Studiengang Betriebswirtschaftslehre: Marketing Betriebswirtschaftslehre: Marketing ... the marketer delivers value to the customer if the benefits of the offering are higher than

Studiengang Betriebswirtschaftslehre: Marketing

© Prof. Dr. Andrea E. RaabHochschule Ingolstadt

Grundlagenstudium Marketing, Hochschule Ingolstadt, Prof. Dr. Andrea E. Raab

What is marketing not ?????

- 2 -


What is marketing ?????

FUTURE

CUSTOMER

CUSTOMER

CUSTOMER

CUSTOMER

CU

ST

OM

ER

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CUSTOMER

CUSTOMER

CUSTOMER

• Nature and function of marketing

• Strategic planning processes

• Corporate and business unit strategic planning

• Analyzing Macro-Environment, Conducting

market research, Forecasting and Demand

Measurement

• Dealing with the competition

• Introduction; gives an overview on different marketing definitions

and concepts

• Demonstrates that strategic planning in a company is carried out on

corporate level, on business unit level and within the marketing.

• Explains the steps of strategic planning (on corporate and business

unit level) necessary to understand and solve business problems.

• Demonstrates basic research methods and analyzing tools for

analysis of marketing situations and for measuring of market demand.

• Identifies competitors as well as competitive forces and explains

Agenda Aim

Aims of selected Agenda points

- 4 -



• Identifying market segments and selecting

target markets (market targeting)

• Designing marketing strategies

• Developing marketing programs

• Designing and managing channels and

integrated marketing communications

• Identifies competitors as well as competitive forces and explains

possible competitive strategies.

• Shows possibilities to identify segments that make up a market and

describes criteria useful to choose the most attractive target

segments.

• Shows the major available differentiating attributes and describes

the contents of a consistent positioning strategy.

• Shows variety of decision areas in product offering and pricing.

• Shows variety of decision areas in channel management and

communications.

Table of content

Content Page

► Nature and function of marketing 6

► Strategic planning processes 13

► Corporate strategic planning 22

► Business unit strategic planning 30

► Marketing process 38

� Analyzing market opportunities

− Conducting market research 40

− Forecasting and Demand measurement 51

− Dealing with the competition 57

− Identifying market segments 70

- 5 -


− Selecting target markets (Market targeting) 75

� Designing marketing strategies

− Positioning strategies 78

− Differentiation strategies 83

� Developing marketing programs

− Setting the product and branding strategy 87

− Developing pricing strategies and programs 103

� Managing the marketing effort

− Designing and managing marketing channels 118

− Designing and managing integrated marketing communications 128

� Learning objectives: Nature and function of marketing*

� What are the tasks of marketing?

� What are customer needs?

� What are the strategic planning processes within a company all about?

Nature and function of marketing: Learning objectives

- 6 -


* see also Kotler, Ph. (2012), a.a.O., Chapter 1: p. 25-29; 31f.; 48 -50 Chapter 2: p. 58- 77; (82f.)

Nature and function of marketing: Some historical perspectives on marketing

Plato: “In well-ordered states, the storekeepers and salesmen are commonly those who are weakest in bodily strength and therefore of little use for any other purpose.”

Cicero: “Merchants are those who are to be accounted vulgar; therefore they can make no profit except by a certain amount of falsehood.”

Karl Marx: “To believe that a coat is worth less than $ 5 as long as it remains in the hands of the tailor, but that its value rises to $ 5 when I take possession of it is ridiculous. Already in the minute when the commodity is finished, it must be worth as much as the consumer pays for it in the end.”

Convincing by

gulling selling

- 7 -


The aim of marketing has to change; today’s focus must be: price for value

Peter Drucker:

Convincing by

creating

customer

value

“There will always, one can assume, be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then is to make the product or service available.”

Nature and function of marketing: What is marketing???

- 8 -


Official definition according to the American Marketing Association (see Kotler, p. 27)

“Marketing is the activity, set of institutions and processes for creating, communicating, delivering, and

exchanging offerings that have value for customers, clients, partners, and society at large.“

Generally accepted doctrine (Marketing News, March 1, 1985, Vol. 19, No. 5, S. 1)

“Marketing (management) is the process of planning and executing the

• conception,

• pricing and

• distribution of

ideas, goods, services to create exchanges that satisfy individual and organizational goals.”

Nature and function of marketing: The three aspects of marketing

�Marketing as a philosophy

market-driven corporate management, „to live with the customer“, customer oriented corporate

style

�Marketing as a medium to organize the marketplace / -space

Industry(sellers)

Market

Communication

Goods / services

- 9 -


Industry(sellers)

Market(buyers)

Information

Money

�Marketing as a method to serve customer needs �� Marketing Mix: 4 P‘s: set of marketing

tools that the firm uses to pursue its market objectives in the target market

Nature and function of marketing: A classification of markets

�Market: various groupings of customers

� need markets

� product markets

� demographic markets

� geographic markets

� basic economic markets

�Marketplace: physical market

� consumer market (place)

Industry(sellers)

Market(buyers)

Goods /

services

Money

Communication

- 10 -


� business market (place)

�manufacturer

� intermediary

� (resource, nonprofit, governmental market (place))

� global marketplace

�Market space: digital market

Information

� Customer needs

Nature and function of marketing: customer needs (1)

needs1 wants demands purchase

transactionbasicrequirement

directed to aspecific object

purchasedisposition

- 11 -


Marketers do not create needs: Needs pre-exist marketers (Kotler, 2012, p. 31-32)

1 see classification of needs: stated needs, real needs, unstated needs, delight needs,

secret needs (Kotler, p. 32)2 goods, services, experiences, information etc.

pre sales phase:target market / prospects (prospective customers)

are the focus

sales phase:exchange of any offering2

between marketer and customer

� Customer needs

Nature and function of marketing: customer needs (2)

needs1 wants demands purchase

transactionbasicrequirement

directed to aspecific object

purchasedisposition

satisfaction

value4 delivery

- 12 -


Marketers do not create needs: Needs pre-exist marketers (Kotler, 2012, p. 31-32);the marketer delivers value to the customer if the benefits of the offering are higher than the costs it causes

pre sales phase:target market / prospects (prospective customers)

are the focus

sales phase:exchange of any offering2

between marketer and customer

after sales phase:successful transaction

if offering delivers

value to the customer

1 see classification of needs: stated needs, real needs, unstated needs, delight needs,

secret needs (Kotler, p. 32)2 goods, services, experiences, information etc3 value: benefits/costs

Broad environment

Task environment

Corporate strategic planning

Defining corporate mission

Establishing strate-gic business units

Assigning resources to SBU

Assessing growth opportunities

PLANNING

Overview - Strategic planning processes

- 13 -


Business unit strategic planning

Business mission SWOT analysis Goal formulationStrategic

formulation

Marketing process

Analyzing market opportunities

Designing mar-keting strategies

Developing mar-keting programs

Managing the marketing effort

Broad environment

Task environment

PLANNING

Economic Technological Socio-culturalLegal

Overview - Strategic planning processes – Broad environment






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Broad marketing environment consists of key macro environment forces



formulation

Marketing process





� Broad environment� The broad environment consists of for main long term factors which can have major impact on a

company

CompanyEconomic

Technological

Legal

Short term

controllable

factors

Long term factors –

non-controllable

Broad Environment

- 15 -


Market actors must pay close attention to the trends and developments in the broad environment and make timely adjustments to their marketing strategies

Socio-cultural

Broad environment

Task environment

PLANNING

Customer CompanyIndustry

Competition /

Industry

Overview - Strategic planning processes – Task environment






- 16 -


Task marketing environment consists of significant micro environment actors (competitors, suppliers, customers etc.)



formulation

Marketing process





� Task marketing environment

� The task environment consists of customer, competition and the company itself

Customer

Task Environment

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Our company has to deliver at least the same value to the customer in order to stay competitive. Delivering higher value would result in competitive advantage over the competition

CompetitionOur CompanyCompetitiveAdvantage

� The corporate strategic planning process consists of 4 components:


Defining the Assigning Assessing

Overview - Strategic planning processes – Corporate strategic planning





PLANNING IMP

LE

ME

NTIN

G

CO

NTR

OLLIN

G

IMP

LE

ME

NTIN

G

CO

NTR

OLLIN

G



Establishing strate-gic business unit



Business mission SWOT Analysis Goal formulation Strategic formulation

Marketing process






PLANNING



Establishing strate-gic business unit




Marketing process


Designing mar-ketingstrategies




Establishing

- 18 -


Defining the

corporate

mission

Assigning

resources to

each SBU

Assessing

growth

opportunities

Focus on: • Criteria for the

definition of

SBUs

• Growth-share

matrix (BCG)

• SBU life cycle

• SBU strategies

• Ansoff’s product/

market expansion

grid

• Growth strategies

• Elements and

characteristics

of a corporate

mission

Establishing

strategic

business

units

� The business unit strategic planning process consists of 4 components:


Overview - Strategic planning processes – Business unit strategic planning


formulation

PLANNING







Marketing process






- 19 -


The business

missionSWOT

analysis

Goal

formulation

Strategic

formulation

Focus on: • External environment

analysis

• Internal environment

analysis

• Types of goals

• Management by

objectives

• Criteria for objectives

• Three generic

types of

strategies

• Specific mission

within the broader

company mission

� The marketing process consists of 4 components:

Analyzing Designing Developing Managing

Marketing process

Overview - Strategic planning processes – Marketing process





PLANNING







Marketing process






- 20 -


Analyzing

market

opportunities

Designing

marketing

strategies

Developing

marketing

programs

Managing

the marketing

effort

Focus on: • Analyzing the Macro-

environment

• Conducting market research

• Forecasting and Demand

Measurement

• Dealing with competition

• Identifying market segments

• Market targeting

• Positioning

Strategies

• Differentiation

Strategies

• Devising a branding

strategy

• Setting product

strategy

• Developing pricing

strategies and

programs

• Designing and managing

channels


integrated marketing

communications

• Managing the marketing

effort

Overview - Strategic planning processes – Results are documented in a Marketing plan

� Marketing plan*• Executive summary and table of contents: Marketing plan should open with a brief summary of the main goals and

recommendations. The executive summary permits senior management to grasp the plans major thrust. A table of contents should follow the executive summary.

