Beckley_WhyMarketingCounts_WIWP_2004

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Business Seminar
1. Why Marketing Counts
33rd New York Wine Industry Workshop
The Understanding & Insight Group
Agenda
Background
 Why Marketing Counts
 Making Your Product Real (continue
through lunch)
 Integrating Marketing & Selling
 Wrap-up and Review
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Five year old business development company
Jacqueline Beckley
Both have had extensive industrial
experience.
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Known for:
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Jacqueline in both Fortune 500 firms and 30 years
in consumer understanding and research.
The Getting It! System
Successful Front End Process
Locations in New Jersey, Ohio, and California
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Overview Weybright
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Marketing is:
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EVERYTHING you do to promote your business, from
the moment you conceive of it to the point at which
customers buy your product or service and begin to
patronize your business on a regular basis.
The key words to remember are everything and
regular basis.
 Jay Conrad Levinson (“Guerrilla
Marketing”)
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Elements of Marketing Shared
by Small & Big Businesses
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1. Research
2. Analysis
3. Strategies and Tactics
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Factors Guiding Strategies and Tactics:
 PRODUCT
 Price
 Promotion
 Place
 (& PEOPLE)
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Product
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Identify and understand the product/service
being marketed
What need is there for your product or
service?
Sell benefits not just products
Question – “Would you buy this product or
service?”
 Why or Why not?
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Market Summary (People)
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Market: past, present, & future
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Review changes in market share, leadership,
players, market shifts, costs, pricing, competition
– (regionally, nationally, internationally)
Mass Market/
Followers
Number
of
customers Early Adopters/
Pioneers
End of Life
Time
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Competition
(useful as a tool for analysis and learning)
The Competitive Landscape
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Provides an overview of
product competitors, their
strengths and weaknesses
(unfilled niches)
Positions each competitor’s
product against new product
(learn what customers do or
don’t want)
Offers marketing ideas
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B
A
Price
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C
D
Performance
9
“If You Do Not Change, You Can
Become Extinct” Who Moved My Cheese, page 46
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43% of U.S.farms have internet
access
This appears to be a large
growth from 2 years ago (29%
were on the Web then)
AgWeb.com says 77% of
farmers use the Internet for
market and weather information
R.Hill says the bigger farmers
with buying power are definitely
out there on the Web,
frequently
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While you live regionally,
think globally
EX: Tomatoes
 Mexican tomatoes
 Planting
 Supply
 Price
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“Small Business” Issues
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I have a great idea, if I don’t move on it
someone will take it!
I am not good at all the things you need to
do to make a business successful.
I don’t have the time!!
I don’t have the money!
(I am afraid – if this doesn’t work……)
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The Decision Making Process
“Big Guys”
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Defining the Problem
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Determining the Objective
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Understand the impact of possible decisions
Making a Choice
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Leveraging information, being creative
Predicting the Consequences
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Profit maximizing, Benefit-cost analysis
Exploring the Alternatives
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Not the symptoms
And being happy with it in the long-run
Performing Sensitivity Analysis
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Understanding the impact of changing assumptions
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Common Business Issues
In “Big Guy” Terms
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Product/portfolio strategy & planning
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Promotional strategy
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Who are my competitors and what can I offer that my competition
cannot?
High incidence of failure
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Who really buys and consumes these products?
Competitive benchmarking & differentiation strategy
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How can I make my advertising more impactful?
Consumer/customer segmentation
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Which products do I invest resources in?
What steps can I take to reduce the likelihood of failure?
Too much information, not enough guidance
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I have a lot if information, but what do I do with it?
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What’s Going on in a
“Big Company”
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More resources
Scale has a way of masking issues that will
have great business impact
Larger number of people, more people issues
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The Product Development Process
FRONT-END
Planning & Situation
Analysis
Consumer Needs &
Idea Generation
Concept
Development
BACK-END
Product
Development
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Product Launch
Post-Launch Audit
Traditionally, big companies have focused
their time and resources on the “back-end” of
the PDP. That is the tactical space.
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The importance of the “front end”
Attention is now being directed on the “Front End”
of the Product Development Process because of
proposed ability to focus resources and improve
chances for successful new product introductions.
