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Introduction
K4020
The Pill Cam
How do you market this?
http://www.youtube.com/watch?v=DAjlApH4qrs
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Why New Products Fail
Common reasons for product failure
Failure to understand consumers and
competitors
Too small a target market
KODAK ULTRALIFE Lithium Power
Cells, the world's first 9-volt lithium cells
for consumer use
Bad timing
Low Carbohydrate Diets
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The Low-Carb Trend
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The Low-Carb Trend
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Why New Products Fail
Common reasons for product
failure
Poor execution of marketing mix
Poor product quality
Inappropriate differentiation
No access to market
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What is Marketing?
To achieve organizational
goals by determining the
needs and wants of
customers and delivering
the desired benefits more
effectively and efficiently
than competitors
“Creating shareholder
wealth is not the purpose
of the business. It is the
reward for creating
customer value.”
Michael Tracy and Fred
Wiersema in CFO magazine
“Everything starts with the
customer.”
Lou Gerstner, CEO of IBM
(1993-2002)
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Marketing Decision System
Competition
Product
Customers
Company
Price
Promotion
Place
Intermediaries
Complements
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Course Objectives and Structure
Identify Market
Opportunities
Set Strategy
Formulate
Marketing
Program
CUSTOMER
SEGMENTATION
PRODUCT
COMPANY
TARGETING
PRICE
COMPETITION
POSITIONING
ACQUISITIONRETENTION
PROMOTION
PLACE
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Course Overview: Strategy
Industry
• Market definition
• Market size/growth
• Industry structure
• Market segments
Competition
• Current and future
• Strength/weakness
• Current behavior
• Future behavior
Customer
• Who buys
• When, where, how
• Benefit sought
• Purpose of buying
Company
• Philosophy/Mission
• Image/product fit
• Objectives
• Capabilities
• Profitability
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Course Overview: The 4Ps
Product
• Features
• Benefits
• Packaging
• Testing
• Selection
Price
•Skimming/penetration
•Price discrimination
•Setting price
Place
•Outlets
•Channels
•Coverage
Promotions
•Advertising
-Measurement
-Media planning
•Sales promotion
•Trade promotion
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What You Can Expect
Mix of learning environments
lecture, discussion, assignments
Useful tools and frameworks that are both
quantitative and qualitative
Interesting discussion and examples
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Expected From You
Class Participation
Exams 1 and 2
Project (groups of 5)
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Customer Analysis
Overview
Understanding customers and their buying behavior
Sources of value to customers
Economic value (EVC)
Functional value
Psychological value
Measuring value
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Customer Analysis
Who are your customers?
Buyers vs. users / Decision making unit (DMU)
Customer’s customers
Decision making and purchase process
Who buys, when, where, ..
How do they get information
Purpose of purchase
Awareness, Info search, evaluation of alternatives, choice
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Value to Customers
Economic Value
Functional Value
Psychological Value
http://www.youtube.com/watch?v=c5Ljh8YvsgI
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Economic Value to Customers (EVC)
EVC is the maximum a customer is willing to pay
EVC is useful for:
Setting a price for a product/service
Market segmentation
Guiding new product development
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EVC Example
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Summary
Customer analysis involves understanding what customers
want and how they value the competitive offerings
Three sources of values:
Psychological
Functional
Economic
Sustained competitive advantage is the result of creating and
delivering customer value either better or more efficiently
than competitors
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