Marketing Strategy Marketing Strategy 任維廉教授 at NCTU, 2012

Marketing StrategyMarketing Strategy

任維廉教授任維廉教授at NCTU, 2012at NCTU, 2012

講師簡介：任維廉講師簡介：任維廉 (William)(William)

現職：交通大學管理學院運輸科技與管理系教授

學歷：交大管理科學研究所博士經歷：交大運輸科技與管理學系系主任交大傑出教學獎台北市交通局顧問新竹市政府市政顧問中華民國運輸學會理事 PCMPCL, Harvard Business School

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交通大學管理學院任維廉教授2

33交通大學管理學院任維廉教授

OutlineOutline1. Introduction to Marketing Strategy

2. Positioning Strategy: Target Market Selection and Product Positioning

3. Tactical Details: The Marketing Mix (4 Ps)

4. Analysis Underlying Marketing Strategy Formulation

5. Conclusion

＊ Basic Marketing Mathematics


1. Introduction to Marketing Strategy1. Introduction to Marketing Strategy There is only one valid definition of business purpose:

to create a customer. any business enterprise has only 2 basic functions: marketing and innovation. (Drucker)

Marketing is the process via which a firm creates value for its chosen customers.

Marketing Strategy: sustain this process of creating and capturing value over time.

1. Selecting a target market and determining the desired positioning of the product in target customers’ mind. 2. Specifying the plan for the marketing activities to achieve the desired positioning.


1. Marketing analysis: Customer needs, Company skills, Competition, Collaborators, Context. (5 Cs)

2. Creating value: Marketing segmentation, Target market selection, Product and service positioning.

3. Capturing value, Marketing mix: Product, Place, Promotion, Pricing. (4 Ps)

4. Sustaining value: Customer acquisition, Customer retention.

5. Profits.

Schematic of marketing processSchematic of marketing process


2. Positioning Strategy (STP)2. Positioning Strategy (STP)Market Segmentation

Target Market Selection

Product Positioning

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2.1 Two Key Questions2.1 Two Key QuestionsWhich potential buyers should the firm attempt to

serve? Segmentation! Demographic, Geographic, Life style,……

How much customization should the firm offer? Mass market, Market segments, Market Niches, Individuals.

e.g. 1. 特力屋：易買，易選，樂趣多（友善環境）。 2. 路邊鞋攤：專賣沒名氣但好穿的男鞋（衡外　　

　　情，量己力）。


Example of Example of SegmentationSegmentationBased on Customer Behavior SurveyBased on Customer Behavior SurveyUser status: nonusers, userUsage rate: light, medium, heavy userBenefits sought: performance, price orientedLoyalty status: none, moderate, strong, totally loyalAttitude toward product: unsatisfied, satisfied, delight


2.2 2.2 Target Target Market SelectionMarket SelectionComparative strengths and weaknesses (vs.

competition),

Corporate goals, the fit of the segment with these goals,

Resources necessary to market successfully to the target segment,

Need for appropriate collaborators,

Likely financial returns from the segment.


PositioningPositioning statements (Fill-in-the-Blank) statements (Fill-in-the-Blank)

____________________ (Our product / brand) is

____________________(single most important claim)

among all ___________________ (competitive frame)

because __________ (single most important support).


3. The Marketing Mix3. The Marketing MixThe 4 Ps: an aggregation, regrouping, easy-to-recall

Product, Place, Promotion, Pricing.

Blend 12 mix elements (Borden): Merchandising / product planning, Pricing, Branding,

Channels of distribution, Personal selling, Advertising, Promotions, Packaging, Display, Servicing, Physical handling, Fact finding and analysis / market research.

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3.1 Product: Definition3.1 Product: DefinitionConsidered from the point of view of value

delivered to the customer. The physical product itself, Brand name, Company reputation, Presale education provided by sales people, Postsale technical support, Repair service, Financial plans, Convenient availability, Word-of mouth references from earlier adopters, Reputation of the outlet.


3.1.1 Product Line Planning Decisions3.1.1 Product Line Planning DecisionsProduct line length: different price points, how many

items, e.g. 高價啤酒，低價電腦……Product line breadth: desired consistency or similarity,

e.g. desktop computer, laptops; men’s golf attire, women’s line; minivan, sport-utility vehicle. (small-motor technology, superior consumer products marketing skills)

Product line depth: how many types, e.g. $100 golf sweater in 5 colors or just 3; or mixed.

