Lecturer: Trn V Hong Hi Reference books: Naked Marketing by Robert Grede 2005 Marketing in a nutshell by Mike Meldrum and

Malcolm Mc Donald Basic marketing

Requirements for this course

Understanding the core terminologies in marketing

Enable to make a marketing plan

Applying what you learn into

your future career

No need to learn by heart Feel free to learn in class, and ask questions

Requirements for this course

Mark allocation: 10%: attendance 10%: Mid-term test (open-book) 10%: Group work/ Presentation. 70%: Final exam (multiple choice)

Form groups of 10 (maximum)

Some fundamentals of business

Why do people do business?? profit, reputation, demand fulfillment What is business?

An organization provides goods and services to others who want or need them.
Types of business: Small, non- profit business, educational, government agencies Tasks: Give some examples

Essential elements
What are essential elements in business?
What is a product?

A product is anything that can be offered to a market that might satisfy a want or need (wikipedia) - It can be tangible and intangible What is a service?

A valuable action, deed, or effort performed to satisfy a need or to fulfill a demand. - It is usually intangible

Essential elements
Selling:

Selling is offering to exchange something of value for something else. (Wikipedia) Something of value can be tangible or intangible. Another def.: The last step in the chain of commerce where a buyer exchanges cash for a seller's goods or service.

Essential elements
Buying (Purchasing):

Consumers purchase goods or services in terms of amount, frequency, timing Selling and buying are a part of exchange and transactions.

The outline of marketing course

I/ Understanding the basics of marketing II/ Market understanding III/ Consumer Behaviors IV/ Defining your market, segmentation, target, position V/ Developing a strategic marketing plan VI/ Marketing plan, establish budget and evaluation

What is marketing?

What is marketing?
How can customers recognize goods or services during

decades?
- Ads in newspapers, magazines - Ads on TVs, radio in the 1950s and 1960s - Billboards, direct mails - Internet ads, email ads

Advertisement is a small part of marketing

What is marketing?
There are many different definitions:

Marketing is a process of all activities necessary for the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives. (American Marketing Association)
Marketing deals with identifying and meeting human and social needs

What is marketing?
One of the shortest definitions of marketing is meeting need profitably Marketing Management is the art an science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value. Marketing is the satisfaction of needs and wants through the sale of your products or services ( Robert Grede)

What is Marketed ?
Marketing people are involved in marketing 10 types of entities including
This is the watch Stephen Hollingshead, Jr. was wearing when he encountered a drunk driver. Time of death 6:55 p.m.

1. Physical goods 2. Services

3. Events (e.g., trade shows, artistic performance)

4. Experiences (e.g., Hard Rock Caf, Disney Worlds) 5. Persons (e.g., Celebrity) 6. Places (e.g., Cities, states) 7. Properties (e.g., real estate, financial property) 8. Organizations 9. Information (e.g., Magazines, Encyclopedias) 10. Ideas

What is the market?

In marketing, the term market refers to the group of

consumers or organizations that is interested in the product, has the resources to purchase the product, and is permitted by law and other regulations to acquire the product.

Market definition conceptual diagram

Levels of market narrowing

Total population Potential market - those in the total population who

have interest in acquiring the product. Available market - those in the potential market who have enough money to buy the product.

Levels of market narrowing

Qualified available market - those in the available

market who legally are permitted to buy the product. Target market - the segment of the qualified available market that the firm has decided to serve (the served market). Penetrated market - those in the target market who have purchased the product.

What do the marketers do?

Marketing is not creating and selling products or

services satisfying needs and wants - Recognize and reflect this in their advertising:
- have it your way, right away - Where do you want to go today?

- No dissatisfied customers

What do marketers do?

Do not confuse needs and wants

Needs, Wants, and Demands

Marketers must try to understand the target markets needs, wants, and demands.
A) Needs are basic human desires.

Ex: food, clothes, shelter, safety, belonging, esteem

Demands, wants, needs

B) Wants are desires for specific goods satisfying a need

Ex:

Food:

Clothes:

Shelter:

 Belongings:

C) Demands are wants for specific products backed by an ability to pay.

