EXAM

• 2 hours open book

• 3 questions

• Answer the questions !

• Headings & bullet points

• Start 6pm

COMPETITIVE POSITIONS

Middle-of-the-roadDifferentiation Focus

Cost leadership

CN-1Cateora & Ghauri, International Marketing, European Edition, © 1999 McGraw-Hill

Country Notebook and Marketing Plan

Cultural analysis Economic analysis

Market auditand

competition analysis

Identify marketing components for adaptation

Marketing plan

Positioning PricingProduct Distribution Promotion

Demand forecasting

Market positioning

Market segmentation

Market targeting

STEPS TO AN

EFFECTIVE

SEGMENTATION OF

THE MARKET

Factors influencing per capita consumption

• Income ( GDP )

• Relative price .. Price of category versus prices in substitute cagegory

• Advertising expenditure in this market ( total compared to other categories)

• Culture

• Availability ( distribution)

• Other eg. climate

Estimating Market Demand

Historical DataHistorical Data

Local Production Plus ImportsLocal Production Plus Imports

Expert OpinionExpert Opinion

Irwin/McGraw-Hill

AnalogyAnalogy

8-10

Market outlook

Market attractiveness model

Competitive intensity outlook

Company capability

Attractiveness

Market profitabilityEnvironmental

Factors

Risk

Ris

k

Market outlook

Size of total market ( demand)o Size of the segment that you are interested in

Growth of market Potential growth of your target segment

Barriers to entry

Competitive outlook

How many competitors and what are their strengths? Big well funded? Global players ?

Are competitors competing only on price? How severe is price competition Well funded players about to enter? Many small players damaging market ( poor quality ?)

Company capability

Ease of entry into market Can we export at low risk , do we need local production

, or local partners if in service sector? Cultural factors ? How risky is the project ? Do we have resources? Do we have the capability to effectively compete in this

market ?

Market attractiveness- Risks

Risks from business environment External environment STEEP factors Risks that your marketing mix not work ( controllable

though)

Market attractiveness

Segment profitability.. How much profit can we make and what are the risks to that profit stream ?

Big markets not necessarily attractive Market attractiveness will vary from one company to

another depending upon company capabilities What is the risk profile of your company ? Are your skills transferable from one market to

another ?

Demographic

Psychographic

Behaviouristic

Geographic

BASES FOR

SEGMENTING

MARKETS

Market segmentation-behaviorial

• Divides market into groups based upon their knowledge, attitudes or responses to a product

• Occasions- when buying or using• FJ promoted outside breakfast usage• Mothers Day for cards , flowers• Benefit- find the benefits that consumers are looking

for eg.toothpaste• Usage rate- heavy , light buyers eg beer, frequent flyers

What is a Brand?

A successful brand is an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant,

unique [sustainable]

added values which match their needs most closely.

Brand Values

• A value is an enduring belief that a specific mode of conduct or end-state of existence is personally or socially preferable to an opposite or converse mode of conduct or end state of existence (Rokeach, 1973)

• Brand values say ‘This is what we believe in and this is how we think our business should be conducted’

• Brand values can– guide behaviour– differentiate the brand from other brands– attract people with similar values

Brand Essence Pyramid

Tutorial 3 OHT 3.9

Laddering process to determine brand values

501'sPersonality James DeanValues Self belief Authentic AssuredEmotional Rewards Sexy Original RuggedBenefits Look good Well made StrongAttributes Tight styling Made since 1870 Rivets

Brand essence to brand positioning

• How do brand owners make their brand stand out against the message clutter ? You are bombarded with messages, many of which you filter out

• Positioning is what you do to the mind of the consumer

• Positioning focuses on the functional aspects of the brand

• Brandowners need to1. Ensure that the brand meets consumers needs by occupying a

distinct, meaningful and valued place in the consumers mind2. Ensure that consumers believe that the brand will meet these needs

better than competitors ( so consumers have to know which category the brand is in )

Differentiation- ch 10

• Consumers select products / services with greatest percieved value to them

• Competitive Advantage is gained when a brand offers superior value to the target market or by providing equivalent benefits at lower prices

• Strong positions are based upon delivering better quality / value

• Positioning begins with differentiating the brand offer

brand positioning

• Positioning ( Rossiter & Percy) has 3 elements1. To... ( Target audience)2. X is the brand of.. ( Category )3. That offers ( benefit )

Diet CokeTo weight conscious adults ( target ) Diet

Coke is the brand of diet cola ( category ) that tastes best ( benefit )

Brand values / personality

• A brand is a cluster of functional & emotional benefits

• Functional benefits can be copied• Competitive advantage in brands often comes

from their emotional benefits& values• Brand positioning focusses on what a brand can

DO for the consumer( functional benefits )• Brand personality focusses on what the brand

SAYs about a consumer & how they FEEL about it

PROFITABLE

AFFORDABLE

PREEMPTIVE

COMMUNICABLE

SUPERIOR

DISTINCTIVE

IMPORTANT

Service

Product

Image

Personnel

COMPETITIVE

ADVANTAGE

Relationship marketing ( RM )- definition

• An organisation engaged in proactively creating, developing and maintaining committed, interactive and profitable excahnges with selected customers ( partners ) over time is engaged in RM– Harker 1999

The Six Markets Model - Christopher

• Customers

• Referral markets

• Suppliers

• Employees

• Influencers

• Internal markets

Tutorial 3 OHT 3.3

RM- lifetime value of a customer

• Can be calculated for individual customers ( key accounts), segments of customers, or the average customer

• Objective is to calculate future profitability of customer

• Data needed– Cost of winning customer– Periodic cost of maintaining customer– Gross margin from 1st, 2nd, nth sale – Probability customer will buy 2nd, 3rd, nth time– Number of purchases made by customer from the

company

The services triangle

Varying retail structures

• Before deciding distribution strategy need to understand retail structure

• Types of store ( supermarket, dept. store, convenience stores,gas stations, Tabacs, Mom &pop ..)

• Other trade channels .. HORECA

• Concentration

15-5Cateora & Ghauri, International Marketing, European Edition, © 1999 McGraw-Hill

Choice of channels

Factors InfluencingChoice of Channels

Capital requirement

Character

Control

Coverage Continuity

Cost

Brands discussed• McDonalds India• Unilever – services• Chocolate market

segmentation• Go, No- frills airlines• Nokia segmentation• P&G segmentation• Oolong Tea

• Nescafe• Panadol China• Colgate• Orangina• Luthansa • Sony camcorder• ManU• Nokia, Pringles, Nike