Transcript Chapter 1, 2, 3.ppt

Overview
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Midterm II Discussion
Marketing Plan Lecture
Midterm III and Presentation Discussion
John Jolliff Presentation
 Country Insurance and Financial
 NPD for Service-based Industry
1-1
Midterm II
 Overall Improvement..
 221 and 222 out of 250
 Suggestions…
1-2
Midterm II
 Positive Comments
 Pretty good screening
 Much better assumptions this time around,
much better information (could still use more
work here)
 More Critical Thinking
1-3
Midterm II
 Suggestions for Improvement
 Make it readable, lead the reader through what is going on,
makes sure that everything is crystal clear at all times
 Maybe try to explain what you doing, instead of just
launching into it?
 Send all files to me named in the way that I named them on
the grade sheets (Key - 002)
 Also, grade sheet issue, send the grade sheet with names
entered into…
 I'm making comments with voice recognition software, so
sometimes things slip by... if something doesn't make
sense, let me know
 Additional comments written in hard copy, I talk about
these it sometimes in the grade sheet, but sometimes not…
1-4
Midterm II
 Suggestions for Improvement
 You don't get points taken off for when I question your
numbers (forecast, estimates, etc.)... I'm just trying to help
out…
 Confuse ATAR and test marketing stuff….
 Marketing support isn't free... if you tell me that you going
to reach 200 million customers, and then don't talk about
how much that's going to cost anywhere else in the paper,
that's an issue
 Confusion of repeat rate and word-of-mouth in ATAR…
 Don't make your concept statement a sales tool
 Make it easy to read…this makes a difference…
1-5
Midterm II
 Suggestions for Improvement
 Adjust screen for your needs
 Probably error on conservative side with screen
assumptions… or at least give a low, medium,
high
 Use stuff that's relevant, don't you stuff that isn't
 Don't apologize for guessing
 Don't say you are going to outsource this, then go
public, and make millions of dollars…
 Reverse code appropriate items on screen
1-6
Midterm II
 Suggestions for Improvement
 Multiple screens can be helpful
 Think of your audience when writing (Bass model detailed
in a easier to understand way)
 Products don't magically appear on shelves, they come
from personal selling as a part of market requirements
 Use hyphens
 Use an intro
 Footnotes … do this in a way that makes sense and it
makes it easy for me… it's all about me
1-7
Midterm II
 Suggestions for Improvement
 Graphs better, more visible, easier to read, more
legible
 You can talk to people and get quick and dirty
answers quite easily… dog collar expert kind of
idea
 Think about the information that people need, and
give it to them... Nick's example of the screen
1-8
Midterm III
 Launch
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Strategic Launch Planning
Implementation of Strategic Plan
Market Testing
Launch Management Plan
1-9
Midterm III
 Presentation
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Strategic Launch Planning
Implementation of Strategic Plan
Market Testing
Launch Management Plan
1-10
1-11
1
Marketing Planning
McGraw-Hill/Irwin
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Marketing Plan
A marketing plan is a written
document containing the
guidelines for the business
center’s marketing programs
and allocations over the
planning period.
1-13
Time Horizons for Marketing Plans
Time
Period
1 year
3 years
5 years
Long term
Indefinite
Other
Consumer Industrial
Products Products
62%
45%
5
5
15
17
4
3
0
2
14
28
Services
65%
8
3
6
2
16
1-14
Hierarchy of Planning
Corporate
Strategic Planning
Group or Sector
Planning
SBU Planning
Annual Marketing
(Business) Plan
1-15
Objectives of a Marketing Plan
1. Define the current business situation.
2. Define problems and opportunities facing the
business.
3. Establish objectives.
4. Define the strategies and programs necessary
to achieve the objectives.
1-16
Objectives of a Marketing Plan cont.
5. Pinpoint responsibility for achieving
product objectives.
6. Encourage careful and disciplined
thinking.
7. Establish a customer/competitor
orientation.
1-17
Frequent Mistakes in the Planning Process
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The speed of the Process
The Amount of Data Collected
Who does the Planning?