大千世界、芸芸眾生中，能被辨識出來的，總是那些：能比別人早起一步、多做一分、深想一層的，他們看的到機會而且與眾不同。


3.1.1 Product Line Planning Decisions3.1.1 Product Line Planning DecisionsConsiderations: satisfy target customer wants,

profitable for the firm, differentiation from competitors, impact on the rest of the line (complement, not substitute), or brand (company’s reputation).


3.1.2 Individual Item Decisions3.1.2 Individual Item DecisionsDelete an item from the line.

Reposition an existing product within the line.

Improve the performance of an existing product to strengthen its positioning.

Introduce a new product within an existing line.

Introduce a product to establish a new line.


3.1.3 The New Product Developing Process:3.1.3 The New Product Developing Process:5 Steps Sequential Process5 Steps Sequential Process

1. Opportunity identification: both product-market fit and product-company fit.

2. Design.3. Testing: survey, taste test, simulated test markets,

actual test markets.4. Product introduction: geographic markets, same

time or sequentially over time. 5. Life cycle management: repositioning or

marketing mix change in a dynamic process, continually learning from environment change (customer reaction, competition, technology).


3.2 Place: Marketing Channels3.2 Place: Marketing Channels8 generic channel functions:

Product information, product customization, product quality assurance, lot size, product assortment, availability, after-sale service, logistics.

Eliminate a layer in the chain? The functions done by the middlemen now have

to be done by someone else.

The 2 major decisions:1. Channel design2. Channel management


3.2.1 Channel Design3.2.1 Channel DesignDirect distribution (IBM blue suits sales force),

indirect (3rd party under contract or independently), dual (own sales force, direct mail, Web site; distributers, retail outlets). Account concentration: jet engines (few, DD);

toothpaste (ID). Control and direct customer contact. (e.g. 法藍

瓷 ).

Limit (high-end, e.g. Infinite); Intensively distribute (more well known, customer convenience, e.g. Coke, PC).


3.2.1 Channel Management3.2.1 Channel ManagementConflict between partners in a distribution system:

Lack of congruence in goals. e.g. 長期聲譽 vs.短期獲利

Lack of consensus on who is doing what. e.g. 售後服務誰負責

Day to day work-on-it (not solve-it-once): Proper design of contracts, Good communications (feedback)


3.3 Promotion: Marketing Communications3.3 Promotion: Marketing Communications6 Ms model:

Market: to whom? Mission: what is the objective? Message: what are the specific points? Media: which vehicles? Money: how much will be spent? Measurement: how well impact be assessed?

Potentially expensive: Personal selling, Nonpersonal elements.


3.3.1 Nonpersonal Vehicles3.3.1 Nonpersonal VehiclesAdvertising in media:

awareness, features, usage situations, distinguishing from competitors, point of purchase, brand image.

Sales promotion event: actually close, trade promotion (advertising allowance);

consumer (cents-off coupon); retail (discount).Direct marketing to household:

customized direct mail.Public relations: nonpaid, but less controllable,

press releases, speeches at industry seminars, appearance on radio on TV programs.

Others: packaging, trade shows……


3.3.2 Personal Selling3.3.2 Personal Selling Interaction to potential customer:

Take an order, providing technical support… e.g. 新藥銷售業務拜訪醫師

Recruiting, selecting, training programs; evaluation, compensation, motivation plans.

Integrated communication plans: People involved in decision-making unit (DMU) different issues.


3.3.3 Constructing the Communications 3.3.3 Constructing the Communications MixMix

Proper allocation of dollars

Push strategy: retailer, Pull strategy: end consumer

Options: event sponsorship, telemarketing, own (others) Web site, infomercials


3.4 Pricing3.4 PricingMaximum price:

Combination of product, place, promotion determine the customer’s perception value of the firm’s product in a given competitive context.

Cost should act as a floor on pricing

Effective pricing: Pricing objectives, Price customization, Price leadership.


3.4.1 Pricing Objectives3.4.1 Pricing ObjectivesSkim ( 吸脂 ) strategy : maximize short-term profit,

top of the market with high value. e.g. hardcover books at $30 initially.

