Today’s Topic: The Marketing Function What it is; why it matters; and how to make Marketing Mix decisions

Course Schedule The Marketing Function (Lenovo) The Marketing Function (Lenovo) Sales & Sales Channels (GolfLogix) Sales & Sales Channels (GolfLogix) Internet-based Marketing (HubSpot) Internet-based Marketing (HubSpot) R&D: Product Development (Guidant) R&D: Product Development (Guidant) Operations (Crocs) Operations (Crocs) Product Launch (Invisalign) Product Launch (Invisalign) Final Exam on Product Launch (Emotiv) Final Exam on Product Launch (Emotiv)

Today’s Agenda Mid-course feedback survey results Mid-course feedback survey results The marketing function and marketing mix decisions The marketing function and marketing mix decisions Return graded mid-term exams Return graded mid-term exams Developing a marketing plan: Lenovo – Building a Global Brand (case) Developing a marketing plan: Lenovo – Building a Global Brand (case) Readings/assignment for next week: sales channels (GolfLogix case) Readings/assignment for next week: sales channels (GolfLogix case)

Today’s Key Learnings Marketing roles and responsibilities Marketing roles and responsibilities The marketing mix The marketing mix Company and product positioning (with, against, content) Company and product positioning (with, against, content) Promoting a product (marketing communication) Promoting a product (marketing communication)

The Marketing Plan Executive Summary Executive Summary Table of Contents Table of Contents Summary of Current Situation Summary of Current Situation Focused Assessment of Market Opportunity Focused Assessment of Market Opportunity Financial and Marketing Goals Financial and Marketing Goals Summary of Company’s Marketing Strategy Summary of Company’s Marketing Strategy Target Market Target Market Product/Service Product/Service Positioning Positioning Distribution Distribution Price Price Promotion Promotion Marketing Budget (Monthly) Marketing Budget (Monthly) Forecast Unit Sales and Revenues (Monthly) Forecast Unit Sales and Revenues (Monthly) Plan to Monitor/Evaluate Action Plans by Period Plan to Monitor/Evaluate Action Plans by Period

The Marketing Mix: C+4P (Target) Customer Product Price(s) Place Promotion Taken together, the 4P’s define __?__

Marketing is responsible for “marketing mix” decisions (C + 4P’s) Customers/needs to be targeted (target customer segments) Customers/needs to be targeted (target customer segments) Product (product, positioning, service,…) Product (product, positioning, service,…) Price (levels and strategies) Price (levels and strategies) Promotion (communication) Promotion (communication) Place (sales/distribution methods) Place (sales/distribution methods)

If that’s what marketing does… who’s responsible for revenues and profits?

The only choices are……. Senior mgmt (CEO/president, group head,...) Senior mgmt (CEO/president, group head,...) Marketing Marketing R&D R&D Sales Sales Operations (manuf, service ops, logistics) Operations (manuf, service ops, logistics) Support: IT, Finance, HR, Legal, Support: IT, Finance, HR, Legal, Investor Relations, Public/Media Investor Relations, Public/Media Relations (PR), etc Relations (PR), etc

What is Marketing’s “true north” in making mix decisions?

Market and financial objectives for the product, based on corporate strategy/objectives (if relevant), guided by the company’s competitive advantages

Mix elements: Customers Targeted end-customers Targeted end-customers (a subset of the entire market) (a subset of the entire market) Identified by: Identified by: Names /group identity Names /group identity Demographics Demographics Psychographics Psychographics Needs Needs Specificity simplifies other mix decisions !

Mix elements: Product Product features/functionality (“product itself”) Product features/functionality (“product itself”) Cost target (and/or profit target) Cost target (and/or profit target) Competitive positioning, and fit with corporate (brand) positioning Competitive positioning, and fit with corporate (brand) positioning Name Name Packaging Packaging Customer service Customer service Breadth and depth of product line (versions) Breadth and depth of product line (versions) …

Product Positioning Statement “Our product, compared to relevant competitors, is the one that… …(has these differentiators) …and/or (provides these benefits)”

Mix elements: Price Prices: manufacturer, wholesaler, distributor Prices: manufacturer, wholesaler, distributor Payment terms and conditions Payment terms and conditions Warranty Warranty Discount policies Discount policies Price strategy vs. competitors Price strategy vs. competitors Bidding tactics Bidding tactics …

Mix elements: Place Channel choice: direct and/or indirect Channel choice: direct and/or indirect Channel length and breadth Channel length and breadth Channel partner selection Channel partner selection Franchising policies Franchising policies Channel coordination and control Channel coordination and control Channel competencies Channel competencies Channel training (sales and product) Channel training (sales and product) …

Mix elements: Promotion Branding (creating a company or product “image”) Branding (creating a company or product “image”) Advertising (multiple media; paid and free) Advertising (multiple media; paid and free) Direct marketing (mail, catalog, telemarketing, internet) Direct marketing (mail, catalog, telemarketing, internet) “Reference” customers (testimonials) “Reference” customers (testimonials) Public relations Public relations Industry relations (trade orgs, industry analysts,…) Industry relations (trade orgs, industry analysts,…) Trade shows and events Trade shows and events Price promotions Price promotions …

Promotion: message and media Message: most often the “message” is the positioning statement itself, often expressed in an attention-grabbing way Message: most often the “message” is the positioning statement itself, often expressed in an attention-grabbing way Media: identifying the most effective “media” for delivering the message is, driven by consideration of who the “positioning targets” are Media: identifying the most effective “media” for delivering the message is, driven by consideration of who the “positioning targets” are

