Today’s Agenda
1.
2.
3.
4.
5.
6.
Course Overview
What are Cases?
Preparing Cases
Participating in a Case based class
Writing up Cases
B04/MGM A01 overview
Evaluation:
Individual Evaluation:
Class Discussion
Individual Case write-ups (10 cases)
20 %
30 %
Group Evaluation:
Group Case presentation (2 cases)
Group Project and Presentation
20 %
30 %
Working with Cases
• Analysing a Case
• Case Coach
Typical student comments
I like using cases because I have a chance to voice my opinions and hear others; most of all, the
discussions help me to sort through and understand what is going on in the case so I don’t miss
anything
The case discussions make events real –it is no longer just another name or act to be memorised, but
the discussion brings the events and individuals to life
I really like these discussions. One thing we do not learn very well in university is teamwork. College
is essentially an individual thing – I study alone; take tests alone. However discussion helps me
to learn from others
I love this class ! It moves quickly and its fun. Its tough not to be right all the time though.
I enjoy the case method because it forces me to think about issues and to take a stand in support of
my opinion. It helps me think about why I believe what I do. It is hard for me sometimes to
express my opinion in such a situation but I working on it here
What I like best are the broader insights I gain and the different perspectives that are represented
Case discussions are interesting and informative and are key to understanding marketing because
views differ and those differences mirror reality
Makes me think
Participation
Preparation:
Reading the materials ahead of time, thinking about the
reading and how it is connected to other course materials
Speaking: Offering insights, observations, analysis, opinion; asking
questions; and responding to other students’ comments
Listening: to what others have to say, following the arguments and
remembering the points
Always bring copy of case, your individual report and your notes to class
Reflection
What Overall lessons do you take from this case?
How would you change your case analysis after today’s
class ?
Your self evaluation
Your goal for the next case
B04/A01
OVERVIEW
Definition of Marketing
AMA, 1986
MARKETING IS . . . .
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.
Utility and Marketing
Time
Utility
Form
Value that comes
from satisfying
human needs
Place
Possession
From Production
From Marketing
The Central Idea !
The
Marketing
Mix
C
The Four Ps of the Marketing Mix
Product
Place
C
Price
Promotion
5th P
Summary of factors that affect an organization’s marketing
program
rces
Soci
al fo
otion
Prom
Consumer
es
forc
ory
ulat
Reg
Prod
uct
Marketing
program
Technological forces
Environmental forces
Marketing’s first task: discovering consumer needs
Organization’s
marketing department
Discover consumer needs
Information about needs
Potential consumers: The market
Marketing’s second task: satisfying consumer needs
Organization’s marketing department
Discover consumer needs
Information about needs
Concepts
for
products
Satisfy consumer needs
Find the right combination of:
• Product
• Price
• Promotion
• Place
Goods, services, ideas
Potential consumers: The market
What Marketers Do
Look for
Opportunities
Consumer
Competition
Company
(Uncontrollable
3Cs)
Analyze
Opportunities
Segmenting
Targeting
Positioning
(STP)
Implement
Positioning
Product
Price
Promotion
Place
(Controllable 4Ps)
The Marketer’s tasks
3 C’s
STP
Customer
Competition
Company
Segmentation
Targeting
Positioning
4P’s
Product
Place
Price
Promotion
Model of Consumer Behavior (CB)
Marketing and
Other Stimuli
Buyer’s Black Box
Product Choice
Brand Choice
Dealer Choice
Buyer’s Response
Purchase
Timing
Purchase
Amount
Influences on Consumer Behavior
Consumer
Characteristics
Consumer
Decision
Processes
Consumer
Decisions
Product Choice
Brand Choice
Dealer Choice
Purchase Timing
Purchase Amount
Maslow’s Hierarchy of Needs
Self
Actualization
(Self-development)
Esteem Needs
(self-esteem, status)
Social Needs
(sense of belonging, love)
Safety Needs
(security, protection)
Physiological Needs
(hunger, thirst)
Higher level
Consumer Decision Process
Problem Recognition
Information Search
Alternative Evaluation
Purchase Decision
Postpurchase Behaviour
Consumer Behavior Questions
What do we need to know about consumers?
Occupants: Who constitutes the market?
Objects:
What does the market buy?
Occasions: When does the market buy?
Outlets:
Where does the market buy?
Organization: Who participates in the buying?
Objectives: Why does the market buy?
Operations: How does the market buy?
Key points for STP
Effective marketing is customer driven.
Step 1: What kinds of customers are there
(segmentation)?
Step 2: Target the customer segment that can deliver
to you the most value in as unique a way as possible.
Step 3: Choose a “position” that communicates your
unique and differentiable position.
Step 4: Evaluate market response and reposition.