The Structure
Length of the Plan
1-18
Frequent Mistakes in the Planning Process (cont)
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Number of Courses of Action Considered
Who Sees the Plan
Not Using the Plan as a Sales Document
Insufficient Senior Management Leadership
Not Tying Compensation to Successful
Planning Efforts
 Frequency of Planning
1-19
Marketing Planning Sequence
Update
historical
data
Collect
current
situation
data
Data
analysis
Develop
objectives,
strategies,
programs Develop
financial
documents Negotiate
final plan
Measure
progress
toward
objectives
Audit
1-20
Marketing Plan Summary
I. Executive summary
II. Situation analysis
A.
B.
C.
D.
E.
Category/competitor definition
Category analysis
Company and competitor analysis
Customer analysis
Planning assumptions
1-21
Marketing Plan Summary cont.
III. Objectives
IV. Product/brand strategy
V. Supporting marketing programs
VI. Financial documents
VII. Monitors and controls
VIII. Contingency plans
1-22
1-23
1
Marketing Planning
McGraw-Hill/Irwin
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Bases of Competition
I.
Customer-oriented
Who they are – competition for same budget
When they use it
Why they use it- benefits sought
II. Marketing-oriented: advertising and
promotion
Theme/copy strategy
Media
Distribution
Price
1-25
Bases of Competition cont.
III. Resource-oriented
Raw materials
Employees
Financial resources
IV. Geographic
1-26
Levels of Competition
Beers
Ice
cream
Tea
Regular
colas
Diet
lemon
limes
Diet-Rite
cola
Wine
Diet
Pepsi
Diet
Coke
Fast food
Bottled
water
Baseball
cards
Fruit
flavored
colas
Coffee
Lemon
limes
Product form
competition:
Diet colas
Juices
Product
category
Video
competition: rentals
Soft drinks
Generic
competition:
Beverages
Budget
competition:
Food and
entertainment
1-27
Levels of Competition: Implications for Product Strategy
Competitive Level
Product Management Task
Product
Form
Convince Customers that the
Brand is Better than Others
Product
Category
Convince Customers that the
Product Form is Best in the
Category
Generic
Convince Customers that the
Product Category is the Best
Way to Satisfy Needs
Budget
Convince Customers that the
Generic Benefits are the Most
Appropriate Way to Spend
their Money
1-28
Energy Bar Competition
Other Snacks
Healthy Snacks
Snack/Health
Bars
Energy
Bars
Odwalla
Power Bar
Balance Bar
Clif
Nutrigrain Bars
Slimfast Bars
Granola Bars
Fruits
Nuts
Juice
Crackers
Chips
Candy
1-29
PDA Competition
Level of
Competition
Definition
Product form POAs
Full-features
Product category
PIMs
Generic computers
Notebook/
subnotebook
Paper-based solutions
Budget
Business items costing
$100-$1,000
Competitors
Palm Pilot VII
Compaq Aero
Casioplus integrated
communication
Cassio Poeia
Palm III
Royal
Casio PV-100
IBM
Toshiba
Many others
Rolodex
Day Timer
Need Satisfied
Personal information
management plus
PIM only
Other solutions to the
above
Fax machines
Personal copiers
Cellular phones
Furniture (e.g.
Steelcase)
1-30
Managerial Judgment of Competition
Product/Services
Markets
Same
Different
Same
A
B
Different
C
D
1-31
Defining Competition with Brand Choice Data
All brands
National
Diet
Cola
Regional
Regular
Family
brand 1
Family
brand 2
Non-Cola
1-32
Defining Competition with Perceptual Mapping
•Moist
•Needs refrigeration
As a formal dessert
•
Bakery cake
Homemade cake • •
• Homemade pie
• Layer cake mix
Takes a long time
• Cheese cake mix
to prepare •
Bundt cake mix •••
• Frozen pie
Chocolate torte mix •
Boston crème pie mix
“Light Style” cake mix
Pudding mix
Local mix •
•Jell-O
Dzer ta •
Custard mix
•Tapioca
pudding mix
•Canned pudding
• Frozen cake
• “Stir’n Frost cake mix
•Individual pie
•Quick bread mix
Coffee cake mix •
“Snackin’ Cake” mix •
•Hostess cupcakes
Date bar mix •
Brownie mix •
Homemade cookies
Cookie mix •
•
Good for a coffee break •
Bakery cookies •
Pillsbury cookie dough •
In my school work lunch •
• Oatmeal cookies
•Pepperidge Farm cookies
• Between meal snack
•Easy to carry with me
1-33
Methods Versus Competition Levels
and Information Required
1-34
1-35
1
Marketing Planning
McGraw-Hill/Irwin
Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved.
