Strategic Marketing
Dr Paul Fifield
Visiting Professor
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Dr Paul Fifield
•
•
•
•
Paul advises companies on Market Strategy and has
written widely on the subject.
He has 25 years’ experience in strategic consulting
with previous clients in: Agri Chemicals, Aviation,
Banking, Brewing, Business Services, Computing
and Software, Construction, Distribution, Domestic
Appliances, Economic Development, Education,
Housing, Hotels and Catering, Insurance, Leisure &
Tourism, Online gaming, Public Sector, Publishing,
Retailing, Telecommunications, Utilities, Web
services and others.
He holds a degree in Business Studies as well as an MBA and a PhD in
Marketing Strategy, both from Cranfield University.
Paul teaches on a number of MBA programmes and is currently Visiting
Professor at the University of Southampton and the College des Ingénieurs
in Paris. He is President of the CIM Southern Region and a Fellow of the
Royal Society for the encouragement of Arts, Manufacturers and
Commerce (FRSA).
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
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The Approach
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2 days of THINKING
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Dealing with strategy & marketing
A ‘Puzzle’
A ‘Problem’
..has a correct ‘Answer’
..has more than one ‘Solution’
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Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
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Strategy Terminology
• The OBJECTIVE(S)
– The goal or aim to which ALL activities in the organisation are
directed
– An objective always begins with the word ‘TO’
– Objectives do NOT change in the short term
• The STRATEGY
– The ONE route which is both NECESSARY and SUFFICIENT to
ACHIEVE the objective
– A strategy always begins with the word ‘BY’
– Strategy is not changed in the short term
• The TACTICS
– The short term actions required to implement the strategy
– Manoeuvres on the field of battle
– Tactics do change in the short term
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Filling the ‘strategy gap’
€
The Gap
0
+1
+2
+3
+4
+5
+6
+7
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Strategy and Implementation
STRATEGY
IMPLEMENTATION
STRATEGY FORMULATION
ineffective
effective
effective
Die quickly
Thrive
ineffective
Die slowly
Survive
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Planning
1. Strategic:
• Three to Five years depending on the nature of the
business.
2. Tactical:
• One year to 18 months.
3. Programmes:
• Rolling quarterly with quarterly and annual milestones and
reporting.
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First, agree the Financial Hurdles
Every organisation has one or more ‘financial imperatives’ that it
must satisfy to remain in business. These are not the same as
objectives. These ‘hurdles’ just need to be seen, measured and
jumped. They should NOT guide the destiny of the organisation
Our financial hurdles are:
1.
2.
3.
4.
……………………………
……………………………
……………………………
……………………………
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Then, set the business objective
1. What is our Business Objective?
 What do we want/need to achieve in this business?
 How is it measured?
 By when?
 How will we know when we have achieved it?
 If we achieve it, will it satisfy the Financial Hurdles?
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SMART Objective(s)
All objectives must be SMART:
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Objectives
What is our Business
Objective?
 What do we want/need to achieve
in this business?
 How is it measured?
OBJECTIVE:
• Begins with “To…….”
• One is better than many
• Must be ‘SMART’
 By when?
• Different from Financial
Targets*
 How will we know when we have
achieved it?
*“Too many organisations
confuse ‘purpose’ with
‘measures of success” RSA
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Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
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Business Strategies
What is our Business
Strategy?
 How do we achieve the agreed
objective?
STRATEGY:
• Begins with “By…….”
• Not short term
 What are the alternatives?
• Not ‘straws in the wind’
 Can it be done?
• Not changed every Friday
 Can we do it?
