Marketing Management

Marketing Management
I. The role of marketing in the company
Evolution of management methods
Orientation production: the company is interested in the tool / capacityAssumption: consumers choose products based on their price and availabilityObjective: To increase capacity and improve the efficiency of the distribution
Product orientation: the company is focused on the productHypothesis: the consumer prefers the product that offers the best performanceObjective: To improve the quality of the productExample: high-tech companies

Orientation Sales are implemented aggressive sales tools to buy the productHypothesis: "The products are sold, not bought"Objective: To use sales techniques to the most aggressive buy the product
Marketing orientationHypothesis needs to be understood in order to meetObjective: To develop products or services that meet those needs
Definition of Marketing
The company must identify the needs and wants of target consumers and produce the desired satisfactions profitably as more effective than the competition. central objective: to satisfy the consumer
A philosophy of management: Meeting the needs of consumers Integration of the organization to meet these needs Obtaining long-term profits through the satisfaction of these needs
Double face of marketing Strategic marketing: strategic decisions fundamental analysis + Marketing Operational execution / implementation
Steps in the strategic and operational marketingStrategic Marketing Operational Marketing
 Choice of marketing audit analysis Identification 4PExternal analysis criteria of attractiveness - Product- Consumer segmentation and differentiation - Price- Competitors competitiveness - Communication- Market - DistributionStrategy-EnvironmentInternal analysis development- Company
 Opportunitiesand threats Forces andweaknesses

Types of strategic marketing
 Marketing strategic response: innovation driven by market we identify unmet needs and then develops a solution for this
 Strategic Marketing of creation: innovation driven by the company we verify the existence of a potential market and then creates a product / service (cooperationbetween marketing e R & D is essential)
Concept of market-orientationThe market-orientation implies that all functions in the company take into account in their analysis, all the actors or stakeholders that influence the buying decision.5 key factors to consider (5C): End customer Client distribution Competition Climate socio-economic Coordinating cross-functional (in terms of the internal organization of the company)
Major changes affecting the marketing
Socio-cultural change: The emergence of new segmentso Seniors, one-person household, household dual-income, working women, etc.. Appearance of new consumers  change purchasing behavioro Feeling of Power, professionalism in buying behavior, new expectations Consumerism (client = king)Creating a power-cons: consumer groups, pressure groups creation of customer service in business
Development of new technologies, competition and technological innovation
Environmental movement: awareness of the scarcity of natural resources Awareness of the impact of marketing and consumption on the environment goal: improving the quality of life and not customer satisfaction
Power of retailers:Distributors are not passive intermediaries. More and bigger, they are a great bargaining power, creating their own brands and great professionalism with new technologies.
Emergence Marketing responsible or ethical= Optical short-term needs of consumer ≠ their long-term interests
Globalization of the economy = market globalizationGlobalization strategies allows economies of scale  problem of choice between standardization and adaptation.

Limits of the concept of marketing needs met in the short or long term? Satisfaction of individual or collective needs? Products demanded by the market or pushed by technology?
Recent developments
Global Marketing Definition of marketing strategies at the global or regional Structural Changes Economies of scale in production, distribution, marketing and management Development of international brands at the expense of local brands.
Relationship Marketing  gives priority to relations with customersA loyal customer is more profitable than a new customer.
Trade marketingB2B marketing approach, the aim being to identify the expectations of each distributor to develop personal relationships with him at LT. The Trade Marketing of sets, policies, products, merchandising, logistics, promotion.
Direct marketing (new technology)= Contact postal, telephone, data transmission or other means of applying a specific message response from customers or prospects (face to face sales, mailings [print, email, etc..] Catalog sales, telemarketing, shopping, "kiosks", online marketing). Through targeted information, ability to customize messages and contacts with the customer (CRM = Customer Relationship Management).
Brand ManagementBrand can have its own existence (beyond the product), existence greater than that of the product. Brands represent tangible and intangible benefits (at the imagination of consumers). Brands become the capital of the company.New strategies: brand extension = use a name that has proven itself to launch a product belonging to a new category; co-branding = combination of two trademarks to market the same product. Advantage: alliance with a leader that can help increase the brand awareness partner (for example). Disadvantages: risk of cannibalization of a product of one partner. Example, logo appears "Intel Inside" on advertisements / products of major brands of computers, the campaign Bacardi-Coke); change of names.

 II. The analysis of needs and buyer behavior
The concept of need
We distinguish generic needs (innate nature) and derived requirements (granted, cultural, social). Example, the automobile needs derived from the generic needs of individual transport. Saturation affects the need for secondary and not the generic need, hence the importance of defining the mission of the company in terms of required credits.According to Kotler, a sense of need is linked to lack the human condition, while desire is the preferred means of meeting a need.
Theories of needs: Maslow's Hierarchy of Needs
Five groups of needs are identified: physiological needs: the need to feed, breed; security requirements: the physical and psychological security, the need to feel in control of their destiny; social needs: the need to join a group, to join his fellow men, need to love and be loved, caring, belonging, a sense of community; esteem needs: esteem / recognition that others have for us; fulfillment needs: self-realization, personal growth, the need to excel, to find the reason.
All behavior is determined by the search needs. Research needs are prioritized. Man seeks first to meet the basic needs to rise thereafter. Self-realization is not possible if first the physiological needs are not met. But we must bear in mind that the needs do not exist to the same extent in all individuals.
Purchasing behavior
Three roles in the customer's buying behavior: User: benefits from the service Payer: finance the purchase Buyer: buysEach role can be exercised by the same person or different people.
Different types of perceived risk: the risk functional (car does not work), financial risk (price), physical risk, social risk (product purchased is no longer in fashion), risk of loss of time, psychological risk ( disappointment of purchase).
Degree of customer involvement: involving high (eg for the purchase of an apartment) or low involvement (for the purchase of matches).
The response from buyers
Hierarchical model of response Answer cognitive (LEARN): fame, recognition Emotional Response (FEEL): feelings, attitudes, preferences behavioral response (OD = buy): test, purchase, repeat purchase, loyalty
Model of Foote, Cone and Belging (FCB)