FRONT-END
Planning &
Situation
Analysis
Consumer
Needs & Idea
Generation
BACK-END
Concept
Development
Product
Development
Product Launch
Post-Launch Audit
Ability to influence outcome
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Small Business
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Same issues as Big Company – Fewer
resources
Better grasp of business solutions required
Fast to understand, fast to change direction
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“Adapt To Change Quickly”
“Be Ready To Change Quickly and Enjoy It Again &
Again” both on pg 74
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Critical Success Factors
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Superior, differentiated products
Products that offer unique benefits & superior
value to the consumer/customer
Thorough understanding of customers’ needs
& wants, competitive situation, and nature of
the market
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Critical Success Factors
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Do the Front End
 Early-on idea screening, market assessment,
technical assessment, business & financial
analysis, product definition, target market,
product concept with attributes & benefits, and
positioning
Prioritize with Go/Kill procedures
Balance speed to market & quality of execution
A company culture that supports the business
goals
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Focused Decision Making
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A strong (product development) Process with a
consumer/customer orientation and a focus on frontend activities can deliver quick market results.
A focused Process leads to focused decision making.
 Defining the Problem
 Determining the Objective
 Exploring the Alternatives
Research
&
 Predicting the Consequences
Analysis
 Making a Choice
 Checking impact of the Market
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Leveraging Business Information
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Every business has significant knowledge stored
within its people, its documents, its resources,
libraries & the world.
The goal: leverage this information, identify
knowledge gaps, fill those gaps, and act on robust
business strategies based on integrated market
information.
How do you do that?

The Getting It!® system
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We have entered into a Demand Driven Economy. We
are No Longer in a Supply Driven Economy…We have to
learn how the rules have changed. – Rick Kash,
Cambridge Group Dec 9, 2003
The pressure for change
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Competition from low cost
economies — using new
technologies, skilled people and
mobile capital.
Innovative products,
processes and services —
spreading rapidly across the
globe or down the street.
Electronic commerce —
radically changing the way
business meets customers'
demands.
Science and knowledge —
underpinning the new
technologies.
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What are the New Rules for a
Demand Economy?
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How High?
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What is rate limiting behavior?
How Wide?
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What is trade off behavior
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Rate Limiting Behavior
What is Rate Limiting Behavior?
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Caloric consumption
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Income
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I can only eat/drink so
much
I can only spend so much
Demographics
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I do certain events at a
specific age
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Caloric Consumption
Approx 530 Calories
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Consumption by Major Food Groups
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%Consumption of Alcoholic/ Non Alcoholic Beverages
has Remained Fairly Constant over 35 years
Total Non Alcoholic
Total Alcoholic
100%
80%
60%
40%
20%
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
0%
Source: USDA Economic Research Service
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Consumption of Most Beverages Except for Coffee, Soft
Drinks, Bottled Water and Milk has Remained Fairly
Constant
50%
Whole Milk
Other Milk
40%
Tea
Coffee
Bottled water
30%
Diet Soft
Drinks
Regular Soft
Drinks
Fruit Juices
Fruit drinks,
20%
Iced Tea
(Canned)
Vegetable
juices
Beer
10%
Wine
Distilled
Spirits
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
1968
1966
0%
Source: USDA Economic Research Service
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Income Impact
$7,000
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Spending by Major Categories
% Change in per capita spending 1970- 2001
Reading
-18%
Clothing
4%
Food at home
11%
Tobacco
13%
Furniture
16%
Entertainment
17%
Health care
19%
Personal care
21%
Alcoholic beverages
23%
Utilities
Source: Consumer
Expenditure Spending
Survey
US Bureau of Labor
-30%
-20%
24%
Food away from home
26%
Housekeeping
26%
Housing
26%
Telephone
28%
Transportation
29%
Education
-10%
30%
0%
10%
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20%
30%
40%
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Demographics
85 years and over
80 to 84 years
75 to 79 years
70 to 74 years
65 to 69 years
60 to 64 years
55 to 59 years
50 to 54 years
45 to 49 years
40 to 44 years
35 to 39 years
30 to 34 years
25 to 29 years
20 to 24 years
15 to 19 years
10 to 14 years
5 to 9 years
Under 5 years
Source: US Census
0
5000000
10000000
15000000
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20000000
25000000
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Demographics – Choice Behavior
Average Age of First Marriage
Male
Female
Average Duration of First Marriage
Average Age at Childbirth (Female)
Average Number of Children in Family Household
% of First Marriage Ending in Divorce
Average age at Divorce
Male
Female
Average Duration of Divorce
Male
Female
% of Women in the Labor Force
1970
1995
23.4
21.8
27
21.4
2.2
36%
28.6
26.6
26
24.9
1.8
42%
36.4
33.9
39.7
37.3
4
9
42%
8
15
60%
Source: US Census. US Dept of Labor
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Rate Limiting Behavior
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Issue:
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Drives consumers to
make trade offs
Global Focus
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Trade Off Behavior
Trade off Behavior
Some Trade Off Data
 Delivering the same experience for the
consumer
 Types of experiences
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What Frameworks do Consumers
Use to Understand Beverages
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Imagine you open a refrigerator
and you see 35 different
beverages.
