Lecture 3 Slides SMM Feb 10th 2012 Module BD415029s

3.1

Kotler, Keller, Brady, Goodman and Hansen, Marketing Management, 1st Edition © Pearson Education Limited 2009

Group Discussion

•Develop a consumer buying process a family would use to to purchase a car. •What differing influences might, mum, dad or the 2 children separately have ?

3.2


This Week

Review

• Competitor analysis Kotler Ch 9

• Distribution Structure and Analysis Ch 17

• Market Analysis Ch 8

• Use the VLE

3.3


Dealing with competition

Lets Remember !

Sustainable Competitive Advantage should be the major focus of the strategic planning process

3.4


Lecture questions

1. How do marketers identify primary competitors?

2. How should we analyse competitors’ strategies, objectives, strengths and weaknesses?

3. How can market leaders expand the total market and defend market share?

4. How should market challengers attack market leaders?

5. How can market followers or nichers compete effectively?

3.5


Behind the five forces

‘Competition is often looked at too narrowly by managers.’

Michael E. Portervideo clip

Article referred to is in Harvard Business Review January 2008

3.6


Figure 9.1 Five forces determining segment structural attractivenessSource: From M. E. Porter (1985) Competitive Advantage. Creating and Sustaining Superior Performance, New York: Free Press. Copyright © 1985 by Michael E. Porter. Reproduced with permission from The Free Press, a division of Simon & Schuster Adult Publishing Group

3.7


Industry concept of competition

• Number of sellers and degree of differentiation

• Entry, mobility and exit barriers

• Cost structure

• Degree of vertical integration

• Degree of globalisation

3.8


Figure 9.4 A competitor’s expansion plans

3.9


Steps in benchmarking• Determine which functions or processes to

benchmark• Identify the key performance variables to

measure • Identify the best-in-class companies• Measure the performance of best-in-class

companies• Measure the company’s performance• Specify programs and actions to close the gap• Implement and monitor results

3.10


Selecting competitors

‘Strong’ vs. ‘Weak’

‘Close’ vs. ‘Distant’

‘Good’ vs. ‘Bad’

3.11


Figure 9.5 Hypothetical market structure

3.12


Expanding the total market

New customers

More usage

3.13


Factors relevant to pursuing increased market share

• Possibility of provoking authoritative action

• Economic cost

• Pursuing the wrong marketing-mix strategy

• The effect of increased market share on actual and perceived quality

3.14


Specific attack strategies

• Price discounts• Lower-priced goods• Value-priced goods• Prestige goods• Product proliferation• Product innovation

• Improved services• Distribution

innovation• Manufacturing-cost

reduction• Intensive advertising

promotion

3.15


Market follower strategies

Counterfeiter

Cloner

Imitator

Adapter

3.16


Designing and managingsupply networks

3.17


Questions

1. What are supply networks and channels of distribution?

2. How should marketers design supply networks and channels of distribution?

3. How can marketers select channel members?

4. What are the challenges of managing distribution channels?

5. What are the impacts of digital/information and communication technologies?

3.18


GOODYEAR Discussion

3.19


Who are the top supply chain companies worldwide?

• Nokia• Apple• Procter & Gamble• IBM• Toyota Motor• Wal-Mart• Anheuser-Busch• Tesco

• Best Buy• Samsung

Electronics• Cisco Systems• Motorola• The Coca-Cola

Company• Johnson & Johnson

3.20


Characteristics of high performing supply chain companies

• ‘Outside-in’ marketing focus

• Supply chains extend out to customers and suppliers

• Innovation is embedded

• Right attitude towards management and supply chain

3.21


What is a supply chain?

A supply chain is a set of three or more entities (organisations or individuals) directly

involved in the upstream or downstream flows of product, service, finances and/or information

from a source to a customer.

3.22


Global supply networksWhat marketing tactics has the concern for long supply seeded ?