Perceptual Map of Beer Market
(This slide shows only the products)
•
Budweiser
Old Milwaukee
•
Meister Brau
•
Miller
Beck’s
•
• Heineken
•
•
•
Coors
Stroh’s
• Michelob
•
•
Old
Milwaukee Light
Miller
Lite
•
Coors
Light
Perceptual Map of Beer Market cont’d
(This slide shows only the attributes)
Heavy
Heavy
Full Bodied
Popular
with Men
Special
Occasions
Good Value
Blue Collar
Dining Out Premium
Budget
Premium
Popular
with
Women
Pale Color
On a
Budget
Light
Light
Less Filling
Perceptual Map of Beer Market cont’d
(This slide shows both products & attributes)
Heavy
Heavy
Full Bodied
•
Budweiser
Old Milwaukee
•
Meister Brau
•
Good Value
Miller
Blue Collar
•
Popular
with Men
Beck’s
•
Stroh’s
Budget
• Heineken
Special
Occasions
•
Coors
•
Dining Out Premium
Premium
• Michelob
•
On a
Budget
•
Pale Color
Old
Milwaukee Light
Light
Miller
Lite
Light
•
Coors
Light
Less Filling
Popular
with
Women
Example Input Data for MDPREF
Vector Model
Input matrix has attributes on rows and objects on
columns
Attractive
Light
Unreliable
Plain
Battery life
Screen
Keyboard
Roomy
Easy service
Expandability
Setup
Common
Value
Preference
B1
B2
B3
B3
B4
B5
B6
B7
B8
New
5.1
6.0
3.4
1.5
3.3
3.5
2.6
5.5
4.5
5.5
5.6
4.1
3.5
7.4
3.6
3.5
4.1
4.1
4.9
5.3
3.5
4.3
4.9
4.3
3.5
3.5
4.8
3.4
3.5
5.0
4.5
2.9
4.3
3.4
2.5
5.4
3.3
5.4
5.6
3.3
4.4
4.8
5.4
3.9
2.1
2.3
4.1
6.4
3.4
3.1
5.0
3.1
5.4
2.9
3.6
6.6
3.9
3.3
4.5
4.5
3.9
5.4
3.8
3.4
4.4
3.4
2.5
4.0
3.6
4.4
4.8
5.3
2.7
2.7
3.0
5.2
3.3
3.3
4.5
3.3
4.2
4.3
2.7
7.4
5.2
5.0
4.5
3.5
3.5
3.3
2.8
4.7
3.3
4.7
5.2
2.2
3.2
7.1
4.0
2.5
3.7
4.3
6.2
6.0
5.0
3.5
4.7
3.5
3.3
4.2
4.7
3.8
5.2
5.5
2.5
2.2
3.5
3.3
4.3
4.3
3.8
4.3
5.8
3.3
3.5
6.9
4.0
2.5
3.8
5.2
4.0
4.8
4.7
4.2
4.5
4.2
2.5
4.2
4.0
3.3
BCG Matrix
BCG Matrix: 4 Contexts:
Stars (Hi, Hi)
Dogs (Lo, Lo)
Question Marks (Hi, Lo)
Cash Cows (Lo, Hi)
Industry Growth Rate
Industry Growth Rate (Y-axis) vs.
Relative Market Share (X- axis)
Question
Marks
Dogs
Stars
Cash Cows
Relative Market Share
Porter’s 5 Forces
Threat of
New
Entrants
Supplier
Power
Industry
Attractiveness
Industry
Competitors
Buyer
Power
Threat of
Substitutes
SWOT
Internal
External
+
Strengths
Opportunities
-
Weaknesses
Threats
Break-even Analysis
Total Revenue and Cost
Higher
Profit Area
Break-Even Point
Loss Area
Total Revenue Curve
Total Cost Curve
Total Variable Costs
Total Fixed Costs
0
Units of Production
More
Breakeven Analysis
How much to produce to START making a profit !
