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1)Competition Analysis
The purpose of Five-Forces Analysis
• The five forces are environmental forces that impact on a company’s ability to compete in a given market.
• The purpose of five-forces analysis is to diagnose the principal competitive pressures in a market and assess how strong and important each one is.
Threat of Substitute Products
Threat of Substitute Products
Threat of New EntrantsThreat of New
EntrantsThreat of New
Entrants
Rivalry Among Competing Firms in Industry
Rivalry Among Competing Firms in Industry
Bargaining Power of Buyers
Bargaining Power of Buyers
Bargaining Power of Suppliers
Bargaining Power of Suppliers
Porter’s Five Forces Model of CompetitionPorter’s Five Forces
Model of Competition
2)Market analysis
Specify Opportunity in Concrete TermsSpecify Opportunity in Concrete Terms
Assess Advantage Relative to CompetitionAssess Advantage Relative to Competition
Assess the Company’s Resources to Deliver the OfferingAssess the Company’s Resources to Deliver the Offering
Assess Market Readiness of TechnologyAssess Market Readiness of Technology
Identify the Specific Customers a Company Will PursueIdentify the Specific Customers a Company Will Pursue
Identify the Unmet and/ or Underserved Customer NeedIdentify the Unmet and/ or Underserved Customer Need
Assess Opportunity AttractivenessAssess Opportunity Attractiveness
CustomerCustomer
TechnologyTechnology
CompetitionCompetition
CompanyCompany
3)Customer Analysis
Customer Analysis
• Who
• Where
• When
• What
• How
Customer Analysis
• Consumers
• Business to Business
Customer Analysis
• Consumers– End use customers– Brand loyalty– Repurchase
Customer Analysis
• Business to Business requires special considerations– derived demand– purchaser is often NOT the user
Customer Analysis
• Where are my customers?– Invoice data– Warranty cards
Customer Analysis
• When Do My Customers Buy?– Demand variation– Changing customer buying patterns
Customer Analysis
• What Do My Customers Want?
• Recording sales by price range, size and color
• Competitive information from independent research firms
Customer Analysis
• How Do My Customers Buy?– Recognition of problem– Search for alternatives and info– Buyer’s mental evaluation of alternatives– Purchase– Postpurchase behavior
4)Positioning Analysis
Step2
STEP-3
STEP-4
STEP-5
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Objectives of MARCOMMEANING & PURPOSE:-
• Understand the process of marcom objective setting and the requirements for good objectives.
• Describe the hierarchy-of-effects model and its relevance for setting marcom objectives.
• Understand the role of sales as a marcom objective and the logic of vaguely right versus precisely wrong thinking.
• Understand the nature and importance of marcom budgeting.
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Setting Marcom Objectives
Goals that the various marcom elements aspire to individually or collectively achieve during a scope of time such as a business quarter or in a financial year.
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Marcom Objectives
• TO Facilitate the successful introduction of new brands.
• To Build sales of existing brands by increasing the frequency of use, the variety of use, or the quantity purchased.
• To Inform the trade and consumers about brand improvements.
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Marcom Objectives
• To Create brand awareness
• To Enhance a brand’s image
• To Generate sales leads
• To Stimulate point-of-purchase sales
• TO Increase customer loyalty
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Marcom Objectives
• TO Improve corporate relations with special interest groups
• TO Ofset bad publicity about a brand or generate good publicity
• To Counter competitors’ communication efforts
• To Provide customers with reasons for buying immediately instead of delaying a purchase
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Requirements for Setting Suitable Marcom Objectives
• Include a precise statement of who, what, and when
• Be quantitative and measurable
• Specify the amount of change
• Be realistic
• Be internally consistent
• Be clear and put it in writing
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Marcom Objectives in Terms of Sales
Presales Objectives: communication objectives that attempt to increase the target audience’s brand awareness, enhance their attitudes toward the brand, shift their preferences from the competitors’ brand and so on.
Sales Objectives: means the marcom objective literally is to increase sales by a particular amount.
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Point-of-Purchase Advertising
• Point-of-purchase;store environment• A final opportunity to affect consumer
behavior• Many product-and-brand choice decisions are
made at this time• “Shoppers are explorers. They are on a
safari, hunting for bargains, new products and different items to add excitement to their everyday lives…”
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Point-of-Purchase MaterialsPermanent P-O-P
Temporary and Semipermanent P-O-P
In-Store Media
displays intended for sixmonths or more
displays intended for fewer than six months
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–37
Marcom Objectives and IMC Tools
Marcom ObjectiveMarcom Objective Marcom ToolMarcom Tool
Facilitate the successful introduction of new Facilitate the successful introduction of new brandsbrands
Brand naming and packaging, advertising, sales Brand naming and packaging, advertising, sales promotions, word-of-mouth buzz generation, and promotions, word-of-mouth buzz generation, and point-of-purchase (P-O-P) displayspoint-of-purchase (P-O-P) displays
Build sales of existing brands by increasing Build sales of existing brands by increasing the frequency of use, the variety of uses, or the frequency of use, the variety of uses, or the quantity purchasedthe quantity purchased
Advertising and sales promotionsAdvertising and sales promotions
Inform the trade (wholesalers, agents or Inform the trade (wholesalers, agents or brokers, and retailers) and consumers about brokers, and retailers) and consumers about brand improvementsbrand improvements
Personal selling and trade-oriented advertisingPersonal selling and trade-oriented advertising
Create brand awarenessCreate brand awareness Advertising, packaging, and P-O-P messages).Advertising, packaging, and P-O-P messages).