What do marketers do?

Good marketers create wants.

Marketers do not create needs. They exist in our society.

- point out how a product satisfies a basic human need.

- influence desires by making their products attractive, affordable, and available.

Ex: desire for esteem satisfied by a BMW

desire for safety satisfied by a Volvo

Marketers, along with society influence wants.

Marketing is simply the act of satisfying those

needs and wants.

Chapter 2: Market Understanding

How do you find out what your customers want?
Marketing research

To know : who your customers are

their buying motives

what they really want

persuade customers to buy your products instead of the competitors

What is marketing research

The process of collecting, analyzing and interpreting

data about customers, competitors and the business environment.

The process includes: - identifying your target ( who do you want to find out

about?) - specifying objectives ( what is it you want to know?) - determining methodology (How do you get the data?)

Types of research
Primary research Secondary research

vs.

Difference between them

Take a look of some examples: When learning in high school, you have to write a term

paper on the mating habits of Borneo lizard buy and observe a thousand lizards primary research. Instead, looked up the information in the book secondary research cheaper and easier. Sometimes, there may not be any information that somebody has already compiled about what you want you need to consider a little primary research.

How to do primary research ?

Do it yourself Compile information through testing, interviews or

questionnaires. Ask the right questions of the right people. Questions: 1. what is the name of our product or service? 2. how does this name mean to you? 3. how often do you purchase this type of product? 4. what is the primary reason you purchase the brand you do?

 5. what are the strengths/advantages of our product? 6. what are our competitors strengths/advantages over

our product? 7. if you believe the adage that a company can offer any two out of three quality, service or price which two would you say best characterize our product?

Who do you ask?

Salespeople
Sales representatives are loaded with information. know why customers buy your products know what motivates them to buy from you over your

competitor
A source for new product opportunities Be careful never to ask yes-no questions Better to appeal their ego

Shipping clerks
Aware of the ultimate destination of your market Alert entirely new markets

Case: what is the market for the watch that can read the pulse? Features: - Large face - Sweep-second hand is perfect
Market for this watch:

School of nursing

Customers
The best way to know what your customers want

Some benefits:
- head off the problems before they become problems - learn how you stack up against your competitors - lead to a new product opportunity or additional sales - make your customers feel better because they think

you care about their needs

Advertising and media research

Testing your advertising to find what customers want Dont test your ad message and your media at the same

time confusion Case: you have to decide whether to use logo A or logo B for Sunflower milk tea ads.
A:

B:

Understanding Fad, Trend, Megatrend

A fad is unpredictable,

short-lived, and without social, economic, and political significance. A trend is a direction or sequence of events that has some momentum and durability. Trends are more predictable and durable than fads.

Fad Trend Megatrend

Understanding Fad, Trend, Megatrend

10 Megatrends Shaping the Consumer Landscape

A trend reveals the shape of the future and provides many opportunities. Megatrends have been described as

Aging boomers Delayed retirement Changing nature of work Greater educational attainment Labor shortages Increased immigration Rising Hispanic influence Shifting birth trends Widening geographic differences Changing age structure

large social, economic, political, and

technological changes [that] are slow to form, and once in place, they influence us for some timebetween seven and

ten years, or longer.

Trends and megatrends merit close attention. To help marketers spot cultural shifts that might bring new opportunities or threats, several firms offer social-cultural forecasts.

Group work
In groups, choose your own product or service to do the market research. 1. What is your product or service? 2. Why do customers purchase your products? 3. What is the market for your products or services? 4. Can you find the slogan which attracts your customers for your products or services, if possible? Find some examples for Fads, Trends, and megatrends in Vietnam or in the world.

Chapter 3: Consumer behaviors

There are 2 fundamental questions: 1. who are your customers?

2. What do they want?

you have to understand the consumers to reach them better

Female brain

Male brain

Male vs. Female

Maslows hierarchy of needs

Abraham Maslow realized that man tended to satisfy

certain basic needs before experience higher level needs. A man marooned on a deserted island first seeks to satisfy the basic physiological needs of sleep, water and food construct shelter for protecting from the weather and predators seek companionship Attain spiritual fulfillment, meaning to our lives Task: Analyze yourselves based on this theory.