• Situation analysis: This section presents relevant background data on sales, costs, the the market, competitors, and the various forces in the macroenvironment. How do we define the market, how big is it, and how fast is it growing? What are the relevanttrends and critical issues? Firms will use all this information to carry out a SWOT analysis

• Marketing strategy: Here the marketing manager defines the mission, marketing and financial objectives, and needs the market offering is intended to satisfy as well as its competitive positioning. All this requires inputs from other areas, such as purchasing, manufacturing, sales, finance, and human resources.

• Financial projections: Financial projections include a sales forecast, an expense forecast, and a break-even analysis. On the revenue side is forecasted sales volume by month and product category, and on the expense side the expected costs of marketing, broken down into finer categories. The break-even analysis estimates haw many units the firm must sell monthly (…)

- 21 -


The marketing plan is one of the most important outputs of the marketing process and summarizes among others, the results of the external and internal analysis, marketing objectives/ strategy and concrete action programs

marketing, broken down into finer categories. The break-even analysis estimates haw many units the firm must sell monthly (…) to offset its monthly fixed costs and average per-unit variable costs.A more complex method of estimating profit is risk analysis. Here we obtain three estimates (optimistic, pessimistic, and most likely) for each uncertain variable affecting profitability, under an assumed marketing environment and marketing strategy for the planning period. The computer simulates possible outcomes and computes a distribution, showing the range of possible rates ofreturns and their probabilities.

• Implementation controls: The last section outlines the controls for monitoring and adjusting implementation of the plan. Typically, it spells out the goals and budget for each month or so management can review each period's results and take corrective action as needed.

* see also Kotler, Ph. (2012), p. 76-78; (82ff.)

Broad environment

Task environment






PLANNING

Overview - Strategic planning processes – Corporate strategic planning

- 22 -




formulation

Marketing process





� Learning objectives: Corporate strategic planning*

� What are the processes towards an effective corporate strategy?

� Why and how to define strategic business units (SBU’s)?

� How to assign resources to each SBU (BCG matrix)?

� How to develop a corporate growth plan (Ansoff’s product/market

Corporate strategic planning – Learning objectives

- 23 -


� How to develop a corporate growth plan (Ansoff’s product/market

expansion grid)?

* see also Kotler, Ph. (2012), a.a.O., Chapter 2: p. 59-67

...

� The corporate strategic planning process consists of 4 components:



Establishing strategic business units


Assessing growth opportunities ...

Corporate strategic planning (1)

- 24 -


By doing the corporate planning process, a company establishes the framework in which the business units prepare their plans



Assigning resources to each SBU


� The corporate mission

� What is our business? Who is our customer? What customer benefits do we provide?

� Firms must avoid marketing myopia (not only short term oriented)

� The corporate mission should reflect 3 elements:

� limited number of objectives

- market share, innovation, productivity, quality, profitability

- be visionary

major policies and values

Corporate strategic planning (2) – Defining the corporate mission





- 25 -


� major policies and values

- customers, stakeholders, employees, suppliers, distributors

� major competitive scopes

- industry scope

- products and applications scope

- competence scope

- market-segment scope

- vertical scope

- geographical scope

A mission statement should be guided by a vision that provides a direction for the company for the next 10 to 20 years; it should give direction to the company itself and to the external environment

� The strategic business unit

� Def.: a SBU is a single business or group of related businesses that can be planned

independently from other company businesses (distinct mission, customers, competitors,

resources or technologies, responsibility for profitability)

� Criteria for definition:

� common consumer need or similar consumer characteristics (target markets)

Corporate strategic planning (3) – Establishing strategic business units





- 26 -


� common consumer need or similar consumer characteristics (target markets)

� common technology or manufacturing process

� same channels of distribution

� etc.

� Guided by the corporate mission and objectives, the firm must select a collection of

businesses or products, known as business portfolio

Companies should define their business units in terms of customer needs, not products or technology

� Portfolio analysis: The BCG matrix (growth-share matrix)M

ark

et

gro

wth

ra

te

Starshigh > 10% ?

? ?Question marks

reinvest

no

investSBU’s business

volume

market growth rate: annual growth

rate of the market

relative market share: SBU’s market share

relative to that of its

largest competitor

in the segment

Corporate strategic planning (4) – Assigning resources to each SBU





- 27 -


A healthy portfolio is a balanced one; an unbalanced portfolio has too many dogs and/or question marks

low < 10%

Relative market share

Ma

rke

t g

row

th r

ate

10 1 0,1

Cash cows Poor dogs

cash flow

divest

no

invest

in the segment

� Portfolio analysis: The BCG Matrix - strategies to pursueM

ark

et

gro

wth

rate

high

� Stars

� market leaders

� fast growing

� require investment to grow

� Strategy

� protect share

� reinvest earnings through price cuts, product improvement, more efficiency

� Question marks

� rapid growth

� poor profit margins

� enormous demand for cash

� Strategy

� invest to aggressively build share

� buy existing shares by acquiring

Corporate strategic planning (5) – Assigning resources to each SBU





- 28 -


low

Relative market share

Mark

et

gro

wth

rate

high low

� obtain large share of new users

� Cash cows

� profitable products

� generate more cash than needed for share maintenance

� slow sales growth

� Strategy

� maintain market dominance

� invest in process technology improvement and price leadership, R&D in other product markets

� Dogs

� many products may fall in this category

� cost disadvantage - few growth opportunities at reasonable cost

� markets not growing

� Strategy

� focus on a specialized, defendable segment

� harvest: cut back all support to maintenance

� divest (sell); abandon (delete f. line)

� Corporate growth plan: Ansoff’s product/market expansion grid

currentmarkets

� Market penetration

� increase market share

� increase product usage

- frequency of usage

- more usage

current products new products

� Product development

� product line extensions

� new products for same market

Corporate strategic planning (6) – Assessing growth opportunities





- 29 -


markets- more usage

- new uses

newmarkets

� Market development

� expand markets for existing products

- geographical expansion

- target new segments

� Diversification

� vertical integration

- forward integration

- backward integration

� diversify into related businesses

� diversify into unrelated businesses

Broad environment

Task environment

PLANNING

Overview - Strategic planning processes – Business unit strategic planning






- 30 -




formulation

Marketing process





� Learning objectives: Business unit strategic planning*

� What are the processes towards an effective business strategy?

� How to do a SWOT analysis?

� How to formulate goals?

� How to define a business strategy?

Business unit strategic planning – Learning objectives

- 31 -


� How to define a business strategy?


� SWOT analysis: overall evaluation of strengths, weaknesses, opportunities

and threats of a business

� External environment analysis (opportunity and threat analysis)

� opportunity analysis:

purpose: discern new marketing opportunities (area of buyer need in which a business can

perform profitability) out of key macro environment forces and key microenvironment actors

Business

missionSWOT

analysisGoal

formulationStrategic

formulation

Business unit strategic planning (1) – SWOT analysis

- 32 -


The competencies of a company must fit with the marketing opportunities the company seeks

perform profitability) out of key macro environment forces and key microenvironment actors

� threat analysis:

purpose: identify environmental threats (challenge posed by an unfavorable trend or development

that would lead to deterioration in sales or profit)

� Characterize business‘s overall attractiveness

� Internal environment analysis (strengths/weaknesses analysis)

� evaluate internal strengths and weaknesses of different competencies periodically by using a

„checklist for performing strengths/weaknesses“

� Core competencies of a company:

� Characteristics of a core competence

� source of competitive advantage in that it makes a significant contribution to perceived

customer benefits

� provides potential access to a wide variety of markets

� difficult for competitors to imitate

Business

missionSWOT

analysisGoal


formulation


- 33 -


Core competencies often go through the whole company and range over several businesses

� difficult for competitors to imitate

� Core competencies are the collective learning in the organization, especially how to

coordinate diverse production skills and integrate multiple streams of technology

� Examples:

� Honda has a core competence in engine design and manufacturing of cars, motorcycles and lawn

mowers

� Sony has a core competence in miniaturization (walkman, video camera, camcorder)

� Additional sources of strengths:

� Distinctive capabilities: describe excellence in broader business processes than

technical and production processes (core competencies)

� Capabilities

� specialized knowledge of segmented

needs

� Resources

� distribution coverage

Business

missionSWOT

analysisGoal


formulation


- 34 -


Market driven organizations often have distinctive capabilities in market sensing, customer linking and channel bonding

needs

� customer service orientation

� design expertise

� trade relationships

� ability to utilize relevant technologies

and transform them into products with

clear benefits

� systems design capabilities

� financial structure and access to

capital

� shared experience with related

businesses

� low cost manufacturing and/or

distribution systems

� production capacity

� control of raw material sources

� Goal formulation:

� Def.: Defining financial objectives (profits, target profit margin, ROI, cash flow etc.) and

marketing objectives (sales, volume, market share, in addition: consumer awareness,

number of dealers, average cost per unit etc.) with respect to magnitude and time period

� Question: What does a business want to achieve?

