András BauerMarketing Management1

András BauerMarketing Management2 Overall marketing strategy Based on their mission statements, firms set strategic objectives Strategic objectives should be quantified and measurable and create a challenge for the organization Insight: you cannot run an organization on a large number of objectives

András BauerMarketing Management3 Overall marketing strategy What is our source of revenue? Where does our business come from? There are many options to increase sales, including converting non-users; taking- away share from competitors; increasing overall market by higher intensity, or unwanted outcomes such as cannibalisation

András BauerMarketing Management4 A OVERALL CUSTOMER BASE B CURRENT CUSTOMERS COMPETING BRAND C OUR OTHER BRAND STARTING SITUATION NON- USERS

András BauerMarketing Management5 OVERALL CUSTOMER BASE B CURRENT CUSTOMERS COMPETING BRAND C OTHER BRAND OPTION: TAKE AWAY CUSTOMERS FROM B A NON-USERS

András BauerMarketing Management6 OVERALL CUSTOMER BASE B CURRENT CUSTOMERS COMPETING BRAND C OUR OTHER BRAND UNWANTED OPTION:CANNIBALIZE A NON-USERS

András BauerMarketing Management7 OVERALL CUSTOMER BASE B CURRENT CUSTOMERS COMPETING BRAND C OUR OTHER BRAND OPTION:INCREASE A BY CONVERTING NON-USERS A NON-USERS

András BauerMarketing Management8 Overall marketing strategy You should do something different in every situation Converting non-users, be careful not to become generic Generic examples:

András BauerMarketing Management9 Overall marketing strategy Take share away from competitors: usually a good move; look at the cost Cannibalization: avoid

András BauerMarketing Management10 Product features The most basic strategic decision: which markets to serve by which products Depending on the product and the customers: develop segment specific product features Insights from information goods: versioning

András BauerMarketing Management11 Competitive advantage There are many ways to create competitive advantage: Cost-based: IKEA, Southwest Quality-based:Fedex, Danone Perceived quality or brand: Or a combination of all these

András BauerMarketing Management12 Product Positioning What are the dimensions ? How important are dimensions ? How do you compare on dimensions ? How do customers decide ?

András BauerMarketing Management13 THE IDEAL POINT x PREFERENCE MAP OF A NEW PRODUCT CATEGORY A B

András BauerMarketing Management14 x PREFERENCE MAP AFTER THE FIRST ENTRY A B Y THE IDEAL POINT x THE NEW IDEAL POINT THE FIRST BRAND

András BauerMarketing Management15 WHERE TO POSITIONS SECOND BRAND ON THE PREFERENCE MAP ? A B Y x THE NEW IDEAL POINT THE FIRST BRAND ? ? ?

András BauerMarketing Management16 The value proposition For (target customer) who (statement of the need) the (product or brand name) is a (product category) that (statement of the key benefit/reason to buy). Unlike (primary competitive alternative), (product/brand name) (statement of the primary differentiation)

András BauerMarketing Management17 The value proposition=often called positioning statement The Coca-Cola Bible: Point of Difference Point of Reference Support

András BauerMarketing Management18

András BauerMarketing Management19 The Marketing Mix Price Communication Promotion Channels Or together: The 4P

András BauerMarketing Management20 Market segmentation Everything we have until now discussed is based on the concept of market segmentation There is an appealing reason to segment markets: to offer exactly what the customers want and create profit this way

András BauerMarketing Management21 Market segmentation definitions Segmenting is breaking down the market into homogeneous groups of customers Reasons: Customers differ in wants Have different price sensitivity Competitors might be active

András BauerMarketing Management22 An overview of segmentation criteria in consumer markets 1. Socio-demographics 2. Psychographics 3. Lifestyle 4. Benefits sought 5. Behavioural variables: user status/loyalty, buyer readiness, usage level, purchase habit 6. Usually multiple variables

Relevant Descriptor Variable: Climate 1 Cold zone 2 Continental zone 3 Hot zone Customer distribution Likelihood of solar panel purchse 0100% Segment 1 Segment 2 Segment 3

Likelihood of solar panel purchse Irrelevant descriptor Customer distribution 0100% Variable: Education 1Low 2 Medium 3 High Segment 1 Segment 2 Segment 3