• Not another word for important
tactics >
Must be both ‘NECESSARY’ and
‘SUFFICIENT’ to achieve the objective
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The Generic Strategies
Focus
Stuck in
The Middle
Cost Leadership
Differentiation
[Source: Porter 1983]
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Red Ocean – Blue Ocean
(Kim & Mauborgne)
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Strategy is rarely linear
Sales/Profit/Market share/other objective
Ma
St
t
e
rk
gy
e
t
ra
The
Market
Environment
B
Vision/Objective
A
Today
1
2
3
4
5
6
7
8 ……………..……….. x
Time
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Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Henry Ford
“It is not the employer
who pays the wages.
Employers only handle
the money. It is the
customer who pays the
wages.”
Henry Ford 1863-1947
American industrialist and pioneer of the
assembly-line production method,
23
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Levitt on Customers
“Customers just need to
get things done. When
people find themselves
needing to get a job done,
they essentially hire
products to do that job for
them”
Theodore Levitt (1925-2006), American
economist and professor at Harvard Business
School. Editor of the Harvard Business Review
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We know that customers are Selfish
•
•
•
•
•
WIIfm
What’s
In
It
For
Me
Me
Me
Me
Me Me
Me?
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Consumer Behaviour models
The Process
Cultural
Sociological
Economic
Cultural beliefs
& values
Lifestyles, etc
Social class structure
Family/group influence
Life-Cycle
Opinion leadership, etc
Price
Delivery
Payment terms
Sales, services, etc
Individual Psychological Factors
Level of knowledge & awareness
Personal (emotional) characteristics
Motivations, Attitudes, etc
Buying Proposition
Product or Service
[Chisnall]
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The B2B Decision Making Unit (DMU)
DECISION-MAKER
USER
GATE-KEEPER
INFLUENCER
CUSTOMER
SPECIFIER
BUYER
FINANCIER
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Value competition
QUALITY
Quality:
• A relative term.
• Refers to the degree of
superiority of an offering.
• Reflected in experiential
characteristics such as
image/style & recognition.
•Difficult to continuously
improve over time.
Key Questions:
1 What Business?
2 Who is the Customer?
3 What is the Value
Proposition?
PRICE
VALUE
Value:
• Enhanced by increasing
quality or reducing costs
• Some retail offers value
by reducing non-monetary
costs and increasing
monetary prices.
• Different markets &
segments see different
“good” value.
Price: The customer’s only tangible measure of quality. Pricing strategies
position the value and quality of the offering in the customer’s mind.
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From Commodities to Experiences
Customer Perceived Value increases….
The Experience
(enjoyed in a
5 star restaurant)
The Service
(brewed in a
regular cafe)
The Good
(ground, packaged,
sold)
The Commodity
(harvested & traded)
$2-5
50¢
5–25¢
1–2¢
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Laura Ashley
“We don't want to push our
ideas on to customers, we
simply want to make what
they want”
Laura Ashley CBE,
(1925 – 1985),
Welsh designer
30
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Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
What business?....
1. Are we in?
2. Should we be in?
“Product led”
Motor Cycles
Watches
Electric Motors
Railroads
Electronics
Cars
Watches
Beer
Cosmetics
Pubs
Coffee Shops
Leather/Luggage
Encyclopedias
Company
Harley Davidson
Swatch
B&D
Amtrak
Sony
Jaguar
Rolex
A Busch
Revlon
Bass Taverns
Starbucks
Louis Vuitton
Britannica
“Market led”
Big Boys’ Toys
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HD and their business definition
x
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What business?
“Product led”
Motor Cycles
Watches
Electric Motors
Railroads
Electronics
Cars
Watches
Beer
Cosmetics
Pubs
Coffee Shops
Leather/Luggage
Encyclopedias
Our Product?
Company
Harley Davidson
Swatch
B&D
Amtrak
Sony
Jaguar
Rolex
A Busch
Revlon
Bass Taverns
Starbucks
Louis Vuitton
Britannica
Our Company
“Market led”
Big Boys’ Toys
Fashion Accessories
DIY
Transport
Entertainment
Status
Jewelry
Friendship
“Hope”
Entertainment
The Third Place
The Art of Traveling
Parental guilt
Our Business
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What business are we in?