Profit = Revenue – Cost
Price x Quantity
Unit Variable Cost x Quantity
Fixed Cost + Variable Cost
Π = Q.P – FC – Q.VC
Breakeven => Π = 0
Q.P – FC – Q.VC = 0
Q(P-VC) = FC
Q=FC/(P-VC)
Q*
Fixed Cost
=
Unit Price – Unit Variable Cost
Pricing
Company:
Cost Plus Pricing
Profit Pricing
Competition: Competitive Parity Pricing
Customer:
Value Based Pricing
Price Summary
What user would have to pay to
get equal benefits i.e perfect
substitute
27.3 c Value to User
SKIM
Perceived Value
Some fraction of actual value to
user
Consumer Surplus
Price
PENETRATION
Producer Surplus
3.45 c
0
Variable Cost
Prospect theory
Subjective Value
J
Losses
K
Gains
Reference
point
L
The PLC, marketing objectives, and marketing mix
Sales revenue
or profit
Stage of the product life cycle
Introduction
Growth
Maturity
Decline
Total industry
sales revenue
+
0
–
Total industry profit
Marketing
objective
Gain
Awareness
Stress
differentiation
Maintain brand Harvesting,
loyalty
deletion
Competition
None
Growing
Many
Reduced
Product
Usually one
More versions
Full product line
Best sellers
Price
Skimming or
penetration
Penetration, deal
Defend share,
profit
Profit
Promotion
Inform, educate
Differentiate
Differentiate,
reminder
Minimal
Place
(distribution)
Limited
More outlets
Maximum outlets
Fewer outlets
Five categories and profiles of product adopters
Diffusion of Innovation
Origin: Rural Sociology – The way farmer adopted new agricultural
innovations
Certain characteristics of an innovation may serve to improve or
detract from it’s chances of adoption by consumers (and the
time frame over which adoption takes place). These are:
•It’s perceived complexity
•It’s compatibility in use with present behaviour patterns and
complementary products
•The ease with which it’s features (and especially it’s benefits)
can be observed and communicated
•The degree of risk – physical, financial and social – attached to
adoption of the innovation in preference to existing products or
procedures
•The extent to which the innovation can be tried on a limited
basis before being adopted on a large scale, permanent basis.
Distribution channel
Any set of firms or individuals who
participate in the flow of products from
producer to final user or consumer
Make the sale of products more efficient by
minimizing the number of sales contacts
Number of interactions without intermediary
M
a
n
u
f
a
c
t
u
r
e
r
s
4 x 4=16 interactions
H
o
u
s
e
h
o
l
d
s
Number of interactions with intermediary
M
a
n
u
f
a
c
t
u
r
e
r
s
4 + 4= 8
interactions
Retailer
H
o
u
s
e
h
o
l
d
s
Short vs. long channels
Factors
Short Channels
Long Channels
Market
Business users
Concentrated
More knowledge req.
Higher service needs
Larger orders
Consumers
Dispersed
Less knowledge req.
Lower service needs
Smaller orders
Product
Perishable
Complex
Expensive
Durable
Standardized
Inexpensive
Producer
Has resources/
Lacks resources/
abilities
abilities
Broad line
Control important
Limited line
Control not important
Integrated marketing communications
Traditional:
Separate functions handled by experts in
separate departments.
Begin with organization’s products/services.
IMC:
All elements of promotional mix strategically
integrated.
All elements viewed from consumer perspective.
IMC strategy
Determine the optimal mix of options
based on:
Economic considerations
Target market
Effectiveness of brand building
IMC strategy (cont’d)
Focus on managing two dimensions
Consistency
Complementarity
Ideal communications program
Large number of communication options
Sharing same core meaning
Complementary advantages & disadvantages
Complementarity in IMC
Strengths inherent in one method
counterbalance the disadvantages of another
For example, TV advertising
Competitive clutter
Ad content and structure
Consumer involvement
“I forget the name of the product, but the jingle on TV goes something like
‘Yadee-dum-dee-rahte-dum-dee-rah-dee-dum.’”
Structure other aspects of promotional mix to
overcome these disadvantages
Retrieval cues on coupon, in store, on packaging
Push vs. pull promotional strategies
Push strategy
Manufacturer
Flow of
demand
stimulation
Wholesaler
Pull strategy
Manufacturer
Flow of
promotion;
mainly
personal
selling
directed to
intermediaries
Flow of
demand
stimulation
Wholesaler
Retailer
Retailer
Consumer
Consumer
Flow of
promotion;
mainly
advertising
directed to
consumers
Slice of Life
Lifestyle
Fantasy
Mood/Image
Musical
Personality Symbol
Technical expertise
Scientific Evidence
Testimonial Evidence
Mission
•Sales Goals
•Adveritising
Objectives
Inform
Persuade
Remind
5 M’s of Advertising
Style
Tone
Words
Format
Money
Factors to
Consider:
•Stage in PLC
•Market Share
and consumer
base
•Competition and
Clutter
•Advertising
Frequency
•Product
substitutability
Message
•Message
Generation
•Message
evaluation and
selection
•Message
execution
•Social
responsibility
review
Desirability
Exclusiveness
Believability
Rational Positioning
Emotional Positioning
Measurement
•Communication
impact
•Sales impact
Media
•Reach,
frequency,
impact
•Major media
types
•Specific media
vehicles
•Media timing
•Geographical
media allocation
Share
Share
Share
Share
of
of
of
of
expenditures
voice
mind and heart
market
Creative strategy: Types of appeals
Cognitive
“Rational”
Affective
“Emotional”
Problem-solution
Humour
Demonstration
Sex
Product comparison
Image or mood
Testimonial
Fear
Slice of life