Introduction Market Analysis PDF

WELCOME! Modul „Marketing“ Introduction Benjamin Guelker Course requirements / organisational matters o Case study as a group project Contact details: [email protected] o Be social / group work work during lectu...

WELCOME! Modul „Marketing“ Introduction Benjamin Guelker Course requirements / organisational matters o Case study as a group project Contact details: [email protected] o Be social / group work work during lectures Consultation hours: before/after class and on o The assessment is an exam request o Regularly attendance at lecturing sessions / mandatory at group work 3 Overview: Case study as a group project o You build groups, working on a case study over the whole semester o Ongoing case study based on the topics of our lecturing sessions o Synchronous and asynchronous working structure o Participation as requirement for the exam 4 Learning Resources Textbook Kotler, P./Armstrong, G., Principles of Marketing. – 18ed. – Prentice Hall Additional literature Kreutzer, Ralf T., Praxisorientiertes Marketing, Grundlagen – Instrumente – Fallbeispiele, 6. Aufl., Wiesbaden, 2022 Hollensen/Opresnik - Marketing Principles and Practice, 2017 Kotler, P./Armstrong, G., Marketing – An introduction, latest edition 5 Overview – what are we doing? Introduction to modern marketing Marketing Management Process Overview Buying Behaviour Overview B2B-Marketing Overview Digital Marketing (Overview ethical aspects of marketing) Introduction 7 What Is Marketing? Marketing is all around you, in good old traditional forms (Billboards, TV, Events) and in a host of new forms, from websites and mobile apps to online videos and social media. f.e. questionnaire to find right size; events; etc. Today’s marketers reach you directly, personally, and interactively. They want to become a part of your life and enrich your experiences with their brands. „…Marketers must decide what features to design into a new product or service, what prices to set, where to sell products or offer services, and how much to spend on advertising, sales, the Internet, or mobile marketing.“ Definition: Kotler/Armstrong, Principles of Marketing, Pearsons, 18ed. Development of the importance of marketing Trade Strategic Interactive Global Digitalisation/ marketing marketing marketing/ marketing/ networking/ CRM CRM/Online CRM marketing Mass Customer Product Trade Strategic Global Digital market rentention perspective perspective perspective perspective perspective perspective perspective Trend towards „sustainability“ Affluent society Consumer society Digitalisation Society of deprivation Dominance of sales markets Dominance of buyer markets 50s 60s 70s 80s 90s 2000s 2010s Time Kreutzer, Ralf T., Praxisorientiertes Marketing, Grundlagen – Instrumente – Fallbeispiele, 6. Aufl., Wiesbaden, 2022 Modern Marketing Most people think of marketing only as But marketing today must focus on selling and advertising or satisfying customer needs. “telling and selling.” Modern Marketing Kotler/Armstrong, Principles of Marketing, Pearsons, 18ed. Modern Marketing – Selling vs. Marketing Concept INSIDE-OUT The SELLING Concept selling & telling is not enough bc of the big competition in Western industrialised countries OUTSIDE-IN The MARKETING Concept Adapted from Kotler/Armstrong, Principles of Marketing, Pearsons, 18ed. What Is Marketing? (or “How we see marketing today”) money, loyalty, recommandation, feedback Marketing is a process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return. Perhaps the simplest definition of marketing is I) engaging customers and II) managing profitable customer relationships. Marketing as critical aspect for the success of almost every organization, not only for-profit organizations Kotler/Armstrong, Principles of Marketing, Pearsons, 18ed. The twofold goal of marketing is to: need to be better than competitors or older product so people choose me 1. Attract new customers by promising superior value ==> Growing 2. Grow current customers by delivering satisfaction Ongoing, constantly => Keeping customers Marketing as part of the organisation Frank_Rothaermel_Strategic_Management, Chapter 2 17 Marketing covers more than toothpaste and online shops. product: idea, safety, product: fun, experiences, activities, product: sell a look responsibility memories, feeling Marketing covers more than toothpaste and online shops. PERSONS IDEAS EXPERIENCES Persons = Sport stars, Ideas = Events = Word cup Politicians Recycling, Experiences = Disney World, Vaccination Amateur Sport Event... Political campaigns  Business to Business: selling machines, etc. Don´t forget B2B Products and Services airline food law cases for businesses  Marketing covers more than toothpaste and online shops. persons organizations information properties places 10 types of entities (Kotler/Keller) Berlin, Tropical Island, restaurant experiences ideas events services goods „Marketing management“, Philip Kotler, Kevin Lane Keller. — 14th ed., Prentice Hall, p.5 Understanding the Marketplace and Customer Needs Market place for this university? Education area, interested in business and law (not medicine) Market place: area but not physically seen As the first step in the marketing process, the company must fully understand consumers and the marketplace in which it operates. Needs are states of felt deprivation. feeling that sth.’s missing; food, drink, warmth Wants are the form human needs take as they are shaped by culture and individual personality. influenced by surrounding -> over-consumption; choose what we eat influenced by what we like => influenced by culture, personality Demands are human wants that are backed by buying power. no money, no demand as for LV bags; need to fulfil certain requisitions Outstanding marketing companies learn about and understand their customers’ needs, wants, and demands.  