Strategic Marketing Course 2nd Exam PDF

Strategic Marketing Course 2nd Exam Innovation and new rnd strategies We use innovation as a term within management in general and specifically on products What is innovation Creation or improvement Producing , a...

Strategic Marketing Course 2nd Exam Innovation and new rnd strategies We use innovation as a term within management in general and specifically on products What is innovation Creation or improvement Producing , assimilating and successfully exploiting a novelty, in economic and or social context, in a way that provides unprecedented solutions to problems, and responds to the needs of people and society Types Product New products Improved Tech specifications Components and materials Software in the product User friendliness or other functional characteristics Incremental Improvement, adding new features, small changes, continuous improvements, short product dev cycles Done to maintain competitive advantage Least risk Disruptive Aims to provide customer with best experience Strategic Marketing Course 2nd Exam 1  Develop concepts never seen before or improve the existing ones by a lot Exploring new technology High risk and uncertainty Radical Drastic changes to product or positioning Transformative advance in technology, business modell, processes or products. Substantial change in industry Highest risk and uncertainty Ex. Electric car, autonomous car Process and logistics Improve existing production processes or development of new ones, a method involving significant changes in predict design and delivery Ex. ikea innovated by transforming the manufacturing process in order to push disassembled furniture that would then be assembled by the customer Marketing A marketing innovation consists of the application of a new marketing method that could involve significant changes in the design or packaging of the product, or its positioning or its promotion/communication or its pricing Ex. starbucks is using AI for better customer service organisation/institutional Consists of developing new forms of management new structures, new systems that will allow us to improve efficiency Ex. uber, steam Change in business model Ex. ibm sells only sells services now Clustering - a group of companies in the same industry get together in order to improve the industry alongside universities and think tanks Ex. clustering in the EU Strategic Marketing Course 2nd Exam 2  Examples of core initiatives for products Based on modulation Variation in any fundamental characteristic of a product or receive Allows to better adapter do segments and increase the size of the markets Ex. car customisation options Size Expansion of the unit purchase options, amount/volume/frequency Target increased consumption by addressing individual purchase needs Ex. coca cola sells differently sized bottles in different countries, bigger where families drink together Packaging Create new products by changing the container, in order to target different markets/consumption preferences. The basic+product remains the same Modifies consumers perception of our product and helps reaching out too more customers Design Create new products by modifying the external appreciate It attracts a new audience that responds to new styles and different positions Ex. watches with different designs Development of compliments Added complimentary ingredients or additional services to basic product or service Useful in the mature stages of products to upgrade the interest of consumers Ex. amazon prime, more benefits Making customer lives easier Apart from spending money, purchasing is an investment of time and resources, as well as some risk taking Companies try to make life easier for their customers Ex. purchasing at home Strategic Marketing Course 2nd Exam 3  There are more possibilities but these are the most relevant Other Replacement Eliminate one or more items from the product and replace them, it also consists of mimic aspect of other products Ex. replace the traditional coffee capsule for other with no residue Reversion Opposite of a product Ex. pilot frixion, a pen that can be reaced and it is not a pencil Non alcoholic gin Combination Add one or more items to the product or service by holding the rest Ex. clock and distr aid kit, life clock Exaggeration Exaggerate way down one or more items of the product or service Ex. The biggest as well as the samples car Elimination Remove one or more items of a product or service Three wheeled bike Lactose free milk Reordering Changing the order or sequence or one or more items form the rpocusct/service Ex. bacardi rum became bacardi breezers, juice with rum. it is not a rum, it is a soda with rum, bottles and cans Originally it was rum and soda, now it is soda and rum Changing the perception of the perception New product development Strategic Marketing Course 2nd Exam 4  Before thinking about creating an absolutely new product based on our ideas, we need to use a specific methodology Need a methodology that allow us to check every step of the process There are different models from linear to overlapping stages Most simple 1. Development