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Introduction

Introduction. K4020. The Pill Cam. How do you market this?. http://www.youtube.com/watch?v=DAjlApH4qrs. Why New Products Fail. Common reasons for product failure Failure to understand consumers and competitors Too small a target market

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Introduction

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Presentation Transcript

  1. Introduction K4020

  2. The Pill Cam • How do you market this? http://www.youtube.com/watch?v=DAjlApH4qrs

  3. Why New Products Fail • Common reasons for product failure • Failure to understand consumers and competitors • Too small a target market • KODAK ULTRALIFE Lithium Power Cells, the world's first 9-volt lithium cells for consumer use • Bad timing • Low Carbohydrate Diets

  4. The Low-Carb Trend

  5. The Low-Carb Trend

  6. Why New Products Fail • Common reasons for product failure • Poor execution of marketing mix • Poor product quality • Inappropriate differentiation • No access to market

  7. What is Marketing? • To achieve organizational goals by determining the needs and wants of customers and delivering the desired benefits more effectively and efficiently than competitors • “Everything starts with the customer.” • Lou Gerstner, CEO of IBM (1993-2002) • “Creating shareholder wealth is not the purpose of the business. It is the reward for creating customer value.” • Michael Tracy and Fred Wiersema in CFO magazine

  8. Marketing Decision System Competition Product Price Promotion Place Product Price Promotion Place Company Customers Intermediaries Complements

  9. SEGMENTATION TARGETING POSITIONING ACQUISITION- RETENTION Course Objectives and Structure CUSTOMER COMPANY COMPETITION Identify Market Opportunities Set Strategy Formulate Marketing Program PRODUCT PRICE PROMOTION PLACE

  10. Course Overview: Strategy • Industry • Market definition • Market size/growth • Industry structure • Market segments • Competition • Current and future • Strength/weakness • Current behavior • Future behavior • Company • Philosophy/Mission • Image/product fit • Objectives • Capabilities • Profitability • Customer • Who buys • When, where, how • Benefit sought • Purpose of buying

  11. Course Overview: The 4Ps • Product • Features • Benefits • Packaging • Testing • Selection • Price • Skimming/penetration • Price discrimination • Setting price • Place • Outlets • Channels • Coverage • Promotions • Advertising • Measurement • Media planning • Sales promotion • Trade promotion

  12. What You Can Expect • Mix of learning environments • lecture, discussion, assignments • Useful tools and frameworks that are both quantitative and qualitative • Interesting discussion and examples

  13. Expected From You • Class Participation • Exams 1 and 2 • Project (groups of 5)

  14. Customer Analysis

  15. Overview • Understanding customers and their buying behavior • Sources of value to customers • Economic value (EVC) • Functional value • Psychological value • Measuring value

  16. Customer Analysis • Who are your customers? • Buyers vs. users / Decision making unit (DMU) • Customer’s customers • Decision making and purchase process • Who buys, when, where, .. • How do they get information • Purpose of purchase • Awareness, Info search, evaluation of alternatives, choice

  17. Value to Customers Economic Value Functional Value Psychological Value http://www.youtube.com/watch?v=c5Ljh8YvsgI

  18. Economic Value to Customers (EVC) • EVC is the maximum a customer is willing to pay • EVC is useful for: • Setting a price for a product/service • Market segmentation • Guiding new product development

  19. EVC Example

  20. Summary • Customer analysis involves understanding what customers want and how they value the competitive offerings • Three sources of values: • Psychological • Functional • Economic • Sustained competitive advantage is the result of creating and delivering customer value either better or more efficiently than competitors

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