 1. life insurance, computer2. car shows3. disposable razor, soap4. chocolate, soft drinks, snacks
Measures of cognitive response: notoriety (= degree of brand awareness in the individual) or assisted spontaneous recall of the brand (degree of retention of the brand that everyone has seen on TV)
Measures of behavioral response: sales of the product; market share; brand loyalty (loyalty card, subscription, coupon); satisfaction (main factor of loyalty): a satisfied customer will stay loyal longer, buys more, it is less price sensitive and less influenced by the competition. A loyalty through an effective relationship marketing
Buying behavior in the industrial market
Differences at three levels Nature of request:o derived demand (dependent on one or more applications downstream)o fairly inelastic demand and fluctuating  more complex analysis Structure and nature of the client (multiple clients, collegiate structure)o purchasing decisions made by mallso multi-stakeholder (customer, user, prescriber, decision maker, filters)o fewer buyers and more purchaseso close trade relations Types of industrial productso develop products for other consumer products or industrialo products to enable the achievement of business operationso lice products purchased for resale
 III. Market segmentation
Macro-segmentation  Identification of product-market
Define the relevant market from the perspective of the buyer groups  What to buy? What technologies? What needs?
Micro-segmentation  Identifying consumer segments
Strategy for identifying groups of buyers with similar needs. The objective is to develop a marketing program that meets the needs of these consumers.
Segmentation variables:
 Segmentation socio-demographico Socio-demographic characteristics: age, gender, income, educational level, socio-professional classes, etc..o Advantages: (1) ease of access to information, (2) ease of access by a targeted marketing mixo Disadvantages: (1) Consumers do they share the same needs? (2) underestimation of cultural trends (3) No new or original segmentations
 Segmentation by benefits soughto consumers are grouped according to the benefits they are looking into buying the product. For example, razor quality, accuracy, price. But also design, branding, etc..o This segment includes: (1) the list of benefits or attributes associated with the product category (2) an assessment of the relative importance of each attribute (3) a group of buyers that give equal weight to attributes. multi-attribute modelo Advantage: logical segmentationo Limitations: (1) difficulty in identifying the benefits to favor (2) conducting market research rather expensive (3) Loss of consciousness profit socio-demographic
 Segmentation Psychographic (lifestyle or socio-cultural)o Consumers can be grouped according to their opinions or their value system.o Ex: 6 consumer groups in Europe (socio-style) the dynamic (material values), the devotees (values ​​of tradition, duty), the altruistic (collective welfare, social issues), the respondents ( family relationships), the hedonistic (pleasure, individual well-being), creative (education, knowledge, technology).o Advantages: (1) needs more and more related to trends or lifestyles (2) identification of new original segmentso Disadvantages: (1) studies of the socio-style: information is not always reliable or representative (2) risk of bad decisions
 Behavioral Segmentationo Consumers are grouped according to their buying behavior.o The criteria: user status (frequent or occasional), utilization (user large, medium, low), loyalty status, buying opportunity
Conditions for effective segmentation: Segments homogeneous consumers in this segment have the same needs Segments measurable: we must estimate the size of the segment Segments substantial: it is necessary that there are enough consumers Segments open to all marketing activities (eg media I have needed to touch the segment identified)
Types of segmentation Segmentation to a variable: a variable is used to divide the market. The segment is less accurate. Segmentation multi-varibales: more info on consumers, more satisfying marketing mix by segment, less consumer segment.Segmentation of industrial markets
Segmentation by benefits sought The most natural method as based on specific needs and defined. Classification of customers by industry type and end user. For example, Arcelor (steel Belgian company) has an interest in segmenting customers according to different needs: automotive, appliance, construction, etc..
Socio-demographic segmentation Criteria describing the client's profile such as industrial activity, location, size of company (large or SME), the composition of shareholders, etc..
Behavioral segmentation Segmentation common in industrial markets. We will put customers according to their structures and how they work shopping center.
Hedging strategies
Undifferentiated marketing strategyObjective: to treat the market as a whole (single market). It does not take account of different segments. All consumers are potential customers.
Differentiated marketing strategy Objective: target several market segments and each segment dealing with marketing strategies. Disadvantage: costs are higher because a marketing program is tailored to each segment. Advantage: wider market coverage For example, L'Oréal Lancôme and Biotherm (sold in perfumery), Vichy (pharmacies), L'Oreal and Garnier (supermarkets), Redken (hair salons). These products are competing with each other.
Marketing strategy focused Objective: to specialize in one segment, being the best in the segment chosen. It's niche marketing. This strategy applies especially for small and medium enterprises. The choice of hedging strategy will depend on the number of viable segments and corporate resources.
Targeting
Targeting will allow you to select target segments that the company wants to occupy.Segment consists of cutting the market.Target is to select market segments to occupy.Targeting is based on the analysis of: attractiveness of the segment (level of demand and phases of life cycle) Competitiveness segment (competitive position, strengths and weaknesses of competitors)The objectives and corporate resources also play a role.
 IV. Attractiveness. Demand analysis and market
Basic concept
Primary demand (market demand) = total quantity purchased by a group of buyers determined in a place and at any given time in a given environment.Ask the company (brand) = share of primary demand corresponding to the market share held by the mark in a particular market.
Examples: If Brand A has a volume growth of 15% and primary demand as 15%, the brand keeps the same PDM, no extraordinary result. If Brand A has a volume growth of 15% with primary demand growing by 20%  fuck the PDM A brand of 5%. If Brand A volume decrease of 5% with primary demand which decreases  10% increase in market share.
The primary demand is based on certain factors: factor out of control environment for the company: end customers, intermediate customers (distributors, ...), competitors, macro-marketing (price changes, economic situation); Total pressure marketing: 4P.
Current and potential market absolute Potential market today: marketing depends on the pressure exerted. Market Potential absolute limit to which tends the primary demand.o Assumptions: Any potential user of a product is effective user.Each user uses the product on each occasion of use.Each is made using the optimal dose.
Primary structure of demand
Demand for consumer goods Demand for consumer goods (volume)Q = primary demand in unitsn = number of consumer unitq = quantity consumed per unit Demand for consumer goods (by value)
R = total revenueP = average price per unit
 Request for perishable consumer goodsunits of consumption potential utilization * * penetrationutilization rate = number of actual users / potential userspenetration rate = unit consumption / actual user
 Application for consumer durableso Request for original equipment = f• equipment rate of consumption units existing• Number of consumer units newo Replacement Request = f• size of the existing• age distribution of the park• life of the product• replacement rate• possible effect of substitutionRequest for service Same as consumer good, but characteristics of the service request:o intangibility of services  importance of trust / reputationo perishability   not be stored concept of load factorInseparability o  importance of customer interaction / service providerVariability in the quality o
Demand for industrial goods Request derivative Consumables Industrial Goods: see consumer goods Application of industrial components  depends on the quantity manufactured by client company Demand for capital goods industry  cfr consumer durables but linked to the production capacity of enterprise customerso accelerator effect
Model life cycle
Life cycle of a product (CVP) dynamic evolution of demand over timeStrategic involvement of CVP:• approx. Eco and conc. ≠ in each phase is• strategic objectives for each phase is redefined• costs and profits at each stage ≠• marketing program is adapted to
 each phase
Applications of CVP:• life cycle of a product-market
    - Different in each product-market
    - Depending on the product (technology) but
      as the market (aggregate demand)• Life cycle of a brand
    - Controlled by the variables E
Limitations of CVP:• Diversity profiles of Ts CVP  products do not go through phases tt• Innovation breaking  E can influence the shape of the curve by innovating
Introductory phase Features: slow-growing saleso technological developmento distribution is builto motivate buyers (habits or high prices)o competition rarely (if innovator) high degree of uncertainty and financial risk Priority objectives: create demand as quickly as possibleo create product awarenesso inform the market of product benefitso encourage buyers to try the producto introduce the product in distribution networks Marketing mix:o Basic design of the producto selective and exclusive distributiono ability to charge high priceso informative communicationGrowth phase Features: rapid development of applicationo occupancy rate increases rapidly "grapevine"o lower costs of production (experience effect)o Product no longer availableo new competitors arrive (Pacific) Priority objectives:o expand and develop the marketo build a strong brand imageo create and maintain brand loyalty Marketing mix:o improve the product (characteristics)o adopt a mass distributiono reduce priceso Communication (cover)
Phase turbulence Features:o demand is growing at a decreasing rateo target = majorityo weaker competitors exit the marketo sector focuses Priority objectives:o segment the market in creative wayso maximize the PDMo maintain brand loyalty Marketing mix:o Product differentiation guided by the target segmentso maximum coverage in distributiono prices based on the perceived valueo communication tailored to segments
Mature Features:o low growth - occupancy rates / high penetrationo very segmented market (covers all needs)o some strong competitorso technologies unmarked Priority objectives: increase the PDMo differentiate the product of new Attributes basketso search for new niches or nicheso avoid price competitiono adopt a relationship marketing
Phase of decline Features: structural decline in demando New products appear more efficiento consumer habits are changingo changes in socio economic policy Priority objectives:o divesto specialize in a residual market
 V. Competitiveness. Analysis of the competitive structure
The concept of competitive advantage
Definition: A set of characteristics or attributes held by a product or a brand that gives it a certain superiority vis-à-vis direct competitors.
It is essential to be differentiated from the competition  differentiation on the basis of competitive advantage external or internal.
External competitive advantage Qualities distinctive product that sets market power  differentiation strategy Allows you to adopt a sales price higher than the competition
Internal competitive advantage Superiority of the company in controlling costs, giving it a lower cost price  strategy of cost leadership (low cost strategy) Problem: Always keep the lowest prices on the market
The benefit cost and the effect of experience
The benefit cost Presence of a gap in cost due to better productivity In areas of intensive labor, lower costs is seen as and as the company builds on the experience learning process
The law of Experience: the unit cost of the added value of a homogeneous product, measured in constant currency, decreases by a fixed percentage and predictable every time cumulative production doubleexperience of workers ↑   more efficient production cost reductions consistent and predictable
expected cost = base cost * (cumulative planned qty / Qty cumulative basis)-e
Causes of the law of Experience: Effectiveness of manual work Specialization of labor and methods New manufacturing processes / innovation Best production equipment Modification of the resources used New product design
Strategic implications of the effect of experience: Accumulation of the highest production cost = lowest Interest down there as soon as the curve Goal is to grow faster than competitors Increase from the start of the activity where experience gains are highest The most effective way is to adopt a penetration pricing
Limits the effect of experience: Application in certain industries Little learning effect when:o Share of value added is low in the producto technological superiority of a competitor with a low market shareo Effects of experience wiped out by technological innovationso non-price sensitive marketo Concurrent is a source of privilegedo Strategic factors other than PDM affect profitability (eg differentiation)The notion of extended rivalry
5 dimensions of the attractiveness of a market according to Porter: threat to the intensity of competition threat of new entrants threat of substitute products bargaining power of customers bargaining power of suppliers
Threat of new entrants firms outside the market firms seeking synergies firms for which the entry is a logical extension of their strategy customers / suppliers who want an integrated upstream / downstreamThreat of new entrants depends on:(1) The existence of entry barriers• Economies of scale• Patents• Strength of brand equity• Capital requirements• Transfer Costs• Access to distribution channels• Effects of experience and benefit costs(2) Capacity of response established competitors
Threat of substitute products(1) Products that meet the same need credits.(2) Products that perform a similar function for the same group of buyers but are based on a different technology.
Bargaining power of customers influence profitability through pressure to lower prices importance depends on:o customer group is concentrated or purchases large quantitieso products purchased by the customer are an important part of its costo products purchased are poorly differentiatedo transfer costs lowo threat of backward integration
Bargaining power of suppliers ability to raise prices, reduce the amount importance depends on:o group of suppliers is more concentrated than the client groupo no threat of substitute productso not an important customer for the suppliero product is an important means of production for the customero Product differentiation supplierso threat of suppliers to integrate downstream
Knowledge of competitors
Who are they? What are their goals? What are their strategies? What are their strengths and weaknesses? What are their modes of reaction? What means do they have?Four types of competitive strategies
Strategies of the leader Development Strategies in global demand for the product:o search for new userso promote new uses of the producto convince the market to consume more product every time Defensive Strategy = PDM protect against competitors in the most dangerous Offensive strategy = benefit from the effects of experience and improve profitability Strategy = demarketing voluntarily reduce PDM
= Challenger strategies to increase its PDM at the expense of a competitor frontal attack = object directly to the leader using the same weapons Attacks = opposing side at a point where the leader is weak or ill-prepared
Strategies of the follower Aligns its decisions on the leader saw its small market share strategy to follow: segment creatively, effectively use the R & D, think small
Strategies Specialist The segment chosen should:o be a sufficient profit potentialo have a growth potentialo between unattractive for competitiono meet the distinctive competencies of the companyo have a defensible barrier to entry