Maslows hierarchy of needs

What influences on consumers behaviors?

Cultures

A consumers buying behavior is influenced by culture

Culture is the fundamental determinant of a persons wants and behaviors. Each culture consists of smaller subcultures that provide more specific identification and socialization for their members. Subcultures include nationalities, religions, racial groups, and geographic regions.
Task: Giving some cultural influences on consumers

behaviors in Vietnam

Social class was existed in the past

Social Diagram in the US

A consumers buying behavior is influenced by social factors

Social classes, relatively homogeneous and enduring

divisions in a society that are hierarchically ordered and whose members share similar values, interests, and behavior.

Social classes have several characteristics: Those within a class tend to behave more alike than

persons from two different social classes.

positions according to social class.

Persons are perceived as occupying inferior or superior Social class is indicated by a cluster of variables

(occupation, income, etc.) rather than by any single variable.

Individuals can move up or down the social-class ladder.

Social factors
Social classes show distinct product and brand preferences in many areas.

. Social classes differ in media preferences

There are language differences among the social

classes.

Social factors
Social factors are factors such as reference groups, family, and social roles and statuses. Reference groups expose an individual to new

behaviors and lifestyles, influencing attitudes and self-concept.

They create pressures

for conformity that may

affect actual product and brand choices.
Ex: Family, friends, TV

Stars, sport stars

Social factors
People are also influenced by groups to which they do no belong: Aspirational groups are those a person hopes to join.

Ex: celebrity, charity groups, political party

Dissociative groups are those whose values or behavior an individual rejects. The buyer evaluates these elements together with the monetary cost to form a total customer cost. Ex: homeless groups, rebellious groups , uncool people

Social Factors
Manufacturers of products and brands where group

influence is strong must determine how to reach and influence opinion leaders in these reference groups.

Social factors
The family is the most important

consumer-buying organization in society, and family members constitute the most influential primary reference group.
We can distinguish between two

families in the buyers life.

The family of orientation consists of

parents and siblings.

Social Factors
Roles and Statuses A person participates in many groups and a persons position in each group can be defined in terms of role and status. Each role carries a status. Marketers must be aware of the status

symbol potential of products and brands.

A consumers buying behavior is influenced by personal factors.

Personal characteristics include the buyers age and

stage in the life cycle; occupation and economic circumstances; personality and self-concept; and lifestyle and values.
People buy different goods and services over a

lifetime (life cycle)

Consumption is also shaped by the family life cycle. In addition, psychological life cycle stage may matter.

Critical life events or transitions give rise to new needs.

Personal factors

Personal Factors

Personal Factors
Occupation influences consumption patterns and economic circumstances influence

product.
Spendable income (level, stability, and time pattern).

Savings and assets.

Debts.

Borrowing power.
Attitudes toward spending and saving.

Personal Factors
Each person has personality characteristics that influence his or her buying behavior. Personality: A set of distinguishing human psychological traits that lead to relatively consistent and enduring responses to environmental stimuli. The idea is that brands have personalities and consumers are likely to choose brands whose personalities match their own. Task: give some examples

Personal Factors
People from the same subculture, social class, and occupation may lead quite different

lifestyles. A lifestyle is a persons pattern of living in the world as expressed in activities, interests, and opinions.
Lifestyle portrays the whole person interacting with his or her environment. Marketers search for relationships between their products and lifestyle groups.

Lifestyles are shaped partly by whether consumers are money-constrained or time-constrained.

The mental iceberg

Sigmund Freud assumed that the

psychological forces shaping peoples behavior are largely unconscious, and that a person cannot fully understand his or her own motivations.

What you see is what you get

The role of perception

How the motivated person actually acts is influenced by his or her view or perception of the situation. Perception is the process by which an individual selects, organizes, and interprets information inputs to create a meaningful picture of the world. Perception depends not only on the physical stimuli, but also on the stimulis relation to the surrounding field and on conditions within the individual.

