WIXLIB

Strategic MarketingByDr. Raafat Youssef Shehata

Table of contentsIntroduction about marketing Components of marketing plan STP Product mix Pricing Distribution Promotional mix Budgeting

MarketingMarketing is defined to be the processresponsible for anticipation, identification ,and satisfaction of customer needs througha profit

What is the relation between these 3 termsLove markBrandProduct

Marketing manager He is the bridge between the company and thecustomersHis functions are (APIC)AnalysisPlanningImplementationControl

Brand management / badexampleCoca-Cola Battered by a nationwide series of taste-test challengesfrom thesweeter-tasting Pepsi-Cola, Coca-Cola decided in 1985 to replace its oldformula with a sweeter variation, dubbed New Coke. Coca-Cola spent 4million on market research. Blind taste tests showed that Coke drinkers preferred the new,sweeter formula, but the launch of New Coke provoked a nationaluproar. Market researchers had measured the taste but failed to measure theemotional attachment consumers had to Coca-Cola. There wereangry letters, formal protests, and even lawsuit threats to force theretention of “The Real Thing.” Ten weeks later, the company withdrew New Coke and reintroducedits century-old formula as “Classic Coke,” a move that ironically mighthave given the old formula even stronger status in the marketplace.

Marketing ManagementPhilosophiesProduction ConceptProduct ConceptSelling ConceptMarketing ConceptSocietal Marketing Concept

Examples marketing orientation

Sanofi-Aventis/ Afara

Faragalla and faragello

Socio-cultural environmentDuring the 1994 soccer world cup both McDonald’s andCoca-Cola made a mistake of reprinting the Saudi Arabianflag (which includes sacred words from the Koran ) ondisposable packaging used in promotions

Culturalenvironment-In 1970 P&G introduced Pampers diapers inJapan-Although successful in USA this product didnot sell well in Japan because P&Gneglected some important culturaldifferences between American andJapanese parents-The Japanese mom changes her baby’sdiaper about 14 times a day twice as oftenas her American counterpart-Pampers were too expensive for aJapanese mother to use so many

Humor in Translations ---Named in honor of GM’s famed fiasco in trying to marketthe Chevrolet Nova in Central and South AmericaIn Spanish, No Va, or Nova, simply means No Go -- orthis car won’t go!

Changing the slogan from AnaAhbo to Ana Bahebo

The 4 P’s & 4 C’s of theMarketing Mix 4 P’s ProductPricePlacePromotion 4 C’s Customer SolutionCustomer CostConvenienceCommunication

Planning and budgeting

The contents and structureof the marketing plan The executive summarySituational analysis and target marketMarketing objectivesMarketing strategiesMarketing tacticsMarketing mixSTPSchedules and budgetsImplementationControl

Situational analysisSWOT analysis PESTEL analysis Market analysis

SWOT analysis Strengths(internal) Weaknesses (internal) Opportunities (external) Threats (external)

PESTEL analysisPolitical factors Economic factors Socio-cultural factors Technological factors Ecological Legal

Market analysisMarket size Growth rate Market trends

ObjectivesObjective should be e related

Strategies Competitive strategies (Porter ) Growth strategies (Ansoff)

Product/Market kets1. MarketPenetration2. MarketDevelopmentNewProducts3. ProductDevelopment4. Diversification

Market Penetration making more sales to current customers withoutchanging its products. How? Add new stores in current market areas,improvements in advertising, prices, etc.

Market Development identify and develop new markets for its currentproducts. How? Review new demographic (seniorconsumers) or geographic (Asian, European &Australian) markets.

Product Development offering modified or new products to currentmarkets. How? Increasing food offerings, extend toFrappuccino drinks.

Diversification start up or buy businesses outside currentproducts and markets. How? Currently testing two new restaurantconcepts – Cafe Starbucks and Circadia, orbranded casual clothing.

Porter’s Generic StrategiesMichael Porter has proposed three generic strategiesthat provide a good starting point for strategicthinking: Overall cost leadership (WalMart) Differentiation Focus.(Sainsbury)

The marketing budget How much the company intend to spendMethods:1. Task method2. Percentage of sales3. Competitive parity4. All you can afford5. Same as Last Time (S.A.L.T.)

S.T.PMarket segmentationMarket TargetingMarket Positioning

Segmentation Variables

Dove Targets Women

Le Carnival and Tespas

Aker Saa versus Cortigino

Segmentation by AgeLevi Strauss has beensuccessful in developing theidea that it is a “brand for life”by introducing products suchas Dockers to meet the needsof consumers as they age

Lifestyle segmentationThe Jeep Cherokee is aimed atlifestyle segment that favors anoutdoor ,adventure-some ,funseeking style of life

PositioningHow the customers are perceiving theproduct versus other products in themarket

Domino’s positioning A good hot pizza, delivered to your door within30 minutes of ordering, at a moderate price

Positioning criteria1.2.3.4.5.6.BenefitsSpecific product features e.g. speedUser categoryAgainst another productsOccasionHybrid basis

To children age range from 5-16 years and to adults’age range from 24-40 we present Safeguard soapwhich will provide a 24hrs. Germ protection as it isthe number one antiseptic soap having the highestquality. The only antibacterial soap approved by theFDA.

Positioning by occasionNestle Kamananna

Personnel Differentiation:Singapore Airlines

Perceptual Map for PainRelieversPerceptualmaps showmarketers howcloselyproducts areconceptuallypositioned byconsumers to“ideal points,”to their ownproducts, andto competitors’products.