Business

missionSWOT

analysisGoal


formulation

Business unit strategic planning (4) – Goal formulation

- 35 -


The more consequent a business is managed by objectives, the better the results will be; “you always get what you measure”

� SBU sets these objectives and manages by objectives (MBO)

� Objectives must meet four criteria:

� objectives must be arranged hierarchically

� objectives should be stated quantitatively

� objectives should be realistic

� objectives must be consistent

� Strategy formulation:

� Def.: Strategy is a game plan for achieving the set of goals

� Question: How does a business want to achieve its goals?

� Three generic types of marketing strategies (Michael Porter):

� overall cost leadership: lowest production and distribution costs --> price cheaper than

Business

missionSWOT

analysisGoal


formulation

Business unit strategic planning (5) – Strategic formulation

- 36 -


Successful companies pursue distinctive strategies consisting of many different but consistent and synergistic activities that would be hard for competitors to imitate as a whole

competitors --> large market share

� differentiation: achieving superior performance over the competition in an customer benefit area

(service leader, quality leader, style leader, technology leader etc.)

� focus: business focuses on one or more narrow market segments; in the segment the firm

pursues either cost leadership or differentiation

� Porter defines strategy „as the creation of a unique and valuable position involving a

different set of activities“

� Example Southwest Airline’s marketing strategy: fit and sustainable

15-minute gate

turnaround

no connection

with other airlines

no meals

Business

missionSWOT

analysisGoal


formulation

frequent

reliable

departure

limited

pass-

enger

service

Short haul,Short haul,

no seat

assignment

Business unit strategic planning (6) – Strategic formulation

transfers

no baggage

transfers

- 37 -


flexible union

contracts

turnaround

standardized fleet

of 737 aircrafts

Short haul,

point-to-point

route between

middle-of-

nowhere

airports

very low

ticket

pricesHigh

aircraft

utilization

lean,

highly

productive

crew

limited use of

travel agents

Automatic ticke-

ting machineshigh level of high level of employee stock

ownership

Broad environment

Task environment

PLANNING

Overview - Strategic planning processes – Marketing process






- 38 -




formulation

Marketing process





...

Marketing process

Marketing process


Designing marketing strategies

Developing marketing programs



Analyzing

market

opportunities

Designing

marketing

strategies

Developing

marketing

programs

Managing

the marketing

effort

- 39 -


• Analyzing the Macro-

environment

• Conducting market

research


Measurement


• Identifying market

segments


Focus on:• Positioning Strategies

• Differentiation

Strategies

• Devising a branding strategy

• Setting product

strategy


strategies and

programs


channels



communications

Marketing process - Analyzing market opportunities


Analyzing

market

opportunities

Designing

marketing

strategies

Developing

market

programs

Managing

the marketing

effort


environment


Focus on: • Positioning

Strategies

• Differentiation

Strategies


• Setting product

strategy


• Designing and

managing marketing

channels

• Managing integrated

- 40 -


research• Forecasting and Demand

Measurement




Strategies • Developing pricing

strategies and

programs


marketing

communications

� Learning objectives: Marketing research*

� Why is information becoming more and more important nowadays?

� What is marketing research all about?

� Which process steps are necessary for achieving good marketing

research results (marketing research process)?

Analyzing market opportunities - Marketing research - Learning objectives

- 41 -


research results (marketing research process)?

* see also Kotler, Ph. (2012), a.a.O., Chapter 3: (p. 89-119);p. 121 -133

� The need for real-time market information is greater than at any time!!! Why

� Brainstorming

� from local to national to global marketing

� from buyer needs to buyer wants

� from price to non-price competition

Analyzing market opportunities - Marketing research - Introduction

- 42 -


P. Kotler: Marketing is becoming more of a battle based on information than one based on sales power

� Why marketing research?

� To get answers to the following questions:

� How high is the actual market potential and the market growth rate? Is there any saturation of the market

visible?

� Who are the potential customers? How, when, where, why do they buy what? Which opinions do they have

towards certain products / services / brands?

� Which are the profitable market segments?

� How do markets react on certain sales promotion activities?

� Is there any threat of substitutes or threat of mobility going on? And so on.........

Analyzing market opportunities - Marketing research - Why and how

- 43 -


Marketing research (oft übersetzt als “Absatzforschung”)

following Def. see Kotler, p. 130

Marketing research is the systematic

• design,

• collection,

• analysis, and

reporting of data and findings relevant to a specific marketing situation facing the company

� The marketing research process

Define the

problem and

research

objectives

Develop

the research

plan

Collect the

informationAnalyze the

information

Present the

findings

� Define nature of problem

� exploratory

research

� descriptive

� Decide on

� data

sources

� research

approach

� Realize survey

� 4 major problems of surveying

� Extract findings

� tabulate data

� develop

frequency

distribution

� Present major findings relevant to the marketing decisions

Analyzing market opportunities - Marketing research - Marketing research process (1)

- 44 -


Successful marketing research has to take a couple of decisions and to overcome several barriers to finally identify market opportunities

� descriptive

research

� causal

research

approach

� research

instruments

� sampling

plan

� contact

methods

surveying distribution

� compute

averages/

measures of

dispersion

� apply

advanced

statistical

techniques

decisions facing management



� exploratory

research

� descriptive

� Decide on

� data

sources

� research

approach

� Realize survey



� tabulate data

� develop

frequency

distribution



Define the

problem and

research

objectives

Develop

the research

plan

Collect the


information

Present the

findings

- 45 -


� descriptive

research

� causal

research

approach

� research

instruments

� sampling

plan

� contact

methods


� compute

averages/

measures of

dispersion

� apply

advanced

statistical

techniques




� exploratory

research

� descriptive

� Decide on

� data

sources

� research

approach

� Realize survey



� tabulate data

� develop

frequency

distribution



Define the

problem and

research

objectives

Develop

the research

plan

Collect the


information

Present the

findings

- 46 -


� descriptive

research

� causal

research

approach

� research

instruments

� sampling

plan

� contact

methods


� compute

averages/

measures of

dispersion

� apply

advanced

statistical

techniques


Developthe research

plan

Primary

research

Market

analysis (once)Survey research

Focus-group

research

Observation

(participatory,

nonparticipating)

Experimental

research (field,

Sampling procedure

• probability sample

• nonprobability

sample

Contact method

• personal

• telephone

• mail

• onlineType of questionnaire

• direct/indirect

• standardized/struc-

tured/unstructured

• open-end questions/

closed-end questions

Analyzing market opportunities - Marketing research - Marketing research process (4): Summary research plan

- 47 -


Secondary

research

Market

observation

(continuous)

Behavioral data

(“Panels”)

• Internal sources

• government

publications

• Periodicals /

books

• Commercial data

research (field,

laboratory)

Type of test

• market test

• product test

• advert. test

• storetest

Arrangement

• number of

experimental

groups

• date of

measurement



� exploratory

research

� descriptive

� Decide on

� data

sources

� research

approach

� Realize survey



� tabulate data

� develop

frequency

distribution



Define the

problem and

research

objectives

Develop

the research

plan

Collect the


information

Present the

findings

- 48 -


� descriptive

research

� causal

research

approach

� research

instruments

� sampling

plan

� contact

methods


� compute

averages/

measures of

dispersion

� apply

advanced

statistical

techniques




� exploratory

research

� descriptive

� Decide on

� data

sources

� research

approach

� Realize survey



� tabulate data

� develop

frequency

distribution



Define the

problem and

research

objectives

Develop

the research

plan

Collect the


information

Present the

findings

- 49 -


� descriptive

research

� causal

research

approach

� research

instruments

� sampling

plan

� contact

methods


� compute

averages/

measures of

dispersion

� apply

advanced

statistical

techniques




� exploratory

research

� descriptive

� Decide on

� data

sources

� research

approach

� Realize survey



� tabulate data

� develop

frequency

distribution



Define the

problem and

research

objectives

Develop

the research

plan

Collect the


information

Present the

findings

- 50 -


� descriptive

research

� causal

research

approach

� research

instruments

� sampling

plan

� contact

methods


� compute

averages/

measures of

dispersion

� apply

advanced

statistical

techniques




Analyzing

market

opportunities

Designing

marketing

strategies

Developing

market

programs

Managing

the marketing

effort


environment


Focus on:• Positioning

Strategies

• Differentiation


• Setting product

strategy

• Designing and

managing marketing

channels

- 51 -



• Forecasting and Demand Measurement




• Differentiation

Strategies

strategy


strategies and

programs

channels


marketing

communications

� Learning objectives: Forecasting and demand measurement*

� What are the major concepts in demand measurement?

� How can demand be more accurately measured and forecasted?

- methods and concepts

- examples to become trained

Analyzing market opportunities - Forecasting and demand measurement - Learning objectives

- 52 -



� What to do after identifying market opportunities?

� Measure and forecast the

� size (sales potential)

� growth potential

� profit potential

of each market opportunity to

� determine the needed cash for investments

� establish capacity

� acquire supplies

� hire the needed number of workers

Marketing is responsible for preparing the sales forecasts which are based on estimates of

Analyzing market opportunities - Forecasting and demand measurement (1)

- 53 -


� What market (demand) do we talk about???

