Bus 352 May 10

1
Bus 352 May 10

• Margaret Cornish
• Global Marketing Environment
• ex bank branch
• Competitive Strategies
• Market Plan Outline
• Marketing and Society
• Case 20

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May 10 - Admin

• Register with Maria Tamblyn
• Course Project handout
• Submit proposal on May 24
• Case Method
• e-mail address list
• Web-site posting of comments
• Mid-term (June 10, 9 -11am)

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Global Marketing Environment- Chapt 3

• Objectives Macro and Micro
• Explain impact of demographic and economic
  factors
• Impact of natural environment and technological
  trends
• Political and cultural context
• How can firm respond to/manage its marketing
  environment?

4
Firms microenvironment

• Internal finance, R D, production, accounting,
  top mgmt
• Suppliers
• Channels, Intermediaries
• Customers
• Competitors
• Publics - community, investors, media,
  government, citizen action, employees

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Macroenvironment

• Demographics pop profile by age, lifestyle,
  education, diversity
• Economic forces gdp income distribution -
  changes in income, cost of living, interest rates
  savings rates
• Natural Environment shortage of resources, need
  to preserve environment

6
Macroenvironment demographics

• Profile of Fiftysomethings job, lifestyle,
  values shopping habits
• Formative life experiences?
• Behaviour categories venturers, organizers,
  worriers and optimists. Are these useful to
  marketers?
• Product for each segment?

7
Macroenvironment (contd)

• New technologies replace old ones (and
  businesses) shorten product life-cycles
• Politics (legislation and guidelines) affect wide
  range of corporate activity - Food Drug Act,
  Competition Act, Customs Act
• Cultural Values (core vs secondary)

8
Marketers Objective

• Watch and adapt to the marketing environment to
  seize opportunities and avoid threats
• six macro-environment forces (incl internal)
• six macro-environment forces
• Class example Describe the global marketing
  environment of a bank branch in Waterloo

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Competitive StrategiesChapter 18 Objectives

• Analyze customers
• Analyze competitors
• Distinguish between
• Customer value and satisfaction
• Value chain and customer value delivery network
• Customer, competitor and market orientation

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Marketing is the art of attracting and keeping
profitable customers
11
Competitive StrategiesHow do customers choose?

• choose the offer with the most value to them
• form expectations/perceptions of value and act
• satisfaction depends on whether the offer
  delivers expected value
• repurchase behaviour is determined by
  satisfaction

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Competitive StrategiesCustomer delivered value

• Total customer value minus customer cost
• customer cost (, search effort, convenience,
  sales process, delivery timing and reliability
  etc).
• Evaluating customer satisfaction surveys, ghost
  shoppers, word of mouth sales, lost customer
  analysis, risk of dominance

13
Value Chain (firm-based) Basic level of
competition

• Each dept must excel at their contribution to
  value chain (design, production, marketing,
  delivery or support). Each must add value
  customer is willing to pay for.
• In addition, the product must be delivered
  seamlessly to the customer. This is a critical
  role of mgmt.

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Customer value delivery chain - advanced level

• Eliminating duplication at each level in the
  delivery chain from suppliers to wholesales to
  delivery and payment systems
• Alternatively adding features and services at
  each of these stages
• While partnerships may be successful, there are
  losers in this struggle early adopters win

15
Competitive Strategies

• Loss of 1 customer is 5x more expensive than cost
  of gaining a new customer. Why?
• Customer lifetime value
• Customer loyalty what does it mean? risk of
  dominance?

16
Old Marketing ModelFirm focused

• focus on product
• define target group
• set brand objectives
• focus on brand benefit
• create strategic advertising
• execute brand plan
• measure performance against fixed set of
  competitors

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New Marketing ModelCustomer focused

• focus on process for serving C
• nourish C relationship
• respect and value C
• develop refresh relevance to C
• enter dialog with C
• improvise to sustain C relnship
• inter-functional attitude
• measure what customers want

18
Relationship MarketingWhen is it most
appropriate?

• Depends on the target market
• There is a spectrum ranging from markets with
  many, low margin customers - to
• markets with few, high margin customers
• To intensify relationship first add financial
  benefits, then social benefits, then structural
  ties

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Competitive Strategies Competitor Analysis

• Identify competitors - companies with similar
  offer as well as latent competitors
• Assess competitor strategies and strategic groups
  on quality-service grid
• Within a strategic group differentiate
  competitors by product quality, pricing, service,
  distribution coverage, sales force strategy, ads
  and promotion

20
Competitive Strategies Competitor Analysis
(contd)

• Analyze competitor capabilities R D,
  technology, manufacturing, purchasing, financial
  resources etc.
• Objective is to identify strengths and weaknesses
  of major competitors as means of anticipating
  what they might do in the market place and how
  the firm can avoid or mitigate the effect of such
  action.