Need vs. want NEED WANT basic physical needs for food, clothing, warmth social needs for belonging and affection; and individual needs for knowledge and self-expression. Understanding the Marketplace and Customer Needs Example: More than just selling products, Apple’s highly successful retail stores create engaging life-feels-good brand experiences. Understanding the Marketplace and Customer Needs A market is the set of actual and potential buyers. Sellers must search for buyers, identify their needs, design good market offerings, set prices for them, promote them, and store and deliver them. Consumers now also engage in marketing when they: search for products interact with companies to obtain information make purchases  A Modern Marketing System marketing intermediaries help the company promote, sell, and distribute its products to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial From: Kotler/Armstrong, Principles of Marketing, Pearsons, 18ed. intermediaries. interaction retailer helping me to bring it to customers like Edeka help promote and sometimes competitors distribute products have the same suppliers want to address customers as well need materials to produce product major environmental forces: demographic, economic, natural, technological, political, and social/cultural Designing a Customer Value-Driven Marketing Strategy Marketing management is the art and science of choosing target markets and building profitable relationships with them. The marketing manager must answer two important questions: I. What customers will we serve (target market)? II. How can we best serve these customers (value proposition)? Under the marketing concept, I) customer focus and II) value are the paths to sales and profits. Designing a Customer Value-Driven Marketing Strategy promising superior value A brand’s value proposition is the set of benefits or values it promises to deliver to customers to satisfy their needs. Example value proposition: Sonos positions its Sonos One with Amazon Alexa as: “The smart speaker for music lovers.” It gives you all the advantages of Alexa but with high-quality Sonos sound.” Value proposition easyjet product: cheap flights https://corporate.easyjet.com/~/media/Files/E/Easyjet/pdf/investors/agm/agm-dec-2020/annual-report-2020.pdf Value proposition Uber looking for new employees https://www.uber.com/de/en/ Designing a Customer Value-Driven Marketing Strategy The major marketing mix is comprised of a set of tools known as the four Ps: 1. Product 2. Price Preview of 3. Promotion our following sessions 4. Place 5. (plus 3 P....comes later) Integrated marketing program—a comprehensive plan blending the four Ps to communicates and delivers intended value to chosen costumer How are we managing Customer Relationships and Capturing Customer Value? 1. Customer relationship: the overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. CRM (Customer Relationship Management) 2. Customer-Engagement Marketing: the goal is to make the brand a meaningful part of consumers’ conversations and lives. Fosters direct and continuous customer involvement in shaping brand conversations, experiences, and community 3. Consumer-Generated Marketing: Brand related content created by consumers themselves (uninvited consumer-to-consumer exchanges or initiated by a brand) 4. Partner Relationship Management: Partner relationship management involves working closely with partners I) in other company departments and II) outside the company to jointly bring greater value to customers ==> generating value Customer-Engagement Marketing Example: Peloton Leaderboard https://www.pelobuddy.com/here-now-leaderboard-comes-to-the-web/ https://sportmagazin.reischmann.biz/allgemein/pelotontraining2022/ Consumer-Generated Marketing https://medium.com/user-generated-content-marketing/best-ugc-campaigns-to-get-inspired-from-2020-updated-518c3d9f11ae Consumer-Generated Marketing Managing Customer Relationships and Capturing Customer Value value only coming from customers (review, telling friends, etc.) “The only value your company will ever create is the value that comes from customers— the ones you have now and the ones you will have in the future.” (Peppers/Rogers in Phillip Kotler, Marketing Management, 14th Ed. P, 123) customer being my costumer for a long time (10 years f.e.) Customer lifetime value is the value of the entire stream of purchases that the customer would make over a lifetime of patronage. = value The ultimate aim of customer relationship management is to produce high customer equity. Customer equity is the total combined customer lifetime values of all of the company’s customers.  