 VI. Positioning
Definition of positioning
The differentiation strategy is to give the product a definite place in the minds of consumers in relation to competition. Differentiate, if possible by finding a sustainable competitive advantage
Types of differentiation
Product differentiation: quality, performance, reliability, design, technological innovation
Differentiation by the service: ease of operation, delays, installation, training, consulting, repair
Differentiation from the image: brand personality
Differentiation by price: high-end low-end price / quality ratio
Value chain (Porter)
One of the possible tools in the search for a distinguishing featureGoal: To create a substantial competitive advantage and sustainable (external).Principles: a company represents a set of activities, each activity is a potential source of differentiation (R & D, production, logistics and marketing).
Criteria for good differentiation
 To be unique compared to competitors Important for the buyer defensible long-term Communicable Financially viable
Relationship marketing mix
Positioning defines the basic strategy chosen for the product / brand. It is reflected in the choice of marketing mix (4P). The elements of the marketing mix must be fully consistent with the positioning.
 VII. Marketing information tools
Marketing information system
SIM is to collect, sort, analyze and distribute relevant and valid information from sources inside and outside the company and to serve as a basis for marketing decisions.
Evolution of information systems
 Progress considerable technical and information processing Many companies have no real service market research Many mangers who are not satisfied with the information received: irrelevant info, info too abundant, too dispersed in the company, presented some operational runs poorly or too late, the difficulty of assessing validity.
Structure of a marketing information system
The role of SIM is to help the manager to express their needs, gather information and disseminate it in time. Information gathered through: States accounting internal sales analysis, reflection on the product lines (product sales), analysis of sales by customer, job analysis of the sales force Marketing Intelligence (information system):o Data on the environment and competitiono there are ways to improve the system info:• using more systematically the sales force• Establish a monitoring system of competition• using the services of research company Studies and Research
Types of studies
Exploratory Studies: Qualitative studies (use of secondary data, focus group, "one to one" expert interviews, case analysis)Advantages: flexibility, imagination, little formality, speed, less expensive than quantitative analysisDisadvantages: Results not shown but only indicative results can be subjective (interpretation)
Descriptive studies (quantitative): Objectives: to provide a photograph or monitor an aspect of the market Types of surveys: personal interview, by telephone, by mail, e-mail
Studies causal Analysis of causal links by sophisticated statistical treatments
 VIII. Portfolio analysis and selection of basic strategies
Portfolio Analysis
Objective: To help the company allocate its resources among its various product-marketAnalysis is to identify the strategic position of each product-market by: market attractiveness competitive strength of the company
Matrix of Boston Consulting Group (BCG)
The BCG Matrix is ​​built around two criteria: the rate of growth of the segment-set target indicator of attractiveness, and the PDM on the most dangerous competitor that is used as an indicator of competitiveness.