Our business is key to our plans, it:
1
2
3
4
5
6
Is defined by the customer
- Would our customers understand our business?
Focuses the organisation on needs satisfied
- What needs should we be satisfying?
Establishes directions for growth
- Where should we be investing for the future?
Establishes boundaries for effort
- What should we do more of/stop doing?
Determines real competitors
- Who are we really competing with?
Establishes the markets to be served
- What is our core target market?
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What businesses for Sony & Apple?
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Case Task
1. What business do you think your
company should be in?
2. Who are your target Customers?
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Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
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Case Task
2. What objective or vision will you
set for your company?
• Remember these must be
‘SMART’
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
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Case Task
4. What strategy will you use for your
company to achieve the objective
or vision you have set?
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
What is ‘Marketing’?
• "Marketing is a social and managerial process by which
individuals and groups obtain what they need and want through
creating, offering and exchanging products of value with others“
•
•
•
•
Philip Kotler
“The process of planning and executing the conception, pricing,
promotion, and distribution of ideas, goods, and services to
create exchanges that satisfy individual and organizational
objectives”
AMA
The act or process of buying and selling in a market. The
commercial functions involved in transferring goods from
producer to consumer.
Answers.com
The point of Marketing is to make Selling unnecessary” Drucker
“Marketing is the management process responsible for
identifying, anticipating and satisfying customer requirements
profitably.”
CIM(UK)
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Other
Stakeholders’
requirements
Shareholder
Value
Long Term
Financial
Objective
Strengths and
Weaknesses
Competitive
opportunities
Resource/
Performance Audit
Competitor
analysis
Vision
Personal values of
key implementers
Leadership
Mission
Customer and
market
orientation
Environment
Audit
Opportunities
And Threats
External
Focus
Industry
analysis
Structural
opportunities
The Business
Objective
(Marketing Strategy)
Competitive
Strategy
The Marketing
Objective
SCORPIO ©
Organisation
Structure &
Culture
Segmentation
Finance
Objective/Strategy
The Business
Strategy
Sustainable
Competitive
Advantage
Industry
or
Market
The
Customer
& Targeting
Offerings
H. Resource
Objective/Strategy
Product
Policy
Place
(distribution)
Policy
(Feedback & Control)
Price
Policy
The Marketing Plans,
Programmes & Implementation
The Customer
Positioning
& Branding
Customer
Retention
IT
Objective/Strategy
Promotion
Policy
Operations
Objective/Strategy
© Fifield 2007
(Feedback & Control)
The Marketing mix (Neil Borden)
Branding
Product
Planning
Promotions
Servicing
Pricing
THE
MARKETING
MIX
Advertising
Packaging
Fact finding
&
Analysis
Physical
Handling
Distribution
channels
Personal
Selling
Display
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The Marketing mix (4P’s)
Product
Price
THE
MARKETING
MIX
Place
Promotion
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The Marketing mix (7P’s)
People
Product
Price
THE
MARKETING
MIX
Place
Promotion
Process
Physical
Evidence
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The Marketing mix (11P’s)
People
Product
Price
THE
MARKETING
MIX
Privacy
Place
Personal
(Social
Networks)
Personal
Interests
Promotion
Process
Physical
Evidence
Public
Commentary
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The Marketing mix (4C’s)
Cost
(to the user)
Customer
Needs & Wants
THE
MARKETING
MIX
Convenience
Communication
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The Marketing mix (5P’s)
Product
Price
THE
MARKETING
MIX
Place
Promotion
Position
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The Marketing mix (make-your-ownP’s)
P
Product
Price
THE
MARKETING
MIX
Place
Promotion
P
P
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The Marketing mix (4P’s)
Product
Quality
Sizes
Features Services
Options Returns
Style
Warranties
Brand
Packaging
Differentiation
Place
Channels
Coverage
Locations Inventory
Transport Partners
Routes-to-market
Supply Chain
Intermediaries
Price
THE
MARKETING
MIX
List price Discounts
Allowances Rates
Credit
Changes
Communications
Opportunity Cost
Payment period
Promotion
Message
Media
Above/Below-the-line
Advertising
Direct
Publicity
PR
Personal Selling WOM
Promotion Internet
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
The Marketing mix (4P’s)
Product
Quality
Sizes
Features Services
Options Returns
Style
Warranties
Brand
Packaging
Differentiation
Place
Channels
Coverage
Locations Inventory
Transport Partners
Routes-to-market
Supply Chain
Intermediaries
Price
THE
MARKETING
MIX
List price Discounts
Allowances Rates
Credit
Changes
Communications
Opportunity Cost
Payment period
Promotion
Message
Media
Above/Below-the-line
Advertising
Direct
Publicity
PR
Personal Selling WOM
Promotion Internet
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Products and/or markets?
