at each stage of the
lifecycle (Kotler 1992) gt Within the Product Life
Cycle a product travels through a series of
stages. The ability to mange and react
accordingly to these stages determines the
success or failure of the product
15
Product Life Cycle (PLC)

• The PLC has the following principle stages
• (1) introduction
• (2) growth
• (3) maturity
• (4) decline
• The PLC is always measured against the volume of
  sales in relation to time. It must also be
  indicated that many company's attempt revamp
  declining products which often go through a short
  period of rejuvenation

16
Principle phases within PLC concept
17
Product Life Cycle (PLC)
(1) Introduction The introduction stage is the
official birth of a product. It will at times
overlap with the late testing stage of the
development cycle. The design focus in this stage
is to monitor early use of the design to ensure
proper performance, working closely with
customers to tune or patch the design as necessary
18
Product Life Cycle (PLC)
(2) Growth The growth stage is the most
challenging stage, where most products fail. The
design focus in this stage is to scale the supply
and performance of the product to meet the
growing demand, and provide the level of support
necessary to maintain customer satisfaction and
growth. Efforts to gather requirements for the
next-generation product should be underway at
this stage.
19
Product Life Cycle (PLC)
(3) Maturity The maturity stage is the peak of
the product life cycle. Product sales have begun
to diminish and competition from competitors is
strong. The design focus at this stage is to
enhance and refine the product to maximize
customer satisfaction and retention. Design and
development of the next-generation product should
be well underway at this stage.
20
Product Life Cycle (PLC)
(4) Decline The decline stage is the end of the
life cycle. Product sales continue to decline and
core market share is at risk. The design focus in
this stage is to minimize maintenance costs and
develop transition strategies to migrate
customers to new products. Testing of the next
generation product should begin at this stage.
21
Product Life Cycle (PLC)

• Consider the life cycle of a product when
  planning and preparing for the future
• During the introduction phase, work closely with
  early adopters to refine and tune products
• During the growth stage, focus on scaling product
  supply and performance
• During the maturity stage, focus on customer
  satisfaction through performance enhancements and
  improved support

22
Product Life Cycle (PLC)

• During decline, focus on facilitating the
  transition to next generation products
• Note that the development cycle for the
  next-generation product begins during the growth
  stage of a current-generation product
• The seminal work on the product life cycle is
  "International Investment and International Trade
  in the Product Cycle" by Raymond Vernon,
  Quarterly Journal of Economics, 1966, vol. 80, p.
  190-207. A contemporary review of the product
  life cycle is found in Marketing Management by
  Philip Kotler, Prentice-Hall, 11th ed

23
Product Life Cycle (PLC)

• Branded products have been found to have short
  product life cycles. The life expectancy of a new
  branded product is approximately 3 years, and
  shortening. It is also common for existing brand
  names are used to launch products forms eg
  i-tunes i-touch i-phone i-mac i-pod...

24
Standard Product Life Cycle (PLC) Curves
25
Standard Product Life Cycle (PLC) Curves

• The main implication of the PLC is to avoid
  having a high proportion of a company's products
  at the end of their life cycles. Drucker (1963)
  has established that there are six categories of
  products which relate to the notion of product
  elimination
• (1) Tomorrow's Breadwinners
• (2) Today's Breadwinners - yesterday's
  innovation
• (3) Products capable of contributing to profit
  with substantial help
• (4) Yesterdays Breadwinners
• (5) Also Ran's
• (6) Failures

26
Standard Product Life Cycle (PLC) Curves

• The purpose of these categories is to determine
  which products should be maintained, built upon
  or eliminated. The PLC also provides valuable
  information for analytical tools (such as the
  Boston Matrix and GEC model)
• Many of the lifecycle curves indicated are
  generalised and the shape of curves will vary
  widely from product area to area and from company
  to company
• It must also be noted that there is nothing fixed
  about the length of a cycle or the length of its
  various stages

27
Standard Product Life Cycle (PLC) Curves

• It has been suggested that the length of the
  cycle is governed by
• (1) the rate of technical change
• (2) the rate of market acceptance
• (3) the ease of competitive entry

28
Sustained product development.

• Sustained development of new products to replace
  others as they die.