The role of perception

The key point is that perceptions vary widely among individuals exposed to the same reality.

In marketing, perceptions are more important than the reality, as it is perceptions will affect consumers actual behavior.

Memory encoding
Memory encoding refers to how and where information gets into memory. Memory encoding can be characterized according to the amount or quantity of processing that information receives at encoding and the nature or quality of processing that information receives at encoding. The quantity and quality of processing will be an important determinant of the strength of an association.

Memory encoding
In general, the more attention placed on the meaning

of information during encoding, the stronger the resulting associations in memory will be.
Another key determinant of the strength of a newly

formed association will be the content, organization, and strength of existing brand associations in memory.
One reason why personal experiences create such

strong brand associations is that information about the product is likely to be related to existing knowledge. Repeated exposures to information provide greater opportunity for processing and thus the potential for stronger associations.

Memory retrieval
Memory Processes: Retrieval Memory retrieval refers to how information gets out of memory. Successful recall of brand information by consumers does not depend only on the initial strength of that information in memory. Three factors are particularly important: The presence of other pertinent information in memory can produce interference effects. The time exposure to information at encoding affects the strength of a new associationthe longer the time delay, the weaker the association. Information may be available in memory (potentially recallable) but may not be accessible (unable to be recalled) without the proper retrieval cues or reminders.

Forms of Encoding

Verbal
Spoken Word Written Word Song Lyrics

Graphic
Pictures Drawings Charts

Musical
Arrangement Instrumentation Voices

Animation
Action/ Motion Pace/ Speed Shape/ Form

An Image Can Convey More Than Words

A Direct Source

Experts Lend Authority to an Appeal

Advertising Risks of Using Celebrities ?

Energy & Power - The Athlete and the Product

Conclusion Drawing

Message Sidedness (two-sided message)

Verbal vs. Visual Messages

Miller Lites Comparative Advertising

Humor in Print Media

Context and Environment

Clutter

67% of all consumer decisions are influenced by Word of Mouth (WoM)

65% of consumers trust their friends as opposed to only 14% who trust advertisers

Understand how Consumers Decide

11

Understand how Consumers Process Information

Example

Same movie, one is bored, another is sad!

Understand how Consumers Process Information

Filter:
Depends on Memory Value, Belief, Decision,
Attitude

13

Implication for Marketer

Two persons go through the same experience can feel differently.

14

Implication for Marketeer

Therefore, Dont treat consumers as blank canvas because they are not.
15

Understand how Consumers Process Information

95% Unconscious Happen very quickly! Happen picture, words

16

in not

Semiotic Relationships
Object (Product)

Cowboy

Rugged American Interpretant (Meaning) 2-17

17

Sign (Image)

Getting to know the target

35

Data vs Insight
-Data (What)

Why Why Aha! Insight!

37

Data vs Insight
Data
Facts -12-19 F have an affinity of 154 with magazines. Insights -Teen girls develop an intimate relationship with their favorite magazines, like their best girlfriend. The medium uniquely seems to understand their unstated needs, their private concerns & conflicts, helps them escape in their little fantasies & talks to them as an equal.

Insight

Possible connection strategy: Girlfriend Contacts

38

Source: Universal McCann

Data vs Insight
- Get beyond the obvious & the generic. - Get beyond the media. Think lifestyle, entertainment, ethnography.

39

Source: Universal McCann

Data vs Insight
Ask Why. - When cant ask anymore whys - probably get an insight!!

40

Source: Universal McCann

Insight Test
- Reality: A deep truth - Relevant: to brand/ business/ connection - Resonates: strikes a chord with consumers

- Reaction: leads to a competitively differentiated idea, powerful enough to change behavior.

41

Source: Universal McCann

Facts > Insight > Solution

- Facts:
- Teens in the UK ride the bus with their friends. - Teens sit on the second tier. - Teens sit on the second tier to gain privacy and to be close to their friends. Connection Insight: - Create an environment to give teens exclusivity with a brand when riding the bus. - Solution: - Place messages on the top of bus shelters that make teens feel special, exclusive and that facilitate fun conversations.