• Product features
• Product sales
• Technical
excellence
• Product service
• Rational
solutions
• Product
profitability
‘PUSH’
Strategy
The
Great
Debate:
• Customer
needs/wants
• Customer
satisfactions
• Customer
expectations
• Customer
service
• Emotional
solutions
• Customer
and/or segment
profitability
‘PULL’
Strategy
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Product 1
“I don't sell cosmetics, I sell hope”
Charles Revson
“What our customer wants is a
pile of rubble, not dynamite!”
Alfred Nobel
“Customers buy holes, not drills”
T Levitt
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Levitt on the product
“A product is
what a
product does”
Theodore Levitt (1925-2006), American
economist and professor at Harvard Business
School. Editor of the Harvard Business Review
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Features or Benefits?
Are you selling a 6mm drill
Or a 6mm hole?
Caterpillar:
We have a bigger digger!
Komatsu:
Did the earth move for you?
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What-it-is or What-it-does?
Are you selling a 6mm drill
A Telephone?
Or a 6mm hole?
Or Identity?
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The Service Product
“A service is any activity or benefit that one party can offer
to another that is essentially intangible and does not result
in the ownership of anything. Its production may or may
not be tied to a physical product”
[Kotler]
Characteristics of services:
1
2
3
4
5
Intangibility
Inseparability
Heterogeneity
Perishability
Ownership
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– A service is..
Government
Private Non-Profit
Business &
Professional
Legal
Educational
Health
Military
Employment
Credit
Communications
Transportation
Information
services, etc
Art & Music Groups
Leisure Facilities
Charities
Churches
Foundations
Colleges, etc
Airlines
Banking
Insurance
Hotels
Management
consultants
Solicitors
Architects
Advertising Agencies
Market Research, etc
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
The Augmented Product Concept
The Support
Services
component
Emotional Benefits
Additional Benefits
The Core
component
Tangible
Benefits or
‘Knowhow’
eg. functions
The
Packaging
component
eg. service
eg. trust, prestige
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The Product/Service Life Cycle
Introduction
Supply;
• Can’t make
enough
• Little formal
infrastructure
• Higher costs
Demand:
• Innovators
• Early adopters
• Higher Price
• Higher Risk
• Little awareness
• ‘New’
Growth
Sales
• Growing
availability
• Growing
Competition
Demand:
• Growing
awareness
• Reducing Prices
• Early majority
• Emerging
standard design
Maturity
to Marketing!
•
•
•
•
•
•
•
•
•
•
No new buyers
Repeat purchase
Can get boring
Best marketing?
Customer focus
Market Segmentation
(S) critical
Consolidation
Fewer BIG players
More NICHE players
Can last a looong time
Decline
• Failing demand
• Falling profits
or debts
• Fewer
customers
• Death, or
• Rejuvenation
• Possible repositioning
“Consolidation”
The ‘Chasm’
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Case Task
5. What Product policy does your
strategy require?