and filter ideas 2. Concepts development and test a. Test is important here 3. Product development and test a. same, test important 4. Product launch and follow up a. Marketing plan and launching b. Post launch as well 1 generating ideas Possible sources of information for product ideas Internal Marketing and sales departments R +d +i Customer services departments External Dealers and consumers Competition Suppliers Universities and research centres External databases When this is finished, everything is exhausted then 2 structured techniques Strategic Marketing Course 2nd Exam 5  Brainstorming Focus group 3 informal techniques Discussions and informal contracts between members of the company Meetings between the staff of Mk and r+d+i Information obtained for attencade at trade fares and conferences Criteria for filtering new prodcit ideas Ecach new idea is analysed by experts thrgou a walitative assessment of at least 5 variables, 1-5 1 environmental Assessment of the impact a particular product has on the enivirments 2 strategical fit 3 market Market potential Cannibalisation Noverly and uniqueness coampred to the ciomt 4 development effort Probability of technical success Time to market 5 financial Investment req Roi All of these will then be averaged to see the best score 2 concept development and test After checking the feasibility of the product in the filter stage, it is time to develop the product concoct Detailed description of features, uses and benefits, packaging prices, distribution channels, sales points available, webpage, sns, Strategic Marketing Course 2nd Exam 6  it is presented to the same sample of consumers in written form, graphics, images, slides, video simulation, webpage sim,etc. Concept testing avoids making misrtakes, ensures alignment of out vp wth the consumer needs. First market test isign potential cusotmres sample through a questionnaire or interactive to reach Perception of product attributes Willingness to pay How good the distribution system is Potential advertising campaign and sns Information regarding purchase intention Causes and reasons for not buying the product Identify differences between the concept and the ideas form the consumers Potential improvements Market profile Information of potential consumers that help us to interpret data on purchase intention Methods Qual Focus group - recommended - using a sample of customers In depth interviews - using experts ex. distributors, university professor Quant Surveys - based on the qual, 3 analysing results and usign them in order to modify the concept Information that we need to be sure that the product matches tht needs of the consumers Product rest, only after positive concepts, then the team will advance with the dev. of a fully functioning prototype Product qualification tests Check the protory meets the concepts specifications Internal and external verification Strategic Marketing Course 2nd Exam 7  Internal panel External panel Sample of customers In use validation tests External and internal panels Consumers Beta testing Tech products are usually tested by trusted customers before launch 4. Launching the product Marketing plan Market test Select geographical area or point of sale, significant to the whole market Sell the product as planned in the marketing plan Although it is important , ther re are istuations where we should avoid Competition is able to imitate the procut Expensive When competitors take advantage of the test information for their own products Selecting launch strat 1 simultaneous The whole market Best distribution channel Risky, if something goes wrong the whole market knwo about it Suitable if the competition can erect quickly 2 gradual intro Sequential introduction in each market segment. Can serve as a test Suitable when the risk of imitation is low and more suitable for innovation comapnties compulsory for small companies Hey are sued less and less and are replaced by experiments in intelligent labs Strategic Marketing Course 2nd Exam 8  Some adopt the pre advertising strategy announce the product in mass media before the final product launch in order to create hype Apple Games Post launch monitoring Product evolution Consider possible adjustments and minor changes in design Review the markeitngplan it the results dont go as planned Manage the life cycle of the product Drivers for internationalisation Salutation of local markets If you have a large market share of the saturated market, you have good finances to be able to develop into international markets (they usually are a loss in the first year) Failing market If a local market is going towards failure, there is a press to leave Economic crisis Can't drive business well in a country in economic crisis Globalisation of markets In terms of management, if you don't sell in different countries, companies form those companies will sell where you are Increased demand in other countries Targets Diversify risk Diversifying the markets, and therefore spreading the risk of failure In terms of management the risk increases with the complexity In terms of pnl, the risk goes down Reduce cost Strategic