42

Source: Universal McCann

Facts > Insight > Solution

- Connection Insight:
- Young women at the point of entry for the category are very embarrassed to watch a TV ad about feminine treatment products in the presence of a male (boyfriend, brother, father) even though she may be truly interested in the ad.

- Solution:
- Focus the messages in women only environments - focus on TV shows with the highest composition of women and by default - the lesser likelihood that her boyfriend was sitting on the couch next to her.

43

Source: Universal McCann

Facts > Insight > Solution

- Connection Insight:
- Moms with young children participate in two types of viewing behavior - - Me time (rest and relaxation) - We time (Co-consumption with babies) - Solution: - Create a balance between Me time and We time.

44

Source: Universal McCann

Exercise

50

Research Methodology
Qualitative

Quantitative

51

Research Methodology
Qualitative
Observe Participate

Participate

Talk with them. Talk with expert.

Reading their blogs/ magazines/ letters-to-editor

52

Look into their refrigerator/ bathroom

Focus Group in Session

53

How does a good question look like?

55

Questionnaire Dos and Donts

DONT
Avoid negatives
Avoid hypothetical Avoid words that could be misheard Desensitize by using Use response bands Fixed responses do not overlap. Allow for other in fixed response questions
56

DO
Ensure questions are free of bias (Dont lead)
Make questions simple Make questions specific Avoid jargon Avoid sophisticated words Avoid ambiguous words

Chapter 4: Defining market

First, take a look at the buying process of the

customers

Problem recognition

 Information search

 Alternative Evaluation

 Purchase

Post purchase Evaluation

The buying process

The buying process

Every buyer goes through this same process. Marketers make this process go smoother for the

customers. When a prospective customer recognizes the problem, he will find a possible solution. Ex: Coca-cola runs ad throughout the world when were thirsty we run to the fridge to drink Coke ads serve as a reminder to drink Coke. My toothbrush changes color when the bristles begin to wear out. I need to replace it Problem recog. What brand do you think of?

Brand loyalty

When you feel thirsty, you order Heineken. Thats called Brand Loyalty You dont even consider any alternatives. Beer and cigarettes enjoy high levels of brand loyalty. Garbage bags and breakfast cereal have low brand loyalty. What is brand loyalty? Brand loyalty, in marketing, consists of a consumer's commitment to repurchase or otherwise continue using the brand and can be demonstrated by repeated buying of a product or service, or other positive behaviors such as word of mouth advocacy.

Brand loyalty types

Undivided loyalty such positive feelings (ex: the city

orange juice purchaser a customer purchases the same brand whenever purchasing an item in that product category)

Brand loyalty types

Divided loyalty exist when consumers are loyal to 2

brands (ex: the beer drinker who only drinks Heineken and 333)

Brand loyalty types

Convenience goods are characterized by

such brand indifference (ex: vegetable, oil, sugar) there may be no loyalty at all

Brand loyalty types

Latent loyalty characterizes a consumer who has positive feelings toward a brand but does not buy

it for a variety of reasons (ex: someone who would like to buy an Audi but cannot because of finances)

Segmentation
Markets are not homogenous.

A company needs to identify which market

segments it can serve effectively. Such decisions require a keen understanding of consumer behavior and careful strategic thinking.

Segmentation
Effective target marketing requires that marketers: Identify and profile distinct groups of buyers who differ in their needs and preferences. Select one or more market segments to enter. For each target market, establish and communicate the distinctive benefit(s) of the companys market offering.

What is market segment

A market segment consists of a group

of customers who share a similar set of needs and wants. The marketer does not create the segments. The marketers task is to identify the segments and decide which one(s) to target.

Market segmentation
The process that identifies different requirements in

the people who buy the key to successful marketing. Remain the most elusive and difficult of marketing skills Being both complex and multifaceted

The objectives of market segmentation are:

- to determine and to focus the direction of marketing resources through the analysis and understanding of trends and buyer behavior. - To help to determine realistic and achievable marketing objectives.