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Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
The Marketing mix (4P’s)
Product
Quality
Sizes
Features Services
Options Returns
Style
Warranties
Brand
Packaging
Differentiation
Place
Channels
Coverage
Locations Inventory
Transport Partners
Routes-to-market
Supply Chain
Intermediaries
Price
THE
MARKETING
MIX
List price Discounts
Allowances Rates
Credit
Changes
Communications
Opportunity Cost
Payment period
Promotion
Message
Media
Above/Below-the-line
Advertising
Direct
Publicity
PR
Personal Selling WOM
Promotion Internet
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
An important word about Price
In any developed
market, 90% of
customers would prefer
to buy on non-price
reasons and pay some
level of premium price
for perceived additional
value
In an undeveloped market,
a proportion of customers
will prefer to pay premium
price for additional value
10% will always buy the
cheapest – because
they don’t care about
the category
Still, 10% will always buy
the cheapest
A proportion appears to
want the cheapest but
have latent needs that
have not yet been
identified and exploited
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67
Approaches to Pricing
1. ‘Cost Plus’ pricing
2. ‘Market’ pricing
 Cost informs the price
 Customers inform price
 Cost informs the profit available
Why is this important????????????
PRICE IS THE ONLY
SOURCE OF REVENUE IN
THE MARKETING MIX!
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Pricing decisions
Objectives
Perception
of value
Fit with rest
of portfolio
The
Pricing
Decision
Box
Product Mix Pricing
•
•
•
•
•
Product line pricing: price banding
Follow-on products
Blocking products
Bundled and option pricing
Pricing corridors
Support from
rest of mix
Costs
BenchMarking
Legislation
Substitutes
Competitive
retaliation
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Percentage of lost customers
Why industrial (B2B) companies lose customers
80
68%
60
40
20
1
Death
3
Relocation
5
Develop
New
Relationships
9
Lower
Price
14
Company
Product
Dissatisfaction Indifference
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Pricing Tactics?
(Source: Winkler)
Sales
Revenue
Direct costs,
materials,
production.
labour
Fixed costs,
overheads,
distribution,
sales
Net profit
£4m(materials)
+£2m(labour)
£3.5m
£0.5m
£12.5m
£5m+£2.5m
£3.5m
£1m
2. Hold your sales
steady and lower your
material costs by 12.5%
£10m
£3.5m+£2m
£3.5m
£1m
3. Increase your prices
by 5% holding costs and
sales volume
£10.5m
£4m+£2m
£3.5m
£1m
This is the business,
how would you double
the profit?
£10m
1. You could increase
sales by 25% & hold
fixed costs steady
=£6m
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Understanding Profit Drivers
Profit
Revenues
Sales Volume
(Units)
1 million
Cost
=
Price €100
Variable Cost
Variable cost
per unit = €60
Fixed Cost
€30 million
Sales
Volume
1 million
What is the profit impact if each of
the 4 levers improves by 10%?
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Understanding Profit Drivers (2)
An increase in price has a greater impact on profit than an increase
in volume or decrease in costs.
10% improve
in:
Profit Driver
Profit
Old
New Old
New
Profit
% Change
Variable cost
per item
€60
€54
€10
€16
60%
Sales Volume
€1m
€1.1m
€10
€14
40%
Fixed costs
€30m
€27m
€10
€13
30%
Price
€100
€110
€10
€20
100%
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Role of price
•
What clients of “Engineering, Procurement & Construction” (EPC)
want (2006)
1
Employees are knowledgeable & experienced in our industry
2
Provide quality engineering appropriate to our needs
3
Meeting schedule commitments
4
Meeting cost expectations & commitments
5
Deliver value for the money
6
Providing schedules that meet our needs
7
Provide quality fabrication and construction that meets our needs
8
Being able to perform the work wherever we need it done
9
Pricing for services & technologies
1
0
Having local employees with knowledge of local customs/regulations
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The race to the bottom
Marketing should not be about:
• Selling as much as possible
• Building market share – at
any cost
• Chasing any sales revenue
available
• Cutting the price to stay in
the “race”
• Unless you want to kill the
company
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Case Task
6. What Pricing policy does your
strategy require?
