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?????s? ?????? ap? µ?a s??p?? marketing

• Session 2
• Dr. Vasilis Theoharakis

• Introduction
• Three Cs
• Four Ps

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What is Marketing?

• Marketing is the process of planning and
  executing the conception, pricing promotion, and
  distribution of ideas, goods, and services to
  create exchanges that satisfy individual and
  organizational objectives (AMA)

Marketing is the art and science of creating and
satisfying customers at a profit
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Marketing Sugar and Water
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Marketing Sodium Hypochlorite

• Pepsi World
• http//www.pepsiworld.com/index2.html
• Clorox
• http//www.clorox.com/science/rmp/how.html

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Competing Orientations Toward the Marketplace

• Production Concept - Consumers favor products
  that are widely available and low in cost.
• Product Concept - Consumers favor products that
  offer the most quality, performance and features.
  
• Selling Concept - Consumers, if left alone, will
  not buy enough of the organizations products.
• Marketing Concept - The key to achieving
  organizational goals consists in determining the
  needs and wants of target markets and delivering
  the desired satisfactions more effectively and
  efficiently than competitors

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THE IMPORTANCE OF CUSTOMER SATISFACTION

• The average business does not hear from 96 of
  its unhappy customers
• For every complaint received, 26 customers
  actually have the same problem
• The average person with a problem tells 9 or 10
  people
• 13 tell more than 20

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THE IMPORTANCE OF CUSTOMER SATISFACTION

• Customers who have their complaints resolved
• tell an average of 5 people
• Complainers are more likely to do business with
• you again than noncomplainers
• 54-70 if the complaint is resolved at all
• 95 if the complaint is resolved quickly

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THE BENEFITS OF CUSTOMER SATISFACTION

• Positive word-of-mouth
• Purchase more frequently
• Less likely to be lost to competitors
• Insulated from price competition
• Positive work environments

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Cost of Losing and Attracting Customers

• Cost of attracting a new customer can be up to 5
  times the cost of keeping a current one happy
• Cost of Offensive Marketing gt Cost of Defensive
  Marketing
• Some companies have increased profits from 25
  to 85 by reducing defections by 5

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Marketing Analysis Framework
3 Cs
Customers Competitors Company
Market research
S
T
P
(Segment)
(Target)
(Position)
4 Ps
Product
Price
Promotion
Place
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Customer Analysis

• Who buys and why?
• How many customers are there will there be?
• How is the buying done?
• Where do they obtain information and where do
  they buy?
• How are decisions made (decision making process)?
• What are and will be their under-served needs and
  wants?
• Are there relevant segments?

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Competitor Analysis

• Who are the competitors?
• Who do customers buy from now?
• Who might become interested in the future?
• What are their
• Goals
• Strategy
• Assumptions
• Capabilities

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Company Analysis

• Objectives
• Corporate
• Business unit
• Strengths Weaknesses Opportunities and Threats
• Reputation
• Costs
• Expertise
• Culture and orientation

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Combining the 3 Cs The Situation Assessment

• What customer needs and wants can we meet?
• What is profit potential?
• What do we need to do to meet them?
• Can we do it better than anyone else?
• What advantages/disadvantages do we have?
• What will likely responses mean for profits?
• How sustainable are our advantages?

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Demand Categories within a Supply Chain
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Illustrative Demand Drivers
Macroeconomic Drivers
Interest Rates
Regulation
Social Trends
Final Demand
Industry Drivers
Substitutes
Complements
Price
Derived Demand
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Direct vs. Indirect Substitution in Market
Modeling

• Direct substitution -
• Displacement of an existing substitute
• Example Intel 80186 vs. 14 existing chips
• Entirely new products -
• Measure the market for the current approach to
  the need you are addressing
• Example Intergraphs 1st CAE system vs. manual
  drafting tools

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Market Attractiveness

• Market size
• Market growth
• Sales cyclicality
• Sales seasonality
• Profit level
• Profit variability

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So, what market should be attractive?

• A market should be attractive to a firm if it
  can exploit the opportunities presented to gain
  competitive advantage

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How is Marketing Changing?

• Increased quality expectations
• The war for brands and shelf space
• Oversaturation of retailing
• How do companies respond?

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Right to choose
Quality of life
Be safe
CONSUMERISM
Be informed
Be heard
ENVIRONMENTALISM
Long-term planning
Eco-systems
Pollution
Growth
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Aggregating Consumers to Segments

• Customers may differ in any step in the consumer
  decision process (heterogeneity)
• Preferences of different customer types may
  conflict
• Making one group happy antagonizes another
• Compromise offerings are dangerous as no group is
  really satisfied competitors can come
• Too expensive to design a different product for
  all
• Segmentation is the answer

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Market Segmentation

• Process of identifying a group of people similar
  in one or more ways, based on a variety of
  characteristics and behaviors
• Results in market segment a group of consumers
  with similar needs and behaviors that differ from
  those of the entire mass market

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Market Segmentation
Identifying Segments
Consumer Characteristics
Geographical Characteristics
Situational Characteristics
Using multiple variables to narrow target
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Criteria for Choosing Segments
Measurability ability to obtain information
about the size, nature and behavior of a market
segment Accessibility degree to which segments
can be reached, either through various
advertising or communication programs or methods
of retailing Substantiality size of the
market--is it large enough to be
profitable? Congruity how similar segment
members are in characteristics or behaviors
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Segmentation Process (STP)

• 1. Identify bases for segmenting the market
• 2. Develop profiles of resulting segments
• 3. Assess the attractiveness of each segment
• Size and growth
• Fit with company capabilities and objectives
• Assess costs and revenues
• 4. Select the target segment(s)
• 5. Develop a positioning strategy for each segment

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Selecting Target Segments
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Positioning - Perceptual Maps
Sportiness
Porsche
BMW
Miata
4
Acura NSX
1
Jaguar
Supra
Prelude
Celica
2
6
VW Golf
Economy
5
3
Twingo Punto
Corolla Civic
Volvo V70
16 Clusters of Ideal Points Radius proportional
to of consumers
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Positioning

• Translate your product into consumer benefits
• people should see that it is satisfying their
  pressing needs
• Then, position your product in peoples mind, in
  a way that differentiates it from all your
  competitors

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• Use 4Ps overhead here

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Conclusions

• Marketing is complex
• There are many issues and no single equation that
  can deal with all of them you must think
• Marketing is quantitative
• Must be comfortable applying finance and
  accounting principles, among others
• Marketing is indispensable
• No business can succeed if it doesnt get the
  marketing right (unless you are a cable monopoly)!