 The strategic goals, financial need and contribution to profit will be different for each group

The circles indicate the position of areas of the east.Their surface is proportional to the CA


The fast-growing markets are those that increase by over 10% per year.
The PDM compares the relative sales of the company to those of competitors (the company's sales not included). If the company has explored 30% of its three main competitors 20%, 15% and 10% and 25% of the other group, the PDM on this company will be 43% (30% ÷ 70%) . If the PDM relative is defined in relation to the three largest competitors, on the PDM will be 67% (30% ÷ 45%). In general, we consider a PDM on> 33% is high.If Brand A has a PDM 10% in a market where the largest competitor has a 20% PDM, the PDM on A will be 0.5 (10% ÷ 20%), which is on a PDM low as less than unity. Similarly, the brand will have a PDM B 2 (20% ÷ 10%), which is high according to the BCG matrix.
The typology of product-market:
Stars experiencing strong growth and high relative hold a PDM. They are hungry for funds that allow them to continue to grow. This, however, a slow day and the stars will gradually become cash cows.Objective: To develop the PDMStrategies: protect the PDM get new users prices down if necessary
Cows have a high PDM in low growth. They give off a substantial amount of cash that allows the company to finance other activities in search of investment, particularly the dilemmas.Priority objective: collectStrategies: keep a PDM dominant invest in cost reduction and technology, avoid overinvest
Dilemmas correspond to activities with low PDM strong growth. The company should assign substantial financial resources to maintain or even increase, the PDM. It is not certain that this is enough to make them stars. In this case, they would become over time the dead weight.Objective: selective developmentStrategies: invest heavily to increase the PDM buying competitors disinvest when necessary
Dead weights have no significant growth or PDM. They find it very difficult to survive and can not in any way contribute to the growth of other activities.Objectives: abandonment or low profileStrategies: target a specific segment cream by reducing support divest
Diagnostic Portfolio: The position of the matrix gives an indication of the potential strategy for each product / market. The position on the matrix it possible to assess the financial needs and earning potential. The distribution of turnover according to the quadrants used to evaluate the balance of the portfolio. Development of scenario to maintain or restore balance
Development scenarios: Innovative: The funds generated by cash cows are invested in R & D to enter a market with a new product that will supersede the existing flagship products. Follower: The resources provided by the cows are used for the problem child in a market dominated by a leader to adopt an aggressive strategy of development of the PDM. Disaster: A star product reduces its PDM due to insufficient investment and become problem child. Weak permanent: The situation in which a problem child continues to vegetate but failed to increase its PDM and joined the quadrant of lame ducks.
Advantage of the BCG matrix: strength of theoretical development use of objective indicators of attractiveness and competitiveness visual summary of the activities of the firm

Limitations of the BCG matrix: fundamental assumption of BCG is the existence of the effect of experience (industry volume): a high relative PDM involves a competitive advantage in terms of cost compared to competitors, conversely, a relatively low PDM involves a disadvantage in terms of cost. However, the effect of experience may not be observed in all the products-markets in the portfolio company. The method is based solely on the notion of competitive advantage internally and does not take into account the external competitive advantage available to a company or brand, successful strategy of differentiation. These products are called lame ducks, simply because they hold a PDM low compared to the leader, could well be profitable if they were offering distinctive qualities valued by buyers willing to pay a surcharge to offset the handicap of cost. measurement difficulties general guidelines, no specific recommendations
Matrix attractiveness / competitiveness (General Electric)
The objective to be assigned to each work area can not really be determined from its position in the matrix only growth / market share. When other factors are incorporated into the analysis (for example, the attractiveness of the market may depend on its accessibility, size, the existence of an organized distribution network, enabling legislation, the absence of strong competitors; the competitive advantage held by the company may come from an image, a technological advance, etc..) gives a more elaborate classification system as the matrix of nine cells strategic analysis proposed by the company General Electric. The figure shows the matrix in the case of an industrial equipment company engaged in seven areas. The surface of the circles is proportional to this time the size of the sector while the shaded area represents the market share. Thus, we are interested in the company holds 30% market share of clutch systems, an area of ​​relatively low importance.

In fact, there are nine in such a matrix cells grouped into three zones: the shaded area, the diagonal color bistre and sepia halftone area. The shaded area corresponds to cases where the attractiveness of the sector is substantial as well as the competence of the company in the field. The rule is then to invest for growth. The area includes situations diagonal attractive way. The rule here is the status quo. Finally, the hatched area bistre gathers for low interest.