Overview Customer Value Value: It represents the difference between the perceived benefits and the costs incurred to obtain the benefits of a product. Simplest form: Customer Value = (perceived) Benefit – Cost Adapted from: https://penpoin.com/customer-value/ Price/Cost are universal — it will cost every customer the same amount to purchase your product or service. But the value will be different for every buyer.  Overview Customer Value Perceived value depends on customer perception as some benefits or costs cannot be quantified. In addition, when making purchasing decisions, consumers also depend on the relative value (benefits and costs) of a product to alternative products. fashionable jacket money Customer Value is important for: Adapted from: https://penpoin.com/customer-value/ Netflix: entertainment mental effort, stress, commitment Satisfaction University: knowledge, job Uber Eats: food delivered searching for perfect Market position product University: famous one -> admiration Profit https://tallyfy.com/customer-value/  Four Categories of Customer Values toothpaste for having clean teeth; socks 1. Functional — the qualities of the brand, product, or service presents; music; cinema; Disney Land => entertainment 2. Emotional — the way the brand, product, or service makes the customer feel 3. Life-Changing — the way the brand, product, or service alters the life of the customer life-saving, improves my life, saves time => Online Banking UberEats: stay at home and food gets delivered 4. Social Impact — the way the brand, product, or service alter/changes the life of others buy the product and then donate money/ plant a tree Adapted from: https://penpoin.com/customer-value/ 5. Some elements are more inwardly focused, primarily addressing consumers’ personal needs (Motivation aspect of FitBit Tracker). Others are outwardly focused, helping customers interact in or navigate the external world. https://hbr.org/2016/09/the-elements-of-value + Marketing Management Process – Bring modern marketing to life Elements and tools of the Marketing Management Process  Marketing Management Process Run a marathon: Am I physically able to do that? Analysis Objectives Strategies Marketing-Mix Control Adapted from Kotler et al. (2019): Marketing Management, p. 88 + 1 sentence explaining Strategic Objectives and Strategy Strategy Success Analysis Indicators Selection and Implementation Control Combination ▪ Environment ▪ Vision and ▪ Product and ▪ Effectiveness and Market Mission ▪ Competitive Pricing Policy of marketing Analysis strategies tools ▪ Strategic and ▪ Distribution ▪ Resource and operational ▪ Portfolio and Communi- ▪ Profitability of Competition objectives strategies cation Policy the chosen Analysis products/ ▪ Economic ▪ Positioning ▪ Process, markets ▪ Customer Targets strategies People, Analysis Physical ▪ Non-economic Evidence Targets Policy Marketing Management Process What situation do we have?? Analysis Objectives Strategies Marketing-Mix Control Adapted from Kotler et al. (2019): Marketing Management, p. 88 69 Terms and definitions Within the marketing analysis, the goal is to find the “best marketing strategy and mix through planning, implementation and control“. “Through these activities, the company can watch and adapt to the actors and forces“ in the market environment. (Enc. Armstrong et al. : Marketing: an Introduction, 2019 p.75) Marketing Analysis Prof. Dr. Sonja Klose 71 A Company’s Marketing Environment The marketing environment includes the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers. By carefully studying the environment, marketers can adapt their strategies to meet new marketplace challenges and opportunities. By using marketing research and marketing intelligence, companies constantly watch and adapt to the changing environment Analysis of the macro environment – the big picture Macro environment consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces. Marketing Analysis Prof. Dr. Sonja Klose 74 DESTEP Analysis Demographic Political/Legal Economic This analysis deals with a company‘s macro environment – external Market factors influencing industry competition Social/Cultural Environmental Technologica l Adapted from Kotler et al. (2019): Marketing Management, p. 140 ff. Example DESTEP factors Uber Microsoft slack regulated by government; competitors w/ Taxi  DESTEP Analysis D Demographic component e.g. population development, average household size, level of education,… f.e. produce bigger portions of toothpaste when bigger families e.g. purchasing power, income distribution, cost of living, E Economic component inflation rate,… f.e. high inflation and I sell a cheap product, ppl buy more -> produce more S Socio-cultural component e.g. social trends (genetically modified crops, nuclear weapons), religions, individualistic/collectivistic culture,… f.e. ppl living more sustainable T Technological component e.g. hard infrastructure, soft infrastructure,… = products leaving market bc of a new technology