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Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
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The Marketing mix (4P’s)
Product
Quality
Sizes
Features Services
Options Returns
Style
Warranties
Brand
Packaging
Differentiation
Place
Channels
Coverage
Locations Inventory
Transport Partners
Routes-to-market
Supply Chain
Intermediaries
Price
THE
MARKETING
MIX
List price Discounts
Allowances Rates
Credit
Changes
Communications
Opportunity Cost
Payment period
Promotion
Message
Media
Above/Below-the-line
Advertising
Direct
Publicity
PR
Personal Selling WOM
Promotion Internet
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The distribution channel is ...
"The route along which a product and its title (ie the rights of
ownership) flow from production to consumption"
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Channel Configurations
Originating manufacturer/Service provider
Agent
OEM
Direct
Post
Phone
Online
F2F
Direct
Mail
Distributor
OEM
VAR
Prime
Contractor
Wholesaler
Sub
Contractor
Retailer
Specialist
End Buyer/User
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Why use intermediaries?
• Specialisation
• Division of labour
• Provide assortment by gathering supplies together from
number of manufacturers - “honest broking”
• Breaking bulk so as to meet scale of need of customers and buying in bulk on behalf of customers
• Reduce “contactual costs”
• Geographical proximity and local knowledge
• Adding value (eg customisation, service, installation)
• Theoretically cash received quicker up the chain
• Running “interference” - for their customers and their
suppliers
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Reducing “contactual costs” or channel geometry
4 Manufacturers contact
4 retailers directly
M
M
M
M
4 Manufacturers distribute
through a wholesaler
M
M
M
M
R
R
W
R
R
R
R
No. of contacts = 4 x 4 = 16
R
R
No. of contacts = 4 + 4 = 8
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Increasing Retailer concentration
M
M
M
M
M
M
M
M
W
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
R
Battle for control
"Let's say I have a new product. Sainsbury and Tesco have
over 50% of the London market: London is so important
that, if they won't accept my product, it simply isn't worth
launching."
- Major Food Manufacturer
"I account for 25% of your business. You account for less
that 5% of mine. Let's talk terms."
- Retail Buyer to Major Household Products Manufacturer
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Who ‘owns’ the customer owns the margins
‘Push’
Producer
(sales)
Communication
‘Pull’
(marketing)
Intermediary
Consumer/
End User
Brand Franchise!
Information
= Margin
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Case Task
7. What Place/Distribution policy does
your strategy require?
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Agenda
DAY 1 STRATEGY
1.1
What is Strategy?
1.2
The critical importance of Customers
1.3
What business?
1.4
What is the Objective?
1.5
What is the Strategy?
DAY 2 MARKETING
2.1
Product
2.2
Price
2.3
Place
2.4
Promotion
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
The Marketing mix (4P’s)
Product
Quality
Sizes
Features Services
Options Returns
Style
Warranties
Brand
Packaging
Differentiation
Place
Channels
Coverage
Locations Inventory
Transport Partners
Routes-to-market
Supply Chain
Intermediaries
Price
THE
MARKETING
MIX
List price Discounts
Allowances Rates
Credit
Changes
Communications
Opportunity Cost
Payment period
Promotion
Message
Media
Above/Below-the-line
Advertising
Direct
Publicity
PR
Personal Selling WOM
Promotion Internet
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Which half ?
"I know that half my
advertising budget
is wasted, but I’m
not sure which
half."
William Hesketh Lever, 1st Viscount
Leverhulme (1851 –1925) was an
English Industrialist, philanthropist and
colonialist. He established a soap
manufacturing company called Lever
Brothers (now part of Unilever) with his
brother James
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Value or Volume?