Weight Score Weight Total Score TotalGlobal market size 0.20 4 0.80 4 0.10 Market share 0.40Annual growth rate 0.20 1.00 5 Growth in market share 2 0.15 0.30Profit margin rose 0.15 4 0.60 4 0.10 Product quality 0.40Intensity of competition 2 0.15 0.30 Brand reputation 0.10 5 0.50Technological know-how 0.15 4 0.60 4 0.05 Distribution network 0.20Sensitivity to inflation 0.05 3 0.15 3 0.15 0.05 Efficiency promotionalEnergy requirements 0.05 2 0.10 3 0.05 Capacity 0.15Environmental impact 3 0.05 2 0.10 0.05 0.15 ProductivityEnvironment Unit Costs 0.15 0.45 3politico-socio-legal: Raw materials should be acceptable 0.05 5 0.25
 Research and development 0.10 0.30 3
 Management 0.05 4 0.20Market attractiveness 1.00 3.70 1.00 3.40 COMPETITIVE POSITIONFormulation of basic strategies
The first step to take in the preparation of a development strategy is to determine the nature of competitive advantage defensible (ACD) to serve as a support for strategic and tactical actions later. Competitive advantage can be defined by reference to two dimensions: a productivity (the benefit is marked in terms of cost) and a dimension of market power (the benefit is in terms of maximum acceptable sale price) .
3 large basic strategies (Porter)
Cost leadershipThe first basic strategy is based on the size and productivity is generally linked to the existence of a fact of experience. This strategy aims to enhance the effects of experience to get a low price relative to competitors.Having a cost advantage is an effective protection against the five competitive forces: Vis-à-vis direct competitors, the company can better withstand a price war. Customers powerful can drive prices down to the level corresponding to that of the competitor in the best position. A low cost of protecting the company cost increases imposed by a powerful supplier. A low cost is a barrier to the entry of new competitors but also a good protection vis-à-vis substitutes.Risks: Technological changes that nullify the effects of experience. Dissemination of low-cost technology among competitors Failure to timely detection of changes to the product because of attention focused exclusively on the issue of cost. Inflation in the cost of reducing the price differential needed to prevail vis-à-vis the competition.
DifferentiationThis strategy aims to give the product of distinctive qualities that differentiate it from competitors in order to have market power. A successful differentiation makes it possible to generate higher profits to competitors with higher price that the market is willing to accept, despite the generally high costs necessary to ensure the distinctive qualities.Differentiation protects against five competitive forces: Vis-à-vis competitors, differentiation reduces the substitutability of the product, increases loyalty, reduces price sensitivity and, thus, improves profitability. Due to customer loyalty, entry of new competitors is complicated. The higher profitability increases the resilience of the company to cost increases imposed by a powerful supplier. Finally, the distinctive qualities of the product and customer loyalty is also a protection vis-à-vis substitutes.Risks: The price necessary to maintain the element of differentiation becomes too high compared to competitors' prices. The buyer needs a differentiated product to fade due to the commoditization of the product. The imitations reduce the impact of differentiation.ConcentrationThis strategy is known as a specialist will focus on the needs of a segment. It involves either differentiation or cost leadership the only vis-à-vis the target chosen.Risks: The price differential compared to competing products unskilled becomes too large. The differences between the segments and the global market disappear. The segment covered is divided into more specialized sub-segments.
Growth Strategies
Intensive growth (in the reference market)When the company did not exploit all the opportunities in its market, growth is required intensive and different strategies can be analyzed, so here are the main Strategy for market entryThis strategy is to increase sales of current products in a market exists. Several ways of doing can be considered:o develop primary demand: converting non-users of the class increase the frequency of use increase the use find new uses (eg aspirin pain = universal)o increase the PDM (win customers on competition) Development Strategy produced byThis strategy is to increase sales by developing or improving products for markets already served and ways can be undertaken:o addition of featureso extending the range of products or brandso Rejuvenation of a product lineo Quality Improvemento acquisition of a range of products Development Strategy by the marketsThis strategy aims to develop a new market with existing products of the company. Several strategies are possible:o new segmentso new distribution channelso geographic expansion
Integrative growth (within the sector, upstream or downstream of its core business)This strategy is necessary if the company wants to improve its profitability by controlling various activities located in the industrial sector in which it fits. This may be to ensure a source of supply or distribution channel. A distinction is made between integration upstream to downstream and horizontal: Integration upstreamo to acquire or control its sources of supply Integration downstreamo to acquire or control its uncorked and / or increase the VA Integration horizontal (lateral)o to acquire and control some competitorso to achieve a critical masso complementary product linesGrowth through diversification (outside the industry)The goal is to grow from opportunities outside the industrial sector. This strategy is required when the reference market of the business is saturated or declining, the competitors are very strong and difficult to combat. This involves the entry of products, new markets for the company. Diversification concentrico Add additional activities in the technological or marketing Diversification pure (eg Virgin Group)o Develop activities unrelated products or markets
Development of a strategic marketing plan
(1) Definition of the mission of the company: long-term vision definition of business area priorities constraints and available resources guiding principles and corporate values basic strategic options: ambition of the company (leader, etc.).(2) Analysis of the external environment:The company must analyze both the forces of the macro-environment: demographics (eg aging population) Economic Technology politico-legal and socio-cultural.and actors in the micro-environment that affects its activity: customers (demand) Competition (to analyze the intensity of competition, the threat of new entrants, etc.). distribution channels suppliers.We must each recognize and appreciate the opportunities and threats.(3) Internal analysis of the company:We review the skills of the company in various areas: Marketing: brand awareness and reputation, market share, portfolio analysis products (BCG Matrix / General Electric), attractive price, distribution efficiency, effectiveness of sales force effectiveness of promotions, innovation (R & D ), geographical coverage; Finance: cost of capital, availability of funds, cash flow, financial stability; Production: production equipment, economies of scale, capacity, qualifications of the workforce, timeliness, technical know-how; Human resources leadership capacity, management capacity, spirit of enterprise, ability to respond.(4) SWOT Analysis(5) Goal Setting: Objectives of sales volume (AC units) Financial objectives (profit) Aims of PDM Objectives consumers (recognition rate, image, ...)(6) Choice of marketing strategy = how of achieving the objectives: Define the basic strategy: defense, penetration by developing products, by developing markets, international development Statement of Strategy: identification of the target segments, positioning(7) Decisions strategic product and brand(8) strategic pricing decisions(9) Strategic Decisions distribution(10) Decisions of strategic communication(11) marketing budget and sensitivity analysis: Detailed description of the means to each element of the marketing program
 IX. Policy decisions related to the brand
Defining the Brand
A name or symbol used to identify a product of another who is registered in the minds of consumers a set of perceptions of both rational and emotional.
Benefits of the brand
For the company: Differentiation from competitors Creating a loyalty to a product Ability to offer a higher price creating a competitive advantage and a barrier to entry
For the consumer: Reduced risk purchase, creation of trust Quality Guarantee Security Guarantee Value sign (symbol)
Key Concepts
Positioning / brand identity: product differentiation from competitors by giving a definite place in the minds of consumers
Prism of brand identity (Kapferer): physical, relationship, reflection, mentalization, culture, personality.The physical refers to the category of product, packaging and tangible product attributes emphasized in the communication. The physics is outside the brand while the second aspect, the inner personality of the brand.Personality: The personality of the brand is specified as a human being by a number of personality traits.Culture: The third facet is formed by the culture that evolves and develops the brand. This is the value system that underpins the brand.The relationship: The brand is a relationship. Kapferer (1998) states that "brands are often the occasion of a transaction, an exchange between people."Reflection: The reflection is the ideal target and set to music by the communication. It is reductive relative to potentially multiple targets pursued by the company.Mentalization: If the reflection is the mirror of the external target mentalization is the internal mirror. With some brands we have some type of relationship with ourselves. What would the ideal is to reach the consumer by becoming consumers of the brand.
Image: consumer perception of positioning / brand identity image must be in line with the position chosen by the company
Brand equity (brand equity) value given to a product after marketing investment brand equity in financial terms (= the value of the brand) Capital brand in consumer (= the strength of the brand)Model Aaker: Brand equity = loyalty, reputation, other advantages to brand owners, perceived quality, brand associations.
Political brand
Choice of brand name: Make-product: Assign a name to a product (which has nothing to do with the company) Ex: Ariel, Dash, Vittel, Evian ...Advantages: cover with several brands in the same market, taking risks without prejudice to other brands, better choose the names.Disadvantages: higher launch costs (because does not use the existing reputation) dilute the PDM. Make-range: a range of products under one name and have the same position. Ex: Kérastase, Moulinex, Clarnis.Advantages: easy to launch a new product, cheaper, structure a range of products.Disadvantages: dilution of the brand, communication difficult for a single product. Brand umbrella: the same brand support multiple products in different markets. Eg Virgin, Canon, Palmolive.Advantages: marketing costs; use reputation.Disadvantages: brand dilution and sometimes loss of connections between brand and new products. Make-source: umbrella brand strategy with products that have a name. Ex: Jazz by Yves St Laurent Petit LU schoolboy.Advantage: two-stage to differentiate the product.Disadvantage: need to respect the identity of the brand.
Qualities of the chosen name: not descriptive, think internationally, not generic, temeps integrate, easy to pronounce.
Co-branding: an alliance with another brand in order to increase the chances of success (eg Sony and Ericsson)Because of co-branding: expanding the target consumer rapid access to new markets strengthen loyalty use the technological advantages of each Synergy reputations Production Sharing and penetrationLimitations: length of development and implementation of partnerships risk of cannibalization of a product of one partner imbalance reputation and dilution risk picture for a partner delicate mechanisms to share the value a priori and a posterioriTypes of co-branding: Strategic Alliances (Swatch and Mercedes)o division of costs and risks of innovationo association over LTo significant investments tactical alliance (Danone and Proximus)o Alliance for TB over the communication product strategyo low investment partnerso poor integration partners
Extending brandsReasons for extension: high costs of launching new products high costs of advertising defense of the sustainability of a brand use of a capital picture potential need louse a single product brandTypes of extensions: Extension of the range (extension by neighborhood) Launch of products under the same name in the same category (very common strategy in cookies or desserts, for example).Advantages: Use of reputation, economy forward in advertising.Risk: association in case of failure to the parent brand, likelihood of confusion if the position is unclear. Extension mark (discontinuous extension) Launch of products under the same name but in a different category (common strategy in the luxury industry).Advantages: Use of notoriety.Disadvantages: does brand image may not be, dilution of the image if failure.Peculiarities of extensions: downward extension upward extension extension in both directions
Sustainability of the brandContinuous innovation, continuous communication, price equal to the VA received, creating a barrier to entry (production, control of technology, dominated by image, legal or distribution).
 X. Strategic decisions of new products
Importance of innovation importance of innovation for survival and development of a business decisive impact on business profits
Explanation of failures: true innovation is rare better chance of success if the product belongs to a great actor success rate higher if it has few competitors need to test the product Product not in line with the promises
Components of an innovation
The importance of risk associated with an innovation depends on three factors: The degree of originality and complexity of the concept that will influence the responsiveness of buyers as well as the magnitude of the marketing efforts of the innovative E  market risk The degree of innovation of the technology necessary to realize the concept technological risk The degree of novelty for the company (ie its degree of familiarity with the market and with technology)  strategic risk
A distinction must be novelty and innovation. The real innovation brings a new solution to the buyer. The term "new product" is used interchangeably to refer to minor and major innovations.
Types of innovations
Innovations can be classified according to four criteria: degree of novelty for the company and the marketNew Product for New E market for the companyhigh low hightechnical risk and commercial risk technicallow-risk small business risk