Figure 17.2 Global supply networks: coordinating road, rail, shipping, airlines and the Internet

3.23


Supply Chain

This video clip explores the role of supply chains within a variety of leading businesses – Dell, Zara, Victoria Secrets and Dyson with a core focus on the customer within the supply chain rather than on efficiency only.

www.youtube.com/watch?v=2XUgce8lZB4&feature=PlayList&p=AB139030DEDC47A5&playnext=1&index=43

http://www.youtube.com/watch?v=2XUgce8lZB4&feature=PlayList&p=AB139030DEDC47A5&playnext=1&index=43





3.24


What are distribution channels?

Distribution channels are sets of intermediaries that are usually independent

organisations involved in the process of making a product or service available for use

or consumption.

3.25


Intermediaries in distribution channels

Non-Title Holders

• Brokers

• Manufacturers’ reps

• Agents

Title Holders

• Wholesalers

• Retailers

• Distributors

• Transport companies

3.26


What is supply chain management?

Supply chain management (SCM) encompasses the planning and

management of all activities in buying, making, providing and distributing. It also includes coordination and collaboration

with channel partners.

3.27


Components of an SCM philosophy

A systems approach

A strategic orientation

A customer focus

3.28


What is a network?

A network consists of nodes and relationships with which interaction takes place.

It can accommodate movements in any direction and change shapes.

Its nodes include people, organisations, machines, events and activities.

3.29


3 As of network effectiveness

Agility

Alignment

Adaptability

3.30


Key processes of supply chain management

• Manufacturing or service process flow management

• Intermediary relationship management

• Product development/ commercialisation

• Returns

• Customer relationship management

• Customer service management

• Demand management

• Order fulfillment

3.31


Consumer marketing channels

Figure 17.11 Consumer and industrial marketing channels

3.32


What is multichannel marketing?

• Multichannel marketing occurs when a company uses two or more marketing channels to reach one or more customer segments.

• A multiple channels strategy provides multiple channels for the consumer while a multichannel strategy has cross-channel benefits.

3.33


Types of buyers

Habitual shoppers

High-value deal seekers

Variety-loving shoppers

High-involvement shoppers

3.34


Types of shoppers

Service/quality customers

Price/value customers

Affinity customers

3.35


Channel member functions• Gather information• Develop and disseminate persuasive

communications• Reach agreements on price and terms• Acquire funds to finance inventories• Assume risks• Provide for storage• Provide for buyers’ payment of their bills• Oversee actual transfer of ownership

3.36


Designing a marketing channel system

Analyse customer needs

Identify and evaluate major channel alternatives

Select channel members and evaluate alternatives

Establish channel objectives

Decide on number of intermediaries

3.37


Customer needs

Quantity of purchase

Waiting/delivery time

Convenience

Product variety

Service backup

3.38


Identifying channel alternativesWho owns the customer interface? It is rarely the manufacturer.

Types of intermediaries

Number of intermediaries

Terms and responsibilities

3.39


Number of intermediariesHow do you ensure your branding and positioning values are maintained ?

Exclusive

Selective

Intensive

3.40


Terms and responsibilities of channel members

• Price policy

• Condition of sale

• Distributors’ territorial rights

• Mutual services and responsibilities

3.41


Figure 17.15 The value adds versus the costs of different channels

3.42


Channel-management decisions

Training channel members

Motivating channel members

Evaluating channel members

Modifying channel members

3.43


Figure 17.16 Self-service channelsSource: Adapted from Microsoft Corporation (2007) Microsoft® Customer Care Framework 2008: Redefining Customer Experience (retrieved from http://download.microsoft.com/download/b/d/2/bd2a14b8-b64b-4191-a2d5- 11d0dc9f0ce/ CCF_08_Brochure_web.pdf). Copyright © Microsoft Corporation. Reproduced with permission

3.44


Analysing business markets

3.45


Questions

1. What is the business market, and how does it differ from the consumer market?

2. What buying situations do organisational buyers face?

3. Who participates in the business-to-business buying process?

4. How do business buyers make their decisions?

3.46


What is organisational buying?