2006 data (UK):
• Number of messages seen per day = +/-3500
– = 4/minute in a waking day
“EyeContact” glasses:
• 90 minute London shopping trip
• 250 messages recorded
– 100 brands
– 70 formats
• Prompted recall = 130
– Customer interested
• Unprompted recall = 1
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The Future of Advertising?
A recent paper titled "The
Future of Advertising is
Now" by Christopher
Vollmer et al, attempts to
solve Lord Leverhulme’s
dilemma, at least for the
automobile industry.
Clearly, his lordship’s
assessment remains
remarkably accurate, as
this chart from the paper
shows.
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Promotion can affect….
1.Attention
2.Interest
3.Desire
4.Action
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Promotional objectives
n
o
,
n
t
o
i
o
t
n
o
n
m
a
o
c
r
,
P
n
w
o
ti s
l
l
e
s
Promotion may be used to achieve the following:
1. To build awareness and interest in the service or product
and the service organisation
2. To differentiate the product/service offer and the
organisation from competitors
3. To communicate and portray the benefits of the
products/services available
4. To build and maintain the overall image and reputation of
the providing organisation
5. To persuade customers to buy or use the product/service
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Promotion by objectives
1
2
3
4
Promotional objectives
The target audience
The message
The media:
advertising
sales promotion
publicity
personal selling
public relations
5 Budgets
6 Testing and Control
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
The promotional mix
Newspapers and Magazines
Trade and Professional Press
Television and Radio
Cinema
---------------------------------------------------------Exhibitions
Direct Mail
Public Relations
Point of Sale
Digital/Internet
Packaging
Sales Promotion
Personal Selling
Indirect
Company Image
The Service Product
Pricing
Word of Mouth
“The Line” separates
the mass media from
the more targeted
In services, personal
selling may be
indistinguishable from
service delivery
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The fundamental proposition
1
2
Who is the one
person you want to
talk to?
What is the one thing
you want to say to
them?
The
4
Questions
4
How do you want
them to feel as a
result?
3
Why should they
believe you?
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Case Task
1. What business do you think your
company should be in?
2. Who are your target Customers?
3. What objective or vision will you set
for your company?
4. What strategy will you use for your
company to achieve the objective or
vision you have set?
5. What Product policy does your
strategy require?
6. What Pricing policy does your strategy
require?
7. What Place/Distribution policy does
your strategy require?
8. What Promotional policy does your
strategy require?
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Reading List
1. “Principles of Marketing: European Edition” - Kotler, Saunders &
Armstrong, FT Prentice Hall 2004
2. “Mercator : Théorie et pratique du marketing”, Lendrevie, Levy &
Lindon 2006
3. “Marketing Strategy” 3rd Edition - P Fifield, Elsevier 2007
4. “Marketing Strategy Masterclass” – P Fifield, Elsevier 2008
5. “Collected Essays in Marketing Strategy” P Fifield, Fifield, 2006
6. “The Marketing Imagination” - T Levitt, Free Press, 1998
7. “Market-led Strategic Change” – N Piercy, Butterworth Heinemann, 2002
8. “Marketing Briefs” – S Dibb & L Simkin, Butterworth Heinemann 2004
9. “Marketing Plans” – M MacDonald, Butterworth Heinemann 2002
10. “Marketing Management and Strategy ” – P Doyle, FT Prentice Hall,
2006
11. “Marketing Research: An Applied Approach” – D Birks & N Malhotra, FT
Prentice Hall 2005
12. “Essentials of Marketing Research” - T Proctor, FT Prentice Hall, 2003
13. “International Marketing” – V Terpstra, South Western College Pub, 2001
14. “Marketing across cultures” - JC Usenier & J Lee, FT Prentice Hall 2005
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission
Strategic Marketing
Proprietary & confidential © Paul Fifield 2011. not to be used or copied without permission