What are portfolio models and how are they used?

Identifying strategic business units: Where do we want to invest our time, reputation, and money?

Cash Cows (milk it for all it's worth)

-low market growth/ high m. penetration

Stars

-high market growth/ high m. penetration

Dogs: Sell it!

-low market growth/ low m. penetration

Question

-high market growth/ low m. penetration

Process of developing, pricing, promoting and distributing products, services and ideas that satisfy targeting customers' needs (e.g. "going green")

Band wagon: people you look to for response to products

Knowledge: how much room we store for that product

Involvement: how much we need that product/ involved with it in our lives

• Situational influences (desperate need e.g. gas)
• consumer decision making
• need recognition
• alternative search
• alternative evaluation (details in comparison)
• purchase decision
• post-purchase evaluation (brand loyalty and good word)

1. physiological

2. safety

3. social/belongingness

4. esteem

5. self-actualization

1. Innovators: 1st one to have product: trend center, educated

2. Early adopters: wait to see if problems but still know latest and greatest: will go to them for advice

3. Early majority: tend to buy new in cycle, social but wait until perfected, educated

4. Late majority: social, less educated, wait for sells, don't have big influence

5. Laggards: only purchase when forced to: cautious and no fears

-an aid to marketing decision making

-tells us about our environment and how our env. is changing

-think about overlooked needs no one is addressing/ we never considered

Primary and Secondary Data

Pros and Cons?

Primary: customized

(more expensive, but more specific)

Secondary: off the shelf

(ready to go, but general)

Simmons for example provides data from market research, on demographics, etc. : benefits sought by consumer

marketers group purchasers to better focus their effort to better satisfy needs and increase profits

• determine consumers needs and wants
• determine how the market should be segmented
• asess your organization's capabilities to serve those segments

(via eg. Simmons market research

--by benefits sought by consumer : based on features, but how consumers benefit from product)

• How your product is positioned in the minds of consumers
• How your product fits into a particular market segment
• How does the marketing mix engage the desired segment?

Plots dimensions related to benefits that are important for consumers (4 square plots)

Would not segment if:

the segment is not worth it

Design Market Mix strategy: What questions can segmenting and positioning answer for consumers?

Too much competition?

1. Advertising: paid form of nonpersonal communication

2. PF: non personal nonpaid communication

3. Direct Marketing: direct forms of communicating with customers (Internet)

4. Sales Promotion: coupons, display, sweepstakes; induce customers

5. Face - to - face: communication with potential buyers

Vertical : Bolts for Cars : narrow

Horizontal: Paper, Carpet and copy machines

Product Mix

Product Line

Extending their line?

Brand extension?

Mix: P&G/ Johnson&Johnson "the full set of products offered for sale by the organization"

Line: "products that share common characteristics, distribution channels, customers or uses" (eg. diapers, paper towels)

width: number of product lines handled by the org.

Extend their line: uses the name to reach a new market segment (Ben & Jerry's Light Ice Cream)

• Brand development: enter new class (Tostitos making dips)
• Franchise extension: Honda - mini vans, SUV's
• Dual branding: Oreo cookies in Dreyers Ice Cream
• Multi-branding: multiple brands, P&G shampoos
• depth: Buick, Sedan (how many) average number of products in each line

catalogs, mailings, telemarketing, internet

(can be expensive, internet is increasing the likelihood for use)

Stages of product life cycle

What's the purpose of a product audit?

• Indroduction: costs are high for marketing and production
• Growth: sales and profits increase (consumers try and adopt)
• Maturation: increased competition means that profits don't keep pace with sales. New marketing stragegies to spark new interest
• Decline: may drop the product, seek new uses, seek new markets, change the product, or continue the same but invest less

Product Audit: review current product offering to ascertain whether product should be continued as is, improved, modified, or deleted

(Deletions: consider sales trends, profit contributions, product life cycles, customer migration patterns)

(Improvements: decisions can be made about how to change the product)

Brand: legal name

Trademark: recognition, trust, "short hand"

? Coca-cola

? Microsoft

? IBM

creates awareness

creates an impression

touts benefits of your product

can differentiate product from competitiors'

have image of the brand

imp9ortance of brand (shorthand)

stimulate distribution of a product

increase product use

lower overall cost of sales

Push: devellop advertising and promotional stragegies geared toward your marketing and distribution channels to entice them in promoting your product (wholesale discounts)

Pull: develop advertising and promotional strategies that are meant to entice the prospect to buy your product or service (1/2 off)

niche marketing on the internet

(profit in "misses" that wouldn't be carried in stores: Amazon)

Google uses advertising opportunity for distinct niches (because need to be advertised sometimes more)

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The development of the big idea

bridge between strategy and tactics

How to:

show the product

show the benefit

show the alternative

comparison

borrowed interest

testimonial history

An unexpected twist that gets your audience's attention! (edgy: sex, nudity, music, jokes)

a linear progression of where you are to where you want to be and how you will get there

What do we want to accomplish?

Who are we talking to?

What do they think now?

What do we want them to think?

Why should they think this?

What is our message?

Creative Strategy Statment

Guiding elemens:

prodcut features and benefits

competitive advantages/weaknesses

information about the target audience

tone of the message

a simple overriding message about the product

make it obvious what the next step should be!

cost effectiveness

evaluating the cost of advertising

based on:

# of subscribers

# of single issue purchasers (more effort exerted)

# of exposures (TV, radio)

Interactive media (more likely to attract attention)

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helps marketer understand what type of ad, size, discounts, terms, and other info

Open rate: single one-time advertisement no discount