Enhance a brand’s imageEnhance a brand’s image Brand naming and packaging, advertising, event Brand naming and packaging, advertising, event sponsorship, cause-oriented marketing, and sponsorship, cause-oriented marketing, and marketing-oriented public relationsmarketing-oriented public relations
Generate sales leadsGenerate sales leads AdvertisingAdvertising
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–38
Marcom Objectives and Tools (cont’d)
Marcom ObjectiveMarcom Objective Marcom ToolMarcom Tool
Persuade the trade to handle the Persuade the trade to handle the manufacturer’s brandsmanufacturer’s brands
Trade-oriented advertising and personal Trade-oriented advertising and personal sellingselling
Stimulate point-of-purchase salesStimulate point-of-purchase sales Brand naming and packaging, P-O-P Brand naming and packaging, P-O-P messages, and external store signagemessages, and external store signage
Increase customer loyaltyIncrease customer loyalty Advertising and sales promotionsAdvertising and sales promotions
Improve corporate relations with special Improve corporate relations with special interest groupsinterest groups
Marketing-oriented PRMarketing-oriented PR
Offset bad publicity about a brand or generate Offset bad publicity about a brand or generate good publicitygood publicity
Marketing-oriented PRMarketing-oriented PR
Counter competitors’ communications effortsCounter competitors’ communications efforts Advertising and sales promotionsAdvertising and sales promotions
Provide customers with reasons for buying Provide customers with reasons for buying immediately instead of delaying a purchaseimmediately instead of delaying a purchase
Advertising and sales promotionsAdvertising and sales promotions
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–39
Marcom Objectives in Terms of Sales
• Objectives of Presales Communication
– To increase the target audience’s brand awareness
– To enhance the target ir attitudes toward the brand
– To shift their preferences from the competitors’ brand
• Sales Objectives
– The marcom objective literally is to increase sales by a particular amount.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–40
The Hierarchy of Marcom Effects
• Advancing Consumers from Unawareness to Awareness– Advertising is the most effective and efficient
method for quickly creating brand awareness.
• Creating an Expectation– Product benefits from buying and experiencing a
brand
• Encouraging Trial Purchases– Free samples, coupons, major price discounts
and rebate offers encourage trial behaviors
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–41
The Hierarchy of Marcom Effects (cont’d)
• Forming Beliefs and Attitudes– Beliefs form the basis for developing an overall
attitude toward the brand.– Beliefs and attitudes are mutually reinforcing
• Reinforcing Beliefs and Attitudes– Marcom serves to reinforce consumer beliefs and
attitudes based on product usage experience
• Accomplishing Brand Loyalty– Brands that continue to satisfy expectations
foster brand-loyalty which reduces price sensitivity
Factors affecting budgeting
• Competition
• Campain objectives
• Product life cycle
• Market size
• Availability of Funds
• Media plan
Budgeting Methods
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–44
Budgeting Methods
1)Percentage-of-Sales Budgeting– Brand advertising budget is a fixed
percentage of past (e.g., last year’s) or anticipated (e.g., next year’s) sales volume.
2)Objective-and-Task Budgeting– Advertising decision makers specify what role
they expect advertising (or some other marcom element) to play for a brand and then set the budget accordingly.
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–45
(cont’d)
3)Competitive Parity Method Budgeting
– Setting the marcom budget to match or exceed what competitors are doing
– Share of Market (SOM)
– Share of Voice (SOV)
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–46
(cont’d)
4)The Affordability Method– Spending on advertising only those funds that
remain after budgeting for everything else.
– Relegating marcom to a position of comparative insignificance (vis-à-vis other investment options)
– Marcom are implicitly considered relatively unimportant to a brand’s present success
– Challenge is to demonstrate that marcom do produce results
© 2010 South-Western, a part of Cengage Learning. All rights reserved.
6–47
Marcom Budgeting
• Budgeting in Theory
– The best (optimal) level of any investment is the level that maximizes profits
• Marginal revenue = Marginal cost, MR=MC
• Marginal Cost = Change in total cost = TCChange in quantity Q
• Marginal Revenue = Change in total revenue = TR Change in
quantity Q
– Advertisers should increase their advertising investment as long as it is profitable to do so