Marketing Course 2nd Exam 9  Economies of scale Increased productivity Experience core ⇒ RnD and innovation Growth New market allows for more growth Extend product cycle Standardisation vs adaptation More of an issue in b2c than b2b Adaptation is more costly, in terms of being able to produce them, having the capability in the factories Different markets have different standards, needs and wants This is not an issue when a company sells commodities, such as chemicals, metals Product standardisation - oracle The needs of the planets/or companies tend to meet Homogenous preferences of the markets It is intended that consumers sacrificed their specific needs Adv Lower costs due to economies of scale, which lower selling price Tech dealers to develop applications for specific customers so that they don't have adaptation costs Standardisation 2 - coca cola Adv Time reduction in the international dissemination of the product Increases the product quality since it is manufactured witht he same criteria in all production factories Standardisation disadvantages Consumer is ignored Strategic Marketing Course 2nd Exam 10  Decisions are too centralised Companies have to face opposite social movements Guochao movement in china, defined by the opposition to the products from sears Ultimately, the decision will depend on the type of product Shaving razors do not have to adapt to markets but others do adaptation An adaptive strategy emphasises on the difference between the target countries. Product adaptation defenders believe Cultural difference sexist and drive consumer preferences There are differences of income, legislation The markets are different The behaviour is different Consumer preferences are heterogenous Adaptation to the market can be voluntary - when the company tries to adapt to the local preferences according to the consumer needs, or compulsory - when laws require Hoffstede Examples Some companies change the brand name The meaning of the brands name changes in different countries, and might have to be changed when localised lays(pepsico) - some markets have limited flavours, while other markets have their own unique flavours that are only available to domestic consumers Masala for india, seaweed for japan Ikea, they failed their first attempt entering the market with western furniture, 20 years later they adapted the furniture to better fit the japanese market Pestle - steeple 4 stages 1. Indirect export 2. Direct export Strategic Marketing Course 2nd Exam 11  3. Trage subsidiaries 4. Production subsidiaries 5. Other - joint venture Indirect export Usually the first stage of the international strategy. The company sells its products to borker and or export/import company, which resell them through specialised exporters/importers Brokers - intermediary between seller and buyer Agent - exporter and or importer of the country There is no control over the final customer Producer ⇒ broker ⇒ export trading company ⇒ import/foreign distributor ⇒ end user Direct export Most advanced stage of the international strategy, unlike indirect export, the company performs all export management duties - licences, customers, currency, insurance exchange The company directly manages export to either Importers in the country of destination - the company does not control channels of distribution not the rest of marketing activities in the destination country Final customers - usually b2b Producer ⇒ (importing company ⇒ distributor or retailers ⇒ end consumer) - in the foreign market Producer ⇒ end consumer, only in b2b Requires more structure and finance, as no one is paying for the product until the delivery Still little control Trade subsidiaries Reasons Experience and command of foreign markets Organisation Creation of commercial subsidiary, controlled by the hq Strategic Marketing Course 2nd Exam 12  It requires a deeper understanding of the demand Convert to the market a desire for permanence Post-purchase services further justify theis strategy hq (trade subsidiary ⇒ (distributor, sometimes ignored) ⇒ retailer ⇒ end user) - foreign market Sometimes TS ⇒ end user, for b2b Not a factory, only a commercial and technical representation For support of product Maintenance warehouse Show strength More control of demand and forecasting as we are closer to the market Production subsidiary Reasons Transportation costs affect the margin Better adapted products to the local markets Improve competitiveness Need to be close to the market and react to trends change Control over all productive and commercial activities What does it mean at the organisational level Creation Of the subsidiaries production Last internationalisation stage: multinational company Hq ( production subsidiary ⇒ distributor, sometime ignored) ⇒ retailers ⇒ end user Sometimes PS ⇒ end user Can control the whole value chain almost Magic the gathering International marketing strategies Not only manufacturing and selling goods, but also facing new challenges Strategic Marketing Course 2nd Exam 13  The other possibilities Export consortia Licence agreement Franchising Joint venture Consortia Small companies have few