What are the drinks identified
top of mind as interesting?
What makes them interesting?
What are the drinks that when
consumers make trade offs are
most interesting? What makes
them interesting?
Is there a difference?
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Expected Experience: What are the drinks identified
top of mind as interesting? What makes them
interesting?
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These everyday beverages; branded and with their primary
attributes… i.e. colored, caffeinated and extreme temperatures are
how the consumer makes sense of drinks.
Same beverages as 2002, different ranking
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Cola
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Ice Tea
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From a Brand
Classic… just the way you like it.
Thick slushie
An Ice Cream Float
Warm smooth flavor
100% natural
So Inviting
From a Brand
Hot Coffee
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Aroma invites you to sip more
Made from 100% Columbian Coffee beans
Fresh ground and brewed with all natural flavors
Warm and inviting
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2003 Trade Off Experience: What are the drinks when
consumers trade off are most interesting? What makes
them interesting?
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Many different beverage bases (creamy, fruit based, coffee
based). Healthiness, brands, what it is made from and the
primary attributes of the beverage themselves are how
consumers make sense of drinks.
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Hot Chocolate
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Rich Creamy with marshmallows
Premium blend of chocolate
Made with creamy milk chocolate
Warm and inviting
Slushies
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Made with real fruit juice and natural flavors
With Tropical flavors
Rainbow of colors
Satisfy your sweet tooth
From a Brand
With a light fizz
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2003 Trade Off Experience: What are the drinks when
consumers trade off are most interesting? What makes
them interesting?
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Many different beverage bases (creamy, fruit based, coffee based).
Healthiness, brands, what it is made from and the primary attributes
of the beverage themselves are how consumers make sense of
drinks.
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Hot Coffee
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Aroma invites you to sip more
Made from 100% Columbian Coffee beans
Fresh ground and brewed with all natural flavors
Warm and inviting
Flavored Milk
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Thick with lots of flavor
From a Brand
100% natural
With Calcium , Vitamins A,D or whatever you need
Good for you and healthy for your bones
Already prepared…just shake and drink
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White Wine
Sports Beverage
Flavored Beer
Cocktails
Red Wine
Cola
Organic Beverage
Fiber Drinks
Flavored Tequila
Flavored Hard Cider
Beer Alternatives
Meal Replacement Beverage
After Dinner Drinks
Pouched Beverage
Iced Coffee Drinks
Soup
Flavored Soy Milk
Coolers
Lemon Lime Soda
Iced Tea
Alcoholic Spritzers
Energy Drinks
Shakes
Juice Spritzers
Juice Drinks
Yogurt Beverage
Creamy Fruit Beverage
Hot Tea
Flavored Water
Flavored Milk
Fruit Smoothies
Hot Coffee Drinks
Slushies
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Hot Chocolate
Initial Interest in Beverages - 2003
Hot Chocolate, Slushies, Hot Coffee, and Flavored Milk are the
beverages consumers are initially interested in the idea of.
70
60
50
40
30
20
10
0
-20
Sports
Organic
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White wine
Flavored Beer
Red Wine
Cola
Soup
Cocktails
Pouched Beverages
After Dinner Drinks
Iced Tea
Flavored Hard Cider
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Hot Tea
Beer Alternatives
Fiber
Iced Coffee
Juice Drinks
Constant
Flavored Tequila
Flavored Soy Milk
Lemon Lime
Shakes
Alcpholic Spritzers
Yogurt
Coolers
Juice Spritzers
Flavored Milk
Hot Coffee
Fruit Smoothies
Flavored Water
Meal Replacements
Slushies
Energy
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Creamy Fruit Beverages
Hot Chocolate
Overall Interest in Beverages - 2003
Hot Chocolate, Creamy Fruit, Energy, Slushies, and Meal Replacement
beverages are the beverages consumers are highly interested in.
avg Product Elements
70
60
50
40
30
20
10
0
-10
What’s the Difference?
Expected Attributes
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Similar
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Branded
Fresh
100% Natural
Textures
So Inviting
Trade Off Experience
Attributes
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Classic
Warm Smooth flavor
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Different
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Unmet Needs
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Branded
Pure, Fresh
100% Natural
Textures
Warm and Inviting
Made from…
Good for you
Nutritious
Added Vitamins, Minerals,
Antioxidants, etc
Lots of flavors, Fruit Flavor
All ready prepared
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Business Development
Your new idea or concept should be evaluated &
reviewed as a new and independent business
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What will we give you today?

What to do after they tell you to do The
Business Plan?
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