 nature of innovationo dominated by technology innovation (physical product)o dominant organizational innovation (user org °, distribution, sales, ...) type of technological change or behavioralTechnological change
Behavioral change high low hightechnical risk and commercial risk technicallimited low-risk business riskReasons for failure no market research product has not kept its promises poorly positioned product, high price underestimation of the competition reactions underestimation of costs
Success factors of innovations superiority of the product (distinctive qualities) marketing skills (understanding of the market, ...) technological know-how (good synergy, r & d, production and engineering)
Steps in developing new products
Research ideas: clients, researchers, competitors, distributors and representatives, senior management, secondary sources (market research, etc.).
Filter ideas: eliminate as soon as possible bad ideas analysis of the most important factors (rubric)
Development of a concept: description of the promise that this new product (no sheet) choice of positioning the new product
Testing the concept: the first investment company subjecting the description of the concept to potential consumers it emerges from the purchase intentions (+ 60%)
Marketing strategy development: segmentation, targeting positioning, marketing mix
Economic analysis: estimation of sales, costs and benefits
Product development: development of a prototype
Testing the market: Consumer products:o "product and use"  test of the concept and use: after testing the concept we move to Phase 2 which involves testing the product by the consumer, if the results are better after using  problem of presentation product, if the opposite  product is not in line with the concepto stores Laboratory (fake stores) or simulated test marketing (advertising and sales effort in a particular region)o test areas (mini test markets)o test markets (we consider a country as a test market) Industrial Productso technical testso test acceptabilityo Trade Show
Product Launch: when? where? how? from whom?
Adoption process by the consumer
Theory of diffusion of innovations Innovators (2.5%) decide to adopt a new product very quickly, even if there is risk. They are not influenced by other people and the spirit of adventure. Early Adopters (13.5%) have the status of opinion leaders. They are quickly embracing new ideas and products but with caution. Early Majority (34%): need info on innovation. Late Majority (34%) are influenced by other individuals. Their dominant feature is the skepticism. Latecomers (16%) turned to the past. They fear any change and difficult to overcome the weight of tradition.
Analysis of the economic viability
Three critical points: Neutral simple: the period when the new activity leaves the area between loss and gain in the area. Neutral general equilibrium: the period when the total revenue covers the total expenditure to date to date, the company has recovered its implementation. Point acquisition of productive capital: the period when the new activity generates a financial surplus for investment in renewal or extension of productivity that could prolong the economic life of the activity.
 XI. The strategic decisions of distribution
The distribution
Distribution networks
A distribution system is a structure formed by the partners involved in the competitive process in order to bring goods to the service consumer.
Distribution functions: Transport Split: making products made in portions and packaging to meet the needs of customers and users. Store Sorting: the creation of sets of specialized products and / or further adapted to situations of consumption or use. Buy Contact: activity facilitating access to groups of buyers. Inform: to improve understanding of market needs. Promote: push the sale of products through advertising and promotional activities held at the place of sale. Sale
Purposes: multiplication of contacts: the complexity of the exchange process increases with increasing number of partners go through a wholesaler, for example, reduces the number of transactions necessary for the meeting supply and demand. Economies of scale: by consolidating the supply of several producers, the intermediary is able to perform the duties assigned to a volume greater than if the manufacturer took care of itself Best assortment offered: consumers generally seek a small amount of a wide variety of products, while producers produce large quantities of a limited variety of products. The role of intermediaries is to provide varied assortments, allowing consumers to purchase a wide variety of products. Better service: through is usually closer to the consumer. To be done, he knows best its needs, can provide shorter delivery times, better customer service, etc..
Types of intermediaries: Wholesalers: Trade through buying goods directly to the manufacturer for resale to retailers. Independent Retailers: Trade through buying the goods to a wholesaler (or manufacturer) for resale to the user or consumer. Integrated Distribution: department store, chain store, variety store, supermarkets, hypermarkets. "hard discounters" retail system characterized by the practice of low price, thanks to a policy of cost containment and service reduction. Eg Aldi and Lidl Agents and Brokers: functional intermediates that do not take title to the property but that arrange the sale or purchase of products on behalf of a client. They are paid a commission based on purchases or sales made. Eg import-export companies, brokers, traders and industrial distributors. Service companies: corporations that assist companies in the distribution functions other than the functions of buying and selling. For the company, it's subcontractors who perform certain tasks distribution because of their specialization or competence. Eg transport companies and storage, advertising agencies, corporate market research, financial intermediaries, insurers, etc..Criteria for choosing a network
Market characteristics:  number of buyers when the market is large, the use of intermediaries will be required  more concentrated the market is geographically dispersed, the more the company will rely on intermediaries to reduce the cost of services provided to customers. structure of the purchasing behavior  major purchases, irregular purchases ... Delivery  so short, so make the stock available near the place of purchaseCharacteristics of the products distributed: physical  highly perishable products or products must have a large network as short as possible technical product  short networks for technically complex products that require a service important, for standardized products throughout the circuit is suitable phase of the life cycle  short circuit will allow the company to exercise greater control over innovation and for which major efforts should be made to promote extensive product range  manufacturer specializing in a product must use wholesalers, manufacturer of a wide variety of products sold in the same outlet may apply to retailers  if high unit value, the cost of contact can be easily amortizedFirm characteristics:  size and financial resources of large companies generally have substantial financial resources and therefore they have the ability to take themselves more distribution functions  high control sought a company decides to adopt a direct circuit just to have more control over the distribution  high profile welcome from the distribution high coverage  distribution must be intensive
Hedging strategies
Mass distribution Objective: To maximize product availability Types of products: product purchasing power, MP basic services to low involvement Difficulty:o complication in the management of orders and hence costso risk of losing control of its marketing policyo may not maintain a consistent brand imageSelective distribution Objective: use a number of intermediaries less than the number available Type of products: products purchasing thought (eg TV, computer, car) Criteria for selection of intermediate size distributor, service quality, technical competenceExclusive distribution An extreme form of selective distribution Types of products: high quality, prestige or premium services (luxury products) A special form is the exclusive distribution franchise (eg McDonalds) Benefits to the franchisor: (1) access to a source of capital (2) avoid the high fixed costs of own stores (3) cooperate with independent distributors, but motivated (4) cooperate with local businessmen (5) create a new revenue stream based on technical know-how (6) benefit from economies of scale Advantages for the franchisee: (1) start a business with limited capital (2) reduce risk (3) receive training and support (4) have better purchasing power (5) benefit from R & D and constant new products (6) receive management support (7) continue to belong to a large organizationCommunication strategies vis-à-vis intermediaries
Strategies pressure (push marketing)This strategy is to focus the efforts of communication and promotion to intermediaries in order to encourage them to reference the brand, store the product in large quantities, to grant adequate space sales and encourage consumers to buy the product. Here we are trying to raise voluntary cooperation with the distributor who, because of the insistent, will focus on the product.
Strategies aspiration (Marketing pull)This strategy focuses the efforts of communication and promotion on the final consumer, bypassing the middlemen. The aim is to create positive attitudes to-product or brand, and make the buyer requests such a mark on the distributor. Here we try to create a forced cooperation on the part of intermediaries.
Strategic marketing distributor
Changes in the retail
Mass distribution is changing due to rising competition, the process of concentration of the leaders in distribution, internationalization (due to the homogenization of market saturation in some markets). This mutation is also due to the development of new formats such as distributors, the discounter, warehouse / clubs and hypermarkets  professionalism and price pressure.
Strategies to find new competitive advantages
Cost leadership Reduction of logistics costs  use of the DPP, which measures the profitability of each reference Reduction of administrative costs  new scanning techniques, new method of data exchange (EDI), use of ECT (Efficient Customer Response) Economies of scale  increase in store size, increase in firm size, offer broader product diversification Reduction of purchase costs  concentration, cooperation with central purchasing
DifferentiationA differentiation strategy applied at the point of sale means that consumers find them a significant advantage in a louse point of sale determined advantage they would not find in competing outlets. This implies: Segmentation and Positioning offer wider product Product Development distributors Development of communication
Development of own brands
Types of private labels: Price and low quality products (white) Price and quality means (me-too) Very good quality at a high priceBranding:  sign marks the retailer seeks to provide quality products equivalent to national brands, but at a lower price than the brand leader and u combining the name of the brand (eg Delhaize products) Brands flag (brand level)  the trademark belongs to the distributor without the name of the sign u is associated (eg Delhaize has created the brand Derby for some families of products)  Cross-brand distributor introduced in the linear marks that belong to and which, each time a different name and are presented as a normal expression by the distributor but can not find in stores (eg Aldi brand) Brand or generic brands of top prizes  own line to the distributor but offer a new price / quality ratio by providing simplified packaging and product quality less sophisticated (white goods)
Categories success: Innovation is limited (eg, mayonnaise) Intensity of advertising is low Concentration of the industry is high Involvement of consumer is weak
Benefits for the dealer: Customer Loyalty Increase in bargaining power Lower costs (introduction, advertisements) Lower prices (because no R & D costs for copy) Best presentation on the shelves Good promotional support Using the image on all products
Disadvantages for the distributor: No way to know the consumers in each product category Image of highest quality for manufacturers Difficult to benefit from advances in technology
Direct marketing and interactive marketing
Definition
Direct marketing: contact postal, telephone, data transmission or other means of applying a specific message response from customers or prospects (face to face sales, mailings [print, email, etc..] Catalog sales , telemarketing, home shopping, "kiosks", online marketing).
It is a system of interactive marketing. Objective is to establish direct contact with prospects or customers.
Purpose of the store without marketing
 Development of the cost of communications and sales force Reduction in communicative effectiveness of advertising Improved selectivity of the target Fantastic advances in telecommunications and computer (Internet)
 XII. Strategic decisions in price
Role of price
Importance of price: Instrument stimulating demand (the price too high or too low can affect product development) determinant of profitability (for the margin bénéficière but also through the amount sold)
Need for triple consistency:  Internal consistency constraints of cost and profitability Consistency  external market capacity Consistency  strategic positioning
Influence price decisions: Level of demand profitability Perception of the brand Comparison with competitors Compatibility with other components of the mix
Complexity of making money: Acceleration of technological change and shortening product life cycle implies that a new activity to be profitable in a much shorter time. An error on the IPO price is all the more serious it is more difficult to correct. Proliferation of poorly differentiated brands reinforces the importance of a proper positioning in terms of price. Policy label brands that offer products with good quality / price ratio. legal and social constraints (eg max setting margins, etc.). Contraction purchasing power makes buyers more price-conscious. Market transparency via the euro
Definition of price
Floor price (limit price) = direct cost is the absolute lower bound below which the company may not fallPrice = neutral technique: direct cost + fixed cost / E (Q) is the production costPrice target: technical price / (1 - desired margin)
Errors of pricing policies
 Determined from the only cost Not enough changed rapidly in response to market changes Developed without reference to other variables in the mix Do not take sufficient account of the variety of product offerings and market segments
Process of pricing
 Determine the objectiveo Award from the choice of the target and positioningo Different objectives can be selected:• survival• Profit maximization (does not include other variables in the mix and the reactions of competitors)• maximization of the PDM• Skimming• Picture Search
 Assess the demand  demand is less elastic, the price may be higho Several factors affect the price sensitivity:• Product differentiation important• Knowledge of alternatives• Ease of comparison• Weight of the expenditure• Weight of the price in the total cost• Perceived quality
 Estimate the costso The application often determines the price ceiling, price floor induce costso The company estimates its costs for different levels of production and experienceo Understanding of fixed costs and variable costs
 Analyze the competitiono Records of priceso Analysis of catalog priceso Surveys of Consumers
 Choose a pricing methodo The key variables:







o Selecting a pricing method• "cost plus margin"• Rate of return required• Perceived value (a measure of the perceived value of each brand by multiplying the marks awarded to the attributes by their respective weight)• Market price• Price bid
 Pricingo Optimization of prices based on:• psychological dimensions (eg 4 € 99)• Feedback from distributors, vendors, suppliers, public authorities, etc..
Price changes
In most cases, companies have a variety of sales prices corresponding to different market situations. Flexibility of prices across markets (strategy often used in international trade for certain socio-demographic groups, etc.). Flexibility in terms of seasonality (eg discounts on fashion products sold off-season, reduced rates for travel in low season, etc.). Promotional prices (special offers, free credit, coupons, etc.). Discounts and rebates (cash discount, discounts for quantity discounts and seasonal sales, times, etc.). Prices of services and "yield management" services sold at a discount in the first place, the services sold at full price last (eg airlines, hotels) Flexibility in e-commerce
Price changes
Initiative for a lower price Reasons: excess capacity, declining market share, need to pass on lower costs ... Risks: image degradation, declining loyalty, volume risk
Initiate a price increase Reasons: cost inflation, excess demand ... Risk: falling demand ...
Reactions to price changes The leader can react in several ways:o Maintain its priceso Maintain prices by forward-cons in other areaso Reducing priceso Increase the price and strike back against the producto Launch a defensive mark
Introductory price of a new product
Skimming pricing strategy  sell at high prices by limiting voluntarily to consumers who are willing to pay a high price for the new product
Penetration pricing strategy  sell at a low price to acquire a high PDMConditions for a price of entry: Request price elastic Ability to achieve low unit costs (economies of scale or experience effect) Threat of strong potential competition Market premium is satisfied Transfer Costs  low costs incurred by the buyer when changing supplier or during the adoption of the product (costs other than price)
 XIII. Communication of policy decisions
Communication
Communication tools
Above the line
 Advertising means any form of presentation and monetized non-interactive promotion of ideas, goods, and services Objective: To communicate a message to a relatively wide audience Means: television, radio, press, cinema, display Types of advertising: informative, persuasive, reminder Advantages: Covers a wide audience, quality of communication of the brand, lasting Disadvantages: relatively high cost, targeting not possible, advertising clutter
Below the line
 Sales Promotion: Any short-term stimulus to encourage the purchase of a product or service Objective: To stimulate consumers to try, buy a product or continue to use a product Means: coupons, sampling, loyalty cards, contests ... Advantage: immediate effect on sales Disadvantages: short-term effect, can degrade the brand, price sensitivity increases
 Sales: Any business oral conversation with one or more potential buyers in order to present a product, answer objections and close a deal Objective: To convince buyers to purchase the product Means: sales force internal or external Advantage: personal contact Disadvantage: very expensive, not to create brand
 Public Relations Objective: reputation and image of the company Means: press contacts, editorial advertising, corporate communications Advantage: less commercial character Disadvantage: difficult to analyze the effects
 Event Marketing and Sponsorship Objective: increase awareness of the product Means: everything is new Advantages: quick creation of awareness, press coverage Disadvantages: difficult to measure effects, not enough long-term
 Direct Marketing Objective: To target consumers with a personalized message Means: mailing, Internet, telephone Advantages: very precise targeting Disadvantages: need to have good file, costs to maintain files

