Customer Value Is a bundle of benefit customers expect

from a brand. As well as, the bundle of costs customer

expect to incur in evaluating, obtaining, and using the product or service

Customer Value=Benefits−Costs

Core Benefit1. Product2. Attribute – functional utility3. Quality – satisfies preferences and

expectations4. Uses—occasions of its use

Product Attribute Benefits based on attribute that provides

functional utilityEx: Volvo is a safe durable car because of its light weight design

Product Quality The collection of features of a product

that satisfies a consumers preference and expectation Durability Warranty On-time Easy-to-deal with Reasonable cost

Product Uses What the product is used for, occasions

Ex: Gatorade to sustain high level of performanceEx: Starbucks as a familiar upscale place to relax and have coffee

Communicating Core Benefits

1. User Imagery —

shows types of people who uses the product most often.

2. Symbols — is an object that represents, stands for, or suggest an idea, belief, or action.

In marketing, symbols take the form of words, sounds, visual image, and logos to represent a brand for easy recognition and recall.

Ex: häagen-dazs logo/word is used to communicate a Belgium like ice cream.

3. Country of Origin — the origin of the brand can add credibility

Ex: “Made in China”

4. Emotional Benefits — the purchase or use of a brand gives the customer a positive feeling

Ex: warm when buying or reading Hallmark cardsEx: Strong and rugged when wearing Levi’s

5. Brand Personality — is the set of human characteristics associated with a brand

Brand Personality

Emotional Benefits

USER IMAGERY

Country of Origin

SYMBOLS

ProductQuality

UsesAttributes

Gender Age Socio-economic class

Ex: frugal and unpretentious by shopping at SM Mall

Limitations of Product Core Benefits

When all brands are perceived to be adequate on an attribute

The uniqueness is important, otherwise it is not a differentiator

Can be easily copied Assumes that customer is a rational

decision-maker all the time, which they aren’t

o Many customers do not care as much about function as they do about style, status, reassurance, and other less functional benefits.

Marketing PlanningA planner considers these questions: Where will sales next year come from? What is the business environment?

How can the Brand grow?

Four (4) Step Marketing Management Process

1. Analysis of Market Opportunities2. Develop Marketing Strategy3. Action Plan & Budget4. Execute & Monitor

1. Situational Analysis Customer Competitors Market Environment Brand Performance

2. Marketing Strategy Objectives of sales and market share

Marketing mix strategy

3. Action Plan and Budget Product Plan Pricing Advertising/Promotion Distribution

4. Execute and Monitor

MARKETING OPTIONSMarket

Existing NewProduct

Same Market Penetration

Market Development

New Product Development

Diversification

Option 1: Marketing Penetrationa. Encourage Frequent Use

Ex. Coke big bottle to smaller bottles

b. Increase Quantity of UseEx. Lucky Me is a snack but it was introduce for breakfast as well

c. Make New ApplicationsEx. Baking Soda can take away bad odors

d. Attract Competitor’s CustomersEx. Coke regular to coke zero

Growth in the current market segment

Segmentation Is a process of placing the buyer in a product market into sub groups so that members of each segment displays similar responsiveness to a particular marketing strategy

.The target customer…

Know the product attributes and bundles of benefits that satisfy customers needs and wants

Respond positively to the emotional and social appeals as they are experienced in

Existing Customers

Customers Using Other BrandsProduct Offerings

the pricing point of sale and advertising material.