resources, therefore they band together into one consortia, that will be the exporter for all of them Features Perform trade operation with foreign markets on behalf of the consortium Licence A company licences the right to exploit a manufacturing process of service delivery method to another entity, typically in exchange for a fee or a percentage of sales. This approach allows the licensor to enter a foreign market with minimal investment, requiring only the negotiation of agreements and the monitoring of compliance. Licensing is also a strategy of growth through diversification Coca cola and carlsberg Lego and starwars Franchising It is a strategy very close to licensing, but involves the transfer of a complete set of business operations Adv for franchisee Working with a reputed and international brand name Getting assistance and knowledge from the franchisor Competing face to other big brands Dis for franchisee Entry cost Operational stringency Adv for franchisor Strategic Marketing Course 2nd Exam 14  Low investment Joint Agreement between 2 complementary companies, different comparative advantages to manufacture abroad Joining top be more competitive They have different expertises Involves greater commitment Adv Taking advantage of knowledge Risk Dis Possible conflicts of interest Legal Imitation There is a line between and legal and illegal imitation, and whilst there is a market for it, we ought not to pay any heed to it Can imitation be a source of competitive advantage - depends For a company that can't gain a comp. adv. Through innovation and rnd, imitation cna be a comp adv.’ For a company with innovation and rnd, imitation can be a source of inspiration for further development We are constantly inundated with products When does the imitation princess start In international markets, everyone is exposed, secrets cannot be kept indefinitely, imitation often begins when demand for innovative product grows while production and marketing processes become more widely understood. At this stage,imitation typically starts once the pioneering or innovative company has gained market recognition or the product, making it possible for others to acquire and replicate its key characteristics Advantages Strategic Marketing Course 2nd Exam 15  No investment in rnd and i to create new products Powerful reason for companies that dont have strong rnd Use the human capital that innovators have educated Use employees from other companies with the expertise Imitators take advantage of the investment in communication of the innovators who have already stimulated deman Risk reduction: imitators only come when the market exists and responds Levels of imitation Counterfeit Why Sometimes customers arent aware that they are counterfeit Non-target segments of the original brand, who consciously buy the counterfeit products It causes damage to original danrds image and through economic loss Legal copies A legal copy refers to a product that is designed to predicate certain elements or features of an original product but doing it within the boundaries of the law, in order to capitalise on trends Avoiding patent infringement Bypasses copyright violation Does not use the logo, names,or branding that would confuse consumers Creative adaptations Imitations of an existing product to satisfy a new market need Adaptation of an existing product by changes in packaging, design, technology Superior adaptations Significant improvement over the original, it usually results in the newcomer taking over the market form the original Ex. kodak Strategic Marketing Course 2nd Exam 16  Imitation strategies There are three that allow companies to compete with the most innovative ones Low price It can be developed when there is a standard in the market , stable and assumed by customers Everybody knows the original product introduction by the innovative companies Market is growing Crucial: imitators must innovate in the product process to reduce costs For Legal copies, creative adaptations Problems: copyright infringement accusations Superior product Creative adaptations, superior adaptations More difficult to find examples of this, as no one wants to say This type of imitation strategy requires to develop a product that is technically superior to the original according The imitator must make the original product obsolete It satisfies existing demand Takes advantage of the success of others Crucial Quickly growing market Flexibility to trend changes and a lot of customer focus Powerful rnd Ex. atari and playstation, Superior marketing strategy Creative, superior The strategy is a usual strategy when: weak barriers to renty against powerful companies, the imbalance in size of the pomanies is significantly in favour of the imitaotr companies Some wining topics for companies with market power Strategic Marketing Course 2nd Exam 17  Prestigious brand image Plenty financial resources to meet the demand Easy inclusion of the imitated product ina ny of the existing product lines Operational distribution channels to sell the imitated product Experience in communication channels for immediate promotions - press, tv, insta