Market segmentation
- To create a basis for developing sustainable

competitive advantage. There are basically four steps in performing a market segmentation analysis: - Analysis of customer responses, preferences or behaviour. - Analysis of customer characteristics or attributes. - Analysis of benefits sought. - Clustering of groups with similar needs.

Analysis of customer behaviors

The way customers actually behave in the marketplace Take a look at these questions:

- the physical characteristics of products;

- how they are used; - where they are bought;

- how they are bought;

- the price paid;

Analysis of customer attributes

Organizations need to know to communicate with

their customers Demographic is found to be the most useful method. important variables include: - age; - sex; - stage in the family lifecycle; - socio-economic groupings (their social status by

their jobs) - Income - Education

Analysis of customer attributes

- Generation: GI Generation 1901-1924 Silent Generation 1925-1945 Baby Boomers 1946-1964 Generation X 1965-1977 Generation Y 1978-1994 Millennial 1995-2002

Analysis of customer attributes

Geographic Segmentation

- Geographic segmentation calls for dividing the market into different geographical units.
Psychographic Segmentation

- Psychographics is the science of using psychology and demographics to better understand consumers. In psychographic segmentation, buyers are divided into different groups on the basis of lifestyle or personality or values.

Value and lifestyles framework

Vals framework
Survivors: brand loyal, look for sales, trust advertising

and watch TV often. Makers: shop for comfort, durability, basic products. Strivers: Image conscious, as impulsive as their financial circumstances allow Believers: slow to change habits, look for bargain, predictable.

Vals framework
Experiencers: spend much on socializing, fashion but

very impulse Achievers: attracted by premium products, read business news. Thinkers: well-educated, conservative, look for durability, functionality and value in their products Innovators: like new products, new brands, upscale products, leaders in the government or business.

Levels of Market Segmentation

http://www.worldwidefred.com/home.htm

Levels of Market Segmentation

http://www.worldwidefred.com/home.htm

Levels of Market Segmentation

http://www.worldwidefred.com/home.htm

Niche market
A niche is a more narrowly defined customer group seeking a distinctive mix of benefits. Marketers usually identify niches by dividing a

segment into sub-segments

Niche marketers presumably understand their customers needs so well that the customers

willingly pay a premium.

Globalization has facilitated niche marketing.

Examples of niche markets

Mass market( all vehicle)

Market segment (small trucks)

Market target ( Panel trucks)

Niche market (Ambulances)

Analysis of benefits sought

Important to look at what benefits customers derive from their purchases These benefits will obviously be closely related to customers attitudes, perceptions and preferences This needs to be done for each micro-segment.
Task: Think about a product or service, then find out some benefits that you are seeking of

Clustering of groups
Clustering or groups of micro-segments with similar needs. It is preferable to use a computerized clustering package such as Market Segment Master

Task:
Using the typical segmentation grid to find the

segments in the market of your own product or service. ( At least 5 micro-segments)

Marketing mix
It is the name given to the main demand-

influencing variables that are available to an organization.

When a customer makes a purchase or engages in

an exchange, what they are responding to is not just the product, but a whole range of variables which constitute the offer.

Marketing mix
The classic description of the marketing mix is the four Ps.

The Four Ps
Product:

- What type and range of product or service should we

provide? Price: - What price should be set for each product or service? Place: - What channels of distribution and what levels of service are appropriate? Promotion: - How do we best communicate with our target customers and persuade them to buy our offer?

Variables of the 4Ps

Product: Name, packaging, Sizes, Features Price: Discounts, Credit terms, Warranties, Returns

Place: Inventory, Channels, Locations, Transport

Promotion: Advertising, Publicity, Sales promotion,

Personal selling, Direct Marketing

The 4 Cs
From a buyers point of view, each marketing tool is designed to deliver a customer benefits. Robert

Lauterborn suggested that the sellers 4Ps correspond to the customers 4Cs
Four Ps
Product Price Place Promotion

Four Cs
Customer Solution Customer Cost Convenience Communication

Main methods for marketing consumer product

Personal selling:

- effective way to develop a sales relationship with a potential customer - to explore his or her needs and to explain the virtues of the offer to him or her

- this is known as door-to-door selling

- very expensive means of making a sale, not very profitable

 Consumer goods sold in this manner tend to be: - Difficult to sell (i.e. the benefits are hard to explain, e.g. insurance, solar heating or timeshares) - Highly profitable (i.e. the margin per sale is large,

e.g. some vacuum cleaners). - Commodity items (i.e. where the only differentiating aspect is the sales process, e.g. loft conversions).