Aggregate Category Factors
 Category size
 Category growth
 Stage in product life cycle
 Sales cyclicity
 Seasonality
 Profits
1-37
Attractiveness of Market Variables
1-38
Category Attractiveness over
the Product Life Cycle
Sales
Stage of
product
life cycle
Introduction
Growth
Maturity
Decline
Category
size
Small
Moderate
Large
Moderate
Category
growth
Low
High
Low
Negative
Category
attractiveness
Low
High
Low/high
Low
Time
1-39
Category Factors
 Threat of new entrants
 Bargaining power of buyers
 Bargaining power of suppliers
 Current category rivalry
 Pressure from substitutes
 Category capacity
1-40
Environmental Factors
 Technological
 Political
 Economic
 Regulatory
 Social
1-41
Factors in Assessing the Structure
of Industries
 Threat of new entrants
 Bargaining power of buyers
 Bargaining power of suppliers
 Amount of intracategory rivalry
 Threat of substitute products or
services
1-42
Buyer Bargaining Power is High When:
 Product bought is a large percentage of the
buyer’s cost.
 Product bought is undifferentiated.
 Buyers earn low profits.
 Buyer threatens to backward integrate.
 Buyer has full information.
 Substitutes exist for the seller’s product or
service.
1-43
Supplier Bargaining Power is High When:
 Suppliers are highly concentrated, that is,
dominated by a few firms.
 There is no substitute for the product
supplied.
 Supplier has differentiated its product or
built in switching costs.
 Supply is limited.
1-44
Major Characteristics of Categories
Exhibiting Intensive Rivalries
 Many or balanced competitors
 Slow growth
 High fixed costs
 Lack of product differentiation
 Personal rivalries
1-45
Impact of Category Factors on Attractiveness
1-46
Conceptualizing Political Risks
1-47
Projected Change in U.S. Population 1995-2005
1-48
U.S. Income Inequality
1-49
Share of Food Purchases
1-50
Energy Bars: Category Attractiveness Summary
Aggregate
Market
Category Size
Attractiveness
++
Analysis
•$504 mm energy bar category in
2001
Energy bar category
contains four primary
brands, plus their subbrands and over 100 smaller
players
1-51
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Analysis
Category Growth •Average annual growth rate of 57%
between 1997 and 2001
Attractiveness
++
U.S. energy bar category sales
forecasted at $750 mm in 2003 for a
continued expected growth of 22%
•IIndustry reports suggest
current annual growth for the
energy bar market 25%-30%
•CCategory expanding: new competitors are
entering, existing brands are expanding with
new products and flavors, market penetration
and usage occasion is increasing
1-52
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Product Life
Cycle
Analysis
•Both the category and Odwalla
Bars specifically are both securely
in early stages of growth phase
Attractiveness
++
1-53
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Sales Cyclicity
Attractiveness
+
Analysis
•While energy bars are premiumpriced for their convenience and
nutrient level, the base dollar point
of $1-$3 per bar is low such that
they are not directly impacted by
GDP variations
1-54
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Seasonality
Attractiveness
++
Analysis
•Year-round sales
•Category overall may experience a
slight sales increase in the spring and
summer month during “race season” and
as users are engaged in more outdoor
activities and desire quick, portable
energy.
1-55
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Profits
Attractiveness
+
Analysis
•As most major competitors are within the
product portfolios of larger consumer
goods companies, it is difficult to
benchmark profitability within the energy
bar category specifically. Nevertheless,
the recent acquisition of the leading
competitors reflects an expectation for
strong profit potential.
Increased category competitiveness
may lead to lower pricing and profits
1-56
Energy Bars: Attractiveness Summary (cont)
Category
Threat of New
Entrants/Exits
Attractiveness
-
Analysis
•Strong potential for new competitors
given that the category is profitable,
fairly easy to enter, and increasingly
relevant to consumers.
•FFurther, with the “big three” brands
strongly in place [PowerBar, Clif (including
Luna), and Balance], it is most likely that small
competitors will enter through the natural
foods channel, creating more direct
competition with Odwalla bars.
