3rd edition

Charlotte H. Mason William D. Perreault, Jr.

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The Marketing Game is Integrative and Covers All Aspects of the Marketing Strategy Planning Process

Narrowing down to focused strategy with quantitative and qualitative screening criteria

Customers
Needs and other Segmenting Dimensions

Company
Mission, Objectives, & Resources

S. W. O. T.

Targeting & Segmentation

Product Price Target Market Promotion Place

Positioning & Differentiation

Competitors
Current & Prospective

External Market Environment

Technology Political & Legal Social & Cultural Economic

Overview

You take over marketing management responsibilities for your firm. Must satisfy customers and earn profits Focus is on marketing strategy planning. Requires integration of all strategy decisions. Requires attention to competitive environment. Considers short term and long term perspectives.

Industry Environment

Market growth

Technological environment
No major innovations expected Yearly revision cycle

Competitive environment
Type of competition depends on firms decisions
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Six Key Product-Market Segments Concerned Parents High-tech Modern Managers Students Professional Creators

Harried Assistants
Segments have different needs, preferences, situations, sizes, growth rates.

Home Users

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Past Sales By Market Segment

For Voice Recognition Device

25000 20000 15000 10000 5000 0

0 1 2 3 A s s is t a n t s M a na g e rs Stude nts Hom e C re a to rs P a re nts

Y ea r

Page 18
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Distribution Channels
Firm 1 Firm 2 Firm 3 Firm 4
Firms reach customers through full-service dealers and Internet/mail-order discount dealers.

Channel 1 Traditional Dealers

Channel 2 Discount Dealers Concerned Parents

High-tech Managers

Modern Students Professional Creators

Different segments have different shopping preferences.

Harried Assistants

Home Users
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Product 1: Voice Recognition Device (VRD)

Number of Special Commands (5-20)

Key Product Features

Error Protection (1-10)

Ability to Customize (1-10)

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R&D for Product Modifications: Computing Costs

Feature
Special Commands (5-20) Error Protection (1-10) Ease of Learning (1-10)

Cost to Decrease
$0 $0 $3,000*change

Cost to Increase
$8,000*(change)2 $5,000*(change)2 $3,000*(change)2

Example Feature
Special Commands Error Protection Ease of Learning
Last periods product This periods product

Change

Cost to Change
$8,000*2*2=$32,000 $0 $3,000*2*2=$12,000 $44,000

6 4 3

8 3 5

+2 -1 +2

Total modification costs: Note: R&D for product changes is more expensive
if you have to make big changes in a short period of time

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Level 3

Product 2: Digital Vocal Communicator (DVC)

Number of Tasks (1-10)

Key Product Features

Similarity of Commands (1-10)

Ease of Learning (1-10)

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Types of Advertising

Pioneering Direct competitive Indirect competitive Reminder Corporate (Institutional)

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Expanded Marketing Responsibilities

PRODUCT PRICE PLACE PROMOTION -Advertising -Personal selling

(Level 2)

Features (and R&D for product modifications) Wholesale price in each channel Distribution intensity in each channel $ Spending Type Number of sales reps in each channel Percent non-selling time Commission rate $ Spending per Channel $ Spending 7 Reports May be Purchased Number of Units
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-Sales promotion CUSTOMER SERVICE MARKET RESEARCH Demand Forecast/ Production order

Response Functions and Marketing Spending

Sales

Threshold Level

Saturation Level

Marketing Spending

Spending too little may have little effect, but spending too much just increases costs and reduces profit.

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Marketing Budget Items (Level 2 and 3)

R&D product modification costs Sales force salaries and severance pay Advertising expense Customer service expense Sales Promotion Expense Market research reports expense

BUDGET FOR FIRST PERIOD: $984k

Sales commission is not a budget item
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Computing Prices

Computing Retail Prices from Wholesale Prices:

Expected Retail Price = Wholesale price/(1-% Markup) Example: Wholesale price = $105 Channel 1 Retail Price = ($105/(1-.50)) = $210 Channel 2 Retail Price = ($105)/(1-.35) = $161.54

Computing Wholesale Prices from Desired Retail

Prices:
Wholesale Price = Retail Price (1 - % Markup) Example: Desired Retail Price = $190 Channel 1 Wholesale Price = $190*(1-.50) = $95.00 Channel 2 Wholesale Price = $190*(1-.35) = $123.50
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Retail Prices Charged Final Consumers

The retail price set by a dealer depends on:

The wholesale price in the dealers channel. The customary markup used in the channel. The portion of any sales promotion deals that the dealer passes along to consumers as a price reduction. Remember R=PxQ

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Competitor Analysis

Estimate competitors net contribution Analyze past strategies & likely changes. Evaluate positioning and target segments.
Firms
1 1 2 3 4