Are predisposed to the product concept and willing to try

Reasons for Segmentation of Market Markets are no longer “one size fits all,”

requiring different value offerings Consumer s that are similar will behave

and respond in particular way to a given stimulus

Products with different features will appeal to another set of consumers

Shared Characteristicsa. Demographicb. Behavioristicc. Psychographic

Segmentation by Demographic Age: under 6; 6-11; 12-19; 20-34; 35-49;

50-64; 65+ Sex: male, female Income: low, middle, high Religion: Catholic, Muslim, Protestant Geographic: Luzon, Visayas, Mindanao

Segmentation by Behavioristic- Group consumers by purchase behavior- Tells us who the customers are, when

they buy and how much

Variables of Behavioristic Benefits Sought

economy, convenience, prestige User Status

nonuser, first-timers, regular Usage Rate

light, medium, heavy Usage Type

product type, size, flavor Purchase Occasion:

regular, special occasion

Option 2: Market Development Strategya. Discover New Customer Segment

Ex. Coke life

b. Seek New Distribution ChannelsEx. ATM machines in Malls

c. Sell in New Geographic LocationsEx. Penshoppe form Cebu to Manila

Analyzing Competitioni. Performance

Size and growth of company Firms that represent the most direct

competitionii. Marketing Practice

Pricing Advertising (positioning) and Media

Spending Sales Promotion Activities Distribution Surveys

iii. Customer Motivations What is important to the customers?

Identify Customers- Competitors are group of firms that offer

similar products that are close substitute.- Products that can satisfy same customer

need from another category

Understand Competitor Strengths and Weaknesses

- In what areas are they successful? Unsuccessful?

- What relevant assets and competencies do they have? Not have?

- What are the key customer motivations?- Which components of the value chain can

create competitive advantage?

Competitive Force that Shape Strategy- Rivalry among existing firms- Threat

Internal AnalysisComponents Reasons

Sales Satisfy desire for productMarket Share Better than competitorsAdvertising, promo, price, distributions

Communication, value, and convenience

Customer relationship Long-term, sustainable development

Situational AnalysisExternal Analysis Internal Analysis

- Customer- Competition- Market- Environment

(opportunities and threats)

- Performance- Current

Marketing (strengths and weaknesses)

Marketing Plan Framework

STEP 1: Strategy Analysis- Customer- Consumer- Market Environment- Brand Performance

STEP 2: Marketing Objectives- Sales and Share- New Product- Problems from step 1

STEP 3: Marketing Strategy- Target Market- Marketing Mix- Competitive Advantage- Opportunities and Threats

Marketing Objectivesa. Financial result that provide Sale

revenues and profitb. Track progress against

competition and guide for future possibilities

Market Share

c. Source of future revenues and profits

New Product Sales

Market ForecastingTotal

2008 2009Champion 35 ?Tide 60 ?Total 346 ?

Given: Total market share in 09 will increase 10%

Solution for Tide:

I. Total market share in 2009

(346×0.10 )+346=380.60

II. Current market share (2008)

60346

=17.34%

III. Sales in 2009

(60×1.10 )=66

Total2008 2009

Champion 35 ?Tide 60 66Total 346 280.60

IV. Recommended Growth Sales in 2009

Action Plan and Budget

Marketing Strategy

Marketing Objective

Strategy Analysis

Market share in 2009 should be greater than market share in 2008 (safe increase is between 1-5pts)

STEP1 :17%+4=21%

STEP2 :0.21×380.60=83.732recommended growth sales

STEP3 :83.732÷60=1.3955∨39.55%recommended growthrate

Option 3: Product Development Strategy1. New Product Innovation

- Enhance existing product

2. Product Line Expansion- Provide more product to sell- Additional items in different product

class and using different brand names but are under one (1) companyEx. Lacoste bag, perfume, and apparelEx. Hershey’s dark, white, and milk chocolate

3. New Generation Product- Big changes

Ex. Apple Touch ScreensEx. Samsung Curve

4. Line Extension Product- Change in size or taste- Provides variety- Expands user base- A way of defending their market so

that competitors would have a hard time finding a niche within the market.

- Additional items in the same product class using the same brand name.Ex. San Miguel Pale to San Miguel Light

Problems with Line Expansion New brand name cost a lot of money to

establish

Problems with Line Extension Confuse the market Create their own competition

Known brands can have a negative connotation to new product

Think “ Where to Compete”1. Defend core products from sharing

corrosion among current target market2. Identify new markets and segments3. Develop new product variants that appeal

to market taste preferences.