Factors for selecting tools
Commodity factors: quantity and complexity of informationFactors related to life cycle stages: introduction, growth, maturity, declineFactors related to the type of product: industrial or consumer products, product prices low or highFactors related to the type of consumer: few or many consumers, need info
Models the action of the communication
 Model of the hierarchy of effects
Advertising
Cognitive stage = know: awareness, knowledge of the product
Emotional stage = to love: attraction to the brand effect on the image, preferably for the product
= Behavioral stage to act: belief (for purchase), purchase
AIDA: Attention interest    desire purchase
Lavidge and Steiner: knowledge awareness    appeal conviction  purchase
Communication strategy
Target: the choice of hearing has a significant impact on the message and the medium
Objectives: the company must specify what type of response she expects consumerThere are three types of responses: Cognitive: awareness, knowledge affective attitude, preference, conviction Behavior: Buying, PDM
Message to communicate: Message Content: What does it mean?o convince a rational way (demonstrating that the product will deliver on its promise)o Convince an emotional way (create a positive or negative emotion to cause the purchase) Structure: How to tell? Format (suitable for medium): In what form? Source: Who is to say it?
Methods of allocation of a budget based on: The resources available The percentage of turnover Alignment competition Analysis of objectives and needs
Commercial development
Partners, advertisers, advertising agencies, media (press, TV, radio, movies, posters, mailings)Development of advertising strategy
1. Goal Setting: in terms of desired outcomes (awareness, trial, etc..) Target audience
2. Establishment of the advertising strategy: identify the location chosen, the result as a "copy-strategy" (advertising placement)
"Copy-strategy" serves as a specification for creative: it defines what needs to be communicated through advertising (description of the content but not in the form of the message)  emanation of the marketing strategy, establishing the LT
It is based on three components:o consumer benefit: distinct advantage offered to the targeto support or "Reason Why" statement of objective characteristics that produce the distinct advantagestyle o / "brand character" style or manner of expression in the ad
Criteria for success of the "copy-strategy":o Specific and concreteo A basic promise (Unique Selling Proposition)o Distinctive compared to competitorso Relies on consumer benefits and non-technicalo Durable (not related to a mode)
3. Development of the "copy brief"Content: Project Description Reminder of the "copy strategy" Competitive Environment "consumer insights" Expected Responses
4. Presentation and agreement on the "board"
5. Production of Advertising
Styles run advertising
Slice of life, lifestyle, fantasy, witness, technical expertise / scientific evidence, symbol character, humorous ...
Measurement of advertising effectiveness
Tools to measure efficiency: Sales increase brand awareness change of attitude specific marketing tests
Tests at different stages of development: Test concept board test (test of understanding) test spot before or after exposure in the media (memory test, recognition test, ...)
Choice of media
Coverage  number of individuals exposed to the message at least once in a companionRate  number of times an individual is exposed to the message in the companionImpact
 XIV. The international marketing strategies and global
International marketing to global marketing
International marketing (multi-domestic) marketing international marketing programs with local
Global Marketing: a maximum standardization of elements of the marketing mix in order to have an ideal standard product for all markets
Reasons for accelerating progress towards global marketing:
 Search for new competitive advantageso take advantage of the lever size in all stages of the business (R & D, Manufacturing, Logistics, Marketing) which can generate substantial cost savings
 Level of globalization of the industryo increasingly competitive global
 Pressure from the financial communityo shareholders and financial analysts favor the restructuring leading to economies of scale (for increase in share value)
Advantages of global marketing:
 Cost reduction at all levels:o Manufacturing: one formula, one type of caro Marketing: one type of packagingo Communication: a single world-renowned advertising  + image more coherent globalo Logistics: a single stock  need to diversify across countries
 Speed ​​of product launch
 Image World
 Better control of subsidiaries
Disadvantages of global marketing:
 Excessive centralization (too many levels)
 Insensitivity to local markets (eg cultural differences)
 Risk of less efficient local execution (eg, delayed response to local crises)
 Standard product
 Risk of weakening the brand (because that is so big impersonal)
 Risk management more difficult
Impact on branding:
 Companies promote international brands and global at the expense of local brands. Consequence: Elimination of local brandsEx: BBL ING ,  GB Carrefour




Strategic marketing at the international level
Identification of market opportunities: Research needs quality at international level Difference from local research: complexity related to the number of variables need to find comparable data
Segmentation international and global: Segments universal: the same group of buyers with different needs by country Segments different group of buyers' expectations in each separate Segments homogeneous groups of countries: a group of buyers by region
Marketing program mix
Product Decisions Products most likely to be globalized high-tech products, products with high usability Types of products:o Universal Product: same product except for the labeling and the language usedo Produced changed: the same basic product, but change the voltage, color or conditioningo Produced custom-produced to meet local demand Adaptation of the product, brand name or packaging:o Adaptation product (eg Swiss watches were adapted to the Japanese market because the bracelet was too late)o Change of name brand: Mr Proper  Mr Clean, Treet  M & M, Twix Raider 
Strategic decisions of communication Importance of having a global campaign:o Economies of scale in productiono More funding for spoto Creating a unique brand image Factors to evaluate:o Cultural Barriero Local regulations