1-57
Energy Bars: Attractiveness Summary (cont)
Category
Economies of
Scale
Analysis
•Competitors within the broader category
of snack bars would likely experience
economies of scale with a relatively
easy entry into the energy bar market
Attractiveness
-
1-58
Energy Bars: Attractiveness Summary (cont)
Category
Capital
Requirements
Attractiveness
Analysis
•Within the mainstream energy bars,
differentiation is largely through brand,
taste, and flavor variety. With the
exception of targeted nutrition products
like protein- or carbohydrate-specific
products, nutritional levels are largely
at parity.
-
1-59
Energy Bars: Attractiveness Summary (cont)
Category
Switching Costs
Analysis
•Switching costs are very low, opening
the door to potential competitors
Attractiveness
-
1-60
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Distribution
Attractiveness
-
Analysis
•As there are not specialty requirements
for distribution (refrigeration, etc.), it
would be very easy for any of the
“center of the store” consumer food
companies to enter the category and
add on to their existing distribution
structure. This is particularly true for
companies that have an established
relationship with the category buyer.
Shelf life
1-61
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Analysis
Bargaining
Power of Buyers
•Lots of competitors with relatively
similar options distinguished by brand
and taste keeps retailer power strong
Attractiveness
-
1-62
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Bargaining
Power of
Suppliers
Analysis
•As the suppliers of raw inputs for
energy bars are largely agricultural, the
commodity nature of agriculture keeps
prices and supplier power low. While
still relatively low, supplier power will
be higher for nutrient supplement
suppliers
Attractiveness
+
1-63
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Pressure from
Substitutes
Analysis
•Considerable
•Fresh fruit, cereal bars, smoothies,
candy bars, etc. are all suitable portable
substitutes for the mainstream energy
bar consumer. True athletes are most
likely to substitute with higher nutrient
level energy bars
Attractiveness
-
1-64
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Category
Capacity
Analysis
•Appears to be high given current
scenario of more than 100
manufacturers and many more products.
But, still, it is too early to determine
true capacity
Attractiveness
+
1-65
Energy Bars: Attractiveness Summary (cont)
Aggregate
Market
Current
Category
Rivalry
Analysis
•Very high. Differentiation largely by
taste and flavor variety, and by
targeting unique market segments
Attractiveness
-
1-66
Energy Bars: Attractiveness Summary (cont)
Environmental
Technological
Analysis
•Technology could play a significant role
with respect to manufacturing
efficiencies and taste profiles
Attractiveness
+
1-67
Energy Bars: Attractiveness Summary (cont)
Environmental
Economic
Analysis
•While premium priced, energy bars have
so far seemed to fair the recession
well. Still, however, if economic
conditions persist, consumers may opt
for less expensive alternatives like
fresh fruit or non-energy snack bars
Attractiveness
+
1-68
Energy Bars: Attractiveness Summary (cont)
Environmental
Political/
Regulatory
Analysis
•The energy bar category is regulated
by the FDA as are other food products.
There are not to our knowledge,
however, additional regulations directed
toward the energy bar category.
Attractiveness
0
1-69
Energy Bars: Attractiveness Summary (cont)
Environmental
Social
Analysis
•As lives get busier and mealtimes
shrink, energy bars will continue to be
an acceptable meal replacement.
Attractiveness
++
1-70
PDA: Category Attractiveness Analysis
Aggregate
Market Factors
Attractiveness
Market Size
Market Growth
Product Life Cycle
$2.3 billion
Profits
Sales Cyclicity
Good
Sales Seasonality
one
0%-40%
Growth
one
+
+
+
+/0
+
+
1-71
PDA: Category Attractiveness Analysis
Category
Factors
Attractiveness
Threat of New
Entrants
•Moderate; R&D required,
distribution
0
Bargaining
Power of Buyers
Low, high switching costs
+
Bargaining Power
of Suppliers
Moderate; PCs use similar
components
0
Category Rivalry
Pressure from
Substitutes
Intense
-
High
-
Category Capacity Not a problem for now
+
1-72
PDA: Category Attractiveness Analysis
Environmental
Factors:
Attractiveness
Technological
•Very sensitive
-
Political/
Regulatory
Telecommunications
deregulation
+
Economic
Relatively inexpensive
+
Social
More work done on
the road
+
1-73