� Market: set of all actual and potential buyers of a market offer

� Potential market (not equal to market potential): set of consumers who profess a sufficient level of

interest in a market offer

� Available market: set of consumers who have interest, income, and access to a particular offer

� Target (served) market: part of the available market the company decides to pursue

� Penetrated market: set of consumers who are buying the company‘s product

Marketing is responsible for preparing the sales forecasts which are based on estimates of market demand

� Market demand

� Market demand: total volume that would be bought by a defined customer group in a defined geographical

area in a defined time period in a defined marketing environment under a defined marketing program �

Market demand is a function dependent on industry marketing expenditure under the precondition of a

particular marketing environment , not a fixed number � market demand function; different market functions

under different marketing environments

� Market forecast: is the market demand corresponding to the level of industry marketing expenditures which

actually occur.

� Market potential: limit approached by market demand as industry marketing expenditures approach infinity

for a given marketing environment; maximum amount of sales that might be available to all the firms in an

industry under the given marketing environment

Market potential and market demand (in dependence of industry marketing expenditure) is higher in a period of prosperity versus in a period of recession


- 54 -


� Company demand

� Company demand: the company‘s estimated share of market demand at alternative levels of company

marketing effort in a given period of time � company demand function; different demand functions under

different marketing environments; different positions on the demand function in dependence on company‘s

performance perceived relative to the competitors

� Company sales forecast: is the expected level of company sales based on a chosen marketing plan and an

assumed marketing environment;

� Company sales potential: sales limit approached by company demand as company marketing effort

increases relative to that of competitors

higher in a period of prosperity versus in a period of recession

� Practical methods for estimating current market demand

� Estimation of total market potential: potential number of buyers x average quantity purchased

by a buyer x price ;

� often start with total population in the nation

� eliminate groups that would not buy the product --> suspect pool

� again eliminate groups that would not buy the product (after further research) ---> prospect pool

estimate average quantity purchased by average customer per year

estimate average price

� do calculation


- 55 -


� Estimation of area market potential: market potential of a city, state, nation

� market-buildup method: North American Industry Classification System (NAICS) (classifies all manufacturing

into 20 major industry sectors and further breaks each sector into a six digit, hierarchical structure, for

business markets)

� multiple-factor index method (top down estimation via index building for consumer markets)

Business marketers typically have a harder time estimating their market potential and market share (own sales / total industry sales) because they have no shared data to rely on (Nielsen)


Analyzing

market

opportunities

Designing

marketing

strategies

Developing

marketing

programs

Managing

the marketing

effort

• Analyzing the

Macroenvironment


research

Focus on: • Positioning Strategies

• Differentiation

Strategies


strategy

• Setting product

strategy


channels




- 56 -


research


Measurement



segments


strategy


strategies and

programs


communications

� Learning objectives: Dealing with competition*

� What does a company need to know about the existing competitive

forces within its industry?

� How do we identify our competitors?

� How should we analyze our competitors?

Analyzing market opportunities - Dealing with the competition - Learning objectives

- 57 -


� Which competitive strategies do exist?

* see also Kotler, Ph. (2012), a.a.O., Chapter 10: p. (299f.);p. 320-331

� Dealing with competition:

Competitive Forces

Analyzing market opportunities-Dealing with competition

• Identify the forces

that determine the

intrinsic long-run

• Examine competition

from both an industry

and a marketing point

• Ascertain competitors’

strategies, objectives,

strengths, and

• Classify companies

by the roles they play

in the target markets

Identifying Competitors

Analyzing Competitors

Competitive Strategies

- 58 -


intrinsic long-run

attractiveness of a

market or a market

segment

and a marketing point

of view

strengths, and

weaknesses

in the target markets

� What does a company need to know about the existing competitive forces within

its industry?

� How much power do our competitors have in comparison to us?

� Who are our competitors? How many are they?

� What are their strategies?

� What are their strengths and weaknesses?

Analyzing market opportunities - Dealing with competition – Relevant questions

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies

- 59 -


� What are other factors that could influence the intensity of competitive actions?

� Existence / Strategies of new competition?

- industry related

- unrelated to particular industry

� How much power do we have elsewhere in the channel?

� What is the market power of our suppliers?

� What is the market power of our buyers?

The more competitive forces exist and the more power they have, the less attractive the market (segment) is!!! (see five forces model)

� Competitive Forces

● Five forces model determining

long-term segment structural

attractiveness

● Competition includes all the actual

and potential rival offerings and

Potentialentrants (threat of mobility)

Suppliers(supplier

Industrycompetitors(segment

Buyers(buyer

Analyzing market opportunities - Dealing with competition – Five forces

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies

- 60 -


substitutes that a buyer might consider

Because markets have become so competitive (global markets), understanding customers is no longer enough. “Competitive intelligence systems” are necessary to permanently know competitors’ strategy and actions.

(supplierpower) (segment

rivalry)

(buyerpower)

Substitutes(threat of

substitutes)

� Factors affecting rivalry among existing competitors

� Numerous or equally balanced competitors

� Slow industry growth

� High fixed or storage costs

� need to operate at capacity and to cut costs

� Lack of product differentiation (in the eyes of the customers)

Analyzing market opportunities - Dealing with competition – Industry competitors

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies

PotentialentrantsPotentialentrants

SuppliersSuppliersIndustry

competitorsIndustry

competitorsBuyersBuyers

SubstitutesSubstitutes

- 61 -


� Capacity augmented in large increments

� (threat of) overcapacity in the industry

� High strategic stakes

� High exit barriers

The more investment is involved and the slower the pay back comes, the more aggressive competitors fight against each other and the more difficult profitable market penetration is

� Barriers to enter

� Economies of scale

� Experience curve (learning curve)

� Cost advantages independent of scale

� partnerships to suppliers

� Capital requirements

Analyzing market opportunities - Dealing with competition – Potential entrants

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies



competitorsIndustry



- 62 -


� Switching costs of customers

� Access to existing distribution channels

� partnerships to intermediaries

� Strong existing customer relationships

� Government policy

� Expected retaliation from existing competitors

� price battle, decreasing industry margins

The more barriers to enter exist, the easier profitable market penetration is for existing competitors

� Segment structural attractiveness is higher when

� There are no substitute products

� Product function can not be replaced

Examples for substitute products:

� Book vs. movie

Analyzing market opportunities - Dealing with competition - Substitutes

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies



competitorsIndustry



- 63 -


� Steel vs. new materials

� Records vs. CD´s vs. mp3 vs. ipod

Be aware when:

� Technology advances in substitute industries

� Substitute industries seeking for new applications

Competition between industries must be recognized but offers new opportunities

� Bargaining power for buyers is high when

� Purchasing is concentrated or is in large

volumes relative to seller‘s sales

� The product represents a large proportion

of buyer‘s costs

Analyzing market opportunities - Dealing with competition- Buyer power

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies



competitorsIndustry



- 64 -


� There is little differentiation or there are

low switching costs

� Backward integration is a credible threat

� Product performance / quality is relatively unimportant

to buyer‘s performance

A detailed knowledge of buyers position in the industry is necessary in order to strengthen the own bargaining power of a company

� Bargaining power for suppliers is high when

� Suppliers industry is dominated by a few firms

and is more concentrated than the customer industry

� The product has few substitutes

� The customer industry is not important to the supplier

Analyzing market opportunities - Dealing with competition – Supplier power

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies



competitorsIndustry



- 65 -


� The supplier product is an important input, is differenciated,

or has high switching costs

� The supplier group poses a credible threat of forward integration

A detailed knowledge of suppliers position in the industry is necessary in order to strengthen the own bargaining power of a company

� Identifying Competitors

� Def.: competition: a group of firms that offer products / solutions that are close substitutes for

one another

� Characteristics

� cross-elasticity

� brand switching

� similarity in use

Analyzing market opportunities - Dealing with the competition (7) – Identifying competitors

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies

- 66 -


� Four levels of competition

� Brand level: suppliers of similar products to similar customers at similar prices --> cross elasticity very

high

� Industry level: suppliers of the same class of products

� Form level: suppliers which offer the same service

� Generic level: suppliers that compete for the same consumer dollars

A detailed knowledge of number and type of competition in all categories is necessary in order to build up a competitive advantage

Mark

et

com

petition

Industr

y

com

petition

� Analyzing Competitors

� Strategic group: a group of firms following the same strategy in a given target market

� What are the competitors’ objectives?

� What are the competitors’ strengths and weaknesses?

- share of market :the competitors’ share of the target market

- share of mind: the percentage of customers who named the competitor as the first

Analyzing market opportunities - Dealing with the competition (8) - Analyzing Competitors

� Analyzing Competitors

� Strategic group: a group of firms following the same strategy in a given target market

� What are the competitors’ objectives?

� What are the competitors’ strengths and weaknesses?

