Grain de Sail - Harvard Report

• Marketing

• Innovation

• selegting target market & determing desired positioning in consumers mind

• specify plan to achieve desired position in consumers mind

• Broad:

  • demographic

  • geographic

  • lifestyle

• Narrow, e.g.

  • user status

  • usage rate

  • loyalty status etc.

• previously 12 elements

• now aggregation to 4 elements

• = product, place, promotion, price

• Definition of the product

• Product line planning decisions

• individual item decision

• New Product Decisions

• product needs to create value e.g. the product itself, company reputation, brand, repair service etc.

• if the individual item fits to the firm’s full product line due to item interrelationships

• e.g. deleting, repositioning, improving etc.

1. Opportunity Identification —> identify consumer needs

2. Design

3. Testing

4. Product Introduction

5. Life Cycle Management —> learning from reactions of the market

• Product Line Breadth = how many different lines will the company

• Product Line Length = how many items will be in a line providing coverage of different price points

• Product Line Depth = how many types of a given product

• = Marketing Channels to “get in touch” with the consumer and "go to the market”

1. Product Information

2. Product Customization

3. Product Quality Assurance

4. Lot Size (ability to buy in small quantities)

5. Product Assortment

6. Availability

7. After-Sales Service

8. Logistics

• Channel design (which invoves both length and breath issues)

• Channel management (what policies and procedures will be used to have the necessary functions)

• indirect = independent party inbetween

• direct = no party inbetween

• account concentration

  —> larger number of customers then with Retailer

  —> smaller numer of customers then without third party

• degree of control and importance of direct customer contract

  —> lack of intermediaries

• lack of congruence in goals

  —> different opinions on distributers and manufacturer side

• lack of consensus on who is doing what

• = deciding the appropriate set of ways in which to communicate with customers

• foster consumer’s

  • awareness of the product

  • knowledge about the product’s features

  • interest in purchasing

  • likelihood of trying the product

  • likelihood of repeat purchasing it

—> effective integrated communication plan is needed

6 M’s Model:

• Market - to whom is the communication to be addressed?

• Mission - what is the objective of the communication?

• Message - what are the specific points to be communicated?

• Media - which vehicels will be used to convey the message?

• Money - how much will be spent in the effort?

• Measurement - how will impact be assessed after the campaign?

• Advertising

• Sales promotion events

• direct marketing

• public relations

• packaging

• trade shows

• personal selling

• understanding the people involved in the purchase decision making

• the roles people play in the process

• current perception of the process

• creating awareness for a product

• descirbing features of a product

• suggesting usage situations

• distinguish the product from competitors

• directing buyers to the point-of-purchase

• creating or enhancing a brand image

• consumer promotions

• trade promotions

• retailer promotions

• = used by a manufacturer and addressed to the end consumer

  • cents-off coupon

  • continuity program

• = used by the manufacturer and addressed to the trade

  • temporary off-invoice price discounts

  • cooperative advertising allowance

• = used by trade and addressed to the end consumer

  • offering a discount

  • displaying or advertising the brand

• interaction between company and potiential customer

• develop an understanding of the particular customer’s perceptions and preferences

• tailor the communications message to the particulars of the situation

• the higher the complexity of a product is

• the higher the need of education for the potential customer

—> e.g. pharamceutical companies

• demand generations

• take an order

• provididing technical support (post sales)

• transmitting customer data to the firm (post sales)

—> depending on “push” / “pull”-Situation

• push:

  • Focus on inducing intermediaries to sell the product at retail

• pull

  • End consumer pulls product through the channels

  • Retailers role just availability of the product

• Consumer is willing to pay as much as they perceive its value

• Cost should act like a floor on pricing

• Choice between a “skim” and a “penetration” strategy

• focus on those customers with high value

• “skimming-the-cream” - off the top of the market

• setting up a lower price to generate lots of sales quickly

• designed to preempt competition and gain a significant number of customers early on

• when customers are sensitive to price

• when economies of scale are important

• when adequate production capacity is available

• when there is a threat of competition

• = prices are varying

• e.g. airlines depending on the demand

• developing a product line

• controlling the availibility of lower prices

• varying prices based on observable buyer characteristics

• varying prices based on observable characteristics of the transaction

• = competitors react to pricing moves

• firms have high fixed and low variable costs

• little differentiation among competitors’ products

• industy growth rate is low

• there are barriers to capacity adjustment

• economies of scale are important

• Initiators - recognize value in solving a particular issue and stimulate search for product

• Deciders - make the choice

• Influencers - while not making the final decision, have input to it.

• Purchasers - consummate the transaction

• Users - consume the product