The mix should “fit” with….. Needs/desires of the target customers Needs/desires of the target customers The company’s competencies and “image” The company’s competencies and “image” Competitors and their strategies/programs Competitors and their strategies/programs Channel partners’ needs and competencies Channel partners’ needs and competencies And….the competitive advantage decision And….the competitive advantage decision

The Marketing Plan Summary of Current Situation Summary of Current Situation Focused Assessment of Market Opportunity Focused Assessment of Market Opportunity Financial and Marketing Goals Financial and Marketing Goals Summary of Company’s Marketing Strategy Summary of Company’s Marketing Strategy Target Market Target Market Product/Service Product/Service Positioning Positioning Distribution Distribution Price Price Promotion Promotion Marketing Budget (Monthly) Marketing Budget (Monthly) Forecast Unit Sales and Revenues (Monthly) Forecast Unit Sales and Revenues (Monthly) Plan to Monitor/Evaluate Action Plans by Period Plan to Monitor/Evaluate Action Plans by Period

Marketing readings for 10/26 Creating a Marketing Plan: An Overview Creating a Marketing Plan: An Overview (read to understand the specific components (read to understand the specific components of each element of the marketing mix) of each element of the marketing mix) Lenovo: Building a Global Brand (case) Lenovo: Building a Global Brand (case)

Lenovo case Case timeframe is 2006 Case timeframe is 2006 Lenovo is the leading maker of PCs in China Lenovo is the leading maker of PCs in China Lenovo has acquired the IBM worldwide PC division; acquisition completed in late 2005 Lenovo has acquired the IBM worldwide PC division; acquisition completed in late 2005 Lenovo has to create a marketing strategy for the combined company Lenovo has to create a marketing strategy for the combined company Includes: rationalizing the product lines, creating a new brand strategy, and launching promotional activities to roll-out the new brand and products Includes: rationalizing the product lines, creating a new brand strategy, and launching promotional activities to roll-out the new brand and products

Marketing assignment for 10/26 What was Lenovo’s financial situation* before the acquisition (2005)? What is the projected financial impact of the acquisition (2006-8)? What was Lenovo’s financial situation* before the acquisition (2005)? What is the projected financial impact of the acquisition (2006-8)? What were Lenovo’s pre-acquisition competitive advantages? What CA’s were obtained via the acquisition? What were Lenovo’s pre-acquisition competitive advantages? What CA’s were obtained via the acquisition? Which of the branding alternatives (p. 9) should Lenovo have chosen? (Consider the positives-and-negatives of each alternative in arriving at your decision.) Which of the branding alternatives (p. 9) should Lenovo have chosen? (Consider the positives-and-negatives of each alternative in arriving at your decision.) How should the Lenovo brand be positioned vs. competitors’ brands? Do the positionings of Think and 3000 (Ex. 9a) “fit” well within the Lenovo positioning? How should the Lenovo brand be positioned vs. competitors’ brands? Do the positionings of Think and 3000 (Ex. 9a) “fit” well within the Lenovo positioning? * Use Exhibits 1a and 1b, not “Selected Company Financials”

Considerations in Creating a Positioning Statement Who are you positioning yourself “with” ? Who are you positioning yourself “with” ? What are their desires/needs and fears/concerns ? What are their desires/needs and fears/concerns ? Who/what are you positioning “against” ? Who/what are you positioning “against” ? What are your differentiators ? What are your differentiators ?

Today’s Key Learnings Marketing roles and responsibilities Marketing roles and responsibilities The marketing mix The marketing mix Company and product positioning (with, against, content) Company and product positioning (with, against, content) Promoting a product (marketing communication) Promoting a product (marketing communication)

Topic for 11/2 Class: Sales (Distribution Channels) How companies reach their customers: types of sales channels available How companies reach their customers: types of sales channels available Rationale for choosing which sales channel(s) to use Rationale for choosing which sales channel(s) to use Issues in “managing” and serving sales channels Issues in “managing” and serving sales channels Impacts of channel choice on the design of the “whole product” Impacts of channel choice on the design of the “whole product”

Sales Readings for 11/2 Class Going to Market - read to understand types of sales channels, and the reasons for choosing them Going to Market - read to understand types of sales channels, and the reasons for choosing them GolfLogix: Measuring the Game of Golf (case) GolfLogix: Measuring the Game of Golf (case)

GolfLogix Case Summary A start-up company in 2002 A start-up company in 2002 Uses GPS technology to aid golfers Uses GPS technology to aid golfers Two product versions: “distance only” and “complete system” Two product versions: “distance only” and “complete system” Currently selling to/through golf courses Currently selling to/through golf courses Considering also using retail channels (would require a modification to their product) Considering also using retail channels (would require a modification to their product)

Sales questions for 11/2 class What are the most significant end-customer and sales channel benefits of the each of the GolfLogix products? What are the most significant end-customer and sales channel benefits of the each of the GolfLogix products? What is the market potential (number sold and GolfLogix revenues) of each of the GolfLogix products? What is the market potential (number sold and GolfLogix revenues) of each of the GolfLogix products? Who are the appropriate target customers for the Distance Only product? For the Complete System? Who are the appropriate target customers for the Distance Only product? For the Complete System? What are the positives-and-negatives of selling through golf courses? Through retail channels? What are the positives-and-negatives of selling through golf courses? Through retail channels? If only one of the channels can be chosen, which one should GolfLogix use? Given the option of selling through both channels, should GolfLogix do that? If only one of the channels can be chosen, which one should GolfLogix use? Given the option of selling through both channels, should GolfLogix do that?