� share of market: the competitors’ share of the target market

� share of mind: the percentage of customers who named the competitor as the first company in the

industry that comes to their mind

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies

- 67 -


company in the industry that comes to their mind

- share of heart: the percentage of customers who named the competitor as the company from

which they prefer to buy the product

� Selecting Competitors:

-strong vs. weak

-close vs. distant

-”good” vs. “bad”

� share of heart: the percentage of customers who named the competitor as the company from which

they prefer to buy the product

� Selecting Competitors:

� strong vs. weak

� close vs. distant

� ”good” vs. “bad”

� Competitive strategies

� Dimensions for mapping: mobility barriers or factors that deter movement of firms from one

strategic position to another in the industry

Challenger Leader

Analyzing market opportunities - Dealing with the competition (9) - Competitive strategies

3. “Commodity”

Player

2. Dominant Player

Vo

lum

e

Competitive

Forces

Identifying

Competitors

Analyzing

Competitors

Competitive

Strategies

Worldwide Production Automotive Industry (2008)

Toyota 9,237,780

General Motors (Opel, Vauxhall, GM, Daewoo)

8,282,803

Volkswagen Group 6,437,414

Ford(Ford, Jaguar, Volvo)

5,407,000

- 68 -


A company must carefully decide which strategic group to compete in and then closely watch its key competitors which are in the same strategic group

Follower Nicher / Visionary

1. Established Niche Player

Player

4. Endangered Player

Vo

lum

e

Differentiation

Ford(Ford, Jaguar, Volvo)

5,407,000

Honda 3,912,700

Nissan 3,395,065

PSA 3,325,407

Hyundai 2,777,137

Suzuki 2,623,567

Fiat 2,524,325

Daimler AG 2,174,299

BMW 1,439,918

Porsche 96,721

Source: OICA (http://oica.net/wp-content/uploads/world-ranking-2008.pdf)


Analyzing

market

opportunities

Designing

marketing

strategies

Developing

marketing

programs

Managing

the marketing

effort

• Analyzing the

Macroenvironment


research


• Differentiation

Strategies


strategy

• Setting product

strategy


channels




- 69 -


research


Measurement

• Dealing with the

competition



strategy


strategies and

programs


communications

� Learning objectives: Identifying market segments / Selecting target markets*

� Market segmentation - why and how?

� Which patterns of target market selection do exist?

Analyzing market opportunities - Identifying market segments - Learning objectives

- 70 -



� Target markets (“target marketing”)

Analyzing market opportunities - Identifying market segments (1)

� Identify segmentation

variables and segment

� Evaluate the

attractiveness of each

Identify possible

positioning concepts for

Marketsegmentation

Product/Service

Positioning

Markettargeting

- 71 -


the market

� Develop profiles of

resulting segments

segment

Select the target

segment(s)

each target segment

� Select, develop and

signal the chosen

positioning concept

� Consumer Market and Business Market segmentation

� Market segmentation is the process of identifying homogeneous groups of buyers

requiring different marketing strategies to influence their consumption

� Organizations have limited resources

� Consumers may be too numerous, widely scattered and varied in their needs


Marketsegmentation

Product/Service

Positioning

Markettargeting

- 72 -


� Consumers may be too numerous, widely scattered and varied in their needs

� Competing organizations my be better able to attract certain groups of customers

(segments) in the market

� Each organization should, therefore identify the most attractive parts of the market that it

could effectively serve (--> target market)

� Market segmentation - questions to ask

� Who are our customers? Purchaser / User

� What do our customers buy? Amount, brand, features, price

� What do our customers do with the products? Usage situation

Where do they buy? Retailer, factory shop, Internet

Marketsegmentation

Product/Service

Positioning

Markettargeting


- 73 -


� Where do they buy? Retailer, factory shop, Internet

� When do they buy? Time of year, week, day; on sale versus full price

� How do they choose? Decision participants‘ roles, decision process, information sources

� Why do they select a product? Functional attributes, service, image, brand equity

� Will they buy it again? Degree of satisfaction, intentions

� Sensitivity to marketing mix: product/service, price, distribution, advertising/promotion


Analyzing

market

opportunities

Designing

marketing

strategies

Developing

marketing

programs

Managing

the marketing

effort

• Analyzing the

Macroenvironment


research


• Differentiation

Strategies


strategy

• Setting product

strategy


channels




- 74 -


research


Measurement


competition


segments


strategy


strategies and

programs


communications

� Market targeting - evaluate market segments

Opportunities for profit Opportunities for profit

• size

• growth potential

Customer

Analyzing market opportunities – Market targeting (1)

Marketsegmentation

Product/Service

Positioning

Markettargeting

- 75 -


Competitive intensity

• unmet needs

• entry barriers

Competition

• firm’s objectives

• firm’s capabilities

CompanyTargetmarket

selection

� Market targeting - select the target segment(s)

� Five patterns of target market selection

� Single segment concentration: concentrated marketing

� Selective specialization: differentiated marketing

Product specialization: rather undifferentiated marketing

Marketsegmentation

Product/Service

Positioning

Markettargeting

Analyzing market opportunities – Market targeting (2)

- 76 -


� Product specialization: rather undifferentiated marketing

� Market specialization: rather differentiated marketing

� Full market coverage

- undifferentiated marketing

- differentiated marketing

Because differentiated marketing leads to both higher sales and higher costs, there is no general statement concerning this strategy’s profitability


Designing

marketing

strategies

Developing

marketing

programs

Managing

the marketing

effort

• Analyzing the

Macroenvironment


research


• Differentiation


strategy

• Setting product

strategy


channels



Marketing process – Designing marketing strategies

Analyzing

market

opportunities

- 77 -


research


Measurement


competition


segments


Strategies strategy


strategies and

programs


communications

� Learning objectives: Positioning and Differentiation*

� How to position a product / service in the competitive landscape?

� What concepts of differentiation do exist?

� How does a consistent positioning strategy look like?

Designing marketing strategies – Positioning and Differentiation - Learning objectives

- 78 -


* see also Kotler, Ph. (2012), a.a.O., Chapter 10: p. 296-298; p. 308; p. 311-313

� Product/service Positioning

� Product/service is the act of designing the company’s offering and image to occupy a

distinctive place in the mind of the target market

� Determine unique differentiating benefits (unique selling proposition; unique advertising

proposition)

Market

segmentation

Product/ServicePositioning

Market

targeting

Designing marketing strategies - Positioning and Differentiation (1)

- 79 -


proposition)

� Design the marketing mix that will establish appropriate perceptions of the brand among

customers

� Positioning statement: To Y (target audience), X is the brand of (frame of reference) that

delivers a benefit Z (point of difference) because of ... (supporting claim)

Positioning is not what you do to the product, but how the product is perceived in the mind of the consumer

� Product/Service Positioning: Types of Positioning

� Attribute Positioning: a company position itself on an attribute such as size (Andersen,

Siemens)

� Benefit Positioning: product is positioned as the leader in a certain benefit; e.g. BMW

and Daimler Chrysler are fighting for technology leadership/great engineering; Volvo:

safest and most durable

� Use / Application Positioning: position the product as best for some use (e.g. utiliy cars

Designing marketing strategies - Positioning and Differentiation (2) -Types of positioning

Market

segmentation


Market

targeting

- 80 -


for people who are doing sports and need to transport heavy and bulky sports

equipment)

� User Positioning: position the product as best for some user group (basketball players

take Nike shoes)

� Competitor Positioning: the product claims to be better in some way than a named

competitor (Coke and Pepsi)

� Product category Positioning: product is positioned as the leader in a certain product

category (aspirin in the segment of pain relief)

� Quality/Price Positioning: product is positioned as offering the best value (Aldi)

� Example of Positioning: beers as people

Beer Brand At a party As his hobbies As his occupation

Budweiser Older guy Watch ball games, rake leaves

Businessman

Heineken Gentleman Polo Rich guy

Market

segmentation


Market

targeting

Designing marketing strategies - Positioning and Differentiation (3)

- 81 -


Heineken Gentleman Polo Rich guy

Michelob Smoke a pipe Philately, philosophy, classic music

Free lancer

Becks Charming guy Sailing CEO

Paulaner Cozy type of guy Beergarden Government employed

Miller Good guy, friendly Golf, tennis Junior executives


Designing

marketing

strategies

Developing Developing

marketing

programs

Managing

the marketing

effort

• Analyzing the

Macroenvironment


research


• Differentiation Strategies


strategy

• Setting product

strategy


channels



Marketing process – Designing marketing strategies

Analyzing

market

opportunities

- 82 -


research


Measurement


competition


segments


strategy


strategies and

programs


communications

� Differentiation Strategies

� Product Differentiation:

� product form, features, performance, conformance, durability, style, design, etc

� Services Differentiation:

� ordering ease, delivery, installation, customer training, customer consulting,

maintenance and repair

� Personnel Differentiation:

Designing market strategies - Positioning and Differentiation (4)

- 83 -


� Personnel Differentiation:

� competence, courtesy, credibility, reliability, responsiveness, communication

� Channel Differentiation:

� coverage, expertise, performance

� Image Differentiation:

� identity : the way a company aims to identify or position itself

� image: the way the public perceives the company or its products

� Summary: towards an effective Positioning Strategy

� Who (which customer segments) should we serve?

� segmentation analysis

� What differentiates us from our competitors in meeting the needs of our target segment?

Marketsegmentation


Markettargeting


- 84 -


How should we position our product so as to highlight our differential advantage over the

competitors?

� competition analysis (what benefits are currently offered?)

� customer analysis per segment (what benefits are most needed?)

� differentiation analysis (how can we differentiate our company?)

� positioning analysis (how can we translate our product characteristics into benefits sought?)

� Summary: internally consistent positioning strategy

Hanna Andersson, a $ 40 million clothing firm in Portland, Oregon, U.S.

� Target segment: Socially conscious, eco-sensitive parents, looking to save time

� Product : 100 % cotton clothing for kids, endlessly washable

Marketsegmentation


Markettargeting


- 85 -


� Product : 100 % cotton clothing for kids, endlessly washable

� Distribution: mail-order, serviced by highly trained phone reps.

