2011.04 marketing management

Marketing ManagementStephan Langdon, MBA, M.Ed.

Week 4

PPT 4-3

Dimensions of a Market Analysis

• Emerging submarkets• Actual and potential market and submarket

size• Market and submarket growth• Market and submarket profitability• Cost structure• Distribution systems• Trends and developments• Key success factors

Emerging Submarkets

Relevance!

PPT 4-4

Chapter 4 - Market and Submarket Analysis

PPT 4-5

SUV

Hybrid

Marketing the Wrong Product

PPT 4-6

Brand PreferenceBrand Relevance

SUV

Determine

Brands to

Consider Mercedes

Select Brand to Buy

Lexus BMW Mercedes

Select Product

Category or Subcategory

Customer Decision Process


PPT 4-7

Questions to Help Structure a Market Analysis

• SubmarketsAre augmented products, emerging niches, trend toward systems, new applications, repositioned product classes, customer trends, or new technologies creating worthwhile submarkets? How should they be defined?

• Size and GrowthPotentially important submarkets? Size and growth characteristics? Submarkets declining? How fast? Driving forces behind the trends?

Figure 4.1


PPT 4-8


• ProfitabilityHow intense is the competition among existing firms? Threats from potential entrants and substitute products? Bargaining power of suppliers and customers? Attractive/profitable markets or submarkets?

• Cost StructureMajor cost and value-added components for various types of competitors?

Figure 4.1


PPT 4-9


• Distribution SystemsAlternative channels of distribution? How are they changing?

• Market Trends

• Key Success FactorsKey success factors, assets, and competencies to compete successfully? Can assets and competencies of competitors be neutralized?

Figure 4.1

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

7-10

Characteristics of Business Markets

• Fewer, larger buyers• Close supplier-customer relationships• Professional purchasing• Many buying influences

• Multiple sales calls• Derived demand• Inelastic demand• Fluctuating demand• Geographically concentrated buyers• Direct purchasing


7-11

Buying Situation

Straight rebuy

Modified rebuy

New task


7-12

Systems Buying and Selling

Turnkey solution desired;

Bids solicited

PrimeContractors

Second-tierContractors

System subcomponents

assembled


7-13

The Buying CenterInitiators

Users

Influencers

Deciders

Approvers

Buyers

Gatekeepers


7-14

Sales Strategies

Small Sellers

Large Sellers

Key Buying Influencers

MultilevelIn-depthSelling


7-15

Stages in the Buying Process: Buyphases• Problem recognition• General need description• Product specification• Supplier search• Proposal solicitation• Supplier selection• Order-routine specification• Performance review


7-16

Table 7.2 Buygrid Framework


7-17

Forms of Electronic Marketplaces

• Catalog sites• Vertical markets

• Pure play auction sites• Spot markets

• Private exchanges• Barter markets

• Buying alliances


7-18

Methods of e-Procurement• Websites organized using vertical hubs• Websites organized using functional hubs• Direct extranet links to major suppliers• Buying alliances• Company buying sites


7-19

Table 7.3 Vendor Analysis


7-20

Establishing Corporate Trust and Credibility

Expertise

LikeabilityTrustworthiness


7-21

Factors Affecting Buyer-Supplier Relationships

Availability of alternatives

Supply marketdynamism

Complexity ofsupply

Importance ofsupply


7-22

Categories of Buyer-Seller Relationships

• Basic buying and selling• Bare bones• Contractual transaction• Customer supply

• Cooperative systems• Collaborative• Mutually adaptive• Customer is king


PPT 4-23

Detecting Maturity and Decline

• Price pressure caused by overcapacity and the lack of product differentiation

• Buyer sophistication and knowledge

• Substitute products or technologies

• Saturation

• No growth sources

• Customer disinterest

A group of organizations (i.e., sellers) offering goods or services that are similar and close substitutes for one another

What’s an industry?

Is the market vs. industry distinction important?Why or why not?

Does industry attractiveness matter? Why or why not?

A Tool for Assessing Industry Attractiveness: Porter’s Five Forces

Rivalry among existing industry

firms

Threat of substitute products

Bargainingpower

of buyers

Bargaining power

of suppliers

Source: Adapted from Michael E. Porter, “Industry Structure and Competitive Strategy: Keys to Profitability,” Financial Analysts Journal, July-August 1980, p. 33.

Threat of new entrants

Porter: Win - Lose

“ The implicit essence of Porter’s theory is that corporate competitiveness play is a “win by some - lose by some” play, where the firms which are competitively agile will alone sustain themselves and grow. In a sense Porter’s theory reflects modern corporate Darwinism where only the fittest would survive.”

Sixth Force

Economic Liquidity• The level and

sustainability of economic liquidity in the value chain of a firm constitute an essential competitive force.

Downes’ Three new Forces

Deregulation:

Globalization:

Digitalization:

• shrinking of government influence• improvements in logistics and communication

• power of IT


PPT 4-31

Competitive Risk

• Overcrowding

• Superior competitive entry

Market Changes

•Changing KSFs

• New technology

• Disappointing growth

• Price instability

Firm Limitations

• Resource constraints

• Distribution unavailable

Figure 4.5

Risks of High-Growth

Market

Political-Legal Environment

Increase in business legislation

Growth of specialinterest groups

3-33

MIS Systems Provide Information on Buyer Preferences and Behavior:Dupont’s Pillow Study

Pillow Segments• 23% - stackers• 20% - plumpers• 16% - rollers or folders• 16% - cuddlers• 10% - smashers


3-34

What is a Marketing Information System (MIS)?

A marketing information system consists of people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed,

timely, and accurate information to marketing decision makers.

Internal Records and Marketing Intelligence

Order-to-PaymentCycle

Databases,Warehousing, Data Mining

MarketingIntelligence

System

Sales Information

System


4-36

The Measures of Market Demand

PotentialMarket

PenetratedMarket

TargetMarket

AvailableMarket


4-37

Figure 4.4 Ninety Types of Demand Measurement


4-38

Figure 4.5 Market Demand Functions


4-39

Figure 4.5 Market Demand Functions


4-40

Table 4.6 Calculating Brand Development Index

41

The Conentional Marketing Mix

Product Price

Place/distribution Promotion.

Plus 4 P’s

Processes,

Productivity

[technology ]

People [employee

s],

Physical evidence

2011.04 marketing management

Education

submarket sizemarket

submarket growthmarket

submarket analysisppt

potential market

wrong productsuvhybrid

emerging submarketsrelevance