29
Product Design methods for controlling life
cycles..

• Built in Obsolescence.
• PDSs (Product Design Specifications).
• Looks at useful service life, maintenance,
  usage environment, manufacturing quality and
  quantity in relation to price and target market.
  Sets tolerances, degradation of technologies etc.
• Introduction of new products.
• Re-promotion.. Target new markets! McDonalds
  bringing grease to new nations!

30
Built in Obsolescence
31
New Product Design Process..
32
(No Transcript)
33
Macro Environmental

• PEST Analysis
• Political
• Economic
• Social
• Technological

34
Political..

• What legal developments are likely, nationally
  and internationally that may affect your market
  strategy?
• Which governments and organisations should be
  monitored?
• Legislation and Standards development
• Political implications regimes, wars other laws.
  
• Government policies, tax, imports etc.

35
Economic..

• Unemployment, credit, savings house prices
  affects consumer spending etc.
• Economic growth rates and income levels,
  disposable income.
• Changes in size and distribution of population
  due to economic change?

36
Social..

• Consumer lifestyles and values environmentally
  conscious people.
• Attitude to government and economic policy,
  media.
• Attitudes towards the companys product and
  services important!
• PAN-AM
• Shell, BP
• McDonalds
• Smoking

37
Social influence..
38
Technological

• What changes are taking place in product and
  process technology.
• Replacement technologies
• Positioning to capitalise on technological
  developments.
• Consider implications
• Technology Leapfrogging..
• Robotic laser spot welding in the motor industry
  and mechanised production lines.

39
Design for sustainability..

• Eco Design.
• What is likely to happen to the cost and
  availability of natural resources for production?
• Contingency plans to cope with enviro-issues.
• Legislations
• Company image JCB

40
Competitor Analysis..

• Competitor Analysis seeks to
• Provide and understanding of your competitive
  advantage/disadvantage relative to your
  competitors positions.
• Gains insights into competitor strategy.
• Give and informed basis for developing future
  strategies and advantages over you competitors.

41
Why?

• Competitor analysis idealism for companies
• To survive
• To handle slow growth
• To cope with change
• Exploit opportunities
• Become intuitive
• Make better decisions
• Stay competitive
• Avoid surprises.

42
Not keeping and eye on the competition..

• 1959 Xerox develop the plain paper photo copier
  huge success and cornered the world market by
  79!
• Failed to monitor competition.. Canon, Ricoh and
  Minolta introduced smaller cheaper versions.
• Xerox shares went from 125 per share to 25 per
  share in 1992.

43
What to do..

• Define your competitors who are there, how
  many, obtain their market share and financial
  details to see who are you direct and in-direct
  competitors.
• Your position in the market, leader, aspiring,
  challenging.
• Intensity of competition high, medium, small,
  none!
• Likelihood of new entrants
• Tactics and strategy planning.
• Competitors likely response!

44
Customer Analysis.

• So has been done during your work identifying
  your market segments in demographic study age
  ranges etc.
• You know the identity of your customer!
• Now we can look at how they may act, and why they
  will buy our product over others.

45
Basic buyer analysis..

• What do they buy?
• Why do they buy?
• Who is involved in buying?
• How do they buy?
• When do they buy?
• Where do they buy?

46
Buyer Behaviour Model..
External Stimuli Buyers Black Box Buyer Decision
Political, Economical Political, Technological Buyer characteristics Cultural, Social, Personal. Product Quality, suitability, aesthetics, ergonomics usability.
Product, Price, Advertising Problem/desire. Brand recognition
Distribution. Searches from information. Dealer influence, knowledge.
Evaluation. Quantity.
Decision. Purchase timing.
47
Buyer thinking..
48
Changing customers..

• Development of new value systems
• Emphasis on high quality for less money
  perceived value for money
• Higher levels of price awareness and information.
  
• Less technophobia.
• Increased demand for new products, faster life
  cycles. disposable society
• Lower levels of brand and supplier loyalty.
• Environmental awareness.
• Changing roles of men and women.

49
Group Activity

• Brief SWOT and PEST analysis of Different
  products..
• Landmine.
• Mobile Phone.
• Alco pops.
• Dirty Great 4x4.
• Big Mac.
• Fur Coat.
• Cigarettes.
• Rolex.