� Promotions: policy on returned clothing that no longer fits; 20% of original price credited

towards next purchase; donates returned clothes to charity

�Product/Services + Channel Differentiation; Benefit + User Positioning


Designing

marketing

strategies

Developing

marketing

programs

Managing

he marketing

effort

• Analyzing the

Macroenvironment


research

Focus on:• Positioning Strategies

• Differentiation

Strategies


• Setting product strategy


channels



Marketing process – Developing marketing programs

Analyzing

market

opportunities

- 86 -


research


Measurement


competition


segments


Strategies strategy• Developing pricing

strategies and

programs


communications

� Learning objectives: Setting the product and branding strategy*

� What is the concept of the product life cycle all about? Which marketing

strategies are appropriate at each stage of the product life cycle?

� What are the characteristics of products?

� Which decisions to take concerning the marketing mix element “product”?

� How can a company build and manage its product mix and product lines?

Developing marketing programs - Setting the product and branding strategy - Learning objectives

- 87 -


How can a company build and manage its product mix and product lines?

� How can a company make better brand decisions?

* see also Kotler, Ph. (2012), a.a.O., Ch. 9: p.262 – 290; Ch 11: 332-336; Ch 12: 346-361

� Product management: the concept of the product life cycle

� Characteristics of the product life cycle concept

� products have a limited time

� product sales pass through distinct stages, each posing different challenges, opportunities,

and problems to seller

� profits rise and fall at different stages of the product life cycle

� products require different marketing, financial, manufacturing, purchasing, and human

resource strategies in each stage of their life cycle

Developing marketing programs - Setting the product and branding strategy (1) - Product management

- 88 -


Not all products exhibit a bell shaped product life cycle with the four typical stages

� Product life cycle curve is typically divided into four stages

� introduction

� growth

� maturity

� decline

� Characteristics of product life cycle stages


introduction growth maturity decline

sales low rapidly rising peak declining

cost/customer high average low low

profits negative rising high declining

customers innovators early adopters middle majority laggards

- 89 -


Each product stage has different objectives and requires a different marketing strategy

customers innovators early adopters middle majority laggards (“Bummler”)

competitors few growing stable, begin to decline

declining

marketing objectives

create product awareness,

induce product trial

maximize market share

maximize profit while defending

share

reduce expenditure and milk the

brand

� Marketing strategies for product life cycle stages


introduction growth maturity decline

product basic product product extensions

diversify brands/models

phase out weak items

price cost + market penetration

price to match competition

cut price

distribution selective intensive more intensive selective

- 90 -


Each product stage has different objectives and requires a different marketing strategy

advertising awareness among early

adopers/ dealers

awareness/ interest i. mass

market

stress brand difference/

benefits

reduce to needed level to retain

hard-core loyals

sales promotion

heavy to induce trial

reduce to exploit heavy demand

increase to encourage brand

switching

reduce to minimal level

� Product management: the market pioneer “advantage” (pioneer: to be first in the

market)

average market share

consumer goods industrial goods

pioneer 29% 29%

early follower 17% 21%

late entrant 13% 15%


- 91 -


Most studies indicate that the market pioneer gains the most advantage; but: there is not necessarily a correlation between market share and profitability

� What is a product??

� Def. a product is anything that can be offered to a market to satisfy a want or need (including physical objects, services, persons, places, organizations, ideas)

core

basic product

expected product

augmented product

potential product

the fundamental service or benefit

that the customer is really buying

a product’s parts, styling, features,

brand name, packaging and other

attributes that support core benefits

a set of attribute and conditions

buyers normally expect

core benefit:

basic product: :

expected product:

Developing marketing programs - Setting the product and branding strategy (5)

- 92 -


Successful companies add benefits to their offering that not only satisfy customers but also surprise and delight them

corebenefit

buyers normally expect

additional services/benefits built

around the basic/expected product

all the possible augmentations and

transformations the product might

undergo in the future

augmented product:

potential product:

� Product classifications

� Classification of products according to durability and tangibility

� nondurable goods: tangible goods normally consumed in one or a few uses

� durable goods: tangible goods that normally survive many uses

� services: intangible, inseparable, variable, perishable; may or may not be tied to a physical product

� Classification of consumer goods according to shopping habits

� convenience goods: usually purchased frequently, immediately, and with a minimum of effort

- staple goods: purchased on a regular basis

- impulse goods: purchased without any planning or search effort

- emergency goods: purchased when a need is urgent

� shopping goods: compared in the process of selection and purchase on such bases as suitability, quality,

price and style


- 93 -


� specialty goods: with unique characteristics/ brand identification for which a number of buyers makes a special

purchasing effort

� unsought goods: the consumer does not know about or does not normally think of buying

� Classification of industrial goods according to production process phase and relative costliness

� materials and parts: goods that enter the manufacturer‘s product completely

- raw materials

- manufactured materials and parts

� capital items: long-lasting goods that facilitate developing or managing the finished product

- installations

- equipment

� supplies / services: short -lasting goods and services that facilitate developing or managing the finished product

- supplies

- business services

� Product and services decisions

� Product attribute decisions� product quality: ability to perform its function

� product features

� product design, process of designing a product‘s style and function

� Product mix decisions: how many products/product lines to carry?

� Branding decisions: to brand or not to brand a product?

� Packaging decisions� process of designing and producing the container or wrapper for a product

� packaging concept: what should the package be or do for the product?


- 94 -


� packaging concept: what should the package be or do for the product?

� packaging has to support the product‘s positioning and marketing strategy

� Label decisions� label identifies the product/brand, grades the product, describes the product characteristics,

promotes product

� Product-support service decisions� Product-support services augment basic products

� function: handle complaints and adjustments, credit service, maintenance, repair, technical service,

other service, consumer information

� an active customer-service department coordinates all the company‘s services, creates consumer

satisfaction and loyalty and helps the company to differentiate itself from competitors

� Product mix decisions

� Definition:

Product mix (also called product assortment) is the set of all products and items that a

particular seller offers for sale

� Characteristics of a product mix

� width: refers to how many different product lines the company carries

� length: refers to the total number of items in the mix


- 95 -


� depth: refers to how many variants are offered of each product in the mix

� consistency: refers to how closely related the various product lines are in end use,

production requirements, distribution channels, or some other way

Product managers need to know the sales and profits of each item in their mix in order to determine which item to build, maintain, harvest, or divest

� Product mix: Example Procter & Gamble


Product mix width

detergents toothpaste bar soapdisposable diapers

paper tissue

Product

Ivory Snow 1930 Gleem 1952 Ivory 1879 Pampers 1961 Charmin 1928

Dreft 1933 Crest 1955 Kirk’s 1885 Luvs 1976 Puffs 1960

Tide 1946 Lava 1893 Banner 1982

Cheer 1950 Camay 1926 Summit 1100’s 1992

- 96 -


Product

line

length

Cheer 1950 Camay 1926 Summit 1100’s 1992

Oxydol 1954 Zest 1952

Dash 1954 Safeguard 1963

Bold 1965 Coast 1974

Gain 1966 Oil of Olaz 1993

Era 1972

� Branding decisions

Richard Branson, CEO of Virgin:

(companies: Virgin Radio, Virgin Cola,

Virgin Clothing, Virgin Records,

Virgin Atlantic Airways)

“Our brand name is incredibly important. It is preserved that if you have a good experience with one Virgin product, you will try / fly / eat / drink / buy another.”


- 97 -


Jean-Nöel Kapferer: “Products are what the company makes; what the customer buys is a brand.”

� Branding decisions

Brand

Performance

CustomerCompany


- 98 -


The brand mediates between the customers, the performance (product + service) and the company.

Brand: A name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

��

�� “Markenführung” / “corporate branding”: the consistent alignment of a company’s processes which refer to positioning the company in the market in order to achieve the desired image.

� Branding: brand extensions

existing

brand name

category

line extensions category extensions


- 99 -


brand name

new to the company

existing new to the company

flankers new product

� Branding: new product introductions by a company

More good: the extension

enhances the brand name

The good:

the brand name aids the

extension


Effects of extending the brand

to a new product

- 100 -


The ugly:

the brand name

is damaged

The bad:

the brand name fails to help

the extension

Brand extensions are not always successful; there is quite a risk to fail!!!

� Several different types and combinations of brand architecture exist*

Types Description

• The existing brand that gives birth to

a brand extension or sub brand is

the parent brand

• If the parent brand is already associated with

multiple products through brand extensions, it

can be called a family brand

parent brand/

umbrella brand

family brand

Examples

Siemens; Virgin;

Matsushita/Panasonic;

Ferrero

Virgin Records;Nivea, Tesa (brands belong to Beiersdorf);Kinder (brand belongs to Ferrero)


- 101 -


sub brand

• When marketers combine a new brand

with an existing brand, the brand extension

can also be called a sub brand

Mc Donalds Big MacToyota Camry automobiles

channel brand• One brand per retail channel

Body Shop

Media Markt, Saturn Hansa

(brands belong to Metro

Group)

individual

product

brand

• Each brand (of a company) has a separate

name, which may even compete against

other brands from the same company

Persil (brand belongs to Henkel)Ariel (brand belongs to P&G


Designing

marketing

strategies

Developing

marketing

programs

Managing

the marketing

effort

• Analyzing the

Macroenvironment


research


• Differentiation

Strategies


strategy

• Setting product

strategy


channels



Marketing process – Developing marketing programs

Analyzing

market

opportunities

- 102 -


research


Measurement


competition


segments


strategy

• Developing pricing strategies and programs


communications

� Learning objectives: Developing pricing strategies and programs*

� What are the essential questions concerning the marketing mix element

“price”?

� What are the process steps towards setting an appropriate pricing policy?

� How to estimate price elasticity of demand?

� What are the six possible methods for selecting a pricing method?

What are the components of a so called price playing field?

Developing marketing programs - Developing pricing strategies and programs - Learning objectives

- 103 -


� What are the components of a so called price playing field?