Segments

3
4 5 6

X
X

?
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Industry Sales Report

Brand Firm 1 Firm 2 Firm 3 Firm 4 Total Channel 1 2 Unit Sales Share (units) $ Sales (retail) 25,151 .250 $4,292,964 25,151 25,151 25,151 100,604 Unit Sales Dollars Sales 56,296 $10,696.240 44,308 $6,475,614
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.250 .250 .250

$4,292,964 $4,292,964 $4,292,964 $17,171,854

Product Features and Prices Report

Brand of VRD Firm 1 Firm 2 Firm 3 Firm 4 Retail Retail Error Ease price price of channel channel Special protect1 2 commands ion learning 8 8 8 8 3 3 3 3 3 3 3 3 $190.00 $190.00 $190.00 $190.00 $146.15 $146.15 $146.15 $146.15

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Market Activity Report (Level 2)

Firm 1 Firm 2 Firm 3 Firm 4

Adv. Dollars Adv. Type

Sales Promotion Channel 1 Channel 2 No. Sales Reps Channel 1 Channel 2 Commission Customer Service

$250,000

$250,000

$250,000

$250,000

$0 $0

$0 $0

$0 $0

$0 $0

10 10 5% $92,500

10 10 5% $92,500

10 10 5% $92,500

10 10 5% $92,500

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Market Research Reports (Level 2)

1. Market share by segment (all brands) 2. Market share by channel (all brands) 3. Consumer preference study 4. Marketing effectiveness report 5. Sales by segment by channel (own brand) 6. Consumer shopping habits study 7. Product positioning report

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Market Share by Segment Report

Segment Brand Firm 1 Firm 2 Firm 3 Firm 4 Total Sales (units) 1 0.250 0.250 0.250 0.250 20,028 2 0.250 0.250 0.250 0.250 15,084 3 0.250 0.250 0.250 0.250 25,104

4
0.250 0.250 0.250 0.250 10,240

5 0.250 0.250 0.250 0.250 22,056

6 0.250 0.250 0.250 0.250 8,092

Whos selling to whom? Whos buying what? What is each firms achieving? Which segments are buying?

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Market Share by Channel Report

Brand Firm 1 Firm 2 Firm 3 Firm 4 Total Sales (units)

Whats selling where? Whos buying what?

Channel 1 Channel 2 0.250 0.250 0.250 0.250 56,296 0.250 0.250 0.250 0.250 44,308

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Consumer Preference Study

Special Error Ease of Commands Protection Learning 10-13 7-10 10-13 12-15 13-16 5-8 2-4 2-4 6-8 2-4 6-8 2-4 1-3 6-8 6-8 4-6 2-4 7-9 Price Range

Segment

Students Home Assistants Creators Managers Parents

low low high high high low

What kind of product would a segment prefer? What reference price seems typical for the segment? How are segments similar and different?

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Marketing Effectiveness Report Index

Brand Awareness Customer Service Consumer Group Rating Industry Average Rating Channel 1: Sales Rep Workload Dealer Satisfaction Channel Strength (Push) Channel 2: Sales Rep Workload Dealer Satisfaction Channel Strength (Push) 0.550 100% 100%

Competitors Competitors with lower with equal or Index higher Index

0

100% 1.00 .500

0 0

3 3

100% 1.00 .500

0 0

3 3

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Detailed Sales Analysis

Segment 1 2 3 4 5 6

Firm
Channel 1
Channel 2 896 5,269 1,109 3,337 5,602 1,396 1,808 1,196 4,363 1,865 1,086 1,074

Unit sales by segment and channel Are you reaching your target?
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Customer Shopping Habits

Percent of Shopping Percent of Shopping

Segment Students Home Assistants Creators Managers Parents

in Channel 1

in Channel 2

? ? ? ? ? ?

? ? ? ? ? ?

Who shops where? How do shopping patterns match distribution focus?

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Product Positioning Report

Segment

Brand Firm 1 Firm 2 Firm 3 Firm 4

1 ? ? ? ?

2 ? ? ? ?

3 ? ? ? ?

4 ? ? ? ?

5 ? ? ? ?

6 ? ? ? ?

Which brands are closest to which segments? Which segments have no close brands?
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Submitting Marketing Plans

Submitting marketing plans decisions Due when stated, send your plan early send to rmathise@kennesaw.edu Past decision will be used if you miss the deadline, check to see if receipt is confirmed Results will be returned to person submitting plan Even if you do not want to make changes still submit a plan The game starts at level 2 and moves to level 3 when you are notified Each firm has a distinct industry and firm identification Need to keep it straight! Remember to use you assigned Industry and Firm number
Example Industry A Firm 1 your file will be PlanA1.tmg Do not send the proforma.txt file. Check the file before you send it to make sure changes have been saved.

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