Download Marketing Mix - Concepts

Marketing Mix
Concepts & Perspectives
Ken Homa
Product is the heart
of marketing strategy.
Product
• Keep it simple
• Constantly regenerate
• Think “augmented”
• Link product & processes
Product is absolutely necessary,
but alone is not sufficient.
The Rest of the Story
• Distribution
• Brand
• Price
• Promotion
DISTRIBUTION
Distribution
• Maximize availability & accessibility
– Manage channels for “harmony”
- Tailored programs
- Derivative products
- Open communications
Distribution
• Maximize availability & accessibility
• Focus on the business system
– Real, sustainable efficiencies
R&D
Mfg.
Mktg.
Sales
Distrib. Serv.
Distribution
• Maximize availability & accessibility
• Focus on the business system
• Forge partnerships selectively
– Mutual benefits, real efficiencies
Distribution
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Maximize availability & accessibility
Focus on the business system
Forge partnerships selectively
Beware the “mean & nasties”
– Balance of power, concentrated risk
Distribution
• Maximize availability & accessibility
• Focus on business system
• Forge partnerships selectively
• Beware the “mean & nasties”
Volume, share & strong brands critical
BRANDING
Branding
• Major company asset
– Equity builds over time
– Insulates from competition
Branding
• Major company asset
• Basis for consumer “pull”
– Especially if high value,
or difficult to judge quality
Branding
• Major company asset
• Basis for consumer “pull”
• Frequently transferable
– Requires logical linkage
– Potential for devaluation
Branding
• Major company asset
• Basis for consumer “pull”
• Frequently transferable
• Many alternative strategies
– Multiple brands, sub-brands
Black & Decker
DeWalt
Black & Decker Spacemaker
Branding
• Major company asset
• Basis for consumer “pull”
• Frequently transferable
• Many alternative strategies
Key : Clear positioning, aggressive support
PROMOTION
Promotion
Objectives
Build awareness
Product,brand, benefits
Establish brand preference
Consumer “pull”
Create Urgency
“Call to action”
Promote new uses
Stimulate trial
Increase usage
Frequency usage
Reinforce decision
Cognitive dissonance
Promotion
Methods
• Direct sales : trade & end users
• Promotions
• Consumer communications
…Advertising
…Public relations
…Point-of-purchase
PROMOTION
Direct Selling
Direct Selling
Issues
• High cost per contact
– Lots of non-productive time
– Multiple calls to close
– Post-sale service
Key measure : net cost per order
Direct Selling
Issues
• High cost per contact
• Wide performance differential
…High independence
…Pareto (still again)
Direct Selling
Issues
• High cost per contact
• Differential performance
• High turnover
– 2-way frustration
– “Free agency”
– Sales => Management
Direct Selling
Issues
• High cost per contact
• Differential performance
• High turnover
• Organizational complexity
– Geographic coverage
– Account diversity
– Specialization or “1 face”
– Intermediation
Direct Selling
Issues
• High cost per contact
• Differential performance
• High turnover
• Organizational complexity
Potentially effective, sometimes necessary
Requires scale … issues manageable
Direct Selling
Management Focus
• Organization size / deployment
• Human resource development
– Recruiting, training, retention
• Performance management
– Objectives & quotas
– Compensation structure
Direct Selling
Current Trends
• Relationship marketing
– Key account management
• Account profitability
– Activity-based costing
• Sales force automation
– Electronic communication
High potential for self-driven achievers
PROMOTIONS
Promotions
• Goal : create urgency to buy
• Limited time period
• Consumer and/or intermediaries
• Frequently price-oriented
– Promo. allowances (PA’s)
– Coupons / rebates
– Free goods , extra quantity
Promotions
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Goal : create urgency to buy
Limited time period
Consumer and/or intermediaries
Frequently price-oriented
Event “umbrellas”
– Seasonal usage
– Legitimized discounts
– External “halo”
Promotions
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Goal : create urgency to buy
Limited time period
Consumer and/or intermediaries
Frequently price-oriented
Event “umbrellas”
Integrated programming
Price incentives
plus
Communication
Sell-in, sell-out
Promotions
Issues
• “Entitlement” psychology
…Waiting for deals
…“Forward buying”
• Brand “devaluation”
…Quality perceptions
…New perceived price
• Logistical complexity
…Special handling
…Induced highs & lows
Promotions
Current Trends
• Everyday Low Pricing
…Less price emphasis
…Muted perturbations
• “Guerilla” tactics
…Any time, any place
• Big events
…Breaking thru the clutter
KFS = Integration + Execution
PROMOTION
Market Communication
Market Communication
• Goal : effective messages
• Multiple objectives :
– Awareness, preference, action
– End users, intermediaries, “others”
• Multiple attacks :
– Mass vs. targeted
– Alternative media
Market Communication
Alternative Media
• Advertising
• Public Relations
• In-store merchandising
• Direct Marketing
Market Communication
Direct Marketing
• Extreme segmentation
– Small groups & 1-on-1
• Leveraged technology
– “800” phone service
– Massive databases
• Service-oriented
– Fast order to delivery
– Satisfaction guaranteed
Market Communication
Direct Marketing - Issues
• Service requirements
– People + infrastructure
• Partnership dependent
– Highly sensitive supply chain
• Surprisingly easy entry
– Uneven performance & ethics
Trend : Test marketing & self-funding ads
Market Communication
In-Store Merchandising
• Goal : “moment of truth” message
• Multiple related formats
…Packaging
…Displays
…Signage
• Very difficult logistics
…Multi-site consistency
…Maintenance
Clear advantage to direct suppliers
Market Communication
Public Relations
• Goal : “free” exposure “in context”
• Requires some newsworthiness
…Hurdle surprisingly low
• Frequent use of celebrities
…High visibility
…Easy placement
…“Halo” effect
…Risky business
Market Communication
Public Relations - KFS
• Clear objectives & targets
• Intense proactivity
• Turnkey packages
• Measured performance
• Aggressive remediation
Market Communications
Advertising
• How much ?
• What message ?
• Which media ?
• When ?
Market Communications
Advertising - How much ?
• Affordability ($$$ or % sales)
• Sustained trend (tradition)
• Competitive reference
(“Share of Voice”)
• Task and method
– Bottoms up approach
– Reach & frequency (GRP)
Market Communications
Advertising - Share of Voice
Market Communications
Advertising - Where ?
• Media
– Electronic (TV. radio)
– Print (Magazines, newspapers)
– “Alternative” (Context placements)
• Buying Options
– National / network
– Local / spot
– Up-front / “remnant”
Trend : targeting … Tendency : ego
Market Communications
Advertising - When ?
• Sustained, on-going
• “Flighting”
• Seasonal “pulsing”
Opinion : discontinuity breeds forgetfulness, fast !
Market Communications
Advertising - KFS
• Don’t underspend
…Critical thresholds, continuity
…Rule of 3X
• Tailor message to audience
…Consumer perceptions !
• Match media to objectives
…Caution : ego-driven business
• Look for market inefficiencies
…New media & “value” buys
SO WHAT ?
Mega-Takeaways
• Product necessary but not sufficient
• Pricing is the grand equalizer
• Distribution can be an advantage
… or a major threat / risk
• Promotion has many facets : Use them!
• Integration & implementation separates
the winners from the losers