f.e. Netflix vs. lending a movie E Ecological component e.g. environmental awareness, scarcity of resources, pollution,… f.e. chocolate bar prices raising bc cacao is more expensive f.e. olive oil bc Spain, Italy are struggling with the heat Political-legal e.g. economic policy orientation, protection of private property, P component legal certainty, laws,… When a company wants to bring out a new product, they need to work with government institutions PESTEL Analysis same as DESTEP Alternative framework for analysing the macro environment https://www.haufe.de/controlling/controllerpraxis/strategieentwicklung-mit-five-forces-und-pestel-analyse_112_540940.html Analysis of the micro environment – detailed look around our business Microenvironment consists of the actors close to the company that affect its ability to serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and publics. + explaining Basic concept of Porter´s 5-forces analysis MARKET ANALYSIS Threat of new competitors entrants Adapted from Kreutzer (2022): Toolbox for Marketing and Management Level of competition: Rivalry among Bargaining power of existing competitors Bargaining power suppliers as part of SW analysis of buyers high / low power when there Are there monopolies? are few/many competitors High for OATLY if product is too high, can easily switch to alternatives Threat from substitute This analysis deals with a company‘s micro products environment – market factors influencing industry competition buy another product ==> Exercise: Haribo DESTEP Analysis; OATLY Porter Analysis Internal Microenvironment: The Company In designing marketing plans, marketing management takes other company groups into account. Top management (e.g. strategic goals) Finance (e.g. marketing budget) Research and development (R&D) Information technology Purchasing Operations Human resources Accounting Analysis of the company and competitive landscape 85  Resource Analysis Finance Know-How Physical Human Reputation ▪ How many people ▪ Which and how many ▪ What information are ▪ Which land, ▪ Will the are employed in the financial resources are within the buildings and organization´s organization? available? organization? equipment is reputation ▪ Are they employed support the ▪ Is the organization ▪ Are these information available for use of on a permantly or a development financially stable? held within the the organization? temporary basis? of the market? organization? ▪ Does the organization ▪ Are the employees ▪ Are these information motivated? have access to funds for used to build a investment and knowledge base, that development? will support the organization? Cadle/Paul/Turner: Business Analysis Techniques: 72 Essential tools for success (2010) p. 10f  ABC-Analysis how much they affect contribution margin (A-Customer 80% the most) 120% smallest share of customers are responsible for the biggest share Turnover 100% => A-customers f.e. airlines, luxury brands 80% ▪ ”...shows the distribution of 60% customers/products based on their level of turnover or impact 40% on contribution margins“ 20% ▪ ABC-Analysis of one´s own 0% products. 0% 20% 40% 60% 80% 100% 120% Customers A-Customers A-Products look at existing/potential costumers and how relevant they are for us B-Customers C-Customers B-Products C-Products f.e. flights (A-Customer: flying often / Business Class C-Customer: flying rarely / Economy Class) => better service Kreutzer (2019): Toolbox for Marketing and Management p.161  ABC-Analysis 120% Turnover 100% 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% 120% Customers A-Customers A-Products B-Customers C-Customers B-Products C-Products smallest amount responsible for the most income Kreutzer (2019): Toolbox for Marketing and Management p.161  Life-Cycle-Analysis sales Sales, maximum Cashflow Increase due to product ▪ "product life cycle (PLC): The improvement course of a product’s sales and profits over its lifetime. profit ▪ Useful framework for describ- maximum irrelevant products ing how products and markets work. ▪ When used carefully, the PLC Profit Sales concept can help in developing good marketing strategies for Break-Even Time the different life-cycle stages. ▪ In practise it´s difficult to say at Developement costs which stage the product is Introduction Growth Maturity Saturation => to identify our market position to adjust or re-design  Life-Cycle-Analysis https://opsmgt.edublogs.org/files/2014/10/6a00e0098d85558833015431f0dde0970c-800wi-2m9xrkt.png https://www.chegg.com/homework-help/questions-and-answers/course-bbct2023-product-development-describe-product-life-cycle-ipods-10marks-q55068647#question-transcript Life-Cycle-Variations ▪ Style: home decor, art, lifestyles… ▪ Fashions tend to grow slowly, remain popular for a while, and then decline slowly. ▪ Fads are temporary periods of unusually high sales driven by consumer enthusiasm and styles being in & out immediate product or brand f.e.: fidget spinner (2000’s style) popularity  Portfolio Analysis Basic Concept of Boston Consulting Group Portfolio Analysis: brands offering a range of products Market growth High Low Why these names? High Stars Question Marks best, most investment Relative market share focus on this Low „Cash-cows“ Poor Dogs not important, eventually stop brings us cash producing which part of a market do we have? Adapted from: Kreutzer (2019): Toolbox for Marketing and Management p.118 Portfolio Analysis set of products, services that a company offers The business portfolio is the collection of businesses and products that make up the company. Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company. Analysis of Strategic business units (Company division, Product line within a division, Single product or brand) Part of a business that works for his own (Chewing gum of Mars) A strategic business unit (S B U): own competitors => could be an own company Is a single business, or a collection of related businesses, that can exist separately from the rest of the company Has its own set of competitors Has a manager responsible for strategic planning and profit performance, who controls most of the factors affecting profit Formation of strategic business units Several products One product within several SBUs, within one SBU targeting different customer segments SBU Product Product 1 SBU 1 Product 2 SBU 2...... Product n SBU n Kreutzer, Ralf T., Praxisorientiertes Marketing, Grundlagen – Instrumente – Fallbeispiele, 6. Aufl., Wiesbaden, 2022  Portfolio Mars Foods ht tps :/ /aut.m ars. com / news -stories/art icles/ einhalt ung-hoher-m arket ingst andards?l anguage_cont ent_ent ity =en Analysis of competition Strengths and weaknesses Description of the current strategy of competitors are always relative quantities 1 in relation to the competition. Analysis of the self-assessment of the competitors and 2 the assessment of the industry Therefore, the analysis of strengths and weaknesses is Identifying the strengths and weaknesses of competitors inseparable connected with 3 the analysis of competition. Identification of future goals of the competitors The analysis of competition 4 consists of 4 steps Problem: collecting the information  Analysis of competition Types of Benchmarking Benchmarking “A benchmark is a standard of compare our comparison for one’s own Internal External compare to the market, products to other Benchmarking Benchmarking competitors and their actions. Benchmarking refers to of our own products products analysing your products, services => What is our perspective? or processes in comparison with Based on the best one or more other companies.“ Based on other practices of competitors departments of own or leadi ng companies in Kreutzer (2019):Toolbox for Marketing and Management p.124 company. their sect or Competitive benchmarking Functional benchmarking Focus on a competit or service/product Comparison of processes Probert/Feys (2015): Benchmarking: Analyze performance and adapt your procedures p.6 Analysis of competition Strengths/Weaknesses Analysis CHARACTERISTIC HIGH LOW 1 2 3 4 5 6 7 8 9 Quality Price Performance This analysis deals with a Usage company‘s strengths and weaknesses in comparison Image to competitors – internal Environmental-friendliness factors influencing company´s success Design Additional functions Technologica l YOUR PRODUCT COMPETITOR’S PRODUCT Adapted from Kreutzer (2019): Toolbox for Marketing and Management, p. 103 Integration of external and internal analysis  SWOT Analysis Determination of the relevant influencing variables of the market and the company resources- competitive analysis of the analysis of the analysis analysis micro macro macro: bigger picture, (own company) (competitors) environment environment (customers,…) our environment (surroundings) company-related market-related compare to competitors, Strength/ Opportunities/ what are we good in Weakness Risks analysis analysis Threats This analysis integrates connection the external and internal point of view to identify strategic options Nieschlag/Dichtl/Hörschgen, S.861  Integration: SWOT Analysis Identification of the company specific strengths and weaknesses Description: Internal Perspective Own Strenghts Own weaknesses External Adapted from Kreutzer (2019): Toolbox for Marketing and Management p.113 Perspective Which market opportunities Which market opportunities opportunities and threats Identification of market Market opportunities can help us to make the most can we not take advantage of out of our strenghts? due to our weaknesses? Which market threaths can From which market threats do Market Threats we profit of, based on our we suffer the most, due to our strengths? weaknesses? Synthesis Derivation of actions SWOT Analysis SWOT analysis is a widely used tool for conducting a situation analysis. Especially when analysing business cases. The goal is to match the company’s strengths to attractive opportunities in the environment while simultaneously eliminating or overcoming the weaknesses and minimizing the threats. Marketing Information and Customer Insights Customer insights Fresh and deep insights into customer needs and wants Companies use customer insights to develop a competitive advantage Insights can be difficult to obtain; marketers must manage marketing information from a wide range of sources Managing the overload of information