Ex. royal crown made the first sugarfree cola, immediately afterwards coca cola and pepsi made imitations The effect of imitation The release if an imitative product triggers two coutnervailing forces; a deiscorvery effect that increases awarness and demand for the igirinal, and a substitution effect, decreasing that demand When the imitation is horizontally differentiated, product vary only marginally, the substitution effect is weaker, and the discovery effect leads to increased demand for the original When the imitation is vertically differentiated, the distinctions between products are objectively measurable and based in quality, the discovery effect does not benefit the original, and demand decreases given the substitution effect Divestment strategies Causes which accelerate the elimination of products Changes in the intensity of competition Changes in consumer needs Changes in the environment Products in an unattractive market, weak competitive position and suffering sustained sales decrease Hidden costs Management team time consuming Need adjustment of price and stock Require special efforts of advertising and sales Strategic Marketing Course 2nd Exam 18  Damages the image of the company Opportunity costs Causes that delay the elimination of products Complementary with other products Problems of credibility, loss of suppliers confidence, and even among distributors Affects the confidence of customers with other products from the company Problems in the financial market for listed companies Stock market reaction Before deciding to divest from one or more products it is necessary to evaluate them, wether or not to divest or revitalise Continuous monitoring of products ⇒ product eval ⇒ either revitalisation or divestment Some ways to revitalise Strat Open new markets Focus on specific markets and remove others Product Modifications Prices Price discounts ¨price reduction Cost reduction Distribution Improve product availability and accessibility at points of sale Add new distribution channels Communications Improving advestining Social managemt Improve teams Strategic Marketing Course 2nd Exam 19  Is divestment a strategy in marketing 4 of them Elimination Quick withdrawal Production stops and the product is removed from the market It is possible in b2c markets but not in b2b Three ways Quick withdrawal, we directly eliminate the product from the market. However, first we will have to inform distributors and customer Slow withdrawal Sale of the brand or product Slow Gradually removing the product, keeping a reduced operating market until the last moment - common in b2b Sometimes, the company sells the product to another company Harvest When a product is competing in a gradually declining market and the company has a moderate market share Goal Withdraw from the market recovering investments What does it depend on When there is no chance that a declining market will improve How quickly sales are decreasing How Eliminate investment in rnd in facilities and equipment Eliminate small customers that require too much service Reduction of services and additional attentions Strategic Marketing Course 2nd Exam 20  Product line reduction compelling customers to choose other more profitable products Replace expensive material with cheaper ones to reduce costs Raise prices if possible Minimise communication campaigns Maintenance When Temporary strategy When there is uncertainty about the future of the market Data is very important here Objective Maintain the position of the pricut in the market until future trends are clear How While maintaining a certain level of investment allowing us to make some product modifications and encourage demand What can happen Market recovers and the modifications allow future growth Market does not recover and we will have to go to recollect or remove Niche When In unprofitable and declining markets attractive niche segments with low compassion can be found When one or more segments will either remain at stable pockets of demand When one or more segments decay slowly Obj Achieve a strong competitive position in the market segment - niche To be able to build a sustainable competitive advantage relatively quickly to anticipate competitors How Strategic Marketing Course 2nd Exam 21  Aoid direct confrontations with large firm leaders Focus on differentiation A company can only stay in the niche until it gets big enough to attracts new entrants and large generalist competitors What can happen Smaller competitors can do it successfully because they will focus their resources in a limited portion of the total market It is an opportunity as ling as a high market share is maintained in declining markets, otherwise withdraw Factors that can effect the removal of the product If the authorities ban a products, the elimination will be faster The obligation to continue manufacturing spare parts can also delay The existence of outstanding orders of supply will force to eliminate more slowly Recommendation: the replacement of one product with another suggests to withdraw the first when the second is ready for sale Strategic Marketing Course 2nd Exam 22