� What other factors for selecting the final price does a company have to

determine?

� Additional factors in the practice to identify an optimal pricing strategy?

� Be able to do basic quantitative analysis in order to make product decisions!

* see also Kotler, Ph. (2012), a.a.O., Chapter 14: p. 404 - 432

� Essential questions concerning pricing

� How much can I charge and still make the sale?

� How should a price be set on a product or service for the first time?

� How should a product mix be priced?

� How should the price be adapted to meet varying circumstances and opportunities?

� When should the company initiate a price change, and how should it respond to a competitor‘s

price change?

� function of customers and competition

Developing marketing programs - Developing pricing strategies and programs (1)

- 104 -


� How much money can I make?

� function of internal costs

The adequate price of a product should primarily be a function of customers and competition, secondly a function of internal costs

� Setting pricing policy: a six step procedure

Selecting the

final price

Selecting a

pricing method

Analyzing

competitor's

costs, prices,

and offers

Estimating

costs

Determining

demand

Selecting the

price objective

� 5 possible objectives

� survival

� maximum

� Different types of costs accounting

3 possible � 3 possible cases

� firm’s offer is

similar to

comp.

� 6 possible methods

� markup pricing

� target-return

� Consider additional factors

� psychological pricing

� Measure demand curve for a product


- 105 -


� maximum

current profit

� maximum

market share

� maximum

market

skimming

� product-

quality

leadership


� Experience curve

� Target Costing

comp.


inferior to

comp.


superior to

comp.

� target-return pricing

� perceived-value pricing

� value pricing

� going-rate pricing

� sealed-bid pricing

pricing

� influence of other marketing-mix elements

� firm’s pricing policies

� impact of price o. other parties

� Estimate price elasticity of demand




� survival

� maximum

Selecting the

final price

Selecting a

pricing method

Analyzing

competitor's

costs, prices,

and offers

Estimating

costs

Determining

demand

Selecting the

price objective

- 106 -


� maximum

current profit

� maximum

market share

� maximum

market

skimming

� product-

quality

leadership




� survival

� maximum


Selecting the

final price

Selecting a

pricing method

Analyzing

competitor's

costs, prices,

and offers

Estimating

costs

Determining

demand

Selecting the

price objective

- 107 -


� maximum

current profit

� maximum

market share

� maximum

market

skimming

� product-

quality

leadership



� Demand curve: shows the market’s probable purchase quantity at alternative prices

inelastic demand: price increase leads to relatively small decline in demand

elastic demand:price increase leads to a substantial drop in demand


Determining

demand

- 108 -


price

quantity demanded per period

price

quantity demanded per period




� survival

� maximum



Selecting the

final price

Selecting a

pricing method

Analyzing

competitor's

costs, prices,

and offers

Estimating

costs

Determining

demand

Selecting the

price objective

- 109 -


� maximum

current profit

� maximum

market share

� maximum

market

skimming

� product-

quality

leadership



� Target Costing





� survival

� maximum




similar to

comp.


Selecting the

final price

Selecting a

pricing method

Analyzing

competitor's

costs, prices,

and offers

Estimating

costs

Determining

demand

Selecting the

price objective

- 110 -


� maximum

current profit

� maximum

market share

� maximum

market

skimming

� product-

quality

leadership



� Target Costing

comp.


inferior to

comp.


superior to

comp.





� survival

� maximum




similar to

comp.


� markup pricing

� target-return


Selecting the

final price

Selecting a

pricing method

Analyzing

competitor's

costs, prices,

and offers

Estimating

costs

Determining

demand

Selecting the

price objective

- 111 -


� maximum

current profit

� maximum

market share

� maximum

market

skimming

� product-

quality

leadership



� Target Costing

comp.


inferior to

comp.


superior to

comp.



� value pricing





Selecting a

pricing method

� 6 possible pricing methods

� markup pricing: add a standard markup to the product’s cost

--> works only if the marked-up price actually brings in the expected level of sales

cost oriente

d


- 112 -


� target-return pricing: price is determined by target rate of ROI (return on investment)

--> works only if different prices and their probable impacts on sales volume (price sensitivity of customers) and

profits are estimated

cost oriente

d


Selecting a

pricing method

� 6 possible pricing methods

� markup pricing: add a standard markup to the product’s cost

--> works only if the marked-up price actually brings in the expected level of sales

� target-return pricing: price is determined by target rate of ROI (return on investment)


cost oriente

d


- 113 -



profits are estimated

� perceived-value pricing: price is based on the customer’s perceived value; other marketing mix elements are

used to build up perceived value in buyers’ minds

--> works only if the market’ perception of the offer’s value is determined accurately

� value pricing: fairly low price for a high-quality offering

-> works only if company’s supply chain is reengineered towards a low-cost producer without sacrificing quality

� going-rate pricing: price based largely on competitors’ prices

--> works only if there is industrial harmony in the market

� sealed-bid pricing: price is based on expectation how competitors will bid (contract business)

--> works only for companies that make many bids

mark

et oriente

dcost oriente

d




� survival

� maximum




similar to

comp.


� markup pricing

� target-return

� Consider additional factors

� psychological pricing


Selecting the

final price

Selecting a

pricing method

Analyzing

competitor's

costs, prices,

and offers

Estimating

costs

Determining

demand

Selecting the

price objective

- 114 -


� maximum

current profit

� maximum

market share

� maximum

market

skimming

� product-

quality

leadership



� Target Costing

comp.


inferior to

comp.


superior to

comp.



� value pricing



pricing

� influence of other marketing-mix elements

� firm’s pricing policies

� impact of price o. other parties



� Price playing field

Economic value = maximum pricecompetition

� customer

� price sensitivity

� fairness

� company

� goals

� image

� situation

� competition� situation

- market share- costs

� co-operation

� collaborators� trade

� suppliers


- 115 -


Variable costs = minimum priceprofit goals

� situation

- market share- costs

� co-operation

� differentiation

� Adapting the price: identify an optimal pricing strategy in the practice

� geographical pricing � countertrade

- barter

- compensation deal

- buyback arrangement

- offset

� discounts and allowances� cash discounts

� quantity discounts

� functional discounts

� seasonal discounts

� allowances- trade-in allowances


- 116 -


- trade-in allowances

- promotional allowances

� two-part pricing� amusement parks: admission + per ride

� car rentals: fixed fee + mileage

� product -bundling pricing

� discriminatory pricing� customer-segment pricing

� product-form pricing

� image pricing

� location pricing

� time pricing


Designing

marketing

strategies

Managing

the marketing

effort

• Analyzing the

Macroenvironment


research


• Differentiation

Strategies


strategy

• Setting product

strategy

• Designing and managingchannels



Marketing process – Managing the marketing effort

Analyzing

market

opportunities

Developing

market

programs

- 117 -


research


Measurement


competition


segments


strategy


strategies and

programs


communications

� Learning objectives: Designing and managing marketing channels*

� Which role does distribution play for manufacturers and buyers? What

work is performed by marketing channels?

� What are the essential questions concerning the marketing mix element

“place”?

� What decisions do companies face in designing, managing, evaluating,

Managing the marketing effort - Designing and managing marketing channels - Learning objectives

- 118 -


and modifying their channels?

� Which types of wholesalers and retailers do exist?

* only Script is relevant

� Some basics about distributing

� A distribution system ... is a key (external) resource. Normally it takes years to build, and it is not

easily changed. It ranks in importance with key internal resources such as manufacturing, research,

engineering, and field sales personnel and facilities. It represents a significant corporate

commitment to large number of independent companies (as a rule) whose business is distribution -

and to the particular markets they serve.

� Def. market channels: sets of interdependent organizations involved in the process of

making a product or service available for use or consumption

Managing the marketing effort - Designing and managing marketing channels (1)

- 119 -


� Why is a channel or intermediary needed?

Intermediaries smooth the flow of goods and services ... This procedure is necessary in order to

bridge the discrepancy between the assortment of goods and services generated by the producer

and the assortment demanded by the customer. The discrepancy results from the fact that

manufacturers typically produce a large quantity of a limited variety of goods, whereas consumers

usually desire only a limited quantity of a wide variety of goods

A marketing channel performs the work of moving goods from producers to consumers and hereby overcomes the time, place and possession gaps

� Distributor’s economic role: sales and logistics

manufacturer distributor customer

transferred business

costs

transferred business

costs

� manufacturer to distributor

� inventory

� customer to distributor

� inventory


- 120 -


� inventory

� transportation

� selling

� order handling

� credit

� communication

� information / market feedback

� inventory

� shrinkage

� freight

� technical support

� service

The distributor takes over costs from manufacturer as well as from customer in terms of sales and logistics

� Channel breadth: what degree of exposure does the firm desire for the product?

� intensive distribution: placing the goods/service in as many outlets as possible

� selective distribution: use of more than a few but less than all of the intermediaries who are willing to carry a

particular product

� exclusive distribution: limiting the number of intermediaries severely

�When is selectivity a good choice?

� product characteristics: shopping goods or specialty goods

� buyer behavior:

- high perceived risk


- 121 -


- low frequency

- high brand loyalty

- high personal selling effort

� degree of control:

- price maintenance

- sales assistance

- display standard

- product image

Selective distribution can be used as differentiating factor when a competitive strategy is pursued

� Channel length: should one sell directly or through intermediaries?