Penetration ( 滲透 ) strategy : maximize market penetration, sets a lower price to generate lots of sales quickly. Consumers are sensitive to price, economies of

scale are important, adequate production capacity, threat of competition .

Difficult to increase prices later (referent point).


3.4.2 Price Customization3.4.2 Price CustomizationCharging different customers different prices:

yield management (airlines, car rental)

Consideration: Quantity discounts, lower price only in a certain locations, Product line (hardcover / softcover), buyer characteristics (upgraders / new customer)


3.4.3 Price Leadership3.4.3 Price LeadershipAny price decision has to reflect anticipated

competitive reaction:

Avoid price cutting, legal and price leadership : High fixed but low variable costs, Little differentiation among competitors’

product, Industry growth rate is low, There are barriers to capacity adjustment Economies of scale are important.


4.Analysis Underlying Marketing Strategy 4.Analysis Underlying Marketing Strategy FormulationFormulation

Marketing analysis: (the 5 Cs) Customers needs, Company skills, Competition, Collaborators, Context.


4.1 Customers Analysis4.1 Customers Analysis

1. Who is involved in the process?

2. What role does each play?


5 Roles in DMU5 Roles in DMU Initiator(s): search product

Decider(s): final decision

Influencer(s): have input into it

Purchaser(s): transaction

User(s): consume


Example of Purchase a Computer for the homeExample of Purchase a Computer for the home Initiator: oldest child

Decider (brand): a relative with computer knowledge

Influencers: parents and all children

Purchaser: decider

Users: all family members


Decision Making Process?Decision Making Process? Is there a search for information?

How is that search being conducted?

What criteria are used to evaluate alternatives?

How important are the various attributes?

How do DMU members interact?

Others: where to buy, how is used……


4.2 Company Analysis4.2 Company AnalysisAssessing comparative strengths and weaknesses

(vs. competition),

Assessing product-company fit (vs. Product-market fit): Finance, R&D capability, Manufacturing capability, Other assets. 人無我有，人有我優，人優我轉 vs. 其他公司的機

會


4.3 Competitive Analysis4.3 Competitive AnalysisBoth current and potential competitors’ strengths

and weaknesses : Seeks differentiation possibilities. 藍海策略

Assess competitors’ objectives and strategies: Predict and shape competitive reactions. 動態競爭


4.4 Collaborators Analysis4.4 Collaborators AnalysisPartners in the marketing system: 1. Downstream retailers: Cost structure, Expectations about margins and allocation of tasks, Support and training requires, Relationship with the firm’s competitors.2. Upstream suppliers: Their ability to supply quality product on a reliable

basis, How much lead time is required?


4.5 Context Analysis4.5 Context AnalysisSpotting important changes in context before

competitor: Context is always changing.

Consider and monitor for signs of disruption: Technology: Web’s disruption, Culture: trends and fashions, Politics, regulation, law, social norms are not

fixed.


5. Conclusion: Terms to Know5. Conclusion: Terms to KnowMarketing analysis: Customer needs, Company

skills, Competition, Collaborators, Context. (5 Cs)Creating value: Marketing segmentation, Target

market selection, Product and service positioning. (STP)

Capturing value, Marketing mix: Product, Place, Promotion, Pricing. (4 Ps)

Sustaining value: Customer acquisition, Customer retention.

Profits.


Dollars

Dollars

Total volume produced

Total volume produced

(a) Constant variable cost per unit

(b) Decreasing variable cost per unit

6. Basic Marketing Mathematics6. Basic Marketing Mathematics(1) Types of Cost(1) Types of Cost


(2) Profit Drivers (2) Profit Drivers


units 000,200unit/5.3$

000,700$

Per UnitMargin Dollar

Dollarsin Cost FixedBEV

(3) Break-even Volume(3) Break-even Volume


(4) Formula of Price (4) Formula of Price

QPTR

QavcFCTC

FCQavcP

avcP

FCQ*

……(1)

……(2)

……(3)

……(4)

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Alvin J. Silk, What Is Marketing? Harvard Business Press, 2006/10/1

Documents

Marketing Strategy Marketing Strategy 任維廉 教授 at NCTU, 2012

Marketing Strategy Marketing Strategy 任維廉教授 at NCTU, 2012