Organisational buying refers to thedecision-making process by which formal

organisations establish the need for purchased products and services, and identify, evaluate and choose among

alternative brands and suppliers.

3.47


Top business marketing challenges

• Expand understanding of customer needs

• Compete globally as China and India reshape markets

• Master analytical tools and improve quantitative skills

• Reinstate innovation as an engine of growth

• Create new organisational models and linkages

3.48


Characteristics of business markets

• Fewer, larger buyers• Close supplier-

customer relationships

• Professional purchasing

• Many buying influences

• Multiple sales calls• Derived demand• Inelastic demand• Fluctuating demand• Geographically

concentrated buyers• Direct purchasing

3.49


Suppliers like Goodyear depend on a market of fewer buyers

Goodyear Tyre Company exemplifies many suppliers that depend on a market of fewer, but larger, business buyers Source : Worth Canoy/Icon/Corbis

3.50


Top business marketing challenges

Table 8.1 The top business marketing challenges for 2005–2007Source: From Institute for the Study of Business Markets (2006) Know thy customer. Marketplace: The ISBM Review, Winter, Exhibit 1, p. 2 (www.smeal.psu.edu/isbm/documents/mktpw06.pdf). Reproduced with permission from ISBM, Smeal College, Pennsylvania State University

3.51


Guidelines for selling to small businesses

• Professional purchasing

• Multiple buying influences

• Multiple sales calls

• Derived demand

• Inelastic demand

• Fluctuating demand

• Direct purchasing

3.52


Buying situations

Straight rebuy

Modified rebuy

New task

3.53


Systems buying and selling

Turnkey solution desired;

Bids solicited

Primecontractors

Second-tiercontractors

System subcomponents

assembled

3.54


The buying center Discussion

Initiators

Users

Influencers

Deciders

Approvers

Buyers

Gatekeepers

3.55


Of concern to business marketers

• Who are the major decision participants?

• What decisions do they influence?

• What is their level of influence?

• What evaluation criteria do they use?

3.56


Seven keys to customer reference stories

1. State customer needs in compelling terms2. Emphasize barriers in satisfying

customer needs3. Describe company’s solution in terms of value4. List qualified results5. Differentiate your offering from those of

competitors6. Provide a brief comprehensive summary7. Include numerous customer quotes

3.57


Stages in the buying process: buyphases

• Problem recognition

• General need description

• Product specification

• Supplier search

• Proposal solicitation

• Supplier selection

• Order-routine specification

• Performance review

3.58


Forms of electronic marketplaces

• Catalog sites

• Vertical markets

• Pure play auction sites

• Spot markets

• Private exchanges

• Barter markets

• Buying alliances

3.59


Methods of e-Procurement

• Websites organised using vertical hubs

• Websites organised using functional hubs

• Direct extranet links to major suppliers

• Buying alliances

• Company buying sites

3.60


Handling price-oriented customers

Limit quantity purchased

Allow no refunds

Make no adjustments

Provide no services

3.61


Methods for researching customer value

• Internal engineering assessment

• Field value-in-use assessment

• Focus-group value assessment

• Direct survey questions

• Conjoint analysis• Benchmarks• Compositional

approach• Importance ratings

3.62


Factors affecting buyer-supplier relationships

Availability of alternatives

Supply marketdynamism

Complexity ofsupply

Importance ofsupply

3.63


Categories of buyer-seller relationships

• Basic buying and selling

• Bare bones• Contractual

transaction• Customer supply

• Cooperative systems

• Collaborative• Mutually adaptive• Customer is king

3.64


Week 3

• Dealing with the Competition • Designing and Managing Supply Networks • Market Analysis

3.65


Week 4

• Research • Mission and Values • Balanced Scorecards• Financial and Non Financial goals.

Documents

Lecture 3 Slides SMM Feb 10th 2012 Module BD415029s