 Direct mail:

- This is a cheaper means of placing a product in

front of a consumer - enables a direct contact to be made - increasing ability to target particular types of customer - The downsides of this method include: a relatively low response rate, consumers begin to feel deluged with offers and a loss of any personal contact with suppliers

 Retail outlets:

- suppliers of many consumer products rely on

retailers to distribute and sell their goods and services - need to select appropriate retail organizations and the requirement for maintaining good relations with them - The power of such retailers has also given rise to a particular type of marketing in the form of trade marketing and a supplier industry providing retail own label products

The product life cycle

Every product has a life cycle. This is a four stage process.

The introductory stage

Slow growth and little or no profits

The launch of a new product form

into the market to the point at which sales begin to accelerate rapidly. Sales will be relatively slow while customers get used to the new ideas If the form is to be a successful innovation, the product will move into its growth phase

The growth stage

Rapid growth in sales as the market expands.

sales volumes will increase rapidly from one time

period to the next The company begins to show a profit.

The maturity Stage

At some points, sales growth will slow as the number of potential new purchasers reduces

The company enjoys peak sales and profits

Begin to attract competitions The lifecycle has reached its saturation phase

where sales are either replacements or latecomers to the market.

The decline stage

Either as more people migrate to a new product form or the need disappears. Lifecycles will move into the decline phase for one of two main reasons: - a replacement technology, usually delivering enhanced performance, will have been developed - a change in another aspect of the marketing environment. Ex: Fashion, trends, development of a new industry Profits decline due to further discounting

External Macro-environment Forces

For example: Stage of business life cycle Inflation, exchange rate and interest rates Economic Conditions Characteristics of population For example: size, distribution, and growth Demographics Macro For example: Brand competition, Substitute competition, and every co. **look for differential advantage** Competition Affection of technology For example: Starting new industry, Altering existing industries, stimulate Other industries

Technology

For example: Values, belief, and life style

Social and cultural forces

Political and legal forces

For example: change of laws and regulation

Adapted from Etzel, et.al Marketing 13 ed.

161

External Micro-environment Forces

Supplier

Market Intermediaries

Micro

Market Intermediaries

Market

Adapted from Etzel, et.al Marketing 13 ed.

162

Internal Macro-environment Forces

External Environmental

Internal Environmental

Adapted from Etzel, et.al Marketing 13 ed.

163

SWOT Analysis
Internal Circumstances Strengths Internal capacities that can support the firm in achieving its goals External Circumstances Opportunities External circumstances that may be exploited for higher performance

164

The marketing plan

What does a marketing plan look like? Every good plan has certain basic elements: 1. Summary Executive 2. Situation Analysis

3. Objectives
4.Target market 5. Strategies for the target market

6. Tactics
7. Budget

Situation analysis
To get the more appraisal, think in terms of the three things you need to know: - Us: Analyze past sales, examine the companys strengths, weaknesses, and opportunities for growth (internal situation) - Them: identify key competitors. Find out their strengths and weaknesses. How can your company avoid the strengths and exploit the weaknesses? What threats do they pose for the future? (external situation) - The Environment: Five forces could affect your company: suppliers, buyers power, new entrants, technology and competitors ( or PEST)

Objectives
Every company has objectives This is the matter of what you want to be and when

you want to get there. Ex: Do you want to launch a new product or line of products? The objective might be: Achieve 10% market share within the first twelve months of product launch Are you trying to boost revenue from existing products? increase revenue 12% from existing line of products over next six months while maintaining current profit margins.