� direct distribution / direct-marketing channel / zero-level marketing channel: manufacturer selling directly to the final customer

� own sales force (consumer business: „Reisende“; industrial business: sales management)

� Manufacturers’ owned stores

� mail order

� electronic commerce: Internet, TV selling

� indirect distribution / one-/two-level-marketing channel: selling through intermediaries

� Merchants („Absatzmittler“): buy and sell products, live on margin

- OEM‘s („Original Equipment Manufacturers“)

- industrial distributor

industr

ial

mark

et


- 122 -


- industrial distributor

- wholesaler

- retailer

� Agents („Absatzhelfer“): don‘t buy products, work for acquisition commission

- sales representatives / manufacturer‘s representatives („Handelsvertreter“§ 84 HGB: in fremdem Namen

auf fremde Rechnung)

- commission merchants („Kommissionär“ § 383 HGB: in eigenem Namen für fremde Rechnung)

- broker („Makler“ § 93 HGB: gewerbsmäßige Vermittlung v. Vertragsabschlüssen f. Dritte)

The channel system evolves in response to local opportunities and conditions and may vary from location to location

industr

ial

mark

et

consum

er

mark

et

� Consumer and Industrial Marketing Channels


Consumer Marketing Channels Industrial Marketing Channels

0-level 1-level 2-level 0-level 1-level 2-level 2-level

Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer Manufacturer

WholesalerManufacturer‘s representative

Manufacturer‘s sales branch

- 123 -


Retailer RetailerIndustrial

distributor

Consumer Consumer ConsumerIndustrial

customer

Industrial

customer

Industrial

customer

Industrial

customer

� Retailing

� Def. retailing: includes all the activities involved in selling goods or services directly to final

consumers for personal, non-business use

� Types of retailers

� specialty store (“Fachgeschäft“): narrow product line with a deep assortment; super specialty store)

� department store (“Kaufhaus“): several product lines - with each line operated as a separate department

managed by specialist buyers or merchandisers

� supermarket: relatively large, low-cost, low-margin, high-volume, self-service operation designed to serve total

needs for food, laundry, and household maintenance products

� convenience store (“Tankstellengeschäft“): relatively small store located near residential area, open long hours

seven days a week, carrying a limited line of high-turnover convenience products at slightly higher prices


- 124 -


seven days a week, carrying a limited line of high-turnover convenience products at slightly higher prices

� discount store: standard merchandise sold at lower prices with lower margins and higher volumes

(� specialty merchandise stores)

� off-price retailer: merchandise bought at less than regular wholesale price and sold at less than retail

(� factory outlets)

� Superstore: huge selling space, routinely purchased food and household items, plus services (laundry, shoe

repair). Category killer (deep assortment in one category) such as Home Depot; combination store, hypermarket

(huge stores that combine supermarket, discount, and warehouse retailing) such as Carrefour.

� Catalog showroom: Broad selection of high-markup, fast-moving, brand-name goods sold by catalog at discount.

Any organization selling to final customers - whether a manufacturer, wholesaler, or retailer -is doing retailing

� Wholesaling

� Def. wholesaling: includes all the activities involved in selling goods or services to those who buy for

resale or business use

� Types of wholesalers

� merchant wholesalers: independently owned business that take title to the merchandise they handle

- full-service wholesalers

- limited-service wholesalers

� brokers: chief function is bringing buyers and sellers together and assisting in negotiation; paid on a

commission base by the part who hired them; they do not carry inventory, get involved in financing, or

assume risk


- 125 -


assume risk

� agents: represent either buyers or sellers on a more permanent basis than broker

� manufacturers‘ and retailers‘ branches and offices: wholesaling operations conducted by sellers or buyers

themselves rather than through independent wholesalers

� miscellaneous wholesalers: specialized types of wholesalers in certain sectors (agricultural assemblers,

auction companies)

The trend towards vertical integration is strong; this trend is especially affecting wholesale; successful wholesalers are aggressively increasing their effectivity and efficiency

� Channel choice: which criteria help to select the right channel???

� economic criteria� determine the sales output per channel

� estimate the sales costs of selling different sales volumes, esp. compare sales costs through direct and indirect selling

sellingcosts

($) company sales force

manufacturer’ssales agency


- 126 -


� control criteria� sales agency: independent firm seeking to maximize its profits, direct control possibility does not exist� own sales force: direct control possibility

� adaptive criteria� sales agency: more adaptability, less continuity

level of sales ($)

� Modifying channel arrangements over the product life cycle - the PC market as an example

marketgrowth

rate

value added by the channel

2. growing

low

1. introductory

� PC‘s: hobbyist stores

� designer apparel:

boutiques

3. mature

4. declining

� PC‘s: mail order


off-price stores


- 127 -


high

rate 2. growing� PC‘s: specialty

retailers


better department

stores

high low

3. mature

� PC‘s: mass

merchandisers


mass merchandisersorigin: Stern and Sturdivant

No marketing channel will remain effective over the whole product life cycle; successful companies adapt their channels according to product evolution


Designing

marketing

strategies

Managing the

marketing

effort

• Analyzing the

Macroenvironment


research


• Differentiation

Strategies


strategy

• Setting product

strategy


channels

• Designing and managing integrated marketing

Marketing process – Managing the marketing effort

Analyzing

market

opportunities

Developing

market

programs

- 128 -


research


Measurement


competition


segments


strategy


strategies and

programs

integrated marketing communications

� Learning objectives: Managing integrated marketing communications*

� What is communication / promotion all about? What major models of

communication do exist?

� What is Integrated Marketing Communications (IMC) all about?

Managing the marketing effort – Designing and managing integrated marketing communications - Learning objectives

- 129 -


* only Script is relevant

Managing the marketing effort – Designing and managing integrated marketing communications (1)

Public relations/Sales promotion

� Marketing communications mix: five major models of communication

� Advertising: paid form of nonpersonal presentation and promotion of ideas, goods, or

services

� Sales promotion: variety of short-term incentives to encourage trial or purchase of a

product or service

� Public relations and publicity: variety of programs to promote or protect a company‘

image or its individual products

- 130 -


Advertising

Public relations/publicity

Sales promotion

Personalselling

Directmarketing

31

2

5 4

Personal selling: face-to-face interaction with prospective

customer(s) for the purpose of making presentations,

answering questions, and procuring orders

Direct marketing: use of mail, telephone, fax, e-mail,

or Internet to communicate directly with specific customers

and prospects

Integrated marketing communications combine a variety of communication models or disciplines to provide clarity, consistency, and maximum communications’ impact through the seamless integration of discrete messages

Managing the marketing effort – Designing and managing integrated marketing communications (2)

� Integrated Marketing Communications (IMC) is defined as following by the

American Association of Advertising Agencies:

IMC is a concept of marketing communications planning that recognizes the added value of IMC is a concept of marketing communications planning that recognizes the added value of

a comprehensive plan that evaluates the strategic roles of a variety of communications

disciplines - for example, general advertising, direct response, sales promotion and public

relations and combines these disciplines to provide clarity, consistency, and maximum

communications‘ impact through the seamless integration of discrete messages

- 131 -


communications‘ impact through the seamless integration of discrete messages

IMC will improve the company’s ability to reach the right customers with the right messages at the right time and in the right place

Advertising

Public relations/publicity

Sales promotion

Personalselling

Directmarketing

31

2

5 4

Managing the marketing effort – Viral Marketing

Definition:*

Viral marketing is an Internet adaption of marketing using the word-of-mouth effect.

Viral marketing can be understood as an advertising message spread by consumers

among other consumers. Viral marketing has been treated by many as an almost

coincidental marketing instrument - as a “funny instrument” that might add a little extra

attention and colour to primary marketing efforts.

Example:*In March 2006 tyre maker Goodyear launched a Europe-wide viral campaign. Consisting of three viral clips produced by Legas Delaney, London, the campaign was launched by marketing agency GoViral in nine different languages with active seeding in five selected markets: Germany, France, UK,

- 132 -


in nine different languages with active seeding in five selected markets: Germany, France, UK, Sweden and Denmark. In just nine month the videos were viewed more than 9 million times - with the major viewing in the five selected markets. The target for the campaign, which aimed to raise awareness of the Goodyear brand, was 700,000 views! From an expected average cost per view at €0.30, actual average cost per view turned out to be just €0,025.

Find the video on youtube:

(Keyword: changing tyres can be dangerous)

http://www.youtube.com/

or

http://5x5m.com/files/goodyearChanging tyres can be dangerous!!

* see also Kotler, Keller, (2012), Chapter 17: p. 516f.

Managing the marketing effort – Social Media Marketing

Social Media Marketing is a form of online-marketing. Social Media Marketing can be

understood as using social media platforms for personal/ company’s purpose.

A Company can pursue different objectives with Social Media Marketing, for example:

• improve image and reputation,

• increase sales,

• provide support and information,

• increase customer loyalty,

• enables exchange of information among users/ consumers,

Definition:1

- 133 -


• enables exchange of information among users/ consumers,

• generate traffic for the own company website,

• use for personal recruitment.

Social Media Marketing Tools:²

• forums, blogs,

• social media platforms like twitter, youtube, facebook

Managing the marketing effort – Social Media Marketing

The Social Media Prisma:

The Social Media Prisma describes the social media landscape in Germany with all relevant communication channels.

•published by ethority.de, in the 3rd

version,

•shows 26 Influence factors on a

- 134 -


•shows 26 Influence factors on a company’s online-reputation,

•Online-reputation is a big challenge for companies, starting to keep an overview of all the different platforms.²

Documents

Studiengang Betriebswirtschaftslehre: Marketing Betriebswirtschaftslehre: Marketing ... the marketer delivers value to the customer if the benefits of the offering are higher than