Perceptual MappingBrands of SoapHigh -deodorantHigh Deodorant1DialLava8LifebuoyLow Moisturizing

Perception TowardsDifferent Brands 1Cairo & AlexFor meValue forMoneyPremiumThe higher the social class the more skewedtowards the international brands and Jam mixesthat is only produced and sold by them.Not for me50

Perception TowardsDifferent Brands 2DeltaFor mePremiumVFMOur target group are aware of different brandsand they have tried different brands as well.Since there was few brands in the market in thepast, as our target group used to consume theVFM and Vitrac until few of them switched toRashidi MizanNot for me51

Perception TowardsDifferent Brands 3Upper EgyptFor meVFMPremiumOur target group are aware of different brandsand they have tried different brands as well.Since there was few brands in the market in thepast, as our target group used to consume theVFM and Vitrac until few of them switched toRashidi El MizanNot for me52

RepositioningReasons:1-The current position may become very competitive2-Change in customer needs

RepositioningMarlboro cigarettes was positioned as a women’scigarette when it was first introduced –complete with a red-tipped filter to hide lipstickstainThe brand really took off, however, whenMarlboro adjusted its image as a male productcomplete with the “macho” Marlboro cowboy

Repositioning/ Zest

Brand ladder

Products and services

What is a Product? A PRODUCT is anything that can be offered to a marketfor attention, acquisition, use, or consumption and thatmight satisfy a want or need.Includes: Physical asCombinations of the above

Product Classifications:ConsumerConvenience ProductsShopping Products Buy frequently & immediately Buy less frequently Low priced Mass advertising Many purchase locationsi.e Candy, newspapers Higher price Fewer purchase locations Comparison shopi.e Clothing, cars, appliancesSpecialty ProductsUnsought Products Special purchase efforts New innovations High price Unique characteristics Brand identification Few purchase locationsi.e Lamborghini, Rolex Products consumers don’twant to think about Require much advertising &personal sellingi.e Life insurance, blood donation

Product portfolio(product assortment orproduct mix) A company product portfolio is all the productlines and items that the company offers for salePortfolio aspects:-Width “breadth”-Length-Depth

P&G’s Product Width andDepth

Product Life CycleSales andProfits ( wthMaturityDeclineLosses/Investments ( )Sales and Profits Over the Product’s Life From Inception toDemise

BrandingA brand is a name , a term , a symbol or any otherunique element of a product that identifies theproduct from its competitors

Adopter Categories

Product characteristics that influencediffusion1-Relative advantage: The degree to which potential consumersperceive a new product is superior to existing substitutes2-Compatibility: The degree to which potential consumers feel anew product is consistent with their present needs, values andpractices3-Complexity: The degree to which a new product is difficult tounderstand or use4-Trialability: The degree to which a new product is capable ofbeing tried on a limited basis5-Observability: The ease with which a product’s benefits orattributes can be observed, imagined or described to potentialconsumers

Packaging5 key functions:1. Protection2. Distribution3. User convenience4. Promotion5. compliance

Packaging is attraction

Packaging is safetyTylenol

MacDonald'sPackaging is promotion

Service

Nature and Characteristicof a Service

Pricing

Gillette Commands a Price Premium

Types of Cost Factors thatAffect Pricing DecisionsFixed Costs(Overhead)Costs that don’tvary with sales orproduction levelsExecutive Salaries, RentVariable CostsCosts that do varydirectly with thelevel of productionRaw materialsTotal CostsSum of the Fixed and Variable Costs for Any GivenLevel of Production

4 Cs on price settingCostCompanyCustomerCompetitor

PricePrice Elasticity of DemandA. Inelastic Demand Demand Hardly Changes Witha Small Change in Price.P2P1PriceQ2 Q1Quantity Demanded per PeriodB. Elastic Demand Demand Changes Greatly Witha Small Change in Price.P’2P’1Q2Q1Quantity Demanded per Period

Price Elasticity of DemandChange in quantity demanded %Change in price %-When elasticity is greater than 1 ----- Elastic-When elasticity is less than 1 ----- Inelastic

Pricing methods

Pricing methods1.2.3.4.5.6.7.8.SkimmingPenetrationCost plusCaptiveLoss leaderCompetitivePsychologicalEDLP

EDLP

Captive pricing

Odd-even pricing

Price bundling

Place or distribution

Number of Channel Levels

Carrefour in Egypt MaddiAmericana changed the place of its refrigerators inCarrefour El Maddi from the entrance to the existbecause some of the frozen vegetables were spoiledbecause of the long time of shopping

ZARA Places Retail Stores inHigh-End, High Traffic Areas

Intermediaries1.2.3.4.5.Retailers :sell directly to consumersWholesalers: sell to retailersDistributor and dealers: sell to customersthrough profitAgents : they do not purchase the products butthey earn commissionFranchisees e.g. KFC

Vendingmachines

Conventional Distribution ChannelVs. a Vertical Marketing System

Number of iveDistributionExclusiveDistribution

Promotion

Marketing Communication Mixor Promotion MixProduct’sDesignProduct’sPriceStores that Sellthe ProductProduct’sPackage

Communication strategies1.Push strategy2.Pull strategy3.Strategy mix

Communications modelsDRIP model:DRIPDifferentiateRemindInformPersuade

AIDAAttentionInterestDesireAction

Public relationsThe planned and sustained effort to establish andmaintain goodwill and mutual understandingbetween an organization and its publics

Public relation activities1.2.3.4.5.6.7.8.9.10.Press release & video news releasePress conferencesSponsorshipExhibitionsCorporate social responsibilityCorporate literatureCorporate hospitalityVideosSpecial events “celebrity store openings”Website

Exhibitions-Here customers come to see the supplier-Visitors are usually from the same industry-Are hold in large halls with large stands-Its cost is rising

ExhibitionsPurposes1. Public relations2. Promotion and selling3. Networking4. Testing the response