Characteristics of Objectives

Specific

Time-bound

Measurable

Realistic

Attainable

Objectives
In short, Objectives need to be satisfied the question:

What do we want to accomplish?

Task:

Write the objective statement for your product or service.

Target market
MARKET SEGMENTS Groups of customers with different wants, buying preferences or product-use behavior

TARGET MARKET A market segment for which the seller designs a marketing mix

POSITIONING Firm creating and maintaining in the minds of a target market a particular image relative to competing products

Marketing strategy
Marketing Strategy

Shows the strategy to be used in achieving the marketing objectives.

Mission: What business are we in? Objectives: What do we want to accomplish?

Strategies: Broad plan of action by which an organization intends to reach its objectives and fulfill its mission.

Tactics: Means by which a strategy is implemented Specifically, How are we going to get the job done?

Strategic Business Unit (SBU) Separately defined business, Distinct mission, Own competitors, and Own team profit responsibility

Ansoffs Product-Market Expansion Grid

Intensive Growth Market-penetration strategy (gain more market share). Market-development strategy (new markets for current products). Product-development strategy (new products for current markets). Diversification strategy (new products for new markets).

Market penetration strategy

Market penetration occurs when a company

enters/penetrates a market with current products. The best way to achieve this is by gaining competitors' customers (part of their market share). Other ways include attracting non-users of your product or convincing current clients to use more of your product/service (by advertising etc)

Product development strategy

Developing new products or modifying existing

products so they appear new, and offering those products to current or new markets It requires keen attention to competitors and customer needs now and in the future, the ability to finance prototypes and manufacturing processes, and a creative marketing and communications plan Ex: Mc Donalds always offers new burgers into the current market.

Market development strategy

Market development is the name given to a growth

strategy where the business seeks to sell its existing products into new markets. There are many possible ways of approaching this strategy, including: New geographical markets; for example exporting the product to a new country New product dimensions or packaging New distribution channels Different pricing policies to attract different customers or create new market segments

Diversification strategy
1. Concentric diversification: - Growth into related industry

- Search for synergies

- Sales and cost related

Ex: Honda produces car and it also offers car services, spare parts, bank loan 2. Conglomerate diversification - Growth into unrelated industries - Concern with financial considerations - Ex: Mai linh taxi invests into education industry

Assessing Growth Opportunities

For new business we could use AIDA as a base strategy:

A - Attention (Awareness): attract the attention of the customer. I - Interest: raise customer interest by focusing on and demonstrating advantages and benefits (values). D - Desire: convince customers that they want and desire the product or service and that it will satisfy their needs. A - Action: lead customers towards taking action and/or purchasing.

Tactics ( Marketing programs)

Lay out the programs supporting the marketing strategy, including specific activities, schedules,

and responsibilities for: Product, Price, Place (channel), Promotion, Service

Entrepreneurs often confuse strategies and tactics.

Ex: develop a brochure to send to new customers not a strategy. Increase awareness among potential customers a strategy. The brochure is a tactic for implementing that strategy.

Tactics
How are we going to get the job done ? this is a question for tactics Here are some tactics: - Brochures

- Business cards and stationery

- Newsletter - Direct mail pieces

- Telemarketing
- Print and Broadcast Ad

Tactics
In Advertising:

what you show is more important than what you say 2. Dont try to do too much with your 30 seconds (use only 75 words or less) 3. Use your products name at least three times in 30 secs.
1. - Trade show attendance - Sales promotion ( coupons, sampling )

- Yellow pages listing

- Publicity and PR

Tactics
- Website development - Membership dues - Subscriptions ( Trade journals, Advisory reports ) - Customer questionnaires and Response cards - Charitable Donations - Sport team Sponsorships - Uniforms

Budget ( Financial Program)

Each tactic has a price Add up all that you plan to use and you know what

your budget must be to achieve your goals.

Executive Summary
After you complete your plan,

write a brief ( not more than one page) summary. It includes a summary of key findings from your Situation analysis, Objectives, Strategy or Tactic, and the total budget. But this part is always on top of the marketing plan.

Are you ready to make plans ?