21
Competitive Strategies Competitor Analysis
(contd)

• Selecting those to attack vs those to avoid
• Clarity about respective strengths and weaknesses

22
Competitive Strategies Market vs customer
orientation

• Market-oriented company pays attention to both
  customers and competition in designing its
  marketing strategies

23
Competitive StrategiesThree Basic Forms

• Overall cost leadership production and
  distribution
• Differentiation product and marketing perceived
  industry leader
• Focus one or more market segments

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Competitive Strategies3 Value Disciplines

• Operational Excellence - low cost, convenience,
  lean and efficient value delivery system
• Customer intimacy - products meet precise needs
  of target segments who are willing to pay
  premium
• Product Leadership - stream of leading edge
  products/services

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Competitive Positions

• Market leader
• Challenger
• Follower
• Nicher

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Market Leader

• Largest share, new products, new channels, new
  uses, new markets, widest distribution coverage,
• Vulnerability Largest sunk costs may be
  over-extended
• Response Inc total demand inc market share
  defend position, attack competitor

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Market Challenger

• 2 or 3 market share
• define strategic objectives a) inc share or b)
  seize leadership
• attack leader (if leader is tired) or attack
  follower - target competitive weakness must
  have advantage can be achieved by acquisition

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Market ChallengerAttack Strategies

• Styles of Attack
• Frontal
• Encirclement
• Bypass
• Flanking
• Guerilla

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Market Follower

• Active Defines growth path to avoid retaliation
• Passive less competitive market leader not
  innovative
• Strategy quickly match and even improve on
  leaders innovation without RD costs
• must have some advantage service. Location,
  price

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Market Niche Strategy

• carefully tailored product or service (end-user,
  geog, price, quality, service)
• premium or lower cost
• niche is typically incidental to large players
• risk niche grows to attract market leaders

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Marketing SocietyObjectives

• major social criticisms
• consumerism and environmentalism
• socially responsible marketing
• ethics in marketing
• guiding principles of public policy

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Marketing Social Criticisms

• Higher prices
• Deceptive practices (ads, sales)
• High pressure selling
• Shoddy unsafe products
• Planned Obsolescence
• Poor service to disadvantaged

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Criticism economic rationale

• Overselling of private goods creates unsatisfied
  demand for public goods. Issue Consider
  life-cycle costs of product and ensure producers
  (or consumers) pay full social costs of their
  operations

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Green MarketingReuse, reduce, recycle

• producer (and consumer?) assume responsibility
  for products life cycle costs
• sustainability framework for pollution, product
  stewardship, new environmental technologies to
  reduce or limit waste pollution
• current investment is in pollution control not
  (yet) prevention

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Marketing EthicsMorally difficult situations

• Criteria individual responsibility, corporate
  policy, legal requirement
• Difference btwn what people say and what they
  choose
• Moral difficulty with world wide standards
• Lets review examples on p.699 and article on
  marketing to children

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Marketing Professional Ethics

• Not knowingly do harm

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Marketing EthicsMorally difficult situations

• Criteria individual responsibility, corporate
  policy, legal requirement
• Difference btwn what people say and what they
  choose
• Moral difficulty with world wide standards
• Lets review examples on p.699 and article on
  marketing to children

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Marketing legal Issues

• Selling kick backs, bribes, discrimination
• Advertising false or deceptive
• Packaging labeling, recyclability
• Pricing fixing, predatory
• Place/Channel tied selling

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Principles for Public Policy

• Consumer and producer freedom
• consumer info/education
• consumer protection
• curbing potential harm
• economic efficiency
• innovation
• meeting basic needs